Company: PTHS
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001753926-25-000503
Chunk: 1196

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 6
Chunk 1196
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 deferred taxes and
uncertain tax positions. The underlying assumptions are also highly susceptible to change from period to period. In assessing
the realizability of deferred tax assets, management considers whether it is more likely than not that some or all the deferred
tax assets will be realized. The ultimate realization of deferred taxes assets is dependent upon generation of future taxable
income during the period in which those temporary differences become deductible. Management considers the scheduled reversal of
deferred tax liabilities, projected future taxable income, and taxable income in carryback years and tax-planning strategies when
making this assessment. There is currently significant negative evidence which contributes to our recording a valuation allowance
against our deferred tax assets due to cumulative losses since inception.

79 

Although
we believe our assumptions, judgments, and estimates are reasonable, changes in tax laws or our interpretation of tax laws and
the resolution of any tax audits could significantly impact the amounts provided for income taxes in our consolidated financial
statements. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period
that includes the enactment date. Adjustments to income tax expense, to the extent we establish a valuation allowance or adjust
the allowance in a future period, could have a material impact on our financial condition and results of operations.

Recently
Issued and Adopted Accounting Pronouncements

The
FASB issues ASUs to amend the authoritative literature in the Accounting Standards Codification (“ASC”). There have
been several ASUs to date, including those above, that amend the original text of ASC. Management believes that those issued to
date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to us or (iv) are not
expected to have a significant impact on our consolidated financial statements.

Other
accounting standards that have been issued or proposed by FASB and do not require adoption until a future date are not expected
to have a material impact on the consolidated financial statements upon adoption. Other than below, management does not believe
that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on
the accompanying consolidated financial statements.

In
December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated
information about a reporting entity’s effective tax rate reconciliation, as well as information related to income taxes
paid to enhance the transparency