Company: PTHS
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001753926-25-000790
Chunk: 7

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 1
Chunk 7
---
 wholly owned subsidiary, Chromocell
Therapeutics Australia Pty. Ltd. All significant intercompany balances and transactions have been eliminated.

Use
of Estimates

The
preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ
from those estimates. Significant estimates made by management include, but are not limited to, estimating the valuation of deferred
income taxes.

Cash
and Cash Equivalents

The
Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
As of March 31, 2025 and December 31, 2024, the Company did not have any cash equivalents.

As
of March 31, 2025, the Company did not have deposits in excess of federally insured limits.

Research
and Development

The
Company incurs research and development (“R&D”) costs during the process of researching and developing technologies
and future offerings. The Company expenses these costs as incurred unless such costs qualify for capitalization under applicable
guidance. The Company reviews acquired R&D and licenses to determine if they should be capitalized or expensed under U.S.
GAAP standards.

    8

Below
is a disaggregation of R&D expenses:

    For
    the Three Months Ended

    For
    the Three Months Ended

    March
    31, 2025

    March
    31, 2024

    Consultant
     
    $
    88,255

    $
    30,033

    Lab
    Materials

    605

    —

    Lab
    Cell Storage

    15,428

    24,127

    Chemistry
    Manufacturing and Controls (“CMC”)

    82,170

    303,397

    IP
    Services

    7,840

    109,049

    Total
     
    $
    194,298

    $
    466,606

Fair
Value Measurements and Fair Value of Financial Instruments

The
Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the
principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following
fair value hierarchy distinguishes between