Company: PTHS
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001753926-25-000790
Chunk: 92

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 2
Chunk 92
---

$1,991,893. The cash flow used in operating activities was primarily due to a net loss of $2,562,330, offset by stock-based compensation
expense of $292,552, amortization of debt discount of $605,630, a change in account payable and accrued expense of $90,994, change
in prepaid expenses of $220,930 and an increase in accrued compensation in the amount of $152,023.

Net
Cash (Used in) Provided by Investing Activities

The
Company neither received nor used cash in investing activities during the three months ended March 31, 2025 and 2024.

Net
Cash Provided by Financing Activities

For
the three months ended March 31, 2025, net cash flows provided by financing activities were $250,000 resulting from net proceeds
from loans.

For
the three months ended March 31, 2024, net cash flows provided by financing activities were $5,665,731 resulting from payments
from loans of $214,757, net proceeds from common stock issued for cash of $5,972,000, and payment of recission on stock of $91,512.

35

Off-Balance
Sheet Arrangements

During
the three months ended March 31, 2025 and 2024, we did not have, and we do not currently have, any off-balance sheet arrangements,
as defined under applicable SEC rules.

Critical
Accounting Estimates

The
following discussions are based upon our consolidated financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States.

The
preparation of these consolidated financial statements requires management to make estimates, judgments and assumptions that affect
the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingencies. We continually evaluate
the accounting policies and estimates used to prepare the consolidated financial statements. We base our estimates on historical
experiences and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could
differ from these estimates made by management.

See
Note 3 – Summary of Significant Accounting Policies to the accompanying consolidated financial statements for a detailed
description of our significant accounting policies.

Income
Taxes

We
are subject to income taxes in the U.S. Significant judgment is required in determining income tax expense, deferred taxes and
uncertain tax positions. The underlying assumptions are also highly susceptible to change from period to period. In assessing
the realiz