Company: PTHS
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001753926-25-000503
Chunk: 2272

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 12
Chunk 2272
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 be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred
tax assets to the amount expected to be realized.

ASC
740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of
tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more
likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties
related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for
interest and penalties as of December 31, 2020. The Company is currently not aware of any issues under review that could result
in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by
major taxing authorities since inception. The Company used the separate return method for the preparation of the income tax provision.

    F-26 

For
the years ended December 31, 2024 and 2023, there was no income tax provision recorded. The tax benefit was added to the net operating
loss to which a full valuation allowance was applied.

A
reconciliation of income tax expense (benefit) computed at the statutory federal income tax rate to income taxes as reflected
in the consolidated financial statements is as follows:

 Schedule reconciliation of income tax expense (benefit)

    2024  
    2023 

    Income taxes at U.S. statutory rate 
     21.00% 
     19.11%

    Income taxes at state rate 
     —% 
     9.00%

    Change in valuation allowance 
     (21.00)% 
     (28.11)%

    Total provision for income taxes 
     —% 
     —%

Deferred
taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income
tax purposes. The significant components of the Company’s deferred tax assets and liabilities as of December 31,
2024 and 2023 are comprised of the following:

 Schedule of deferred taxes

    December 31, 

    2024  
    2023 

    Deferred tax assets 

    Net operating loss carryforwards 
    $4,297,287