Company: PTHS
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001753926-25-001764
Chunk: 18

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 18
---
 generate cash flows from operations.

Based
on current projections, management believes there is substantial doubt about its ability to continue to operate as a going concern
and fund its operations through at least the next twelve months following the issuance of these condensed consolidated financial
statements. While the Company completed the PIPE Financing in July 2025, the Company expects that costs associated with the commercial
launch of ZELSUVMI, expenses related to its manufacturing facility and costs related to
potential clinical trials associated with the existing pain programs, and other activities will require the Company to
raise additional funds. However, there is no assurance that the Company will be able
to raise such additional funds on acceptable terms, if at all. If the Company raises additional funds by issuing securities, existing
stockholders may be diluted.

The
condensed consolidated financial statements included in this report do not include any adjustments to reflect the possible future
effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from
the matters discussed herein. While the Company believes in the viability of the Company’s strategy to generate sufficient
revenue, control costs, and raise additional funds, when necessary, there can be no assurances to that effect. The Company’s
ability to continue as a going concern is dependent upon the ability to implement the business plan, generate sufficient revenues,
raise capital, and to control operating expenses.

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 revenues and expenses during the reporting period. Actual results
could differ from those estimates.

    12

Significant
estimates made by management include provisions for prompt-pay discounts, customer fees, co-payment assistance, government and
payor rebates and fees, inventory net realizable value, useful lives of property, plant and equipment and amortizable intangible
assets, stock-based compensation, accrued expenses, valuation of assets and liabilities in business combinations, developmental
timelines related to licensed products, valuation of future obligations related to licensees and contractual payments, deferred
income taxes and contingencies. Actual results may differ materially and adversely from these estimates. To the extent there are
material differences between the estimates and actual results, the Company’s future results of operations will be affected.

Business
Acquisitions

The
Company accounts for business acquisitions using the