Company: PTHS
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001753926-25-000790
Chunk: 8

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 1
Chunk 8
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 observable and unobservable inputs, which are categorized in one of the following levels:

    ●
    Level
    1 Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

    ●
    Level
    2 Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or
    similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs
    derived from or corroborated by observable market data.

    ●
    Level
    3 Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market
    participants would use in pricing the asset or liability based on the best available information.

The
Company did not identify any assets or liabilities that are required to be presented on the balance sheets at fair value in accordance
with ASC Topic 820.

Due
to the short-term nature of all financial assets and liabilities, their carrying value approximates their fair value as of the
balance sheet dates.

Stock-Based
Compensation

The
Company accounts for stock-based compensation costs under the provisions of ASC 718, Compensation—Stock Compensation (“ASC
718”), which requires the measurement and recognition of compensation expense related to the fair value of stock-based compensation
awards that are ultimately expected to vest. Stock-based compensation expense recognized includes the compensation cost for all
stock-based payments granted to employees, officers, and directors based on the grant date fair value estimated in accordance
with the provisions of ASC 718. ASC 718 is also applied to awards modified, repurchased, or cancelled during the periods reported.
Stock-based compensation is recognized as expense over the employee’s requisite vesting period and over the nonemployee’s
period of providing goods or services. Pursuant to ASC 718, the Company can elect to either recognize the expenses on a straight-line
or graded basis and has elected to do so under the straight-line basis.

Basic
and Diluted Net Loss per Common Share

Basic
loss per common share is computed by dividing the net loss by the weighted average number of shares of Common Stock outstanding
for each period. Diluted loss per share is computed by dividing the net loss by the weighted average number of shares of Common
Stock outstanding plus the dilutive effect of shares issuable through the common stock equivalents. The weighted-average number
of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. As of March 31,