Company: PTHS
Filing Date: 2025-05-09
Form Type: PREM14C
Source: 0001140361-25-018219
Chunk: 540

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-09
Form: PREM14C
Chunk 540
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 and analysis of all the positive and negative evidence available, including cumulative losses in recent years and projected future taxable income, to determine whether all or some portion of the deferred tax assets will not be realized. Pursuant to Section 382 and 383 of the Internal Revenue Code of 1986, as amended, utilization of our net operating losses and credits may be subject to annual limitations in the event of any significant future changes in its ownership structure. These annual limitations may result in the expiration of net operating losses and credits prior to utilization. The Company accounts for income taxes by evaluating a probability threshold that a tax position must meet before a financial statement benefit is recognized. The minimum threshold is a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The Company does not have any uncertain tax positions for the periods covered. Note 10: Relationship with Parent and Related Entities Historically, the Company's business has been managed and operated in the normal course of business consistent with other affiliates of the Parent. Accordingly, certain shared costs have been allocated to the Company and reflected as expenses in its financial statements. Management considers the allocation methodologies used to be reasonable and appropriate reflections of the historical Parent expenses attributable to the Company for purposes of its stand-alone financial statements. However, the expenses reflected in the financial statements may not be indicative of the actual expenses that would have been incurred during the periods presented if the Company historically operated as a

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separate, stand-alone entity. In addition, the expenses reflected in the financial statements may not be indicative of related expenses that will be incurred in the future by the Company. The statements of operations include expenses for certain centralized functions (such as accounting, treasury, audit, purchasing, human resources, legal and facilities), executive compensation and other programs provided and/or administered by Parent that are charged directly to the Company. A portion of these costs benefits the Company and is allocated using a pro-rata method based on measures that management believes are consistent and reasonable. The amounts of corporate expenses allocated to the Company are summarized in a table below:

|                                                   |     |         2024 |     |            2023 |     |              |
|                                                   |     |    Successor |     |       Successor |     |  Predecessor |
|                                                   |     | January 1 to 
  December 31 |     | September 28 to 
     December