Company: PTHS
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001753926-25-000503
Chunk: 2463

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 8
Chunk 2463
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 so under the straight-line basis.

    F-11 

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 December
31, 2024, 870,449 stock options, 55,000 warrants, and 243,100 unvested restricted stock units (“RSUs”)
were excluded from dilutive earnings per share as their effects were anti-dilutive. As of December 31, 2023, 197,560 stock
options were excluded from dilutive earnings per share as their effects were anti-dilutive.

Income
Taxes

The
Company accounts for income taxes pursuant to the provision of ASC 740 “Accounting for Income Taxes,” (“ASC
740”) which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset
and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences
of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided
to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will
not be realized.

The
Company follows the provision of the ASC 740 related to Accounting for Uncertain Income Tax Position. When tax returns are filed,
it is more likely than not that some positions taken would be sustained upon examination by the taxing authorities, while others
are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained.
In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the consolidated financial statements
in the period during which, based on all available evidence, management believes it is most likely that not that the position
will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are
not offset or aggregated with other positions.

Tax
positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more