Company: PTHS
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001753926-25-000503
Chunk: 422

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1A
Chunk 422
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xel
Claim

On
July 31, 2024, the Company received a demand letter from an attorney representing Parexel International (IRL) Limited (“Parexel”).
 The letter, which was addressed to both the Company and Chromocell Holdings, purports to be a notice of default of
a note (the “Promissory Note”) between Chromocell Holdings and Parexel and seeks the payment of allegedly
unpaid principal in the amount of $682,551 plus interest exceeding $177,000.  The Company denies that it is liable for any
of the amounts sought by Parexel; the Company is not a party to the Promissory Note and does not believe it is
liable for any amounts allegedly due thereunder.  The Company intends to defend itself vigorously in the matter.

NOTE
8 – INCOME TAX

The
Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred
tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated
financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences
are expected to 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