Company: PTHS
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001753926-25-001764
Chunk: 24

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 24
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; (iv) allocate the transaction price to the performance obligations
in the contract; and (v) recognize revenue when (or as) a performance obligation is satisfied.

Net
Product Revenues

The
Company sells ZELSUVMI to three wholesalers and one specialty distributor in the United States. The three wholesalers and one
specialty distributor are considered the Company’s customers for accounting purposes.

Revenue
from product sales is recognized when the customer obtains control of the Company’s product, which typically occurs on delivery.
Revenue from product sales is recorded at the transaction price, net of estimates for variable consideration consisting of prompt-pay
discounts, customer fees, government rebates, co-payment assistance and payor rebates and administration fees for which reserves
are established. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified
as reductions of accounts receivable (if the amount is payable to the customer) or a liability (if the amount is payable to a
party other than the customer).

Variable
consideration is estimated using the expected-value amount method, which is the sum of probability-weighted amounts in a range
of possible consideration amounts. In making these estimates, the Company considers historical data, including patient mix and
inventory sold to customers that has not yet been dispensed. Actual amounts of consideration ultimately received may differ from
the Company’s estimates. If actual results vary materially from the Company’s estimates, the Company will adjust these
estimates, which will affect net product sales and earnings in the period such estimates are adjusted. These items, as applicable
based on current contractual agreements and obligations on behalf of the Company, include:

●Prompt-Pay
                                         Discounts — The Company generally provides discounts on product sales to its
                                         customers for prompt payment. The Company estimates that its customers will earn these
                                         discounts. These discounts are recorded as a reduction of gross revenue and accounts
                                         receivable at the time such revenue is recognized.

●Customer
                                         Fees — The Company pays certain customer fees, such as fees for certain data
                                         that customers provide to the Company or for distribution services provided to the Company.
                                         Customer fees paid to its customers are recorded as a reduction of gross revenue and
                                         accounts receivable, unless the payment is: (i) for a distinct good or service from the
                                         customer; and (ii) the Company can reasonably estimate the fair value of the goods or
                                         services received. If both conditions are met, the Company records the consideration