Company: PTHS
Filing Date: 2025-05-27
Form Type: DEFM14C
Source: 0001140361-25-020509
Chunk: 543

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-27
Form: DEFM14C
Chunk 543
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 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. For the years ended December 31, 2024 and 2023, there was no income tax provision recorded. The tax benefit was added to the net operating loss to which a full valuation allowance was applied. A reconciliation of income tax expense (benefit) computed at the statutory federal income tax rate to income taxes as reflected in the consolidated financial statements is as follows:

|                                     |     |     2024 |     |     2023 |
| Income taxes at U.S. statutory rate |     |   21.00% |     |   19.11% |
| Income taxes at state rate          |     |       —% |     |    9.00% |
| Change in valuation allowance       |     | (21.00)% |     | (28.11)% |
| Total provision for income taxes    |     |       —% |     |       —% |

Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. The significant components of the Company’s deferred tax assets and liabilities as of December 31, 2024 and 2023 are comprised of the following:

|                                         |     | December 31, |     |            |
|                                         |     |         2024 |     |       2023 |
| Deferred tax assets                     |     |              |     |            |
| Net operating loss carryforwards        |