Company: PTHS
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001753926-25-001764
Chunk: 28

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 28
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 the condensed consolidated financial
statements in the period during which, based on all available evidence, management believes it is more likely than 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
than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated
with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain
tax benefits in the accompanying condensed consolidated balance sheet along with any associated interest and penalties that would
be payable to the taxing authorities upon examination. The Company believes its tax positions will more likely than not be upheld
upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.

The
federal and state income tax returns of the Company are subject to examination by the Internal Revenue Service and state taxing
authorities, generally for three years after they were filed. The Company has filed its tax returns for the year ended December 31,
2024 and after review of the prior year consolidated financial statements and the results of operations through December 31,
2024, the Company has recorded a full valuation allowance on its deferred tax asset.

Comprehensive
Loss

Comprehensive
loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances
from non-owner sources. For all periods presented, comprehensive loss was equal to net loss.

Segment
Information

Operating
segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation
by the Company’s Chief Executive Officer, the chief operating decision-maker (“CODM”). For accounting purposes, the
CODM is making decisions regarding resource allocation and assessing performance based on consolidated net income as if presented
in the Company’s condensed consolidated financial statements. The Company views its operations and manages its business in two
operating segments, the Commercial Operations segment, and the Research and Development Operations segment. See Note 13 —
“Segment Information” for additional detail.

Related
Party Transactions

The
Company has historically separately presented certain related party transactions and balances on its condensed consolidated financial
statements. See Note 6 — “Notes Payable” and Note 8— “License and Other Agreements” for additional
detail regarding related party transactions.

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