Company: PTHS
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001753926-25-000503
Chunk: 204

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1
Chunk 204
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 consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ
from those estimates. Significant estimates made by management include, but are not limited to, estimating the valuation of deferred
income taxes.

Cash
and Cash Equivalents

The
Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
As of December 31, 2024 and December 31, 2023, the Company did not have any cash equivalents.

As
of December 31, 2024, the Company had deposits in excess of federally insured limits.

    F-10 

Research
and Development

The
Company incurs research and development (“R&D”) costs during the process of researching and developing technologies
and future offerings. The Company expenses these costs as incurred unless such costs qualify for capitalization under applicable
guidance. The Company reviews acquired R&D and licenses to determine if they should be capitalized or expensed under U.S.
GAAP standards.

Below
is a disaggregation of R&D expenses:

 Schedule
of disaggregation of R&D expenses

    For the Year Ended  
    For the Year Ended 

    December 31, 2024  
    December 31, 2023 

    Consultant 
    $286,680  
    $68,900 

    Lab Materials 
     1,818  
     — 

    Lab Cell Storage 
     88,662  
     48,572 

    Chemistry Manufacturing and Controls (“CMC”) 
     642,304  
     — 

    IP Services 
     159,972  
     2,461,946 

    Total 
    $1,179,436  
    $2,579,418 

Fair
Value Measurements and Fair Value of Financial Instruments

The
Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the
principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following
fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

    ●
    Level
    1 Inputs are unadjusted quoted prices in