Company: PTHS
Filing Date: 2025-05-09
Form Type: PREM14C
Source: 0001140361-25-018219
Chunk: 355

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-09
Form: PREM14C
Chunk 355
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, net proceeds from common stock issued for cash under the equity line of credit of $82,620, proceeds from loans of $536,184, partially offset by payment of recission on stock of $91,512, payment of repurchase of common stock under Stock Repurchase Plan of $75,000 and payments on loans of $214,757. For the year ended December 31, 2023, net cash flows provided by financing activities were $1,022,348 resulting from proceeds from loans of $766,936, with $565,928 of that amount derived from related parties and $255,412 from common stock issued for cash. Off-Balance Sheet Arrangements During the year ended December 31, 2024 and 2023, Channel did not have, and Channel does not currently have, any off-balance sheet arrangements, as defined under applicable SEC rules. Critical Accounting Estimates The following discussions are based upon Channel’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures

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of contingencies. Channel continually evaluates the accounting policies and estimates used to prepare the consolidated financial statements. Channel bases Channel’s estimates on historical experiences and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management.

See Note 3 - Summary of Significant Accounting Policies to the accompanying consolidated financial statements for a detailed description of Channel’s significant accounting policies.

#### Income Taxes
Channel is subject to income taxes in the U.S. Significant judgment is required in determining income tax expense, deferred taxes and uncertain tax positions. The underlying assumptions are also highly susceptible to change from period to period. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some or all the deferred tax assets will be realized. The ultimate realization of deferred taxes assets is dependent upon generation of future taxable income during the period in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and taxable income in carryback years and tax-planning strategies when making this assessment. There is currently significant negative evidence which contributes to Channel’s recording a valuation allowance against Channel’s deferred tax assets due to cumulative losses since inception.

Although Channel believe it’s assumptions, judgments, and estimates are reasonable,