Company: PTHS
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001753926-25-000503
Chunk: 276

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1A
Chunk 276
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-security
incidents, including data security breaches or computer viruses, could harm our business by disrupting our delivery of services,
damaging our reputation or exposing us to liability.

We
receive, process, store and transmit, often electronically, confidential data of others. Unauthorized access to our computer systems
or stored data could result in the theft or improper disclosure of confidential information, the deletion or modification of records,
or could cause interruptions in our operations. These cyber-security risks increase when we transmit information from one location
to another, including transmissions over the Internet or other electronic networks. Despite implemented security measures, our
facilities, systems, and procedures, and those of our third-party service providers, may be vulnerable to security breaches, acts
of vandalism, software viruses, misplaced or lost data, programming and/or human errors, or other similar events which may disrupt
our delivery of services or expose the confidential information of our customers and others. Any security breach involving the
misappropriation, loss or other unauthorized disclosure or use of confidential information of others, whether by us or a third
party, could: (i) subject us to civil and criminal penalties; (ii) have a negative impact on our reputation; or (iii) expose us
to liability to our customers, third parties or government authorities.

Product
liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that
we may develop.

Our
business exposes us to significant potential product liability risks that are inherent in the development, manufacturing, marketing
and sale of human device and drug products. Product liability claims could delay or prevent completion of its development programs,
clinical or otherwise. If we succeed in marketing and selling products, such claims could result in a recall of any products or
a limitation or other change in the indications for which they may be used. If we cannot successfully defend ourselves against
claims that our compounds or drugs caused injuries, we will incur substantial liabilities. Depending on their merit or eventual
outcome, liability claims may result in:

    ●
    decreased demand
    for any product candidates or drugs that we may develop;

    ●
    injury to our reputation
    and significant negative media attention;

    ●
    withdrawal of clinical
    trial participants;

    ●
    significant costs
    to defend the related litigation;

    ●
    substantial monetary
    awards paid to trial participants or patients.

    ●
    loss of revenue;

    ●
    reduced resources
    of our management to pursue our