Company: CSDX
Filing Date: 2025-10-09
Form Type: 10-Q
Source: 0001214659-25-014817
Chunk: 16

Company: CS DIAGNOSTICS CORP.
Filing Date: 2025-10-09
Form: 10-Q
Item: Part I, Item 1
Chunk 16
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 consumers raise any concerns about our privacy practices, even if unfounded, it could damage our reputation and operating results.

In the area of information security and data protection, many states
have passed laws requiring notification to users when there is a security breach for personal data or requiring the adoption of minimum
information security standards that are often vaguely defined and difficult to implement. Costs to comply with these laws may increase
as a result of changes in interpretation. Furthermore, any failure on our part to comply with these laws may subject us to significant
liabilities. Security measures that we put in place to protect our data and the personal information of our employees, customers and partners
could be breached due to cyber-attacks initiated by third party hackers, employee error or malfeasance, or otherwise. Because the techniques
used to obtain unauthorized access, to disable or degrade service or to sabotage systems change frequently and often are not recognized
until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Any breach
or unauthorized access could materially interfere with our operations or our ability to offer our services or result in significant legal
and financial exposure, damage to our reputation and a loss of confidence in the security of our data, which could have an adverse effect
on our business and operating results.

  18  

We may be liable if third parties misappropriate our customers'
personal information.

If third parties are able to penetrate our network security or otherwise
misappropriate our customers' personal information or credit card information, or if we give third parties improper access to our customers'
personal information or credit card information, we could be subject to liability. This liability could include claims for unauthorized
purchases with credit card information, impersonation or other similar fraud claims. This liability could also include claims for other
misuses of personal information, including unauthorized marketing purposes.

These claims could result in litigation. Liability for misappropriation
of this information could adversely affect our business. In addition, the Federal Trade Commission and state agencies have been investigating
various Internet companies regarding their use of personal information. We could incur additional expenses if new regulations regarding
the use of personal information are introduced or if government agencies investigate our privacy practices.

We rely on encryption and authentication technology licensed from third
parties to provide the security and authentication necessary to effect secure transmission of confidential information such as customer
credit card numbers. We cannot assure you that advances in computer capabilities, new discoveries in the field of cryptography or other
events or developments will not result in