Company: PTHS
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001753926-25-000503
Chunk: 273

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1A
Chunk 273
---
 or restructuring of our operations.

The
risk of our being found in violation of these laws is increased by the fact that many of them have not been fully interpreted
by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations. Any action against
us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses
and divert our management’s attention from the operation of our business. The shifting compliance environment and the need
to build and maintain a robust and expandable systems to comply with multiple jurisdictions with different compliance and/or reporting
requirements increases the possibility that a healthcare company may run afoul of one or more of the requirements.

If
we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or
incur costs that could have a material adverse effect on the success of our business.

We
are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures
and the generation, handling, use, storage, treatment, manufacture, transportation and disposal of, and exposure to, hazardous
materials and wastes, as well as laws and regulations relating to occupational health and safety. Our operations involve the use
of hazardous and flammable materials, including chemicals and biologic materials. Our operations also produce hazardous waste
products. We generally contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk
of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials,
we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant
costs associated with civil or criminal fines and penalties. We do not carry specific biological or hazardous waste insurance
coverage, and our property, casualty and general liability insurance policies specifically exclude coverage for damages and fines
arising from biological or hazardous waste exposure or contamination. Accordingly, in the event of contamination or injury, we
could be held liable for damages or be penalized with fines in an amount exceeding our resources, and our clinical trials or regulatory
approvals could be suspended.

Although
we maintain workers’ compensation insurance for certain costs and expenses, we may incur due to injuries to our employees
resulting from the use of hazardous materials or other work-related injuries, this insurance may not provide adequate coverage
against potential liabilities. We do not maintain insurance for toxic tort claims that may be asserted against us in connection
with