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Item 1A. Risk Factors

2025-03-31 compared with 2024-04-15 · 769 added, 1174 removed, 695 unchanged (74% of the section changed)

15 unchanged sentences

that make investing in our company risky include, among others:

Risks Related to the Potential Merger with

● The risk that the conditions to the closing of

the transaction are not satisfied, including the failure to obtain stockholder approval for the transaction.

● The timing, receipt and terms and conditions

of any required regulatory approvals of the Merger that could cause the parties to abandon the Merger.

● Our and YOOV’s ability to meet expectations

regarding the timing and completion of the Merger.

● Uncertainties as to the timing of the consummation

of the transaction and the ability of each of us and YOOV to consummate the transaction.

● Risks related to our continued listing on The

Nasdaq Capital Market until closing of the Merger.

● Risks that our stock price may decline significantly

if the Merger is not completed.

● The outcome of any legal proceedings that may

be instituted against us and others following the announcement of the Merger Agreement.

● Expectations regarding the strategies, prospects,

plans, expectations and objectives of management of us or YOOV for future operations of the combined company following the closing of

● The ability of the combined company to recognize

the benefits that may be derived from the Merger, including the commercial or market opportunity of the product candidates of YOOV and

the combined company.

● Risks related to our and YOOV’s ability

to correctly estimate their respective operating expenses and expenses associated with the transaction, uncertainties regarding the impact

any delay in the closing would have on the anticipated cash resources of the combined company upon closing and other events and unanticipated

spending and costs that could reduce the combined company’s cash resources.

● The occurrence of any event, change or other

circumstance or condition that could give rise to the termination of the Merger Agreement.

● The fact that under the terms of the Merger Agreement,

we are restrained from soliciting other acquisition proposals during the pendency of the Merger, except in certain circumstances.

● The effect of the announcement or pendency of

the Merger on our or YOOV’s business relationships, operating results and business generally, including disruption of our and YOOV’s

management’s attention from ongoing business operations due to the Merger and potential adverse reactions or changes to business

relationships resulting from the announcement or completion of the transaction.

● The risk that the Merger Agreement may be terminated

in circumstances that require us to pay a termination fee.

General Operating and Business Risks

Our limited operating history makes it difficult for us to evaluate our future business prospects and make decisions based on those estimates of our future performance.

Our results of operations have not resulted in profitability and we may not be able to achieve profitability going forward.

There is substantial doubt about our ability to continue as a going concern, which will affect our ability to obtain future financing and may require us to curtail our operations.

Our cash will only fund our operations for a limited time and we will need to raise additional capital in order to support our development.

Joint ventures, joint ownership arrangements and other projects

pose unique challenges and we may not be able to fully implement or realize synergies, expected returns or other anticipated benefits associated

with such projects.

● Our limited operating history

makes it difficult for us to evaluate our future business prospects and make decisions based on those estimates of our future performance.

● Our results of operations have

not resulted in profitability and we may not be able to achieve profitability going forward.

● There is substantial doubt

about our ability to continue as a going concern, which will affect our ability to obtain future financing and may require us to curtail

our operations.

● Our cash will only fund our

operations for a limited time and we will need to raise additional capital in order to support our development.

Joint ventures, joint ownership arrangements and other projects pose unique challenges and we may not be able to fully implement or realize synergies, expected returns or other anticipated benefits associated with such projects.

We must effectively manage the growth of our operations, or our company will suffer.

Our prospects will suffer if we are not able to hire, train, motivate, manage, and retain a significant number of highly skilled employees.

Potential liability claims may adversely affect our business.

In accordance with our strategic development policy, we may invest in companies for strategic reasons and may not realize a return on our investments.

Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and any patent protection we may obtain in the future could be reduced or eliminated for non-compliance with these requirements.

It is difficult and costly to protect our proprietary rights, and we may not be able to ensure their protection.

If we fail to protect or enforce our intellectual property rights adequately or secure rights to patents of others, the value of our intellectual property rights would diminish.

If any of our trade secrets, know-how or other proprietary information is disclosed, the value of our trade secrets, know-how and other proprietary rights would be significantly impaired and our business and competitive position would suffer.

Risk Factors Related to our Laboratory Services

Continued changes in healthcare reimbursement models and products, changes in government payment and reimbursement systems, or changes in payer mix could have a material adverse effect on our revenues, profitability and cash flow.

The Laboratory Services MSO Acquisition will result in organizational changes that could create significant growth for our business.

If we fail to effectively manage this growth and adapt our business structure in a manner that preserves our reputation, then our business, financial condition and results of operations could be harmed.

The clinical testing business is highly competitive, and if we fail to provide an appropriately priced level of service or otherwise fail to compete effectively it could have a material adverse effect on our revenues and profitability.

Failure to obtain and retain new customers, the loss of existing customers or material contracts, or a reduction in services or tests ordered or specimens submitted by existing customers, or the inability to retain existing and/or create new relationships with health systems could impact our ability to successfully grow our business.

Discontinuation or recalls of existing testing products;

failure to develop or acquire licenses for new or improved testing technologies;

or our customers using new technologies to perform their own tests could adversely affect our business.

Continued and increased consolidation of pharmaceutical, biotechnology and medical device companies, health systems, physicians and other customers could adversely affect our business.

Risk Factors Related to Clinical and Commercialization

We may not be able to file investigational new drug applications (INDs) to commence additional clinical trials on the timelines we expect, and even if we are able to do so, the FDA may not permit us to proceed.

We have limited experience in conducting clinical trials.

Delays in the commencement, enrollment, and completion of clinical testing could result in increased costs to us and delay or limit our ability to obtain regulatory approval for our product candidates.

As the results of earlier pre-clinical studies or clinical trials are not necessarily predictive of future results, any product candidate we advance into clinical trials may not have favorable results in later clinical trials or receive regulatory approval.

Even if our product candidates receive regulatory approval, we may still face future development and regulatory difficulties.

Any cell based therapies we develop may become subject to unfavorable pricing regulations, third party coverage and reimbursement practices or healthcare reform initiatives, thereby harming our business.

● Potential liability claims

may adversely affect our business.

● In accordance with our strategic

development policy, we may invest in companies for strategic reasons and may not realize a return on our investments.

● Obtaining and maintaining patent

protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental

patent agencies, and any patent protection we may obtain in the future could be reduced or eliminated for non-compliance with these requirements.

● It is difficult and costly

to protect our proprietary rights, and we may not be able to ensure their protection.

If we fail to protect or enforce our intellectual

property rights adequately or secure rights to patents of others, the value of our intellectual property rights would diminish.

● If any of our trade secrets,

know-how or other proprietary information is disclosed, the value of our trade secrets, know-how and other proprietary rights would be

significantly impaired and our business and competitive position would suffer.

Risk Factors Related to Commercialization

Some of our medical device

products in the future may face significant government regulation, and there is no guarantee that our medical devices will receive

regulatory approval.

Even if our medical

devices receive regulatory approval, we may still face future development and regulatory difficulties.

If we or our current or future collaborators, manufacturers, or service providers fail to comply with healthcare laws and regulations, we or they could be subject to enforcement actions and substantial penalties, which could affect our ability to develop, market and sell our products and may harm our reputation.

Any medical devices we develop may become subject to unfavorable pricing regulations, third party coverage and reimbursement practices or healthcare reform initiatives, thereby harming our business.

The healthcare industry is heavily regulated in the U.S.

at the federal, state, and local levels, and our failure to comply with applicable requirements may subject us to penalties and negatively affect our financial condition.

Our ability to obtain reimbursement or funding from the federal government may be impacted by possible reductions in federal spending.

Risks Related to Our Securities

Our officers, directors and principal stockholders own a significant percentage of our capital stock and will be able to exert significant control over matters that are subject to stockholder approval.

If we are unable to maintain listing of our securities on The Nasdaq Capital Market or another reputable stock exchange, it may be more difficult for our stockholders to sell their securities.

The price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for our stockholders.

You may experience dilution of your ownership interests because of the future issuance of additional shares of our common or preferred stock or other securities that are convertible into or exercisable for our common or preferred stock.

● Our officers, directors and

principal stockholders own a significant percentage of our capital stock and will be able to exert significant control over matters that

are subject to stockholder approval.

● If we are unable to maintain

listing of our securities on The Nasdaq Capital Market or another reputable stock exchange, it may be more difficult for our stockholders

to sell their securities.

● The price of our common stock

may be volatile and fluctuate substantially, which could result in substantial losses for our stockholders.

● You may experience dilution

of your ownership interests because of the future issuance of additional shares of our common or preferred stock or other securities

that are convertible into or exercisable for our common or preferred stock.

Risks Related to the Potential Merger with

Failure to complete the Merger could negatively

impact the stock price and our future business and financial results.

The parties’ respective obligations to complete

the Merger are subject to the satisfaction or waiver of a number of conditions set forth in the Merger Agreement.

There can be no assurance

that the conditions to completion of the Merger will be satisfied or waived or that the Merger will be completed.

If the Merger is not

completed for any reason, our ongoing businesses may be materially and adversely affected and, without realizing any of the benefits of

having completed the Merger, We would be subject to a number of risks, including the following:

● we may experience negative reactions from the

financial markets, including negative impacts on the trading price of our common stock, which could affect our ability to secure sufficient

financing in the future on attractive terms (or at all) as a standalone company, and from their respective customers, vendors, regulators

and employees, and if we are unable to obtain additional capital, we may need to cease operations, dissolve or seek protection of bankruptcy

● we may be required to pay YOOV a termination

fee of $1,000,000 if we fail to consummate the Merger under specified circumstances;

● we will be required to pay certain expenses incurred

in connection with the Merger, whether or not the Merger is completed;

● the Merger Agreement places certain restrictions

on the operation of our business prior to the closing of the Merger, and such restrictions, the waiver of which is subject to the consent

of YOOV, may prevent us from making certain acquisitions, taking certain other specified actions or otherwise pursuing business opportunities

during the pendency of the Merger that we would have made, taken or pursued if these restrictions were not in place;

● matters relating to the Merger (including integration

planning) will require substantial commitments of time and resources by our management and the expenditure of significant funds in the

form of fees and expenses, which would otherwise have been devoted to day-to-day operations and other opportunities that may have been

beneficial to us as an independent company.

In addition, we could be subject to litigation

related to any failure to complete the Merger or related to any proceeding to specifically enforce our or YOOV’s obligations under

the Merger Agreement.

If any of these risks materialize, they may materially

and adversely affect our business, financial condition, financial results and stock prices.

We and YOOV will be subject to business uncertainties

and contractual restrictions while the Merger is pending.

Uncertainty about the effect of the Merger on

employees, vendors and customers may have an adverse effect on our or YOOV and consequently on the combined company after the closing

of the Merger.

These uncertainties may impair our and YOOV’s ability to retain and motivate key personnel and could cause customers

and others that deal with us and YOOV, as applicable, to defer or decline entering into contracts with us or YOOV, as applicable, or making

other decisions concerning us or YOOV, as applicable, or seek to change existing business relationships with us or YOOV, as applicable.

In addition, if key employees depart because of uncertainty about their future roles and the potential complexities of the Merger, our

and YOOV’s businesses could be harmed.

Furthermore, the Merger Agreement places certain restrictions on the operation of our and

YOOV’s businesses prior to the closing of the Merger, which may delay or prevent us and YOOV from undertaking certain actions or

business opportunities that may arise prior to the consummation of the Merger.

Third parties may terminate or alter existing

contracts or relationships with us or YOOV.

Each of us and YOOV has contracts with customers,

vendors and other business partners which may require us or YOOV, as applicable, to obtain consents from these other parties in connection

with the Merger.

If these consents cannot be obtained, the counterparties to these contracts and other third parties with which us and/or

YOOV currently have relationships may have the ability to terminate, reduce the scope of or otherwise materially adversely alter their

relationships with either party in anticipation of the Merger, or with the combined company following the Merger.

The pursuit of such

rights may result in us and YOOV suffering a loss of potential future revenue, incurring liabilities in connection with a breach of such

agreements or losing rights that are material to their businesses.

Any such disruptions could limit the combined company’s ability

to achieve the anticipated benefits of the Merger.

The adverse effect of such disruptions could also be exacerbated by a delay in the

completion of the Merger or the termination of the Merger.

The Merger is subject to a number of closing

conditions and, if these conditions are not satisfied, the Merger Agreement may be terminated in accordance with its terms and the Merger

may not be completed.

In addition, the parties have the right to terminate the Merger Agreement under other specified circumstances, in

which case the Merger would not be completed.

The Merger is subject to a number of closing conditions

and, if these conditions are not satisfied or waived (to the extent permitted by law), the Merger will not be completed.

These conditions include, among others:

absence of certain legal impediments, (ii) effectiveness of the registration statement on Form S-4 relating to the Merger, (iv) obtaining

approval from our stockholders to (i) approve the issuance of the shares of our common stock to be issued to YOOV shareholders in

connection with the Merger pursuant to the rules of Nasdaq and (ii) amend our certificate of incorporation to effect a reverse stock split

of our common stock to the extent we and YOOV mutually agree implementing such reverse stock split is necessary to meet Nasdaq’s

listing requirements, (v) the approval of the Merger Agreement and the Merger by YOOV shareholders and (vi) the approval of the Nasdaq

listing application and the listing of the our shares on The Nasdaq Capital Market following the Merger.

In addition, each party’s

obligation to complete the Merger is subject to the accuracy of the other parties’ representations and warranties in the Merger

Agreement, the other parties’ compliance, in all material respects, with their respective covenants and agreements in the Merger

The conditions to the closing of the Merger may

not be fulfilled and, accordingly, the Merger may not be completed.

In addition, if the Merger is not completed by March 7, 2026, any

party may choose not to proceed with the Merger.

Moreover, the parties can mutually decide to terminate the Merger Agreement at any time

prior to the consummation of the Merger, before or after receipt of the requisite approvals by our stockholders and the YOOV shareholders,

each party may elect to terminate the Merger Agreement in certain other circumstances, as set forth in the Merger Agreement.

If the Merger

Agreement is terminated, we may incur substantial fees and expenses in connection with termination of such Agreement and we will not realize

the anticipated benefits of the Merger.

In addition, if the Merger is not completed, we may not have sufficient capital to continue to

operate our business in the long term and may become insolvent and be required to seek the protection of the bankruptcy courts and, without

additional funding or a strategic transaction, we would likely be delisted from Nasdaq.

We or YOOV may waive one or more of the closing

conditions to the Merger without re-soliciting stockholder approval.

Each of us and YOOV has the right to waive certain

of the closing conditions to the Merger.

Any such waiver may not require re-solicitation of stockholders, in which case stockholders of

us and shareholders of YOOV will not have the chance to change their votes as a result of any such waiver and we and YOOV will have the

ability to complete the Merger without seeking further stockholder approval.

Any determination whether to waive any condition to the Merger,

whether stockholder approval would be re-solicited as a result of any such waiver or whether this proxy statement/prospectus would be

amended as a result of any waiver will be made us or YOOV, as applicable, at the time of such waiver based on the facts and circumstances

as they exist at that time, and any such waiver could have an adverse effect on the combined company.

Our stockholders will have a reduced ownership

and voting interest after the Merger and will exercise less influence over management.

Our stockholders, as a group have significantly

reduced ownership and voting power in the combined company compared to their current ownership and voting power in us.

In particular,

upon consummation of the Merger, our stockholders, as a group, will own less than 3% of the outstanding common stock of us.

our stockholders, as a group, will be able to exercise less collective influence over the management and policies of the combined company

than they currently exercise over the management and policies of us.

The Merger Agreement limits our ability to

pursue alternatives to the Merger.

The Merger Agreement contains provisions that

make it more difficult for us to enter into alternative transactions.

The Merger Agreement contains certain provisions that restrict our

ability to solicit or facilitate proposals from third parties with respect to transactions involving the financing or sale of us, or provide

non-public information to, or otherwise participate or engage in discussions or negotiations with, third parties or take certain other

actions that would reasonably be expected to lead to a third-party acquisition proposal.

Further, there are only limited exceptions to

our agreement that our board of directors will not change its recommendation in favor of the adoption of the Merger Agreement.

at any time prior to the receipt of the requisite stockholder approval by our stockholders and the approval of the Merger Agreement and

the Merger by YOOV shareholders, in response to an unsolicited superior proposal made by a third party, Our board of directors may make

an adverse recommendation change, and terminate the Merger Agreement to enter into an alternative acquisition agreement, if it concludes

in good faith, after consultation with outside financial advisors and outside legal counsel, that the failure to take such action would

be inconsistent with the fiduciary duties of our board of directors under the circumstances and under applicable law.

As described above, we may be required to pay

a termination fee of $1,000,000 to YOOV if the Merger is not consummated under specified circumstances as set forth in the Merger Agreement.

Upon obtaining the requisite approvals from our stockholders and YOOV shareholders, our right to terminate the Merger Agreement in response

to a Superior Proposal (as defined in the Merger Agreement) will cease.

While we believe these provisions are reasonable,

customary and not preclusive of other offers, the provisions might discourage a third party that has an interest in acquiring all or a

significant part of us from considering or proposing such an acquisition, even if such party were prepared to pay consideration with a

higher per-share value than the currently proposed merger consideration or if such party were prepared to enter into an agreement that

may be more favorable to us or our stockholders.

Our executive officers and directors may have

interests in the Merger that are different from, or in addition to, the rights of their respective stockholders.

Our executive officers negotiated the terms of

the Merger Agreement and the board of directors approved the Merger Agreement and the Merger and recommend that each stockholder vote

in favor of the proposals to be presented at the special meeting in connection with the Merger.

These executive officers and directors

may have interests in the Merger that are different from, or in addition to, our stockholders.

These interests include the potential continued

employment or retention as consultants of certain executive officers of us with the combined company following the Merger, the continued

service of certain of our directors as directors of the combined company following the Merger and the indemnification of our executive

officers and directors.

We, YOOV and, subsequently, the combined company

may have difficulty attracting, motivating and retaining executives and other key employees in light of the proposed Merger.

The combined company’s success after the

Merger will depend in part on each of our and YOOV’s ability to retain key executives and other employees.

Uncertainty about the

effect of the Merger on our and YOOV’s employees may have an adverse effect on each company separately and consequently, the combined

This uncertainty may impair the combined company’s ability to attract, retain and motivate key personnel.

Employee retention

may be particularly challenging during the pendency of the Merger, as our and YOOV’s employees may experience uncertainty about

their future roles in the combined business.

YOOV’s common stock

Furthermore, if any of our or YOOV’s key

employees depart or are at risk of departing, including because of issues relating to the uncertainty and difficulty of integration, financial

security or a desire not to become employees of the combined business, we or YOOV, as applicable, may have to incur significant costs

in retaining such individuals or in identifying, hiring and retaining replacements for departing employees and may lose significant expertise

and talent, and the combined company’s ability to realize the anticipated benefits of the Merger may be materially and adversely

No assurance can be given that the combined company will be able to attract or retain key employees to the same extent that

we or YOOV have been able to attract or retain employees in the past.

We will incur significant transaction and Merger-related

transition costs in connection with the Merger.

We expect that we will incur significant, non-recurring

costs in connection with consummating the Merger and integrating the operations of the two companies post-Closing.

We will incur significant

fees and expenses relating to financing arrangements and legal services (including any costs that would be incurred in defending against

any potential class action lawsuits and derivative lawsuits in connection with the Merger if any such proceedings are brought), accounting

and other fees and costs, associated with consummating the Merger.

Some of these costs are payable regardless of whether the Merger is

In addition, we may be required to pay a termination fee of $1,000,000 if the Merger Agreement is terminated under specified

circumstances described in the Merger Agreement.

Though we continue to assess the magnitude of these costs, additional unanticipated costs

may be incurred in the Merger and the integration of the businesses of us and YOOV.

We may be the target of securities class action

and stockholder lawsuits which could result in substantial costs and may delay or prevent the Merger from being completed.

Securities class action lawsuits and stockholder

lawsuits are often brought against public companies that have entered into merger agreements.

Even if the lawsuits are without merit,

defending against these claims can result in substantial costs and divert management time and resources.

An adverse judgment could result

in monetary damages, which could have a negative impact on our liquidity and financial condition.

Additionally, if a plaintiff is successful

in obtaining an injunction prohibiting completion of the Merger, then that injunction may delay or prevent the Merger from being completed,

which may adversely affect our or the combined company’s business, financial position and results of operations.

As of the date

of this report, no such lawsuits have been filed in connection with the Merger and the parties cannot predict whether any will be filed.

General Operating and Business Risks

Our limited operating history makes it difficult

for us to evaluate our future business prospects and make decisions based on those estimates of our future performance .

We did not begin operations of our business through

AHS until May 2015.

We have a limited operating history and limited revenue.

As a consequence, it is difficult, if not impossible, to

forecast our future results based upon our historical data.

Reliance on the historical results may not be representative of the results

we will achieve, particularly in our combined form.

Because of the uncertainties related to our lack of historical operations, we may

be hindered in our ability to anticipate and timely adapt to increases or decreases in revenues or expenses.

If we make poor budgetary

decisions as a result of unreliable historical data, we could be less profitable or incur losses, which may result in a decline in our

Our limited revenue makes it difficult for

us to evaluate our future business prospects and make decisions based on those estimates of our future performance .

We have limited operating revenue.

Because of the uncertainties related

to our lack of significant revenue, we may be hindered in our ability to anticipate and timely adapt to increases or decreases in revenues

If we make poor budgetary decisions as a result of unreliable historical data, we could be less profitable or incur losses,

which may result in a decline in our stock price.

Our results of operations have not resulted

in profitability and we may not be able to achieve profitability going forward.

We incurred net losses amounting to

approximately $16.7 million and $11.9 million for the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2023,

we had an accumulated deficit of approximately $79.8 million.

If we incur additional significant losses, our stock price may

decline, perhaps significantly.

Our management is developing plans to achieve profitability.

Our business plan is speculative and

There is no assurance that we will be successful in executing our business plan or that even if we successfully implement

our business plan, that we will be able to curtail our losses now or in the future.

Further, as we are a new enterprise, we expect

that net losses will continue.

We incurred net losses amounting to approximately $7.9 million and

$16.7 million for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, we had an accumulated deficit of

approximately $87.7 million.

If we incur additional significant losses, our stock price may decline, perhaps significantly.

Our management

is developing plans to achieve profitability.

Our business plan is speculative and unproven.

There is no assurance that we will be successful

in executing our business plan or that even if we successfully implement our business plan, that we will be able to curtail our losses

now or in the future.

Further, as we are a new enterprise, we expect that net losses will continue.

There is substantial doubt about our ability

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a limited time and we will need to raise additional capital in order to support our development.

We are currently operating at a loss and expect

our operating costs will increase significantly as we continue to grow our operations.

The independent registered public accounting firm

that audited our 2023 financial statements, in their report, included an explanatory paragraph referring to our recurring losses since

inception and expressing management’s assessment and conclusion that there is substantial doubt in our ability to continue as a

going concern.

At December 31, 2023, we had cash of approximately $285,000.

We will need to raise additional capital or generate substantial

revenue in order to support our development and commercialization efforts.

We are currently operating at a loss and expect our operating costs

will increase significantly as we continue to grow our operations.

The independent registered public accounting firm that audited our

2024 financial statements, in their report, included an explanatory paragraph referring to our recurring losses since inception and expressing

management’s assessment and conclusion that there is substantial doubt in our ability to continue as a going concern.

31, 2024, we had cash of approximately $2.9 million.

We will need to raise additional capital or generate substantial revenue in order

to support our development and commercialization efforts.

If our available cash balances are insufficient

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or for other reasons, including to:

fund development and expansion of our operations;

acquire, license or invest in technologies and additional laboratories;

acquire or invest in complementary businesses or assets;

finance capital expenditures and general and administrative expenses.

● fund development and expansion

of our operations;

● acquire, license or invest

in technologies and additional laboratories;

● acquire or invest in complementary

businesses or assets;

● finance capital expenditures

and general and administrative expenses.

Our present and future funding requirements will

depend on many factors, including:

our revenue growth rate and ability to generate cash flows from operating activities;

our sales and marketing and research and development activities;

changes in regulatory oversight applicable to our products and services.

Other than our debt facility with our chairman,

we have no arrangements or credit facilities in place as a source of funds, and there can be no assurance that we will be able to raise

sufficient additional capital on acceptable terms, or at all, and if we are not successful in raising additional capital, we may not be

able to continue as a going concern.

We may seek additional capital through a combination of private and public equity offerings, debt

financings and strategic collaborations.

Debt financing, if obtained, may involve agreements that include covenants limiting or restricting

our ability to take specific actions, such as incurring additional debt, that could increase our expenses and require that our assets

secure such debt.

Equity financing, if obtained, could result in dilution to our then existing stockholders and/or require such stockholders

to waive certain rights and preferences.

If such financing is not available on satisfactory terms, or is not available at all, we may

be required to delay, scale back or eliminate the development of business opportunities and our operations and financial condition may

be materially adversely affected.

We can provide no assurances that any additional sources of financing will be available to us on favorable

terms, if at all.

Future capital raises may dilute our existing stockholders’ ownership and/or have other adverse effects on our

● our revenue growth rate and

ability to generate cash flows from operating activities;

● our sales and marketing and

research and development activities;

● changes in regulatory oversight

applicable to our products and services.

Other than our debt facility with our

chairman, we have no arrangements or credit facilities in place as a source of funds, and there can be no assurance that we will be

able to raise sufficient additional capital on acceptable terms, or at all, and if we are not successful in raising additional

capital, we may not be able to continue as a going concern.

We may seek additional capital through a combination of private and

public equity offerings, debt financings and strategic collaborations.

Debt financing, if obtained, may involve agreements that

include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, that could

increase our expenses and require that our assets secure such debt.

Equity financing, if obtained, could result in dilution to our

then existing stockholders and/or require such stockholders to waive certain rights and preferences.

If such financing is not

available on satisfactory terms, or is not available at all, we may be required to delay, scale back or eliminate the development of

business opportunities and our operations and financial condition may be materially adversely affected.

We can provide no assurances

that any additional sources of financing will be available to us on favorable terms, if at all.

Future capital raises may dilute our

existing stockholders’ ownership and/or have other adverse effects on our operations.

If we raise additional capital by issuing equity

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and servicing these debt obligations will require a significant amount of capital, and our business may not be able to pay our substantial

As of December 31, 2023, we had approximately

$9.1 million of outstanding indebtedness.

In order to service this indebtedness and any additional indebtedness we may incur in the future,

we will need to generate cash from our operating activities.

Our ability to generate cash is subject, in part, to our ability to successfully

execute our business strategy, as well as general economic, financial, competitive, regulatory and other factors beyond our control.

we are unable to generate sufficient cash to repay our debt obligations when they become due and payable, either when they mature, or

in the event of a default, we may not be able to obtain additional debt or equity financing on favorable terms, if at all, which may negatively

impact our business operations and financial condition.

As of December 31, 2024, we had approximately $8.4 million of outstanding

indebtedness.

In order to service this indebtedness and any additional indebtedness we may incur in the future, we will need to generate

cash from our operating activities.

Our ability to generate cash is subject, in part, to our ability to successfully execute our business

strategy, as well as general economic, financial, competitive, regulatory and other factors beyond our control.

If we are unable to generate

sufficient cash to repay our debt obligations when they become due and payable, either when they mature, or in the event of a default,

we may not be able to obtain additional debt or equity financing on favorable terms, if at all, which may negatively impact our business

operations and financial condition.

If we breach any of the undertakings or default

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indebtedness were to be accelerated, there can be no assurance that our assets would be sufficient to repay in full that indebtedness.

Our business and

operations may be further impacted by epidemics, outbreaks and other public health events.

Epidemics, outbreaks

or other public health events that are outside of our control could significantly disrupt our operations and adversely affect our financial

The global or national outbreak of an illness or other communicable disease, or any other public health crisis, such as COVID-19,

may cause disruptions to our business and operations, which may include (i) shortages of employees, (ii) unavailability of contractors

or subcontractors, (iii) interruption of supplies from third parties upon which we rely, (iv) recommendations of, or restrictions imposed

by government and health authorities, including quarantines, to address an outbreak and (v) restrictions that we and our contractors,

subcontractors and our customers impose, including facility shutdowns, to ensure the safety of employees.

Our business and operations may be further

impacted by epidemics, outbreaks and other public health events.

Epidemics, outbreaks or other public health events

that are outside of our control could significantly disrupt our operations and adversely affect our financial condition.

The global or

national outbreak of an illness or other communicable disease, or any other public health crisis, such as COVID-19, may cause disruptions

to our business and operations, which may include (i) shortages of employees, (ii) unavailability of contractors or subcontractors, (iii)

interruption of supplies from third parties upon which we rely, (iv) recommendations of, or restrictions imposed by government and health

authorities, including quarantines, to address an outbreak and (v) restrictions that we and our contractors, subcontractors and our customers

impose, including facility shutdowns, to ensure the safety of employees.

We depend upon key personnel and need additional

Our success depends on the continuing services

of Wenzhao Lu, our Chairman of the Board, and David Jin, Meng Li and Luisa Ingargiola, our executive officers.

The loss of Mr.

Our success depends on the continuing

services of Wenzhao Lu, our Chairman of the Board, and David Jin, Meng Li and Luisa Ingargiola, our executive officers.

Ingargiola could have a material and adverse effect on our business operations.

Additionally, the success of our operations

will largely depend upon our ability to successfully attract and maintain competent and qualified key management personnel.

company with limited resources, there can be no guaranty that we will be able to attract such individuals or that the presence of such

individuals will necessarily translate into profitability for us.

Our inability to attract and retain key personnel may materially and

adversely affect our business operations.

The supply of qualified technical, professional, managerial and other personnel, including lab

medical directors and lab operations managers, is currently constrained;

competition for qualified employees, even across different industries,

is intense, including as individuals leave the job market.

We may lose, or fail to attract and retain, key management personnel, or qualified

skilled technical, professional or other employees.

The same is true for patient-facing staff with specialized training required to perform

activities related to specimen collection.

In the future, if competition for the services of these professionals increases, we may not

be able to continue to attract and retain individuals in its markets.

Changes in key management, or the ability to attract and retain

qualified personnel, as a result of increased competition for talent, wage growth, or other market factors, could lead to strategic and

operational challenges and uncertainties, distractions of management from other key initiatives, and inefficiencies and increased costs,

any of which could adversely affect our business, financial condition, results of operations, and cash flows.

Joint ventures, joint ownership arrangements and other projects

pose unique challenges and we may not be able to fully implement or realize synergies, expected returns or other anticipated benefits associated

with such projects.

Additionally, the

success of our operations will largely depend upon our ability to successfully attract and maintain competent and qualified key

management personnel.

As with any company with limited resources, there can be no guaranty that we will be able to attract such

individuals or that the presence of such individuals will necessarily translate into profitability for us.

Our inability to attract

and retain key personnel may materially and adversely affect our business operations.

The supply of qualified technical,

professional, managerial and other personnel, including lab medical directors and lab operations managers, is currently constrained;

competition for qualified employees, even across different industries, is intense, including as individuals leave the job market.

may lose, or fail to attract and retain, key management personnel, or qualified skilled technical, professional or other employees.

The same is true for patient-facing staff with specialized training required to perform activities related to specimen collection.

In the future, if competition for the services of these professionals increases, we may not be able to continue to attract and

retain individuals in its markets.

Changes in key management, or the ability to attract and retain qualified personnel, as a result

of increased competition for talent, wage growth, or other market factors, could lead to strategic and operational challenges and

uncertainties, distractions of management from other key initiatives, and inefficiencies and increased costs, any of which could

adversely affect our business, financial condition, results of operations, and cash flows.

Joint ventures, joint ownership arrangements

and other projects pose unique challenges and we may not be able to fully implement or realize synergies, expected returns or other anticipated

benefits associated with such projects.

We are, and may be in the future, involved in

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or we may disagree on governance matters with respect to the joint venture entity or the jointly owned assets.

when we enter into joint ventures or joint ownership arrangements, we may be subject to a number of risks.

In some joint ventures and

joint ownership arrangements we may not be responsible for the operation of projects and will rely on our joint venture or

joint owner counterparties for such services.

Joint ventures and joint ownership arrangements may also require us to expend additional

internal resources that could otherwise be directed to other projects.

If we are unable to successfully execute and manage our existing

and any proposed joint venture and joint owner arrangements, it could adversely impact our financial and operating results.

As a result, when we enter

into joint ventures or joint ownership arrangements, we may be subject to a number of risks.

In some joint ventures and joint ownership

arrangements we may not be responsible for the operation of projects and will rely on our joint venture or joint owner counterparties

for such services.

Joint ventures and joint ownership arrangements may also require us to expend additional internal resources that could

otherwise be directed to other projects.

If we are unable to successfully execute and manage our existing and any proposed joint venture

and joint owner arrangements, it could adversely impact our financial and operating results.

We may be undertaking, or participating with various

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that are beyond our control, including the following:

● We may be unable to realize our forecasted commercial, operational or administrative synergies in

connection with our joint venture and joint ownership arrangements, including the Laboratory Services MSO Acquisition;

● Joint ventures and other joint ownership arrangements may demand substantial internal resources and may

divert resources and attention from other areas of our business.

As a result of these uncertainties, the anticipated benefits associated

with our joint ventures and joint ownership arrangements may not be achieved or could be delayed.

In turn, this could negatively impact

our cash flow and our ability to make or increase cash distributions to our partners.

We may be unable to realize our forecasted commercial, operational or administrative synergies in connection with our joint venture and joint ownership arrangements;

● Joint ventures and other joint

ownership arrangements may demand substantial internal resources and may divert resources and attention from other areas of our business.

As a result of these uncertainties, the anticipated

benefits associated with our joint ventures and joint ownership arrangements may not be achieved or could be delayed.

In turn, this could

negatively impact our cash flow and our ability to make or increase cash distributions to our partners.

We must effectively manage the growth of our

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sustain our growth would have a material adverse effect on our business, financial condition, and results of operations.

Our revenue and results of operations may

suffer if we are unable to attract new tenants.

We presently derive our revenue from rental revenue from our income-producing

real estate property in New Jersey.

Our revenue and results of operations may suffer

if we are unable to attract new tenants.

We presently derive our revenue from rental revenue

from our income-producing real estate property in New Jersey.

Our growth therefore depends on our ability to attract new tenants.

This depends on our ability to

understand and anticipate market and pricing trends and our tenants’ needs.

Our failure to attract new tenants could materially

and adversely affect our operating results.

Our prospects will suffer if we are not able

to hire, train, motivate, manage, and retain a significant number of highly skilled employees.

We only recently commenced business and we presently

generate medical related consulting services from related parties and generate rental revenue from our income-producing real estate property

in New Jersey.

On the consulting side, Wenzhao Lu, our Chairman and significant shareholder, is the Chairman of each of the clients in

which we have provided consulting services.

Our future success depends upon our ability to hire, train, motivate, manage, and retain a

significant number of highly skilled employees, particularly research analysts, technical experts, and sales and marketing staff.

experience competition for professional personnel in each of our business lines.

Hiring, training, motivating, managing, and retaining

employees with the skills we need is time consuming and expensive.

Any failure by us to address our staffing needs in an effective manner

could hinder our ability to continue to provide high-quality products and services and to grow our business.

depends on our ability to understand and anticipate market and pricing trends and our tenants’ needs.

Our failure to attract new

tenants could materially and adversely affect our operating results.

Potential liability claims may adversely affect

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In the future, we could have additional impairment charges related to investments that we may make.

Our strategic transactions involve risks, and

we may not realize the expected benefits because of numerous uncertainties and risks.

We regularly consider and may enter into strategic

transactions, including mergers, acquisitions, joint ventures, investments and other growth, market and geographic expansion strategies,

with the expectation that these transactions will result in increases in sales, cost savings, synergies, and other various benefits.

ability to deliver the expected benefits from any strategic transaction is subject to numerous uncertainties and risks, including our

ability to integrate personnel, labor models, financial, IT and other systems successfully;

disruption of our ongoing business and distraction

of management;

hiring additional management and other critical personnel;

and increasing the scope, geographic diversity, and complexity

of our operations.

Effective internal controls are necessary to provide reliable and accurate financial reports, and the integration of

businesses may create complexity in our financial systems and internal controls and make them more difficult to manage.

Integration of

businesses into our internal control system could cause us to fail to meet our financial reporting obligations.

Additionally, we may recognize

material impairments in the future, including in connection with assets we have acquired or divested in a strategic transaction or charges

to earnings associated with any strategic transaction, which may materially reduce our earnings.

Our shareholders may react unfavorably

to our strategic transactions and strategic transactions may also be subject to regulatory uncertainty due to the changing enforcement

We may not realize the anticipated benefits from such transactions, we may be exposed to additional liabilities of any acquired

business or joint venture, and we may be exposed to litigation in connection with the strategic transaction.

Further, we may finance these

strategic transactions by incurring additional debt, which could increase leverage or impact our ability to access capital in the future.

We face intense competition which could cause us to lose market

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Massachusetts Institute of Technology (“MIT”) for development of chimeric antigen receptor (CAR) technology.

MIT has granted

us options to non-exclusively or exclusively license MIT inventions arising under this research agreement.

We may need to negotiate commercially

reasonable terms and conditions with MIT to advance our research and development activities or allow the commercialization of CAR technology

or any other product candidates we may identify and pursue.

Although we have

halted all research and development, MIT has granted us options to non-exclusively or exclusively license MIT inventions arising under

this research agreement and we continue to maintain our joint patent applications.

Moreover, Disputes may arise regarding intellectual

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reduce the scope of, or invalidate, our patent rights, which could adversely affect our competitive position.

The USPTO has developed new and untested regulations

and procedures to govern the full implementation of the Leahy-Smith Act, and many of the substantive changes to patent law associated

with the Leahy-Smith Act, and in particular, the “first-to-file” provisions, only became effective in March 2013.

The Leahy-Smith

Act has also introduced procedures that may make it easier for third parties to challenge issued patents, as well as to intervene in the

prosecution of patent applications.

Finally, the Leahy-Smith Act contains new statutory provisions that still require the USPTO to issue

new regulations for their implementation, and it may take the courts years to interpret the provisions of the new statute.

it is not clear what, if any, impact the Leahy-Smith Act will have on the operation of our business.

The Leahy-Smith Act and its implementation

could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our

issued patents.

The USPTO has developed new and untested

regulations and procedures to govern the full implementation of the Leahy-Smith Act, and many of the substantive changes to patent

law associated with the Leahy-Smith Act, and in particular, the “first-to-file” provisions, only became effective in

The Leahy-Smith Act has also introduced procedures that may make it easier for third parties to challenge issued

patents, as well as to intervene in the prosecution of patent applications.

Finally, the Leahy-Smith Act contains new statutory

provisions that still require the USPTO to issue new regulations for their implementation, and it may take the courts years to

interpret the provisions of the new statute.

Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have on the

operation of our business.

The Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the

prosecution of our patent applications and the enforcement or defense of our issued patents.

We may not be able to protect our intellectual

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Periodic maintenance fees, renewal fees, annuity

fees and various other governmental fees on patents and/or applications will be due to be paid to the USPTO and various governmental patent

agencies outside of the United States in several stages over the lifetime of the patents and/or applications.

The USPTO and various non-U.S.

governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during

the patent application process.

There are situations in which non-compliance can result in abandonment or lapse of the patent or patent

application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.

In such an event, our competitors might

be able to enter the market and this circumstance would have a material adverse effect on our business.

fees and various other governmental fees on patents and/or applications will be due to be paid to the USPTO and various governmental

patent agencies outside of the United States in several stages over the lifetime of the patents and/or applications.

The USPTO and various

governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions

during the patent application process.

There are situations in which non-compliance can result in abandonment or lapse of the patent

or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.

In such an event, our competitors

might be able to enter the market and this circumstance would have a material adverse effect on our business.

It is difficult and costly to protect our proprietary

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inventorship of patents and other intellectual property.

We or our licensors may be subject to claims that

former employees, collaborators or other third parties have an interest as an inventor or co-inventor in intellectual property we own

For example, we or our licensors may have inventorship disputes arise from conflicting obligations of employees, consultants

or others who are involved in developing our product candidates.

We may be subject to claims by third parties asserting that our licensors,

employees or we have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property.

Litigation may be necessary to defend against these and other claims challenging inventorship or our or our licensors’ ownership

of our owned or in-licensed patents, trade secrets or other intellectual property.

If we or our licensors fail in defending any such claims,

in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to

use, intellectual property that is important to our product candidates.

Even if we are successful in defending against such claims, litigation

could result in substantial costs and be a distraction to management and other employees.

Any of the foregoing could have a material adverse

effect on our business, financial condition, results of operations and prospects.

We or our licensors may be subject to claims

that former employees, collaborators or other third parties have an interest as an inventor or co-inventor in intellectual property

we own or license.

For example, we or our licensors may have inventorship disputes arise from conflicting obligations of employees,

consultants or others who are involved in developing our product candidates.

We may be subject to claims by third parties asserting

that our licensors, employees or we have misappropriated their intellectual property, or claiming ownership of what we regard as our

own intellectual property.

Litigation may be necessary to defend against these and other claims challenging inventorship or our or

our licensors’ ownership of our owned or in-licensed patents, trade secrets or other intellectual property.

licensors fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property

rights, such as exclusive ownership of, or right to use, intellectual property that is important to our product candidates.

we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management

and other employees.

Any of the foregoing could have a material adverse effect on our business, financial condition, results of

operations and prospects.

If any of our trade secrets, know-how or other

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more difficult to defend the validity of claims in already issued patents.

Furthermore, a third party may claim that we or

our manufacturing or commercialization partners are using inventions covered by the third party’s patent rights and may go to court

to stop us from engaging in our normal operations and activities, including making or selling our product candidates.

These lawsuits are

costly and could affect our results of operations and divert the attention of managerial and technical personnel.

There is a risk that

a court could decide that we or our commercialization partners are infringing the third party’s patents and order us or our partners

to stop the activities covered by the patents.

In addition, there is a risk that a court could order us or our partners to pay the other

party damages for having violated the other party’s patents.

The biotechnology industry has produced a proliferation of patents,

and it is not always clear to industry participants, including us, which patents cover various types of products, manufacturing processes

or methods of use.

The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform.

we are sued for patent infringement, we would need to demonstrate that our products, manufacturing processes or methods of use either

do not infringe the patent claims of the relevant patent and/or that the patent claims are invalid, and we may not be able to do this.

Proving invalidity, in particular, is difficult since it requires a showing of clear and convincing evidence to overcome the presumption

of validity enjoyed by issued patents.

Furthermore, a third party may claim that we

or our manufacturing or commercialization partners are using inventions covered by the third party’s patent rights and may go

to court to stop us from engaging in our normal operations and activities, including making or selling our product candidates.

lawsuits are costly and could affect our results of operations and divert the attention of managerial and technical personnel.

is a risk that a court could decide that we or our commercialization partners are infringing the third party’s patents and

order us or our partners to stop the activities covered by the patents.

In addition, there is a risk that a court could order us or

our partners to pay the other party damages for having violated the other party’s patents.

The biotechnology industry has

produced a proliferation of patents, and it is not always clear to industry participants, including us, which patents cover various

types of products, manufacturing processes or methods of use.

The coverage of patents is subject to interpretation by the courts,

and the interpretation is not always uniform.

If we are sued for patent infringement, we would need to demonstrate that our

products, manufacturing processes or methods of use either do not infringe the patent claims of the relevant patent and/or that the

patent claims are invalid, and we may not be able to do this.

Proving invalidity, in particular, is difficult since it requires a

showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents.

As some patent applications in the United States

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liability FCPA violations committed by companies in which we invest or that we acquire.

Risk Factors Related to our Lab Services MSO

Continued changes in healthcare reimbursement

models and products (e.g., health insurance exchanges), changes in government payment and reimbursement systems, or changes in payer mix,

including an increase in third-party benefits management and value-based payment models, could have a material adverse effect on our revenues,

profitability and cash flow.

Diagnostic testing services are billed to managed

care organizations (MCOs), Medicare, Medicaid, physicians and physician groups, hospitals, patients and employer groups.

services are billed to a party other than the physician or other authorized person who ordered the test.

Increases in the percentage of

services billed to government and MCOs could have an adverse effect on our revenues.

Although we currently do not provide any “in

network” laboratory services, our plan is to begin providing such services in the near future.

These organizations have different contracting

philosophies, which are influenced by the design of their products.

Some MCOs contract with a limited number of clinical laboratories

and engage in direct negotiation of rates.

Other MCOs adopt broader networks with generally uniform fee structures for participating clinical

laboratories.

In some cases, those fee structures are specific to independent clinical laboratories, while the fees paid to hospital-based

and physician-office laboratories may be different, and are typically higher.

MCOs may also offer Managed Medicare or Managed Medicaid

In addition, an increasing number of MCOs are implementing, directly or through third parties, various types of laboratory benefit

management programs that may include laboratory networks, utilization management tools (such as prior authorization and/or prior notification),

and claims edits, which may impact coverage or reimbursement for commercial laboratory tests.

Some of these programs address commercial

laboratory testing broadly, while others are focused on certain types of testing such as molecular, genetic and toxicology testing.

increase in the use of such programs could lead to increased denial of claims, extended appeals, and reduced revenue.

Our ability to attract and retain MCOs is critical

given the impact of healthcare reform, related products and expanded coverage (e.g.

health insurance exchanges and Medicaid expansion)

and evolving value-based care and risk-based reimbursement delivery models (e.g., accountable care organizations (ACOs) and Independent

Physician Associations (IPAs)).

A portion of the managed care fee-for-service

revenues is collectible from patients in the form of deductibles, coinsurance and copayments.

As patient cost-sharing has been increasing,

our collections may be adversely impacted.

In addition, Medicare and Medicaid and private

insurers have increased their efforts to control the cost, utilization and delivery of healthcare services, including commercial laboratory

Measures to regulate healthcare delivery in general, and clinical laboratories in particular, have resulted in reduced prices,

added costs and decreased test utilization for the commercial laboratory industry by increasing complexity and adding new regulatory and

administrative requirements.

Pursuant to legislation passed in late 2003, the percentage of Medicare beneficiaries enrolled in Managed

Medicare plans has increased.

The percentage of Medicaid beneficiaries enrolled in Managed Medicaid plans has also increased;

changes to, or repeal of, the Patient Protection and Affordable Care Act (ACA) may continue to affect coverage, reimbursement, and utilization

of laboratory services, as well as administrative requirements, in ways that are currently unpredictable.

Further healthcare reform could

adversely affect laboratory reimbursement from Medicare, Medicaid or commercial carriers.

We expect the efforts to impose reduced reimbursement,

more stringent payment policies, and utilization and cost controls by government and other payers to continue.

If our laboratory services

business cannot offset additional reductions in the payments it receives for its services by reducing costs, increasing test volume, and/or

introducing new services and procedures, it could have a material adverse effect on our revenues, profitability and cash flows.

Congress passed the Protecting Access to Medicare Act (PAMA), requiring Medicare to change the way payment rates are calculated for tests

paid under the Clinical Laboratory Fee Schedule (CLFS), and to base the payment on the weighted median of rates paid by private payers.

On June 23, 2016, CMS issued a final rule to implement PAMA that required applicable laboratories, including our laboratory services business,

to begin reporting their test-specific private payer payment amounts to CMS during the first quarter of 2017.

CMS exercised enforcement

discretion to permit reporting for an additional 60 days, through May 30, 2017.

CMS used that private market data to calculate weighted

median prices for each test (based on applicable current procedural technology (CPT) codes) to represent the new CLFS rates beginning

in 2018, subject to certain phase-in limits.

For 2018-2020, a test price could not be reduced by more than 10% per year.

As a result of

provisions included within the CARES Act, PAMA rate reductions for 2021 were suspended.

As a result of the Protecting Medicare and American

Farmers from Sequester Cuts Act that became law in December 2021, the data reporting requirements and Medicare reimbursement cuts that

would have occurred under PAMA in 2022 were delayed by one additional year.

As a result of the Consolidated Appropriations Act, 2023,

which became law in December 2022, the data reporting requirements and Medicare reimbursement cuts that would have occurred under PAMA

in 2023 were delayed by one additional year.

For 2024-2026, a test price cannot be reduced

by more than 15.0% per year.

The process of data reporting and repricing will be repeated every three years for Clinical Diagnostic Laboratory

Tests (CDLTs) beginning in 2024.

CFLS rates for 2027 and subsequent periods will not be subject to phase-in limits.

The phase-in of rates

for CDLTs established in 2018 will resume in 2024.

New CLFS rates will be established in 2025 based on data from 2019 to be reported in

New CLFS rates will be established in 2028 based on data from 2026 to be reported in 2027 CLFS rates for Advanced Diagnostic Laboratory

Tests (ADLTs) will be updated annually.

CMS published its initial proposed CLFS rates

under PAMA for 2018-2020 on September 22, 2017.

Following a public comment period, CMS made adjustments and published final CLFS rates

for 2018-2020 on November 17, 2017, with additional adjustments published on December 1, 2017.

2021, 2022 and 2023 PAMA rates were frozen

as described above.

Healthcare reform legislation also contains numerous

regulations that will require us, as an employer, to implement significant process and record-keeping changes to be in compliance.

changes increase the cost of providing healthcare coverage to employees and their families.

Given the limited release of regulations to

guide compliance, as well as potential changes to the ACA, the exact impact to employers, including us, is uncertain.

Government payers, such as Medicare and Medicaid,

have taken steps to reduce the utilization and reimbursement of healthcare services, including clinical testing services.

Although we currently do not provide any laboratory

services that are billed through Medicare or Medicaid, we plan to do so in the near future.

At that time, we will face efforts by government

payers to reduce utilization of and reimbursement for diagnostic information services.

One example of this is increased use of prior authorization

requirements.

We expect efforts to reduce reimbursements, to impose more stringent cost controls and to reduce utilization of clinical

test services will continue.

Pursuant to PAMA, reimbursement rates for many

clinical laboratory tests provided under Medicare were reduced from 2018 - 2020.

PAMA calls for further revision of the Medicare CLFS

for years after 2020, based on future surveys of market rates;

reimbursement rate reduction from 2024-26 is capped by PAMA at 15% annually.

PAMA’s next data collection and reporting period have been delayed, most recently by federal legislation adopted in December 2022,

which further delayed the reimbursement rate reductions and reporting requirements until January 1, 2024.

In addition, CMS has adopted policies limiting

or excluding coverage for clinical tests that we perform.

We also expect in the future to provide physician services that are reimbursed

by Medicare under a physician fee schedule, which is subject to adjustment on an annual basis.

Medicaid reimbursement varies by state

and is subject to administrative and billing requirements and budget pressures.

In addition, over the last several years, the

federal government has expanded its contracts with private health insurance plans for Medicare beneficiaries, called “Medicare Advantage”

programs, and has encouraged such beneficiaries to switch from the traditional programs to the private programs.

There has been growth

of health insurance plans offering Medicare Advantage programs, and of beneficiary enrollment in these programs.

States have mandated

that Medicaid beneficiaries enroll in private managed care arrangements.

In addition, state budget pressures have encouraged states to

consider several courses of action that may impact our business, such as delaying payments, reducing reimbursement, restricting coverage

eligibility, denying claims and service coverage restrictions.

Further, CMS has set goals for value-based reimbursement to be achieved

Reimbursement for Medicare services also is subject

to annual reduction under the Budget Control Act of 2011, and the Statutory Pay-As-You-Go Act of 2010.

From time to time, the federal government has

considered whether competitive bidding could be used to provide clinical testing services for Medicare beneficiaries while maintaining

quality and access to care.

Congress periodically considers cost-saving initiatives.

These initiatives have included coinsurance for clinical

testing services, co-payments for clinical testing and further laboratory physician fee schedule reductions.

Other steps taken to reduce utilization and reimbursement

include requirements to obtain diagnosis codes to obtain payment, increased documentation requirements, limiting the allowable number

of tests or ordering frequency, expanded prior authorization programs and otherwise increasing payment denials.

Steps to reduce utilization and reimbursement

also discourage innovation and access to innovative solutions that we may offer.

Health plans and other third parties have taken

steps to reduce the utilization and reimbursement of health services, including clinical testing services.

We face efforts by non-governmental third-party

payers, including health plans, to reduce utilization of and reimbursement for clinical testing services.

Examples include increased use

of prior authorization requirements and increased denial of coverage for services.

There is increased market activity regarding alternative

payment models, including bundled payment models.

We expect continuing efforts by third-party payers, including in their rules, practices

and policies, to reduce reimbursements, to impose more stringent cost controls and to reduce utilization of clinical testing services.

ACOs and Independent Delivery Networks (IDNs), including hospitals and hospital health systems, also may undertake efforts to reduce utilization

of, or reimbursement for, diagnostic information services.

The healthcare industry has experienced a trend

of consolidation among health insurance plans, resulting in fewer but larger insurance plans with significant bargaining power to negotiate

fee arrangements with clinical testing providers.

The increased consolidation among health plans also has increased pricing transparency,

insurer bargaining power and the potential adverse impact of ceasing to be a contracted provider with an insurer.

Health plans, and independent

physician associations, may demand that clinical testing providers accept discounted fee structures or assume all or a portion of the

financial risk associated with providing testing services to their members through capitated payment arrangements.

Some health plans also

are reviewing test coding, evaluating coverage decisions and requiring preauthorization of certain testing.

There are also an increasing

number of patients enrolling in consumer driven products and high deductible plans that involve greater patient cost-sharing.

Other steps taken to reduce utilization and reimbursement

include requirements to obtain diagnosis codes to obtain payment, increased documentation requirements, limiting the allowable number

of tests or ordering frequency, expanded prior authorization programs and otherwise increasing payment denials.

Steps to reduce utilization and reimbursement

also discourage innovation and access to innovative solutions that we may offer.

The Laboratory Services MSO Acquisition will

result in organizational changes that could create significant growth for our business.

If we fail to effectively manage this growth and

adapt our business structure in a manner that preserves our reputation, then our business, financial condition and results of operations

could be harmed.

On February 9, 2023, we acquired 40% of all the

issued and outstanding equity interests of Lab Services MSO.

The Laboratory Services MSO Acquisition has resulted in significant growth

in our operations.

We have incurred and will continue to incur significant expenditures and the allocation of management time to assimilate

Lab Services MSO in a manner that preserves the key aspects of our business, but there can be no assurance that we will be successful

in our efforts.

If we do not effectively integrate Lab Services MSO, the effectiveness of our business growth could suffer, and our reputation

could be harmed, each of which could adversely impact our business, financial condition and results of operations.

The success of our business will depend, in part,

on our ability to realize our anticipated benefits and opportunities from the acquisition.

We can provide no assurance that the anticipated

benefits of the Laboratory Services MSO Acquisition will be fully realized in the time frame anticipated or at all.

The failure to meet

the challenges involved in integrating the two businesses could cause an interruption of business activities, an increase in operating

costs or lower anticipated financial performance.

Our failure to achieve the anticipated and the potential benefits underlying our reasons

for the Laboratory Services MSO Acquisition could have a material adverse impact on our business, financial condition and results of operations.

The clinical testing business is highly competitive,

and if we fail to provide an appropriately priced level of service or otherwise fail to compete effectively it could have a material adverse

effect on our revenues and profitability.

The laboratory testing industry is fragmented

and highly competitive.

We primarily compete with three types of clinical testing providers:

commercial clinical laboratories IDN-affiliated

laboratories and physician-office laboratories.

Our largest commercial clinical laboratory competitors are Quest Diagnostic Laboratories

and Laboratory Corporation of America.

In addition, we compete with many smaller regional and local commercial clinical laboratories,

specialized advanced laboratories and providers of consumer-initiated testing.

There also has been a trend among physician practices to

establish their own histology laboratory capabilities and/or bring pathologists into their practices, thereby reducing referrals from

these practices and increasing the competitive position of these practices.

The commercial laboratory business is intensely

competitive both in terms of price and service.

Pricing of laboratory testing services is often one of the most significant factors used

by physicians, third-party payers and consumers in selecting a laboratory.

As a result of significant consolidation in the commercial

laboratory industry, larger commercial laboratory providers are able to increase cost efficiencies afforded by large-scale automated testing.

This consolidation results in greater price competition.

Our laboratory services business may be unable to increase cost efficiencies

sufficiently, if at all, and as a result, its net earnings and cash flows could be negatively impacted by such price competition.

face increased competition from health system laboratories, due to physicians within those systems directing their testing to the health

system laboratory and away from us, and as those laboratories seek to expand their testing volume from unaffiliated physicians in their

service areas.

We may also face competition from companies that do not comply with existing laws or regulations or otherwise disregard

compliance standards in the industry.

Additionally, we may also face changes in fee schedules, competitive bidding for laboratory services,

or other actions or pressures reducing payment schedules as a result of increased or additional competition.

These competitive pressures

may affect the attractiveness or profitability of our laboratory services business, and could adversely affect our financial results.

The diagnostic information services industry also

is faced with changing technology and new product introductions.

Competitors may compete using advanced technology, including technology

that enables more convenient or cost-effective testing.

Digital pathology, still in an emerging state, is an example of this.

also may compete on the basis of new service offerings.

Competitors also may offer testing to be performed outside of a commercial clinical

laboratory, such as (1) point-of-care testing that can be performed by physicians in their offices;

(2) advanced testing that can be performed

by IDNs in their own laboratories;

and (3) home testing that can be carried out without requiring the services of outside providers.

Failure to obtain and retain new customers,

the loss of existing customers or material contracts, or a reduction in services or tests ordered or specimens submitted by existing customers,

or the inability to retain existing and/or create new relationships with health systems could impact our ability to successfully grow

our business.

To maintain and grow its business, we need to

obtain and retain new customers and business partners.

In addition, a reduction in tests ordered or specimens submitted by existing customers,

a decrease in demand for our services from existing customers, or the loss of existing contracts, without offsetting growth in its customer

base, could impact our ability to successfully grow its business and could have a material adverse effect on our revenues and profitability.

We compete primarily on the basis of the quality of services, reporting and information systems, reputation in the medical community,

the pricing of services and ability to employ qualified personnel.

Our failure to successfully compete on any of these factors could result

in the loss of existing customers, an inability to gain new customers and a reduction in our business.

Discontinuation or recalls of existing testing

failure to develop or acquire licenses for new or improved testing technologies;

or our customers using new technologies to

perform their own tests could adversely affect our business.

From time to time, manufacturers discontinue or

recall reagents, test kits or instruments used by us to perform laboratory testing.

Such discontinuations or recalls could adversely affect

our costs, testing volume and revenue.

The commercial laboratory industry is subject

to changing technology and new product introductions.

If we are unable to license new or improved technologies to expand its esoteric

testing operations, its testing methods may become outdated when compared with our competition, and testing volume and revenue may be

materially and adversely affected.

In addition, advances in technology may lead to

the development of more cost-effective technologies such as point-of-care testing equipment that can be operated by physicians or other

healthcare providers (including physician assistants, nurse practitioners and certified nurse midwives, generally referred to herein as

physicians) in their offices or by patients themselves without requiring the services of freestanding clinical laboratories.

of such technology and its use by our customers could reduce the demand for its laboratory testing services and the utilization of certain

tests offered by us and negatively impact its revenues.

Currently, most commercial laboratory testing

is categorized as high or moderate complexity, and thereby is subject to extensive and costly regulation under the Clinical Laboratory

Improvement Act (CLIA).

The cost of compliance with CLIA makes it impractical for most physicians to operate clinical laboratories in

their offices, and other laws limit the ability of physicians to have ownership in a laboratory and to refer tests to such a laboratory.

Manufacturers of laboratory equipment and test kits could seek to increase their sales by marketing point-of-care laboratory equipment

to physicians and by selling test kits approved for home or physician office use to both physicians and patients.

Diagnostic tests approved

for home use are automatically deemed to be “waived” tests under CLIA and may be performed in physician office laboratories

as well as by patients in their homes with minimal regulatory oversight.

Other tests meeting certain FDA criteria also may be classified

as “waived” for CLIA purposes.

The FDA has regulatory responsibility over instruments, test kits, reagents and other devices

used by clinical laboratories, and it has taken responsibility from the U.S.

Centers for Disease Control and Prevention for classifying

the complexity of tests for CLIA purposes.

Increased approval of “waived” test kits could lead to increased testing by physicians

in their offices or by patients at home, which could affect our market for laboratory testing services and negatively impact its revenues.

Changes or disruption in services supplies,

or transportation provided by third parties have impacted and could continue to impact or adversely affect our business.

We depend on third parties to provide supplies

and services critical to our laboratory services business.

We are heavily reliant on third-party ground and air travel for transport of

clinical trial and diagnostic testing supplies and specimens, research products, and people.

A significant disruption to these travel

systems, or our access to them, could have a material adverse effect on our business.

We are also reliant on an extensive network of third-party

suppliers and vendors of certain services and products, including for certain animal populations.

Disruptions to the continued supply,

or increases in costs, of these services, products, or animal populations may arise from export/import restrictions or embargoes, political

or economic instability, pressure from animal rights activists, adverse weather, natural disasters, public health crises, transportation

We depend on third parties to provide supplies and services critical

to our Keto Air business.

We are heavily reliant on third-party ground and air travel for transport of diagnostic testing supplies.

significant disruption to these travel systems, or our access to them, could have a material adverse effect on our business.

to the continued supply, or increases in costs, of these products.

may arise from export/import restrictions or embargoes, political or

economic instability, pressure from animal rights activists, adverse weather, natural disasters, public health crises, transportation

disruptions, cyber-attacks, or other causes, as well as from termination of relationships with suppliers or vendors for their failure

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Disruption of supply and services has impacted and could continue to impact or have

a material adverse effect on our business.

Continued and increased consolidation of pharmaceutical,

biotechnology and medical device companies, health systems, physicians and other customers could adversely affect our business.

Many healthcare companies and providers, including

pharmaceutical, biotechnology and medical device companies, health systems and physician practices are consolidating through mergers,

acquisitions, joint ventures and other types of transactions and collaborations.

In addition to these more traditional horizontal mergers

that involve entities that previously competed against each other, the healthcare industry is experiencing an increase in vertical mergers,

which involve entities that previously did not offer competing goods or services.

As the healthcare industry consolidates, competition

to provide goods and services may become more intense, and vertical mergers may give those combined companies greater control over more

aspects of healthcare, including increased bargaining power.

This competition and increased customer bargaining power may adversely affect

the price and volume of our services.

In addition, as the broader healthcare industry

trend of consolidation continues, including the acquisition of physician practices by health systems, relationships with hospital-based

health systems and integrated delivery networks are becoming more important.

Our laboratory services business’ inability to retain

its existing relationships with physicians if they become part of healthcare systems and networks and/or to create new relationships could

impact its ability to successfully grow.

Changes, including changes in interpretation,

in payer regulations, policies or approvals, or changes in laws, regulations or policies in the U.S.

or globally, may adversely affect

and state government payers, such as Medicare

and Medicaid, as well as insurers, including MCOs, have increased their efforts to control the cost, utilization and delivery of healthcare

From time to time, Congress has considered and implemented changes in Medicare fee schedules in conjunction with budgetary legislation.

The first phase of reductions pursuant to PAMA came into effect on January 1, 2018, and will continue annually subject to certain delays

in implementation and phase-in limits through 2026, and without limitations for subsequent periods.

Further reductions due to changes

in policy regarding coverage of tests or other requirements for payment, such as prior authorization, diagnosis code and other claims

edits, may be implemented from time to time.

Reimbursement for pathology services performed by us is also subject to statutory and regulatory

Reductions in the reimbursement rates and changes in payment policies of other third-party payers may occur as well.

in the past have resulted in reduced payments as well as added costs and have decreased test utilization for the commercial laboratory

industry by adding more complex new regulatory and administrative requirements.

Further changes in third-party payer regulations, policies,

or laboratory benefit or utilization management programs may have a material adverse effect on our business.

Actions by federal and state

agencies regulating insurance, including healthcare exchanges, or changes in other laws, regulations, or policies may also have a material

adverse effect upon our business.

Our business could be harmed from the loss

or suspension of a license or imposition of a fine or penalties under, or future changes in, or interpretations of, the law or regulations

of CLIA, Medicare, Medicaid or other national, state or local agencies in the U.S.

and other countries where we operate laboratories currently

and in the future.

The commercial laboratory testing industry is

subject to extensive U.S.

regulation, and many of these statutes and regulations have not been interpreted by the courts.

federal oversight to virtually all clinical laboratories operating in the U.S.

by requiring that they be certified by the federal government

or by a federally approved accreditation agency.

The sanction for failure to comply with CLIA requirements may be suspension, revocation

or limitation of a laboratory’s CLIA certificate, which is necessary to conduct business, as well as significant fines and/or criminal

In addition, we are subject to regulation under state law.

State laws may require that laboratories and/or laboratory personnel

meet certain qualifications, specify certain quality controls or require maintenance of certain records.

In the future, we may also operate

laboratories outside of the U.S.

and become subject to laws governing its laboratory operations in the other countries where it operates.

Applicable statutes and regulations could be interpreted

or applied by a prosecutorial, regulatory or judicial authority in a manner that would adversely affect our business.

Potential sanctions

for violation of these statutes and regulations include significant fines and the suspension or loss of various licenses, certificates

and authorizations, which could have a material adverse effect on our business.

In addition, compliance with future legislation could

impose additional requirements on us, which may be costly.

Failure of us or our third-party service providers

to comply with privacy and security laws and regulations could result in fines, penalties and damage to our reputation with customers

and have a material adverse effect upon our business.

If we and our third-party service providers do

not comply with existing or new laws and regulations related to protecting the privacy and security of personal or health information,

we could be subject to monetary fines, civil penalties or criminal sanctions.

In the U.S., HIPAA privacy and security regulations,

including the expanded requirements under HITECH, establish comprehensive standards with respect to the use and disclosure of protected

health information (PHI), by covered entities, in addition to setting standards to protect the confidentiality, integrity and security

HIPAA restricts our ability to use or disclose

PHI, without patient authorization, for purposes other than payment, treatment or healthcare operations (as defined by HIPAA), except

for disclosures for various public policy purposes and other permitted purposes outlined in the privacy regulations.

HIPAA and HITECH

provide for significant fines and other penalties for wrongful use or disclosure of PHI in violation of the privacy and security regulations,

including potential civil and criminal fines and penalties.

The regulations establish a complex regulatory framework on a variety of subjects,

● the circumstances under which

the use and disclosure of PHI are permitted or required without a specific authorization by the patient, including, but not limited to,

treatment purposes, activities to obtain payments for our services, and its healthcare operations activities;

● a patient’s rights to

access, amend and receive an accounting of certain disclosures of PHI;

● the content of notices of privacy

practices for PHI;

● administrative, technical and

physical safeguards required of entities that use or receive PHI;

● the protection of computing

systems maintaining electronic PHI.

We have implemented policies and procedures designed

to comply with the HIPAA privacy and security requirements as applicable.

The privacy and security regulations establish a “floor”

and do not supersede state laws that are more stringent.

Therefore, we are required to comply with both additional federal privacy and

security regulations and varying state privacy and security laws.

In addition, federal and state laws that protect the privacy and security

of patient information may be subject to enforcement and interpretations by various governmental authorities and courts, resulting in

complex compliance issues.

For example, we could incur damages under state laws, including pursuant to an action brought by a private

party for the wrongful use or disclosure of health information or other personal information.

Failure to comply with U.S., state or local

environmental, health and safety laws and regulations could result in fines, penalties and loss of licensure, and have a material adverse

effect upon us.

We are subject to licensing and regulation under

laws and regulations relating to the protection of the environment and human health and safety, including laws and regulations relating

to the handling, transportation and disposal of medical specimens, infectious and hazardous waste and radioactive materials, as well as

regulations relating to the safety and health of laboratory employees.

Failure to comply with these laws and regulations could subject

us to denial of the right to conduct business, fines, criminal penalties and/or other enforcement actions that would have a material adverse

effect on its business.

In addition, compliance with future legislation could impose additional requirements on us that may be costly.

healthcare system is evolving and

medical laboratory testing market fundamentals are changing, and our business could be adversely impacted if we fail to adapt.

healthcare system continues to evolve.

Significant change is taking place in the healthcare system.

For example, value-based reimbursement is increasing;

CMS has set goals for

value-based reimbursement to be achieved by 2030.

Patients are encouraged to take increased interest in and responsibility for, and often

are bearing increased responsibility for payment for, their healthcare.

Healthcare industry participants are evolving and consolidating.

Healthcare services increasingly are being provided by non-traditional providers ( e.g ., physician assistants), in non-traditional

venues ( e.g ., retail medical clinics, urgent care centers) and using new technologies ( e.g ., telemedicine, digital pathology).

Utilization of the healthcare system is being influenced by several factors and may result in a decline in the demand for diagnostic information

In addition, we believe that clinical testing

market fundamentals are changing.

We believe that PAMA-driven reimbursement pressure remains a catalyst for structural change in the market.

We also believe that health plans and consumers increasingly are focusing on driving better value in laboratory testing services.

that the evolution of the healthcare industry will continue, and that industry change is likely to be extensive.

Failure to establish and perform to appropriate

quality standards, or to assure that the appropriate standard of quality is observed in the performance of our diagnostic information

services, could adversely affect the results of our operations and adversely impact our reputation.

The provision of diagnostic information services

involves certain inherent risks.

The services that we provide are intended to provide information in providing patient care.

users of our services may have a greater sensitivity to errors than the users of services or products that are intended for other purposes.

Negligence in performing our services can lead

to injury or other adverse events.

We may be sued under physician liability or other liability law for acts or omissions by our pathologists,

laboratory personnel and IDN employees who are under our supervision.

We are subject to the attendant risk of substantial damages awards

in excess of our insurance coverage and risk to our reputation.

We are subject to numerous legal and regulatory

requirements governing our activities, and we may face substantial fines and penalties, and our business activities may be impacted, if

we fail to comply.

Our business is subject to or impacted by extensive

and frequently changing laws and regulations in the United States (including at both the federal and state levels) and the other jurisdictions

in which we engage in business.

While we seek to conduct our business in compliance with all applicable laws, many of the laws and regulations

applicable to us are vague or indefinite and have not been extensively interpreted by the courts, including many of those relating to:

● billing and reimbursement of

clinical testing;

● certification or licensure

of clinical laboratories;

● the anti-self-referral and

anti-kickback laws and regulations;

● the laws and regulations administered

● the corporate practice of medicine;

● operational, personnel and

quality requirements intended to ensure that clinical testing services are accurate, reliable and timely;

● physician fee splitting;

● relationships with physicians

● marketing to consumers;

● privacy of patient data and

other personal information;

● safety and health of laboratory

● handling, transportation and

disposal of medical specimens, infectious and hazardous waste and radioactive materials.

These laws and regulations may be interpreted

or applied by a prosecutorial, regulatory or judicial authority in a manner that could require us to make changes in our operations, including

our pricing and/or billing practices.

We may not be able to maintain, renew or secure required permits, licenses or any other regulatory

approvals needed to operate our business or commercialize our services.

If we fail to comply with applicable laws and regulations, or

if we fail to maintain, renew or obtain necessary permits, licenses and approvals, we could suffer civil and criminal penalties, fines,

exclusion from participation in governmental healthcare programs and the loss of various licenses, certificates and authorizations necessary

to operate our business, as well as incur additional liabilities from third-party claims.

If any of the foregoing were to occur, our reputation

could be damaged and important business relationships with third parties could be adversely affected.

We also are subject from time to time to qui tam

claims brought by former employees or other “whistleblowers.” The federal and state governments continue aggressive enforcement

efforts against perceived healthcare fraud.

Legislative provisions relating to healthcare fraud and abuse provide government enforcement

personnel substantial funding, powers, penalties and remedies to pursue suspected cases of fraud and abuse.

In addition, the government

has substantial leverage in negotiating settlements since the amount of potential damages far exceeds the rates at which we are reimbursed

for our services, and the government has the remedy of excluding a non-compliant provider from participation in the Medicare and Medicaid

Regardless of merit or eventual outcome, these types of investigations and related litigation can result in:

● diversion of management time

and attention;

● expenditure of large amounts

of cash on legal fees, costs and payment of damages;

● increases to our administrative,

billing or other operating costs;

● limitations on our ability

to continue some of our operations;

● enforcement actions, fines

and penalties or the assertion of private litigation claims and damages;

● decreases to the amount of

reimbursement related to diagnostic information services performed;

● adverse affects to important

business relationships with third parties;

● decreased demand for our services;

● injury to our reputation.

Changes in applicable laws and regulations may

result in existing practices becoming more restricted, or subject our existing or proposed services to additional costs, delay, modification

or withdrawal.

Such changes also could require us to modify our business objectives.

Failure to accurately bill for our services,

or to comply with applicable laws relating to government healthcare programs, could have a material adverse effect on our business .

Billing for diagnostic information services is

complex and subject to extensive and non-uniform rules and administrative requirements.

Depending on the billing arrangement and applicable

law, we bill various payers, such as patients, insurance companies, Medicare, Medicaid, clinicians, IDNs and employer groups.

of billing and related operations for our Company are being provided by a third party under our oversight.

Failure to accurately bill

for our services could have a material adverse effect on our business.

In addition, failure to comply with applicable laws relating to

billing government healthcare programs may result in various consequences, including:

civil and criminal fines and penalties, exclusion

from participation in governmental healthcare programs and the loss of various licenses, certificates and authorizations necessary to

operate our business, as well as incur additional liabilities from third-party claims.

Certain violations of these laws may also provide

the basis for a civil remedy under the federal False Claims Act, including fines and damages of up to three times the amount claimed.

The qui tam provisions of the federal False Claims Act and similar provisions in certain state false claims acts allow private individuals

to bring lawsuits against healthcare companies on behalf of government payers, private payers and/or patients alleging inappropriate billing

Although we believe that we are in compliance,

in all material respects, with applicable laws and regulations, there can be no assurance that a regulatory agency or tribunal would not

reach a different conclusion.

The federal or state government may bring claims based on our current practices, which we believe are lawful.

The federal and state governments have substantial leverage in negotiating settlements since the amount of potential damages and fines

far exceeds the rates at which we are reimbursed, and the government has the remedy of excluding a non-compliant provider from participation

in the Medicare and Medicaid programs.

We believe that federal and state governments continue aggressive enforcement efforts against perceived

healthcare fraud.

Legislative provisions relating to healthcare fraud and abuse provide government enforcement personnel with substantial

funding, powers, penalties and remedies to pursue suspected cases of fraud and abuse.

Inflationary pressures could adversely impact

us because of increases in the costs of materials, supplies and services, and increased labor and people-related expenses.

Inflationary pressures have resulted in increases

in the costs of the testing equipment, supplies and other goods and services that we purchase from manufacturers, suppliers and others.

Inflationary pressures, along with the competition for labor, have also resulted in a rise of our labor costs, which include the costs

of compensation, benefits, and recruiting and training new hires.

Our ability to raise the prices and fees we charge for the services

we provide is limited.

Continuation of the current inflationary environment may adversely impact us.

Risk Factors Related to Clinical and Commercialization Activity

Our business faces significant government regulation,

and there is no guarantee that our product candidates will receive regulatory approval.

Our research and development activities, pre-clinical

studies, anticipated human clinical trials, and anticipated manufacturing and marketing of our potential products are subject to extensive

regulation by the FDA and other regulatory authorities in the United States, as well as by regulatory authorities in other countries.

In the United States, our product candidates are subject to regulation as biological products or as combination biological products/medical

devices under the Federal Food, Drug and Cosmetic Act, the Public Health Service Act and other statutes, as outlined in the Code of Federal

Different regulatory requirements may apply to our products depending on how they are categorized by the FDA under these

These regulations can be subject to substantial and significant interpretation, addition, amendment or revision by the FDA and by

the legislative process.

The FDA may determine that we will need to undertake clinical trials beyond those currently planned.

the FDA may determine that results of clinical trials do not support approval for the product.

Similar determinations may be encountered

in foreign countries.

The FDA will continue to monitor products in the market after approval, if any, and may determine to withdraw its

approval or otherwise seriously affect the marketing efforts for any such product.

The same possibilities exist for trials to be conducted

outside of the United States that are subject to regulations established by local authorities and local law.

Any such determinations would

delay or deny the introduction of our product candidates to the market and have a material adverse effect on our business, financial condition,

and results of operations.

Cell based therapeutics are subject to ongoing

a material adverse effect on our business related to the sale of Keto Air.

Risk Factors Related to Commercialization Activity

Some of our medical device products in the

future may face significant government regulation, and there is no guarantee that our medical devices will receive regulatory approval.

The manufacturing and marketing of our potential

medical device products such as our breathalyzer system may be subject to extensive regulation by the FDA and other regulatory authorities

in the United States, as well as by regulatory authorities in other countries.

In the United States, our product candidates are subject

to regulation as biological products or as combination biological products/medical devices under the Federal Food, Drug and Cosmetic Act,

the Public Health Service Act and other statutes, as outlined in the Code of Federal Regulations.

Different regulatory requirements may

apply to our products depending on how they are categorized by the FDA under these laws.

These regulations can be subject to substantial

and significant interpretation, addition, amendment or revision by the FDA and by the legislative process.

The FDA may determine that

we will need to undertake clinical trials beyond those currently planned.

Furthermore, the FDA may determine that results of clinical

trials do not support approval for the product.

Similar determinations may be encountered in foreign countries.

The FDA will continue

to monitor products in the market after approval, if any, and may determine to withdraw its approval or otherwise seriously affect the

marketing efforts for any such product.

The same possibilities exist for trials to be conducted outside of the United States that are

subject to regulations established by local authorities and local law.

Any such determinations would delay or deny the introduction of

our product candidates to the market and have a material adverse effect on our business, financial condition, and results of operations.

Certain medical devices are subject to ongoing

periodic unannounced inspection by the FDA, the Drug Enforcement Agency, other federal agencies and corresponding state agencies to ensure

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control over third-party manufacturers’ compliance with these regulations and standards, nor can we guarantee that we will maintain

compliance with such regulations in regards to our own manufacturing processes.

compliance with such regulations in regard to our own manufacturing processes.

Other risks include:

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or product liability claims.

Even if our product candidates receive regulatory

Even if our medical devices receive regulatory

approval in the United States, we may never receive approval or commercialize our product candidates outside of the United States.

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uses for which the product may be marketed or require costly, post-marketing follow-up studies.

Even if our product candidates receive regulatory

Even if our medical devices receive regulatory

approval, we may still face future development and regulatory difficulties.

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for accelerated approval the pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of

Given the number of recent high-profile adverse

safety events with certain drug and cell related products, the FDA may require, as a condition of approval, costly risk management programs,

which may include safety surveillance, restricted distribution and use, patient education, enhanced labeling, special packaging or labeling,

expedited reporting of certain adverse events, pre-approval of promotional materials, and restrictions on direct-to-consumer advertising.

Furthermore, heightened Congressional scrutiny on the adequacy of the FDA’s drug approval process and the FDA’s efforts to

assure the safety of marketed cell based therapy has resulted in the proposal of new legislation addressing drug safety issues.

any new legislation could result in delays or increased costs during the period of product development, clinical trials, and regulatory

review and approval, as well as increased costs to assure compliance with any new post-approval regulatory requirements.

restrictions or requirements could force us to conduct costly studies or increase the time for us to become profitable.

For example, any

labeling approved for any of our product candidates may include a restriction on the term of its use, or it may not include one or more

of our intended indications.

Given the number of recent high-profile adverse safety events with

certain medical devices, the FDA may require, as a condition of approval, costly risk management programs, which may include safety surveillance,

restricted distribution and use, patient education, enhanced labeling, special packaging or labeling, expedited reporting of certain adverse

events, pre-approval of promotional materials, and restrictions on direct-to-consumer advertising.

Furthermore, heightened Congressional

scrutiny on the adequacy of the FDA’s drug approval process and the FDA’s efforts to assure the safety of marketed cell based

therapy has resulted in the proposal of new legislation addressing drug safety issues.

If enacted, any new legislation could result in

delays or increased costs during the period of product development, and regulatory review and approval, as well as increased

costs to assure compliance with any new post-approval regulatory requirements.

Any of these restrictions or requirements could force us

to conduct costly studies or increase the time for us to become profitable.

For example, any labeling approved for any of our product

candidates may include a restriction on the term of its use, or it may not include one or more of our intended indications.

Our product candidates will also be subject to

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issue warning letters;

● require us to enter into a

consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions,

and penalties for noncompliance;

● impose other civil or criminal

require us to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions, and penalties for noncompliance;

impose other civil or criminal penalties;

suspend regulatory approval;

● suspend any ongoing clinical

● refuse to approve pending applications

or supplements to approved applications filed by us;

● impose restrictions on operations,

including costly new manufacturing requirements;

● seize or detain products or

require a product recall.

suspend any ongoing clinical trials;

refuse to approve pending applications or supplements to approved applications filed by us;

impose restrictions on operations, including costly new manufacturing requirements;

seize or detain products or require a product recall.

If we or current or future collaborators, manufacturers,

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penalties, which could affect our ability to develop, market and sell our products and may harm our reputation.

Although we do not currently have any products

on the market, once our therapeutic candidates or clinical trials are covered by federal health care programs, we will be subject to additional

healthcare statutory and regulatory requirements and enforcement by the federal, state and foreign governments of the jurisdictions in

which we conduct our business.

Healthcare providers, physicians and third party payors play a primary role in the recommendation and prescription

of any therapeutic candidates for which we obtain marketing approval.

Our future arrangements with third party payors and customers may

expose us to broadly applicable fraud and abuse, transparency, and other healthcare laws and regulations that may constrain the business

or financial arrangements and relationships through which we market, sell and distribute our therapeutic candidates for which we obtain

Although we currently are only marketing Keto Air, once our medical

devices are covered by federal health care programs, we will be subject to additional healthcare statutory and regulatory requirements

and enforcement by the federal, state and foreign governments of the jurisdictions in which we conduct our business.

Healthcare providers,

physicians and third party payors play a primary role in the recommendation and prescription of any medical devices for which we obtain

marketing approval.

Restrictions under applicable federal and state healthcare laws and regulations include, but are not limited to, the

federal Anti-Kickback

Statute, which prohibits, among other things, persons from soliciting, receiving, offering or providing remuneration, directly or indirectly,

to induce either the referral of an individual for a healthcare item or service, or the purchasing or ordering of an item or service,

for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare or Medicaid;

● federal civil and criminal

false claims laws and civil monetary penalty laws, such as the U.S.

federal FCA, which imposes criminal and civil penalties, including

through civil whistleblower or qui tam actions, against, individuals or entities for knowingly presenting or causing to be presented,

to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal

an obligation to pay money to the federal government.

In addition, the government may assert that a claim including items and services

resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA;

● HIPAA includes a fraud and

abuse provision referred to as the HIPAA All-Payor Fraud Law, which imposes criminal and civil liability for executing a scheme to defraud

any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially

false statement in connection with the delivery of or payment for healthcare benefits, items or services.

Similar to the federal Anti-Kickback

Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed

● HIPAA, as amended by HITECH,

and its implementing regulations, which impose obligations on certain covered entity healthcare providers, health plans, and healthcare

clearinghouses as well as their business associates that perform certain services involving the use or disclosure of individually identifiable

health information, including mandatory contractual terms, with respect to safeguarding, the privacy, security, and transmission of individually

identifiable health information, and require notification to affected individuals and regulatory authorities of certain breaches of security

of individually identifiable health information;

● federal and state consumer

protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;

● the federal Physician Payment

Sunshine Act and the implementing regulations, also referred to as “Open Payments,” issued under the ACA, which require that

manufacturers of pharmaceutical and biological drugs reimbursable under Medicare, Medicaid, and Children’s Health Insurance Programs

report to the Department of Health and Human Services all consulting fees, travel reimbursements, research grants, and other payments,

transfers of value or gifts made to physicians and teaching hospitals with limited exceptions;

● analogous state laws and regulations,

such as, state anti-kickback and false claims laws potentially applicable to sales or marketing arrangements and claims involving healthcare

items or services reimbursed by nongovernmental third party payors, including private insurers;

and some state laws require pharmaceutical

companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated

by the federal government in addition to requiring drug and cell based therapy manufacturers to report information related to payments

to physicians and other healthcare providers or marketing expenditures, and state laws governing the privacy and security of health information

in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating

compliance efforts.

Our future arrangements with third party payors and customers may expose us to broadly applicable fraud and abuse,

transparency, and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through

which we market, sell and distribute our therapeutic candidates for which we obtain marketing approval.

Restrictions under applicable

federal and state healthcare laws and regulations include, but are not limited to, the following:

federal Anti-Kickback Statute, which prohibits, among other things, persons from soliciting, receiving, offering or providing remuneration, directly or indirectly, to induce either the referral of an individual for a healthcare item or service, or the purchasing or ordering of an item or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare or Medicaid;

federal civil and criminal false claims laws and civil monetary penalty laws, such as the U.S.

federal FCA, which imposes criminal and civil penalties, including through civil whistleblower or qui tam actions, against, individuals or entities for knowingly presenting or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.

In addition, the government may assert that a claim including items and services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA;

HIPAA includes a fraud and abuse provision referred to as the HIPAA All-Payor Fraud Law, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services.

Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

HIPAA, as amended by HITECH, and its implementing regulations, which impose obligations on certain covered entity healthcare providers, health plans, and healthcare clearinghouses as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding, the privacy, security, and transmission of individually identifiable health information, and require notification to affected individuals and regulatory authorities of certain breaches of security of individually identifiable health information;

federal and state consumer protection and unfair competition laws,

which broadly regulate marketplace activities and activities that potentially harm consumers;

the federal Physician Payment Sunshine Act and the implementing regulations, also referred to as “Open Payments,” issued under the ACA, which require that manufacturers of pharmaceutical and biological drugs reimbursable under Medicare, Medicaid, and Children’s Health Insurance Programs report to the Department of Health and Human Services all consulting fees, travel reimbursements, research grants, and other payments, transfers of value or gifts made to physicians and teaching hospitals with limited exceptions;

The scope and enforcement of each of these laws

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applicable laws and regulations may be costly to us in terms of money, time and resources.

Any cell based therapies we develop may become

subject to unfavorable pricing regulations, third party coverage and reimbursement practices or healthcare reform initiatives, thereby

harming our business.

The regulations that govern marketing approvals,

pricing, coverage and reimbursement for new drugs and cell based therapies vary widely from country to country.

Any medical devices we develop may become subject

to unfavorable pricing regulations, third party coverage and reimbursement practices or healthcare reform initiatives, thereby harming

our business.

The regulations that govern marketing

approvals, pricing, coverage and reimbursement for new medical devices vary widely from country to country.

Some countries require

approval of the sale price of a drug before it can be marketed.

In many countries, the pricing review period begins after marketing or

product licensing approval is granted.

In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental

control even after initial approval is granted.

Although we intend to monitor these regulations, our programs are currently in earlier

stages of development and we will not be able to assess the impact of price regulations for a number of years.

As a result, we might obtain

regulatory approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of

the product and negatively impact the revenues we are able to generate from the sale of the product in that country.

Our ability to commercialize any products successfully

also will depend in part on the extent to which coverage and reimbursement for these products and related treatments will be available

from government health administration authorities, private health insurers and other organizations.

However, there may be significant

delays in obtaining coverage for newly-approved cell based therapies.

Moreover, eligibility for coverage does not necessarily signify

that a cell based therapy will be reimbursed in all cases or at a rate that covers our costs, including research, development, manufacture,

sale and distribution costs.

Also, interim payments for new cell based therapy if applicable, may be insufficient to cover our costs and

may not be made permanent.

Thus, even if we succeed in bringing one or more products to the market, these products may not be considered

medically necessary or cost-effective, and the amount reimbursed for any products may be insufficient to allow us to sell our products

on a competitive basis.

Because our programs are in earlier stages of development, we are unable at this time to determine their cost

effectiveness, or the likely level or method of reimbursement.

In addition, obtaining coverage and reimbursement approval of a product

from a government or other third-party payor is a time-consuming and costly process that could require us to provide to each payor supporting

scientific, clinical and cost-effectiveness data for the use of our product on a payor-by-payor basis, with no assurance that coverage

and adequate reimbursement will be obtained.

A payor’s decision to provide coverage for a product does not imply that an adequate

reimbursement rate will be approved.

Further, one payor’s determination to provide coverage for a product does not assure that other

payors will also provide coverage for the product.

Adequate third-party reimbursement may not be available to enable us to maintain price

levels sufficient to realize an appropriate return on our investment in product development.

If reimbursement is not available or is available

only at limited levels, we may not be able to successfully commercialize any product candidate that we successfully develop.

approval of the sale price of a device before it can be marketed.

In many countries, the pricing review period begins after

marketing or product licensing approval is granted.

In some foreign markets, prescription pharmaceutical pricing remains subject to

continuing governmental control even after initial approval is granted.

Although we intend to monitor these regulations, our

programs are currently in earlier stages of development and we will not be able to assess the impact of price regulations for a

number of years.

As a result, we might obtain regulatory approval for a product in a particular country, but then be subject to

price regulations that delay our commercial launch of the product and negatively impact the revenues we are able to generate from

the sale of the product in that country.

Our ability to commercialize any products successfully also will depend

in part on the extent to which coverage and reimbursement for these products and related treatments will be available from government

health administration authorities, private health insurers and other organizations.

However, there may be significant delays in obtaining

coverage for newly-approved medical devices.

Moreover, eligibility for coverage does not necessarily signify that a cell based therapy

will be reimbursed in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution

Also, interim payments for new cell based therapy if applicable, may be insufficient to cover our costs and may not be made permanent.

Thus, even if we succeed in bringing one or more products to the market, these products may not be considered medically necessary

or cost-effective, and the amount reimbursed for any products may be insufficient to allow us to sell our products on a competitive basis.

Because our programs are in earlier stages of development, we are unable at this time to determine their cost effectiveness, or the likely

level or method of reimbursement.

In addition, obtaining coverage and reimbursement approval of a product from a government or other third-party

payor is a time-consuming and costly process that could require us to provide to each payor supporting scientific, clinical and cost-effectiveness

data for the use of our product on a payor-by-payor basis, with no assurance that coverage and adequate reimbursement will be obtained.

A payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved.

one payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage for the

Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate

return on our investment in product development.

If reimbursement is not available or is available only at limited levels, we may not

be able to successfully commercialize any product candidate that we successfully develop.

Increasingly, the third party payors who reimburse

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be adversely affected.

We currently expect that certain drugs we develop

may need to be administered under the supervision of a physician on an outpatient basis.

Under currently applicable U.S.

drugs that are not usually self-administered (including injectable cell based therapies) may be eligible for coverage under Medicare through

Medicare Part B.

Specifically, Medicare Part B coverage may be available for eligible beneficiaries when the following, among other requirements

have been satisfied:

● the product is reasonable and

necessary for the diagnosis or treatment of the illness or injury for which the product is administered according to accepted standards

of medical practice;

● the product is typically furnished

incident to a physician’s services;

● the indication for which the

product will be used is included or approved for inclusion in certain Medicare-designated pharmaceutical compendia (when used for an

off-label use);

● the product has been approved

Average prices for cell therapies may be reduced

by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that

presently restrict imports of drugs and cell based therapy from countries where they may be sold at lower prices than in the U.S.

Reimbursement

rates under Medicare Part B would depend in part on whether the newly approved product would be eligible for a unique billing code.

Self-administered,

outpatient drugs and cell based therapies are typically reimbursed under Medicare Part D, and cell based therapies that are administered

in an inpatient hospital setting are typically reimbursed under Medicare Part A under a bundled payment.

It is difficult for us to predict

how Medicare coverage and reimbursement policies will be applied to our products in the future and coverage and reimbursement under different

the product is reasonable and necessary for the diagnosis or treatment of the illness or injury for which the product is administered according to accepted standards of medical practice;

the product is typically furnished incident to a physician’s services;

the indication for which the product will be used is included or approved for inclusion in certain Medicare-designated pharmaceutical compendia (when used for an off-label use);

the product has been approved by the FDA.

Average prices for medical devices may be reduced by mandatory discounts

or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports

of medical devices from countries where they may be sold at lower prices than in the U.S.

Reimbursement rates under Medicare Part B would

depend in part on whether the newly approved product would be eligible for a unique billing code.

It is difficult for us to predict how

Medicare coverage and reimbursement policies will be applied to our products in the future and coverage and reimbursement under different

federal healthcare programs are not always consistent.

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Medicare program.

Third party payors often rely upon Medicare coverage

policies and payment limitations in setting their own reimbursement rates.

These coverage policies and limitations may rely, in part,

on compendia listings for approved therapeutics.

Our inability to promptly obtain relevant compendia listings, coverage, and adequate

reimbursement from both government-funded and private payors for new cell based therapies that we develop and for which we obtain regulatory

approval could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products

and our financial condition.

We expect that these and other healthcare reform

measures that may be adopted in the future, may result in more rigorous coverage criteria and lower reimbursement, and in additional downward

pressure on the price that we receive for any approved product.

Any reduction in reimbursement from Medicare or other government-funded

programs may result in a similar reduction in payments from private payors.

The implementation of cost containment measures or other healthcare

reforms may prevent us from being able to generate revenue, attain profitability or commercialize our cell based therapies, once marketing

approval is obtained.

Third party payors often rely upon Medicare coverage policies and payment

limitations in setting their own reimbursement rates.

These coverage policies and limitations may rely, in part, on compendia listings

for approved therapeutics.

Our inability to promptly obtain relevant compendia listings, coverage, and adequate reimbursement from both

government-funded and private payors for products that we develop and for which we obtain regulatory approval could have a material adverse

effect on our operating results, our ability to raise capital needed to commercialize products and our financial condition.

We expect that these and other healthcare reform measures that may

be adopted in the future, may result in more rigorous coverage criteria and lower reimbursement, and in additional downward pressure on

the price that we receive for any approved product.

Any reduction in reimbursement from Medicare or other government-funded programs may

result in a similar reduction in payments from private payors.

The implementation of cost containment measures or other healthcare reforms

may prevent us from being able to generate revenue, attain profitability or commercialize our products, once marketing approval is obtained.

We believe that the efforts of governments and

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products, of importance to our potential therapeutic candidates are the following:

● increases to pharmaceutical

manufacturer rebate liability under the Medicaid Drug Rebate Program due to an increase in the minimum basic Medicaid rebate on most

branded prescription drugs and the application of Medicaid rebate liability to drugs used in risk-based Medicaid managed care plans;

● the expansion of the 340B Drug

Pricing Program to require discounts for “covered outpatient drugs” sold to certain children’s hospitals, critical

access hospitals, freestanding cancer hospitals, rural referral centers, and sole community hospitals;

● requirements imposed on pharmaceutical

companies are required to offer discounts on brand-name cell based therapy to patients who fall within the Medicare Part D coverage gap,

commonly referred to as the “Donut Hole”;

● requirements imposed on pharmaceutical

companies to pay an annual non-tax-deductible fee to the federal government based on each company’s market share of prior year

total sales of branded drugs to certain federal healthcare programs, such as Medicare, Medicaid, Department of Veterans Affairs and Department

● for products classified as

biologics, marketing approval for a follow-on biologic product may not become effective until 12 years after the date on which the reference

innovator biologic product was first licensed by the FDA, with a possible six-month extension for pediatric products.

After this exclusivity

ends, it may be possible for biosimilar manufacturers to enter the market, which is likely to reduce the pricing for the innovator product

and could affect our profitability if our products are classified as biologics.

Separately, pursuant to the health reform legislation

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and negatively affect our financial condition.

As a healthcare company, our operations, clinical

trial activities and interactions with healthcare providers may be subject to extensive regulation in the U.S., particularly if we receive

FDA approval for any of its products in the future.

For example, if we receive FDA approval for a product for which reimbursement is available

under a federal healthcare program (e.g., Medicare, Medicaid), it would be subject to a variety of federal laws and regulations, including

those that prohibit the filing of false or improper claims for payment by federal healthcare programs (e.g.

the federal False Claims Act),

prohibit unlawful inducements for the referral of business reimbursable by federal healthcare programs (e.g.

the federal Anti-Kickback

Statute), and require disclosure of certain payments or other transfers of value made to U.S.-licensed physicians and teaching hospitals

or Open Payments.

We are not able to predict how third parties will interpret these laws and apply applicable governmental guidance and

may challenge our practices and activities under one or more of these laws.

If our past or present operations are found to be in violation

of any of these laws, we could be subject to civil and criminal penalties, which could hurt our business, our operations and financial

The federal Anti-Kickback Statute prohibits, among

other things, any person or entity, from knowingly and willfully offering, paying, soliciting or receiving any remuneration, directly

or indirectly, overtly or covertly, in cash or in kind, to induce or in return for purchasing, leasing, ordering or arranging for the

purchase, lease or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs.

The term remuneration

has been interpreted broadly to include anything of value.

The Anti-Kickback Statute has been interpreted to apply to arrangements between

pharmaceutical manufacturers on one hand and prescribers, purchasers, and formulary managers on the other.

There are a number of statutory

exceptions and regulatory safe harbors protecting some common activities from prosecution.

The exceptions and safe harbors are drawn narrowly

and practices that involve remuneration that may be alleged to be intended to induce prescribing, purchasing or recommending may be subject

to scrutiny if they do not qualify for an exception or safe harbor.

Failure to meet all of the requirements of a particular applicable

statutory exception or regulatory safe harbor does not make the conduct per se illegal under the Anti-Kickback Statute.

Instead, the legality

of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances.

Our practices

may not in all cases meet all of the criteria for protection under a statutory exception or regulatory safe harbor.

As a healthcare company, our operations and interactions

with healthcare providers may be subject to extensive regulation in the U.S., particularly if we receive FDA approval for any of its products

in the future.

For example, if we receive FDA approval for a product for which reimbursement is available under a federal healthcare program

(e.g., Medicare, Medicaid), it would be subject to a variety of federal laws and regulations, including those that prohibit the filing

of false or improper claims for payment by federal healthcare programs (e.g.

the federal False Claims Act), prohibit unlawful inducements

for the referral of business reimbursable by federal healthcare programs (e.g.

the federal Anti-Kickback Statute), and require disclosure

of certain payments or other transfers of value made to U.S.-licensed physicians and teaching hospitals or Open Payments.

We are not able

to predict how third parties will interpret these laws and apply applicable governmental guidance and may challenge our practices and

activities under one or more of these laws.

If our past or present operations are found to be in violation of any of these laws, we could

be subject to civil and criminal penalties, which could hurt our business, our operations and financial condition.

The federal Anti-Kickback Statute prohibits,

among other things, any person or entity, from knowingly and willfully offering, paying, soliciting or receiving any remuneration,

directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for purchasing, leasing, ordering or

arranging for the purchase, lease or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare

The term remuneration has been interpreted broadly to include anything of value.

The Anti-Kickback Statute has been

interpreted to apply to arrangements between pharmaceutical manufacturers on one hand and prescribers, purchasers, and formulary

managers on the other.

There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from

The exceptions and safe harbors are drawn narrowly and practices that involve remuneration that may be alleged to be

intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or

Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does

not make the conduct per se illegal under the Anti-Kickback Statute.

Instead, the legality of the arrangement will be evaluated on a

case-by-case basis based on a cumulative review of all of its facts and circumstances.

Our practices may not in all cases meet all

of the criteria for protection under a statutory exception or regulatory safe harbor.

Additionally, the intent standard under the Anti-Kickback

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Additionally, to the extent that our product is sold in a foreign country, we may be subject to similar foreign

Our products, once approved, may be eligible for

coverage under Medicare and Medicaid, among other government healthcare programs.

Accordingly, we may be subject to a number of obligations

based on their participation in these programs, such as a requirement to calculate and report certain price reporting metrics to the government,

such as average sales price (ASP) and best price.

Penalties may apply in some cases when such metrics are not submitted accurately and

Further, these prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or

private payors and by any future relaxation of laws that presently restrict imports of drugs and biological products from countries where

they may be sold at lower prices than in the United States.

It is difficult to predict how Medicare coverage and reimbursement policies

will be applied to our products in the future and coverage and reimbursement under different federal healthcare programs are not always

Medicare reimbursement rates may also reflect budgetary constraints placed on the Medicare program.

In order to distribute products commercially,

we must comply with state laws that require the registration of manufacturers and wholesale distributors of drug and biological products

in a state, including, in certain states, manufacturers and distributors who ship products into the state even if such manufacturers or

distributors have no place of business within the state.

Some states also impose requirements on manufacturers and distributors to establish

the pedigree of product in the chain of distribution, including some states that require manufacturers and others to adopt new technology

capable of tracking and tracing product as it moves through the distribution chain.

Several states have enacted legislation requiring

pharmaceutical and biotechnology companies to establish marketing compliance programs, file periodic reports with the state, make periodic

public disclosures on sales, marketing, pricing, clinical trials and other activities, and/or register their sales representatives, as

well as to prohibit pharmacies and other healthcare entities from providing certain physician prescribing data to pharmaceutical and biotechnology

companies for use in sales and marketing, and to prohibit certain other sales and marketing practices.

All of our activities are potentially

subject to federal and state consumer protection and unfair competition laws.

Our products, once approved, may be eligible

for coverage under Medicare and Medicaid, among other government healthcare programs.

Accordingly, we may be subject to a number of

obligations based on their participation in these programs, such as a requirement to calculate and report certain price reporting

metrics to the government, such as average sales price (ASP) and best price.

Penalties may apply in some cases when such metrics are

not submitted accurately and timely.

Further, these prices for medical devices may be reduced by mandatory discounts or rebates

required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of

medical devices from countries where they may be sold at lower prices than in the United States.

It is difficult to predict how

Medicare coverage and reimbursement policies will be applied to our products in the future and coverage and reimbursement under

different federal healthcare programs are not always consistent.

Medicare reimbursement rates may also reflect budgetary constraints

placed on the Medicare program.

In order to distribute products commercially, we must comply with state

laws that require the registration of manufacturers and wholesale distributors of medical devices in a state, including, in certain states,

manufacturers and distributors who ship products into the state even if such manufacturers or distributors have no place of business within

Some states also impose requirements on manufacturers and distributors to establish the pedigree of product in the chain of

distribution, including some states that require manufacturers and others to adopt new technology capable of tracking and tracing product

as it moves through the distribution chain.

Several states have enacted legislation requiring pharmaceutical and biotechnology companies

to establish marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales, marketing,

pricing, clinical trials and other activities, and/or register their sales representatives, as well as to prohibit pharmacies and other

healthcare entities from providing certain physician prescribing data to pharmaceutical and biotechnology companies for use in sales and

marketing, and to prohibit certain other sales and marketing practices.

All of our activities are potentially subject to federal and state

consumer protection and unfair competition laws.

If our operations are found to be in violation

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could, among other things, cut Medicare payments to providers.

The Medicare program is frequently mentioned as a target for spending cuts.

The full impact on our business of any future cuts in Medicare or other programs is uncertain.

In addition, we cannot predict any impact

President Trump’s administration and the U.S.

The Trump Administration cost reduction initiatives may impact Medicare

and Medicaid reimbursement levels.

Medicare program is frequently mentioned as a target for spending cuts.

The full impact on our business

of any future cuts in Medicare or other programs is uncertain.

In addition, we cannot predict any impact President Trump’s administration

Congress may have on the federal budget.

If federal spending is reduced, anticipated

budgetary shortfalls may also impact the ability of relevant agencies, such as the FDA or the National Institutes of Health, to continue

to function at current levels.

Amounts allocated to federal grants and contracts may be reduced or eliminated.

These reductions may also

impact the ability of relevant agencies to timely review and approve drug research and development, manufacturing, and marketing activities,

which may delay our ability to develop, market and sell any products we may develop.

If federal spending is reduced, anticipated budgetary shortfalls may also impact

the ability of relevant agencies, such as the FDA or the National Institutes of Health, to continue to function at current levels.

allocated to federal grants and contracts may be reduced or eliminated.

These reductions may also impact the ability of relevant agencies

to timely review and approve medical devises and development, manufacturing, and marketing activities, which may delay our ability to

develop, market and sell any products we may develop.

Risks Related to Our Securities

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own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

Our officers, directors and 5% stockholders and

their affiliates beneficially own a significant percentage of our outstanding common stock.

As a result, these stockholders have significant

influence and may be able to determine all matters requiring stockholder approval.

For example, these stockholders may be able to control

elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate

transactions.

This concentration of ownership could delay or prevent any acquisition of our company on terms that other stockholders may

desire, and may adversely affect the market price of our common stock.

If we are unable to maintain listing of our

securities on The Nasdaq Capital Market or another reputable stock exchange, it may be more difficult for our stockholders to sell their

Nasdaq requires listing issuers to comply with

certain standards in order to remain listed on its exchange.

If, for any reason, Nasdaq should delist our securities from trading on its

exchange and we are unable to obtain listing on another reputable national securities exchange, a reduction in some or all of the following

may occur, each of which could materially adversely affect our stockholders.

A delisting of our common stock is likely to reduce the liquidity

of our common stock and may inhibit or preclude our ability to raise additional financing.

On November 3, 2023, we received notice

from Nasdaq that the closing bid price for our common stock had been below $1.00 per share for the previous 30 consecutive

business days, and that we were therefore not in compliance with the minimum bid price requirement for continued inclusion on

The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (the “Rule”).

Nasdaq’s notice had no immediate effect

on the listing or trading of our common stock on The Nasdaq Capital Market.

The notice indicated that we will

have 180 calendar days, until May 1, 2024, to regain compliance with the Rule.

We could regain compliance with the $1.00 minimum

bid listing requirement if the closing bid price of our common stock is at least $1.00 per share for a minimum of ten (10) consecutive

business days during the 180-day compliance period.

If we do not regain compliance during the initial compliance period, we

may be eligible for additional time to regain compliance with the Rule.

To qualify, we will be required to meet the continued

listing requirement for market value of our publicly held shares and all other Nasdaq initial listing standards, except the bid price

requirement, and provide written notice to Nasdaq of our intention to cure the deficiency during the second compliance period by effecting

a reverse stock split, if necessary.

If we are not eligible or it appeared to Nasdaq that we will not be able to cure

the deficiency during the second compliance period, Nasdaq then provides written notice to us that our common

stock will be subject to delisting.

In the event of such notification, we may appeal Nasdaq’s determination to delist our

securities, but there can be no assurance that Nasdaq will grant our request for continued listing.

The price of our common stock may be volatile and fluctuate substantially,

which could result in substantial losses for our stockholders.

Our common stock has been listed on the Nasdaq

Capital Market under the symbol “ALBT” since November 10, 2022.

Our common stock was listed on the Nasdaq Capital Market under

the symbol “AVCO” since November 5, 2018 through the close of business on November 9, 2022.

Our common shares were traded

previously on the OTC Market Group Inc.’s Venture Market (the “OTCQB”) since February 22, 2016, under the symbol “AVCO”

since October 18, 2016 and “GTHC” prior to October 18, 2016.

The price of our common stock has been, and we

expect it to continue to be, volatile.

The stock market in general and the market for smaller healthcare companies in particular have

experienced extreme volatility that has often been unrelated to the operating performance of particular companies.

As a result of this

volatility, you may not be able to sell your shares of common stock at or above the price you paid for your shares of common stock.

market price for our common stock may be influenced by many factors, including:

● the success of competitive

products or technologies;

● developments related to our

existing or any future collaborations;

● regulatory or legal developments

in the United States and other countries;

● developments or disputes concerning

patent applications, issued patents or other proprietary rights;

● the recruitment or departure

of key personnel;

● actual or anticipated changes

in estimates as to financial results or recommendations by securities analysts;

● variations in our financial

results or those of companies that are perceived to be similar to us;

● changes in the structure of

healthcare payment systems;

● market conditions in the healthcare,

pharmaceutical and biotechnology sectors;

● general economic, industry

and market conditions;

● the other factors described

in this “Risk Factors” section.

sales of our common stock or securities convertible or exchangeable for our common stock may cause our stock price to decline.

our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the price

of our common stock could decline.

The perception in the market that these sales may occur could also cause the price of our common stock

addition, as of December 31, 2023,

Our officers, directors and 5% stockholders

and their affiliates beneficially own a significant percentage of our outstanding common stock.

As a result, these stockholders have

significant influence and may be able to determine all matters requiring stockholder approval.

For example, these stockholders may

be able to control elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or

other major corporate transactions.

This concentration of ownership could delay or prevent any acquisition of our company on terms

that other stockholders may desire, and may adversely affect the market price of our common stock.

If we are unable to

maintain listing of our securities on The Nasdaq Capital Market or another reputable stock exchange, it may be more difficult for our

stockholders to sell their securities.

Nasdaq requires listing

issuers to comply with certain standards in order to remain listed on its exchange.

If Nasdaq should delist our securities from trading

on its exchange for any reason and we are unable to obtain listing on another reputable national securities exchange, a reduction in some

or all of the following may occur, each of which could materially adversely affect our stockholders.

A delisting of our common stock is

likely to reduce the liquidity of our common stock and may inhibit or preclude our ability to raise additional financing.

The price of our common stock may be volatile

and fluctuate substantially, which could result in substantial losses for our stockholders.

Our common stock is listed on the Nasdaq Capital

Market under the symbol “ALBT.” The price of our common stock has been, and we expect it to continue to be, volatile.

stock market in general and the market for smaller healthcare companies in particular have experienced extreme volatility that has often

been unrelated to the operating performance of particular companies.

As a result of this volatility, you may not be able to sell your

shares of common stock at or above the price you paid for your shares of common stock.

The market price for our common stock may be influenced

by many factors, including:

the success of competitive products or technologies;

developments related to our existing or any future collaborations;

regulatory or legal developments in the United States and other countries;

developments or disputes concerning patent applications, issued patents or other proprietary rights;

the recruitment or departure of key personnel;

actual or anticipated changes in estimates as to financial results or recommendations by securities analysts;

variations in our financial results or those of companies that are perceived to be similar to us;

changes in the structure of healthcare payment systems;

market conditions in the healthcare, pharmaceutical and biotechnology sectors;

general economic, industry and market conditions;

the other factors described in this “Risk Factors” section.

Future sales of our common stock or securities

convertible or exchangeable for our common stock may cause our stock price to decline.

If our existing stockholders sell, or indicate

an intention to sell, substantial amounts of our common stock in the public market, the price of our common stock could decline.

The perception

in the market that these sales may occur could also cause the price of our common stock to decline.

In addition, as of December 31, 2024:

shares of our common stock were issuable upon exercise of outstanding stock options;

shares of our common stock were issuable upon exercise of outstanding stock warrants;

shares of our common stock were issuable upon the conversion of our outstanding Series A

Convertible Preferred Stock (the “Series A Preferred Stock”), which will become

shares of our common stock issuable upon conversion of our outstanding Series A Preferred

shares of our common stock were issuable upon the conversion of our outstanding Series B

Convertible Preferred Stock (the “Series B Preferred Stock”), which will become

eligible for sale in the public market to the extent permitted by the provisions of various

vesting schedules, lock-up agreements and Rule 144 under the Securities Act of 1933, as amended

(the “Securities Act”);

shares of our common stock issuable upon conversion of our outstanding Series B Preferred

vesting schedules, lock-up agreements and Rule 144 under the Securities Act;

shares of our common stock issuable upon conversion of our outstanding Series C Preferred

shares of our common stock issuable upon conversion of our outstanding convertible notes.

the shares we may issue from time to time upon the exercise of outstanding options and warrants and the conversion of our outstanding

Series A Preferred Stock and Series B Preferred Stock are sold and outstanding convertible notes are issues, or if it is perceived that

they will be sold, by the award recipients in the public market, the price of our common stock could decline.

If the shares we may issue from time to time upon

the exercise of outstanding options and warrants and the conversion of our outstanding Series C Preferred Stock and Series D Preferred

Stock are sold and outstanding convertible notes are issues, or if it is perceived that they will be sold, by the award recipients in

the public market, the price of our common stock could decline.

You may experience dilution of your ownership

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As of the date of this filing, we have issued

an aggregate of (i) 9,000 shares of our newly designated Series A Preferred Stock and (ii) 11,000 shares of our newly designated Series

B Preferred Stock.

an aggregate of (i) 3,500 shares of our newly designated Series C Preferred Stock and (ii) 5,000 shares of our newly designated Series

D Preferred Stock.

In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of

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The rights of holders of our common stock are subject to the rights of the holders of our preferred

stock, including our newly designated Series A Preferred Stock, Series B Preferred Stock, Series C Convertible Preferred Stock and any

preferred stock that may be issued.

The ability of the Board to issue such additional shares of preferred stock, with rights and preferences

it deems advisable, could discourage an attempt by a party to acquire control of us by tender offer or other means.

Such issuances could

therefore deprive stockholders of benefits that could result from such an attempt, such as the realization of a premium over the market

price for their shares in a tender offer or the temporary increase in market price that such an attempt could cause.

Moreover, the issuance

of such additional shares of preferred stock to persons friendly to the Board could make it more difficult to remove incumbent managers

and directors from office even if such change were to be favorable to stockholders generally.

stock, including our newly designated Series D Preferred Stock, Series D Preferred Stock and any preferred stock that may be issued.

ability of the Board to issue such additional shares of preferred stock, with rights and preferences it deems advisable, could discourage

an attempt by a party to acquire control of us by tender offer or other means.

Such issuances could therefore deprive stockholders of

benefits that could result from such an attempt, such as the realization of a premium over the market price for their shares in a tender

offer or the temporary increase in market price that such an attempt could cause.

Moreover, the issuance of such additional shares of

preferred stock to persons friendly to the Board could make it more difficult to remove incumbent managers and directors from office even

if such change were to be favorable to stockholders generally.

We are incorporated in Delaware.

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on our common stock, and we do not anticipate such a declaration or payment for the foreseeable future.

We expect to use

future earnings, if any, to fund business growth.

Therefore, stockholders will not receive any funds absent a sale of their shares

of our common stock.

We cannot assure stockholders of a positive return on their investment when they sell their shares, nor can we

assure that stockholders will not lose the entire amount of their investment.

We expect to use future earnings, if any, to fund

business growth.

Therefore, stockholders will not receive any funds absent a sale of their shares of our common stock.

We cannot assure

stockholders of a positive return on their investment when they sell their shares, nor can we assure that stockholders will not lose the

entire amount of their investment.

Applicable regulatory requirements, including

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listing of our shares of common stock on any national securities exchange could be adversely affected.

If we cannot satisfy, or continue to satisfy,

the initial listing requirements and other rules of The Nasdaq Capital Market, our securities may be delisted, which could negatively

impact the price of our securities and your ability to sell them.

Our common stock has been listed on The Nasdaq

Capital Market under the symbol “ALBT” since November 10, 2022 and under the symbol “AVCO” since November 5, 2018

through the close of business on November 9, 2022.

In order to maintain our listing on The Nasdaq Capital Market, we are required to comply

with certain rules of the applicable trading market, including those regarding minimum stockholders’ equity, minimum share price

and certain corporate governance requirements.

We may not be able to continue to satisfy the listing requirements and other applicable

rules of The Nasdaq Capital Market.

If we are unable to satisfy the criteria for maintaining our listing, our securities could be subject

to delisting.

If we cannot satisfy the continued listing

requirements and other rules of The Nasdaq Capital Market, our securities may be delisted, which could negatively impact the price of

our securities and your ability to sell them.

Our common stock is listed on The Nasdaq Capital

Market under the symbol “ALBT.” In order to maintain our listing on The Nasdaq Capital Market, we are required to comply with

certain rules of the applicable trading market, including those regarding minimum stockholders’ equity, minimum share price and

certain corporate governance requirements.

We may not be able to continue to satisfy the listing requirements and other applicable rules

of The Nasdaq Capital Market.

If we are unable to satisfy the criteria for maintaining our listing, our securities could be subject to

If our common stock is delisted from trading by

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors