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Item 1. Business

2024-04-01 compared with 2023-03-31 · 618 added, 323 removed, 0 unchanged (100% of the section changed)

Timeline and Detailed Business Description

Technologies (Other OTC:

NVNT) (“Novint”, the “Company”, “we”, “our”, “us”)

was incorporated in the State of New Mexico as Novint Technologies, Inc.

in April 1999.

On February 26, 2002, the Company changed

its state of incorporation to Delaware by merging into Novint Technologies, Inc., a Delaware corporation.

Company was formed with the goal of commercializing haptics technology by developing a revolutionary haptic game controller for

computer video gaming and other computer applications based on technology licensed from Sandia National Laboratories (“Sandia”),

one of three National Nuclear Security Administration research and development laboratories in the United States.

Sandia is managed

and operated by the National Technology and Engineering Solutions of Sandia LLC, a wholly owned subsidiary of Honeywell International,

Haptics technologies allow people to use their sense of touch to interact with computers.

the Company derived revenue primarily from developing professional applications for customers, including Aramco, Lockheed Martin,

Chrysler, Chevron and Sandia.

Beginning in 2007, the Company began to derive revenue primarily from the sale to customers of the

consumer Falcon product (described in the sections below), and the associated “grips,” or handles that are shaped

to mirror the application simulated by the Falcon product (e.g., a gun handle, a sword handle, or a steering wheel) and the sale

or license of specially enabled computer games designed to be used with the Falcon.

2007, we commercially released the Novint Falcon game controller, which uses patented nano-vibrations to create different “textures

and “feels” that allow users to experience a realistic and detailed sense of touch, referred to as a “haptic”

feel, when using video games and other computer applications..

Holding its handle, users feel the shapes, textures, weight, dimension

and force feedback effects in software games that have been enabled to work with the Falcon.

These “feelings”, which

are felt in the hand of the user that is holding the Falcon controller, are generated by tiny nano vibrations that create sensations

that simulate the real-life sensation of touch, as opposed to providing simple vibrations and feedback like Rumble Strip based

joysticks developed by Immersion Corporation (IMMR).

For example, a person can feel the difference between a piece of rubber or

wool as he holds the handle of the Falcon and runs over the different materials on the screen.

When firing a gun, the person gets

a kickback and feeling based on the type of gun that is being fired.

When a person is hit onscreen, the person feels the type

of hit and from what direction the hit came.

When a person catches a baseball in a glove, the person feels like the ball is landing

in the glove.

The feelings are almost surreal and frightening at times.

It is difficult to describe the experience without feeling

it firsthand.

The Falcon and its haptics technology, games and applications provide the crucial missing “third sense”

to human computer interaction.

In late 2006, BusinessWeek wrote that “Novint’s haptic controller, the Falcon, looks

set to revolutionize gaming.”

2007, the Company began shipping the Falcon to commercial retailers and distributors in the U.S., including Fry’s, Tiger

Direct, and J&R Music Store.

Additionally, in the fourth quarter of 2007, Novint opened its online store for the sale of the

Falcon, and computer games integrated to work with the Falcon.

Customers could download games for use with the Falcon by going

to the Company’s website and purchasing the haptics enabled games.

The Company developed many of its own gaming titles.

Also, the Company licensed several better-known game titles.

The Company’s programmers haptically enabled these titles to

take advantage of the haptic feedback and sensations when using the Falcon controller.

Novint’s programmers added the haptic

parts to the play of the programming code of these games using manual customization.

We have commercialized over 45 gaming titles

available for use with the Falcon controller since 2007.

We are free to sell or provide the internally developed gaming titles

as an accompanying software bonus along with the Falcon, not subject to any license agreement or royalty obligation.

licensing agreements with various gaming software providers have expired and are treated as terminated.

The license agreement

referenced in Note 4, which accounts for the contingent accrued royalties shown on the Company’s Balance Sheet for the year

ended December 31, 2022, is an agreement dated January 4, 2004, as amended on July 24, 2007, between Novint Technologies, Inc.

and Force Dimension, LLC, based in Switzerland.

The Company treats the agreement as terminated without any further royalty obligation

on the basis that Force Dimension, LLC committed a material breach of the agreement by failing to deliver the deliverables specified

in the agreement.

Our determination that Force Dimension committed a material breach is based on extensive due diligence, including

examining related documents, and interviews with prior management and employees.

In accordance with ASC 405-20, the contingent

liability for unpaid royalties remains on the Company’s Balance Sheet for the year ended December 31, 2022 because there

was never an official termination.

we sold thousands of Falcon units since 2007 and released dozens of software titles that were optimized to work with the Falcon,

sales of the Falcon controller struggled and failed to reach a critical mass, which continues to this day.

We believe that the

titles were not released fast enough to satisfy consumer demand and that the cost of acquiring rights to game titles and haptically

enabling the software was too large of a challenge for us.

Additionally, we were not successful in securing a strategic partner

to help us market the Falcon more effectively and assist with the huge software development efforts that were necessary for successful

market penetration.

time to time, we engaged in discussions with larger commercial partners and performed R&D under contract for larger companies

with the goal of obtaining assistance for commercial product development.

None of these efforts were successful and there can

be no assurances that we will be able to find partners to assist us in successfully commercializing our products.

pursuant to the 2015 Patent Sale and License Agreement described below, there are extensive restrictions on our ability to engage

commercial partners on a go forward basis.

However, we retain the right to enter into manufacturing arrangements to produce certain

Falcon products for others or engage contract manufacturers to produce certain Falcon products on our behalf.

The permitted Falcon

products are limited to Falcon products that are based solely on designs existing at the time of the 2015 Patent Sale and License

Agreement, as well as the unreleased next generation designs of the Company’s Xio products (described below).

time to time, we engage in discussions with potential strategic partners for the purpose of effecting a merger, share exchange,

asset acquisition, share purchase, reorganization or similar business combination (“Business Combination”).

reviewed several opportunities to enter into a Business Combination but none of our reviews has resulted in a binding agreement.

There can be no assurances that we will be able to find a suitable strategic partner or successfully negotiate and enter into

any binding agreement regarding a Business Combination.

Tek Transaction

April 2011, Novint merged with Force Tek Technologies, LLC (“Force Tek”), a company founded by serial entrepreneur

Shannon Vissman, which developed a full arm controller with forced feedback that could be used for gaming.

Novint and Force Tek

initially met at a gaming conference where the companies recognized the potential of merging their complementary technologies

into a single unified gaming controller that had much of the haptic feedback of the Falcon, but in a portable controller that

fits on a user’s arm.

The combined company continued to be known as Novint.

the 2011 merger, Shannon Vissman and Ryan Christoff joined the Company’s Board of Directors (the “Board”), replacing

Brian Long and Jan Richardson.

On October 24, 2011, Tom Anderson resigned as CEO and was replaced by Shannon Vissman.

In connection

with the merger, all debt of the Company was either repaid or converted to equity.

Vissman, and to a lesser extent Mr.

provided equity funding of approximately $3 million at a fixed price per share.

This funding was used to merge R&D teams and

to create a next generation game controller with the combined technologies, called the Xio, while continuing to support the Company’s

sales of the Falcon controller and related accessories and software.

The integration work for the Xio was never completed, though

various prototypes were developed.

During this time, Novint performed custom haptic projects related to Xio prototypes for customers,

including the US army, but these efforts failed to generate significant business opportunities and the Company was unsuccessful

in obtaining any commercial production contracts as a result of this work.

connection with the merger, the Company assumed the license agreement dated April 6, 2009 among Force Tek, as licensee, and Inverse

Technology Corporation and Kinetecs, Inc., as licensors (the “Force Tek License”).

Pursuant to the Force Tek License,

Force Tek paid an initial payment and incurred an obligation to pay royalties based on sales of products that utilize the licensed

technology, which may be used in the Xio product, in which case the Company would be required to pay royalties on commercial sales

of the Xio product.

There can be no assurances that we will successfully commercialize the Xio product.

August 2013, Brian Long, Jan Richardson, Tom Anderson and Shannon Vissman resigned from the Board, and Orin Hirschman and Martin

Chopp joined the Board to serve alongside Ryan Christoff.

The Company issued and sold $55,180 of senior secured debt to support

Since that time, we have worked to preserve cash and reduce expenses while continuing to sell small amounts of Falcons

and related accessories and software titles, with a goal of preserving cash.

Simultaneously, we initiated a process to explore

ways to further realize value from Novint’s patent portfolio, the Falcon hardware and related software, and the our next

generation Xio product.

June 2015, after an extensive process, Novint sold 5 patents and sublicensed 5 patents to an undisclosed technology company for

a $750,000 upfront payment, and a potential second payment of $750,000 upon waiver of assignment from the DOE to Sandia (the “2015

Patent Sale and License Agreement”).

The second payment was paid in July 2016.

Net of broker fees, legal expenses and payments

to Sandia to release their rights to the IP, we received net proceeds of $699,714.

We retained a non-transferable license that

allows us to continue selling Falcon products that are based solely on their designs existing at the time of the 2015 Patent Sale

and License Agreement (the “Permitted Falcon Products”) and next generation devices, such as the Xio.

that time, Novint has continued selling small amounts of Permitted Falcon Products and related software and accessories while

engaging in discussions with potential partners on Permitted Falcon Products and Xio products and studying other ways to realize

value from these products.

Management believes that Novint was too early in trying to pioneer the market for a consumer haptic

One of the major disadvantages of the original Falcon design highlighted by customers and potential commercial partners

was its size and weight and the need for the controller to be sitting on a desktop.

The Xio product, our next generation product

that is developed but not completed, addresses this issue by being lightweight and strapping onto the hand and forearm.

is not ready for commercial release and there can be no assurances that the product will be completed or commercially released

in the future.

Products – Falcon

Falcon is an extensible, grounded (e.g., desktop), three-dimensional (3D) haptic interaction device.

It is a compact robotic device

with characteristics optimized for real-time force-feedback and tactile interaction.

The Falcon was specifically developed for

consumer applications with an emphasis on interactive gaming..

The Novint Falcon was designed to be used for both PC and console

All that is required to interface to the device is some form of serial interface (wired or wireless).

Novint has also

created in-lab prototypes of the Falcon that would be directly connected to gaming consoles.

Additionally, the performance characteristics

of the Falcon device are such that it has seen some wider application in fields such as education, medicine, scientific visualization,

robotics and tele-robotics

current consumer version of the Falcon consists of the Main Unit, a Stand and a “Grip” or end effector.

The Main Unit

is capable of generating high-fidelity, high-bandwidth, 3D forces and accurately sensing 3D position in real-time within its working

The Main Unit has on-board computational capabilities and is programmed by and communicates with a host computer or

system via a bi-directional USB communication interface.

It is typically powered using an external DC power supply.

Main Unit has a modular, quick connect/disconnect, electromechanical interface (i.e., the Grip Interface) that allows various

grips to be mounted to it.

This interface allows a grip to be mechanically connected to the Main Unit and provides electrical

power and communication with the grip.

When the Falcon is utilized as a haptic interaction device, it is the grip that the end-user

actually grasps and uses to interact with the device.

Grips themselves have arbitrary shapes and functions.

A Grip simply has to adhere to the mechanical and electrical constraints

of the Grip Interface.

Grips typically use on-board computational elements to report their state to the Main Unit via the serial

communication channel of the Grip Interface.

Two typical consumer grips are a general-purpose spherical interface and a pistol

shaped grip typically used for game play and interaction.

These grips have various buttons and communicate their identity as well

as button state via the Grip Interface to the Main Unit.

The Main Unit is modularly mounted on a Stand.

Consumer units are typically

shipped with a “U” stand.

The Falcon Main Unit can be mounted, however, on any stand or object that provides the appropriate

mechanical interface and fasteners.

Falcon communicates with a host computer or system via a bi-directional USB communication interface at a 1 KHz data rate.

and APIs/SDKs on the host side allow haptic interaction to be incorporated or added to various applications across various markets.

to the introduction of the current consumer Falcon haptic interface device, there have been a variety of improvements, features

and options to the design of the device, which the Company has implemented on a limited number of units for specific customers.

Other significant changes have been designed for the device as product improvements or model variations.

These changes to the

device design have not yet made it to the consumer version of the device but could do so given appropriate funding, timing and

For example, the current capstan cable drive mechanism for the Falcon utilizes a single spring tensioner.

Under high-speed

motions, this approach results in unequal cable tension between the cable on one side of the capstan and the other, potentially

leading to slippage of the cable relative to the capstan when motor direction is abruptly reversed after a high-speed run.

system that helps guarantee balanced cable tension is one of the pre-planned product improvements for the Falcon.

Another example

is the potential to decrease the electronics cost.

The current consumer Falcon utilizes a Digital Signal Processor (DSP), and

other electronics elements to implement the Falcon’s processing and communication system.

Significant effort has been undertaken

in designs where an ASIC is used for a major portion of these processing and communication requirements.

This design will allow

more economical production of the Falcon for larger volume production runs.

are other areas of potential improvement to the Falcon.

The current consumer Falcon is relatively compact compared to other arm

The radial twist employed in the “arm” design decreases the radial cross section of the device.

layout of the electronics is also optimized to decrease size.

In addition, the U-shaped base helps to decrease the apparent size

of the device.

Nonetheless, further decreasing the apparent and real volume of the device is desirable for increased consumer

Ideally, this decrease would also reduce the manufacturing cost for the Falcon.

Novint has outlined a fundamental

approach where most of the encasing plastic for the Falcon Main Unit will be removed and the underlying plastic frame for the

Falcon will be modified to be the exterior of the device as well as supporting the device mechanisms and electronics.

significantly decrease the apparent size and volume of the Falcon.

It also provides significant additional shape, color and opacity

options to the appearance of the Falcon Main Unit, including clear plastic options where the internal mechanisms and electronics

significant amount of effort has been taken in the design of potential consumer grips.

One major class of effort has revolved

around variations in general purpose grips for ergonomic and functional improvements.

A significant number of custom variations

of the Falcon have been designed and built over time.

Typically, these developments have been for customers in the “professional”

sectors (e.g., medicine, telerobotics, and scientific visualization).

These variations have been based on the current consumer

Falcon design and can easily be incorporated into the standard Falcon line when appropriate.

has made several custom variations to the Falcon for specific customers and use cases.

As part of its custom efforts, we have

developed improved control algorithms for the Falcon Main Unit that allow higher peak forces to be generated or lower forces to

be maintained for longer periods of time.

These developments are embodied in custom units referred to as “Super Falcons”.

Fundamentally, these improvements involve changes to the timing and pulse-width modulation motor control used in the control algorithms

run on the Falcon Main Unit’s DSP.

No changes to Falcon hardware are required.

This allows a “Super Falcon”

to be sold to consumers when appropriate.

In addition, several fundamentally new Grip designs for the Falcon have been developed

for custom customer applications.

Consumer versions of these designs are possible.

addition to the Falcon device, we have developed and sold software and demonstrations for all gaming genres including Action,

Adventure, Fighting, Racing, Simulation, Sport, Strategy, Parlor, Massively Multiplayer Online (MMO) and Miscellaneous (e.g.,

board games, pinball).

Also, we have created a number of haptically enabled software applications that allow the Falcon to be

utilized for many non-gaming uses.

For example, Novint has developed medical simulation software for various injection procedures,

including Epidural injections, Synvisc™ injection, Depo-Medrol™ injection and other injections.

Novint has also developed

software applications that allow a user to feel as well as see medical data.

For example, CT Scan data can be probed using the

Falcon, and the difference between soft tissue and bone can be felt.

Novint’s medical applications have typically been used

both for medical marketing and procedure familiarization or training.

In addition, Novint has developed specific software for

marketing purposes that works with the Falcon.

For example, Novint modified a game for Anheuser-Busch to use during its on-site

marketing campaigns.

Novint has also developed software applications where a Falcon’s motion is controlled via software

or in real time using another (remote) Falcon.

Haptic Companies and Competition

over the last several years create the potential for more consumer interest in haptic devices and controllers.

In 2016, Facebook

released the Oculus Rift Virtual Reality (VR) headset at a sub $1,000 price point, which a consumer can wear on his/her head and

experience virtual reality.

HTC, a market leader in VR, sells a similar headset.

Both companies sell companion hand controllers

that are are small and lightweight, but offer limited haptic feedback compared to the Falcon.

the last few years, and in particular in very recent periods, there have been a number of start-up companies working on new haptic

controllers, including handheld devices that are similar to the controllers sold by Facebook and HTC, as well as more elaborate

wearable haptic controllers, including gloves.

These devices are more similar to Novint’s next generation Xio design and

are more elaborate than the handheld controllers currently on the market.

The sudden surge in development in this area suggests

that the field is beginning to gain more interest following the commercial releases of the Oculus Rift and HTC products as well

as similar headsets that are being introduced by other companies.

are many companies producing VR and haptic devices that compete with or may compete in the future with the Falcon and Xio.

of the companies that may be competitive include:

Corporation (NASDAQ:

IMMR) is primarily a 1D or 2D haptics hardware company (a Haptic

computer interaction in which forces are mechanically displayed to a user in 1 or 2 directions

examples are force feedback joysticks and force feedback mice).

has acquired other haptics device companies, such as Cybernet, Haptech and Virtual Technologies.

based in Atlanta, Georgia, offers a haptic glove for controlling virtual reality systems,

such as the Occulus Rift and HTC Vive.

The glove has sensors throughout as well as force

feedback and appears to provide a very robust user experience.

VRgluv appears be directly

competitive with our Xio product.

offers several haptic devices that simply vibrate and rumble, such as the control pads

for their Xbox systems.

Microsoft may be working on various haptic controllers to complement

the company’s Hololens Virtual Reality headset that it has begun selling.

sells haptics mice, wheels, and joysticks licensed from Immersion, which are primarily

used for gaming.

Logitech’s haptics products are two-dimensional and do not offer

as many features as the Falcon.

of March 31, 2023, we do not have any full-time employees in our workforce.

and Available Information

Technologies was incorporated in the State of New Mexico as Novint Technologies, Inc.

in April 1999.

On February 26, 2002, the

Company changed its state of incorporation to Delaware by merging into Novint Technologies, Inc., a Delaware corporation.

Company’s principal executive offices are located at 100 Merrick Road–Suite 400W, Rockville Center, NY 11570.

Company’s telephone number is (866) 298-4420, and its website address is www.novint.com .

information contained in, or accessible through our website does not constitute a part of and is not deemed or otherwise incorporated

by reference in this Annual Report on Form 10-K.

The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q,

Current Reports on Form 8-K, and all amendments to those reports, are available free of charge through the “Investors —

SEC Filings” section of the Company’s website as soon as reasonably practicable after such materials have been electronically

filed with, or furnished to, the Securities and Exchange Commission.

The Company’s shares of common stock are listed on

Other OTC under the symbol “NVNT.”

required to be provided by smaller reporting companies.

UNRESOLVED STAFF COMMENTS

the Company does not lease or own any real property.

used in this Report, all references to “we,” “our” and “us” for periods prior to the closing of the

Share Exchange refer to Dror Ortho-Design Ltd., a company incorporated under the laws of the State of Israel, and for periods subsequent

to the closing of the Share Exchange refer to Dror Ortho-Design, Inc., a Delaware corporation and its direct and indirect subsidiaries.

We were incorporated as Novint Technologies, Inc.

in the State of New

Mexico in April 1999.

On February 26, 2002, we changed our state of incorporation to Delaware by merging with Novint Technologies, Inc.,

a Delaware corporation.

On July 5, 2023, we entered into a share exchange agreement with the shareholders of Dror Ortho-Design, Ltd.

Dror”), pursuant to which the shareholders of Private Dror agreed to exchange all of their outstanding ordinary shares Private Dror

for shares of our Common Stock and convertible preferred stock (the “Share Exchange”).

On August 14, 2023, the Share

Exchange was consummated and we changed our name from “Novint Technologies, Inc.” to “Dror Ortho-Design, Inc.”

Following the Share Exchange, we succeeded to the business of Private Dror as our sole line of business.

have reimagined the way people can correct their smile.

plan to disrupt the aligner market by offering millions of people a revolutionary alternative.

We believe that people do not need to

change their lifestyle to correct their smile as they are required to do with existing aligner solutions.

aligner solutions generally share the same treatment principles, which are different from our solution.

In most cases, patients seeking

to improve their smile need to undergo a 12-to-15 month process of wearing plastic aligners, which need to be worn the entire day and

should only be removed while eating or drinking.

Patients are prescribed a series of 20 to 30 aligners that are intended to forcefully

move teeth progressively closer to their intended final position.

This process causes pain every time a new aligner is used and restricts

blood circulation, which counterproductively slows down tooth movement.

All-day aligner solutions are also intrusive, as patients need

to conduct their lives at work or school wearing the plastic aligners.

In addition, most existing aligner therapies require multiple

visits to an orthodontist to monitor the progress of treatment plans through intraoral scanning, physical examination and patient testimony.

believe that recent rapid advancements in technology have made traditional aligner solutions no longer the most effective treatment option

for smile correction.

Our Company has developed a proprietary AI-based platform to correct people’s smiles in a discreet and less

painful manner (the “Platform”).

The Platform uses only one smart aligner to gently move teeth into their optimum position

with pulsating air while the patient is sleeping or at home.

The Company has several patents for the technology used in the Platform

and is currently in the process of preparing the prototype for FDA approval.

predecessor first generation Aerodentis System is a Class II medical device, which was cleared by FDA for commercialization in the U.S.

pursuant to the 510(k) notification process for movement and alignment of teeth during orthodontic treatment of malocclusion in April

The Company is preparing to apply for 510(k) clearance for the Platform as a Class II medical device, which constitutes an updated

version of the currently cleared device.

Such updated Platform contains new and/or different components than the original device, which

is why a new 510(k) clearance is required prior to marketing the Platform in the U.S.

We have not yet filed a 510(k) submission for the

Platform, and it has, thus, not been found by the FDA to be substantially equivalent to the first generation Aerodentis System.

Company currently does not generate revenues to fund operations and anticipates that it will continue to incur significant losses as

it continues to develop the Platform.

Please refer to “Risk Factors - We are in the development stage, are not generating revenues

and have no operating history in the manufacturing and distribution of orthodontic medical devices or platforms for consumer use.”

for additional information.

The Company intends to spend approximately $2.5 million over the next 18 months on software and hardware

development as well as the accompanying regulatory approvals and IP protection associated with such software and hardware projects.

First Generation Aerodentis System

Company was founded in 2005 with the goal of offering millions of people a chance to correct their smile in a more discreet and less

painful manner.

The first generation of our product underwent ten years of development by a team of twelve orthodontists, engineers,

industrial designers and dental technicians.

This team developed a new clinically-proven method for correcting Class 1 and Class 2 malocclusion

using pulsating air.

The team discovered that using pulsating air improved blood circulation in the gums, which is essential to tooth

This first-generation product (the “Aerodentis System”) was composed of a base control unit that contained a pump

and motor that would deliver pulses of air to a micro balloon that was part of a mouthpiece to be used by the patient to deliver the

The use of pulsating air is the base patented technology that distinguishes our Aerodentis System from clear aligner therapies,

which are designed to move teeth using continuous resistant force delivered by the aligner, which impairs blood flow.

Base control unit, containing micro-pump and controls, attached to the smart aligner.

The smart aligner is composed of an outer mouthpiece

structure, which is shaped based on the final position of the teeth for a perfect smile.

Behind the outer mouthpiece structure is a micro

balloon that is attached to the base control unit with a fine and flexible microtube.

The balloon delivers pulsating air by inflating

and deflating.

Behind the balloon is the “push structure,” which provides the balloon with a surface to push against as it

gently moves the teeth.

January 2013, the Aerodentis System composed of the base control unit and custom mouthpiece received the European CE Mark.

received FDA clearance via the 510(k) process as a Class II medical device, with broad indication for use “in movement and alignment

of teeth during orthodontic treatment of malocclusion.” Clinical trials demonstrated that Aerodentis System was suitable for adults

and pediatric patients with Class 1 and Class 2 malocclusion, including crowding, proclination and retroclination.

Further, clinical

trials have demonstrated that the effectiveness of Aerodentis System was consistent with the results achieved by the Invisalign clear

aligners solution provided by Align Technology, Inc.

Close up of smart aligner with (1) outer structure formed based on the final tooth position desired for a perfect smile and (2) micro

balloon inserted between the outer structure and the inner structure to support the balloon’s expansion.

on the Aerodentis System, we have developed a prototype of the Platform, our next generation, comprehensive enhanced solution to Class

1 and Class 2 malocclusion for which we intend to submit a 510(k) application for marketing in the U.S., as the Platform is beyond the

scope of our current FDA clearance.

The prototype of the Platform was developed over the course of eighteen months and is intended to

advance the proven clinical features of the Aerodentis System while incorporating recent developments in artificial intelligence utilized

in our Aerodentis AI Cloud (as defined below) component of the Platform, secure wireless and Internet communications with Internet of

Things (“IoT”) devices used in our Smart Aligner System component of the Platform and advanced imaging and 3D printing technologies.

IoT devices revers to pieces of hardware, such as sensors, actuators, gadgets, appliances, or machines, that are programmed for certain

applications and can transmit data over the internet or other networks.

is comprised of three primary components:

Aerodentis smartphone application;

AI-based cloud service (“Aerodentis AI Cloud”), which is used to perform analytics and manage patient treatment plans;

smart aligner system used by the patient, which consists of:

(i) a base control unit containing the pump and the IoT components and (ii)

a smart aligner containing the micro-balloon that gently pushes teeth into their intended final position using pulsating air (the “Smart

Aligner System”).

The following

provides a more detailed description of each of the components of our Platform:

Smartphone Application

freely downloadable Aerodentis smartphone application will allow potential patients to make a video of their smile and teeth and upload

the video to the Aerodentis AI Cloud.

This 2D video will be converted into a 3D model using our proprietary patent-pending AI based image

analysis technology.

The underlying algorithms will then perform an initial analysis to determine if the patient can potentially benefit

from our solution.

This complex analysis will be performed in minutes and will deliver a “Go/No Go” response.

Once a patient

begins treatment, they will use the smartphone application to provide their dental professional with ongoing remote monitoring of their

treatment progress.

The smartphone application can be used to upload additional teeth videos showing progress and to transmit data from

the Smart Aligner System (described below), including the amount of time the patient used the Smart Aligner System and the pressure and

pulse levels administered.

Aerodentis AI Cloud will be used to analyze data uploaded by patients and to facilitate communication between patients and dental professionals.

If the analysis performed on the initial video upload from the Aerodentis smartphone application delivers a “Go” result,

the patient will be invited to have an intraoral scan performed by a dental professional from our network of participating providers.

The results of this intraoral scan will be uploaded to the Aerodentis AI Cloud by the dental professional, and the Aerodentis AI Cloud

will use a machine learning algorithm to compare the scan with the initial model generated from the patient’s initial video upload.

The machine learning algorithm is designed to learn with every scan how to improve the accuracy of the 3D images it generates from smartphone

We believe that the Platform’s image analysis of smartphone videos will eventually approach the level of accuracy observed

in intraoral scans.

If we achieve this, we will be in a position to be able provide highly accurate image analysis of teeth that can

be used throughout the dental industry since it would allow for smartphones to essentially replace the need for intraoral scans for certain

This would dramatically increase the efficiency and treatment delivery cycle in the dental industry and result in a potentially

material economic benefit to our Company in the future.

Aerodentis AI Cloud will also be used for ongoing analysis of patient data and management of a patient’s treatment plan throughout

the treatment.

A dental professional will use our Platform to develop a customized treatment plan, including any interproximal reduction

necessary before treatment begins, based on the Smart Aligner System.

As a patient uploads progress videos from their smartphone, the

Platform will compare tooth positions in previous videos to current positions.

A dental professional will be able to use this data to

remotely monitor the treatment progress and modify the treatment plan remotely as needed.

Aligner System

Platform’s Smart Aligner System features a newer, more advanced version of our first generation Aerodentis System, featuring completely

redesigned micropump and motor mechanisms.

The redesign has significantly increased the pump’s pressure capacity, efficiency, and

In addition, the base control unit of Smart Aligner System is now IoT-enabled to allow external secure communication with

the device using Wi-Fi and Bluetooth.

The device will thus be able to communicate with the patient’s smartphone as well as the

Aerodentis AI Cloud and the designated dental professional, subject to FDA clearance.

clear aligner of a patient’s Smart Aligner System will be created using 3D printing based on various 3D images of the patient’s

teeth that are collected and analyzed in the Aerodentis AI Cloud.

This will represent a significant development in our industry since,

today, aligners are not printed but produced using a thermoforming process.

Other companies have implemented 3D printing to produce the

aligner models but not the actual aligners.

Although using 3D printing is a superior method for production due to its level of precision

and customizability, it has not been implemented in the production of aligners in the traditional aligner market because it would be

financially prohibitive to do so, since traditional aligner solutions would need to print multiple aligners for each patient.

solution requires only one smart aligner to be produced for each patient, we will be able to take advantage of this cost-effective production

method that will also have economies of scale.

is one of the most prevalent clinical dental conditions in the world, affecting approximately 60% to 75% of the global population.

It is estimated that there are approximately 500 million people globally with malocclusion who could benefit from straightening

2 However, most people afflicted by malocclusion do not seek orthodontic treatment due to a number of reasons,

including negative perceptions of metal braces, affordability of treatment, and accessibility to doctors in certain markets and geographies.

Annually, only approximately 21 million or 4.2% of the affected individuals elect treatment by orthodontists.

3 Today, most

orthodontic patients continue to have their malocclusions treated with the use of traditional corrective methods such as metal arch wires

and brackets, referred to as braces, augmented with elastics, metal expanders, headgear or functional appliances, and other ancillary

devices as needed.

Upon completion of a patient’s treatment, their dental professional may recommend the patient use a retainer

appliance to preserve the benefits of their treatments.

to a 2022 study conducted by Precedent Research (“Precedence Research 2022 Study”), the global clear aligners market size

was estimated at $6.29 billion in 2022 and is expected to surpass around $46.3 billion by 2030, expanding at a compound annual growth

rate (CAGR) of 28.34% during the period 2022 to 2030.

Precedence Research Study, 2022

Platform seeks to address this large and underserved global market by offering a discreet, less intrusive and less painful treatment

alternative to available clear aligners and traditional orthodontic treatments.

Our Platform is optimized to correct malocclusions that

relate to the “social six,” which are the front upper six and lower six teeth.

We believe that at least 30% of those who

currently seek treatment, or 6.6 million people, could benefit from using Aerodentis to correct their smiles.

According to the Precedence

Research 2022 Study, by 2028, the market for clear aligners will surpass 22 million people, which is our total addressable market.

Alhammadi, Maged Sultan, et al.

“Global distribution of malocclusion traits:

A systematic review.” Dental press journal of

orthodontics 23 (2018):

Business Insight.

The global clear aligners market is projected to grow from $3.80 billion in 2023 to $17.27 billion by 2030, at a CAGR

of 24.2% during the forecast period, 2023-2030 (June 2023), available at https://www.fortunebusinessinsights.com/industry-reports/clear-aligners-market-101377.

Global Orthodontic Supplies Market Report 2027 – Improving Oral Health Care, available at https://meditechinsights.com/global-orthodontic-supplies-market/.

Clear Aligners Market (By Age:

Adults, Teenagers;

At-home aligners/Direct-to-consumer (DTC) Aligners, In-office Aligners;

Hard Type, Medium Type, Soft Type;

By Material Type:

Polyurethane, Plastic Polyethylene Terephthalate Glycol, Poly-vinyl

By Distribution Channel:

Direct Sales, Laboratories, Others;

Hospitals, Standalone Practices, Group Practices,

Others) - Global Industry Analysis, Size, Share, Growth, Trends, Regional Outlook, and Forecast 2022-2030 (October 2022), available at

https://www.precedenceresearch.com/clear-aligners-market.

Precedence Research Study, 2022

addressable market also stands to benefit from the recent trend toward dentists, rather than orthodontists, delivering orthodontic care

through clear aligners.

In order for a smile correction solution to work properly, a treatment plan and monitoring needs to be executed

by a dental professional, such as dentists and orthodontists.

Since the Aerodentis Platform provides the necessary information to develop

and administer a treatment plan using our solution, it may be used by dentists as well as orthodontists, which expands our target distribution

channel to cover both orthodontists and dentists.

According to a 2019 Journal of Family Medicine and Primary Care article, approximately

36% of dentists were already performing orthodontic procedures such as the malocclusion corrections.

5 This is an indication

of an ongoing trend of dentists assuming more orthodontic treatment offerings in their practices.

We believe that the ease of use of

our Platform will also facilitate eventually selling our solution directly to the consumer in qualified cases with remote dental professional

business model is focused on engaging the customer throughout their smile correction journey and beyond.

Our solution provides an innovative,

proprietary end-to-end platform that spans all stages of customer engagement, from initial acquisition to treatment and ongoing maintenance—all

with minimal need for office visits and lifestyle inconvenience.

Initiated Dentist-Controlled Treatment

other solutions in the market, such as traditional clear aligners, we believe our Platform will provide greater access and interaction

with the customers and allow customers to feel more involved in their own treatment process.

We hope to engage the power of social media

and other digital outlets to initiate initial demand for our Platform by the customers.

5 See Jayaprakash, Poonam K., et al.

“A survey on orthodontic

services provided by general dental practitioners.” Journal of family medicine and primary care 8.7 (2019):

Engagement – Value Creation

Platform is designed to have a high level of engagement with customers, if cleared for marketing in the U.S., as users will be able to

scan their teeth with any smartphone and see how our solution can improve their smile.

We intend to engage the customer from their first

interest in correcting their smile and guide them throughout our convenient process.

of Dental Professionals

cleared by FDA, the Platform will generally function via the following process:

if the customer can benefit from our Platform, based

on the severity of their tooth alignment and malocclusions, they will be referred to a dental professional in our network for an intraoral

Once the results of the scan are uploaded to our Aerodentis AI Cloud, a remote dental professional will develop a treatment plan

for that patient using our Platform.

If the patient requires any tooth preparation before initiating treatment with the smart aligner,

the patient will again be referred to a dental professional in our network.

The Company currently does not have any written agreements

or arrangements with any dental professionals governing provision of orthodontic services using our Platform.

– Value Capture

intend to generate revenues by:

our solution through a professional dental network;

ongoing monitoring and treatment plans for those who have completed their smile correction and may require smile maintenance throughout

selling directly to the consumer in qualified cases with remote dental professional involvement

and Marketing

intend to market our Platform in Israel, the European Union (“E.U.”), United Kingdom, United States, and Canada, subject

to each country’s requisite regulatory authorization.

We intend to utilize social media to promote our Platform to our targeted

The Platform has a potentially viral social media message that we hope will drive demand by placing user-generated content

on all major social medial platforms.

Our marketing strategy themes and promotional messages will emphasize the ease and convenience

offered by our Platform as compared to other available treatments.

and Development

have a research and development team with software development, medical device development, dental/orthodontic, data science and other

innovation focused backgrounds.

Our current research and development efforts are primarily focused on enhancing the Platform and developing

software and processes to enable the manufacture of our smart aligner systems in volume as well as productizing the prototype through

the development of UI/UX and system integration with existing patent systems.

of March 2023, our outsourced software development team is composed of eight professionals with years of experience in artificial intelligence

development, data science, application and software engineering.

Members of the team come from the elite intelligence units of the Israeli

Defense Force and have a breadth of experience in computer vision, imaging and targeting systems development.

Our software development

team is headed by Yossi Avni, who has 25 years of experience in developing advanced artificial intelligence applications, behavioral

biometrics, behavioral profiling and advanced security systems and holds over 100 patents in these areas.

hardware and systems development team is composed of six professionals with years of experience in FDA-compliant medical device development.

They are a part of Aran Research Development Prototypes Ltd.

(“Aran”), a leading Israeli product design and development firm

and our third-party hardware development partner.

Aran is ISO 13485 certified and maintains a ISO 7 cleanroom for testing and assembly.

Aran also has manufacturing facilities and a full suite of 3D printing capabilities, which are compliant with FDA guidelines.

and systems development team is headed by Avi Kayton, a skilled development manager and systems engineer with 16 years of experience,

including extensive experience in medical device companies.

have three issued U.S.

patents, four pending U.S.

patents and numerous global patent applications.

These patents and applications cover

critical aspects of our Platform, including the movement of teeth using pulsating air, our diagnostic process, Platform technology, and

Our issued U.S.

patents 7819661, 10806376, and 10820965 expire in 2030, 2040, and 2040 respectively.

We currently do not

own any trademarks.

intend to continue to pursue further intellectual property protection through U.S.

patent applications, trademark applications,

and non-disclosure and non-compete agreements.

We also intend to seek to protect our software, documentation and other written materials

under trade secret and copyright laws.

There can be no assurance that patents will be issued as a result of any patent application or

that patents that have been issued to us or may issue in the future will be found to be valid and enforceable and sufficient to protect

our technology or products.

business is generally not seasonal.

However, we may experience moderate sales fluctuations, at certain periods of the year, such as January,

due to renewed consumer focus on health improvement and aesthetics.

dental industry is in a period of immense and rapid digital transformation involving products, technologies, distribution channels and

business models.

We face competition in the market for our Platform from the clear aligners market and we expect competition from existing

competitors and new companies that may enter the market or introduce new technologies in the future.

We compete with several well-established

companies both in the traditional orthodontic industry and the direct-to-consumer clear aligner industry, including Align Technologies,

Smile Direct Club, Dentsply Sirona (Byte), 3M Clarity Aligners, and Straumann Group.

Although these companies offer clear aligner solutions,

and thus do not use technologies similar to the Platform, we expect that potential patients will view clear aligner products as alternatives

to the Platform.

For this reason, we view any company in the clear aligners market as a potential competitor.

that the principal competitive factors in the market for orthodontic appliances include:

and financing options;

and convenience;

appeal of the treatment method;

associated with the treatment method;

and effectiveness of treatment;

● orthodontist

believe that our Platform will compare favorably with respect to each of these factors.

products (including the currently cleared version, as well as the next generation Platform for which we have not yet submitted the requisite

510(k) application to FDA) are considered medical devices, and, accordingly, are subject to rigorous regulation by government agencies

in the United States and other countries in which we intend to sell our products.

These regulations vary from country to country but

cover, among other things, the following activities with respect to medical devices:

development and manufacturing;

labeling, content and language of instructions for use and storage;

storage and safety;

sales and distribution;

clearance and approval;

keeping procedures;

● advertising

and promotion;

and field safety corrective actions;

● post-market

surveillance;

● post-market

approval studies;

import and export

the U.S., numerous laws and regulations govern the processes by which medical devices are developed, manufactured, brought to market

and marketed.

These include the Federal Food, Drug, and Cosmetic Act (“FD&C Act”) and its implementing regulations issued

by FDA, among others.

Unless an exemption applies, each medical device commercially distributed in the United States requires FDA clearance

of a 510(k) premarket notification (“510(k) clearance”), granting of a de novo request, or approval of an application

for premarket approval (“PMA”).

In general, under the FD&C Act, medical devices are classified in one of three classes

on the basis of the controls necessary to reasonably assure their safety and effectiveness.

A medical device’s classification determines

the level of FDA review and approval to which the device is subject before it can be marketed to consumers:

I devices, the lowest-risk FDA device classification, include devices with the lowest risk to the patient and are those for which safety

and effectiveness can be assured by adherence to FDA’s medical device general controls, including labeling, establishment registration,

device product listing, adverse event reporting, and, for some products, adherence to good manufacturing practices through FDA’s

Quality System Regulations.

II devices, moderate-risk devices, also require compliance with general controls and in some cases, special controls as deemed necessary

by FDA to ensure the safety and effectiveness of the device.

These special controls may include performance standards, particular labeling

requirements, or post-market surveillance obligations.

While most Class I devices are exempt from the 510(k) premarket notification requirement,

typically a Class II device also requires pre-market review and 510(k) clearance as well as adherence to the Quality System Regulations/good

manufacturing practices for devices.

III devices, high-risk devices that are often implantable or life-sustaining, also require compliance with the medical device general

controls and Quality System Regulations, and generally must be approved by FDA before entering the market through a PMA application.

Approved PMAs can include post-approval conditions and post-market surveillance requirements, analogous to some of the special controls

that may be imposed on Class II devices.

manufacturing quality system is required to be in compliance with the Quality System Regulations enforced by FDA and similar regulations

enforced by other worldwide regulatory authorities.

FDA’s Quality System Regulations require manufacturers to follow stringent

design, testing, process control, documentation, and other quality assurance procedures.

first generation Aerodentis System is a Class II medical device, which was cleared by FDA for commercialization in the U.S.

to the 510(k) notification process for movement and alignment of teeth during orthodontic treatment of malocclusion in April 2020.

are preparing to apply for 510(k) clearance for the updated version of the currently cleared device.

Such updated Platform contains new

and/or different components than the original device, which is why a new 510(k) clearance is required prior to marketing the Platform

We have not yet filed a 510(k) submission for the Platform, and it has, thus, not been found by the FDA to be substantially

equivalent to the first generation Aerodentis System.

The manufacture, marketing and distribution of the Aerodentis System, as well as

our next-generation Platform once cleared by FDA, if ever, is subject to continuing regulation and enforcement by FDA and other government

authorities, which includes routine FDA inspections of our facilities to determine compliance with facility registration requirements,

product listing requirements, medical device reporting regulations, and Quality System Regulations, among others.

If FDA finds that we

have failed to comply with Quality System Regulations or other legal or regulatory requirements, it or other government agencies may

institute a wide variety of enforcement actions against us, ranging from Warning Letters to more severe sanctions, including but not

limited to financial penalties, withdrawal of 510(k) clearances already granted, and criminal prosecution.

We have passed our International

Organization for Standardization (“ISO”) and Medical Device Single Audit Program (“MDSAP”) certification process

and have added the U.S.

to our ISO/MDSAP certification in 2019

510(k) Process

the 510(k) process, the manufacturer must submit to FDA a premarket notification demonstrating that the device is “substantially

equivalent” to either a device that was legally marketed prior to May 28, 1976, the date upon which the Medical Device Amendments

of 1976 were enacted, and for which a PMA is not required, a device that has been reclassified from Class III to Class II or Class I,

or another commercially available device that was cleared through the 510(k) process.

To be “substantially equivalent,” the

proposed device must have the same intended use as the predicate device, and either have the same technological characteristics as the

predicate device or have different technological characteristics and not raise different questions of safety or effectiveness than the

predicate device.

Clinical data is sometimes required to support substantial equivalence.

a 510(k) premarket notification is submitted, FDA determines whether to accept it for substantive review.

If it lacks necessary information

for substantive review, FDA will refuse to accept the 510(k) notification.

If it is accepted for filing, FDA begins a substantive review.

By statute, FDA is required to complete its review of a 510(k) notification within 90 days of receiving the 510(k) notification.

practical matter, clearance often takes longer, and clearance is never assured.

FDA may require further information, including clinical

data, to make a determination regarding substantial equivalence, which may significantly prolong the review process.

If FDA agrees that

the device is substantially equivalent to a predicate device currently on the market, it will grant 510(k) clearance to commercially

market the device.

a device is cleared or approved for marketing, numerous and extensive regulatory requirements may continue to apply.

These include but

are not limited to:

and updated establishment registration and device listing with FDA;

System Regulation requirements, which require manufacturers to follow stringent quality assurance procedures during all aspects of the

design and manufacturing process;

● restrictions

on sale, distribution, or use of a device;

advertising, promotion, and marketing regulations, which require that promotion is truthful,

not misleading, and provide adequate directions for use and that all claims are substantiated,

and also prohibit the promotion of products for unapproved or “off-label” uses

(i.e., indications that are inconsistent with or beyond the scope of the applicable FDA approval

or clearance) and impose other restrictions on labeling;

or approval of product modifications to legally marketed devices that could significantly

affect safety or effectiveness or that would constitute a major change in intended use;

device reporting regulations, which require that a manufacturer report to FDA if a device

it markets may have caused or contributed to a death or serious injury, or has malfunctioned

and the device or a similar device that it markets would be likely to cause or contribute

to a death or serious injury if the malfunction were to recur;

● correction,

removal, and recall reporting regulations, and FDA’s recall authority;

with the federal law and regulations requiring Unique Device Identifiers on devices;

● post-market

surveillance activities and regulations, which apply when deemed by FDA to be necessary to

protect the public health or to provide additional safety and effectiveness data for the

has broad regulatory compliance and enforcement powers.

If FDA determines that we failed to comply with applicable regulatory requirements,

it can take a variety of compliance or enforcement actions, which may result in any of the following sanctions:

letters, untitled letters, fines, injunctions, consent decrees, and civil penalties;

withdrawals, or administrative detention, or seizure of our products;

restrictions or partial suspension or total shutdown of production;

or delaying requests for 510(k) marketing clearance or PMA approvals of new products or modified

● withdrawing

510(k) clearances or PMA approvals that have already been granted;

to grant export or import approvals for our products;

International

countries throughout the world have established regulatory frameworks for marketing and commercialization of medical devices.

As a designer,

manufacturer, and marketer of medical devices, we are obligated to comply with the respective frameworks of these countries to obtain

and maintain access to these global markets.

The frameworks often define requirements for marketing authorizations which vary by country.

Failure to obtain appropriate marketing authorization and to meet all local requirements, including specific quality and safety standards

in any country in which we currently market our products, could cause commercial disruption and/or subject us to sanctions and fines.

Delays in receipt of, or a failure to receive, such marketing authorizations, or the loss of any previously received authorizations,

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

is currently no premarket government review of medical devices in the European Economic Area (“EEA”).

However, all medical

devices placed on the market in the EEA must meet the relevant essential requirements laid down in Annex I of Directive 93/42/EEC concerning

medical devices, or the Medical Devices Directive.

The most fundamental essential requirement is that a medical device must be designed

and manufactured in such a way that it will not compromise the clinical condition or safety of patients, or the safety and health of

users and others.

In addition, the device must achieve the performances intended by the manufacturer and be designed, manufactured, and

packaged in a suitable manner.

The European Commission has adopted various standards applicable to medical devices.

These include standards

governing common requirements, such as sterilization and safety of medical electrical equipment, and product standards for certain types

of medical devices.

There are also harmonized standards relating to design and manufacture.

While not mandatory, compliance with these

standards is viewed as the easiest way to satisfy the essential requirements as a practical matter.

Compliance with a standard developed

to implement an essential requirement also creates a rebuttable presumption that the device satisfies that essential requirement.

April 5, 2017, the European Parliament passed the Medical Devices Regulation (Regulation 2017/745), which repeals and replaces the E.U.

Medical Device Directive and became effective on May 26, 2021.

The Medical Devices Regulation, among other things, is intended to establish

a uniform, transparent, predictable, and sustainable regulatory framework across the EEA for medical devices and ensure a high level

of safety and health while supporting innovation.

The new regulations, among other things:

the rules on placing devices on the market and reinforce surveillance once they are available;

explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance, and safety of devices placed

on the market;

the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number;

up a central database to provide patients, healthcare professionals, and the public with comprehensive information on products available

rules for the assessment of certain high-risk devices, such as implants, which may have to undergo an additional check by experts before

they are placed on the market.

received our European CE mark and ISO/MDSAP certification in 2019.

In light of our ISO/MDSAP certification, we believe that we are in

substantial compliance with applicable E.U.

regulations and do not anticipate having to make any material expenditures as a result of

or other currently applicable regulatory requirements.

Under Medical Devices Regulation, manufacturing facilities are subject to

periodic inspections by regulatory authorities and must comply with device safety and effectiveness requirements as set forth therein.

To that end, we have implemented controls and procedures intended to ensure that our Access Dental Lab Quality System meets FDA’s

and ISO requirements.

We passed our audit to renew our ISO/MDSAP certification in April 2023.

System Regulations

manufacturing quality system is required to be in compliance with the Quality System Regulations enforced by FDA and similar regulations

enforced by other worldwide regulatory authorities.

FDA’s Quality System Regulations require manufacturers to follow stringent

design, testing, process control, documentation, and other quality assurance procedures.

If FDA finds that we have failed to comply with

Quality System Regulations or other legal or regulatory requirements, it or other government agencies may institute a wide variety of

enforcement actions against us, ranging from Warning Letters to more severe sanctions, including but not limited to financial penalties,

withdrawal of 510(k) clearances already granted, and criminal prosecution.

In addition, under Canadian regulation, manufacturing facilities

are subject to periodic inspections by regulatory authorities and must comply with device safety and effectiveness requirements as required

by the Medical Devices Regulation.

Professional Regulation

ability to conduct business in each state is dependent in part upon that particular state’s treatment of remote healthcare delivery

under such state’s laws, rules and policies governing the practice of dentistry, which are subject to changing political, regulatory

and other influences.

Orthodontists and dentists who provide professional services to a patient via teledentistry must, in most instances,

hold a valid license to practice or to provide treatment in the state in which the patient is located.

In addition, certain states require

an orthodontist or dentist providing telehealth services to be physically located in the same state as the patient.

Failure to comply

with these laws and regulations can give rise to civil or criminal penalties.

Federal and State Laws

are also subject to various laws inside and outside the U.S.

concerning our relationships with healthcare professionals and government

officials, price reporting and regulation, the promotion, sales and marketing of our products and services, the importation and exportation

of our products, reimbursement for our products and services, the operation of our facilities, and the distribution of our products.

Initiatives sponsored by government agencies, legislative bodies, and the private sector regarding these matters, including efforts to

limit the growth of healthcare expenses generally, are ongoing in markets where we do business.

It is not possible to predict at this

time the long-term impact of such cost containment and other measures on our future business.

intend to enter into contracts with orthodontists, dentists, or professional corporations to deliver our products and services to their

Such contractual relationships will be subject to various state laws that prohibit the practice of dentistry by lay entities

or persons and are intended to prevent unlicensed persons from interfering with or influencing the orthodontist’s or dentist’s

professional judgment.

In addition, laws in various states also generally prohibit the sharing of professional services income with nonprofessional

or business interests.

Activities other than those directly related to the delivery of healthcare may be considered an element of the

practice of dentistry in many states.

Under the corporate practice of dentistry restrictions of certain states, non-clinical decisions

and activities may implicate the restrictions on the corporate practice of dentistry.

We will continually monitor state requirements

as to what constitutes the practice of dentistry and take steps to ensure that the orthodontists and dentists who utilize our services

and teledentistry platform handle all clinical aspects of their patients’ care to ensure we do not violate those laws and regulations.

a participant in the health care industry we are subject to extensive and frequently changing regulation under many other laws administered

by governmental entities at the federal, state, and local levels, some of which are, and others of which may be, applicable to our business.

Laws regulating medical device manufacturers and health care providers cover a broad array of subjects.

states have fraud and abuse and consumer protection laws that apply to healthcare items or services reimbursed by any third-party payor,

including commercial insurers, not just those reimbursed by a federally funded healthcare program, or apply regardless of payor.

scope of these laws and the interpretations of them vary from state to state and are enforced by state courts and regulatory authorities,

each with broad discretion.

A determination of liability under such laws could result in fines and penalties and restrictions on our

ability to operate in these jurisdictions.

Information Privacy and Security Laws

are numerous U.S.

federal and state laws and regulations related to the privacy and security of PII, including health information.

others, the federal Health Insurance Portability and Accountability Act of 1996, as amended by HITECH, and their implementing regulations,

which we collectively refer to as HIPAA, establish privacy and security standards that limit the use and disclosure of PHI and require

covered entities and business associates to implement administrative, physical, and technical safeguards to ensure the confidentiality,

integrity, and availability of individually identifiable health information in electronic form, among other requirements.

of HIPAA may result in civil and criminal penalties.

We must also comply with HIPAA’s breach notification rule which requires notification

to affected individuals and HHS, and in certain cases to media outlets, in the case of a breach of unsecured PHI.

The regulations also

require business associates of covered entities to notify the covered entity of breaches by the business associate.

attorneys general also have the right to prosecute HIPAA violations committed against residents of their states, and HIPAA standards

have been used as the basis for the duty of care in state civil suits, such as those for negligence or recklessness in misusing personal

In addition, HIPAA mandates that HHS conduct periodic compliance audits of HIPAA covered entities and their business associates

for compliance.

states also have laws that protect the privacy and security of sensitive and personal information, including health information.

laws may be similar to or even more protective than HIPAA and other federal privacy laws.

For example, the laws of the State of California,

are more restrictive than HIPAA.

Where state laws are more protective than HIPAA, we must comply with the state laws we are subject to,

in addition to HIPAA.

California passed the California Consumer Privacy Act or CCPA on June 28, 2018, which went into effect January

On November 3, 2020, the California Privacy Rights Act of 2020 (“CPRA”), which amends the CCPA and adds new privacy

protections that became effective on January 1, 2023, was enacted through a ballot initiative.

While information we maintain that is

covered by HIPAA may be exempt from the CCPA, other records and information we maintain on our patients may be subject to the CCPA.

certain cases, it may be necessary to modify our planned operations and procedures to comply with these more stringent state laws.

only may some of these state laws impose fines and penalties upon violators, but also some, unlike HIPAA, may afford private rights of

action to individuals who believe their personal information has been misused.

In addition, state and federal privacy laws subject to

frequent change.

addition to HIPAA and state health information privacy laws, we may be subject to other state and federal privacy laws, including laws

that prohibit unfair privacy and security practices and deceptive statements about privacy and security, laws that place specific requirements

on certain types of activities, such as data security and texting, and laws requiring holders of personal information to maintain safeguards

and to take certain actions in response to a data breach.

data protection, privacy, and other laws and regulations are often more restrictive than those in the U.S.

The E.U., for example, traditionally

has imposed stricter obligations under its laws and regulations relating to privacy, data protection and consumer protection than the

In May 2018, the General Data Protection Regulation (the “GDPR”), which governs data practices and privacy in the E.U.,

became effective and replaced the data protection laws of the individual member states.

GDPR requires companies to meet stringent requirements

regarding the handling of personal data of individuals in the E.U.

These more stringent requirements include expanded disclosures to

inform members about how we may use their personal data, increased controls on profiling members, and increased rights for members to

access, control and delete their personal data.

In addition, there are mandatory data breach notification requirements.

includes significant penalties for non-compliance, which may result in monetary penalties of up to 20 million Euros or 4% of a company’s

worldwide turnover, whichever is higher.

GDPR and other similar regulations require companies to give specific types of notice and informed

consent is required for the placement of a cookie or similar technologies on a user’s device for online tracking for behavioral

advertising and other purposes and for direct electronic marketing, and the GDPR also imposes additional conditions in order to satisfy

such consent, such as a prohibition on pre-checked consents.

It remains unclear how the U.K.

data protection laws or regulations will

develop in the medium to longer term and how data transfer to the U.K.

from the E.U.

will be regulated.

Outside of the E.U., there are

many other countries with data protection laws, and new countries are adopting data protection legislation with increasing frequency.

Many of these laws may require consent from individuals for the use of data for various purposes, including marketing, which may reduce

our ability to market our products.

is no harmonized approach to these laws and regulations globally.

Consequently, we increase our risk of non-compliance with applicable

foreign data protection laws and regulations when we expand internationally.

We may need to change and limit the way we use personal

information in operating our business and may have difficulty maintaining a single operating model that is compliant.

Compliance with

such laws and regulations will result in additional costs and may necessitate changes to our business practices and divergent operating

models, limit the effectiveness of our marketing activities, adversely affect our business, results of operations, and financial condition,

and subject us to additional liabilities.

Environmental

have no material expenditures for compliance with Federal, State or local provisions regulating the discharge of materials into the environment,

or otherwise relating to the protection of the environment.

of August 14, 2023, we had 3 full-time employees and 1 part-time employee.

principal executive offices are located at Shatner Street 3, Jerusalem, Israel, and our telephone number is +972 (0)74-700-6700.

web page address is www.aerodentis.com.

References to our website address do not constitute incorporation by reference of the information

contained on the website, and the information contained on the website is not part of this document or any other document that we file

with or furnish to the SEC.

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 1. Business