What changed in this filing

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Item 1A. Risk Factors

2021-03-15 compared with 2020-04-14 · 1228 added, 41 removed, 111 unchanged (92% of the section changed)

1A Risk Factors - continued

following risk factors and other information included in this Annual Report on Form 10-K should be carefully considered.

and uncertainties described below are not the only ones we face.

Additional risks and uncertainties not presently known to us

or we presently deem less significant may also impair our business operations.

If any of the following risks occur, our business,

financial condition, results of operations and future growth prospects could be materially and adversely affected.

Related to Financial Position and Capital Resources

have incurred operating losses since our inception and may not be able to achieve profitability.

have incurred net losses since our inception.

date, since our inception in June 2014, we have financed our operations principally through issuances of common stock, preferred

stock, warrants, and debt, in both private placements and underwritten public offerings of our securities.

Our ability to generate

sufficient revenue from any of our products in development, and to transition to profitability and generate consistent positive

cash flows is dependent upon factors that may be outside of our control.

We expect our operating expenses will continue to increase

as we continue to build our commercial infrastructure, develop, enhance and commercialize new products and incur additional operational

and reporting costs associated with being a public company.

As a result, we expect to continue to incur operating losses for the

foreseeable future.

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Associated with Our Business

may need substantial additional funding and may be unable to raise capital when needed, which could force us to delay, reduce,

eliminate or abandon growth initiatives or product development programs.

intend to continue to make investments to support our business growth.

Because we have not generated any revenue or cash flow

to date, we will require additional funds to:

our research and development;

clinical trials;

Commercialize

our new products and services;

market acceptance of our products and services;

and expand our sales, marketing, and distribution capabilities for our products and services;

our intellectual property rights or defend, in litigation or otherwise, any claims we infringe third-party patents or other

intellectual property rights;

in businesses, products and technologies, although we currently have no commitments or agreements relating to do so.

fund our operations;

we do not have, or are not able to obtain, sufficient funds, we may have to delay product development initiatives or license to

third parties the rights to commercialize products or technologies we would otherwise seek to market.

We also may have to reduce

marketing, customer support or other resources devoted to our products.

we have a limited operating history, and have not generated any revenues, you will have little basis upon which to evaluate our

ability to achieve our business objective.

we have a limited operating history, and have not generated any revenues, you will have little basis upon which to evaluate our

ability to achieve our business objective.

We are subject to all of the problems, expenses, delays and other risks inherent in

any new business, as well as problems inherent in establishing a name and business reputation.

markets in which we operate are highly competitive, and we may not be able to effectively compete against other providers of medical

devices, particularly those with greater resources.

face intense competition from companies with dominant market positions in the medical device industry.

These competitors have

significantly greater financial, technical, marketing and other resources than we have and may be better able to:

to new technologies or technical standards;

to changing customer requirements and expectations;

other companies to gain new technologies or products may displace our products;

market and sell products;

prosecute, enforce and defend patents and other intellectual property;

resources to the development, production, promotion, support and sale of products;

a broad range of competitive products at lower prices.

expect competition in the markets in which we participate to continue to increase as existing competitors improve or expand their

product offerings.

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have finite resources, which may restrict our success in commercializing our current products and other products we may develop,

and we may be unsuccessful in entering into or maintaining third-party arrangements to support our internal efforts.

grow our business as planned, we must expand our sales, marketing and customer support capabilities, which will involve developing

and administering our commercial infrastructure and/or collaborative commercial arrangements and partnerships.

We must also maintain

satisfactory arrangements for the manufacture and distribution of our tests and other products.

Also, we partner with CLIA-certified

lab facilities to process our tests and provide patient results.

have only three products, EsoGuard, EsoCheck and CarpX, that are commercially available for sale, and have not generated substantial

revenue from product sales to date.

We have limited experience managing a sales force, customer support operation, manufacturing

and clinical laboratory operations for multiple products in multiple locations with divergent regulatory requirements.

encounter difficulties retaining and managing the specialized workforce these activities require.

We may seek to partner with

others to assist us with any or all of these functions.

Additionally, we may be unable to find appropriate third parties with

whom to enter into these arrangements.

sales efforts are growing in size and complexity including recruiting and hiring selling resources throughout the United States,

supporting those efforts with marketing materials sufficient to attract physicians and patients to our products, and then duplicating

those efforts outside the United States either with distributor relationships or hired employees.

We must coordinate among our

internal sales teams, as well as our partners’, to ensure that we are effectively marketing our tests and other products

while being fully compliant with all relevant healthcare regulations.

we are unable to deploy and maintain effective sales, marketing and medical affairs capabilities, we will have difficulty achieving

market awareness and selling our tests and other products.

achieve commercial success for our EsoGuard test and our EsoCheck and CarpX products, as well as any products we develop in the

future, we must continue to develop and grow our sales, marketing and medical affairs organizations to effectively explain to

healthcare providers the reliability, effectiveness and benefits of our current and future tests and other products as compared

to alternatives.

We may not be able to successfully manage our dispersed or inside sales forces or our sales force may not be

Because of the competition for their services, we may be unable to hire, partner with or retain additional qualified

sales representatives or marketing or medical affairs personnel, either as our employees or independent contractors or through

independent sales or other third-party organizations.

Market competition for commercial, marketing and medical affairs talent

is significant, and we may not be able to hire or retain such talent on commercially reasonable terms, if at all.

and maintaining sales, marketing and medical affairs capabilities will be expensive and time-consuming.

Our expenses associated

with maintaining our sales force may be disproportional compared to the revenues we may be able to generate on sales of our EsoGuard

tests, our EsoCheck and CarpX products or any future tests or other products.

may be dependent on the sales and marketing efforts of third parties if we choose not to develop an extensive sales and marketing

we will depend on the efforts of third parties (including sales agents and distributors) to carry out the sales and marketing

of our products.

We anticipate that each third party will control the amount and timing of resources generally devoted to these

However, these third parties may not be able to generate demand for our products.

In addition, there is a risk that

these third parties will develop products competitive to ours, which would likely decrease their incentive to vigorously promote

and sell our products.

If we are unable to enter into co-promotion agreements or to arrange for third-party distribution of our

products, we will be required to expend time and resources to develop an effective internal sales force.

However, it may not be

economical for us to market our own products or we may be unable to effectively market our products.

Therefore, our business could

be harmed if we fail to enter into arrangements with third parties for the sales and marketing of our products or otherwise fail

to establish sufficient marketing capabilities.

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products may never achieve market acceptance.

date, we have not generated sales revenues from our products and services.

Our ability to generate sales revenues from product

and services, and to achieve profitability will depend upon our ability to successfully commercialize our products and services.

As we only recently began to market our first product and service for sale, we have no basis to predict whether our current product

and service (or potential future products and services) will achieve market acceptance.

A number of factors may limit the market

acceptance of any of our products, including:

timing of regulatory approvals of our products and services and market entry compared to competitive products;

effectiveness of our products and services, including any potential side effects, as compared to alternative treatments;

rate of adoption of our products and services by hospitals, doctors and nurses and acceptance by the health care community;

labeling and /or inserts required by regulatory authorities for each of our products and services;

competitive features of our products and services, including price, as compared to other similar products and services;

availability of insurance or other third-party reimbursement, such as Medicare, for patients using our products and services;

extent and success of our marketing efforts and those of our collaborators;

publicity concerning our products and services or similar products and services.

Recommendations,

guidelines and quality metrics issued by various organizations may significantly affect payers’

willingness to cover, and

healthcare providers’

willingness to prescribe, our products.

influential recommendations, inclusion in healthcare guidelines and inclusion in quality measures are keys to our healthcare provider

and payer engagement strategies.

These guidelines, recommendations and quality metrics may shape payers’

coverage decisions

and healthcare providers’

cancer screening procedures.

an example, the U.S.

Preventative Services Task Force (“USPSTF”), a panel of primary care providers and epidemiologists

and other national experts funded by the U.S.

Department of Health and Human Services’

Agency for Healthcare Research and

Quality, makes influential recommendations on clinical preventative services.

We intend to seek a USPSTF recommendation in the

future for our EsoGuard test.

The process of USPSTF recommendation development is lengthy, requires high quality supporting evidence

for a positive recommendation, and that the outcome of any USPSTF process is uncertain.

A USPSTF recommendations may have the

effect of reducing screening, may not include our test in a favorable manner, or may add new technologies could have a material

adverse effect on our business.

Failing to achieve a high USPSTF recommendation for our tests and other products may have certain

other potentially significant collateral implications as well.

For instance, the ACA mandates that certain non-grandfathered health

insurers cover evidence-based items or services that have in effect a rating of “A”

or “B”

in the current

recommendations of USPSTF without imposing any patient cost-sharing.

Similarly, federal regulations require that Medicare Advantage

plans cover “A”

or “B”

graded preventive services without patient cost-sharing.

the healthcare industry in the United States has experienced a trend toward cost containment and value-based purchasing of healthcare

Some government and private payers are adopting pay-for-performance programs that differentiate payments for healthcare

services based on the achievement of documented quality metrics, cost efficiencies or patient outcomes.

Payers may look to quality

measures such as the National Committee for Quality Assurance (“NCQA”), Healthcare Effectiveness Data and Information

Set (“HEDIS”) and the CMS Medicare Advantage Star Ratings to assess quality of care.

These measures are intended to

provide incentives to service providers to deliver the same or better results while consuming fewer resources.

If our tests or

other products are not included in HEDIS, the Star Ratings or other quality metrics, payers may be less inclined to reimburse

our tests or other products at adequate levels, if at all, which could adversely impact our business.

Additionally, if our tests

or other products are not included in HEDIS, the Star Ratings or other quality metrics, healthcare providers may not earn quality

credit for prescribing Cologuard and therefore may be less inclined to do so.

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or our third-party manufacturers may not have the manufacturing and processing capacity to meet the production requirements of

clinical testing or consumer demand in a timely manner.

capacity to conduct clinical trials and commercialize our products will depend in part on our ability to manufacture or provide

our products on a large scale, at a competitive cost and in accordance with regulatory requirements.

We must establish and maintain

a commercial scale manufacturing process for all of our products to complete clinical trials.

We or our third-party manufacturers

may encounter difficulties with these processes at any time that could result in delays in clinical trials, regulatory submissions

or the commercialization of products.

some of our products, we or our third-party manufacturers will need to have sufficient production and processing capacity in order

to conduct human clinical trials, to produce products for commercial sale at an acceptable cost.

We have no experience in large-scale

product manufacturing, nor do we have the resources or facilities to manufacture most of our products on a commercial scale.

cannot guarantee that we or our third-party manufacturers will be able to increase capacity in a timely or cost-effective manner,

Delays in providing or increasing production or processing capacity could result in additional expense or delays in

our clinical trials, regulatory submissions and commercialization of our products.

manufacturing processes for our products have not yet been tested at commercial levels, and it may not be possible to manufacture

or process these materials in a cost-effective manner.

will be dependent on third-party manufacturers since we will not initially directly manufacture our products.

we will not directly manufacture our products and will rely on third parties to do so for us.

If our manufacturing and distribution

agreements are not satisfactory, we may not be able to develop or commercialize products as planned.

In addition, we may not be

able to contract with third parties to manufacture our products in an economical manner.

Furthermore, third-party manufacturers

may not adequately perform their obligations, may delay clinical development or submission of products for regulatory approval

or otherwise may impair our competitive position.

We may not be able to enter into or maintain relationships with manufacturers

that comply with good manufacturing practices.

If a product manufacturer fails to comply with good manufacturing practices, we

could experience significant time delays or we may be unable to commercialize or continue to market the products.

Changes in our

manufacturers could require costly new product testing and facility compliance inspections.

In the United States, failure to comply

with good manufacturing practices or other applicable legal requirements can lead to federal seizure of violative products, injunctive

actions brought by the federal government, and potential criminal and civil liability on the part of a company and its officers

and employees.

Because of these and other factors, we may not be able to replace our manufacturing capacity quickly or efficiently

in the event that our manufacturers are unable to manufacture our products at one or more of their facilities.

As a result, the

sale and marketing of our products could be delayed or we could be forced to develop our own manufacturing capacity, which could

require substantial additional funds and personnel and compliance with extensive regulations.

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currently expect to perform our EsoGuard test in one laboratory facility.

If demand for our EsoGuard test grows, we may lack adequate

facility space and capabilities to meet increased processing requirements.

Moreover, if these or any future facilities or our

equipment were damaged or destroyed, or if we experience a significant disruption in our operations for any reason, our ability

to continue to operate our business could be materially harmed.

currently perform the EsoGuard test in a single laboratory facility in Irvine, California.

The laboratory facility, without purchasing

additional lab equipment applicable to our test, is expected to have an annual capacity of approximately 50,000 tests per year.

If demand for the EsoGuard test outstrips this capacity, and the laboratory fails to add additional equipment and staff, or complete,

or timely complete, an expansion of its available laboratory facilities, it may significantly delay our EsoGuard processing times

and limit the volume of EsoGuard tests we can process, which may adversely affect our business, financial condition and results

of operation.

In addition, our financial condition may be adversely affected if they are unable to complete these expansion projects

on budget and otherwise on terms and conditions acceptable to us.

Finally, our financial condition will be adversely affected

if demand for our products and services does not materialize in line with our current expectations and if, as a result, we end

up building excess capacity that does not yield a reasonable return on our investment.

our present, or any future, laboratory facilities were to be damaged, destroyed or otherwise unable to operate, whether due to

fire, floods, storms, tornadoes, other inclement weather events or natural disasters, employee malfeasance, terrorist acts, power

outages, or otherwise, our business could be severely disrupted.

We may not be able to perform our EsoGuard test or generate test

reports as promptly as patients and healthcare providers require or expect, or possibly not at all.

If we are unable to perform

our EsoGuard test or generate test reports within a timeframe that meets patient and healthcare provider expectations, our business,

financial results and reputation could be materially harmed.

currently maintain insurance against damage to our property and equipment and against business interruption, subject to deductibles

and other limitations.

If we have underestimated our insurance needs with respect to an interruption, or if an interruption is

not subject to coverage under our insurance policies, we may not be able to cover our losses.

future performance will depend in part on the success of products we have not yet developed.

is an important component of our business and growth strategy, and our success depends on the development, implementation and

acceptance of our products.

To date, only our EsoCheck and EsoGuard products have reached the marketing stage.

Commitments to

develop new products must be made well in advance of any resulting sales, and technologies and standards may change during development,

potentially rendering our products outdated or uncompetitive before their introduction.

Our ability to develop products to meet

evolving industry requirements and at prices acceptable to our customers will be significant factors in determining our competitiveness.

We may expend considerable funds and other resources on the development of our products without any guarantee these products will

be successful.

If we are not successful in bringing one or more products to market, whether because we fail to address marketplace

demand, fail to develop viable technologies or otherwise, we may not generate any revenues and our results of operations could

be seriously harmed.

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products and services may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare

reform initiatives, thereby harming our business.

regulations that govern marketing approvals, pricing and reimbursement for new products vary widely from country to country.

countries require approval of the sale price of a product before it can be marketed.

In many countries, the pricing review period

begins after marketing approval is granted.

In some foreign markets, pricing remains subject to continuing governmental control

even after initial approval is granted.

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 revenue we

are able to generate from the sale of the product in that country.

Adverse pricing limitations may hinder our ability to recoup

our investment in one or more other products we may develop, even if our other products we may develop obtain regulatory approval.

ability to commercialize any products we may develop successfully also will depend in part on the extent to which reimbursement

for these products and related treatments becomes available from government health administration authorities, private health

insurers and other organizations.

Government authorities and third-party payors, such as private health insurers and health maintenance

organizations, decide which treatments they will pay for and establish reimbursement levels.

A primary trend in the U.S.

industry and elsewhere is cost containment.

Government authorities and these third-party payors have attempted to control costs

by limiting coverage and the amount of reimbursement for particular treatments.

We cannot be sure reimbursement will be available

for any product we commercialize and, if reimbursement is available, what the level of reimbursement will be.

Reimbursement may

impact the demand for, or the price of, any product for which we obtain marketing approval.

If reimbursement is not available

or is available only to limited levels, we may not be able to successfully commercialize any product we successfully develop.

eligibility for reimbursement does not imply any product will be paid for in all cases or at a rate that covers our costs, including

research, development, manufacture, sale and distribution.

Payment rates may vary according to the use of the product and the

clinical setting in which it is used, may be based on payments allowed for lower cost products that are already reimbursed and

may be incorporated into existing payments for other services.

Net prices for products 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 products from countries where they may be sold at lower prices than in the U.S.

Third-party payors often rely upon

Medicare coverage policy and payment limitations in setting their own reimbursement policies.

Our inability to promptly obtain

coverage and profitable payment rates from both government funded and private payors could have a material adverse effect on our

operating results, our ability to raise capital needed to commercialize products and our overall financial condition.

reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness

of our product to other available therapies.

Our business could be materially harmed if reimbursement of any products we may develop,

if any, is unavailable or limited in scope or amount or if pricing is set at unsatisfactory levels.

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products and services may cause serious adverse side effects or even death or have other properties that could delay or prevent

their regulatory approval, limit the commercial desirability of an approved label or result in significant negative consequences

following any marketing approval.

risk of failure of clinical development is high.

It is impossible to predict when or if our current products and services or any

we may develop will prove safe enough to receive regulatory approval.

Undesirable side effects caused by our products and services

or we may develop could cause us or regulatory authorities to interrupt, delay or halt clinical trials.

They could also result

in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign regulatory authority.

Additionally,

even after receipt of marketing approval of our products and services, if we or others later identify undesirable side effects

or even deaths caused by such product, a number of potentially significant negative consequences could result, including:

may be forced to recall such product and suspend the marketing of such product;

authorities may withdraw their approvals of such product;

authorities may require additional warnings on the label that could diminish the usage or otherwise limit the commercial success

of such products;

FDA or other regulatory bodies may issue safety alerts, Dear Healthcare Provider letters, press releases or other communications

containing warnings about such product;

FDA may require the establishment or modification of Risk Evaluation Mitigation Strategies or a comparable foreign regulatory

authority may require the establishment or modification of a similar strategy that may, for instance, restrict distribution

of our products and impose burdensome implementation requirements on us;

may be required to change the way the product is administered or conduct additional clinical trials;

could be sued and held liable for harm caused to subjects or patients;

may be subject to litigation or product liability claims;

reputation may suffer.

of these events could prevent us from achieving or maintaining market acceptance of the particular product.

liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that

we may develop.

face an inherent risk of product liability exposure related to the sale of any products we may develop.

The marketing, sale and

use of our current products and services and any we may additionally develop could lead to the filing of product liability claims

against us if someone alleges product failures, product malfunctions, manufacturing flaws, or design defects, resulted in injury

We may also be subject to liability for a misunderstanding of, or inappropriate reliance upon, the information we

If we cannot successfully defend ourselves against claims that any product, we may develop caused injuries, we may incur

substantial liabilities.

Regardless of merit or eventual outcome, liability claims may result in:

demand for our products;

to our reputation and significant negative media attention;

of patients from clinical studies or cancellation of studies;

costs to defend the related litigation and distraction to our management team;

monetary awards to patients;

inability to commercialize any products that we may develop.

addition, insurance coverage is increasingly expensive.

We may not be able to maintain insurance coverage at a reasonable cost

or in an amount adequate to satisfy any liability that may arise.

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may not be able to protect or enforce our intellectual property rights, which could impair our competitive position.

success depends significantly on our ability to protect our rights to the patents, trademarks, trade secrets, copyrights and all

the other intellectual property rights used, or expected to be used, in our products.

Protecting intellectual property rights

is costly and time consuming.

We rely primarily on patent protection and trade secrets, as well as a combination of copyright

and trademark laws and nondisclosure and confidentiality agreements to protect our technology and intellectual property rights.

However, these legal means afford only limited protection and may not adequately protect our rights or permit us to gain or maintain

any competitive advantage.

Despite our intellectual property rights practices, it may be possible for a third party to copy or

otherwise obtain and use our technology without authorization, develop similar technology independently or design around our patents.

cannot be assured that any of our pending patent applications will result in the issuance of a patent to us.

Trademark Office, or PTO, may deny or require significant narrowing of claims in our pending patent applications, and patents

issued as a result of the pending patent applications, if any, may not provide us with significant commercial protection or be

issued in a form that is advantageous to us.

We could also incur substantial costs in proceedings before the PTO.

may be issued to or licensed by us in the future may expire or may be challenged, invalidated or circumvented, which could limit

our ability to stop competitors from marketing related technologies.

Upon expiration of our issued or licensed patents, we may

lose some of our rights to exclude others from making, using, selling or importing products using the technology based on the

expired patents.

There is no assurance that competitors will not be able to design around our patents.

we may not be able to obtain patent protection or secure other intellectual property rights in all the countries in which we operate,

and under the laws of such countries, patents and other intellectual property rights may be unavailable or limited in scope.

any of our patents fails to protect our technology, it would make it easier for our competitors to offer similar products.

trade secrets may be vulnerable to disclosure or misappropriation by employees, contractors and other persons.

Any inability on

our part to adequately protect our intellectual property may have a material adverse effect on our business, financial condition

and results of operations.

also rely on unpatented proprietary technology.

We cannot assure you that we can meaningfully protect all our rights in our unpatented

proprietary technology or that others will not independently develop substantially equivalent proprietary products or processes

or otherwise gain access to our unpatented proprietary technology.

We seek to protect our know-how and other unpatented proprietary

technology, as trade secrets or otherwise, with confidentiality agreements and/or intellectual property assignment agreements

with our team members, independent distributors and consultants.

However, such agreements may not be enforceable or may not provide

meaningful protection for our proprietary information in the event of unauthorized use or disclosure or other breaches of the

agreements or in the event that our competitors discover or independently develop similar or identical designs or other proprietary

Our trade secrets may be vulnerable to disclosure or misappropriation by employees, contractors and other persons.

addition, we intend to rely on the use of registered and common law trademarks with respect to the brand names of some of our

Common law trademarks provide less protection than registered trademarks.

Loss of rights in our trademarks could adversely

affect our business, financial condition and results of operations.

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may be subject to intellectual property infringement claims by third parties which could be costly to defend, divert management’s

attention and resources, and may result in liability.

medical device industry is characterized by vigorous protection and pursuit of intellectual property rights.

Companies in the

medical device industry have used intellectual property litigation to gain a competitive advantage in the marketplace.

to time, third parties may assert against us their patent, copyright, trademark and other intellectual property rights relating

to technologies that are important to our business.

Searching for existing intellectual property rights may not reveal important

intellectual property and our competitors may also have filed for patent protection, which is not publicly-available information,

or claimed trademark rights that have not been revealed through our availability searches.

We may be subject to claims that our

team members have disclosed, or that we have used, trade secrets or other proprietary information of our team members’

Our efforts to identify and avoid infringing on third parties’

intellectual property rights may not always be

Any claims that our products or processes infringe these rights, regardless of their merit or resolution, could be

costly, time consuming and may divert the efforts and attention of our management and technical personnel.

In addition, we may

not prevail in such proceedings given the complex technical issues and inherent uncertainties in intellectual property litigation.

claims of patent or other intellectual property infringement against us, even those without merit, could:

the cost of our products;

expensive and/or time consuming to defend;

in our being required to pay significant damages to third parties;

us to cease making or selling products that incorporate the challenged intellectual property;

us to redesign, reengineer or rebrand our products and technologies;

us to enter into royalty or licensing agreements in order to obtain the right to use a third party’s intellectual property

on terms that may not be favorable or acceptable to us;

us to develop alternative non-infringing technology, which could require significant effort and expense;

us to indemnify third parties pursuant to contracts in which we have agreed to provide indemnification for intellectual property

infringement claims;

in our customers or potential customers deferring or limiting their purchase or use of the affected products impacted by the

claims until the claims are resolved.

of the foregoing could affect our ability to compete or have a material adverse effect on our business, financial condition and

results of operations.

may violate our intellectual property rights, and we may bring litigation to protect and enforce our intellectual property rights,

which may result in substantial expense and may divert our attention from implementing our business strategy.

believe that the success of our business depends, in significant part, on obtaining patent protection for our products and technologies,

defending our patents and preserving our trade secrets.

Our failure to pursue any potential claim could result in the loss of

our proprietary rights and harm our position in the marketplace.

Therefore, we may be forced to pursue litigation to enforce our

Future litigation could result in significant costs and divert the attention of our management and key personnel from

our business operations and the implementation of our business strategy.

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business may suffer if we are unable to manage our growth.

we fail to effectively manage our growth, our ability to execute our business strategy could be impaired.

The anticipated rapid

growth of our business may place a strain on our management, operations and financial systems.

We need to improve existing systems

and controls or implement new systems and controls in response to anticipated growth.

officers will allocate their time to other businesses thereby potentially limiting the amount of time they devote to our affairs.

This conflict of interest could have a negative impact on our operations.

officers are not required to commit their full time to our affairs, which could create a conflict of interest when allocating

their time between our operations and their other commitments.

We presently expect each of our employees to devote such amount

of time as they reasonably believe is necessary to our business.

All of our officers are engaged in several other business endeavors

and are not obligated to devote any specific number of hours to our affairs.

If our officers’

other business affairs require

them to devote more substantial amounts of time to such affairs, it could limit their ability to devote time to our affairs and

could have a negative impact on our operations.

We cannot assure you these conflicts will be resolved in our favor.

ability to be successful will be totally dependent upon the efforts of our key personnel.

ability to successfully carry out our business plan is dependent upon the efforts of our key personnel.

We cannot assure you that

any of our key personnel will remain with us for the immediate or foreseeable future.

The unexpected loss of the services of our

key personnel could have a detrimental effect on us.

We may also be unable to attract and retain additional key personnel in the

An inability to do so may impact our ability to continue and grow our operations.

officers have fiduciary obligations to other companies and, accordingly, may have conflicts of interest in determining to which

entity a particular business opportunity should be presented.

of our officers have fiduciary obligations to other companies engaged in medical device business activities, namely Saphena Medical,

Kaleidoscope Medical and Cruzar Medsystems.

Accordingly, they may participate in transactions and have obligations that may be

in conflict or competition with our business.

As a result, a potential business opportunity may be presented by certain members

of our management team to another entity prior to its presentation to us and we may not be afforded the opportunity to engage

in such a transaction.

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business, financial condition and results of operations could be adversely affected by the political and economic conditions of

the countries in which we conduct business.

business, financial condition and results of operations could be adversely affected by the political and economic conditions of

the countries in which we conduct business.

These factors include:

associated with cultural differences, languages and distance;

in clinical practices, needs, products, modalities and preferences;

payment cycles in some countries;

risks of many kinds;

and regulatory differences and restrictions;

exchange fluctuations;

exchange controls that might prevent us from repatriating cash earned in certain countries;

and economic instability and export restrictions;

in sterilization requirements for multi-usage surgical devices;

adverse tax consequences;

cost associated with doing business internationally;

in implementing educational programs required by our approach to doing business;

economic developments in economies around the world and the instability of governments, including the threat of war, terrorist

attacks, epidemic or civil unrest;

changes in laws and governmental policies, especially those affecting trade and investment;

epidemics and /or pandemics, such as the epidemics resulting from the Ebola virus, or the enterovirus, or the avian influenza

virus, or the pandemic resulting from a novel strain of a coronavirus designated “Severe Acute Respiratory Syndrome

Coronavirus 2”

- or “SARS-CoV-2”, which may adversely affect our workforce as well as our local suppliers

and customers;

or export licensing requirements imposed by governments;

labor standards;

levels of protection of intellectual property;

threat that our operations or property could be subject to nationalization and expropriation;

practices of the regulatory, tax, judicial and administrative bodies in the jurisdictions where we operate;

burdensome taxation and changes in foreign tax.

- Risk Factors - continued

Associated with Our Business - continued

future products or services we may develop may not be approved for sale in the U.S.

or in any other country.

only product for which we have obtained approval or clearance from the FDA or a comparable foreign regulatory authority is our

EsoCheck cell sample collection device and our CarpX minimally invasive surgical device.

In certain limited circumstances, we

also may market our products without such approval or clearance, as is the case for the EsoGuard LDT.

Generally, however, neither

we nor any future collaboration partner can commercialize any products we may develop in the U.S.

or in any foreign country without

first obtaining regulatory approval for the product from the FDA or comparable foreign regulatory authorities.

The approval route

for any products we may develop may be either via the PMA process, a de novo 510(k) pathway, or traditional

The PMA approval process is more complex, costly and time consuming than the 510(k) process.

Additional randomized, controlled

clinical trials may be necessary to obtain approval.

The approval process may take several years to complete and may never be

Before obtaining regulatory approvals for the commercial sale of any product we may develop in the U.S., we must demonstrate

with substantial evidence, gathered in preclinical and well-controlled clinical studies, that the planned products are safe and

effective for use for that target indication.

We may not conduct such a trial or may not successfully enroll or complete any such

Any products we may develop may not achieve the required primary endpoint in the clinical trial and may not receive regulatory

We must also demonstrate that the manufacturing facilities, processes and controls for any products we may develop are

Moreover, obtaining regulatory approval in one country for marketing of any products we may develop does not ensure

we will be able to obtain regulatory approval in other countries, while a failure or delay in obtaining regulatory approval in

one country may have a negative effect on the regulatory process in other countries.

if we or any future collaboration partner were to successfully obtain a regulatory approval for any product we may develop, any

approval might contain significant limitations related to use restrictions for specified age groups, warnings, precautions or

contraindications, or may be subject to burdensome post-approval study or risk management requirements.

If we are unable to obtain

regulatory approval for any products, we may develop in one or more jurisdictions, or any approval contains significant limitations,

we may not be able to obtain sufficient revenue to justify commercial launch.

Also, any regulatory approval of a product, once

obtained, may be withdrawn.

If we are unable to successfully obtain regulatory approval to sell any products we may develop in

or other countries, our business, financial condition, results of operations and growth prospects could be adversely

- Risk Factors - continued

Associated with Our Business - continued

business may be adversely affected by health epidemics and or pandemics, including the pandemic resulting from the “Severe

Acute Respiratory Syndrome Coronavirus 2”

- “SARS-CoV-2”

- and the resulting illness of “Coronavirus Disease

- “COVID-19”.

in 2019, an outbreak of a novel strain of a coronavirus occurred, with such coronavirus designated by the United Nations (UN)

World Health Organization (“WHO”) as the “Severe Acute Respiratory Syndrome Coronavirus 2”

- or “SARS-CoV-2”

- which spread on a global basis to other countries, including the United States of America (“USA”

“U.S.”

or “United States”).

On March 11, 2020, the WHO declared a pandemic resulting SARS-CoV-2, with such pandemic commonly

referred to as the “COVID-19 pandemic”

after the resulting illness of “coronavirus disease-2019”

(“COVID-19”),

and is thus referred to herein as the “COVID-19 pandemic”.

The COVID-19 pandemic is ongoing, and we continue to monitor

the ongoing impact of the COVID-19 pandemic on the United States national economy, the global economy, and our business.

COVID-19 pandemic may have an adverse impact on our operations, supply chains, and distribution systems and /or those of our contractors

of our laboratory partner, and increase our expenses, including as a result of impacts associated with preventive and precautionary

measures being taken, restrictions on travel, quarantine polices, and social distancing.

Such adverse impact may include, for

example, the inability of our employees and /or those of our contractors or laboratory partner to perform their work or curtail

their services provided to us.

expect the significance of the COVID-19 pandemic, including the extent of its effect on our consolidated financial condition and

consolidated operational results and cash flows, to be dictated by the success of United States and global efforts to mitigate

the spread of and /or to contain the SARS-CoV-2 and the impact of such efforts.

addition, the spread of the SARS-CoV-2 has disrupted the United States’

healthcare and healthcare regulatory systems which

could divert healthcare resources away from, or materially delay United States Food and Drug Administration (“FDA”)

approval with respect to our products.

our clinical trials have been and may be further affected by the COVID-19 pandemic, as site initiation and patient enrollment

may be delayed, for example, due to prioritization of hospital resources toward the virus and /or illness response, as well as

travel restrictions imposed by governments, and the inability to access clinical test sites for initiation and monitoring.

COVID-19 pandemic may have an adverse impact on the economies and financial markets of many countries, including the USA, resulting

in an economic downturn that could adversely affect demand for our products and services and /or our product candidates.

we are continuing to monitor and assess the effects of the COVID-19 pandemic on our business, the ultimate impact of the COVID-19

pandemic (or a similar health epidemic) is highly uncertain and subject to change, and therefore, its impact on our consolidated

financial condition, consolidated results of operations, and /or consolidated cash flows, the adverse impact could be material.

- Risk Factors - continued

Associated with Our Business - continued

in our information technology or storage systems could significantly disrupt our operations and our research and development efforts,

which could adversely impact our revenues, as well as our research, development and commercialization efforts.

ability to execute our business strategy depends, in part, on the continued and uninterrupted performance of our information technology

(“IT”) systems that support our operations and our research and development efforts, and those IT systems within the

control of our contract manufacturers and contract laboratories.

The integrity and protection of our own data, and that of our

customers and employees, is critical to our business.

The regulatory environment governing information, security and privacy laws

is increasingly demanding and continues to evolve.

IT systems are vulnerable to damage from a variety of sources, including telecommunications

or network failures, malicious human acts and natural disasters.

Moreover, despite network security and back-up measures, some

of our servers are potentially vulnerable to physical or electronic break-ins, computer viruses and similar disruptive problems.

Despite the precautionary measures we have taken to prevent unanticipated problems that could affect our IT systems, and the precautionary

measures taken by our contract parties, sustained or repeated system failures that interrupt our ability to generate and maintain

data, could adversely affect our ability to operate our business.

Furthermore, any breach in our IT systems could lead to the

unauthorized access, disclosure and use of non-public information, including protected health information, which is protected

by HIPAA and other laws.

Any such access, disclosure, or other loss of information could result in legal claims or proceedings,

liability under laws that protect the privacy of personal information, and damage to our reputation.

upgrades, enhancements and replacements, as well as new systems, are required from time to time, and require significant expenditures

and allocation of valuable employee resources.

Delays in integration or disruptions to our business from implementation of these

new or upgraded systems could have a material adverse impact on our financial condition and operating results.

There can be no

assurance that our process of improving existing systems, developing new systems to support our expanding operations, integrating

new systems, protecting confidential patient information, and improving service levels will not be delayed or that additional

systems issues will not arise in the future.

Failure to adequately protect and maintain the integrity of our information systems

issues and data may result in a material adverse effect on our financial position, results of operations and cash flows.

are and may become the subject of various claims, threats of litigation, litigation or investigations which could have a material

adverse effect on our business, financial condition, results of operations or price of our common stock.

are and may become subject to various claims, threats of litigation, litigation or investigations, including commercial disputes

and employee claims, and from time to time may be involved in governmental or regulatory investigations or similar matters.

claims asserted against us or our management, regardless of merit or eventual outcome, could harm our reputation and have an adverse

impact on our relationship with our clients, distribution partners and other third parties and could lead to additional related

Furthermore, there is no guarantee that we will be successful in defending ourselves in pending or future litigation or

similar matters under various laws.

Any judgments or settlements in any pending litigation or future claims, litigation or investigation

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

- Risk Factors - continued

Related to Government Regulation

regulatory approval process is expensive, time consuming and uncertain, and may prevent us or our partners from obtaining approval

for the commercialization of any products we may develop.

Approval of products in the U.S.

or other territories may require that

we, or a partner, conduct randomized, controlled clinical trials.

many of the products we are currently developing, the regulatory pathway in the U.S.

for approval of the product has not been

However, it is possible the FDA will require us to file for approval via the PMA pathway for one or more of our planned

In this case, the FDA is likely to require that randomized, controlled clinical trials be conducted before an application

for approval can be filed.

These are typically expensive and time consuming and require substantial commitment of financial and

personnel resources from the sponsoring company.

These clinical trials also entail significant risk, and the resulting data may

not be sufficient to support approval by the FDA or other regulatory bodies.

regulatory approval of a PMA or a 510(k) pathway is not guaranteed, and the filing and approval process itself is expensive and

may take several years.

The FDA also has substantial discretion in the approval process.

Despite the time and expense exerted,

failure may occur at any stage, and we could encounter problems that cause us to abandon or repeat clinical studies.

delay, limit, or deny approval of a future product for many reasons, including but not limited to:

future product may not be deemed to be safe and effective;

officials may not find the data from clinical and preclinical studies sufficient;

FDA may not approve our or our third-party manufacturer’s processes or facilities;

FDA may change its approval policies or adopt new regulations.

any products we may develop fail to demonstrate safety and efficacy in further clinical studies may be required, or do not gain

regulatory approval, our business and results of operations will be materially and adversely harmed.

if we receive regulatory approval for any product we may develop, we will be subject to ongoing regulatory obligations and continued

regulatory review, which may result in significant additional expense and subject us to penalties if we fail to comply with applicable

regulatory requirements.

regulatory approval has been obtained, the approved product and its manufacturer are subject to continual review by the FDA or

regulatory authorities.

Our regulatory approval for any products we may develop may be subject to limitations on the

indicated uses for which the product may be marketed.

Future approvals may contain requirements for potentially costly post-marketing

follow-up studies to monitor the safety and efficacy of the approved product.

In addition, we are subject to extensive and ongoing

regulatory requirements by the FDA and other regulatory authorities with regard to the labeling, packaging, adverse event reporting,

storage, advertising, promotion and recordkeeping for our products.

In addition, we are required to comply with cGMP regulations

regarding the manufacture of any products we may develop, which include requirements related to quality control and quality assurance

as well as the corresponding maintenance of records and documentation.

Further, regulatory authorities must approve these manufacturing

facilities before they can be used to manufacture drug products, and these facilities are subject to continual review and periodic

inspections by the FDA and other regulatory authorities for compliance with cGMP regulations.

If we or a third party discover

previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the

facility where the product is manufactured, a regulatory authority may impose restrictions on that product, the manufacturer or

us, including requiring withdrawal of the product from the market or suspension of manufacturing.

- Risk Factors - continued

Related to Government Regulation - continued

to obtain regulatory approvals in foreign jurisdictions will prevent us from marketing our products internationally.

intend to seek distribution and marketing partners in foreign countries for our products and services and any we may develop in

the future, if any.

The approval procedures vary among countries and can involve additional clinical testing, and the time required

to obtain approval may differ from that required to obtain FDA approval.

Moreover, clinical studies or manufacturing processes

conducted in one country may not be accepted by regulatory authorities in other countries.

Approval by the FDA does not ensure

approval by regulatory authorities in other countries, and approval by one or more foreign regulatory authorities does not ensure

approval by regulatory authorities in other foreign countries or by the FDA.

However, a failure or delay in obtaining regulatory

approval in one country may have a negative effect on the regulatory process in others.

The foreign regulatory approval process

may include all of the risks associated with obtaining FDA approval.

We may not obtain foreign regulatory approvals on a timely

basis, if at all.

We may not be able to file for regulatory approvals and even if we file, we may not receive necessary approvals

to commercialize our products in any market.

reform measures could hinder or prevent our products’

commercial success.

the U.S., there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare

system in ways that could affect our future revenue and profitability and the future revenue and profitability of our potential

Federal and state lawmakers regularly propose and, at times, enact legislation that could result in significant changes

to the healthcare system, some of which are intended to contain or reduce the costs of medical products and services.

one of the most significant healthcare reform measures in decades, the PPACA, was enacted in 2010.

The PPACA contains a number

of provisions, including those governing enrollment in federal healthcare programs, reimbursement changes and fraud and abuse

measures, all of which will impact existing government healthcare programs and will result in the development of new programs.

The PPACA, among other things, could result in the imposition of injunctions.

Supreme Court upheld the constitutionality of most elements of the PPACA in June 2012, other legal challenges are still

pending final adjudication in several jurisdictions.

In addition, Congress has also proposed a number of legislative initiatives,

including possible repeal of the PPACA.

For instance, in December 2019, the 2.3% tax on sales of medical devices was repealed.

At this time, it remains unclear whether there will be any changes made to the PPACA, whether to certain provisions or its entirety.

We cannot assure you that the PPACA, as currently enacted or as amended in the future, will not adversely affect our business

and financial results and we cannot predict how future federal or state legislative or administrative changes relating to healthcare

reform will affect our business.

addition, other legislative changes have been proposed and adopted since the PPACA was enacted.

For example, the Budget Control

Act of 2011, among other things, created the Joint Select Committee on Deficit Reduction to recommend proposals for spending reductions

The Joint Select Committee did not achieve a targeted deficit reduction of at least $1.2 trillion for the years 2013

through 2021, which triggered the legislation’s automatic reduction to several government programs, including aggregate

reductions to Medicare payments to providers of up to 2.0% per fiscal year, starting in 2013.

In January 2013, President Obama

signed into law the American Taxpayer Relief Act of 2012, or the ATRA, which delayed for another two months the budget cuts mandated

by the sequestration provisions of the Budget Control Act of 2011.

The ATRA, among other things, also reduced Medicare payments

to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments

to providers from three to five years.

In March 2013, President Obama signed an executive order implementing sequestration, and

in April 2013, the 2.0% Medicare reductions went into effect.

We cannot predict whether any additional legislative changes will

affect our business.

- Risk Factors - continued

Related to Government Regulation - continued

likely will continue to be legislative and regulatory proposals at the federal and state levels directed at containing or lowering

the cost of health care.

We cannot predict the initiatives that may be adopted in the future or their full impact.

The continuing

efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain

or reduce costs of health care may adversely affect:

ability to set a price that we believe is fair for our products;

ability to generate revenue and achieve or maintain profitability;

availability of capital.

changes in regulatory requirements and guidance may occur, both in the United States and in foreign countries, and we may need

to amend clinical study protocols to reflect these changes.

Amendments may require us to resubmit our clinical study protocols

to IRB’s for reexamination, which may impact the costs, timing or successful completion of a clinical study.

widely publicized events concerning the safety risk of certain drug and medical device products, regulatory authorities, members

of Congress, the Governmental Accounting Office, medical professionals and the general public have raised concerns about potential

safety issues.

These events have resulted in the recall and withdrawal of medical device products, revisions to product labeling

that further limit use of products and establishment of risk management programs that may, for instance, restrict distribution

of certain products or require safety surveillance or patient education.

The increased attention to safety issues may result in

a more cautious approach by the FDA or other regulatory authorities to clinical studies and the drug approval process.

clinical studies may receive greater scrutiny with respect to safety, which may make the FDA or other regulatory authorities more

likely to terminate or suspend clinical studies before completion or require longer or additional clinical studies that may result

in substantial additional expense and a delay or failure in obtaining approval or approval for a more limited indication than

originally sought.

the serious public health risks of high profile adverse safety events with certain products, the FDA or other regulatory authorities

may require, as a condition of approval, costly risk evaluation and mitigation strategies, which may include safety surveillance,

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

adverse events, preapproval of promotional materials and restrictions on direct-to-consumer advertising.

- Risk Factors - continued

Related to Government Regulation - continued

we fail to comply with healthcare regulations, we could face substantial penalties and our business, operations and financial

condition could be adversely affected.

though we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party

payors, certain federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’

and will be applicable to our business.

We could be subject to healthcare fraud and abuse and patient privacy regulation by both

the federal government and the states in which we conduct our business.

The regulations that may affect our ability to operate

include, without limitation:

federal healthcare program Anti-Kickback Statute, which prohibits, among other things, any person from knowingly and willfully

offering, soliciting, receiving or providing remuneration, directly or indirectly, in exchange for or to induce either the

referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made

under federal healthcare programs, such as the Medicare and Medicaid programs;

Foreign Corrupt Practices Act, or FCPA, which prohibits payments or the provision of anything of value to foreign officials

for the purpose of obtaining or keeping business;

federal False Claims Act, or FCA, which prohibits, among other things, individuals or entities from knowingly presenting,

or causing to be presented, false claims, or knowingly using false statements, to obtain payment from the federal government,

and which may apply to entities like us which provide coding and billing advice to customers;

criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating

to healthcare matters;

federal transparency requirements under the Health Care Reform Law requires manufacturers of drugs, devices, biologics and

medical supplies to report to the Department of Health and Human Services information related to physician payments and other

transfers of value and physician ownership and investment interests;

federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic

and Clinical Health Act, which governs the conduct of certain electronic healthcare transactions and protects the security

and privacy of protected health information;

law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or

services reimbursed by any third-party payor, including commercial insurers.

PPACA, among other things, amends the intent requirement of the Federal Anti-Kickback Statute and criminal healthcare fraud statutes.

A person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it.

In addition, the

PPACA provides that the government may assert that a claim including items or services resulting from a violation of the Federal

Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA.

our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply

to us, we may be subject to penalties, including civil and criminal penalties, damages, fines and the curtailment or restructuring

of our operations.

Any penalties, damages, fines, curtailment or restructuring of our operations could adversely affect our ability

to operate our business and our financial results.

Any action against us for violation of these laws, even if we successfully

defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation

of our business.

Moreover, achieving and sustaining compliance with applicable federal and state privacy, security and fraud laws

may prove costly.

- Risk Factors - continued

Related to Government Regulation - continued

required, clinical trials necessary to support a FDA 510(k) notice or PMA application will be expensive and will require the enrollment

of large numbers of patients, and suitable patients may be difficult to identify and recruit.

Delays or failures in our clinical

trials will prevent us from commercializing any modified or new products and will adversely affect our business, operating results

and prospects.

and completing clinical trials necessary to support a FDA 510(k) notice or a PMA application will be time-consuming and expensive

and the outcome uncertain.

Moreover, the results of early clinical trials are not necessarily predictive of future results, and

any product the Company advances into clinical trials may not have favorable results in early or later clinical trials.

successful clinical studies will require the enrollment of large numbers of patients, and suitable patients may be difficult to

identify and recruit.

Patient enrollment in clinical trials and completion of patient participation and follow-up depend on many

factors, including the size of the patient population, the nature of the trial protocol, the attractiveness of, or the discomforts

and risks associated with, the treatments received by patients enrolled as subjects, the availability of appropriate clinical

trial investigators, support staff, and proximity of patients to clinical sites and ability to comply with the eligibility and

exclusion criteria for participation in the clinical trial and patient compliance.

For example, patients may be discouraged from

enrolling in our clinical trials if the trial protocol requires them to undergo extensive post-treatment procedures or follow-up

to assess the safety and effectiveness of our products or if they determine that the treatments received under the trial protocols

are not attractive or involve unacceptable risks or discomforts.

Patients may also not participate in our clinical trials if they

choose to participate in contemporaneous clinical trials of competitive products.

In addition, patients participating in clinical

trials may die before completion of the trial or suffer adverse medical events unrelated to investigational products.

of sufficient and appropriate clinical protocols to demonstrate safety and efficacy may be required and the Company may not adequately

develop such protocols to support clearance and approval.

Further, the FDA may require the Company to submit data on a greater

number of patients than it originally anticipated and/or for a longer follow-up period or change the data collection requirements

or data analysis for any clinical trials.

Delays in patient enrollment or failure of patients to continue to participate in a

clinical trial may cause an increase in costs and delays in the approval and attempted commercialization of our products or result

in the failure of the clinical trial.

The FDA may not consider our data adequate to demonstrate safety and efficacy.

Such increased

costs and delays or failures could adversely affect our business, operating results and prospects.

results of the Company’s clinical trials may not support our product candidate claims or may result in the discovery of

adverse side effects.

if any of the Company’s clinical trials are completed as planned, it cannot be certain that study results will support product

candidate claims or that the FDA or foreign regulatory authorities will agree with our conclusions regarding them.

pre-clinical evaluation and early clinical trials does not ensure that later clinical trials will be successful, and we cannot

be sure that the later trials will replicate the results of prior trials and pre-clinical studies.

The clinical trial process

may fail to demonstrate that our product candidates are safe and effective for the proposed indicated uses, which could cause

us to abandon a product candidate and may delay development of others.

Any delay or termination of our clinical trials will delay

the filing of our product submissions and, ultimately, our ability to commercialize our product candidates and generate revenues.

It is also possible that patients enrolled in clinical trials will experience adverse side effects that are not currently part

of the product candidate’s profile.

- Risk Factors - continued

Related to Government Regulation - continued

Company’s medical products may in the future be subject to product recalls that could harm its reputation, business and

financial results.

FDA has the authority to require the recall of commercialized medical device products in the event of material deficiencies or

defects in design or manufacture.

In the case of the FDA, the authority to require a recall must be based on an FDA finding that

there is a reasonable probability that the device would cause serious injury or death.

Manufacturers may, under their own initiative,

recall a product if any material deficiency in a device is found.

A government-mandated or voluntary recall by the Company or

one of its distributors could occur as a result of component failures, manufacturing errors, design or labeling defects or other

deficiencies and issues.

Recalls of any of the Company’s products would divert managerial and financial resources and have

an adverse effect on its financial condition and results of operations.

The FDA requires that certain classifications of recalls

be reported to the FDA within ten (10) working days after the recall is initiated.

Companies are required to maintain certain

records of recalls, even if they are not reportable to the FDA.

The Company may initiate voluntary recalls involving its products

in the future that the Company determines do not require notification of the FDA.

If the FDA disagrees with the Company’s

determinations, they could require the Company to report those actions as recalls.

A future recall announcement could harm the

Company’s reputation with customers and negatively affect its sales.

In addition, the FDA could take enforcement action

for failing to report the recalls when they were conducted.

No recalls of the Company’s medical products have been reported

the Company’s medical products cause or contribute to a death or a serious injury, or malfunction in certain ways, we will

be subject to medical device reporting regulations, which can result in voluntary corrective actions or agency enforcement actions.

the FDA medical device reporting regulations, medical device manufacturers are required to report to the FDA information that

a device has or may have caused or contributed to a death or serious injury or has malfunctioned in a way that would likely cause

or contribute to death or serious injury if the malfunction of the device or one of our similar devices were to recur.

Company fails to report these events to the FDA within the required timeframes, or at all, the FDA could take enforcement action

against the Company.

Any such adverse event involving its products also could result in future voluntary corrective actions, such

as recalls or customer notifications, or agency action, such as inspection or enforcement action.

Any corrective action, whether

voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of the Company’s time

and capital, distract management from operating our business, and may harm its reputation and financial results.

the effectiveness and safety of the Company’s devices are not supported by long-term data, the Company’s future revenues

could decline.

Company’s products may not be accepted in the market if the Company does not produce clinical data supported by the independent

efforts of clinicians, and if that data indicates that treatment with the Company’s products does not provide patients with

sustained benefits or that treatment with the Company’s products is less effective or less safe than the Company’s

current data suggests, the Company’s future revenues could decline.

In addition, the FDA could then bring legal or regulatory

enforcement actions against the Company and/or its products including, but not limited to, recalls or requirements for pre-market

510(k) authorizations.

The Company can give no assurance that its data will be substantiated in studies involving more patients.

In such a case, the Company may never achieve significant revenues or profitability.

- Risk Factors - continued

Related to Government Regulation - continued

the Company is found to be promoting the use of its devices for unapproved or “off-label”

uses or engaging in other

noncompliant activities, the Company may be subject to recalls, seizures, fines, penalties, injunctions, adverse publicity, prosecution,

or other adverse actions, resulting in damage to its reputation and business.

Company’s labeling, advertising, promotional materials and user training materials must comply with the FDA and other applicable

laws and regulations, including the prohibition of the promotion of a medical device for a use that has not been cleared or approved

Obtaining 510(k) clearance or PMA approval only permits the Company to promote its products for the uses specifically

cleared by the FDA.

Use of a device outside its cleared or approved indications is known as “off-label”

and consumers may use the Company’s products off-label because the FDA does not restrict or regulate a physician’s

choice of treatment within the practice of medicine nor is there oversight on patient use of over-the-counter devices.

the Company may request additional cleared indications for our current products, the FDA may deny those requests, require additional

expensive clinical data to support any additional indications or impose limitations on the intended use of any cleared product

as a condition of clearance.

Even if regulatory clearance or approval of a product is granted, such clearance or approval may

be subject to limitations on the intended uses for which the product may be marketed and reduce our potential to successfully

commercialize the product and generate revenue from the product.

the FDA determines that the Company’s labeling, advertising, promotional materials, or user training materials, or representations

made by Company personnel, include the promotion of an off-label use for the device, or that the Company has made false or misleading

or inadequately substantiated promotional claims, or claims that could potentially change the regulatory status of the product,

the agency could take the position that these materials have misbranded the Company’s devices and request that the Company

modifies its labeling, advertising, or user training or promotional materials and/or subject the Company to regulatory or legal

enforcement actions, including the issuance of an Untitled Letter or a Warning Letter, injunction, seizure, recall, adverse publicity,

civil penalties, criminal penalties, or other adverse actions.

It is also possible that other federal, state, or foreign enforcement

authorities might take action if they consider the Company’s labeling, advertising, promotional, or user training materials

to constitute promotion of an unapproved use, which could result in significant fines, penalties, or other adverse actions under

other statutory authorities, such as laws prohibiting false claims for reimbursement.

In that event, we would be subject to extensive

fines and penalties and the Company’s reputation could be damaged and adoption of the products would be impaired.

the Company intends to refrain from statements that could be considered off-label promotion of its products, the FDA or another

regulatory agency could disagree and conclude that the Company has engaged in off-label promotion.

For example, the Company has

made statements regarding some of its devices that the FDA may view as off-label promotion.

In addition, any such off-label use

of the Company’s products may increase the risk of injury to patients, and, in turn, the risk of product liability claims,

and such claims are expensive to defend and could divert the Company’s management’s attention and result in substantial

damage awards against the Company.

- Risk Factors - continued

Related to Government Regulation - continued

Company may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws and regulations and could

face substantial penalties if the Company is unable to fully comply with such laws.

the Company does not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payors,

many healthcare laws and regulations apply to the Company’s business.

For example, the Company could be subject to healthcare

fraud and abuse and patient privacy regulation and enforcement by both the federal government and the states in which the Company

intends to conduct its business.

The healthcare laws and regulations that may affect the Company’s ability to operate include:

federal healthcare programs’

Anti-Kickback Law, which prohibits, among other things, persons or entities from soliciting,

receiving, offering or providing remuneration, directly or indirectly, in return for or to induce either the referral of an

individual for, or the purchase order or recommendation of, any item or service for which payment may be made under a federal

healthcare program such as the Medicare and Medicaid programs;

false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be

presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent, or are for

items or services not provided as claimed and which may apply to entities like the Company to the extent that the Company’s

interactions with customers may affect their billing or coding practices;

federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which established new federal crimes for knowingly

and willfully executing a scheme to defraud any healthcare benefit program or making false statements in connection with the

delivery of or payment for healthcare benefits, items or services, as well as leading to regulations imposing certain requirements

relating to the privacy, security and transmission of individually identifiable health information;

law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or

services reimbursed by any third-party payor, including commercial insurers, and state laws governing the privacy 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.

the medical device industry has been under heightened scrutiny as the subject of government investigations and regulatory or legal

enforcement actions involving manufacturers who allegedly offered unlawful inducements to potential or existing customers in an

attempt to procure their business, including arrangements with physician consultants.

If the Company’s operations or arrangements

are found to be in violation of any of the laws described above or any other governmental regulations that apply to the Company,

the Company may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from the Medicare and

Medicaid programs and the curtailment or restructuring of its operations.

Any penalties, damages, fines, exclusions, curtailment

or restructuring of the Company’s operations could adversely affect its ability to operate its business and its financial

The risk of the Company being found in violation of these laws is increased by the fact that many of these laws are broad

and their provisions are open to a variety of interpretations.

Any action against the Company for violation of these laws, even

if the Company successfully defends against that action and the underlying alleged violations, could cause the Company to incur

significant legal expenses and divert its management’s attention from the operation of its business.

If the physicians or

other providers or entities with whom the Company does business are found to be non-compliant with applicable laws, they may be

subject to sanctions, which could also have a negative impact on the Company’s business.

- Risk Factors - continued

Related to Government Regulation - continued

Company or its subsidiaries’

failure to obtain or maintain necessary FDA clearances or approvals, or equivalents thereof

and relevant foreign markets, could hurt our ability to distribute and market our products.

both the United States and foreign markets, the Company and its subsidiaries are affected by extensive laws, governmental regulations,

administrative determinations, court decisions and similar constraints.

Such laws, regulations and other constraints may exist

at the federal, state or local levels in the United States and at analogous levels of government in foreign jurisdictions.

example, as discussed above, certain of the Company’s planned product candidates may fall under the regulatory purview of

various centers at the FDA and in other countries by similar health and regulatory authorities.

Each medical device that the Company

wishes to market in the U.S.

must first receive either 510(k) clearance or premarket approval from the FDA unless an exemption

Either process can be lengthy and expensive.

The FDA’s 510(k) clearance process may take from three to twelve months,

or longer, and may or may not require human clinical data.

The premarket approval process is much costlier and lengthier.

take from eleven months to three years, or even longer, and will likely require significant supporting human clinical data.

in obtaining regulatory clearance or approval could adversely affect the Company’s revenues and profitability.

the Company has obtained 510(k) clearance for EsoCheck, this clearance may be subject to revocation if post-marketing data demonstrates

safety issues or lack of effectiveness.

Similar clearance processes may apply in foreign countries.

Further, more stringent regulatory

requirements or safety and quality standards may be issued in the future with an adverse effect on the Company’s business.

addition, the formulation, manufacturing, packaging, labeling, distribution, importation, sale and storage of the Company’s

and its subsidiaries’

products are subject to extensive regulation by various federal agencies, including, but not limited

to, the FDA, the FTC, State Attorneys General in the United States, the Ministry of Health, Labor and Welfare in Japan, as well

as by various other federal, state, local and international regulatory authorities in the countries in which its products are

manufactured, distributed or sold.

If the Company or its manufacturers fail to comply with those regulations, the Company and

its subsidiaries could become subject to significant penalties or claims, which could harm its results of operations or its ability

to conduct its business.

In addition, the adoption of new regulations or changes in the interpretations of existing regulations

may result in significant compliance costs or discontinuation of product sales and may impair the marketing of its products, resulting

in significant loss of net sales.

The Company’s failure to comply with federal or state regulations, or with regulations

in foreign markets that cover its product claims and advertising, including direct claims and advertising by the Company or its

subsidiaries, may result in enforcement actions and imposition of penalties or otherwise harm the distribution and sale of its

Further, the Company and its subsidiaries’

businesses are subject to laws governing our accounting, tax and import

and export activities.

Failure to comply with these requirements could result in legal and/or financial consequences that might

adversely affect its sales and profitability.

- Risk Factors - continued

Associated with Ownership of Our Common Stock

may issue shares of our common and /or preferred stock in the future which could reduce the equity interest of our stockholders

and might cause a change in control of our ownership.

certificate of incorporation authorizes the issuance of up to 150,000,000 shares of common stock, par value $.001 per share, and

20,000,000 shares of preferred stock, par value $.001 per share.

We may issue a substantial number of additional shares of our

common stock or preferred stock, or a combination of common and preferred stock, to raise additional funds or in connection with

any strategic acquisition.

The issuance of additional shares of our common stock or any number of shares of our preferred stock:

significantly reduce the equity interest of investors;

subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded to our

common stockholders;

cause a change in control if a substantial number of our shares of common stock are issued, which may affect, among other

things, our ability to use our net operating loss carryforwards, if any, and most likely also result in the resignation or

removal of some or all of our present officers and directors;

adversely affect prevailing market prices for our common stock.

management and their affiliates control a substantial interest in us and thus may influence certain actions requiring a stockholder

of December 31, 2020, our management and their affiliates collectively own approximately 10% of our issued and outstanding shares

of common stock.

Accordingly, these individuals would have considerable influence regarding the outcome of any transaction that

requires stockholder approval.

Furthermore, our Board of Directors is and will be divided into three classes, each of which will

generally serve for a term of three years with only one class of directors being elected in each year.

As a consequence of our

“staggered”

Board of Directors, only a minority of the Board of Directors will be considered for election in any given

year and our initial stockholders, because of their ownership position, will have considerable influence regarding the outcome.

can be no assurance that our common stock will continue to trade on the Nasdaq Capital Market or another national securities exchange.

can be no assurance that we will be able to continue to meet Nasdaq Capital Market listing standards.

If we are unable to maintain

compliance with all applicable listing standards, our common stock may no longer be listed on the Nasdaq Capital Market or another

national securities exchange and the liquidity and market price of our common stock may be adversely affected.

robust public market for our common stock may not be sustained, which could affect your ability to sell our common stock or depress

the market price of our common stock.

are unable to predict whether an active trading market for our common stock will be sustained.

If an active market is not sustained

for any reason, it may be difficult for you to sell your securities at the time you wish to sell them, at a price that is attractive

to you, or at all.

- Risk Factors - continued

Associated with Ownership of Our Common Stock - continued

stock price may be volatile, and purchasers of our securities could incur substantial losses.

stock price is likely to be volatile.

The stock market in general, and the market for life science companies, and medical device

companies in particular, have experienced extreme volatility that has often been unrelated to the operating performance of particular

The market price for our common stock may be influenced by many factors, including the following:

in the public trading market for our stock that may produce price movements that may or may not comport with macro, industry

or company-specific fundamentals, including, without limitation, the sentiment of retail investors (including as may be expressed

on financial trading and other social media sites and online forums), the direct access by retail investors to broadly available

trading platforms, the amount and status of short interest in our securities, access to margin debt, trading in options and

other derivatives on our common stock and any related hedging and other trading factors

in the press or investment community about our company or industry

ability to successfully commercialize, and realize revenues from sales of, any products we may develop;

performance, safety and side effects of any products we may develop;

success of competitive products or technologies;

of clinical studies of any products we may develop or those of our competitors;

or legal developments in the U.S.

and other countries, especially changes in laws or regulations applicable to any products

we may develop;

introductions

and announcements of new products by us, our commercialization partners, or our competitors, and the timing of these introductions

or announcements;

taken by regulatory agencies with respect to our products, clinical studies, manufacturing process or sales and marketing

in our financial results or those of companies that are perceived to be similar to us;

success of our efforts to acquire or in-license additional products or other products we may develop;

concerning our collaborations, including but not limited to those with our sources of manufacturing supply and our commercialization

concerning our ability to bring our manufacturing processes to scale in a cost-effective manner;

announcements

by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

or disputes concerning patents or other proprietary rights, including patents, litigation matters and our ability to obtain

patent protection for our products;

ability or inability to raise additional capital and the terms on which we raise it;

recruitment or departure of key personnel;

in the structure of healthcare payment systems;

conditions in the medical device, pharmaceutical and biotechnology sectors;

or anticipated changes in earnings estimates or changes in stock market analyst recommendations regarding our common stock,

other comparable companies or our industry generally;

volume of our common stock;

of our common stock by us or our stockholders;

economic, industry and market conditions;

other risks described in this “

Risk Factors ”

broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance.

In the past, following periods of volatility in the market, securities class action litigation has often been instituted against

Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention

and resources, which could materially and adversely affect our business, financial condition, results of operations and growth

- Risk Factors - continued

Associated with Ownership of Our Common Stock - continued

outstanding warrants and other convertible securities may have an adverse effect on the market price of our common stock.

of March 12, 2021, in addition to 82,460,720 shares of our common stock issued and outstanding, we had outstanding

and reserved for issuance, but not subject to outstanding stock-based equity awards, as follows:

options to purchase 7,023,529 shares of our common stock at a weighted average exercise price of $2.53 per share,

under the PAVmed Inc.

2014 Long-Term Incentive Equity Plan (“PAVmed Inc.

2014 Equity Plan”);and 1,778,406 shares

of our common stock reserved for issuance, but not subject to outstanding stock-based equity awards under the PAVmed Inc.

2014 Equity Plan;

and 360,673 shares of our common stock reserved for issuance under the PAVmed Inc.

Employee Stock Purchase

Plan (“PAVmed Inc.

stock purchase warrants to purchase 16,422,915 shares

of our common stock at a weighted average exercise price of $1.68 per share;

purchase options to purchase 53,000 units at an exercise price of $5.50 per unit, with each unit consisting of one share of

our common stock and one warrant, and each warrant entitling the holder to purchase one share of our common stock at an exercise

price of $1.60 per share;

B Convertible Preferred Stock of 1,252,273 shares, convertible, at the holders election, into a corresponding number

of shares of our common stock;

issuance of these shares will dilute our other equity holders, which could cause the price of our common stock to decline.

do not intend to pay any dividends on our common stock at this time.

have not paid any cash dividends on our shares of common stock to date.

The payment of cash dividends on our common stock in the

future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition and will

be within the discretion of our Board of Directors.

It is the present intention of our Board of Directors to retain all earnings,

if any, for use in our business operations and, accordingly, our Board of Directors does not anticipate declaring any dividends

on our common stock in the foreseeable future.

As a result, any gain you will realize on our common stock (including common stock

obtained upon exercise of our warrants) will result solely from the appreciation of such shares.

- Risk Factors - continued

Associated with Ownership of Our Common Stock - continued

are an “emerging growth company”, and we cannot be certain if the reduced reporting requirements applicable to emerging

10 unchanged sentences

will remain an emerging growth company until the earlier of 

(1) the last day of the fiscal year following the fifth anniversary

of the completion of our initial public offering, December 31, 2021, (2) the last day of the fiscal year in which we have

total annual gross revenue of at least $1.0 billion, (3) the date on which we are deemed to be a large accelerated filer, which

means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30th, and

(4) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.

(1) December 31, 2021, which is the last day of the fiscal

year following the fifth anniversary of the first sale of our common stock pursuant to the effective SEC Registration Statement

on Form S-1 in connection with our initial public offering (“IPO”) of our common stock on April 14, 2016;

last day of the fiscal year in which we have total annual gross revenue of at least $1.07 billion;

(3) the date on which we have,

during a previous three year period, issued more than $1.07 billion in non-convertible debt;

or (4) the date on which we are deemed

to be a “large accelerated filer”, which means the market value of our common stock held by non-affiliates (the “public

float”) exceeds $700.0 million as of June 30 of the prior year;

cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.

If some investors

7 unchanged sentences

the extended transition period under the JOBS Act.

- Risk Factors - continued

Associated with Ownership of Our Common Stock - continued

incur significant costs as a result of operating as a public company, and our management will be required to devote substantial

39 unchanged sentences

our auditors if required under Section 404 of the Sarbanes-Oxley Act.

This, in turn, could have an adverse impact on trading

prices for our common stock, and could adversely affect our ability to access the capital markets.

We identified a material weakness

in our internal control over financial reporting.

If we are unable to remediate the material weakness, or if we experience additional

material weaknesses in the future, our business may be harmed.

Our management is responsible for establishing

and maintaining adequate internal control over financial reporting and for evaluating and reporting on the effectiveness of our

system of internal control.

Our internal control over financial reporting is a process designed to provide reasonable assurance

regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in

accordance with U.S.

As a public company, we are required to comply with the Sarbanes-Oxley Act and other rules that govern

public companies.

In particular, we are required to certify our compliance with Section 404 of the Sarbanes-Oxley Act, which requires

us to furnish annually a report by management on the effectiveness of our internal control over financial reporting.

Management performed an assessment of the

effectiveness of our internal control over financial reporting as of December 31, 2019 and concluded that our internal control

over financial reporting was not effective as of December 31, 2019 due to the material weakness related to the level of precision

of our control environment.

Specifically, we did not maintain a properly designed control environment that identified key control

risk areas with an appropriate level of precision in order to conclude on the operating effectiveness of our disclosure controls

This, in turn, could have an adverse impact on trading prices

for our common stock, and could adversely affect our ability to access the capital markets.

- Risk Factors - continued

Associated with Ownership of Our Common Stock - continued

identified a material weakness in our internal control over financial reporting, which we subsequently remediated.

experience additional material weaknesses in the future, our business may be harmed.

management is responsible for establishing and maintaining adequate internal control over financial reporting and for evaluating

and reporting on the effectiveness of our system of internal control.

Our internal control over financial reporting is a process

designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements

for external reporting purposes in accordance with U.S.

As a public company, we are required to comply with the Sarbanes-Oxley

Act and other rules that govern public companies.

In particular, we are required to certify our compliance with Section 404 of

the Sarbanes-Oxley Act, which requires us to furnish annually a report by management on the effectiveness of our internal control

over financial reporting.

performed an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2019 and concluded

our internal control over financial reporting was not effective as of December 31, 2019 due to the material weakness related to

the level of precision of our control environment.

Specifically, we did not maintain documentation with an appropriate level of

precision of the identified key internal control risk areas to conclude on the operating effectiveness of our disclosure controls

and procedures.

We have taken and continue to take remedial steps to improve our internal control over financial reporting.

further discussion of the material weakness identified and our remedial efforts, see Item 9A.

Remediation efforts place a significant

burden on management and add increased pressure to our financial resources and processes.

If we are unable to successfully remediate

our existing material weakness or any additional material weaknesses in our internal control over financial reporting that may

be identified in the future in a timely manner, the accuracy and timing of our financial reporting may be adversely affected;

We performed remedial steps to improve our internal control over financial reporting.

As of February

19, 2021, we determined the material weakness had been remediated.

For further discussion of the material weakness identified

and our remedial efforts, see Item 9A.

we may experience additional material weakness in the future.

Remediation efforts place a significant burden on management and add increased pressure to our financial resources and processes.

If we are unable to successfully remediate any additional material weaknesses in our internal control over financial reporting

that may be identified in the future in a timely manner, the accuracy and timing of our financial reporting may be adversely affected;

our liquidity, our access to capital markets, the perceptions of our creditworthiness may be adversely affected;

6 unchanged sentences

and our stock price may decline.

1A Risk Factors - continued

Associated with Ownership of Our Common Stock - continued

securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, our

8 unchanged sentences

on us regularly, demand for our common stock could decrease, which might cause our stock price and trading volume to decline.

- Risk Factors - continued

Associated with Ownership of Our Common Stock - continued

in our corporate charter documents and under Delaware law could make an acquisition of us more difficult and may prevent attempts

27 unchanged sentences

because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation

Law, which prohibits a person who owns in excess of 15.0% of our outstanding voting stock from merging or combining with us for

a period of three years after the date of the transaction in which the person acquired in excess of 15.0% of our outstanding voting

stock, unless the merger or combination is approved in a prescribed manner.

Law (“DGCL”), which prohibits a person who owns in excess of 15.0% of our outstanding voting stock from merging or

combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15.0%

of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.

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