What changed in this filing

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Item 1A. Risk Factors

2024-03-28 compared with 2023-03-30 · 387 added, 327 removed, 1320 unchanged (35% of the section changed)

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our inception, we have not been profitable and have incurred significant losses and cash flow deficits.

As of December 31, 2022, the

Company had an accumulated deficit of approximately $79.5 million and ended the period with approximately $3.5 million in cash assets.

For the years ended December 31, 2022 and 2021, the Company incurred a net loss of approximately $23.8 and $20.3 million, respectively.

Net cash used in operating activities amounted to approximately $19.6 million and $15.7 million for the years ended December 31, 2022

and 2021, respectively.

As of December 31, 2022, the Company had total liabilities of approximately $8.9 million.

We anticipate that

we will continue to report losses and negative cash flow until we can substantially increase our revenues, which we may be unable to

There is therefore a risk that we will be unable to operate our business in a manner that generate positive cash flow or profit,

and our failure to increase our revenues, generate positive cash flow and operate our business profitably would damage our reputation

and stock price.

For the fiscal years ended December

31, 2023 and 2022, we reported net losses of $13.6 million and $23.8 million respectively, and negative cash flow from operating activities

of $11.9 million and $19.6 million, respectively.

As of December 31, 2023, we had an accumulated deficit of approximately $93.1

million and ended the period with approximately $1.6 million in cash and cash equivalents.

As of December 31, 2023, the Company had total liabilities

of approximately $10.3 million.

We anticipate that we will continue to report losses and negative cash flow until we can substantially

increase our revenues, which we may be unable to do.

There is therefore a risk that we will be unable to operate our business in a manner

that generate positive cash flow or profit, and our failure to increase our revenues, generate positive cash flow and operate our business

profitably would damage our reputation and stock price.

VIP program is a relatively new business model for us, and management has limited experience operating this model.

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Any such failure may have an adverse impact on our business, financial condition and results of

will need to raise additional capital to fund and grow our business.

Such funding, even if obtained, could result in substantial dilution

or significant debt service obligations.

We may not be able to obtain additional capital on commercially reasonable terms in a timely

manner or at all, which could adversely affect our liquidity, financial position, and ability to continue operations.

order to fund and grow our business, we will need to obtain additional financing, either through borrowings, private offerings, public

offerings, or some type of business combination, such as a merger, or buyout, and there can be no assurance that we will be successful

in such pursuits.

will need to raise additional capital to bolster our stockholders’ equity and to fund and grow our business.

Such funding, even

if obtained, could result in substantial dilution or significant debt service obligations.

We may not be able to obtain additional capital

on commercially reasonable terms in a timely manner or at all, which could adversely affect our liquidity, financial position, and ability

to continue operations.

have a present need for additional capital to fund and grow our business, as well as to bolster our stockholders’ equity for Nasdaq

Stock Market purposes.

We will need to obtain additional financing either through borrowings, private offerings, public offerings, or

some type of business combination, such as a merger, or buyout, and there can be no assurance that we will be successful in such pursuits.

We may be unable to acquire the additional funding necessary to fund our growth or to continue operating.

if we are unable to generate adequate cash from operations, and if we are unable to find sources of funding, it may be necessary for

us to sell one or more lines of business or all or a portion of our assets, enter into a business combination, or reduce or eliminate

Any of these possibilities, to the extent available, may be on terms that result in significant dilution to our shareholders

or that result in our investors losing all of their investment in our company.

Accordingly, if we are unable

to generate adequate cash from operations, and if we are unable to find sources of funding, it may be necessary for us to sell one or

more lines of business or all or a portion of our assets, enter into a business combination, or reduce or eliminate operations.

these possibilities, to the extent available, may be on terms that result in significant dilution to our shareholders or that result

in our investors losing all of their investment in our company.

if we are able to raise additional capital, we do not know what the terms of any such capital raising would be.

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Additionally,

during 2022, we actively began a process of reducing staff, eliminating or renegotiating certain vendor contracts, strategically reorganizing

our business and revamping our business model.

Further such steps, or even more, may be required before management is satisfied that

we are positioned to succeed or even survive, and there is a risk that we will be unable to implement cost cutting programs effectively.

starting in 2022 and through 2023, we have been engaged in an active process of reducing staff, eliminating or renegotiating certain

vendor contracts, strategically reorganizing our business and revamping our business model.

Further such steps, or even more, may be

required before management is satisfied that we are positioned to succeed or even survive, and there is a risk that we will be unable

to implement cost cutting programs effectively.

have identified material weaknesses in our internal control over financial reporting.

connection with the audit of our consolidated financial statements for the years ended December 31, 2022 and 2021, we and our independent

registered public accounting firm identified a material weakness in our internal control over financial reporting.

A material weakness

is a deficiency, or a combination of deficiencies, within the meaning of PCAOB Auditing Standard AS 2201, in internal control over financial

reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will

not be prevented or detected on a timely basis.

For the year ended December 31, 2021, our material weakness related to the operating

effectiveness of our review controls.

Specifically, we did not put the appropriate resources in place to be able to identify technical

accounting issues and perform review functions appropriately.

Material errors were also identified in our analysis and review of our

VIP contracts for applicable factors to meet the definition of a contract under ASC 606 Contracts with Customers, step 1, and our evaluation

of our note receivable with respect to our former Orem dental clinic for impairment in accordance with ASC 310 Receivables.

connection with the audit of our consolidated financial statements for the years ended December 31, 2023, 2022 and 2021, we and our

independent registered public accounting firm identified a material weakness in our internal control over financial reporting.

material weakness is a deficiency, or a combination of deficiencies, in internal control over financial

reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements

will not be prevented or detected on a timely basis.

The material weakness in our case related to the operating effectiveness of our

review controls in that we did not put the appropriate resources in place to be able to identify technical accounting issues and

perform review functions appropriately.

Material errors were also identified in our analysis and review of our VIP contracts for

applicable factors to meet the definition of a contract under ASC 606 Contracts with Customers , step 1, and our evaluation of

our note receivable with respect to our former Orem dental clinic for impairment in accordance with ASC 310 Receivables .

in 2022 we did not put the appropriate resources in place to be able to identify technical accounting issues and perform review functions

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or over the customer life as applicable.

Additionally, we did not put the

appropriate resources in place to be able to identify technical accounting issues and perform review functions appropriately.

As a consequence,

we did not effectively design, implement, and operate process-level control activities related to order-to-cash (including revenue, trade

receivables, allowance for doubtful accounts, deferred revenue, and bad debt expense), procure-to-pay (including prepaid expenses), hire-to-pay

(including compensation expense), and leases.

These control deficiencies resulted in immaterial misstatements, some of which were corrected,

in the consolidated financial statements as of and for the year ended December 31, 2022.

These control deficiencies, aggregated,

create a reasonable possibility that a material misstatement to the consolidated financial statements will not be prevented or detected

on a timely basis.

Additionally, we did not put the appropriate resources in place to be able to identify technical accounting issues and perform review functions appropriately.

As a consequence, we did not effectively design, implement, and operate process-level control activities related to order-to-cash (including revenue, trade receivables, allowance for doubtful accounts, deferred revenue, and bad debt expense), procure-to-pay (including prepaid expenses), hire-to-pay (including compensation expense), and leases.

These control deficiencies resulted in immaterial misstatements, some of which were corrected, in the consolidated financial statements as of and for the year ended December 31, 2022.

These control deficiencies, aggregated, create a reasonable possibility that a material misstatement to the consolidated financial statements will not be prevented or detected on a timely basis.

summary, as of December 31, 2022 we identified material weaknesses related to the operating effectiveness of our review controls in

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perform review functions appropriately.

For the year ended December 31, 2023, we began to implement a remediation plan to address the material weakness derived from the deficiencies and errors noted above.

While we believe that at December 31, 2023, we had taken great strides to complete the full remediation of all of our internal control deficiencies and associated material weakness by undertaking the plan described in Item 9A of this Report, we believe that additional review and testing is required in the coming periods during 2024 before we can affirmatively declare that the material weakness has been fully remediated.

we are unable to remedy these or similar material weakness that may arise in the future, or if we generally fail to establish and maintain

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reliant on the commercial viability of The Vivos Method.

our primary product is The Vivos Method, inclusive of MyoCorrect, our SleepImage ® HST, and our multidisciplinary protocols

for adjunctive therapy.

Our secondary source of revenue is our clinical training and practice support programs, including Billing Intelligence

Services, Airway Intelligence System and AireO 2 .

We expect that sales of the component aspects of The Vivos Method and our

services to our VIPs related to the use of such treatments will account for a significant majority of our prospective revenue for the

foreseeable future.

We currently market and sell our appliances (which are central to The Vivos Method) primarily in the United States

and Canada, with a very limited presence in Australia.

The Vivos Method is different from current surgical and non-surgical treatments

dentofacial abnormalities and/or mild to moderate OSA and snoring, therefore we cannot assure you that dentists in corroboration with

physicians will use The Vivos Method or become VIPs, and demand for The Vivos Method may decline or may not increase as quickly as we

Also, we cannot assure you that The Vivos Method will compete effectively as a treatment alternative to other more well-known

and well-established therapies, such as CPAP, mandibular advancement, or palatal surgical procedures.

Since The Vivos Method currently

represents our primary product, and since our VIP program is our primary means of commercialization, we are significantly reliant on

the level of recurring sales of The Vivos Method treatment and decreased or lower than expected sales or recruitment and integration

of new VIPs would cause us to lose all or substantially all of our revenue.

our primary product is The Vivos Method, inclusive of MyoCorrect and our SleepImage HST.

Our secondary source of revenue is our clinical

training and practice support programs, including Billing Intelligence Services, Airway Intelligence System and AireO 2 .

expect that sales of the component aspects of The Vivos Method and our services to our VIPs related to the use of such treatments will

account for a significant majority of our prospective revenue for the foreseeable future.

We currently market and sell our appliances

(which are central to The Vivos Method) primarily in the United States and Canada, with a very limited presence in Australia.

Method is different from current surgical and non-surgical treatments dentofacial abnormalities and/or mild to severe OSA and snoring,

therefore we cannot assure you that dentists in corroboration with physicians will use The Vivos Method or become VIPs, and demand for

The Vivos Method may decline or may not increase as quickly as we expect.

Also, we cannot assure you that The Vivos Method will compete

effectively as a treatment alternative to other more well-known and well-established therapies, such as CPAP, mandibular advancement,

or palatal surgical procedures.

Since The Vivos Method currently represents our primary product, and since our VIP program is our primary

means of commercialization, we are significantly reliant on the level of recurring sales of The Vivos Method treatment and decreased

or lower than expected sales or recruitment and maintenance of new VIPs would cause us to lose all or substantially all of our revenue.

material portion of our future revenue is expected to derive from sales and enrollments of new dentists into our Vivos Integrated Practice

(VIP) program, including dentists who are part of a Dental Service Organization (DSO) which leaves us reliant on the willingness of dentists

and/or DSO groups to continue to enroll.

(VIP) program, including dentists who are part of a DSO which leaves us reliant on the willingness of dentists and/or DSO groups to continue

believe that The Vivos Method is the first commercially available treatment based on our proprietary technology for the treatment of

dentofacial abnormalities and/or mild to moderate OSA.

dentofacial abnormalities and/or mild to severe OSA.

Our success depends both on the sufficient acceptance and adoption by the medical/dental

community of The Vivos Method as a non-invasive treatment for the treatment of dentofacial abnormalities and/or mild to moderate OSA.

Currently, a relatively limited number of dentists and other medical clinicians provide treatment with The Vivos Method.

We cannot predict

how quickly, if at all, the medical/dental community will accept The Vivos Method, or, if accepted, the extent of its use.

be successful:

community of The Vivos Method as a non-invasive treatment for the treatment of dentofacial abnormalities and/or mild to severe OSA.

a relatively limited number of dentists and other medical clinicians provide treatment with The Vivos Method.

We cannot predict how quickly,

if at all, the medical/dental community will accept The Vivos Method, or, if accepted, the extent of its use.

For us to be successful:

dentist customers and referring physicians must believe that The Vivos Method offers meaningful clinical and economic benefits for

the treating provider and for the patient as compared to the other surgical and non-surgical procedures or devices currently being

used to treat individuals with dentofacial abnormalities and/or mild to moderate OSA and referring physicians must write a prescription

used to treat individuals with dentofacial abnormalities and/or mild to severe OSA and referring physicians must write a prescription

for the use of a Class II Vivos appliance;

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new clinical and technical skills and invest in the technology required to treat patients with dentofacial abnormalities and/or mild

to moderate OSA using The Vivos Method.

Independent dentists as well as dentists affiliated with a DSO may not desire to continue

to enroll in our VIP or DSO program.

reference to the treatment of mild to moderate OSA and snoring, studies have shown that a significant percentage of people who have OSA

to severe OSA using The Vivos Method.

Independent dentists as well as dentists affiliated with a DSO may not desire to continue to

enroll in our VIP or DSO program.

reference to the treatment of mild to severe OSA and snoring, studies have shown that a significant percentage of people who have OSA

remain undiagnosed and therefore do not seek treatment.

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failure of large U.S.

customers or Dental Service Organizations (DSO) to pay for their purchases of The Vivos Method products and services

on a timely basis could reduce our future sales revenue and negatively impact our liquidity.

customers or DSO to pay for their purchases of The Vivos Method products and services on a timely basis could reduce

our future sales revenue and negatively impact our liquidity.

timing and extent of our future growth in sales revenue depends, in part, on our ability to continue to increase the number of U.S.

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to these organizations and find new customers, which could reduce our future sales revenue and negatively impact our liquidity.

face risks from negative publicity from unregistered oral appliances which has and may continue to hurt our sales.

or about March 1, 2023, CBS News reported the tragic case of a woman with a malocclusion and breathing problem who had received treatment

via a fixed oral appliance known as the AGGA (Anterior Growth Guidance Appliance).

According to the televised CBS report, the device

created serious issues with her dentition and jaws, resulting in the loss of several anterior teeth.

The patient filed a $10 million

lawsuit against the treating dentist.

News of this lawsuit quickly spread throughout the country, and particularly within the dental

and orthodontic communities.

Within days, rumors and wildly untrue statements were published on social media platforms and elsewhere

that began to associate and confuse our appliances with the AGGA.

Our company was not named in the lawsuit, nor was our device implicated

in creating the tooth displacement and other concerns that gave rise to the lawsuit.

We have never had any association or affiliation

with the AGGA device or its promoters, nor have we ever endorsed these kind of counterfeit fixed oral appliances that make unproven and

unsubstantiated claims.

The AGGA is a non-FDA cleared oral appliance.

We believe that the publicity regarding the AGGA device generated

confusion and apprehension amongst both existing VIP dentists and other non-affiliated dentist prospects.

We believe that our VIP enrollments

and sales of our appliances in the first and second quarter of 2023 decreased as a result of the negative publicity.

The persistence

of negative publicity regarding the use of oral appliances to treat OSA could continue to have a material adverse effect on our revenue

and overall results of operations.

failure to expand our market penetration with DME distribution agreements would adversely affect our revenue and results of operations.

2023, we entered into distribution collaborations with third parties to expand access of our products to potential patients.

that these strategic initiatives will lead to revenue growth opportunities for us in 2024 and beyond, and our ability to capitalize on

these initiatives is expected to be a material aspect of our sales and marketing program going forward.

These distribution agreements

could be subject to the success from a pilot program, and regulatory approvals prior to us being able to fully deploy these arrangements.

The failure of any pilot program or to obtain regulatory approval could lead to termination of a DME relationship.

Even if our DME distribution

arrangements proceed, we may not be able to achieve our planned growth or, even if we are able to expand our market penetration as planned,

any new territories may not be profitable or otherwise perform as planned.

Failure to successfully implement our growth strategy with

DMEs would have an adverse impact on our business, financial condition, and results of operations.

face risks relating to public health conditions such as the COVID-19 pandemic, which could adversely affect our dentist customers, our

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business and prospects have been and could continue to be materially adversely affected by the COVID-19 pandemic or recurrences of COVID-19

(such as has occurred in the fall of 2020 and into 2021 and the first half of 2022) or any other similar diseases in the future.

adverse effects from COVID-19 and similar diseases could result in numerous known and currently unknown ways including from quarantines

and lockdowns which impair our marketing and sales efforts to dentists or other medical professionals.

During the COVID-19 pandemic,

dental offices throughout the U.S.

and Canada shut down for extended periods of time (and may be shut down again due to government mandates

or lockdowns), thus negatively impacting our product revenues.

Such dental practice closures disrupted and dislodged significant portions

of the dental workforce, including many hygienists who decided to quit or retire.

Such disruptions to dental practices has had a negative

and ongoing impact on our VIP offices’ ability to educate and inform patients about their OSA and The Vivos Method.

and reactions to the pandemic or future outbreaks of COVID-19 and variants of COVID-19 could also impair the timing of obtaining necessary

consents and approvals from the FDA, as its employees could also be under such quarantines and lockdowns and their time could be mandatorily

required to be allocated to more immediate global and domestic concerns relating to COVID-19.

In addition, we purchase materials for

our products from suppliers located in affected areas, and we may not be able to procure required components or secure manufacturing

The effects of the COVID-19 pandemic have also placed travel restrictions on us and our VIPs, as well as temporary closures

of the facilities of our suppliers and our VIPs as non-essential medical and dental procedures have been limited, which could also adversely

impact our business.

In addition, a significant outbreak of contagious diseases in the human population could result in a widespread

health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that

could reduce the demand for our products and impair our business prospects including as a result of being unable to raise additional

capital on acceptable terms to us, if at all.

(such as has occurred in the fall of 2020 and into 2021) or any other similar diseases in the future.

Material adverse effects from COVID-19

and similar diseases could result in numerous known and currently unknown ways including from quarantines and lockdowns which impair

our marketing and sales efforts to dentists or other medical professionals.

During the COVID-19 pandemic, dental offices throughout the

and Canada shut down for extended periods of time (and may be shut down again due to recurrences of COVID-19), thus negatively impacting

our product revenues.

The pandemic and reactions to the pandemic or future outbreaks of COVID-19 and variants of COVID-19 could also

impair the timing of obtaining necessary consents and approvals from the FDA, as its employees could also be under such quarantines and

lockdowns and their time could be mandatorily required to be allocated to more immediate global and domestic concerns relating to COVID-19.

In addition, we purchase materials for our products from suppliers located in affected areas, and we may not be able to procure required

components or secure manufacturing capability.

The effects of the COVID-19 pandemic have also placed travel restrictions on us and our

VIPs, as well as temporary closures of the facilities of our suppliers and our VIPs as non-essential medical and dental procedures have

been limited, which could also adversely impact our business.

In addition, a significant outbreak of contagious diseases in the human

population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries,

resulting in an economic downturn that could reduce the demand for our products and impair our business prospects including as a result

of being unable to raise additional capital on acceptable terms to us, if at all.

may not be able to successfully implement our growth strategy for our VIPs on a timely basis or at all, which could harm our business,

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adequate information systems and other operational system capabilities.

convincingly that the investment of time, training, and money in becoming a VIP will have a tangible and significant ROI for the

applicable laws, rules and regulations (including licensure requirements) could negatively impact our ability to recruit and enroll VIPs.

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other personnel to staff their practices using The Vivos Method.

we are unable to find and onboard attractive VIPs in existing markets or new markets, our revenue and profitability may be harmed, we

may not be able to implement our growth strategy and our financial results may be negatively affected.

we are unable to find and onboard VIPs in existing markets or new markets, our revenue and profitability may be harmed, we may not be

able to implement our growth strategy and our financial results may be negatively affected.

we have begun to expand marketing and related efforts to medical professional beyond the dentistry community.

We may be unable to convince

medical sleep specialists, cardiologists, pediatric sleep specialists, chiropractors, nutritionists and other professionals of the benefits

of The Vivos Method specifically and a multidisciplinary approach to treating OSA in general.

Our inability to implementing.

We may be unable to

convince medical sleep specialists, cardiologists, pediatric sleep specialists, chiropractors, nutritionists and other professionals

of the benefits of The Vivos Method specifically and a multidisciplinary approach to treating OSA in general.

Our inability to

implement strategies in increase our VIP enrollments or generate interest from other medical professionals who could refer

patients to our VIPs would have a material adverse effect on our revenues and results of operations.

future operating results are difficult to predict and may vary significantly from quarter to quarter, which may adversely affect the

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You should not rely on our past revenue growth as any indication of future growth rates or operating

Our valuation and the price of our securities likely will fall in the event our operating results (notably our revenue growth,

Our valuation and the price of our securities will likely fall in the event our operating results (notably our revenue growth,

with the goal of achieving cash flow positive and profitable operations) do not meet the expectations of analysts and investors.

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inability to attract demand for and obtain acceptance of The Vivos Method for the treatment of dentofacial abnormalities and/or mild

to moderate OSA and snoring by both medical professionals and their patients;

to severe OSA and snoring by both medical professionals and their patients;

success of alternative therapies and surgical procedures to treat individuals, and the possible future introduction of new products

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effects of global or local pandemics or epidemics and governmental responses, such as COVID-19;

fluctuations in revenue due to the elective nature of sleep related breathing disorder treatments for mild to moderate OSA, as well as seasonal fluctuations resulting from adverse weather conditions, earthquakes, floods

or other acts of nature in certain areas or regions that result in power outages, transportation interruptions, damages to one or

more of our facilities, food shortages, or other events which may cause a temporary or long-term disruption in patient priorities,

finances, or other matters;

fluctuations in revenue due to the elective nature of sleep-disordered breathing treatments for mild to severe OSA, as well as seasonal

fluctuations resulting from adverse weather conditions, earthquakes, floods or other acts of nature in certain areas or regions that

result in power outages, transportation interruptions, damages to one or more of our facilities, food shortages, or other events

which may cause a temporary or long-term disruption in patient priorities, finances, or other matters;

economic conditions as well as those specific to our customers and markets.

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VIPs to the degree anticipated.

SleepImage ® HST used in our VivoScore Program is a relatively new technology which could take longer to gain acceptance

within the medical and dental communities.

If medical and dental care providers do not utilize this new technology, or if the test is

not as effective as anticipated, the financial results from the program may be lower than currently expected.

Also, we are subject to

many risks associated with this new technology that we are unable to presently identify, such as pricing, competition, marketing and

regulatory risks.

If we fail to adequately identify and respond to such risks in a timely manner, on our business, financial condition

and results of operations could be adversely affected.

SleepImage HST used in our VivoScore Program is a relatively new technology which could take longer to gain acceptance within the medical

and dental communities.

If medical and dental care providers do not utilize this new technology, or if the test is not as effective as

anticipated, the financial results from the program may be lower than currently expected.

Also, we are subject to many risks associated

with this new technology that we are unable to presently identify, such as pricing, competition, marketing and regulatory risks.

fail to adequately identify and respond to such risks in a timely manner on our business, financial condition and results of operations

could be adversely affected.

the design and implementation of our VivoScore Program is new, as the current program arose following our renegotiated agreement with

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Therefore, we face the risks associated with establishing a new revenue center as the VivoScore Program itself

(under which we lease the SleepImage ® ring recorder to dentists) may not attract a following sufficient to make the program

a successful revenue generator for us.

(under which we lease the SleepImage ring recorder to dentists) may not attract a following sufficient enough to make the program a successful

revenue generator for us.

may not be able to respond in a timely and cost-effective manner to changes in consumer preferences.

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have conducted, and continue to conduct, a number of clinical studies of the use of The Vivos Method to treat patients with dentofacial

abnormalities and/or mild to moderate OSA in the United States and Canada.

abnormalities and/or mild to severe OSA in the United States and Canada.

We are involved in a number of ongoing clinical studies evaluating

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cannot assure you that these clinical studies will continue to demonstrate that The Vivos Method provides clinical effectiveness for

individuals with dentofacial abnormalities and patients diagnosed with mild to moderate OSA, nor can we assure you that the use of The

individuals with dentofacial abnormalities and patients diagnosed with mild to severe OSA, nor can we assure you that the use of The

Vivos Method will prove to be safe and effective in clinical studies under United States or international regulatory guidelines for any

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practical, The Vivos Method is paid for primarily out-of-pocket by patients, with any available health insurance coverage being reimbursed

if and as paid at a later date, where the patient is being treated for dentofacial abnormalities and/or mild to moderate OSA.

cost of treatments for dentofacial abnormalities and/or mild to moderate OSA, such as CPAP, and most surgical procedures generally are

if and as paid at a later date, where the patient is being treated for dentofacial abnormalities and/or mild to severe OSA.

cost of treatments for dentofacial abnormalities and/or mild to severe OSA, such as CPAP, and most surgical procedures generally are

covered and reimbursed in whole or part by third-party healthcare insurers.

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Our ability to generate revenue from additional

sales of The Vivos Method for the treatment of dentofacial abnormalities and/or mild to moderate OSA may be materially limited by the

extent to which reimbursement of The Vivos Method is available in the future.

sales of The Vivos Method for the treatment of dentofacial abnormalities and/or mild to severe OSA may be materially limited by the extent

to which reimbursement of The Vivos Method is available in the future.

In addition, third-party healthcare insurers are increasingly

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does not generally call on sleep specialists or third-party sleep centers to sell The Vivos Method, and we do not believe that most qualified

sleep specialists today would recommend The Vivos Method to their patients with mild to moderate OSA.

We cannot predict the extent to

which medical doctors will, in the future, endorse or recommend our protocol to their patients, even for those who are unwilling or unable

sleep specialists today would recommend The Vivos Method to their patients with mild to severe OSA.

We cannot predict the extent to which

medical doctors will, in the future, endorse or recommend our protocol to their patients, even for those who are unwilling or unable

to comply with other alternative therapies.

face significant competition in the rapidly changing market for treating mild to moderate OSA and snoring in adults, and we may be unable

face significant competition in the rapidly changing market for treating mild to severe OSA and snoring in adults, and we may be unable

to manage or respond to competitive pressures.

market for treating mild to moderate OSA and snoring in adults, is highly competitive and evolving rapidly.

According to the

American Sleep Apnea Association, over 100 different oral appliances are FDA cleared for the treatment of snoring and mild to

moderate obstructive sleep apnea.

The Vivos Method must compete with more established products, treatments and surgical procedures,

which may limit our growth and negatively affect our business.

Many of our competitors have an established presence in the field and

have established relationships with pulmonologists, sleep clinics and ear, nose and throat specialists, which play a significant

role in determining which product, treatment or procedure is recommended to the patient.

We believe certain of our competitors are

attempting to develop innovative approaches and new products for diagnosing and treating OSA and other sleep related breathing

disorder conditions.

We cannot predict the extent to which ENTs, oral maxillofacial surgeons, primary care physicians or

pulmonologists would or will recommend The Vivos Method over new or other established devices, treatments or procedures.

market for treating mild to severe OSA and snoring in adults, is highly competitive and evolving rapidly.

According to the American Sleep

Apnea Association, over 100 different oral appliances are FDA cleared for the treatment of snoring and mild to severe obstructive sleep

The Vivos Method must compete with more established products, treatments and surgical procedures, which may limit our growth and

negatively affect our business.

Many of our competitors have an established presence in the field and have established relationships

with pulmonologists, sleep clinics and ear, nose and throat specialists, which play a significant role in determining which product,

treatment or procedure is recommended to the patient.

We believe certain of our competitors are attempting to develop innovative approaches

and new products for diagnosing and treating OSA and other sleep disordered breathing conditions.

We cannot predict the extent to which

ENTs, oral maxillofacial surgeons, primary care physicians or pulmonologists would or will recommend The Vivos Method over new or other

established devices, treatments or procedures.

we are in the early stages of implementing our business plan and have limited resources with which to market, develop and sell The Vivos

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operations in which event and you could lose all of your investment.

United States Federal Trade Commission (FTC) has recently put forward a new policy proposal, currently undergoing public comment and

review, that if implemented in its current form, would ban the enforcement of restrictive covenant agreements for employees, thereby

making it almost impossible for us to protect our trade secrets and know-how.

In that event, we would likely experience a loss of control

and confidentiality over our core intellectual property, with unknown consequences.

may face intellectual property infringement claims that would be costly to resolve.

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Our marketing and sales efforts may not be successful in increasing awareness and sales of The Vivos Method.

In addition, other marketing efforts like MID and our collaborations with Candid and Empower Sleep may not increase revenue to the extent

In addition, other marketing efforts like MID and our collaborations with Candid, Ormco and On Demand Orthodontist may not increase revenue to the extent

we currently anticipate.

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increasing revenue.

Furthermore, other marketing efforts like MID and the VivoScore Program may not increase revenue to the extent we

currently anticipate.

failure to educate or train a sufficient number of physicians and dentists in the use of The Vivos Method could reduce the market acceptance

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However, to receive this training, dentists must be aware of The Vivos Method as a treatment option for dentofacial

abnormalities and/or mild to moderate OSA and snoring in adults and be interested in using the protocol in their practice.

predict the extent to which dentists will dedicate the time and energy necessary for adequate training in the use of our proprietary

treatments, have the knowledge of or experience in the clinical outcomes or feel comfortable enough to recommend it to their patients.

Even if a dentist is well versed in The Vivos Method, he or she may be unwilling to require patients to pay for it out-of-pocket.

dentists do not continue to accept and recommend The Vivos Method, our revenue could be materially and adversely affected.

abnormalities and/or mild to severe OSA and snoring in adults and be interested in using the protocol in their practice.

We cannot predict

the extent to which dentists will dedicate the time and energy necessary for adequate training in the use of our proprietary treatments,

have the knowledge of or experience in the clinical outcomes or feel comfortable enough to recommend it to their patients.

dentist is well versed in The Vivos Method, he or she may be unwilling to require patients to pay for it out-of-pocket.

If dentists do

not continue to accept and recommend The Vivos Method, our revenue could be materially and adversely affected.

rely on third-party suppliers and contract manufacturers for the manufacture and assembly of our products, and a loss or degradation

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Our marketing

activities to date have had limited impact in terms of overall market penetration, and have been principally focused on increasing brand

awareness in the communities in which we provide services.

We expect to continue to undertake aggressive marketing campaigns to increase

medical and dental community awareness about our product and service capabilities.

We conduct our marketing efforts in local areas primarily

through various social media and online channels, radio advertisements, physician referrals, other professional referrals, and community

event sponsorships.

If we are not successful in these efforts, we will have incurred expenses without materially increasing revenue.

activities are principally focused on increasing brand awareness in the communities in which we provide services.

We expect to continue

to undertake aggressive marketing campaigns to increase medical and dental community awareness about our product and service capabilities.

We conduct our marketing efforts in neighborhoods through channels such as direct mail, billboards, radio advertisements, physician open

houses, community sponsorships and various social media.

If we are not successful in these efforts, we will have incurred expenses without

materially increasing revenue.

OSA market is highly competitive, including competition for patients, strategic relationships, and commercial payor contracts.

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have limited clinical evidence to support patient compliance with the use our products is superior to competitive products.

believe that our non-surgical treatment of limited duration is preferable relative to mild to moderate OSA CPAP users or other oral appliance

believe that our non-surgical treatment of limited duration is preferable relative to mild to severe OSA CPAP users or other oral appliance

or surgical therapies, resulting in improved patient compliance.

However, we have limited clinical evidence to support our beliefs that

patient compliance in the use of our products as well as actual clinical outcomes are superior to competitive products.

If actual patient

compliance as studied in a clinical trial (should we conduct one) proves less than what we had anticipated, the acceptance of

The Vivos Method in the marketplace, and our revenues and overall results of operations, may be adversely impacted.

patient compliance in the use of our products is superior to competitive products.

If actual patient compliance as studied in a clinical

trial (should we conduct one) proves less than what we had anticipated, the acceptance of The Vivos Method in the marketplace,

and our revenues and overall results of operations, may be adversely impacted.

healthcare programs may reduce reimbursement rates, which could adversely affect sales of our appliances and demand for dental practitioners

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promotion, may implicate the False Claims Act;

federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that

federal Health Insurance Portability and Accountability Act of 1996 (or HIPAA), which created new federal criminal statutes that

prohibit a person from knowingly and willfully executing a scheme or making false or fraudulent statements to defraud any healthcare

benefit program, regardless of the payor (e.g., public or private);

as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and its implementing regulations,

as amended by the Health Information Technology for Economic and Clinical Health Act (or HITECH), and its implementing regulations,

and as amended again by the final HIPAA omnibus Rule, Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notification

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(i) payments or other “transfers of value” made to physicians and teaching hospitals;

and (ii) ownership and investment interests held by physicians and their immediate family members;

ownership and investment interests held by physicians and their immediate family members;

and foreign law equivalents of each of the above federal laws, state laws that require manufacturers to report information related

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healthcare programs and the curtailment of our operations.

addition, dentists may misuse our appliances within The Vivos Method or use improper techniques if they are not adequately trained or

if they deviate in their techniques or protocols from those we promulgate and endorse, potentially leading to injury and an increased

risk of product liability.

If The Vivos Method is misused or used with improper technique, we may become subject to costly litigation

by our customers or their patients.

Similarly, in an effort to decrease costs, physicians may also reuse our appliances despite them

being intended for a single use or may purchase reprocessed Vivos appliances from third-party processors in lieu of purchasing a new

Vivos appliance from one of our contract manufacturers, which could result in product failure and liability.

Product liability claims

could divert management’s attention from our core business, be expensive to defend and result in sizeable damage awards against

us that may not be covered by insurance.

is also possible that alternative products available in the market that make claims similar to ours may cause confusion or the impression

that such products are substantially the same, or work in substantially the same manner as our products, or that they have similar regulatory

approvals or are backed by clinical research.

If that were to occur, the company may lose market share or be unfairly lumped into any

regulatory or legal actions that may arise from such third-party claims.

have undertaken and plan to continue to explore acquisitions of complementary businesses or technologies, which could divert the attention

of management, and which may not be integrated successfully into our existing business.

have undertaken and plan to continue to explore acquisitions or licenses of technology to, among other things, expand the scope of products

addition, dentists may misuse our appliances within The Vivos Method or use improper techniques if they are not adequately trained, potentially

leading to injury and an increased risk of product liability.

If The Vivos Method is misused or used with improper technique, we may

become subject to costly litigation by our customers or their patients.

Similarly, in an effort to decrease costs, physicians may also

reuse our appliances despite them being intended for a single use or may purchase reprocessed Vivos appliances from third-party processors

in lieu of purchasing a new Vivos appliance from one of our contract manufacturers, which could result in product failure and liability.

Product liability claims could divert management’s attention from our core business, be expensive to defend and result in sizeable

damage awards against us that may not be covered by insurance.

We have engaged in

and may continue to pursue acquisitions of complementary businesses or technologies, which could divert the attention of management, and

which may not be integrated successfully into our existing business.

We have engaged

in and may continue to pursue acquisitions or licenses of technology to, among other things, expand the scope of products and

services we provide.

Examples of our implementation of this strategy include our (i) late February 2023 acquisition of c ertain

and international patents, product rights, and other miscellaneous intellectual property from Advanced Facialdontics, LLC, (ii)

March 2021 acquisition certain assets related to our OMT service in March 2021 from MyoCorrect, LLC, and (iii) April 2021 acquisition

of certain medical billing and practice management software, licenses and contracts (including the software underlying AireO2) from Lyon

Management and Consulting, LLC .

The acquisition and integration of another business or technology

can divert management attention from other business activities, including our core business.

This diversion, together with other difficulties

we may incur in integrating an acquired business or technology, could have a material adverse effect on our business, financial condition

and results of operations.

for future potential acquisitions, we cannot guarantee that we will identify suitable acquisition candidates, that acquisitions will

be completed on acceptable terms or that we will be able to successfully integrate the operations of any acquired business into our existing

The acquisitions could be of significant size and involve operations in multiple jurisdictions.

In addition, we may borrow

money or issue capital stock to finance acquisitions.

Such borrowings might not be available on terms as favorable to us as our current

borrowing terms and may increase our leverage, and the issuance of capital stock could dilute the interests of our stockholders.

For example, in February 2023, acquired certain U.S.

and international

patents, product rights, and other miscellaneous intellectual property from Advanced

Facialdontics , LLC.

We cannot guarantee that we will identify suitable acquisition

candidates, that acquisitions will be completed on acceptable terms or that we will be able to successfully integrate the operations

of any acquired business into our existing business.

The acquisitions could be of significant size and involve operations in

multiple jurisdictions.

The acquisition and integration of another business or technology would divert management attention from

other business activities, including our core business.

This diversion, together with other difficulties we may incur in integrating

an acquired business or technology, could have a material adverse effect on our business, financial condition and results of

In addition, we may borrow money or issue capital stock to finance acquisitions.

Such borrowings might not be available

on terms as favorable to us as our current borrowing terms and may increase our leverage, and the issuance of capital stock could

dilute the interests of our stockholders.

business is seasonal, which impacts our results of operations.

Historically,

our fourth quarters tend to be our best performing quarters, both in terms of new VIP enrollments as well as appliance sales from case

starts, while the first quarters have tended to be our worst.

We believe that the patient volumes of our VIPs will be sensitive to seasonal

fluctuations in urgent care and primary care activity.

Typically, winter months see a higher occurrence of influenza, bronchitis, pneumonia

and similar illnesses;

however, the timing and severity of these outbreaks vary dramatically.

Additionally, as consumers shift toward

high deductible insurance plans, they are responsible for a greater percentage of their bill, particularly in the early months of the

year before other healthcare spending has occurred, which may lead to lower than expected patient volume or an increase in bad debt expense

during that period.

Our quarterly operating results may fluctuate significantly in the future depending on these and other factors.

believe that the patient volumes of our VIPs will be sensitive to seasonal fluctuations in urgent care and primary care activity.

winter months see a higher occurrence of influenza, bronchitis, pneumonia and similar illnesses;

however, the timing and severity of

these outbreaks vary dramatically.

Additionally, as consumers shift toward high deductible insurance plans, they are responsible for

a greater percentage of their bill, particularly in the early months of the year before other healthcare spending has occurred, which

may lead to lower than expected patient volume or an increase in bad debt expense during that period.

Our quarterly operating results

may fluctuate significantly in the future depending on these and other factors.

could be subject to lawsuits for which we are not fully insured.

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Kirk Huntsman, our Chief

Financial Officer, Brad Amman, Susan McCullough, our EVP of Operations, and Patrick Kircher, our EVP of Sales and Marketing, among others.

Our business would be impeded or harmed if we were to lose their services.

In addition, if we are unable to attract, train and retain

highly skilled technical, managerial, product development, sales and marketing personnel, we may be at a competitive disadvantage and

unable to develop new products or increase revenue.

The failure to attract, train, retain and effectively manage employees could negatively

impact our research and development, sales and marketing and reimbursement efforts.

In particular, the loss of sales personnel could

lead to lost sales opportunities as it can take several months to hire and train replacement sales personnel.

Uncertainty created by

turnover of key employees could adversely affect our business.

Financial Officer, Brad Amman and Susan McCullough, our EVP of Operations, among others.

Our business would be impeded or harmed if we

were to lose their services.

In addition, if we are unable to attract, train and retain highly skilled technical, managerial, product

development, sales and marketing personnel, we may be at a competitive disadvantage and unable to develop new products or increase revenue.

The failure to attract, train, retain and effectively manage employees could negatively impact our research and development, sales and

marketing and reimbursement efforts.

In particular, the loss of sales personnel could lead to lost sales opportunities as it can take

several months to hire and train replacement sales personnel.

Uncertainty created by turnover of key employees could adversely affect

our business.

of our board of directors and our executive officers will have other business interests and obligations to other entities.

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depend, in large part, on The Vivos Method technology.

The loss or dilution of the trade secrets and other intellectual property that

comprises this key technology would seriously impair our business and future viability, and could result in delays in developing, introducing

or maintaining our treatments/products until equivalent technology, if available, is identified, licensed and integrated.

any defects in the products of The Vivos Method technology or other technologies we gain access to in the future could prevent the implementation

or impair the functionality of our products, delay new product introductions or injure our reputation.

If we are required to acquire

or enter into license agreements with third parties for replacement technologies, we could be subject to higher fees, milestone or royalty

payments, assuming we could access such technologies at all.

The loss of this key technology would seriously impair our business and future

viability, and could result in delays in developing, introducing or maintaining our treatments/products until equivalent technology,

if available, is identified, licensed and integrated.

In addition, any defects in the products of The Vivos Method technology or other

technologies we gain access to in the future could prevent the implementation or impair the functionality of our products, delay new

product introductions or injure our reputation.

If we are required to acquire or enter into license agreements with third parties for

replacement technologies, we could be subject to higher fees, milestone or royalty payments, assuming we could access such technologies

failure to obtain government approvals, including required FDA approvals, or to comply with ongoing, and ever increasing, governmental

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have received an FDA warning letter in the past when such a letter was received by our subsidiary BioModeling Solutions, Inc.

(“BioModeling” or “BMS”) in January 2018 following a routine FDA audit.

In its letter, the FDA noted matters

such as inadequate documentation of certain FDA-required procedures, not keeping certain records and materials in paper format and

in triplicate, and using certain descriptive words and phrases on its website and in marketing materials that were unapproved in

advance by FDA.

On January 31, 2023, the FDA sent us a letter stating that, based on their evaluation, the violations contained in

warning letter were addressed, and therefore the warning letter was considered closed-out.

Future FDA inspections and regulatory

activities will further assess the adequacy and sustainability of those corrections, and we may again become subject to FDA review and scrutiny, which could adversely impact our business.

(“BioModeling”

or “BMS”) in January 2018 following a routine FDA audit.

In its letter, the FDA noted matters such as inadequate documentation

of certain FDA-required procedures, not keeping certain records and materials in paper format and in triplicate, and using certain descriptive

words and phrases on its website and in marketing materials that were unapproved in advance by FDA.

We believe these issues have been

resolved as of our latest FDA audit in fall of 2022 by not having any repeat offenses from the stated observations of said warning letter

and we have submitted written request to have the warning letter resolved.

FDA also has the authority to request repair, replacement or refund of the cost of any medical device manufactured or distributed by

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Thus, with the exception of specific patients who participated in studies, clinical trials

or case reports, we have had limited visibility into patient records which might contain data on the long-term durability and stability

of our treatment beyond just a few years.

Therefore, we have limited empirical data to support our view that the risk of post treatment

regression or relapse is not significant.

To the extent a material number of patients who were treated with The Vivos Method were to

be found to experience post-treatment relapse or regression, it could pose a significant risk to our brand, the willingness or ability

of physicians to prescribe and dentists to use our products and the willingness of patients to engage in treatment with our products

and could thus have a material adverse effect on our results of operations.

or case reports, we have had limited visibility into patient records which might contain data on this subject.

Therefore, we have limited

empirical data to support our view that the risk of post treatment regression or relapse is not significant.

To the extent a material

number of patients who were treated with The Vivos Method were to be found to experience post-treatment relapse or regression, it could

pose a significant risk to our brand, the willingness or ability of physicians to prescribe and dentists to use our products and the

willingness of patients to engage in treatment with our products and could thus have a material adverse effect on our results of operations.

are subject to potential risks associated with the need to comply with state or other DSO laws.

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Therefore, the market for our common stock

is relatively new, and has experience periods of inactivity as well as significant volatility.

We cannot assure you that an orderly and

liquid trading market for our common stock will develop, or if it does develop, it may not be maintained.

You may not be able to sell

your common stock quickly or at the market price if trading in our securities is not active.

market price of our common stock has been and may continue to be highly volatile, which creates the risk of substantial losses for investors.

market price of our common stock has at times been, and is likely in the future to be, volatile.

This volatility may prevent you from

being able to sell your securities at or above the price you paid for your securities.

Our stock price could be subject to wide fluctuations

in response to a variety of factors, which include:

is relatively new, and has experienced periods of inactivity as well as significant volatility.

We cannot assure you that an orderly

and liquid trading market for our common stock will develop, or if it does develop, it may not be maintained.

You may not be able to

sell your common stock quickly or at the market price if trading in our securities is not active.

market price of our common stock has been and may continue to be highly volatile, and you could lose all or part of your investment.

market price of our common stock has been, and is likely in the future to be, volatile (which we define the frequency and magnitude of

movements in the market price for our common stock).

As we believe is typical for smaller public companies, particularly those who operate

in our industry, our common stock prices have been volatile around the times we announce significant news to the marketplace or when

we conduct financings.

For example, in late November 2023, we announced that our CARE appliances were cleared by the FDA to treat moderate

and severe OSA in adults, 18 years of age and older along with positive airway pressure (PAP) and/or myofunctional therapy, as needed.

This announcement was followed by an over 800% increase in the price of our common stock with over 46 million shares of common stock

traded on November 29, 2023.

There is a significant risk that this level of upward market volatility will not be sustained, and downward

volatility in our public stock price could lead to investment losses by our stockholders.

It is important to note that market volatility

is not something over which we have direct control.

volatility may prevent you from being able to sell your securities at or above the price you paid for your securities.

Our stock price

could be subject to wide fluctuations in response to a variety of factors, which include:

we achieve our anticipated corporate objectives;

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Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance,

failure to meet the continuing listing requirements of The Nasdaq Capital Market could result in a de-listing of our securities.

we fail to satisfy the continuing listing requirements of Nasdaq, such as the corporate governance, stockholders equity or minimum closing

bid price requirements, Nasdaq may take steps to delist our common stock.

Such a delisting would likely have a negative effect on the

price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so.

In the event of

a delisting, we would likely take actions to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance

that any such action taken by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity

of our securities, prevent our common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance

with Nasdaq’s listing requirements.

During 2022, we received two notices from Nasdaq informing us of our failure to comply with

two continuing Nasdaq listing requirements:

failure to timely file our reports with the SEC, and failure to achieve the Nasdaq minimum

bid price for 30 consecutive trading days.

While both of these deficiencies were cleared by January 2023, we may again become subject

to potential delisting from Nasdaq if we are unable to comply with all continued listing requirements.

terms of our January 2023 private placement could hamper our fundraising efforts.

January 2023, we engaged in an $8 million private placement with a single institutional investor.

The terms of the Securities Purchase

Agreement related to such private placement contains certain restrictions that could hamper our future fundraising efforts.

and downward volatility in our public stock price could lead to investment losses by our stockholders.

are presently subject to potential delisting from Nasdaq, and our failure to meet and maintain the continuing listing requirements of

The Nasdaq Capital Market could result in a delisting of our securities.

we fail to satisfy the continuing listing requirements of Nasdaq, such as the corporate governance, stockholders equity or minimum

closing bid price requirements, Nasdaq may take steps to delist our common stock.

Such a delisting would likely have a negative

effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so.

In the event of a delisting, we would likely take actions to restore our compliance with Nasdaq’s listing requirements, but we

can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market

price or improve the liquidity of our securities, prevent our common stock from dropping below the Nasdaq minimum bid price

requirement or prevent future non-compliance with Nasdaq’s listing requirements.

During 2022, we received two notices from

Nasdaq informing us of our failure to comply with two continuing Nasdaq listing requirements:

failure to timely file our reports

with the SEC, and failure to achieve the Nasdaq minimum bid price for 30 consecutive trading days.

While both of these deficiencies

were cleared by January 2023, we became subject to additional delisting from Nasdaq during 2023, one for failure to meet the minimum bid

requirement and the other for failing to meet Nasdaq’s $2.5 million minimum stockholders’ equity requirement.

September 21, 2023, we received a written notice from the Nasdaq staff confirming that since, as of that date, we failed to meet the

minimum bid price requirement, and because as of the period ended June 30, 2023 we also failed the minimum stockholders’ equity

requirement, Nasdaq would commence delisting proceedings against us.

As permitted under Nasdaq rules, we appealed the Nasdaq staff’s

determination and requested a hearing (the “Hearing”) before a Nasdaq Hearing Panel (the “Hearing Panel”).

Hearing request stayed any delisting or suspension action by the Nasdaq staff pending the issuance of the Hearing’s Panel decision.

The Hearing took place on November 9, 2023.

to the date of the Hearing, we effectuated a reverse stock split of our issued and outstanding shares of common stock at a ratio of 1-for-25.

The reverse stock split became effective on October 25, 2023, and our common stock began trading on a post-reverse stock split basis

on the Nasdaq on October 27, 2023.

To satisfy the minimum bid requirement, our common stock was required to trade at above $1.00 per

share for at least 10 trading days, and this was achieved on November 9, 2023.

We therefore believe that the Hearing Panel should find

that we have regained compliance with the Minimum Bid Requirement.

the Hearing on November 9, 2023, we presented our plan to regain compliance with the minimum stockholders’ equity requirement (the

“Equity Rule”), which plan includes raising additional equity capital.

On November 30, 2023, we received a letter from the

Hearings Panel that, subject to certain conditions, the Hearings Panel granted our request to continue to be listed on Nasdaq.

conditions include providing an update as to our plan to regain compliance with the Equity Rule as well as demonstrating compliance by

March 19, 2024.

On February 23, 2024 we presented our plan of compliance to the Hearings Committee.

We believe that we will be able to

regain and maintain compliance with both the minimum bid requirement and the minimum stockholders’ equity requirement, which would

allow our common stock to continue to trade on Nasdaq.

However, there can be no assurance that the Hearing Panel will agree with our

plan, that will be provided adequate time to achieve compliance or, even if provided adequate time, that we will in fact be able to regain

and maintain compliance with both requirements, in which case our common stock would be subject to delisting from Nasdaq.

Such a delisting

could have a material adverse effect on our stock price, the ability of our stockholders to buy or sell their common stock, and our reputation,

all of which could make it significantly more difficult to operate our company.

The terms of our November

2023 private placement and February 2024 warrant exercise transaction could hamper our fundraising efforts.

2023, we consummated in a $4 million private placement with a single institutional investor.

The terms of the Securities Purchase Agreement

related to such private placement contain certain restrictions that could hamper our future fundraising efforts.

Specifically:

from January 5, 2023 until May 9, 2023, neither our company nor any subsidiary

November 2, 2023 until forty-five (45) days after the effective date of the registration statement, neither our company nor any subsidiary

of our company shall (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common

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thereto, in each case other than as contemplated by the Registration Rights Agreement we entered into with the investor;

from January 5, 2023 until November 8, 2023, we shall be prohibited from effecting

November 2, 2023 until twelve (12) months after the effective date of the registration statement, we shall be prohibited from effecting

or entering into an agreement to effect any issuance by us or any of our subsidiaries of any shares of common stock or securities convertible

1 unchanged sentence

a transaction in which we (i) issue or sell any debt or equity securities that are convertible into, exchangeable or exercisable for,

or include the right to receive, additional shares of common stock either (i) at a conversion price, exercise price or exchange rate

or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of common stock at any time

after the initial issuance of such debt or equity securities or (ii) with a conversion, exercise or exchange price that is subject to

being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent

events directly or indirectly related to our business or the market for the common stock or (ii) enter into, or effect a transaction

under, any agreement, including, but not limited to, an equity line of credit, whereby we may issue securities at a future determined

existence of these restrictions could reduce the number of fundraising structures available to us, or could discourage potential investors

from making offers of investment to us.

As a result, we may find it more difficult to raise required funding at times and on terms we

deem desirable, and our inability to raise necessary funding could have a material adverse effect on our company and stock price.

or include the right to receive, additional shares of common stock either (i) at a conversion price, exercise price or exchange rate or

other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of common stock at any time after

the initial issuance of such debt or equity securities or (ii) with a conversion, exercise or exchange price that is subject to being

reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent

events directly or indirectly related to our business or the market for the common stock or (ii) enter into, or effect a transaction under,

any agreement, including, but not limited to, an equity line of credit, whereby we may issue securities at a future determined price.

14 2024, we entered into a warrant inducement letter (the “Inducement Agreement”) with the same institutional investor.

terms of this Inducement Agreement contain certain restrictions that could hamper our future fundraising efforts.

Specifically:

February 14, 2024 until forty-five (45) days after the closing date of the Inducement Agreement, neither our Company nor any subsidiary

of our Company shall (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common

stock or securities convertible into or exercisable for common stock or (ii) file any registration statement or any amendment or supplement

thereto, in each case other than as contemplated by the Registration Rights Agreement we entered into with the investor

February 14, 2024 until six (6) months after the effective date of the registration statement we are required to file in connection with

the transactions contemplated by the Inducement Agreement, we shall be prohibited from effecting or entering into an agreement to effect

any issuance by us or any of our subsidiaries of any shares of common stock or securities convertible into or exercisable for common stock

(or a combination of units thereof) involving a “variable rate transaction”, meaning a transaction in which we (i) issue or

sell any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional

shares of common stock either (i) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies

with, the trading prices of or quotations for the shares of common stock at any time after the initial issuance of such debt or equity

securities or (ii) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial

issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to our

business or the market for the common stock or (ii) enter into, or effect a transaction under, any agreement, including, but not limited

to, an equity line of credit, whereby we may issue securities at a future determined price.

The existence of these restrictions could reduce the number of fundraising

structures available to us, or could discourage potential investors from making offers of investment to us.

As a result, we may find it

more difficult to raise required funding at times and on terms we deem desirable, and our inability to raise necessary funding could have

a material adverse effect on our company and stock price.

This is of particular risk to our company as of the date of this Report, since

we need to raise additional equity capital to bolster our stockholders’ equity for Nasdaq Stock Market purposes and to fund and

grow our business generally.

our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares.

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that we will be able to sell the business in order to provide liquidity or a profit for our investors.

officers and directors may have the ability to exert significant influence over our affairs, including the outcome of matters requiring

stockholder approval.

officers and directors and their affiliates (primarily Kirk Huntsman) currently own shares of common stock, in the aggregate, representing

approximately 7.6% of our outstanding voting capital stock.

In addition, Dr.

Dave Singh, our former Chief Medical Officer and director,

owns an additional 10.8% of our outstanding voting stock.

As a result, if these stockholders and any associated stockholders were to

choose to act together, they have and may continue to be able to exert control over certain matters submitted to our stockholders for

approval by having the ability to block certain proposals.

For example, these persons, if they choose to act collectively, would have

the ability to vote against and block a proposed merger, consolidation or sale of all or substantially all of our assets.

This concentration

of voting power could delay or prevent an acquisition of our company on terms that other stockholders may desire.

of activist shareholders could be disruptive and potentially costly and the possibility that activist shareholders may seek changes that

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visibility in the financial markets, which in turn could cause the price of our common stock or trading volume to decline.

Unresolved Staff Comments.

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