What changed in this filing

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Item 1A. Risk Factors

2026-04-15 compared with 2025-03-31 · 731 added, 520 removed, 584 unchanged (68% of the section changed)

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Related to Our Business and Industry

business has a limited operating history, and we continue to refine our business model, which makes it difficult to evaluate and compare

our past performance with future prospects.

Moreover, we have recently made significant strategic, operational and staffing changes to

our business, and it is impossible to know how or if such changes will increase future revenue and earnings.

Our business was formed only in 2016, and therefore there is limited historical

data on which to evaluate our company.

This is particularly true because our VIP-focused business model only commenced in mid-2018.

since the roll out of our VIP-focused business model, we have continued to refine or alter our strategies, including in 2024 to reduce

our reliance on VIP enrollment revenue and instead pursue marketing and distribution alliances with, or acquisitions of, sleep clinics

and other providers.

The 2024 pivot in our business model was accompanied by significant strategic, operational and staffing changes to

our business.

Therefore, there is very limited and evolving or differing historical operating data on which to evaluate the results of

and prospects for our current business model.

Moreover, given that our new sales, marketing and distribution model is at its very early

stages, it is impossible to know with any certainty whether this new model will increase our revenues or ultimately lead to profitability.

business has a limited operating history, and we continue to refine our business model, which makes it difficult to evaluate and

compare our past performance with both current performance and future prospects.

Moreover, we have recently made significant

strategic, operational and staffing changes to our business, and it is impossible to know how or if such changes will increase

future revenue and earnings.

business was formed only in 2016, and therefore there is limited historical data on which to evaluate our company.

This is particularly

true because our VIP-focused business model only commenced in mid-2018.

Furthermore, since the roll out of our VIP-focused business model,

we have continued to refine or alter our strategies, including in 2024 to reduce our reliance on VIP enrollment revenue and instead pursue

marketing and distribution alliances with, or acquisitions of, medical sleep clinics and other medical providers.

The 2024 pivot in our

business model was accompanied by significant strategic, financial, operational and staffing changes to our business, which we have continued

to refine as we progress.

Therefore, there is very limited and evolving or differing historical operating data on which to evaluate the

results of and prospects for our current business model.

Moreover, given that our medical-focused sales, marketing and distribution model

is at its early stages, it is impossible to know with any certainty whether this new model will increase our revenues or ultimately lead

to profitability.

have a history of operating losses and may never achieve cash flow positive or profitable results of operations.

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Additionally,

from 2022 and until 2023, we have reduced staff and eliminated or renegotiated certain vendor contracts, strategically reorganized our

business and revamped 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.

We previously identified material weaknesses in our internal controls and

may identify additional material weaknesses in the future or otherwise fail to operating effectiveness of our review controls, which may

result in material misstatements of our consolidated financial statements or cause us to fail to meet our periodic reporting obligations.

beginning in 2022 we have periodically reduced staff and eliminated or renegotiated certain vendor contracts, strategically

reorganized our business and revamped 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.

previously identified material weaknesses in our internal controls and may identify additional material weaknesses in the future or otherwise

fail to operating effectiveness of our review controls, which may result in material misstatements of our consolidated financial statements

or cause us to fail to meet our periodic reporting obligations.

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

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After analyzing contracts using the five-step process in ASC 606, we have determined

that for both VIP enrollment contracts and Orofacial Myofunctional Therapy (MyoCorrect), modifications to our revenue recognition policies

that for both VIP enrollment contracts and Orofacial Myofunctional Therapy (MyoSync), modifications to our revenue recognition policies

were required in order to identify the performance obligations and recognize the revenue as the performance obligations are satisfied

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of our internal control deficiencies and associated material weakness by undertaking the plan described in Item 9A of this Report, we

believe the additional review and testing in 2024 can affirmatively declare that the

material weakness has been fully remediated as of December 31, 2024.

a similar material weakness or weaknesses arise in the future, or if we generally fail to establish and maintain effective internal

controls appropriate for a public company, we may be unable to produce timely and accurate financial statements, and we may be

required to again conclude that our internal control over financial reporting is not effective, which could adversely impact our

investors’ confidence and our stock price.

Delays in filing our periodic reports have led and could in the future lead to the

loss of our ability to use certain “short form” registration statements (including “shelf” registration

statements used for more efficient fundraising).

believe our additional review and testing in 2024 had cured and fully remediated the material weakness as of December 31, 2024.

a similar material weakness or weaknesses arise in the future, or if we generally fail to establish and maintain effective internal controls

appropriate for a public company, we may be unable to produce timely and accurate financial statements, and we may be required to again

conclude that our internal control over financial reporting is not effective, which could adversely impact our investors’ confidence

and our stock price.

Delays in filing our periodic reports have led and could in the future lead to the loss of our ability to use certain

“short form” registration statements (including “shelf” registration statements used for more efficient fundraising).

Readers are advised

that notwithstanding our management’s assessment that our internal controls were effective as of December 31, 2025, such assessment

does not mean our internal controls are free from any significant deficiencies or do not require any improvement.

As our business

has evolved, most notably through the acquisition of the operating assets of SCN in 2025, we have faced new accounting challenges, including

those relating to integrating SCN’s operations into our own and properly accounting for revenues generated through SCN.

we look to replicate acquisitions like SCN and our MSO/DSO support model in order to grow our business, we will need to continue to evolve

and improve our accounting controls and procedures.

These efforts have taken, and will continue to take, material time and resources,

and we may be unable to undertake such efforts effectively.

expect to derive a substantial portion of our prospective future revenue from sales of our appliances and treatment pursuant to our new

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products and services.

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 and sleep clinics in corroboration with physicians will use The Vivos Method or become VIPs

or strategic alliance partners, 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.

The Vivos Method currently represents our primary product, and

since our VIP program has historically been, but is no longer, our primary means of commercialization, however, we are reliant on the

level of recurring sales using The Vivos Method treatment and decreased or lower than expected sales to and maintenance of VIPs or sleep

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

material portion of our future revenue is expected to derive from sales of our appliances and other closely related diagnostic and therapeutic

services to patients through dentists and other medical professionals, who are part of Dental Service Organization (DSO) we may form

and other Medical Service Organization (MSO) which leaves us reliant on our ability to establish, staff, and operate such operations

successfully across diverse and geographically dispersed markets.

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

Our secondary source of revenue is our

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

that sales of the component aspects of The Vivos Method and our services to our VIPs and affiliated sleep centers related to the use

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

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 severe OSA and snoring, therefore we cannot assure you that dentists and sleep clinics in corroboration

with physicians will use The Vivos Method or become VIPs or strategic alliance partners, 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.

The Vivos Method currently represents our primary product, and since our VIP program has historically been, but

is no longer, our primary means of commercialization, however, we are reliant on the level of recurring sales using The Vivos Method

treatment and decreased or lower than expected sales to and maintenance of VIPs or sleep centers would cause us to lose all or

substantially all of our revenue.

material portion of our future revenue is expected to derive from sales

of our appliances and other closely related diagnostic and therapeutic services to patients through dentists and other medical professionals,

who are part of various Vivos-supported Medical and Dental Service Organizations (MSOs / DSOs) which we intend to form in various states,

and which leave us reliant on our ability to establish, staff, and operate such operations successfully across diverse and geographically

dispersed markets.

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

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ability to design, implement and as necessary modifying product pricing programs for existing VIPs;

the success of our sleep centers and other sleep centers we operate in

a strategic alliance model, which are dependent on patient volume, insurance reimbursement rates, provider credentialing timelines, staff

recruitment and retention, the time required for each Sleep Optimization team to reach full operational capacity, and other factors beyond

expansion and rate of success of our marketing and advertising efforts to both consumers and dentists as well as other medical professionals,

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business and results of operations may be impacted by the extent to which patients using The Vivos Method achieve adequate levels of

third-party insurance reimbursement.

third-party insurance reimbursement, or the extent to which third party patient financing is available.

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

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with custom oral appliance therapy, some of which currently qualify for reimbursement.

Our ability to generate revenue from additional

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

challenging the prices charged for medical products and procedures.

If we are successful in our efforts to obtain reimbursement for the

billable procedures within The Vivos Method, any changes in this reimbursement system could materially affect our ability to continue

to grow our business.

Our ability to generate revenue from

additional sales of The Vivos Method for the treatment of dentofacial abnormalities and/or mild to severe OSA, as well as our

potential revenues from MSO/DSO support fees, may be materially limited by the extent to which reimbursement of The Vivos Method or

other treatments and testing offered by our supported providers is available in the future.

In addition, third-party healthcare

insurers are increasingly challenging the prices charged for medical products and procedures.

If we are successful in our efforts to

obtain reimbursement for the billable procedures within The Vivos Method or otherwise impacting our business, any changes in this reimbursement system could materially

affect our ability to continue to grow our business.

Medical coverage and benefits

are subject to medical necessity, provider credentialing, and payer guidelines.

We have experienced challenges with these insurance processes

in connection with establishing our SCN-related operations, causing delays in revenue generation and cash flow, and we expect to face

these challenges with other sleep practices we may acquire or affiliate with.

Reimbursement

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in the markets in which these approvals are sought.

an effort to help expand in-network insurance coverage for The Vivos Method, in December 2022, we announced a collaboration with Nexus

which effectively combines our proprietary out-of-network Billing Intelligence Service with the Nexus’ in-network medical billing

The goal is to provide both companies’ medical professional networks with greater access to both in or out-of-network

billing with all major medical insurance companies, facilitating case acceptances, insurance billing procedures and reimbursement.

our collaboration with Nexus may not achieve the result of expanding insurance coverage for The Vivos Method, which in turn could have

an adverse effect on our results of operations (particularly if our outlay of resources in connection with the Nexus collaboration exceed

the revenues, if any, generated).

products and third-party contract manufacturing activities are subject to extensive governmental regulation that could prevent us from

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and treatment of sleep breathing disorders.

Accordingly, our ability to scale our business is thus highly dependent

on the expansion of qualified medical sleep specialists who will support and recommend the Vivos Method to their patients.

majority of patients being treated today for OSA, domestically and internationally, are initially referred to pulmonologists or other

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increases the possibility that a healthcare company may run afoul of one or more of the requirements.

misuse or off-label use of The Vivos Method or other Vivos products and services could result in injuries that lead to product liability

suits or result in costly investigations, fines or sanctions by regulatory bodies if we are deemed to have engaged in the promotion of

these uses, any of which could be costly to our business.

train our marketing personnel and direct sales force to not promote the oral appliances of The Vivos Method for uses outside of the FDA-cleared

indications for use, known as off-label uses.

We cannot, however, prevent a medical professional from using our appliances off label

when, in their independent professional medical judgment, he or she deems it appropriate.

There may be increased risk of injury or other

side effects to patients if physicians attempt to use our appliances and associated treatments off label.

Furthermore, the use of our

appliances and associated treatments for indications other than those cleared by the FDA or cleared by any foreign regulatory body may

not effectively treat such conditions, which could harm our reputation in the marketplace among physicians and patients.

misrepresentation, misuse or off-label use of The Vivos Method or other Vivos products and services could result in injuries that

lead to product liability suits or result in costly investigations, fines or sanctions by regulatory bodies if we are deemed to have

engaged in the promotion of these uses, any of which could be costly to our business.

train our marketing personnel and direct sales force to not promote the oral appliances of The Vivos Method for uses outside of the

FDA-cleared indications for use, known as off-label uses.

We cannot, however, prevent a medical professional from using our

appliances off label when, in their independent professional medical judgment, he or she deems it appropriate.

increased risk of injury or other side effects to patients if physicians misrepresent, misuse or attempt to use our appliances and

associated treatments off label.

Furthermore, the use of our appliances and associated treatments for indications other than those

cleared by the FDA or cleared by any foreign regulatory body may not effectively treat such conditions, which could harm our

reputation in the marketplace among physicians and patients.

that we are aware that, notwithstanding our training guidelines, our independent VIPs may use our appliances off-label, there is a risk

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

We have engaged in and will continue to pursue

acquisitions of medical or dental practices or 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 will continue

to pursue acquisitions of medical or dental practices or other complementary businesses or assets as well as licenses of technology to,

among other things, expand the our marketing and distribution model and the scope of products and services we provide.

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.

have engaged in and will continue to pursue acquisitions of, or affiliations with, medical or dental practices or complementary businesses or technologies,

which could divert the attention of management, and which may not be integrated successfully into our existing business.

have engaged in and will continue to pursue acquisitions of medical or dental practices or other complementary businesses or assets as

well as licenses of technology to, among other things, expand our marketing and distribution model and the scope of products and services

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.

Moreover, the acquisition of medical or

dental practice implicates complicated healthcare laws which will need to be navigated.

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 operations.

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.

We could be subject to lawsuits for which we

are not fully insured.

Healthcare providers have become

subject to an increasing number of lawsuits alleging malpractice and related legal theories such as negligent hiring, supervision and

credentialing.

Moreover, the

acquisition of medical or dental practice implicates complicated healthcare laws which will need to be navigated.

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 operations.

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.

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

providers have become subject to an increasing number of lawsuits alleging malpractice and related legal theories such as negligent hiring,

supervision and credentialing.

Some of these lawsuits involve large claim amounts and substantial defense costs.

We generally procure professional liability

insurance coverage for our affiliated medical professionals and professional and corporate entities.

We are currently insured under policies

in amounts management deems appropriate, based upon the nature and risk of our business.

Our medical professionals are also required to

provide their own medical malpractice insurance coverages.

Nevertheless, there are exclusions and exceptions to coverage under each insurance

policy that may make coverage for any claim unavailable, future claims could exceed the limits of available insurance coverage, existing

insurers could become insolvent and fail to meet their obligations to provide coverage for such claims, and such coverage may not always

be available with sufficient limits and at reasonable cost to insure us adequately and economically in the future.

One or more successful

claims against us not covered by, or exceeding the coverage of, our insurance could have a material adverse effect on our business, prospects,

results of operations and financial condition.

Moreover, in the normal course of our business, we may be involved in other types of lawsuits,

claims, audits and investigations, including those arising out of our billing and marketing practices, employment disputes, contractual

claims and other business disputes for which we may have no insurance coverage.

Furthermore, for our losses that are insured or reinsured

through commercial insurance providers, we are subject to the financial viability of those insurance companies.

Although we believe our

commercial insurance providers are currently creditworthy, they may not remain so in the future.

The outcome of these matters could have

a material adverse effect on our financial position, results of operations, and cash flows.

We depend on certain key personnel.

We substantially rely on the efforts

of our current senior management, including our Chief Executive Officer, R.

Kirk Huntsman, our Chief Financial Officer, Brad Amman and

Susan McCullough, our EVP of Operations, among others.

We generally procure

professional liability insurance coverage for our affiliated medical professionals and professional and corporate entities.

We are currently

insured under policies in amounts management deems appropriate, based upon the nature and risk of our business.

Our medical professionals

are also required to provide their own medical malpractice insurance coverages.

Nevertheless, there are exclusions and exceptions to

coverage under each insurance policy that may make coverage for any claim unavailable, future claims could exceed the limits of available

insurance coverage, existing insurers could become insolvent and fail to meet their obligations to provide coverage for such claims,

and such coverage may not always be available with sufficient limits and at reasonable cost to insure us adequately and economically

in the future.

One or more successful claims against us not covered by, or exceeding the coverage of, our insurance could have a material

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

Moreover, in the normal course of our business,

we may be involved in other types of lawsuits, claims, audits and investigations, including those arising out of our billing and marketing

practices, employment disputes, contractual claims and other business disputes for which we may have no insurance coverage.

for our losses that are insured or reinsured through commercial insurance providers, we are subject to the financial viability of those

insurance companies.

Although we believe our commercial insurance providers are currently creditworthy, they may not remain so in the

The outcome of these matters could have a material adverse effect on our financial position, results of operations, and cash

depend on certain key personnel.

substantially rely on the efforts of our current senior management, including our Chief Executive Officer, R.

Kirk Huntsman, our

Chief Financial Officer, Brad Amman, Susan McCullough, our EVP of Operations, and Michael Bruhn, our EVP of Operations, East Coast,

among others.

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

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.

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.

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.

Members of our board of directors and our executive

officers will have other business interests and obligations to other entities.

Neither our directors nor our

executive officers will be required to manage our business as their sole and exclusive function and they may have other business interests

and may engage in other activities in addition to those relating to us, provided that such activities do not compete with the business

of our company or otherwise breach their agreements with us.

We are dependent on our directors and executive officers to successfully

operate our company.

Their other business interests and activities could divert time and attention from operating our business.

We will need to carefully manage our expanding

operations to achieve sustainable growth.

To expand our marketing and distribution

model, achieve increased revenue levels, complete clinical studies and develop future products, we believe that we will be required to

periodically expand our operations, particularly in the areas of sales and marketing, clinical research, reimbursement, research and development,

manufacturing and quality assurance.

As we expand our operations in these areas, management will face new and increased responsibilities.

To accommodate any growth and compete effectively, we must continue to upgrade and improve our information systems, as well as our procedures

and controls across our business, and expand, train, motivate and manage our work force.

Our future success will depend significantly

on the ability of our current and future management to operate effectively.

Our personnel, systems, procedures and controls may not be

adequate to support our future operations.

If we are unable to effectively manage our expected growth, this could have a material adverse

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

We could be adversely affected by violations

Foreign Corrupt Practices Act and similar worldwide anti-bribery and anti-kickback laws with respect to our activities outside

the United States.

We distribute our products to

locations within and outside the United States and Canada.

Foreign Corrupt Practices Act, and other similar anti-bribery and

anti-kickback laws and regulations, generally prohibit companies and their intermediaries from making improper payments to non-U.S.

for the purpose of obtaining or retaining business.

As we expect to expand our international operations in the future, we will become

increasingly subjected to these laws and regulations.

We cannot assure you that we will be successful in preventing our agents from taking

actions in violation of these laws or regulations.

Such violations, or allegations of such violations, could disrupt our business and

result in a material adverse effect on our financial condition, results of operations and cash flows

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

our directors nor our executive officers will be required to manage our business as their sole and exclusive function and they may have

other business interests and may engage in other activities in addition to those relating to us, provided that such activities do not

compete with the business of our company or otherwise breach their agreements with us.

We are dependent on our directors and executive

officers to successfully operate our company.

Their other business interests and activities could divert time and attention from operating

our business.

will need to carefully manage our expanding operations to achieve sustainable growth.

expand our medical provider-focused marketing and distribution model, achieve increased revenue levels, complete clinical studies and

develop future products, we believe that we will be required to periodically expand our operations, particularly in the areas of sales

and marketing, clinical research, reimbursement, research and development, manufacturing and quality assurance.

As we expand our operations

in these areas, management will face new and increased responsibilities.

To accommodate any growth and compete effectively, we must continue

to upgrade and improve our information systems, as well as our procedures and controls across our business, and expand, train, motivate

and manage our work force.

Our future success will depend significantly on the ability of our current and future management to operate

Our personnel, systems, procedures and controls may not be adequate to support our future operations.

If we are unable to

effectively manage our expected growth, this could have a material adverse effect on our business, financial condition and results of

could be adversely affected by violations of the U.S.

Foreign Corrupt Practices Act and similar worldwide anti-bribery and anti-kickback

laws with respect to our activities outside the United States.

distribute our products to locations within and outside the United States and Canada.

Foreign Corrupt Practices Act, and other

similar anti-bribery and anti-kickback laws and regulations, generally prohibit companies and their intermediaries from making improper

payments to non-U.S.

officials for the purpose of obtaining or retaining business.

As we expect to expand our international operations

in the future, we will become increasingly subjected to these laws and regulations.

We cannot assure you that we will be successful in

preventing our agents from taking actions in violation of these laws or regulations.

Such violations, or allegations of such violations,

could disrupt our business and result in a material adverse effect on our financial condition, results of operations and cash flows

Related to Our Products and Regulation

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third party may need to delay or terminate ongoing clinical trials, which could negatively affect our business.

The results of our clinical trials may not support

either further clinical development or the commercialization of any new product candidates or modifications to existing products.

Even if our ongoing or contemplated

clinical trials are completed as planned, their results may not support either the further clinical development or the commercialization

of any new product candidates or modifications of existing products.

The FDA or government authorities may not agree with our conclusions

regarding the results of our clinical trials.

Success in preclinical testing and early clinical trials does not ensure that later clinical

trials will be successful, and the results from any later clinical trials may not replicate the results of prior clinical trials and pre-clinical

The clinical trial process may fail to demonstrate that our product candidates are safe and effective for indicated uses.

failure would cause us to abandon a product candidate or a modification to any existing product and may delay development of other product

Any delay in, or termination of, our clinical trials will delay the filing of our 510(k)’s and, ultimately, our ability

to commercialize our product candidates and generate product revenue.

Generally, Class II medical device marketed in the U.S.

a 510(k) clearance from the FDA.

A 510(k) is a premarket submission made to FDA to demonstrate that the device to be marketed is at least

as safe and effective, that is, substantially equivalent (or SE), to a legally marketed device.

Companies must compare their device to

one or more similar legally marketed devices, commonly known as “predicates”, and make and support their substantial equivalency

The submitting company may not proceed with product marketing until it receives an order from the FDA declaring a device substantially

The substantially equivalent determination is usually made within 90 days, based on the information submitted by the applicant.

In addition, we or the FDA may

suspend our clinical trials at any time if it appears that we are exposing participants to unacceptable health risks or if the FDA finds

deficiencies in the conduct of these trials.

A number of companies in the medical technology industry have suffered significant setbacks

in advanced clinical trials despite promising results in earlier trials.

In the end, we may be unable to develop marketable products.

Modifications to appliances within The Vivos

Method may require additional FDA approvals which, if not obtained, could force us to cease marketing and/or recall the modified device

until we obtain new approvals.

After a device receives a 510(k) clearance, any modification that could significantly affect its safety or effectiveness,

or that would constitute a major change in its intended use, requires a new 510(k) clearance or could require a Premarket approval (or

PMA is the FDA process of scientific and regulatory review to evaluate the safety and effectiveness of Class III medical devices.

Class III devices are those that support or sustain human life, are of substantial importance in preventing impairment of human health,

or which present a potential, unreasonable risk of illness or injury.

Currently we do not market devices within this Class III category

nor do we intend to in the foreseeable future.

However, the FDA requires each manufacturer to make this determination in the first instance,

but the FDA can review any decision.

If the FDA disagrees with a manufacturer’s decision not to seek a new 510(k) clearance, the

agency may retroactively require the manufacturer to seek 510(k) clearance or PMA approval.

The FDA also can require the manufacturer

to cease marketing and/or recall the modified devices until 510(k) clearance or PMA approval is obtained.

We cannot assure you that the

FDA would agree with any of our decisions not to seek 510(k) clearance or PMA approval.

If the FDA requires us to seek 510(k) clearance

or PMA approval for any modification, we also may be required to cease marketing and/or recall the modified device until we obtain a new

510(k) clearance or PMA approval.

results of our clinical trials may not support either further clinical development or the commercialization of any new product candidates

or modifications to existing products.

if our ongoing or contemplated clinical trials are completed as planned, their results may not support either the further clinical development

or the commercialization of any new product candidates or modifications of existing products.

The FDA or government authorities may not

agree with our conclusions regarding the results of our clinical trials.

Success in preclinical testing and early clinical trials does

not ensure that later clinical trials will be successful, and the results from any later clinical trials may not replicate the results

of prior clinical trials and pre-clinical testing.

The clinical trial process may fail to demonstrate that our product candidates are

safe and effective for indicated uses.

This failure would cause us to abandon a product candidate or a modification to any existing product

and may delay development of other product candidates.

Any delay in, or termination of, our clinical trials will delay the filing of

our 510(k)’s and, ultimately, our ability to commercialize our product candidates and generate product revenue.

Generally, Class

II medical device marketed in the U.S.

must receive a 510(k) clearance from the FDA.

A 510(k) is a premarket submission made to FDA to

demonstrate that the device to be marketed is at least as safe and effective, that is, substantially equivalent (or SE), to a legally

marketed device.

Companies must compare their device to one or more similar legally marketed devices, commonly known as “predicates”,

and make and support their substantial equivalency claims.

The submitting company may not proceed with product marketing until it receives

an order from the FDA declaring a device substantially equivalent.

The substantially equivalent determination is usually made within

90 days, based on the information submitted by the applicant.

addition, we or the FDA may suspend our clinical trials at any time if it appears that we are exposing participants to unacceptable health

risks or if the FDA finds deficiencies in the conduct of these trials.

A number of companies in the medical technology industry have

suffered significant setbacks in advanced clinical trials despite promising results in earlier trials.

In the end, we may be unable to

develop marketable products.

Modifications

to appliances within The Vivos Method may require additional FDA approvals which, if not obtained, could force us to cease marketing

and/or recall the modified device until we obtain new approvals.

a device receives a 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute

a major change in its intended use, requires a new 510(k) clearance or could require a Premarket approval (or PMA).

PMA is the FDA process

of scientific and regulatory review to evaluate the safety and effectiveness of Class III medical devices.

Class III devices are those

that support or sustain human life, are of substantial importance in preventing impairment of human health, or which present a potential,

unreasonable risk of illness or injury.

Currently we do not market devices within this Class III category nor do we intend to in the

foreseeable future.

However, the FDA requires each manufacturer to make this determination in the first instance, but the FDA can review

any decision.

If the FDA disagrees with a manufacturer’s decision not to seek a new 510(k) clearance, the agency may retroactively

require the manufacturer to seek 510(k) clearance or PMA approval.

The FDA also can require the manufacturer to cease marketing and/or

recall the modified devices until 510(k) clearance or PMA approval is obtained.

We cannot assure you that the FDA would agree with any

of our decisions not to seek 510(k) clearance or PMA approval.

If the FDA requires us to seek 510(k) clearance or PMA approval for any

modification, we also may be required to cease marketing and/or recall the modified device until we obtain a new 510(k) clearance or

PMA approval.

are subject to regular inspection and market surveillance by the FDA to determine compliance with regulatory requirements.

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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.

resolved as the FDA notified the Company in 2022 that the Warning Letter had been resolved.

Since that time, we have enhanced our quality systems, policies, and procedures designed to support ongoing compliance.

In a subsequent

FDA inspection in 2024, the agency issued a single observation and did not cite any repeat observations related to those matters.

subject to ongoing FDA oversight, and there can be no assurance that future inspections will not identify additional issues.

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

our alliance marketing and distribution model, our M&A Group, or formerly known as our Medical Integration Division, which will seek

to acquire or create alliances with healthcare providers, may implicate federal and state laws involving the practice of medicine and

related anti-kickback and similar laws.

medical-provider focused alliance marketing and distribution model under which will seek to acquire or create alliances with healthcare

providers, may implicate federal and state laws involving the practice of medicine and related anti-kickback and similar laws.

M&A Group, or formerly known as the MID, was launched in 2020 to assist VIP practices in establishing clinical collaboration ties

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Group in Canada.

Related to Our Acquisition of the Sleep Center of Nevada (“SCN”)

2024 and 2025, we worked to pivot our sales, marketing distribution model, including via the acquisition of the Sleep Center of

Nevada (the “SCN Acquisition”).

However, we have limited experience operating this business model, and it may not

produce the benefits we anticipate.

This makes it difficult to evaluate our future prospects and may increase the risk of your

June 2025, we acquired all assets, including operating assets such as sleep testing, diagnostics, and treatment centers, of SCN.

SCN Acquisition marked the completion in a pivot to our sales, marketing distribution model for our innovative OSA appliances.

the new model, SCN will provide sleep disorder patients with the opportunity to be candidates for our advanced, proprietary and FDA-cleared

CARE oral medical devices, oral appliances and additional adjunctive therapies and methods.

Under customary agreements designed to comply

with applicable corporate practice of medicine law, our operation of SCN allows us to manage and capture both diagnostic and consulting

revenues, representing new higher margin revenue streams for us, as well as potential Vivos appliance sales revenue from SCN.

exploring and seeking to implement additional acquisitions of, or collaborations with, medical sleep and similar healthcare practices

to expand our business model in an effort to grow our revenues.

are placing significant emphasis on establishing and growing this new model as means of increasing our revenue.

However, we have limited operating history associated with this business model.

Our prior collaboration with Rebis Health in Colorado

entered into in 2024 has not met our expectations and differed materially from the SCN Acquisition in that we did not have adequate control

over patient processing, systems and protocols, dentist hiring and management, staff hiring and management, patient education, hours

of operation, or medical provider training and education.

As a result, the Rebis Health collaboration has not benefited us as we had

There is therefore a lack of information for you to evaluate our future prospects utilizing this business model.

there is a material risk that this new model will not increase our revenues or gross margins in the manner we anticipate.

we have faced challenges in fully integrating SCN’s operations into our own and meeting market demand due to matters such as (i)

difficulties in identifying and training healthcare providers in the products and services we offer and (ii) obtaining insurance reimbursement

for such products and services.

Our ability to address these and similar challenges could lead to slower increases, or even reductions,

in our revenues.

addition, we may be unable to find additional sleep medical providers to incorporate into our business, and even if we do, the is a risk

we may not derive the benefits from additional acquisition that we intend to.

Our inability to implement and scale this marketing and

distribution model would materially harm our business and operating results and likely cause our stock price to suffer.

Additionally,

if the benefits of the SCN Acquisition or similar acquisitions or collaborations we may undertake do not meet the expectations of our

shareholders, the market price of our securities may decline.

Fluctuations, including declines, in the price of our common stock could

contribute to the loss of all or part of your investment.

Certain factors, including, but not limited to, the factors listed below could

have a material adverse effect on the price of our common stock:

or anticipated fluctuations in financial results post-SCN-Acquisition or following the execution of similar transactions;

in the market’s expectations about our operating results post-SCN-Acquisition or following the execution of similar transactions;

announcements

of technological innovation, or new products, by our competition;

success of our competitors.

such, no assurances can be given that the SCN Acquisition or similar transactions will benefit our operating results or stock price.

have incurred substantial indebtedness in connection with financing the SCN acquisition, the cost of servicing that debt could adversely

affect our business, financial condition, and results of operation, and we may not be able in the future to service that debt.

with the SCN Acquisition, we entered into a Note Purchase Agreement with Streeterville, pursuant to which we issued and sold to Streeterville

a Secured Promissory Note in the original principal amount of $8,250,000 (the “ Streeterville Note ”).

The Streeterville

Note is secured by our wholly-owned subsidiary AIM, which manages SCN in accordance with the corporate practice of medicine.

has also pledged the entirety of AIM’s membership interests to the Streeterville as collateral for the Streeterville Note pursuant

and caused AIM to provide a guarantee of our obligations to the Streeterville under the Streeterville Note and the other transaction

ability to make scheduled payments under the Streeterville Note or any alternative debt financing arrangements we may enter into in connection

with our growth strategy to acquire additional medical sleep practices will depend on our financial and operating performance, which

will be affected by economic, financial, competitive, business, and other factors, some or all of which are beyond our control.

The indebtedness

we incurred in connection with the SCN Acquisition will require us to dedicate a portion of our cash flow to servicing this debt, thereby

reducing the availability of cash to fund other business initiatives.

There can be no assurance that our business, inclusive of SCN,

will generate sufficient cash flow from operations to service our indebtedness or to fund our other liquidity needs.

If we are unable

to meet our debt obligations or fund our other liquidity needs, we may need to restructure or refinance all or a portion of our indebtedness

on or before maturity or sell certain of our assets.

There can be no assurance that we will be able to restructure or refinance any of

our indebtedness on commercially reasonable terms, if at all, which could cause us to default on our debt obligations and impair our

Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants,

which could further restrict our business operations.

If we are unable to generate or borrow sufficient cash to make payments on our

indebtedness, our business, financial condition, and results of operations could be adversely affected.

SCN’s operations may be more difficult, costly, or time-consuming than expected.

ongoing integration of Vivos and SCN could result in the disruption of our ongoing business, and inconsistencies in standards, controls,

procedures, policies and insurance coverage that adversely affect our ability to maintain relationships with patients and employees or

achieve the anticipated benefits of the SCN Acquisition.

As with any acquisition, there also may be disruptions that cause us to lose

patients or cause patients to elect alternative form of sleep treatment.

We may also face other unintended consequences from the SCN

Acquisition (including adverse effects on our business reputation, supply chain issues, and similar matters) that that could have a material

adverse effect on our results of operations, financial condition and stock price.

our contractual arrangements between Airway Integrated Management Company, LLC, a Colorado limited liability company and a

wholly-owned subsidiary of the Company (“AIM”) and our physicians at SCN are found to constitute the improper rendering

of medical services or to violate corporate practice of medicine or dentistry or fee splitting under applicable state laws, our

business, financial condition and our ability to operate in those states could be adversely impacted.

contractual relationships between AIM and our physicians at SCN (and similar arrangements we may enter into in the future in connection

with other sleep provider acquisitions) may implicate certain state laws that generally prohibit non-professional entities from providing

licensed medical services or exercising control over medical practitioners or other healthcare professionals (such activities generally

referred to as the “corporate practice of medicine”, and laws, rules and regulations relating to the corporate practice of

medicine, the “ CPM Laws” ) or engaging in certain practices such as fee-splitting with such licensed professionals.

The interpretation and enforcement of CPM Laws vary significantly from state to state.

There can be no assurance that CPM Laws will be

interpreted in a manner consistent with our practices or that other laws or regulations will not be enacted in the future that could

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

Regulatory authorities, state boards

of medicine, state attorneys general and other parties may assert that, despite the agreements through which we operate, we are engaged

in the provision of medical services and/or that our arrangements with our medical practitioners constitute unlawful fee-splitting.

a jurisdiction’s prohibition on the corporate practice of medicine or fee-splitting is interpreted in a manner that is inconsistent

with our practices, we would be required to restructure or terminate our arrangements with our medical practitioner at SCN to bring our

activities into compliance with such CPM Laws.

A determination of non-compliance, or the termination of or failure to successfully restructure

these relationships could result in disciplinary action, penalties, damages, fines, and/or a loss of revenue, any of which could have

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

State corporate practice and fee-splitting

prohibitions also often impose penalties our medical practitioners for aiding in the improper rendering of professional services, which

could discourage medical practitioners and other healthcare professionals from providing clinical services at SCN or other sleep centers

we may operate in the future.

a result of our business model pivot which includes the acquisition of sleep centers like SCN, we may become a party to lawsuits, demands,

claims, qui tam suits, governmental investigations and audits and other legal matters, any of which could result in, among other things,

substantial financial and other penalties, damage to our reputation or adverse effects on our ability to conduct business.

a result of our 2025 business model pivot, which includes acquisitions of sleep medical providers like SCN as a means of driving sales

of our OSA treatments, our business has (subject to compliance with CPM laws as described above) become more associated with diagnosing

and treating OSA patients.

Given the nature of this business, we may in the future be subject to investigations and audits by governmental

agencies, private civil qui tam complaints and other lawsuits, demands, claims, legal proceedings and/or other actions alleging

our, or the medical practices we manage, failure to comply with applicable rules, regulations, laws or the practice of medicine.

example, we and sleep medical providers we manage (like SCN) could become subject to audits from the government concerning the billing

If, following the conclusion of any audit, the government were to require refunds and/or modifications to our business practices,

and such amounts or changes are significant, it could have a material adverse effect on our business, results of operations, financial

condition and cash flows.

In addition, any allegation against us, our medical providers we manage or related personnel, representatives,

third party vendors, or operations in such matters or matters that involve patients suffering adverse health outcomes, may, among other

things harm our reputation, stock price, and adversely affect our relationships and/or contracts related to our business, among other

to subpoenas, investigations and other lawsuits, claims and legal proceedings, as well as defending ourselves in such matters, would

require management’s attention and cause us to incur significant legal expense.

Negative developments, findings or terms and conditions

that we might agree to accept as part of a negotiated resolution of pending or future legal or regulatory matters, or have been forced

upon us, could result in, among other things, harm to our or our medical providers’ reputation, substantial financial penalties

or awards against us, substantial payments made by us, required changes to our business practices, impacts on our various relationships

and/or contracts related to our business, exclusion from future participation in Medicare, Medicaid and other healthcare programs and,

in certain cases, criminal penalties, any of which could have a material adverse effect on us.

in the structure and payment rates under private insurance, Medicare, Medicaid or other non-Medicare government-based programs or

payment rates related to our business could have a material adverse effect on our business, results of operations, financial condition

and cash flows.

center providers like SCN or other medical sleep providers we may acquire and manage or do business with rely on various forms of insurance

held by patients for payment for products and services.

These include private insurance, Medicare, Medicaid and other government programs.

As such, the business of the medical sleep providers we manage and our business and results of operations could be adversely impacted

by matters related to insurance coverage including, without limitation:

risk that reimbursement rates are reduced by private insurance carriers or government insurance providers;

risk that changes in insurance policies or regulatory mandates could limit the ability to either be paid for covered services or

bill for treatments or services or otherwise impact reimbursement;

risk that interpretations of existing regulations, manual provisions and/or guidance, or the implementation or enforcement of new

interpretations, will be inconsistent with how we and the medical sleep providers we manage have interpreted regulations, manual

provisions and/or guidance;

risk that data and related reporting requirements are implemented that result in decreased reimbursement, increased technology and

operational costs, or reputational harm;

risk that increases in our operating costs will outpace any Medicare or other rate increases we receive;

risk of federal budget sequestration cuts or other disruptions in federal government operations and funding;

risk of ensuring that the sleep medical providers we manage remain compliant with applicable requirements, including marketing and

education requirements and restrictions, as well as contractual terms with associated insurance plans.

we are faced with these or similar risks, we could face material adverse consequences on our business, results of operations, financial

condition and cash flows.

business and the medical practices we manage are labor intensive.

Our inability to recruit qualified talent, including but not limited to sufficient numbers of dentists, physicians,

nurse practitioners, or other clinical support personnel and manage labor costs or

shortages could result in significant increases in our operating costs, decreases in productivity, and disruptions in our business

business and the business of the medical practices we manage is labor intensive.

This is particularly true with respect to the Sleep

Optimization (SO) teams we are putting in place at SCN, each consisting of one nurse practitioner (or physician’s assistant), two

specially trained dentists, six dental assistants, six administrative support personnel, and one treatment navigator.

Labor requirements

also exist, albeit to a lesser extent, for contractual alliances with medical sleep providers we may enter into.

We face increased labor

costs and the risk of difficulties in hiring skilled clinical personnel.

The healthcare labor market for the talent we require is challenging

and experiences volatility, uncertainty and labor supply shortages.

We may be unable to achieve the financial results we desire from

the SCN acquisition, the acquisition of other medical sleep providers or our contractual alliances due to variations in labor-related

costs and the productivity our personnel.

have incurred and, as we seek to scale our business, expect to continue to incur increased labor costs, including through elevated compensation

levels to our personnel, the ultimate extent of which will depend on the needs at SCN or other medical sleep providers we acquire as

well as macroeconomic conditions and ancillary impacts on the labor market, among other things.

compete for qualified talent with hospitals and other healthcare providers.

Furthermore, changes in certification requirements could

adversely impact our ability to maintain sufficient staff levels, including to the extent our personnel are not able to meet new requirements.

In addition, if we experience a higher than normal turnover rate for our skilled clinical personnel, our operations and ability to meet

patient demand may be negatively impacted, which could adversely affect our business, results of operations, financial condition and

political or other efforts at the national or local level could result in actions or proposals that increase the likelihood of success

of union organizing activities at the facilities we manage.

If a significant portion of our personnel were to become unionized, we could

experience, among other things, potential additional work stoppages or other business disruptions;

adverse impacts to our financial results

due to the costs of bargaining or implementing a grievance procedure and processing grievances, decreases in our operational flexibility

and efficiency, or negative impacts on our employee culture.

Any of these events or circumstances, including our responses to such events

or circumstances, could have a material adverse effect on our employee relations, treatment growth, productivity, business, results of

operations, financial condition, cash flows and reputation.

Related to Our Securities Generally

market for our common stock is relatively new and may not develop to provide investors with adequate liquidity.

conducted our initial public offering in December 2020, and a follow-on offering in May 2021.

Therefore, the market for our common stock

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 will 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.

have issued a large number of shares of common stock and warrants to purchase common stock in connection with financing activities.

future sales of such shares of our common stock could cause the market price of our common stock to decline or have other adverse effects

on our Company.

the January 2023 Private Placement, we have issued a large number of shares of common stock and warrants to purchase shares of common

stock in connection with financing activities.

Most of those shares have been registered for resale pursuant to registration statement

filed by us with the SEC, including the shares of common stock underlying warrants and certain of those shares of common stock may currently

be sold by holders, pursuant to Rule 144, promulgated under the Securities Act (“ Rule 144 ”).

When these shares of

common stock are sold by the holders, either pursuant to an applicable registration statement or pursuant to Rule 144, thereafter will

become freely tradable.

Sales of a substantial number of these shares in the public market, or the perception that these sales might

occur, could depress the market price of our common stock or cause such market price to decline significantly.

Such sales or the perception

that such sales might occur could also impair our ability to raise capital through the sale of additional equity securities.

We are unable

to predict with any certainty the effect that such sales, or the perception that such sales may occur, or may have on the prevailing

market price of our shares of common stock or other adverse impacts that this situation could have on our company.

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

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appliances were cleared by the FDA to treat

moderate and severe OSA in adults, 18 years of age and older along with PAP and/or myofunctional therapy,

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.

moderate and severe OSA in adults, 18 years of age and older along with 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

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.

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

failure to meet 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.

failure to meet the continuing listing requirements of The Nasdaq Capital Market, including the minimum stockholders’ equity requirement and minimum bid price requirements, could result in

a delisting of our securities.

we fail to satisfy the continuing listing requirements of Nasdaq, such as the corporate governance, $2.5 million minimum stockholders’

equity (the “Equity Requirement”) or minimum closing bid price requirements, Nasdaq may take steps to delist our common stock.

Given that our stockholders’ equity at December 31, 2025 was less than $2.5 million, we are presently not in compliance with the

Equity Requirement.

We are seeking to regain compliance by raising new funding in the form of equity and reducing costs.

will be faced with delisting proceedings which will distract management and cost resources to remedy,

delisting of our common stock from Nasdaq for any would very likely (i) damage our reputation, (ii) make it more difficult to manage

our business and raise necessary capital, (iii) have a negative effect on the price of our common stock and (iv) impair your ability

to sell or purchase our common stock when you wish to do so.

In the event of a delisting scenario, 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.

should be aware that we have a history of challenges in maintaining compliance with the Nasdaq’s continuing 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 cured 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 the 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

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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.

On May 6, 2024, we received written

notice from the Nasdaq staff indicating that the Company had regained compliance with the Equity Rule.

the Hearing on November 9, 2023, we presented our plan to regain compliance with the Equity Requirement, which included 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.

These conditions include providing an update as to our plan to regain compliance

with the Equity Requirement as well as demonstrating compliance by March 19, 2024.

On February 23, 2024 we presented our plan of compliance

to the Hearings Committee.

On May 6, 2024, we received written notice from the Nasdaq staff indicating that the Company had regained

compliance with the Equity Requirement.

May 16, 2024, we received a further written notice from Nasdaq indicating that, as of March 31, 2024, we failed to comply with the Equity

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June 27, 2024, we met with the Panel to discuss our past, current, and anticipated future compliance with the Equity Requirement, and

requested the continued listing of its securities on Nasdaq.

July 5, 2024, we were notified that the Panel had granted our request for continued listing on Nasdaq, subject to our filing of the Form

10-Q for the quarter ended June 30, 2024, with the Securities and Exchange Commission by August 15, 2024, evidencing our compliance with

the Equity Requirement.

requested the continued listing of our securities on Nasdaq.

On July 5, 2024, we were notified that the Panel granted our request for

continued listing on Nasdaq, subject to our filing of the Form 10-Q for the quarter ended June 30, 2024, with the Securities and Exchange

Commission by August 15, 2024, evidencing our compliance with the Equity Requirement.

are working diligently to ensure continued compliance with the Equity Requirement, including exploring potential additional equity capital

financing or financings to stay above the minimum threshold of the Equity Requirement.

We anticipate that our new strategic marketing

and distribution alliance will also positively impact our revenue growth and stockholders’ equity in upcoming fiscal quarters.

However, there is a risk that we will be unable to raise sufficient capital or generate sufficient revenue or positive operating results

to maintain compliance with the Equity Requirement.

If we fail to achieve ongoing compliance and our common stock is delisted by Nasdaq,

such delisting would likely have a material adverse effect on our stock price, the ability of its stockholders to buy or sell their common

stock, our ability to raise capital and on our reputation, all of which could make it significantly more difficult to operate.

If our shares of common stock become subject

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

The Securities and Exchange Commission (or SEC) has adopted rules that regulate broker-dealer practices in connection

with transactions in penny stocks.

Penny stocks are generally equity securities with a price of less than $5.00, other than securities

registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that

current price and volume information with respect to transactions in such securities is provided by the exchange or system.

obtain or retain a listing on Nasdaq and if the price of our common stock is less than $5.00, our common stock will be deemed a penny

The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to

deliver a standardized risk disclosure document containing specified information.

In addition, the penny stock rules require that before

effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination

that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt

of a risk disclosure statement;

(ii) a written agreement to transactions involving penny stocks;

and (iii) a signed and dated copy of

a written suitability statement.

These disclosure requirements may have the effect of reducing the trading activity in the secondary market

for our common stock, and therefore stockholders may have difficulty selling their shares.

Actions of activist shareholders could be disruptive and potentially costly and the possibility that activist shareholders

may seek changes that conflict with our strategic direction could cause uncertainty about the strategic direction of our business.

investors and other stockholders who disagree with our management may attempt to effect changes in our

strategic direction and how our company is governed or may seek to acquire control over our company.

Some investors (commonly known

as “activist investors”) seek to increase short-term stockholder value by advocating corporate actions such as financial

restructuring, increased borrowing, special dividends, stock repurchases, or even sales of assets or the entire company.

campaigns can also seek to change the composition of our board of directors, and campaigns that contest or conflict with our

strategic direction could have an adverse effect on our results of operations and financial condition as responding to proxy

contests and other actions by activist shareholders can disrupt our operations, be costly and time-consuming, and divert the

attention of our board of directors and senior management from the pursuit of our business strategies.

In addition, perceived

uncertainties as to our future direction that can arise from potential changes to the composition of our board of directors sought

by activists may lead to the perception of a change in the direction of the business, instability or lack of continuity which may be

exploited by our competitors, may cause concern to our current or potential customers or other partners, may result in the loss of

potential business opportunities and may make it more difficult to attract and retain qualified personnel and business partners.

These types of actions could divert our management’s attention from our business or cause significant fluctuations in our

stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying

We anticipate that our medical provider-focused

strategic marketing and distribution alliance will also positively impact our revenue growth and stockholders’ equity in upcoming

fiscal quarters.

However, there is a risk that we will be unable to raise sufficient capital or generate sufficient revenue or positive

operating results to maintain compliance with the Equity Requirement.

If we fail to achieve ongoing compliance and our common stock is

delisted by Nasdaq, such delisting would likely have a material adverse effect on our stock price, the ability of its stockholders to

buy or sell their common stock, our ability to raise capital and on our reputation, all of which could make it significantly more difficult

The risk of delisting for our company is compounded by the fact that we have been faced with delisting proceedings before,

and no assurances can be given that we will be able to maintain compliance or satisfy Nasdaq that our plan to regain compliance has merit.

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

SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.

Penny stocks are generally

equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized

for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions

in such securities is provided by the exchange or system.

If we do not obtain or retain a listing on Nasdaq and if the price of our common

stock is less than $5.00, our common stock will be deemed a penny stock.

The penny stock rules require a broker-dealer, before a transaction

in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information.

In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules,

a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive

(i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement;

(ii) a written agreement to transactions

involving penny stocks;

and (iii) a signed and dated copy of a written suitability statement.

These disclosure requirements may have

the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty

selling their shares.

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

conflict with our strategic direction could cause uncertainty about the strategic direction of our business.

investors and other stockholders who disagree with our management may attempt to effect changes in our strategic direction and how our

company is governed or may seek to acquire control over our company.

Some investors (commonly known as “activist investors”)

seek to increase short-term stockholder value by advocating corporate actions such as financial restructuring, increased borrowing, special

dividends, stock repurchases, or even sales of assets or the entire company.

Activist campaigns can also seek to change the composition

of our board of directors, and campaigns that contest or conflict with our strategic direction could have an adverse effect on our results

of operations and financial condition as responding to proxy contests and other actions by activist shareholders can disrupt our operations,

be costly and time-consuming, and divert the attention of our board of directors and senior management from the pursuit of our business

In addition, perceived uncertainties as to our future direction that can arise from potential changes to the composition

of our board of directors sought by activists may lead to the perception of a change in the direction of the business, instability or

lack of continuity which may be exploited by our competitors, may cause concern to our current or potential customers or other partners,

may result in the loss of potential business opportunities and may make it more difficult to attract and retain qualified personnel and

business partners.

These types of actions could divert our management’s attention from our business or cause significant fluctuations

in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying

fundamentals and prospects of our business, all of which could have a material adverse effect on our company.

We are an “emerging growth company,”

and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.

We are an “emerging growth

company,” or EGC, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.

We will remain an EGC until the

(i) the last day of the fiscal year in which we have total annual gross revenue of $1.235 billion or more;

(ii) the last day

of the fiscal year following the fifth anniversary of the date of the completion of our initial public offering (which occurred in December

(iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years;

date on which we are deemed to be a large accelerated filer under the rules of the SEC.

For so long as we remain an EGC, we are permitted

and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging

growth companies.

These exemptions include:

not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, or Section 404;

not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;

being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;

reduced disclosure obligations regarding executive compensation;

exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We may choose to take advantage

of some, but not all, of the available exemptions.

We have taken advantage of reduced reporting burdens in this Annual Report on Form

In particular, we have not included all of the executive compensation information that would be required if we were not an EGC.

We cannot predict whether investors will find our common stock less attractive if we rely on certain or all of these exemptions.

investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock

price may be more volatile.

We continue to incur increased costs as a result

of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.

As a public company, and particularly

after we are no longer an EGC, we will incur significant legal, accounting and other expenses that we did not incur as a private company.

In addition, the Sarbanes-Oxley Act and rules subsequently implemented by the SEC and Nasdaq have imposed various requirements on public

companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.

Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives.

Moreover, these rules

and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly.

example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer

liability insurance.

Pursuant to Section 404, we will

be required to furnish a report by our management on our internal control over financial reporting, including an attestation report on

internal control over financial reporting issued by our independent registered public accounting firm if certain criteria are met.

while we remain an EGC, we will not be required to include an attestation report on internal control over financial reporting issued by

our independent registered public accounting firm.

To achieve compliance with Section 404 within the prescribed period, we will be engaged

in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging.

In this regard,

we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess

and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate

through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal

Seneca and its affiliates

own a significant percentage of our common stock and are thus able to exert significant control over matters subject to stockholder approval

and otherwise.

date of this Report, affiliates of our investor Seneca collectively own approximately 19.99% of our outstanding common stock on a primary

basis and approximately 48% on a fully diluted basis assuming full exercise of all common stock warrants held by Seneca (and not accounting

for a 19.99% beneficial ownership blocker contained in certain of the warrants held).

Representatives of Seneca have the right to

attend meetings of our board of directors and are actively involved in advising our management regarding our business.

Seneca has significant influence over all matters related to our company, including those matters requiring stockholder approval, such

the election of directors;

amendment to our organizational

approval of significant

corporate transactions, such as mergers, consolidations, or the sale of all or substantially all of our assets.

a risk that this concentration of ownership may have the effect of delaying, preventing, or deterring a change in control, could deprive

our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company, and might depress the

market price of our common stock as a result of the market’s perception of Seneca’s influence.

there is a risk that the interests of Seneca may not always coincide with your interests or the interests of our other stockholders.

may make decisions regarding our business or our company generally that you or other stockholders disagree with, or that may be more aligned

with Seneca’s own investment objectives rather than the view of our board of directors, management and other stockholders regarding

the long-term value of our company.

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

time to new compliance initiatives.

a public company, and particularly since we ceased being an “emerging growth company” as of December 31, 2025, we incur significant

legal, accounting and other expenses that we did not incur as a private company.

The Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall

Street Reform and Consumer Protection Act, the listing requirements of The Nasdaq Capital Market and other applicable securities rules

and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and

financial controls and corporate governance practices.

Our management and other personnel devote a substantial amount of time to these

compliance initiatives.

Moreover, these rules and regulations have increased our legal and financial compliance costs relative to prior

years and will make some activities more time-consuming and costly.

as long as we remain a smaller reporting company, we may take advantage of certain exemptions from various reporting requirements as

described in the preceding risk factor.

to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, we are required to furnish a report by our management on our internal

control over financial reporting.

Despite our efforts, there is a risk that neither we nor our independent registered public accounting

firm will be able to conclude within the prescribed timeframe that our internal control over financial reporting is effective as required

by Section 404.

This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our

financial statements.

Certain provisions of our Certificate of Incorporation

may make it more difficult for a third party to effect a change-of-control.

Our Certificate of Incorporation

authorizes our board of directors to issue up to 50,000,000 shares of preferred stock.

The preferred stock may be issued in one or more

series, the terms of which may be determined at the time of issuance by our board of directors without further action by the stockholders.

These terms may include preferences as to dividends and liquidation, conversion rights, redemption rights and sinking fund provisions.

The issuance of any preferred stock could diminish the rights of holders of our common stock, and therefore could reduce the value of

such common stock.

In addition, specific rights granted to future holders of preferred stock could be used to restrict our ability to

merge with, or sell assets to, a third party.

The ability of our board of directors to issue preferred stock could make it more difficult,

delay, discourage, prevent or make it more costly to acquire or effect a change-in-control, which in turn could prevent our stockholders

from recognizing a gain in the event that a favorable offer is extended and could materially and negatively affect the market price of

our common stock.

Our bylaws designate certain courts as the sole

and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’

ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

Our bylaws provide that, unless

we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have

jurisdiction, the federal district court for the District of Delaware) will be the exclusive forum for:

(i) any derivative action or proceeding

brought on behalf of our company;

(ii) any action asserting a claim for breach of a fiduciary duty owed by any director, officer, employee,

or agent of ours to us or our stockholders;

(iii) any action asserting a claim arising pursuant to any provision of the Delaware General

Corporation Law, the Certificate of Incorporation, or the bylaws;

and (iv) any action asserting a claim governed by the internal affairs

doctrine (the “Delaware Forum Provision”).

Our bylaws further provide that, unless we consent in writing to the selection

of an alternative forum, the federal district courts of the United States of America shall be the sole and exclusive forum for resolving

any complaint asserting a cause of action arising under the Securities Act (the “Federal Forum Provision”).

In addition, our

bylaws provide that any person or entity purchasing or otherwise acquiring any interest in shares of our common stock is deemed to have

notice of and consented to the Delaware Forum Provision and the Federal Forum Provision.

Section 27 of the Securities Exchange

Act of 1934, as amended (the “Exchange Act”), creates exclusive federal jurisdiction over all suits brought to enforce any

duty or liability created by the Exchange Act or the rules and regulations thereunder.

As a result, the Delaware Forum Provision will

not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts

have exclusive jurisdiction.

We note, however, that there is uncertainty as to whether a court would enforce this provision and that investors

cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

We recognize that the Delaware

Forum Provision and the Federal Forum Provision in our bylaws may impose additional litigation costs on stockholders in pursuing any such

claims, particularly if the stockholders do not reside in or near the State of Delaware.

Additionally, the Delaware Forum Provision and

the Federal Forum Provision may limit our stockholders’ ability to bring a claim in a forum that they find favorable for disputes

with us or our directors, officers or employees, which may discourage such lawsuits against us and our directors, officers and employees

even though an action, if successful, might benefit our stockholders.

In addition, while the Delaware Supreme Court ruled in March 2020

that federal forum selection provisions purporting to require claims under the Securities Act be brought in federal court were “facially

valid” under Delaware law, there is uncertainty as to whether other courts will enforce the Federal Forum Provision.

If the Federal

Forum Provision is found to be unenforceable, we may incur additional costs associated with resolving such matters.

The Federal Forum

Provision may also impose additional litigation costs on stockholders who assert that the provision is not enforceable or invalid.

Court of Chancery of the State of Delaware and the United States District Court may also reach different judgments or results than would

other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action,

and such judgments may be more or less favorable to us than our stockholders.

Limitations on director and officer liability

and indemnification of our officers and directors by us may discourage stockholders from bringing suit against an officer or director.

Our Certificate of Incorporation

and bylaws provide that, to the fullest extent permitted by Delaware law, as it presently exists or may be amended from time to time,

a director shall not be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duty as a director.

Under Delaware law, this limitation of liability does not extend to, among other things, acts or omissions which involve intentional misconduct,

fraud or knowing violation of law, or unlawful payments of dividends.

These provisions may discourage stockholders from bringing suit

against a director or officer for breach of fiduciary duty and may reduce the likelihood of derivative litigation brought by stockholders

on our behalf against a director or officer.

We are responsible for the indemnification of

our officers and directors.

Should our officers and/or directors

require us to contribute to their defense, we may be required to spend significant amounts of our capital.

Our Certificate of Incorporation

and bylaws also provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against

attorney’s fees and other expenses incurred by them in any litigation to which they become a party arising from their association

with or activities on behalf of our company.

This indemnification policy could result in substantial expenditures, which we may be unable

If these expenditures are significant or involve issues which result in significant liability for our key personnel, we may

be unable to continue operating as a going concern.

Our ability to use our net operating losses

and research and development credit carryforwards to offset future taxable income may limited, perhaps substantially.

In general, under Sections 382

and 383 of the Internal Revenue Code of 1986, as amended (or the Code), a corporation that undergoes an “ownership change,”

generally defined as a greater than 50% change by value in its equity ownership over a three-year period, is subject to limitations on

its ability to utilize its pre-change net operating losses (“NOLs”), carryforwards to offset future taxable income.

NOLs may be subject to limitations arising from previous ownership changes.

If we undergo, or are deemed to have previously undergone,

an ownership change, our ability to utilize NOLs carryforwards could be limited (perhaps substantially) by Sections 382 and 383 of the

Additionally, future changes in our stock ownership, some of which might be beyond our control, could result in an ownership change

under Section 382 of the Code.

For these reasons, in the event we experience or are deemed to have experienced an “ownership change”

for these purposes, we may not be able to utilize a material or even a substantial portion of the NOLs carryforwards, even if we attain

profitability.

We have not completed a Code Section 382 analysis regarding any limitation on our NOL carryforwards.

The financial and operational projections that

we may make from time to time are subject to inherent risks.

The projections that our management

may provide from time to time (including, but not limited to, those relating to market sizes and other financial or operational matters)

reflect numerous assumptions made by management, including assumptions with respect to our specific as well as general business, economic,

market and financial conditions and other matters, all of which are difficult to predict and many of which are beyond our control.

there is a risk that the assumptions made in preparing the projections, or the projections themselves, will prove inaccurate.

be differences between actual and projected results, and actual results may be materially different from those contained in the projections.

The inclusion of the projections in this Annual Report should not be regarded as an indication that we or our management or representatives

considered or consider the projections to be a reliable prediction of future events, and the projections should not be relied upon as

If we were to dissolve, the holders of our securities

may lose all or substantial amounts of their investments.

If we were to dissolve as a corporation,

as part of ceasing to do business or otherwise, we may be required to pay all amounts owed to any creditors before distributing any assets

to the investors.

There is a risk that in the event of such a dissolution, there will be insufficient funds to repay amounts owed to holders

of any of our indebtedness and insufficient assets to distribute to our other investors, in which case investors could lose their entire

An investment in our company may involve tax

implications, and you are encouraged to consult your own advisors as neither we nor any related party is offering any tax assurances or

guidance regarding our company or your investment.

The formation of our company and

our financings, as well as an investment in our company generally, involves complex federal, state and local income tax considerations.

Neither the Internal Revenue Service nor any state or local taxing authority has reviewed the transactions described herein, and may take

different positions than the ones contemplated by management.

You are strongly urged to consult your own tax and other advisors prior

to investing, as neither we nor any of our officers, directors or related parties is offering you tax or similar advice, nor are any such

persons making any representations and warranties regarding such matters.

Because we do not anticipate paying any cash

dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.

We have never declared or paid

cash dividends on our capital stock.

We currently intend to retain all of our future earnings, if any, to finance the growth and development

of our business.

This means that it is very unlikely that we will pay dividends on our shares of common stock.

In addition, the terms

of any future debt agreements may preclude us from paying dividends.

As a result, capital appreciation, if any, of our common stock will

be your sole source of gain for the foreseeable future.

If securities or industry analysts do not publish

or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our common

stock adversely, the price of our common stock and trading volume could decline.

The trading market for our

common stock may be influenced by the research and reports that securities or industry analysts may publish about us, our business, our

market or our competitors.

If any of the analysts who may cover us change their recommendation regarding our common stock adversely,

or provide more favorable relative recommendations about our competitors, the price of our common stock would likely decline.

analyst who may cover us was to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in

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

However, while we remain a non-accelerated filer and a smaller reporting company, we will not be required

to include an attestation report on internal control over financial reporting issued by our independent registered public accounting

To achieve compliance with Section 404 within the prescribed period, we engaged in a process to document and evaluate our internal

control over financial reporting, which is both costly and challenging.

In this regard, we will need to continue to dedicate internal

resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control

over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning

as documented and implement a continuous reporting and improvement process for internal control over financial reporting.

efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over

financial reporting is effective as required by Section 404.

If we identify one or more material weaknesses in our internal control over

financial reporting, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of

our financial statements.

provisions of our Certificate of Incorporation may make it more difficult for a third party to effect a change-of-control.

Certificate of Incorporation authorizes our board of directors to issue up to 50,000,000 shares of preferred stock.

The preferred stock

may be issued in one or more series, the terms of which may be determined at the time of issuance by our board of directors without further

action by the stockholders.

These terms may include preferences as to dividends and liquidation, conversion rights, redemption rights

and sinking fund provisions.

The issuance of any preferred stock could diminish the rights of holders of our common stock and therefore

could reduce the value of such common stock.

In addition, specific rights granted to future holders of preferred stock could be used

to restrict our ability to merge with, or sell assets to, a third party.

The ability of our board of directors to issue preferred stock

could make it more difficult, delay, discourage, prevent or make it more costly to acquire or effect a change-in-control, which in turn

could prevent our stockholders from recognizing a gain in the event that a favorable offer is extended and could materially and negatively

affect the market price of our common stock.

bylaws designate certain courts as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by

our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our

directors, officers, or employees.

bylaws provide that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware (or, if the

Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware) will be the exclusive forum for:

(i) any derivative action or proceeding brought on behalf of our company;

(ii) any action asserting a claim for breach of a fiduciary

duty owed by any director, officer, employee, or agent of ours to us or our stockholders;

(iii) any action asserting a claim arising

pursuant to any provision of the Delaware General Corporation Law, the Certificate of Incorporation, or the bylaws;

and (iv) any action

asserting a claim governed by the internal affairs doctrine (the “Delaware Forum Provision”).

Our bylaws further provide

that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America

shall be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act (the “Federal

Forum Provision”).

In addition, our bylaws provide that any person or entity purchasing or otherwise acquiring any interest in

shares of our common stock is deemed to have notice of and consented to the Delaware Forum Provision and the Federal Forum Provision.

27 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), creates exclusive federal jurisdiction over all

suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.

As a result, the

Delaware Forum Provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim

for which the federal courts have exclusive jurisdiction.

We note, however, that there is uncertainty as to whether a court would enforce

this provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

recognize that the Delaware Forum Provision and the Federal Forum Provision in our bylaws may impose additional litigation costs on stockholders

in pursuing any such claims, particularly if the stockholders do not reside in or near the State of Delaware.

Additionally, the Delaware

Forum Provision and the Federal Forum Provision may limit our stockholders’ ability to bring a claim in a forum that they find

favorable for disputes with us or our directors, officers or employees, which may discourage such lawsuits against us and our directors,

officers and employees even though an action, if successful, might benefit our stockholders.

In addition, while the Delaware Supreme

Court ruled in March 2020 that federal forum selection provisions purporting to require claims under the Securities Act be brought in

federal court were “facially valid” under Delaware law, there is uncertainty as to whether other courts will enforce the

Federal Forum Provision.

If the Federal Forum Provision is found to be unenforceable, we may incur additional costs associated with resolving

such matters.

The Federal Forum Provision may also impose additional litigation costs on stockholders who assert that the provision is

not enforceable or invalid.

The Court of Chancery of the State of Delaware and the United States District Court may also reach different

judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise

choose to bring the action, and such judgments may be more or less favorable to us than our stockholders.

on director and officer liability and indemnification of our officers and directors by us may discourage stockholders from bringing suit

against an officer or director.

Certificate of Incorporation and bylaws provide that, to the fullest extent permitted by Delaware law, as it presently exists or may

be amended from time to time, a director shall not be personally liable to us or our stockholders for monetary damages for any breach

of fiduciary duty as a director.

Under Delaware law, this limitation of liability does not extend to, among other things, acts or omissions

which involve intentional misconduct, fraud or knowing violation of law, or unlawful payments of dividends.

These provisions may discourage

stockholders from bringing suit against a director or officer for breach of fiduciary duty and may reduce the likelihood of derivative

litigation brought by stockholders on our behalf against a director or officer.

are responsible for the indemnification of our officers and directors.

our officers and/or directors require us to contribute to their defense, we may be required to spend significant amounts of our capital.

Our Certificate of Incorporation and bylaws also provide for the indemnification of our directors, officers, employees, and agents, under

certain circumstances, against attorney’s fees and other expenses incurred by them in any litigation to which they become a party

arising from their association with or activities on behalf of our company.

This indemnification policy could result in substantial expenditures,

which we may be unable to recoup.

If these expenditures are significant or involve issues which result in significant liability for our

key personnel, we may be unable to continue operating as a going concern.

ability to use our net operating losses and research and development credit carryforwards to offset future taxable income may limited,

perhaps substantially.

general, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (or the Code), a corporation that undergoes an “ownership

change,” generally defined as a greater than 50% change by value in its equity ownership over a three-year period, is subject to

limitations on its ability to utilize its pre-change net operating losses (“ NOLs ”), carryforwards to offset future

taxable income.

Our existing NOLs may be subject to limitations arising from previous ownership changes.

If we undergo, or are deemed

to have previously undergone, an ownership change, our ability to utilize NOLs carryforwards could be limited (perhaps substantially)

by Sections 382 and 383 of the Code.

Additionally, future changes in our stock ownership, some of which might be beyond our control,

could result in an ownership change under Section 382 of the Code.

For these reasons, in the event we experience or are deemed to have

experienced an “ownership change” for these purposes, we may not be able to utilize a material or even a substantial portion

of the NOLs carryforwards, even if we attain profitability.

We have not completed a Code Section 382 analysis regarding any limitation

on our NOL carryforwards.

financial and operational projections that we may make from time to time are subject to inherent risks.

projections that our management may provide from time to time (including, but not limited to, those relating to market sizes and other

financial or operational matters) reflect numerous assumptions made by management, including assumptions with respect to our specific

as well as general business, economic, market and financial conditions and other matters, all of which are difficult to predict and many

of which are beyond our control.

Accordingly, there is a risk that the assumptions made in preparing the projections, or the projections

themselves, will prove inaccurate.

There will be differences between actual and projected results, and actual results may be materially

different from those contained in the projections.

The inclusion of the projections in this Annual Report should not be regarded as an

indication that we or our management or representatives considered or consider the projections to be a reliable prediction of future

events, and the projections should not be relied upon as such.

we were to dissolve, the holders of our securities may lose all or substantial amounts of their investments.

we were to dissolve as a corporation, as part of ceasing to do business or otherwise, we may be required to pay all amounts owed to any

creditors before distributing any assets to the investors.

There is a risk that in the event of such a dissolution, there will be insufficient

funds to repay amounts owed to holders of any of our indebtedness and insufficient assets to distribute to our other investors, in which

case investors could lose their entire investment.

investment in our company may involve tax implications, and you are encouraged to consult your own advisors as neither we nor any related

party is offering any tax assurances or guidance regarding our company or your investment.

formation of our company and our financings, as well as an investment in our company generally, involves complex federal, state and local

income tax considerations.

Neither the Internal Revenue Service nor any state or local taxing authority has reviewed the transactions

described herein, and may take different positions than the ones contemplated by management.

You are strongly urged to consult your own

tax and other advisors prior to investing, as neither we nor any of our officers, directors or related parties is offering you tax or

similar advice, nor are any such persons making any representations and warranties regarding such matters.

we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be

your sole source of gain.

have never declared or paid cash dividends on our capital stock.

We currently intend to retain all of our future earnings, if any, to

finance the growth and development of our business.

This means that it is very unlikely that we will pay dividends on our shares of common

In addition, the terms of any future debt agreements may preclude us from paying dividends.

As a result, capital appreciation,

if any, of our common stock will be your sole source of gain for the foreseeable future.

securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they

change their recommendations regarding our common stock adversely, the price of our common stock and trading volume could decline.

trading market for our common stock may be influenced by the research and reports that securities or industry analysts may publish about

us, our business, our market or our competitors.

If any of the analysts who may cover us change their recommendation regarding our common

stock adversely, or provide more favorable relative recommendations about our competitors, the price of our common stock would likely

If any analyst who may cover us was to cease coverage of our company or fail to regularly publish reports on us, we could lose

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

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