What changed in this filing

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Item 1A. Risk Factors

2025-03-31 compared with 2024-03-28 · 549 added, 1152 removed, 555 unchanged (75% 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 our past

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 affect 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 current VIP-focused business model only commenced in mid-2018.

In addition, since the roll out of our VIP-focused business

model, we have continued to refine our strategies, for example by experimenting with different VIP enrollment and subscription plans

and by adding strategic offerings like OMT.

Therefore, there is limited and evolving or differing historical operating data on which

to evaluate the results of and prospects for our current business model.

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.

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

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of $12.7 million and $11.9 million, respectively.

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

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

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

As of December 31, 2024, we had an accumulated deficit of approximately $104.2 million

and ended the period with approximately $6.3 million in cash and cash equivalents.

As of December 31, 2024, we had total liabilities

of approximately $7.3 million.

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profitably would damage our reputation and stock price.

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

VIP program is a relatively new business model for us, and members of our management team have only a few years of experience in operating

our company through this model.

As a result, our historical financial results may not be comparable to future results.

Also, we are subject

to many risks associated with the VIP business model, some of which we have faced and some which we may be unable to presently identify,

such as risks associated pricing, competition, marketing and regulatory matters.

Moreover, our ability to onboard new VIPs may be impeded

by the investments VIPs must make in adapting their practices to the use of The Vivos Method.

We cannot assure you that management will

be able to recruit and adopt new VIPs.

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

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

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Additionally,

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

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

Further such steps, or even more, may be

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

to implement cost cutting programs effectively.

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

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

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

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

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

will not be prevented or detected on a timely basis.

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

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

perform review functions appropriately.

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

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

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

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.

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

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

A material weakness

is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility

that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

weakness in our case related to the operating effectiveness of our review controls in that we did not put the appropriate resources in

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

Material errors were also identified

in our analysis and review of our VIP contracts for applicable factors to meet the definition of a contract under ASC 606 Contracts

with Customers , step 1, and our evaluation of our note receivable with respect to our former Orem dental clinic for impairment in

accordance with ASC 310 Receivables .

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

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or over the customer life as applicable.

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

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

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

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

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

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

perform review functions appropriately.

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

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

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

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

we may continue to 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).

expect to derive a substantial portion of our prospective future revenue from sales of our appliances and treatments, which leaves us

reliant on the commercial viability of The Vivos Method.

Additionally,

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

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

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

expenses), hire-to-pay (including compensation expense), and leases.

These control deficiencies resulted in immaterial misstatements,

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

These control

deficiencies, aggregated, create a reasonable possibility that a material misstatement to the consolidated financial statements will

not be prevented or detected on a timely basis.

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

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

functions appropriately.

the year ended December 31, 2023, we began to implement a remediation plan to address the material weakness derived from the deficiencies

and errors noted above.

While we believe that at December 31, 2023, we had taken great strides to complete the full remediation of all

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

believe 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).

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

strategic alliance and acquisition models, which leaves us reliant on the commercial viability of The Vivos Method and other associated

products and services.

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

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

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

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

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

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

or palatal surgical procedures.

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

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

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

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

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

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.

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

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for treatment in The Vivos Method is the best alternative to either doing nothing or entering into another treatment option.

dentist customers must be willing to pay us for the right to become VIPs and to commit the time and resources required to learn the

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

to severe OSA using The Vivos Method.

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

enroll in our VIP or DSO program.

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

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

failure of large U.S.

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

our future sales revenue and negatively impact our liquidity.

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

using The Vivos Method, as well as expanding the number of The Vivos Method treatments used by these physicians/dentists.

To the extent

one or more of our large U.S.

dentist customers or DSO groups fails to pay us on a timely basis, we may be required to discontinue selling

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

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

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

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

According to the televised CBS report, the device

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

The patient filed a $10 million

lawsuit against the treating dentist.

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

and orthodontic communities.

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

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

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

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

We have never had any association or affiliation

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

unsubstantiated claims.

The AGGA is a non-FDA cleared oral appliance.

We believe that the publicity regarding the AGGA device generated

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

We believe that our VIP enrollments

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

The persistence

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

and overall results of operations.

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

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

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

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

These distribution agreements

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

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

Even if our DME distribution

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

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

Failure to successfully implement our growth strategy with

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

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

business and our results of operations .

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

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

Material adverse effects from COVID-19

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

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

During the COVID-19 pandemic, dental offices throughout the

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

our product revenues.

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

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

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

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

components or secure manufacturing capability.

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

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

been limited, which could also adversely impact our business.

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

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

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

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

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

financial condition, and results of operations.

growth of our VIP base depends on our ability to execute our plan to recruit and enroll new VIPs.

Our ability to recruit and enroll VIPs

depends on many factors, including our ability to:

brand awareness in new and existing markets;

potential VIPs of the value of our products and services and to make the required investments in becoming a VIP and using The Vivos

costs, which could give rise to delays or cost overruns;

train, and retain qualified dentists, dental hygienists, physicians, physician assistants, medical technologists and other staff

in our local markets;

favorable reimbursement rates for services rendered at VIP offices;

adequate information systems and other operational system capabilities.

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

we may not be able to achieve our planned growth or, even if we are able to grow our VIP base as planned, any new VIPs may not be profitable

or otherwise perform as planned.

Failure to successfully implement our growth strategy would likely have an adverse impact on our business,

financial condition, and results of operations.

long-term success of our VIP program is highly dependent on our ability to successfully identify, recruit and enroll target independent

dental practices as well as to convince other medical professionals to participate in the treatment of OSA with our products and services.

achieve our growth strategy, we will need to identify, recruit, and enroll new VIPs and have them operate on a profitable and recurring

We consider numerous factors in identifying target markets where we can enter or expand.

The number and timing of new VIPs enrolled

during any given period may be negatively impacted by several factors including, without limitation:

identification and availability of attractive practices to be VIPs;

ability to successfully identify and address pertinent risks and benefits during the onboarding process, including designing, implementing

and as necessary modifying pricing programs for VIP enrollment and subscription fees that are acceptable to dental practices;

proximity of VIPs to one of our or our competitors’ existing centers;

VIP’s ability to obtain required governmental licenses, permits and authorizations on a timely basis;

VIP’s ability to recruit qualified dentists, dental hygienists, physicians, physician assistants, medical technologists and

other personnel to staff their practices using The Vivos Method.

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

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

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

We may be unable to

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

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

Our inability to

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

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

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

price of our common stock.

limited history of sales of The Vivos Method and VIP enrollments and subscriptions, together with our history of losses, make prediction

of future operating results difficult.

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

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

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

of our quarterly operating results are an unreliable indication of our future performance because they are likely to vary significantly

based on many factors, including:

limited history of sales of The Vivos Method, together with our history of losses, make prediction of future operating results difficult.

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

Our valuation and the price

of our securities will likely fall in the event our operating results (notably our revenue growth, with the goal of achieving cash flow

positive and profitable operations) do not meet the expectations of analysts and investors.

Comparisons of our quarterly operating results

are an unreliable indication of our future performance because they are likely to vary significantly based on many factors, including:

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

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and treatments;

ability to design, implement and as necessary modifying pricing programs for VIP enrollment and subscription fees;

ability to expand by adding additional VIPs in leading major metro areas;

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

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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you should expect that our results of operations will be difficult to predict, which will make an investment in our company uncertain.

MID program may not perform as anticipated or may take longer than expected to gain acceptance.

only in 2020, our MID is a new business offering for us, and the model is yet unproven.

As a result, actual results may be lower than

expected due to lower than expected referrals and other factors.

Also, we are subject to many risks associated with this new business

model that we are unable to presently identify, such as pricing, competition, marketing and regulatory risks.

If we fail to adequately

identify and respond to such risks in a timely manner, our financial condition and results of operations could be adversely affected.

SleepImage ® home sleep test used in our VivoScore Program is a relatively new technology which may not be utilized by

VIPs to the degree anticipated.

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

and dental communities.

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

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

Also, we are subject to many risks associated

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

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

could be adversely affected.

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

MyCardio LLC in early 2022.

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

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

revenue generator for us.

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

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will be materially adversely impacted.

clinical studies of our products comprising The Vivos Method may adversely impact our ability to generate revenue if they do not demonstrate

that The Vivos Method is clinically effective.

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

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

We are involved in a number of ongoing clinical studies evaluating

clinical outcomes from the use of The Vivos Method including prospective, randomized, placebo-controlled studies, as well as clinical

studies that are structured to obtain additional clearances from the FDA for expanded clinical indications for use of The Vivos Method.

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

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

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

expanded indications.

Additional clinical studies of The Vivos Method may identify significant clinical, technical or other obstacles

that will have to be overcome prior to obtaining clearance from the applicable regulatory bodies to market The Vivos Method for such

expanded indications.

If further studies of The Vivos Method indicate that it is not a safe and effective, our ability to market The

Vivos Method, and generate substantial revenue from additional sales, may be materially limited.

selected to participate in these further clinical studies must meet certain anatomical and other criteria to participate.

We cannot assure

you that an adequate number of individuals can be enrolled in clinical studies on a timely basis.

Further, we cannot assure you that

the clinical studies will be completed as planned.

A delay in the analysis and publication of the positive outcomes data from these clinical

studies, or the presentation or publication of negative outcomes data from these clinical studies, including data related to approval

of The Vivos Method for expanded indications, may materially impact our ability to increase revenue through sales and negatively impact

our stock price.

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

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

selling our appliances or introducing new and/or improved products in the United States or internationally.

manufacturing or obtaining Vivos appliances or introducing new and/or improved products in the United States or internationally.

products and third-party contract manufacturing activities are subject to extensive regulation by several governmental agencies, including

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action could substantially increase our costs, damage our reputation and materially affect our operating results.

products are currently not recommended by most medical sleep specialists, who are integral to the diagnosis and treatment of sleep breathing

products are currently recommended only by a relatively small minority of medical sleep specialists, who are integral to the diagnosis

and treatment of sleep breathing disorders.

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

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CPAP is typically prescribed as the therapy of choice.

Although we offer The Vivos Method through our VIPs, our domestic sales organization

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

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

We cannot predict the extent to which

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

to comply with other alternative therapies.

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

to manage or respond to competitive pressures.

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

According to the American Sleep

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

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

negatively affect our business.

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

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

treatment or procedure is recommended to the patient.

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

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

We cannot predict the extent to which

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

established devices, treatments or procedures.

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

Many of our competitors have substantially greater financial and other resources than we do, including larger research and development

staffs who have more experience and capability in conducting research and development activities, testing products in clinical trials,

obtaining regulatory approvals and manufacturing, marketing, selling, and distributing products.

Some of our competitors may achieve

patent protection, regulatory approval, or product commercialization more quickly than we do, which may decrease our ability to compete.

If we are unable to be competitive in the market for OSA, our revenue will decline, which would negatively affect our results of operations.

Vivos Method may become obsolete if we are unable to anticipate and adapt to rapidly changing technology.

medical device industry is subject to rapid technological innovation and, consequently, the life cycle of any particular product can

Alternative products, procedures or other discoveries and developments to treat dentofacial abnormalities and/or OSA may render

The Vivos Method obsolete.

Furthermore, the greater financial and other resources of many of our competitors may permit them to respond

more rapidly than we can to technological advances.

If we fail to develop new technologies, products, or procedures to upgrade or improve

our existing treatments to respond to a changing market before our competitors are able to do so, our ability to market our products

and protocol and generate substantial revenue may be limited.

international sales are subject to a number of risks that could seriously harm our ability to successfully commercialize The Vivos Method

in international markets.

do not have significant international sales outside of Canada, although we hope to more broadly introduce The Vivos Method into international

Our ability to generate international sales is subject to several risks, including:

ability to obtain appropriate regulatory approvals to market The Vivos Method in certain countries;

ability to identify new independent third-party distributors in international markets where we do not currently have distributors;

impact of recessions in economies outside the United States;

difficulty in negotiating with socialized medical systems, maintaining profit margins comparable to those achieved in the United

States, collecting accounts receivable, and longer collection periods;

changes in regulatory requirements, tariffs or other trade barriers;

intellectual property rights protection in some countries;

adverse tax consequences;

and economic instability.

occurrence of any of these events could seriously harm our future international sales and our ability to successfully commercialize our

products in international markets, thereby limiting our growth and revenue.

depend on a few suppliers for key components, making us vulnerable to supply shortages and price fluctuation.

purchase components for The Vivos Method from a variety of vendors on a purchase order basis;

we have no long-term supply contracts with

any of our vendors.

While it is our goal to have multiple sources to procure certain key components, in some cases it is not economically

practical or feasible to do so.

To mitigate this risk, we maintain an awareness of alternate supply sources that could provide our currently

single-sourced components with minimal or no modification to the current version of The Vivos Method, practice supply chain management,

maintain safety stocks of critical components and have arrangements with our key vendors to manage the availability of critical components.

Despite these efforts, if our vendors are unable to provide us with an adequate supply of components in a timely manner, or if we are

unable to locate qualified alternate vendors for components at a reasonable cost, the cost of our products would increase, the availability

of our products to our customers would decrease and our ability to generate revenue could be materially limited.

are risks associated with outsourced production that may hurt our results of operations.

outsource the manufacture of substantially all our products to third-party manufacturers on a case-by-case basis.

By law, the selection

of the manufacturer is at the sole discretion of the treating dentist.

However, we select our approved and certified manufacturers by

training and screening them in advance based on their capabilities, supply capacity, reputation, regulatory registration and compliance,

and other relevant traits.

Most of these manufacturers are located in the U.S., but at least one important manufacturer is located in

South Korea, and other smaller manufacturers are located in Canada.

In any case, the possibility of delivery delays, product defects,

import or customs blockages, and other production-side risks stemming from outsourcers creates the risk that our expenses associated

with these issues could unexpectedly increase in any period.

In addition, inadequate production capacity among outsourced manufacturers

could result in our being unable to supply enough product amid periods of high product demand, the opportunity costs of which could be

All of these risks could have a material adverse effect on our results of operations.

do not have any long-term contracts with manufacturers, suppliers or other service providers for our products.

Our business would be

harmed if manufacturers and service providers are unable to deliver products or provide services in a timely and cost-effective manner,

or if we are unable to timely fulfill orders.

do not have any long-term contracts with contract manufacturers, suppliers or other service providers for our products.

We do not anticipate

that this will change.

As a result, if any manufacturer or supplier is unable, either temporarily or permanently, to manufacture or deliver

products or provide services to us in a timely and cost-effective manner, it could have an adverse effect on our financial condition

and results of operations.

Our ability to provide effective customer service and efficiently fulfill orders for merchandise depends,

to a large degree, on the efficient and uninterrupted operation of the manufacturing and related call centers, distribution centers,

and management information systems, some of which are run by third parties.

Any material disruption or slowdown in manufacturing, order

processing or fulfillment systems resulting from strikes or labor disputes, telephone down times, electrical outages, mechanical problems,

human error or accidents, fire, natural disasters, adverse weather conditions or comparable events could cause delays in our ability

to receive and fulfill orders and may cause orders to be lost or to be shipped or delivered late.

As a result, these disruptions could

adversely affect our financial condition or results of operations in future periods.

depend on our patents and proprietary technology, which we may not be able to protect.

Although we offer The Vivos Method through our VIPs and strategic alliances, our

domestic sales organization does not generally call on sleep specialists or third-party sleep centers to sell The Vivos Method, and we

do not believe that most qualified sleep specialists today would recommend The Vivos Method to their patients with mild to severe OSA.

We cannot predict the extent to which medical doctors will, in the future, endorse or recommend our protocol to their patients, even

for those who are unwilling or unable to comply with other alternative therapies.

may not be able to protect our patents and proprietary technology and may become subject to intellectual property claims or litigation.

success depends, in part, on our ability to obtain and maintain patent protection for The Vivos Method components and the confidentiality

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independently developed by competitors.

Confidentiality

agreements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information and disclosure

of our trade secrets or proprietary information could compromise any competitive advantage that we have, which could have a materially

adverse effect on our business.

success depends, in part, on our ability to protect our proprietary rights to the technologies used in our products and our proprietary

clinical treatments.

We depend heavily upon confidentiality agreements with our officers, employees, consultants and subcontractors to

maintain the proprietary nature of our technology and our proprietary clinical treatments.

These measures may not afford us complete

or even sufficient protection, and may not afford an adequate remedy in the event of an unauthorized disclosure of confidential information.

If we fail to protect and/or maintain our intellectual property, third parties may be able to compete more effectively against us, we

may lose our technological or competitive advantage, and/or we may incur substantial litigation costs in our attempts to recover or restrict

use of our intellectual property.

In addition, others may independently develop technology similar to ours, otherwise avoiding the confidentiality

agreements, or produce patents that would materially and adversely affect our business, prospects, financial condition and results of

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

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

has been substantial litigation regarding patent and other intellectual property rights in the medical device industry, and our competitors

and others may initiate intellectual property litigation, including as a means of competition.

Intellectual property litigation is complex

and expensive, and outcomes are difficult to predict.

We cannot assure you that we will not become subject to patent infringement claims

or litigation, or interference proceedings, to determine the priority of inventions.

Litigation or regulatory proceedings also may be

necessary to enforce our patent or other intellectual property rights.

We may not always have the financial resources to assert patent

infringement suits or to defend ourselves from claims.

An adverse result in any litigation could subject us to liabilities, or require

us to seek licenses from or pay royalties to others that may be substantial.

Furthermore, we cannot predict the extent to which the necessary

licenses would be available to us on satisfactory terms, if at all.

failure to secure trademark registrations could adversely affect our ability to market our products and operate our business.

trademark applications in the United States and any other jurisdictions where we may file may not be allowed registration, and we may

not be able to maintain or enforce our registered trademarks.

During trademark registration proceedings, we may receive rejections.

we are given an opportunity to respond to those rejections, we may be unable to overcome such rejections.

In addition, in the USPTO and

in corresponding foreign agencies, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel

registered trademarks.

Opposition or cancellation proceedings may be filed against our applications and/or registrations, and our applications

and/or registrations may not survive such proceedings.

Failure to secure such trademark registrations in the United States and in foreign

jurisdictions could adversely affect our ability to market our products and our business.

may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.

is common in the medical device industry, we may employ individuals who were previously employed at other companies similar to ours,

including our competitors or potential competitors.

We may become subject to claims that these employees or we have inadvertently or

otherwise used or disclosed trade secrets or other proprietary information of their former employers.

Litigation may be necessary to

defend against these claims.

Even if we are successful in defending against these claims, litigation could result in substantial costs

and be a distraction to management.

face the risk of product liability claims that could be expensive, divert management’s attention and harm our reputation and business.

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financial condition and results of operations.

may not be able to maintain adequate product liability insurance.

product liability and clinical study liability insurance is subject to deductibles and coverage limitations.

Our product liability insurance

may not continue to be available to us on acceptable terms, if at all, and, if available, coverage may not be adequate to protect us

against any future product liability claims.

If we are unable to obtain insurance at an acceptable cost or on acceptable terms or otherwise

protect against potential product liability claims, we could be exposed to significant liabilities.

A product liability claim, recall

or other claim with respect to uninsured liabilities or for amounts in excess of insured liabilities could have a material adverse effect

on our business, financial condition and results of operations.

bear the risk of warranty claims on our appliances.

We may not be successful in claiming recovery under any warranty or indemnity provided

to us by our suppliers or vendors in the event of a successful warranty claim against us by a customer or that any recovery from such

vendor or supplier would be adequate.

In addition, warranty claims brought by our customers related to third-party components may arise

after our ability to bring corresponding warranty claims against such suppliers expires, which could result in costs to us.

sales and marketing efforts may not be successful.

currently market and sell our appliances and associated treatments and services to a limited number of licensed professionals, primarily

general dentists.

Less than 1% of the general dentists in the U.S.

have been trained and certified in The Vivos Method.

The commercial

success of The Vivos Method ultimately depends upon a number of factors, including the number of dentists who use The Vivos Method, the

number of Vivos appliances used by these dentists, the number of patients who become aware of The Vivos Method by self-referral or referrals

by their primary care physicians, the number of patients who elect to use The Vivos Method, and the number of patients who, having successfully

used The Vivos Method, endorse and refer The Vivos Method to other potential patients.

The Vivos Method may not gain significant increased

market acceptance among physicians/dentists who use it or who refer their patients, other patients, third-party healthcare insurers and

managed care providers.

We believe that primary care physicians typically elect to refer individuals to pulmonologists or other physicians

who treat sleep disordered breathing, and these physicians may not recommend The Vivos Method to patients for any number of reasons,

including safety and clinical efficacy, the availability of alternative procedures and treatment options, or inadequate levels of reimbursement.

In addition, while positive patient experiences can be a significant driver of future sales, it is impossible to influence the manner

in which this information is transmitted and received, the choices potential patients may make and the recommendations that treating

physicians make to their patients.

we sell our product directly to our corporate-owned and independent VIP practices, our experience in marketing and selling The Vivos

Method or VIP program through a direct sales organization in the United States is limited.

We may not be able to maintain a suitable

sales force in the United States or train up a suitable number of VIPs, or enter into or maintain satisfactory marketing and distribution

arrangements with others.

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

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

we currently anticipate.

addition, we conduct our targeted marketing efforts in neighborhoods through channels such as direct mail, billboards, radio advertisements,

physician open houses, community sponsorships and various social media.

These marketing and sales efforts may not be successful in increasing

awareness and sales of The Vivos Method, and if we are not successful in these efforts, we will have incurred expenses without materially

increasing revenue.

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

and reduce our revenue.

is critical to the success of our sales efforts that there is an increasing number of dentists familiar with, trained in, and proficient

in the use of The Vivos Method.

Currently, dentists learn to use The Vivos Method through hands-on, on-site training or virtual training

by our representatives.

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

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

We cannot predict

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

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

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

If dentists do

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

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

in performance of these suppliers and contract manufacturers could have a material adverse effect on our business, financial condition

and results of operations.

rely on third-party suppliers and contract manufacturers for the raw materials and components used in our appliances and to manufacture

and assemble our products.

Any of our other suppliers or our third-party contract manufacturers may be unwilling or unable to supply

the necessary materials and components or manufacture and assemble our products reliably and at the levels we anticipate or that are

required by the market.

Our ability to supply our products commercially and to develop any future products depends, in part, on our ability

to obtain these materials, components and products in accordance with regulatory requirements and in sufficient quantities for commercialization

and clinical testing.

While our suppliers and contract manufacturers have generally met our demand for their products and services on

a timely basis in the past, we cannot guarantee that they will in the future be able to meet our demand for their products, either because

of acts of nature, the nature of our agreements with those manufacturers or our relative importance to them as a customer, and our manufacturers

may decide in the future to discontinue or reduce the level of business they conduct with us.

If we are required to change contract manufacturers

due to any change in or termination of our relationships with these third parties, or if our manufacturers are unable to obtain the materials

they need to produce our products at consistent prices or at all, we may lose sales, experience manufacturing or other delays, incur

increased costs or otherwise experience impairment to our customer relationships.

We cannot guarantee that we will be able to establish

alternative relationships on similar terms, without delay or at all.

additional or replacement suppliers for any of these materials, components or services, if required, could be time-consuming and expensive,

may result in interruptions in our operations and product delivery, may affect the performance specifications of our appliances or could

require that we modify its design.

Even if we are able to find replacement suppliers or third-party contract manufacturers, we will be

required to verify that the new supplier or third-party manufacturer maintains facilities, procedures and operations that comply with

our quality expectations and applicable regulatory requirements.

our third-party suppliers fail to deliver the required commercial quantities of materials on a timely basis and at commercially reasonable

prices, and we are unable to find one or more replacement suppliers capable of production at a substantially equivalent cost in substantially

equivalent volumes and quality on a timely basis, the continued commercialization of our appliances, the supply of our products to customers

and the development of any future products will be delayed, limited or prevented, which could have material adverse effect on our business,

financial condition and results of operations.

to our reputation or our brand could negatively impact our business, financial condition, and results of operations.

must grow the value of our brand to be successful.

We intend to develop a reputation based on the high quality of our products and services,

Vivos trained clinicians, as well as on our particular culture and the experience of the patients of our VIPs.

If we do not make investments

in areas such as marketing and advertising, as well as personnel training, the value of our brand may not increase or may be diminished.

Any incident, real or perceived, regardless of merit or outcome, that adversely affects our brand, such as, but not limited to, patient

disability or death due to malpractice or allegations of malpractice, failure to comply with federal, state, or local regulations, including

allegations or perceptions of non-compliance or failure to comply with ethical and operational standards, could significantly reduce

the value of our brand, expose us to negative publicity and damage our overall business and reputation.

marketing activities may not be successful.

incur costs and expend other resources in our marketing efforts to attract and retain VIPs and other medical professionals.

Our marketing

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

We expect to continue

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

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

houses, community sponsorships and various social media.

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

materially increasing revenue.

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

market for providing treatment for OSA is highly competitive.

Our VIP offices and our VIPs face competition from existing facilities

providing treatment for OSA, depending on the type of patient and geographic market.

Our VIPs compete on the basis of our protocol/products

(The Vivos Method) , quality, price, accessibility, and overall experience.

We compete with national, regional, and local enterprises,

many of which have greater financial and other resources available to them, greater access to dentists and physicians or greater access

to potential patients.

We also compete on the basis of our multistate, regional footprint, which we believe will be of value to both

employers and third-party payors.

As a result of the differing competitive factors within the markets in which we operate and will operate,

the individual results of our VIP offices may be volatile.

If we are unable to compete effectively with any of these entities or groups,

or we are unable to implement our business strategies, there could be a material adverse effect on our business, prospects, results of

operations and financial condition.

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

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

or surgical therapies, resulting in improved patient compliance.

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

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

If actual patient compliance as studied in a clinical

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

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

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

from becoming or remaining VIPs.

recent years, new legislation has been proposed and adopted at both the federal and state level that is effecting major changes in the

healthcare system.

Any change in the laws, regulations, or policies governing the healthcare system could adversely affect reimbursement

rates, which could adversely affect sales of our appliances and thus adversely affect our operations and financial condition.

in 2010, the Affordable Care Act (or ACA) seeks to expand healthcare coverage, while increasing quality and limiting costs.

The ACA substantially

changes the way healthcare is financed by both governmental and commercial payors.

As a result of the ACA or the adoption of additional

federal and state healthcare reforms measures there could be limits to the amounts that federal and state governments will pay for healthcare

services, which could result in reduced demand for, or profitability of our appliances and for dental practitioners from becoming or

remaining VIPs.

uncertainty exists as to the reimbursement status of healthcare products.

The regulations that govern marketing approvals, pricing and

reimbursement for medical devices vary widely from country to country.

In the United States, the Patient Protection and Affordable Care

Act, as amended by the Health Care and Education Affordability Reconciliation Act of 2010, is significantly changing the way healthcare

is financed by both governmental and private insurers.

While we cannot predict what impact on federal reimbursement policies this law

or any amendment to it will continue to have in general or specifically on The Vivos Method or any product that we commercialize, the

ACA or any such amendment may result in downward pressure on reimbursements, which could negatively affect market acceptance of The Vivos

In addition, although the United States Supreme Court has upheld the constitutionality of most of the ACA, several states have

not implemented certain sections of the ACA, including 19 that have rejected the expansion of Medicaid eligibility for low-income citizens,

and some members of the U.S.

Congress are still working to repeal the ACA.

We expect that the ACA, as currently enacted or as it may

be amended or repealed in the future, and other healthcare reform measures that may be adopted in the future, could have a material adverse

effect on our industry generally and on our ability to successfully commercialize our products.

We cannot predict the likelihood, nature

or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad.

If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or our

collaborators are not able to maintain regulatory compliance, our products may lose any regulatory approval that may have been obtained

and we may not achieve or sustain profitability, which would adversely affect our business.

payments from commercial or governmental payors are significantly delayed, reduced or eliminated, our business, prospects, results of

operations and financial condition could be adversely affected.

will depend upon revenue from sales of the billable procedures from The Vivos Method, and in turn on reimbursement from third-party payors.

The amount that our VIPs receive in payment for the billable procedures may be adversely affected by factors we do not control, including

federal or state regulatory or legislative changes, cost-containment decisions and changes in reimbursement schedules of third-party

Any reduction or elimination of these reimbursements could have a material adverse effect on our business, prospects, results

of operations and financial condition.

Additionally,

the reimbursement process is complex and can involve lengthy delays.

Also, third-party payors may reject, in whole or in part, requests

for reimbursement based on determinations that certain amounts are not reimbursable under plan coverage, that services provided were

not medically necessary, that additional supporting documentation is necessary, or for other reasons.

Retroactive adjustments by third-party

payors may be difficult or cost prohibitive to appeal, and such changes could materially reduce the actual amount we receive from our

Delays and uncertainties in the reimbursement process may be out of our control and may adversely affect our business, prospects,

results of operations and financial condition.

changes in our payor mix resulting from fluctuations in the types of patients seen by our VIPs could have a material adverse effect on

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

results may change from period to period due to fluctuations in our VIPs’ payor mix.

Payor mix refers to the relative amounts we

receive from the mix of persons or entities that pay or reimburse our VIPs for healthcare services.

Because we believe that our VIPs

will receive a higher payment rate from commercial payors than from governmental payors or self-pay patients, a significant shift in

our payor mix toward a higher percentage of self-pay or patients whose treatment is paid in whole or part by a governmental payor, could

occur for reasons beyond our control and could lessen demand for The Vivos Method, which in turn could have a material adverse effect

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

by our Billing Intelligence Service to bill timely or accurately for billable services rendered by participating VIP providers could

have a negative impact on our revenue and cash flow.

for medical services rendered in connection with billable procedures of The Vivos Method is often complex and time consuming.

of providing dental or medical services in advance of payment or prior to assessing a patient’s ability to pay for such services

may have a significant negative impact on a VIP provider’s patient service revenue, bad debt expense and cash flow.

VIPs subscribe to our Billing Intelligence Service.

For VIPs who do subscribe, we bill numerous medical payors, including various forms

of commercial health insurance providers on their behalf.

Billing requirements that must be met prior to receiving payment for services

rendered often vary by payor.

Self-pay patients and third-party payors may fail to pay for services even if they have been properly billed.

Reimbursement is typically dependent on providing the proper procedure and diagnosis codes, supportive documentation to show medical

Medical insurance is never a guarantee of payment.

factors that could affect our ability to collect from insurers for the services rendered by our participating VIP providers include:

among payors as to which party is responsible for payment;

in coverage among various payors for similar services;

difficulty of adherence to specific compliance requirements, coding and various other procedures mandated by responsible parties;

institution of new coding standards;

to properly credential a dentist to enable them to bill various payors.

complexity associated with billing for The Vivos Method procedures may lead to delays in cash collections by our VIPs, resulting in increased

carrying costs associated with the aging of our accounts receivable as well as the increased potential for bad debt expense.

may incur costs resulting from security risks in connection with the electronic data processing by our partner banks.

we accept electronic payment cards for payments at our facilities and the facilities of our VIPs, we may incur costs resulting from related

security risks in connection with the electronic processing of confidential information by our partner banks.

Recently, several large

national banks have experienced potential or actual breaches in which similar data has been or may have been stolen.

Such occurrences

could cause patient dissatisfaction resulting in decreased visits or could also distract our management team from the management of the

day-to-day operations.

relationships with VIPs, other healthcare providers, and third-party payors will be subject, directly or indirectly, to federal and state

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If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.

providers (including our VIPs), physicians and third-party payors in the United States and elsewhere will play a primary role in the

recommendation of The Vivos Method.

Our current and future arrangements with healthcare professionals, principal investigators, consultants,

customers and third-party payors may subject us to various federal and state fraud and abuse laws and other health care laws, including,

without limitation, the federal Anti-Kickback Statute, the federal civil and criminal false claims laws and the law commonly referred

to as the Physician Payments Sunshine Act and regulations.

These laws will impact, among other things, our clinical research, sales,

marketing and educational programs.

In addition, we may be subject to patient privacy laws by both the federal government and the states

in which we conduct or may conduct our business.

The laws that will affect our operations include, but are not limited to:

providers (including our VIPs and strategic alliances), physicians and third-party payors in the United States and elsewhere will play

a primary role in the recommendation of The Vivos Method.

Our current and future arrangements with healthcare professionals, principal

investigators, consultants, customers and third-party payors may subject us to various federal and state fraud and abuse laws and other

health care laws, including, without limitation, the federal Anti-Kickback Statute, the federal civil and criminal false claims laws

and the law commonly referred to as the Physician Payments Sunshine Act and regulations.

These laws will impact, among other things,

our clinical research, sales, marketing and educational programs.

In addition, we may be subject to patient privacy laws by both the

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

The laws that will affect our operations include,

but are not limited to:

federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting,

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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 may harm our reputation in the marketplace, result in injuries that lead to product liability

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

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

We have engaged in

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

which may not be integrated successfully into our existing business.

We have engaged

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

services we provide.

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

and international

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

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.

The acquisitions could be of significant size and involve operations in

multiple jurisdictions.

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

other business activities, including our core business.

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

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

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.

business is seasonal, which impacts our results of operations.

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

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

however, the timing and severity of

these outbreaks vary dramatically.

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

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

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

Our quarterly operating results

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

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

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

supervision and credentialing.

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.

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.

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 and Susan McCullough, our EVP of Operations, among others.

Our business would be impeded or harmed if we

were to lose their services.

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

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

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

marketing and reimbursement efforts.

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

several months to hire and train replacement sales personnel.

Uncertainty created by turnover of key employees could adversely affect

our business.

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

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.

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,

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.

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.

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.

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

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.

Our business plan also anticipates VIP offices

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.

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

Related to Our Products and Regulation

depend in large part on The Vivos Method technology, and the loss of access to this technology would terminate or delay the further development

of our products, injure our reputation or force us to pay higher fees.

depend in large part on The Vivos Method technology, and the loss of regulatory approval or access to this technology would terminate

or delay the further development of our products, injure our reputation or force us to pay higher fees.

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

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other resources.

trials that may be required to support regulatory submissions in the United States are expensive.

We cannot assure that we will be able

to complete any required clinical trial programs successfully within any specific time period, and if such clinical trials take longer

to complete than we project, our ability to execute our current business strategy will be adversely affected.

cannot assure that we will be able to complete any required clinical trial programs successfully within any specific time period, and

if such clinical trials take longer to complete than we project, our ability to execute our current business strategy will be adversely

clinical trials is a lengthy, time-consuming and expensive process.

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

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

If the FDA finds that

we have failed to comply, the agency can institute a wide variety of enforcement actions which may materially affect our business operations.

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.

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

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

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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.

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

core VIP business model does not involve any form of joint ownership, operational control, or employment of licensed professionals by

Thus, we are not typically regarded as a “dental service organization” (or DSO) under the laws of the various

states within the United States or in Canada, in which we conduct most of our business.

However, we do operate two retail treatment clinics

in Colorado wherein we do employ dentists under a provider network model consistent with Colorado law.

In that respect, we may be regarded

In addition, we have begun to strategically establish a nationwide network of professional corporations, owned by independent

licensed dentists in each state, in order to lay the regulatory groundwork for our Airway Alliance model and program.

In essence, Airway

Alliance will operate in similar fashion to a DSO, thus providing us with what we believe to be certain strategic and competitive advantages.

Nevertheless, to the extent we are deemed to be a DSO in any jurisdiction, it could make it difficult or impossible for us to recruit

and retain qualified dentists as VIPs, as some state dental boards are sometimes adverse to corporate DSOs operating in their states.

Moreover, where such DSO-provider relationships are permitted, such regulations may impose significant constraints on the structure and

financial arrangements that are permissible between us and our affiliated dentists in a particular state.

jurisdictions where laws allow DSOs to operate (which includes almost all U.S.

states and Canada), a growing number of dentists are affiliating

with corporate DSOs.

In those cases, the DSO may not allow their affiliated dentists to offer our products and services or to become

Thus, the overall number of dentists who are prospects to become VIPs and utilize our products and services may be reduced, which

would impair our ability to generate revenue from our core VIP business model.

Medical Integration Division business line may implicate federal and state laws involving the practice of medicine and related anti-kickback

and similar laws.

MID was launched in 2020 to assist VIP practices in establishing clinical collaboration ties to local primary care physicians, sleep

specialists, ENTs, pediatricians and other healthcare professionals who routinely see or treat patients with sleep and breathing disorders.

The primary objective of our MID is to promote The Vivos Method to the medical profession and thus facilitate more patients being able

to receive a treatment with The Vivos Method.

There is a risk, however, that our MID may implicate legal or regulatory compliance issues

that may arise in the course of our activities, including various Federal healthcare statutes such as the Stark and anti-kickback laws

as well as state-by-state regulations pertaining to inter-disciplinary ownership of professional corporations or other legal entities.

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.

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

to local primary care physicians, sleep specialists, ENTs, pediatricians and other healthcare professionals who routinely see or treat

patients with sleep and breathing disorders.

Historically, the primary objective of our MID was to promote The Vivos Method to the medical

profession and thus facilitate more patients being able to receive a treatment with The Vivos Method.

With the change in business model

to focus on alliance marketing and distribution of Vivos products through sleep centers, the M&A Group has shifted focus to identifying

and closing strategic alliances with sleep clinics.

There is a risk that our M&A Group may implicate legal or regulatory compliance

issues that may arise in the course of our activities, including various Federal healthcare statutes such as the Stark and anti-kickback

laws as well as state-by-state regulations pertaining to inter-disciplinary ownership of professional corporations or other legal entities.

We have conducted research, including obtaining advice from outside legal counsel, regarding the implications of these laws and regulations

to MID and believe the MID’s operations will be in compliance with or will not implicate these laws and regulations.

However, there

is a risk that such laws and regulations (or similar laws and regulations adopted in the future) might be interpreted, reinterpreted,

or modified in the future in such a way so as to impede or prevent us from continuing to develop or manage our MID, which could lead

to our having to discontinue the MID and could leave us subject to regulatory scrutiny and sanction.

No advice of counsel has been obtained

with respect any potential operations of the MID in Canada.

may not be able to prohibit or limit our dentists, physicians and other healthcare professionals from competing with us in our local

certain states in which we operate or intend to operate, non-compete, non-solicitation, and other negative covenants applicable to employment

or ownership are judicially or statutorily limited in their effectiveness or are entirely unenforceable against dentists, physicians

and other healthcare professionals.

As a result, we may not be able to retain our provider relationships or protect our market share,

operational processes or procedures, or limit insiders or VIPs from using competitive information against us or competing with us, which

could have a material adverse effect on our business, financial condition and ability to remain competitive as our arrangements with

our VIPs do not contain competitive restrictions.

to the M&A Group and believe M&A Group’s operations will be in compliance with or will not implicate these laws and regulations.

However, there is a risk that such laws and regulations (or similar laws and regulations adopted in the future) might be interpreted,

reinterpreted, or modified in the future in such a way so as to impede or prevent us from continuing our M&A Group, which could leave

us subject to regulatory scrutiny and sanction.

No advice of counsel has been obtained with respect any potential operations of the M&A

Group in Canada.

Related to Our Securities Generally

4 unchanged sentences

We cannot assure you that an orderly

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

You may not be able to

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

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.

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

4 unchanged sentences

we conduct financings.

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

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

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

traded on November 29, 2023.

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

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

It is important to note that market volatility

is not something over which we have direct control.

For example, in late November 2023, we announced that our C.A.R.E.

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.

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

12 unchanged sentences

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

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

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

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

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

Such a delisting would likely have a negative

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

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

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

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

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

During 2022, we received two notices from

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

failure to timely file our reports

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

While both of these deficiencies

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

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

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.

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

19 unchanged sentences

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

We believe that we will be able to

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

allow our common stock to continue to trade on Nasdaq.

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

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

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

Such a delisting

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

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

The terms of our November

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

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

The terms of the Securities Purchase Agreement

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

Specifically:

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

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

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

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

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

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

into or exercisable for common stock (or a combination of units thereof) involving a “variable rate transaction”, meaning

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

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

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

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

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

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

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

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

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

Specifically:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The existence of these restrictions could reduce the number of fundraising

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

As a result, we may find it

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

a material adverse effect on our company and stock price.

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

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

grow our business generally.

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

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.

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

On May 6, 2024, we received written

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

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

On June 25, 2024, we reported in a Current Report on Form 8-K that we believed we had stockholders’ equity of at least

$2.5 million as of the date of the filing of such report as a result of our closing of a $7.5 million equity private placement on June

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.

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

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.

can be no assurance that we will ever provide liquidity to our investors through a sale of our company.

acquisitions of medical technology companies like ours are not uncommon, potential investors are cautioned that no assurances can be

given that any form of merger, combination, or sale of our company will take place relating to our company, or that any merger, combination,

or sale, even if consummated, would provide liquidity or a profit for our investors.

You should not invest in our company with the expectation

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

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 or 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

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

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

are an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make

our common stock less attractive to investors.

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 earlier of:

(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

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;

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

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

2 unchanged sentences

These exemptions include:

being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, or Section 404;

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

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 obligations regarding executive compensation;

from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute

payments not previously approved.

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 10-K.

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.

If some 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.

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 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

Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities

more time-consuming and costly.

For 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.

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.

However, 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 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.

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

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.

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

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.

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