Lucid Diagnostics Inc 10-K for FY2023

Lucid Diagnostics Inc. (LUCD)

10-K 2024-03-25 For: 2023-12-31

Added on April 08, 2026

About this 10-K

Lucid Diagnostics Inc filed this 10-K on March 25, 2024, covering the fiscal year ended December 31, 2023 (FY2023).

Headline figures

Fiscal year ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.43M; up 544.0% from $377K a year earlier
Net loss: $52.67M; compared with a net loss of $56.17M a year earlier
Diluted EPS: -$1.26; compared with -$1.55 a year earlier

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Delaware		82-5488042
(State or Other Jurisdiction of		(IRS Employer
Incorporation or Organization)		Identification No.)

360 Madison Avenue
25th Floor
New York, NY		10017
(Address of Principal Executive Offices)		(Zip Code)

Title of each Class		Trading Symbol(s)		Name of each Exchange on which Registered
Common Stock, $0.001 par value per share		LUCD		The NASDAQ Stock Market LLC

Large Accelerated filer	☐	Accelerated filed	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☒

	PART I
Item 1.	Business	1
Item 1A.	Risk Factors	14
Item 1B.	Unresolved Staff Comments	40
Item 1C.	Cybersecurity	40
Item 2.	Property	40
Item 3.	Legal Proceedings	40
Item 4.	Mine Safety Disclosures	40

	PART II
Item 5.	Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	41
Item 6.	[Reserved]	41
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	42
Item 7A.	Quantitative and Qualitative Disclosure About Market Risk	50
Item 8.	Financial Statements and Supplementary Data	50
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	50
Item 9A.	Controls and Procedures	51
Item 9B.	Other Information	51
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	51

	PART III
Item 10.	Directors, Executive Officers, and Corporate Governance	52
Item 11.	Executive Compensation	52
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	52
Item 13.	Certain Relationships and Related Transactions and Director Independence	52
Item 14.	Principal Accountant Fees and Services	52

	PART IV
Item 15.	Exhibits and Financial Statement Schedules	53
Item 16.	Form 10-K Summary	55

	●	our limited operating history;
	●	our financial performance, including our ability to generate revenue;
	●	our ability to obtain regulatory approval for the commercialization of our products;
	●	the risk that the FDA will cease to exercise enforcement discretion with respect to LDTs, like EsoGuard;
	●	the ability of our products to achieve market acceptance;
	●	our success in retaining or recruiting, or changes required in, our officers, key employees or directors;
	●	our potential ability to obtain additional financing when and if needed;
	●	our ability to protect our intellectual property;
	●	our ability to complete strategic acquisitions;
	●	our ability to manage growth and integrate acquired operations;
	●	the potential liquidity and trading of our securities;
	●	our regulatory and operational risks;
	●	cybersecurity risks;
	●	risks related to the COVID-19 pandemic and other health-related emergencies;
	●	risks related to our relationship with PAVmed; and
	●	our estimates regarding expenses, future revenue, capital requirements and needs for additional financing.

	●	Stage 1: End the general enforcement discretion approach with respect to Medical Device Regulation (MDR) requirements and correction and removal reporting requirements 1 year after FDA publishes a final phaseout policy, which FDA intends to issue in the preamble of the final rule.
	●	Stage 2: End the general enforcement discretion approach with respect to requirements other than MDR, correction and removal reporting, Quality System (QS), and premarket review requirements 2 years after FDA publishes a final phaseout policy.
	●	Stage 3: End the general enforcement discretion approach with respect to QS requirements 3 years after FDA publishes a final phaseout policy.
	●	Stage 4: End the general enforcement discretion approach with respect to premarket review requirements for high-risk IVDs 3.5 years after FDA publishes a final phaseout policy, but not before October 1, 2027.
	●	Stage 5: End the general enforcement discretion approach with respect to premarket review requirements for moderate risk and low risk IVDs (that require premarket submissions) 4 years after FDA publishes a final phaseout policy, but not before April 1, 2028.

	●	the product itself including all embodiments with future commercial potential;
	●	the methods of using the product; and
	●	the methods of manufacturing the product.

	●	In June 2019, we received FDA 510(k) clearance for EsoCheck, permitting us to market it in the U.S. as a cell collection device indicated for use in the collection and retrieval of surface cells of the esophagus in the general population of adults, 22 years of age and older. In 2022, we received FDA clearance to expand EsoCheck’s indications for use to include adults and adolescents, 12 years of age and older. In 2023, we further received FDA clearance to permit us to market EsoCheck as non-sterile.
	●	In December 2019, RDx, our then-CLIA-certified laboratory partner completed documentation of EsoGuard analytical validity allowing us to commercialize it as an LDT. In March 2022, we transferred EsoGuard testing to our own CLIA-certified laboratory, upon our acquisition of certain assets from RDx as described elsewhere in this report.

	●	FDA Quality Systems Regulation (QSR), which governs, among other things, how manufacturers design, test manufacture, exercise quality control over, and document manufacturing of their products;
	●	labeling and claims regulations, which prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling; and
	●	the Medical Device Reporting regulation, which requires reporting to FDA of certain adverse experience associated with use of the product.

	●	We have incurred operating losses since our inception and may not be able to achieve profitability.
	●	We have concluded there is substantial doubt of our ability to continue as a going concern and our independent registered public accounting firm’s report on our financial statements contains an explanatory paragraph describing our ability to continue as a going concern.
	●	To raise capital, we have issued a significant amount of convertible securities under which we expect to issue a correspondingly significant amount of shares of our common stock upon conversion thereof. In addition, we may issue shares of our capital stock or debt securities in the future in order to raise capital to fund our operations. All of the foregoing would dilute the equity interest of our stockholders and might cause a change in control of our ownership.
	●	We expect to need additional capital funding, which may be compounded by our obligations to our parent company, PAVmed, which requires its own additional capital funding.
	●	Our quarterly operating results could be subject to significant fluctuation, which could increase the volatility of our stock price and cause losses to our stockholders.
	●	Servicing our indebtedness may require a significant amount of cash, and the restrictive covenants contained in our indebtedness could adversely affect our business plan, liquidity, financial condition, and results of operations.

	●	Since we have a limited operating history, and have not generated any significant revenues to date, you will have little basis upon which to evaluate our ability to achieve our business objective.
	●	The markets in which we operate are attractive and other companies or institutions may develop and market novel or improved technologies, which may make the EsoGuard or EsoCheck technologies less competitive or obsolete.
	●	We expect to derive substantially all of our revenues from the EsoGuard and EsoCheck products.
	●	We are highly dependent on our license agreement with CWRU, the termination of which would prevent us from commercializing our products, and which imposes significant obligations on us.
	●	Our products may never achieve market acceptance.
	●	The sizes of the markets for our current and future products have not been established with precision, and may be smaller than we estimate.
	●	Recommendations in published clinical practice guidelines issued by various organizations, including professional societies and federal agencies may significantly affect payors’ willingness to cover, and physicians’ willingness to prescribe, our products and services.
	●	We or our third-party manufacturers may not have the manufacturing and processing capacity to meet the production requirements of consumer demand or clinical testing in a timely manner.
	●	Our EsoGuard test is performed in a single commercial clinical laboratory facility. If demand for our EsoGuard test grows, we may lack adequate facility space and capabilities to meet increased processing requirements. Moreover, if these or any future facilities or their equipment were damaged or destroyed, or if we experience a significant disruption in our commercial clinical laboratory operations for any reason, our ability to continue to operate our business could be materially harmed.
	●	Our results of operations can be adversely affected by labor shortages, turnover, and labor cost increases.
	●	We expect to rely on courier delivery services to transport EsoCheck devices and EsoGuard specimen kits to physicians and other medical professionals and samples back to laboratory facilities for analysis. If these delivery services are disrupted or become prohibitively expensive, customer satisfaction and our business could be negatively impacted.
	●	If we attempt to bring any other products or services to market in addition to the EsoGuard test and EsoCheck device, we likely will be required to make significant investments in research and development, which ultimately may prove unsuccessful. Our future performance may be affected by the success of products we have not yet developed, licensed, acquired.
	●	Our officers may allocate their time to other businesses thereby potentially limiting the amount of time they devote to our affairs. This conflict of interest could have a negative impact on our operations.
	●	Our ability to be successful will be totally dependent upon the efforts of our key personnel.
	●	Our officers and directors have fiduciary obligations to other companies and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
	●	Our business may suffer if we are unable to manage our growth.
	●	Our business, financial condition and results of operations could be adversely affected by the political and economic conditions of the countries in which we conduct business.
	●	We may engage in acquisitions that are not successful and which could disrupt our business, cause dilution to our stockholders and reduce our financial resources.
	●	Adverse results in material litigation matters could have a material adverse effect upon our business.

	●	If private or governmental third-party payors do not maintain reimbursement for our products at adequate reimbursement rates, we may be unable to successfully commercialize our products which would limit or slow our revenue generation and likely have a material adverse effect on our business.
	●	FDA has proposed a policy under which it would phase out its general enforcement discretion approach for LDTs so that IVDs manufactured at a laboratory would generally fall under the same enforcement approach as other IVDs. While we are confident that the proposed policy will not have a material impact on our business, there can be no assurance that will be the case.
	●	If we fail to maintain CLIA-certification or otherwise meet the applicable requirements of federal or state law regulating commercial clinical laboratories, such failure could limit or prevent our ability to perform our EsoGuard test, or any other tests which we may develop, license or acquire, affect any payor consideration of such tests, prevent their clearance or approval entirely, and/or interrupt the commercial sale and/or marketing of any such tests, cause us to incur significant expense to remedy this failure and otherwise negatively impact our business.
	●	EsoGuard may not be jointly marketed as a combined product with EsoCheck without first securing FDA approval of the combined product as an IVD device. If FDA deems that we are jointly marketing such an IVD product with EsoCheck without FDA approval of the combined product as an IVD device, we would be subject to FDA enforcement action which could limit or halt commercialization of our products, and result in FDA sanctions which could severely impact our business.
	●	Securing FDA approval of EsoGuard as an IVD device, separately or as a combined product with EsoCheck, is a complex process requiring substantial time, commitment of resources and expense without any assurance that FDA will grant such approval.
	●	Failure to obtain regulatory approvals in foreign jurisdictions will prevent us from marketing our products internationally.
	●	Modifications to our cleared or approved products may require new clearances or premarket approvals, or may require us to cease marketing or recall the modified products until clearances are obtained.
	●	Clinical trials necessary to support regulatory submission will be expensive and will require the enrollment of large numbers of patients, and suitable patients may be difficult to identify and recruit. Delays or failures in our clinical trials will prevent us from expanding our commercial efforts and will adversely affect our business, operating results and prospects.
	●	The results of our clinical trials may not support our product candidate claims or may result in the discovery of adverse side effects.
	●	If our clinical studies do not satisfy providers, payors, patients and others as to the reliability and performance of our EsoGuard test and the EsoCheck device, or any other product or service we may develop and seek to commercialize, we may experience reluctance or refusal on the part of physicians to order, and third-party payors to pay for, such test.
	●	If the validity of an informed consent for a clinical trial of one of our products was challenged, we could be subject to fines, penalties, litigation, or regulatory sanctions, or other adverse consequences, including invalidating or requiring us to repeat clinical trials which could negatively affect our business and results of operations.
	●	EsoCheck and any other products we develop that receive regulatory clearance or approval will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense and subject us to penalties if we fail to comply with applicable regulatory requirements.
	●	If we are found to be promoting the use of our devices for unapproved or “off-label” uses or engaging in other noncompliant activities, we may be subject to recalls, seizures, fines, penalties, injunctions, adverse publicity, prosecution, or other adverse actions, resulting in damage to our reputation and business.
	●	Clinical laboratories and medical diagnostic companies are subject to extensive and frequently changing federal, state, and local laws. We could be subject to significant fines and penalties if we fail (or if our prior unrelated third-party laboratory partner previously failed) to comply with these laws and regulations.
	●	We operate Lucid Test Centers where prescribing physicians can send patients for EsoGuard testing, including undergoing specimen collection using EsoCheck. These Lucid Test Centers are subject to federal and state regulations which may be burdensome, costly or difficult to comply with. Failure to comply with these regulations could result in sanctions, fines or other enforcement actions which may be costly, time-consuming and limit our ability to utilize them and adversely impact our business.
	●	We intend to engage with one or more third-party telemedicine companies to provide physicians to evaluate patients and, if clinically indicated, refer the patient to our Lucid Test Centers or to a #CheckYourFoodTube Precancer Testing Event, to undergo EsoCheck specimen collection for EsoGuard testing. Telemedicine is subject to numerous federal and state regulations and faces particularly intense scrutiny by these regulators. If we fail to comply with federal healthcare regulations, we could face substantial penalties, sanctions, fines or prosecution and our business, operations and financial condition could be adversely affected.
	●	Many aspects of our business, beyond the specific elements described above, are subject to complex, intertwined, costly and/or burdensome federal health care laws and regulations which may open to interpretation and be subject to varying levels of discretionary enforcement. If we fail to comply with these laws and regulations, we could face substantial penalties and our business, operations and financial condition could be adversely affected.
	●	The regulations that govern pricing and reimbursement for new products vary widely from country to country, and may adversely affect the pricing, coverage and reimbursement rates of our products in other countries.
	●	Due to billing complexities in the diagnostic and laboratory service industry, we may not be able to collect payment for the EsoGuard tests we perform.
	●	Healthcare reform measures could hinder or prevent our products’ commercial success.
	●	Our medical products may in the future be subject to product recalls that could harm our reputation, business, and financial results.
	●	If our medical products cause or contribute to a death or a serious injury, or malfunction in certain ways, we will be subject to medical device reporting regulations, which can result in voluntary corrective actions or agency enforcement actions.
	●	Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of our products.
	●	Compliance with the HIPAA security, privacy and breach notification regulations may increase our costs.

	●	We may not be able to protect or enforce the intellectual property rights for the technology used in, or expected to be used in, our products, which could impair our competitive position.
	●	We may be subject to intellectual property infringement claims by third parties which could be costly to defend, divert management’s attention and resources, and may result in liability.
	●	Competitors may violate the intellectual property rights for the technology used in, or expected to be used in, our products, and we may bring litigation to protect and enforce our intellectual property rights, which may result in substantial expense and may divert our attention from implementing our business strategy.
	●	Failure in our information technology systems could significantly disrupt our operations and our research and development efforts, which could adversely impact our revenues, as well as our research, development and commercialization efforts.
	●	Our internal computer systems, or those used by our third-party research institution collaborators, vendors or other contractors or consultants, may suffer security breaches.

	●	PAVmed owns a majority of our voting stock and thus it (or any successor to its stake in the Company), may control certain actions requiring a stockholder vote.
	●	If PAVmed’s debt is accelerated due to its default under the terms thereof, PAVmed could cease to have voting control of the Company.
	●	Certain conflicts of interest may arise between us and our affiliated companies, including PAVmed, and in some cases we have waived certain rights with respect thereto.
	●	Our ability to operate our business effectively may suffer if the MSA with PAVmed is insufficient to meet our needs or if, upon the termination of the MSA, we do not cost-effectively establish our own fully functional financial, administrative, operational and other support systems in order to operate as a stand-alone company.
	●	Any disputes that arise between us and PAVmed with respect to our past and ongoing relationships could harm our business operations.

	●	If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, our stock price and trading volume could decline.
	●	Nasdaq may in the future delist our common stock, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
	●	Our stock price may be volatile, and holders of our common stock could incur substantial losses.
	●	We do not intend to pay any dividends on our common stock at this time.
	●	We incur significant costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance initiatives.
	●	If we fail to establish and maintain proper and effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could decline significantly.
	●	We are subject to evolving corporate governance and public disclosure expectations and regulations that impact compliance costs and risks of noncompliance.
	●	We are an “emerging growth company,” and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock less attractive to investors.
	●	Provisions in our corporate charter documents and under Delaware law could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our current management.
	●	Our charter provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.

	Technology	Year

	EsoCheck	May 2034

	EsoGuard	August 2024

	●	may significantly dilute the equity interest of our current investors;
	●	may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded to our common stockholders;
	●	may cause a change in control if a substantial number of our shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carryforwards, if any, and most likely also result in the resignation or removal of some or all of our present officers and directors; and
	●	may adversely affect prevailing market prices for our common stock.

	●	default and foreclosure on our assets if our operating revenues are insufficient to pay our debt obligations and we are not able to refinance such obligations;
	●	acceleration of our obligations to repay the indebtedness even if we have made all principal and interest payments when due if the debt security contains covenants that require the maintenance of certain financial ratios or reserves, and any such covenant is breached without a waiver or renegotiation of that covenant;
	●	our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand and a demand is made;
	●	our inability to obtain additional financing, if necessary, if the debt security contains covenants restricting our ability to obtain additional financing while such security is outstanding; and
	●	our inability to conduct acquisitions, joint ventures or similar arrangements if the debt security contains covenants restricting such transactions or the funding thereof or requiring prior approval of the debt holders.

	●	continue our research and development including existing and new clinical trials;
	●	fund our operations;
	●	protect our intellectual property rights or defend, in litigation or otherwise, any claims that we infringe third-party patents or other intellectual property rights;
	●	manufacture and distribute our products; and
	●	promote market acceptance of our products.

	●	the cost and timing of expanding our sales, marketing and distribution capabilities;
	●	the effect of competing technological and market developments; and
	●	the extent to which we acquire or invest in businesses, products and technologies, although we currently have no commitments or agreements relating to any of these types of transactions.

	●	our success in marketing and selling, and changes in demand for, our products, and the level of reimbursement and collection obtained for our products;
	●	seasonal variations affecting physician recommendations for esophageal precancer and cancer screenings and patient compliance with physician recommendations, including without limitation holidays, weather events, and other circumstances that may limit patient access to medical practices for preventive services such as esophageal precancer and cancer screening;
	●	our success in collecting payments from third-party payors, patients and collaborative partners, variation in the timing of these payments and recognition of these payments as revenues;
	●	the pricing of our products, including potential changes in CMS reimbursement rates or other reimbursement rates;
	●	circumstances affecting our ability to provide our products, including weather events, supply shortages, or regulatory or other circumstances that adversely affect our ability to manufacture our products or process tests in our clinical laboratory;
	●	fluctuations in the amount and timing of our selling and marketing costs and our ability to manage costs and expenses and effectively implement our business; and
	●	our research and development activities, including the timing of costly clinical trials.

	●	require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness;
	●	limit, among other things, our ability to borrow additional funds and otherwise raise additional capital, and our ability to conduct acquisitions, joint, ventures or similar arrangements, as a result of our obligations to make such payments and comply with the restrictive covenants in the indebtedness;
	●	limit our flexibility in planning for, or reacting to, changes in our businesses and the industries in which we operate;
	●	increase our vulnerability to general adverse economic and industry conditions; and
	●	place us at a competitive disadvantage compared to our competitors that have lower fixed costs.

	●	the effectiveness, reliability and safety of our products, including any potential side effects, and the other competitive features of our products, including price, as compared to alternatives;
	●	the rate of adoption of our products by hospitals, doctors and nurses and acceptance by the health care community, and the ease of the ordering process for doctors;
	●	guidelines and other recommendations from medical societies and other similar organizations relating to screening for, monitoring, diagnosing and treating esophageal precancer and cancer or other medical conditions for which our products are used;
	●	the product labeling or product inserts required by regulatory authorities for each of our products;
	●	the availability and amount of insurance or other third-party reimbursement, such as Medicare, for patients using our products;
	●	the extent and success of our marketing efforts and those of our collaborators;
	●	unfavorable publicity concerning our products or similar products; and
	●	in the case of FDA PMA approval of the EsoGuard combined with EsoCheck as an IVD device, and in the case of any other products or services we may develop in the future, the timing of regulatory approvals of our products and market entry compared to competitive products.

	●	challenges associated with cultural differences, languages and distance;
	●	differences in clinical practices, needs, products, modalities and preferences;
	●	longer payment cycles in some countries;
	●	credit risks of many kinds;
	●	legal and regulatory differences and restrictions;
	●	currency exchange fluctuations;
	●	foreign exchange controls that might prevent us from repatriating cash earned in certain countries;
	●	political and economic instability and export restrictions;
	●	variability in sterilization requirements for multi-usage surgical devices;
	●	potential adverse tax consequences;
	●	higher cost associated with doing business internationally;
	●	challenges in implementing educational programs required by our approach to doing business;
	●	negative economic developments in economies around the world and the instability of governments, including the threat of war, terrorist attacks, epidemic or civil unrest;
	●	adverse changes in laws and governmental policies, especially those affecting trade and investment;
	●	health epidemics and /or pandemics, such as the epidemics resulting from the Ebola virus, or the enterovirus, or the avian influenza virus, or the pandemic resulting from a novel strain of a coronavirus designated “Severe Acute Respiratory Syndrome Coronavirus 2” - or “SARS-CoV-2”, which may adversely affect our workforce as well as our local suppliers and customers;
	●	import or export licensing requirements imposed by governments;
	●	differing labor standards;
	●	differing levels of protection of intellectual property;
	●	the threat that our operations or property could be subject to nationalization and expropriation;
	●	varying practices of the regulatory, tax, judicial and administrative bodies in the jurisdictions where we operate; and
	●	potentially burdensome taxation and changes in foreign tax.

	●	a future product may not be deemed to be safe and effective;
	●	FDA officials may not find the data from clinical and preclinical studies sufficient;
	●	FDA may not approve our or our third-party manufacturer’s processes or facilities; or
	●	FDA may change its clearance or approval policies or adopt new regulations.

	●	test ordering and billing practices;
	●	marketing, sales and pricing practices;
	●	health information privacy and security, including the Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and comparable state laws;
	●	insurance;
	●	anti-markup legislation; and
	●	consumer protection.

	●	the federal healthcare program Anti-Kickback Statute, which prohibits, among other things, any person from knowingly and willfully offering, soliciting, receiving, or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs, such as the Medicare and Medicaid programs;
	●	the U.S. Foreign Corrupt Practices Act, or “FCPA,” which prohibits payments or the provision of anything of value to foreign officials for the purpose of obtaining or keeping business;
	●	the federal False Claims Act, or “FCA,” which prohibits, among other things, individuals or entities from knowingly presenting, or causing to be presented, false claims, or knowingly using false statements, to obtain payment from the federal government, and which may apply to entities like us which provide coding and billing advice to customers;
	●	federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;
	●	the federal transparency requirements under the Health Care Reform Law requires manufacturers of drugs, devices, biologics and medical supplies to report to the Department of Health and Human Services information related to physician payments and other transfers of value and physician ownership and investment interests;
	●	the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, which governs the conduct of certain electronic healthcare transactions and protects the security and privacy of protected health information, and
	●	state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers.

	●	disputes among payors as to which payor is responsible for payment;
	●	disparity in coverage among various payors or among various healthcare plans offered by a single payor;
	●	payer medical management requirements, including prior authorization requirements;
	●	differing information and billing requirements among payors; and
	●	failure by patients or physicians to provide complete and correct billing information.

	●	our ability to set a price that we believe is fair for our products;
	●	our ability to generate revenue and achieve or maintain profitability; and
	●	the availability of capital.

	●	decreased demand for our products;
	●	injury to our reputation and significant negative media attention;
	●	withdrawal of patients from clinical studies or cancellation of studies;
	●	significant costs to defend the related litigation and distraction to our management team;
	●	substantial monetary awards to patients;
	●	loss of revenue; and
	●	the inability to commercialize any products that we may develop.

	●	the circumstances under which uses and disclosures of PHI are permitted or required without a specific authorization by the patient, including but not limited to treatment purposes, activities to obtain payments for our services, and our healthcare operations activities;
	●	a patient’s rights to access, amend and receive an accounting of certain disclosures of PHI;
	●	requirements to notify individuals if there is a breach of their PHI;
	●	the contents of notices of privacy practices for PHI;
	●	administrative, technical and physical safeguards required of entities that use or receive PHI; and
	●	the protection of computing systems maintaining electronic PHI.

	●	increase the cost of our products;
	●	be expensive and/or time consuming to defend;
	●	result in our being required to pay significant damages to third parties;
	●	force us to cease making or selling products that incorporate the challenged intellectual property;
	●	require us to redesign, reengineer or rebrand our products and technologies;
	●	require us to enter into royalty or licensing agreements in order to obtain the right to use a third party’s intellectual property on terms that may not be favorable or acceptable to us;
	●	require us to develop alternative non-infringing technology, which could require significant effort and expense;
	●	require us to indemnify third parties pursuant to contracts in which we have agreed to provide indemnification for intellectual property infringement claims;
	●	result in our customers or potential customers deferring or limiting their purchase or use of the affected products impacted by the claims until the claims are resolved; and
	●	otherwise have a material adverse effect on our business.

	●	employee allocation, retention and recruiting;
	●	the nature, quality, and pricing of the services PAVmed has agreed to provide us; and
	●	business opportunities that may be attractive to both PAVmed and us.

	●	a limited availability of market quotations for our common stock;
	●	reduced liquidity with respect to our common stock;
	●	a determination that our shares of common stock are “penny stock” which will require brokers trading in our shares of common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our shares of common stock;
	●	a limited amount of news and analyst coverage for our company; and
	●	a decreased ability to issue additional securities or obtain additional financing in the future.

	●	our Board of Directors will have the right to elect directors to fill a vacancy created by the expansion of our Board of Directors or the resignation, death or removal of a director, which will prevent stockholders from being able to fill vacancies on our Board of Directors;
	●	our certificate of incorporation will not permit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; and
	●	our stockholders will be required to provide advance notice and additional disclosures in order to nominate individuals for election to our Board of Directors or to propose matters that can be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company.

	●	costs associated with regulatory filings;
	●	patent license fees;
	●	cost of laboratory supplies and acquiring, developing, and manufacturing preclinical prototypes; and
	●	MSA Fee allocated to research and development.