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of the date of this Current Report, the Company updates and supplements the risk factors disclosed
in its Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on March 3, 2023, as
supplemented and updated by the risk factors disclosed in the Company's Quarterly Reports on Form 10-Q for the quarterly periods
ended March 30, 2023, June 30, 2023, and September 30, 2023 filed with the SEC on May 15, 2023, August 9, 2023,
and November 9, 2023, respectively, with the following risk factor. Any of the risk factors disclosed in the Company's Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, proxy statements on Schedule 14A or herein could result in a significant
or material adverse effect on the results of operations or financial condition of the Company. Additional risk factors not presently
known to the Company or that it currently deems immaterial may also impair the Company's business or results of operations. The
Company may disclose changes to such risk factors or disclose additional risk factors from time to time in future filings with the SEC.
Risks Related to the Company's Business
Our current business plans require a significant amount of capital.
If we are unable to obtain sufficient funding or do not have access to capital, we may not be able to execute our business plans and our
prospects, financial condition and results of operations could be materially adversely affected.
We have experienced operating losses and expect to continue to incur
operating losses as we implement our business plans. We anticipate making significant capital expenditures for the foreseeable future
as we expand our business, including the development of new hospital facilities and acquisition of additional IPAs.
In addition to the net proceeds from this offering, we expect to continue
to seek other sources of funding, including by offering additional equity, and/or equity-linked securities, through one or more credit
facilities and potentially by offering debt securities, to finance a portion of our future expenditures.
The sale of additional equity or equity-linked securities could dilute
our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and
financing covenants that would restrict our operations or our ability to pay dividends to our stockholders. Our ability to obtain the
necessary additional financing to carry out our business plans or to refinance, if necessary, any outstanding debt when due is subject
to a number of factors, including general market conditions and investor acceptance of our business model. These factors may make the
timing, amount, terms and conditions of such financing not commercially viable or unavailable to us.
If we are unable to raise sufficient funds on favorable terms, we may
have to significantly reduce our spending, delay or cancel our planned activities or substantially change our corporate structure. We
may not be able to obtain any such funding or have sufficient resources to conduct our business as projected, both of which could
mean that we would be forced to curtail or discontinue our operations and our business, financial condition and results of operation could
be materially adversely affected.
We may decide to close underperforming hospitals which may result
in a temporary decrease in overall revenues.
In the ordinary course of business, we continuously review the individual
performance of each of our hospital facilities. We have historically closed underperforming facilities, as disclosed under "Subsequent
Events" in our Annual Report on Form 10-K for the year ended December 31, 2022, and in our most recent Quarterly Report
on Form 10-Q for the period ended September 30, 2023. At this time, our board has not made any determinations with respect to
potential additional hospital facilities closures, however, our commitment to providing high-quality healthcare services demands that
we continually assess the performance of our hospitals. In some instances, we may find it necessary to make the difficult decision
to close underperforming facilities. This could be due to various factors such as declining patient admissions, increasing operational
costs, or changes in healthcare regulations. The closure of any hospital within our portfolio carries inherent risks, including a potential
negative impact on our overall revenues. The closure process may involve staff reallocation or severance, and asset dispositions, all
of which can be complex and costly. Additionally, the closure of a hospital may temporarily disrupt patient referrals and relationships
with healthcare providers in the affected region.
While we believe that such strategic decisions are essential for the
long-term sustainability of our organization and the continued provision of high-quality care, there is a risk that the closure of underperforming
hospitals could lead to a short-term decrease in our overall revenues. This revenue decline may occur due to the time it takes to execute
the closure process as well as potential legal or regulatory challenges associated with hospital closures.
Investors should be aware that the closure of underperforming hospitals
is part of our ongoing effort to optimize our operations and improve financial performance. While we intend to carefully plan and execute
our closure strategies, there can be no assurance that such strategies will successfully offset the temporary revenue decrease resulting
from hospital closures.
It is important for investors to consider this risk factor when assessing
our financial performance and prospects. We encourage investors to review our financial disclosures and updates to stay informed about
any significant developments related to hospital closures and their potential impact on our business.
Reimbursement for our medical services is subject to change,
and the reimbursement that we receive for emergency services could be subject to a significant and sustained decline.
Because we provide emergency medicine services, we do not have extensive
relationships with large commercial payors and are generally out-of-network. Although some licensed facilities are in-network with payors,
the Company's general payor contracting/government enrollment strategy is to remain out of network. Since we do not have any contractual
arrangements with insurance companies, we cannot predict the timing and amount of the payments we ultimately receive for our services
and estimates and assumptions, which are based on historical insurance payment amounts and timing.
In addition, as a result of the NSA becoming effective on January 1,
2022, and the implementation of related regulations, we experienced a significant decline in
collections of patient claims for emergency services and have had only limited success at achieving collections at or higher than the
established qualifying payment amount, which is the median in-network contracted rate for the same insurance market. Any sustained
decline in the collections we receive for our emergency services could have a material adverse effect on our operations and financial
performance and may negatively affect the trading value of our Common Stock.
Although we believe that the funds we
raise in our recent offering will allow us to generate sufficient funds from operations, if that is not the case, we may have to
raise additional capital which may not be available or may be too costly, which, if we cannot obtain, could keep us from executing
our business strategy.
We expect that the funds we raise in this offering will
allow us to maintain a positive cash flow. However, if that does not turn out to be the case, our capital requirements could be more than
our operating income. We do not have sufficient cash to indefinitely sustain operating losses but believe the funds raised in this offering
may help maintain a positive cash flow. Our potential profitability depends on our ability to collaborate with and expand the number of
highly qualified physicians and other healthcare professionals and the demand for the services we provide. We may not operate on a profitable
basis or believe that cash flow from operations will be enough to pay our operating costs. We anticipate that the funds raised in this
offering will be sufficient to fund our planned growth for the year assuming we raise the minimum amount in this offering. Thereafter,
if we do not achieve profitability, we will need to raise additional capital to finance our operations. We have no current or proposed
financing plans or arrangements other than this offering. We could seek additional financing through debt or equity offerings. Additional
financing may not be available to us, or, if available, may be on terms unacceptable or unfavorable to us. If we need and cannot raise
additional funds, further development of our business, upgrades in our technology, or opening of additional facilities may be delayed
or postponed indefinitely; if this happens, the value of your investment could decline or become worthless.
Recent healthcare regulations, and other changes in the healthcare
industry and in healthcare spending may adversely affect our business, financial condition and results of operations.
The impact on us of recent healthcare regulations, related court challenges
and uncertainties with respect to the implementation of court mandates related to the reimbursement process, other changes in the healthcare
industry and in healthcare spending may adversely affect our business, financial condition and results of operations. Our revenue is dependent
on healthcare spending, reimbursement regulations and policy.
On January 1, 2022, the No Surprises Act ("NSA") and
associated regulations became effective. As a result, during 2022, we experienced a significant
decline in collections of patient claims for emergency services and have had only limited success at achieving collections at or higher
than the established qualifying payment amount, which is the median in-network contracted rate for the same insurance market.
While numerous legal challenges to the reimbursement related regulated regulations have recently resulted in favorable outcomes, we cannot
predict whether the rules proposed by Department of Health and Human Services on October 27, 2023 will make the federal independent
dispute resolution process more favorable to us. Any sustained decline in the reimbursements we receive for our emergency services could
have a material adverse effect on our operations and financial performance and may negatively affect the trading value of our Common Stock.
In addition, the Affordable Care Act ("ACA"), which was
enacted in 2010, made major changes in how healthcare is delivered and reimbursed, and it increased access to health insurance benefits
to the uninsured and underinsured populations of the United States. Since its enactment, there have been judicial, executive and Congressional