UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
FOR
THE QUARTERLY PERIOD ENDED:
OR
FOR THE TRANSITION PERIOD FROM __________ TO __________
Commission
File Number
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices, Zip Code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☐ | Accelerated filer ☐ | ||
Smaller
reporting company |
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Emerging
growth company |
If an emerging growth company, indicate by check mark if the company has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of November 13, 2024, there were shares of the registrant’s common stock outstanding.
TABLE OF CONTENTS
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PART I – FINANCIAL INFORMATION
VIVOS INC
CONDENSED BALANCE SHEETS
SEPTEMBER 30, 2024 (UNAUDITED) AND DECEMBER 31, 2023
SEPTEMBER 30, | DECEMBER 31, | |||||||
2024 | 2023 | |||||||
(UNAUDITED) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash | $ | $ | ||||||
Accounts receivable | ||||||||
Prepaid expenses | ||||||||
Total Current Assets | ||||||||
TOTAL ASSETS | $ | $ | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
LIABILITIES | ||||||||
Current Liabilities: | ||||||||
Accounts payable and accrued expenses | $ | $ | ||||||
Total Current Liabilities | ||||||||
Total Liabilities | ||||||||
Commitments and contingencies | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||
Preferred stock, par value, $ , shares authorized, Series A Convertible Preferred, shares authorized, shares issued and outstanding, respectively | |
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Additional paid in capital - Series A Convertible preferred stock | ||||||||
Series B Convertible Preferred, shares authorized, shares issued and outstanding, respectively | |
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Additional paid in capital - Series B Convertible preferred stock | ||||||||
Series C Convertible Preferred, shares authorized, shares issued and outstanding, respectively | |
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Additional paid in capital - Series C Convertible preferred stock | ||||||||
Common stock, par value, $ , shares authorized, and issued and outstanding, respectively | |
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Additional paid in capital - common stock | ||||||||
Accumulated deficit | ( | ) | ( | ) | ||||
Total Stockholders’ Equity | ||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ |
1 |
VIVOS INC
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
NINE MONTHS ENDED | THREE MONTHS ENDED | |||||||||||||||
SEPTEMBER 30, | SEPTEMBER 30, | SEPTEMBER 30, | SEPTEMBER 30, | |||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Revenues, net | $ | $ | $ | $ | ||||||||||||
Cost of Goods Sold | ( | ) | ( | ) | ( | ) | ||||||||||
Gross profit | ||||||||||||||||
OPERATING EXPENSES | ||||||||||||||||
Professional fees, including stock-based compensation | ||||||||||||||||
Payroll expenses | ||||||||||||||||
Research and development | ||||||||||||||||
General and administrative expenses | ||||||||||||||||
Total Operating Expenses | ||||||||||||||||
OPERATING LOSS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
NON-OPERATING INCOME (EXPENSE) | ||||||||||||||||
Interest income | ||||||||||||||||
Total Non-Operating Income (Expenses) | ||||||||||||||||
NET LOSS BEFORE PROVISION FOR INCOME TAXES | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Provision for income taxes | ||||||||||||||||
NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Net loss per share - basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
Weighted average common shares outstanding |
2 |
VIVOS INC
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
Additional | Additional | Additional | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Paid-In | Paid-In | Paid-In | Additional | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A Preferred | Capital
- Series A | Series B Preferred | Capital
- Series B | Series C Preferred | Capital
- Series C | Common Stock | Paid-In Capital - | Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Preferred | Shares | Amount | Preferred | Shares | Amount | Preferred | Shares | Amount | Common | Deficit | Total | |||||||||||||||||||||||||||||||||||||||||||
Balance - December 31, 2022 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||||||||
Net loss for the period | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance - March 31, 2023 | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock issued for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants purchased for cash | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
RSUs granted to consultants that have vested | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss for the period | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance - June 30, 2023 | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSUs granted to consultants that have vested | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss for the period | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance - September 30, 2023 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||||||||
Balance - December 31, 2023 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||||||||
Stock issued for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Services | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants purchased for cash | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
RSUs granted to consultants that have vested | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss for the period | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance - March 31, 2024 | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock issued for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Services | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cashless exercise of warrants | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants purchased for cash | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
RSUs granted to consultants that have vested | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss for the period | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance - June 30, 2024 | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock issued for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Services | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cashless exercise of warrants | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Vested RSUs | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment for vested RSUs | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
RSUs granted to consultants that have vested | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss for the period | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance - September 30, 2024 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ |
The accompanying notes are an integral part of these unaudited condensed financial statements.
3 |
VIVOS INC
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
2024 | 2023 | |||||||
CASH FLOW FROM OPERTING ACTIVIITES | ||||||||
Net loss | $ | ( | ) | $ | ( | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
Common stock, stock options and warrants for services | ||||||||
RSUs issued for services | ||||||||
Changes in assets and liabilities | ||||||||
Accounts receivable | ||||||||
Prepaid expenses and other assets | ( | ) | ||||||
Accounts payable and accrued expenses | ( | ) | ||||||
Total adjustments | ||||||||
Net cash used in operating activities | ( | ) | ( | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITES | ||||||||
Proceeds from short-term advances from related party | ||||||||
Proceeds from common stock and warrants | ||||||||
Net cash provided by financing activities | ||||||||
NET (DECREASE) IN CASH | ( | ) | ( | ) | ||||
CASH - BEGINNING OF PERIOD | ||||||||
CASH - END OF PERIOD | $ | $ | ||||||
CASH PAID DURING THE PERIOD FOR: | ||||||||
Interest expense | $ | $ | ||||||
Income taxes | $ | $ |
4 |
VIVOS INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
NOTE 1: BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying condensed financial statements of Vivos Inc. (the “Company”) have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures required by accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. These condensed financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the results of operations of the Company for the period presented. The results of operations for the nine months ended September 30, 2024, are not necessarily indicative of the results that may be expected for any future period or the fiscal year ending December 31, 2024 and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 18, 2024.
Business Overview
The Company was incorporated under the laws of Delaware on December 23, 1994 as Savage Mountain Sports Corporation (“SMSC”). On September 6, 2006, the Company changed its name to Advanced Medical Isotope Corporation, and on December 28, 2017, the Company began operating as Vivos Inc. The Company has authorized capital of shares of common stock (“Common Stock”), $ par value per share, and shares of preferred stock (“Preferred Stock”), $ par value per share.
Our principal place of business is located at 1030 North Center Parkway, Kennewick, WA 99336. Our telephone number is (509) 222-2222. Our corporate website address is http://www.radiogel.com. Our Common Stock is currently quoted on the OTC Pink Marketplace under the symbol “RDGL.”
The Company is a radiation oncology medical device company engaged in the development of its yttrium-90 based brachytherapy device, RadioGel™, for the treatment of non-resectable tumors. A prominent team of radiochemists, scientists and engineers, collaborating with strategic partners, including national laboratories, universities and private corporations, lead the Company’s development efforts. The Company’s overall vision is to globally empower physicians, medical researchers, and patients by providing them with new isotope technologies that offer safe and effective treatments for cancer.
In January 2018, the Center for Veterinary Medicine Product Classification Group ruled that RadioGel ™should be classified as a device for animal therapy of feline sarcomas and canine soft tissue sarcomas. Additionally, after a legal review, the Company believes that the device classification obtained from the Food and Drug Administration (“FDA”) Center for Veterinary Medicine is not limited to canine and feline sarcomas, but rather may be extended to a much broader population of veterinary cancers, including all or most solid tumors in animals. We expect the result of such classification and label review will be that no additional regulatory approvals are necessary for the use of IsoPet® for the treatment of solid tumors in animals. The FDA does not have premarket authority over devices with a veterinary classification, and the manufacturers are responsible for assuring that the product is safe, effective, properly labeled, and otherwise in compliance with all applicable laws and regulations.
Based on the FDA’s recommendation, RadioGel™ will be marketed as “IsoPet®” for use by veterinarians to avoid any confusion between animal and human therapy. The Company already has trademark protection for the “IsoPet®” name. IsoPet® and RadioGel™ are used synonymously throughout this document. The only distinction between IsoPet® and RadioGel™ is the FDA’s recommendation that we use “IsoPet®” for veterinarian usage, and reserve “RadioGel™” for human therapy. Based on these developments, the Company has shifted its primary focus to the development and marketing of Isopet® for animal therapy, through the Company’s IsoPet® Solutions division.
IsoPet Solutions
The Company’s IsoPet Solutions division was established in May 2016 to focus on the veterinary oncology market, namely engagement of university veterinarian hospitals to develop the detailed therapy procedures to treat animal tumors and ultimately use of the technology in private clinics. The Company has worked with three different university veterinarian hospitals on IsoPet® testing and therapy. Washington State University treated five cats for feline sarcoma and served to develop the procedures which are incorporated in our label. They concluded that the product was safe and effective in killing cancer cells. Colorado State University demonstrated the CT and PET-CT imaging of IsoPet®. A contract was signed with University of Missouri to treat canine sarcomas and equine sarcoids starting in November 2017.
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The dogs were treated for canine soft tissue sarcoma. Response evaluation criteria in solid tumors (“RECIST”) is a set of published rules that define when tumors in cancer patients improve (respond), stay the same (stabilize), or worsen (progress) during treatment. The criteria were published by an international collaboration including the European Organisation for Research and Treatment of Cancer (“EORTC”), National Cancer Institute of the United States, and the National Cancer Institute of Canada Clinical Trials Group.
The testing at the University of Missouri met its objective to demonstrate the safety of IsoPet®. Using its advanced CT and PET equipment it was able to demonstrate that the dose calculations were accurate and that the injections perfused into the cell interstices and did not stay concentrated in a bolus. This results in a more homogeneous dose distribution. There was insignificant spread of Y-90 outside the points of injection demonstrating the effectiveness of the particles and the gel to localize the radiation with no spreading to the blood or other organs nor to urine or fecal material. This confirms that IsoPet® is safe for same day therapy.
The effectiveness of IsoPet® for life extension was not the prime objective, but it resulted in valuable insights. Of the cases one is still cancer-free but the others eventually recurred since there was not a strong focus on treating the margins. The University of Missouri has agreed to become a regional center to administer IsoPet® therapy and will incorporate the improvements suggested by the testing program.
The Company anticipates that future profits, if any, will be derived from direct sales of RadioGel™ (under the name IsoPet®) and related services, and from licensing to private medical and veterinary clinics in the United States of America (the “USA”, or, the “U.S.”) and internationally. The Company intends to report the results from the IsoPet® Solutions division as a separate operating segment in accordance with generally accepted accounting principles (“GAAP”).
Commencing in July 2019, the Company recognized its first commercial sale of IsoPet®. A veterinarian from Alaska brought his cat with a re-occurrent spindle cell sarcoma tumor on his face. The cat had previously received external beam therapy, but now the tumor was growing rapidly. He was given a high dose of 400 Gray with heavy therapy at the margins. This sale met the revenue recognition requirements under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606 – Revenue from Contracts with Customers (“ASC 606”) as the performance obligation was satisfied. The Company completed sales for an additional four animals that received the IsoPet® during 2019.
Our plan is to incorporate the data assembled from our work with Isopet® in animal therapy to support the Company’s efforts in the development of our RadioGel™ device candidate, including obtaining approval from the FDA to market and sell RadioGel™ as a Class II medical device. RadioGel™ is an injectable particle-gel for brachytherapy radiation treatment of cancerous tumors in people and animals. RadioGel™ is comprised of a hydrogel, or a substance that is liquid at room temperature and then gels when reaching body temperature after injection into a tumor. In the gel are small particles, less than two microns, of Y-90. Once injected, these inert particles are locked in place inside the tumor by the gel, delivering a very high local radiation dose. The radiation is beta, consisting of high-speed electrons. These electrons only travel a short distance so the device can deliver high radiation to the tumor with minimal dose to the surrounding tissue. Optimally, patients can go home immediately following treatment without the risk of radiation exposure to family members. Since Y-90 has a half-life of 2.7 days, the radioactivity drops to 5% of its original value after ten days.
The Company modified its Indication for Use from skin cancel to cancerous tissue or solid tumors pathologically associated with locoregional papillary thyroid carcinoma and recurrent papillary thyroid carcinoma having discernable tumors associated with metastatic lymph nodes or extranodal disease in patients who are not surgical candidates or who have declined surgery, or patients who require post-surgical remnant ablation (for example, after prior incomplete radioiodine therapy). Papillary thyroid carcinoma belongs to the general class of head and neck tumors for which tumors are accessible by intraoperative direct needle injection. The Company’s Medical Advisory Board felt that demonstrating efficacy in clinical trials was much easier with this new indication.
In the third quarter of 2024, the Company entered the market of treating exotic animals by treating a ferret. The Company also has established important contacts at zoos and used conferences to communicate the effectiveness of Precision Radionuclide Therapy TM to the zoo community.
The Company intends to conduct human trials internationally, initially in Southeast Asia. These trials will be initiated prior to trials in the United States, and will be conducted under a protocol consistent with and complimentary to the IDE and human trial roadmap in the United States.
Intellectual Property
Our original license with Battelle National Laboratory (the “Battelle License”) reached its end of life in 2022. During the past several years, we have expanded our proprietary knowledge, as well as our trademark and patent protection, in anticipation of the Battelle License reaching the end of its term.
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Our RadioGel™ trademark protection is in 17 countries. We have expanded our trademark protection from RadioGel™ to now include IsoPet®. We obtained the International Certificate of Registration for ISOPET, which is the first step to file in several countries.
We have filed for trademark protection for the term Precision Radionuclide Therapy™. We believe this term will be increasingly important.
The Company received the Patent Cooperation Treaty (“PCT”) International Search Report on our patent application (No.1811.191). Seven of our claims were immediately ruled as having novelty, inventive step and industrial applicability. This gives us the basis to extend for many years the patent protection for our proprietary Y-90 phosphate particles utilized in Isopet® and Radiogel™.
Our patent team filed our particle patent in more than ten patent offices that collectively cover 63 countries throughout the world. We filed a continuation-in-part applications number 1774054 in the USA to expand the claims on our particle patent. The U.S. Patent office recently gave us the Notice of Allowance for our patent to produce our yttrium phosphate microparticles, U.S. Patent Application Serial No: 16-459,466. We also filed an amendment to correct the wording on our claims at make them consistent with the USE claims. Ref: 4207-0005; European Patent Application NO. 20 834 229.5; VIVOS INC; Our Ref: FS/53791.
We filed a hydrogel utility patent in the USA (16309:17/943,311) and internationally (16389:PCT/US22/4374) based on the last 18 months of development work to optimize our hydrogel component. These include reducing the polymer production time and increasing the output by a factor of three. We have also further reduced the level of trace contaminants to be well below the FDA guidelines.
We filed a provisional patent (Serial Number 63436562) to protect our innovative improvements in our shipping container, our vial shield, our syringe shield, and our Peltier chiller. Our objectives were to reduce shipping costs, decrease radiation exposure, and enhance sterility. These devices will be preferentially used at Mayo Clinics for human clinical studies at our IsoPet regional treatment centers. The Company filed a utility patent in the fourth quarter of 2023 for this therapy support equipment.
We anticipate that Precision Radionuclide Therapy will become increasingly important in the future and expand to other isotope and other indications for use. Therefore, we filed an alternate particle utility patent (Serial number 18/152,137). We will focus our near-term effort on the Y-90 therapy, which we believe is the best beta emitter; however, we leveraged our hydrogel utility patent to incorporate other promising isotopes and compounds for a range of future applications. This includes gamma and alpha particle emitters.
We have trademark protection in several countries on IsoPet®, RadioGel®, Precision Radionuclide TherapyTM, BetaGelTM, GammaGelTM, and AlphaGelTM.
Going Concern
The
accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction
of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has suffered recurring
losses and used significant cash in support of its operating activities and the Company’s cash position is not sufficient to support
the Company’s operations. Research and development of the Company’s brachytherapy product line has been funded with proceeds
from the sale of equity and debt securities as well as a series of grants. The Company requires funding of approximately $
Financing and Strategy
In
November 2019, the SEC qualified the Company’s offering of its Common Stock, under Regulation A of Section 3(6) of the Securities
Act of 1933, as amended (the “Securities Act”) (“Regulation A”), which offering was and amended
from time to time thereafter (the “2019 Regulation A+ Offering”). In September 2021, the SEC qualified the Company’s
offering of Common Stock under Regulation A, which offering was amended from time to time thereafter (together with the 2019 Regulation
A+ Offering, the “Prior Regulation A+ Offerings”). During the year ended December 31, 2023, $
7 |
On
July 17, 2024, the SEC qualified the Company’s offering under Regulation A to offer up to $
The Company is using the proceeds generated from the Prior Regulation A+ Offering and the July 2024 Regulation A+ Offering as follows:
Research
and development of the Company’s brachytherapy product line has been funded with proceeds from the sale of equity and debt securities.
The Company may require additional funding of approximately $
The continued deployment of the brachytherapy products and a worldwide regulatory approval effort will require additional resources and personnel. The principal variables in the timing and amount of spending for the brachytherapy products in the next 12 to 24 months will be the FDA’s classification of the Company’s brachytherapy products as Class II or Class III devices (or otherwise), and any requirements for additional studies (which may possibly include clinical studies). Thereafter, the principal variables in the amount of the Company’s spending and its financing requirements would be: (1) the timing of any approvals; (2) the nature of the Company’s arrangements with third parties for manufacturing, sales, distribution, and licensing of those products; and (3) the products’ success in the U.S. and elsewhere. The Company intends to fund its activities through strategic transactions such as licensing and partnership agreements, as well as proceeds to be raised from the Regulation A+ Offerings.
Following receipt of required regulatory approvals and necessary financing to fund our working capital requirements, the Company intends to outsource material aspects of manufacturing, distribution, sales, and marketing for operations within the U.S. Outside of the U.S., the Company intends to pursue licensing arrangements and/or partnerships to facilitate its global commercialization strategy.
Long-term, the Company intends to consider resuming research efforts with respect to other products and technologies intended to help improve the diagnosis and treatment of cancer and other illnesses. These long-term goals are subject to the Company: (1) receiving adequate funding; (2) receiving regulatory approval for RadioGel™ and other brachytherapy products; and (3) being able to successfully commercialize its brachytherapy products.
Based on the Company’s financial history since inception, the Company’s independent registered public accounting firm has expressed substantial doubt as to the Company’s ability to continue as a going concern. The Company has limited revenue, nominal cash, and has accumulated deficits since inception. If the Company cannot obtain sufficient additional capital, the Company will be required to delay the implementation of its business strategy and may not be able to continue operations.
The Company’s headquarters are in Northeast Washington, however, our focus on the animal therapy market has been the Northwestern sector of the U.S. The Company continues its marketing efforts on the animal therapy market and our attempts to increase the exposure to our product, and generate revenue accordingly.
As
of September 30, 2024, the Company had $
8 |
The Company anticipates using the proceeds from the July 2024 Regulation A+ Offering as follows:
For the animal therapy market:
● | Expand communication on our website, the Company’s social media presence, conferences, and journals, each intended to increase the number of certified clinics for small animal and equine therapy and to increase the number of patients. | |
● | Subsidize some IsoPet® therapies, if necessary, to ensure that all viable candidates are treated; and. | |
● | Assist a new regional clinic with their license and certification training. |
For the human market:
● | Enhance the pedigree of the Quality Management System. | |
● | Begin automation of product manufacturing. | |
● | Fund liability insurance for human clinical studies; and. | |
● | Fund human clinical studies in the US. |
Research
and development of the Company’s precision radionuclide therapy product line has been funded with proceeds from the sale of equity
and debt securities, including from the Prior Regulation A+ Offerings. The Company requires additional funding of approximately $
The continued deployment of the precision radionuclide therapy products and a worldwide regulatory approval effort will require additional resources and personnel. The principal variables in the timing and amount of spending for the precision radionuclide therapy products in the next 12 to 24 months will be the FDA’s classification of the Company’s precision radionuclide therapy products as Class II or Class III devices (or otherwise) and any requirements for additional studies which may possibly include clinical studies. Thereafter, the principal variables in the amount of the Company’s spending and its financing requirements would be the timing of any approvals and the nature of the Company’s arrangements with third parties for manufacturing, sales, distribution and licensing of those products and the products’ success in the U.S. and elsewhere. The Company intends to fund its activities through strategic transactions such as licensing and partnership agreements or from proceeds raised from the Prior Regulation A+ Offering and from the July 2024 Regulation A+ Offering.
The Company intends to expand the indications for use in phases: first, for lymph nodes associated with thyroid cancer, secondly, cancerous lung nodules, and finally, all non-sectable solid tumors. It is anticipated that the medical community may begin to use RadioGel off-label, we will support but will not encourage that practice.
Following receipt of required regulatory approvals and financing, in the U.S., the Company intends to outsource material aspects of manufacturing, distribution, sales and marketing. Outside of the U.S., the Company intends to pursue licensing arrangements and/or partnerships to facilitate its global commercialization strategy.
Long-term, the Company intends to consider resuming research efforts with respect to other products and technologies, such as Gamma Gel and Alpha Gel intended to help improve the diagnosis and treatment of cancer and other illnesses. These long-term goals are subject to the Company: (1) receiving adequate funding; (2) receiving regulatory approval for RadioGel™ and other precision radionuclide therapy products; and (3) being able to successfully commercialize its precision radionuclide therapy products.
Based on the Company’s financial history since inception, the Company’s independent registered public accounting firm has expressed substantial doubt as to the Company’s ability to continue as a going concern. The Company has limited revenue, nominal cash, and has accumulated deficits since inception. If the Company cannot obtain sufficient additional capital, the Company will be required to delay the implementation of its business strategy and may not be able to continue operations.
The Company’s headquarters are in the State of Washington., The initial focus of the animal therapy market has been the Northwestern sector of the United States. The Company has initiated marketing efforts to the animal therapy market in other regions of the United States, attempting to increase the exposure to our product and increase revenue opportunities.
9 |
There are currently commitments to vendors for products and services purchased. To continue the development of the Company’s products, the current level of cash will not be enough to cover the fixed and variable obligations of the Company. The Company has focused on operating on minimum overhead, including using a virtual office for the last several years and retaining experienced industry consultants available on an as needed basis. This has helped focus the capital received from the Company’s Regulation A+ Offerings on activities that enhance our objectives.
There is no guarantee that the Company will be able to raise additional funds or to do so on terms advantageous to the Company’s stockholders.
The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability. The Company plans to seek additional funding to maintain its operations through debt and equity financing and to improve operating performance through a focus on strategic products and increased efficiencies in business processes and improvements to the cost structure. There can be no assurance that the Company will be successful in its efforts to raise additional working capital or achieve profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Use of Estimates
The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amount of revenue and expense during the reporting period. Estimates the Company considers include criteria for stock-based compensation expense, and valuation allowances on deferred tax assets. Actual results could differ from those estimates.
Financial Statement Reclassification
Certain account balances from prior periods have been reclassified in these financial statements so as to conform to current period classifications.
Cash Equivalents
For the purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.
The Company occasionally maintains cash balances in excess of the FDIC insured limit. The Company does not consider this risk to be material.
Fair Value of Financial Instruments
Fair value of financial instruments requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2024 and December 31, 2023, the balances reported for cash, prepaid expense, accounts receivable, accounts payable, and accrued expense, approximate the fair value because of their short maturities.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting Standards Codification (“ASC”) Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:
Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
10 |
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
The Company measures certain financial instruments including options and warrants issued during the period at fair value on a recurring basis.
Patents and Intellectual Property
While
patents are being developed or pending, they are not being amortized. Management has determined that the economic life of the patents
to be ten years and amortization, over such
The Company evaluates the recoverability of intangible assets, including patents and intellectual property on a continual basis. Several factors are used to evaluate intangibles, including, but not limited to, management’s plans for future operations, recent operating results and projected and expected undiscounted future cash flows.
There have been no such capitalized costs in the three and nine months ended September 30, 2024 and 2023, respectively. However, a patent was filed on July 1, 2019 (No. 1811.191) filed by Michael Korenko and David Swanberg and assigned to the Company based on the Company’s proprietary particle manufacturing process. The timing of this filing was important given the Company’s plans to make IsoPet® commercially available, which it did on or about July 9, 2019. This additional patent protection will strengthen the Company’s competitive position. It is the Company’s intention to further extend this patent protection to several key countries within one year, as permitted under international patent laws and treaties.
Revenue Recognition
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). This standard provides a single set of guidelines for revenue recognition to be used across all industries and requires additional disclosures. The updated guidance introduces a five-step model to achieve its core principal of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the updated guidance effective January 1, 2018 using the full retrospective method.
Under ASC 606, in order to recognize revenue, the Company is required to identify an approved contract with commitments to perform respective obligations, identify rights of each party in the transaction regarding goods to be transferred, identify the payment terms for the goods transferred, verify that the contract has commercial substance and verify that collection of substantially all consideration is probable. The adoption of ASC 606 did not have an impact on the Company’s operations or cash flows.
The Company recognized revenue as they (i) identified the contracts with each customer; (ii) identified the performance obligation in each contract; (iii) determined the transaction price in each contract; (iv) were able to allocate the transaction price to the performance obligations in the contract; and (v) recognized revenue upon the satisfaction of the performance obligation. Upon the sales of the product to complete the procedures on the animals, the Company recognized revenue as that was considered the performance obligation.
All revenue recognized in the three and nine months ended September 30, 2024 and 2023 relate to the procedures performed with respect to the IsoPet® therapies.
The Company accounts for its loss per common share by replacing primary and fully diluted earnings per share with basic and diluted earnings per share. Basic loss per share is computed by dividing loss available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period, and does not include the impact of any potentially dilutive Common Stock equivalents since the impact would be anti-dilutive. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares had been issued. For the given periods of loss, of the periods ended in the nine months ended September 30, 2024 and 2023, the basic earnings per share equals the diluted earnings per share.
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September 30, 2024 | December 31, 2023 | |||||||
Preferred stock | ||||||||
Restricted stock units | ||||||||
Common stock options | ||||||||
Common stock warrants | ||||||||
Total potential dilutive securities |
Research and Development Costs
Research and developments costs, including salaries, research materials, administrative expense and contractor fees, are charged to operations as incurred. The cost of equipment used in research and development activities which has alternative uses is capitalized as part of fixed assets and not treated as an expense in the period acquired. Depreciation of capitalized equipment used to perform research and development is classified as research and development expense in the year computed.
The
Company incurred $
Advertising and Marketing Costs
Advertising and marketing costs are expensed as incurred except for the cost of tradeshows which are deferred until the tradeshow occurs. During the three and nine months ended September 30, 2024 and 2023, the Company incurred nominal advertising and marketing costs.
Contingencies
In the ordinary course of business, the Company is involved in legal proceedings involving contractual and employment relationships, product liability claims, patent rights, and a variety of other matters. The Company records contingent liabilities resulting from asserted and unasserted claims against it, when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. The Company discloses contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. Estimated probable losses require analysis of multiple factors, in some cases including judgments about the potential actions of third-party claimants and courts. Therefore, actual losses in any future period are inherently uncertain. The Company has entered into various agreements that require them to pay certain fees to consultants and/or employees that have been fully accrued for as of September 30, 2024 and December 31, 2023.
Income Taxes
To address accounting for uncertainty in tax positions, the Company clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. The Company also provides guidance on de-recognition, measurement, classification, interest, and penalties, accounting in interim periods, disclosure and transition.
The Company files income tax returns in the U.S. federal jurisdiction. The Company did not have any tax expense for the three and nine months ended September 30, 2024 and 2023. The Company did not have any deferred tax liability or asset on its balance sheets as of September 30, 2024 and December 31, 2023.
Interest costs and penalties related to income taxes, if any, will be classified as interest expense and general and administrative costs, respectively, in the Company’s financial statements. For the three and nine months ended September 30, 2024 and 2023, the Company did not recognize any interest or penalty expense related to income taxes. The Company believes that it is not reasonably possible for the amounts of unrecognized tax benefits to significantly increase or decrease within the next twelve months.
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The Company recognizes compensation costs under FASB ASC Topic 718, Compensation – Stock Compensation and ASU 2018-07. Companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.
Recent Accounting Pronouncements
The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.
NOTE 2: RELATED PARTY TRANSACTIONS
In
September 2023, our Chief Executive Officer advanced $
NOTE 3: STOCKHOLDERS’ EQUITY
Common Stock
The Company has authorized shares of Common Stock. As of September 30, 2024 and December 31, 2023, there are and shares of Common Stock issued and outstanding, respectively.
Preferred Stock
The Company has authorized shares of Preferred Stock. There are currently three series of Preferred Stock outstanding; Series A Convertible Preferred Stock, Series B Convertible Preferred Stock and Series C Convertible Preferred Stock. The Company’s Board of Directors is authorized to provide for the issuance of shares of Preferred Stock in one or more series, fix or alter the designations, preferences, rights, qualifications, limitations or restrictions of the shares of each series, including the dividend rights, dividend rates, conversion rights, voting rights, term of redemption including sinking fund provisions, redemption price or prices, liquidation preferences and the number of shares constituting any series or designations of such series without further vote or action by the shareholders. The issuance of Preferred Stock may have the effect of delaying, deferring or preventing a change in control of management without further action by the shareholders and may adversely affect the voting and other rights of the holders of Common Stock. The issuance of Preferred Stock with voting and conversion rights may adversely affect the voting power of the holders of Common Stock, including the loss of voting control to others.
Series A Convertible Preferred Stock
On June 30, 2015, a certificate of designations was filed with the Delaware Secretary of State to designate shares of the Company’s Preferred Stock as Series A Convertible Preferred Stock, par value $ per share (“Series A Preferred”) (the “Series A COD”). Effective March 31, 2016, the Company amended the Series A COD, increasing the maximum number of shares of Series A Preferred from shares to shares. As of September 30, 2024 and December 31, 2023, there are shares of Series A Preferred issued and outstanding, respectively.
The following summarizes the current rights and preferences of the Series A Preferred:
Liquidation
Preference. The Series A Preferred has a liquidation preference of $
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Dividends. Shares of Series A Preferred do not have any separate dividend rights.
Conversion.
Subject to certain limitations set forth in the Series A COD, each share of Series A Preferred is convertible, at the option of the holder,
into that number of shares of Common Stock (the “Series A Conversion Shares”) equal to the liquidation preference
thereof, divided by Conversion Price (as such term is defined in the Series A COD), currently $
In
the event the Company completes an equity or equity-based public offering, registered with the SEC, resulting in gross proceeds to the
Company totaling at least $
Redemption.
Voting
Rights.
Liquidation. Upon any liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the holders of Series A Preferred shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the liquidation preference of the Series A Preferred before any distribution or payment shall be made to the holders of any junior securities, and if the assets of the Company are insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Series A Preferred shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.
Certain Price and Share Adjustments.
a) Stock Dividends and Stock Splits. If the Company (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock equivalents; (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the conversion price shall be adjusted accordingly.
b) Merger or Reorganization. If the Company is involved in any reorganization, recapitalization, reclassification, consolidation or merger in which the Common Stock is converted into or exchanged for securities, cash or other property than each share of Series A Preferred shall be convertible into the kind and amount of securities, cash or other property that a holder of the number of shares of Common Stock issuable upon conversion of one share of Series A Preferred prior to any such merger or reorganization would have been entitled to receive pursuant to such transaction.
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Series B Convertible Preferred Stock
On October 10, 2018, a certificate of designation was filed with the Delaware Secretary of State to designate shares of our Preferred Stock as Series B Convertible Preferred Stock, par value $ per share (“Series B Preferred”) (the “Series B COD”). As of September 30, 2024 and December 31, 2023, there are shares of Series B Preferred issued and outstanding, respectively.
The following summarizes the current rights and preferences of the Series B Preferred:
Liquidation
Preference. The Series B Preferred has a liquidation preference of $
Dividends. Shares of Series B Preferred do not have any separate dividend rights.
Conversion.
Subject to certain limitations set forth in the Series B COD, each share of Series B Convertible is convertible, at the option of the
holder, into that number of shares of Common Stock (the “Series B Conversion Shares”) equal to the liquidation preference
thereof, divided by the Conversion Price (as such term is defined in the Series B COD), currently $
Redemption.
Voting
Rights.
Liquidation. Upon any liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the holders of Series B Preferred shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the liquidation preference of the Series B Preferred before any distribution or payment shall be made to the holders of any junior securities, and if the assets of the Company are insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Series B Preferred shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.
Certain Price and Share Adjustments.
a) Stock Dividends and Stock Splits. If the Company (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock equivalents; (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the conversion price shall be adjusted accordingly.
b) Merger or Reorganization. If the Company is involved in any reorganization, recapitalization, reclassification, consolidation or merger in which the Common Stock is converted into or exchanged for securities, cash or other property than each share of Series B Preferred shall be convertible into the kind and amount of securities, cash or other property that a holder of the number of shares of Common Stock issuable upon conversion of one share of Series B Preferred prior to any such merger or reorganization would have been entitled to receive pursuant to such transaction.
Series C Convertible Preferred Stock
On March 27, 2019, a certificate of designation was filed with the Delaware Secretary of State to designate shares of our Preferred Stock as Series C Convertible Preferred Stock, par value $ per share (“Series C Preferred”) (the “Series C COD”). As of September 30, 2024 and December 31, 2023, there were shares of Series C Preferred issued and outstanding, respectively.
The following summarizes the current rights and preferences of the Series C Preferred:
Liquidation
Preference. The Series C Preferred has a liquidation preference of $
Dividends. Shares of Series C Preferred do not have any separate dividend rights.
15 |
Conversion.
Subject to certain limitations set forth in the Series C COD, each share of Series C Preferred is convertible, at the option of the holder,
into that number of shares of Common Stock (the “Series C Conversion Shares”) equal to the liquidation preference
thereof, divided by Conversion Price (as such term is defined in the Series C COD), currently $
The Series C Preferred will only be convertible at any time after the date that the Company shall have amended its Certificate of Incorporation to increase the number of shares of Common Stock authorized for issuance thereunder or effect a reverse stock split of the outstanding shares of Common Stock by a sufficient amount to permit the conversion of all Series C Preferred into shares of Common Stock (“Authorized Share Approval”) (such date, the “Initial Convertibility Date”), each share of Series C Preferred shall be convertible into validly issued, fully paid and non-assessable shares of Common Stock on the terms and conditions set forth in the Series C COD under the definition “Conversion Rights”.
Redemption.
Voting
Rights.
Liquidation. Upon any liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the holders of Series C Preferred shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the liquidation preference of the Series C Preferred before any distribution or payment shall be made to the holders of any junior securities, and if the assets of the Company are insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Series C Preferred shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.
Certain Price and Share Adjustments.
a) Stock Dividends and Stock Splits. If the Company (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock equivalents; (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the conversion price shall be adjusted accordingly.
b) Merger or Reorganization. If the Company is involved in any reorganization, recapitalization, reclassification, consolidation or merger in which the Common Stock is converted into or exchanged for securities, cash or other property than each share of Series C Preferred shall be convertible into the kind and amount of securities, cash or other property that a holder of the number of shares of Common Stock issuable upon conversion of one share of Series C Preferred prior to any such merger or reorganization would have been entitled to receive pursuant to such transaction.
Common and Preferred Stock Issuances
Common and Preferred Stock Issuances - 2024
From
January 1, 2024 through September 30, 2024, the Company issued
The
Company issued
The
Company issued
The Company settled RSUs for Common Stock.
The Company adjusted their common shares for vested RSUs in prior periods that were cancelled.
16 |
Common and Preferred Stock Issuances – 2023
In
April 2023, the Company issued
Common Stock Options
The Company recognizes in the financial statements compensation related to all stock-based awards, including stock options and warrants, based on their estimated grant-date fair value. The Company has estimated expected forfeitures and is recognizing compensation expense only for those awards expected to vest. All compensation is recognized by the time the award vests.
Options Outstanding | Weighted
Average Remaining | Weighted Average | ||||||||||||||||||
Number Of Shares | Exercise
Price Per Share | Contractual Life | Aggregate Intrinsic Value | Exercise Price Per Share | ||||||||||||||||
Nine Months Ended September 30, 2024 | ||||||||||||||||||||
Outstanding at January 1, 2024 | $ | - | years | $ | $ | |||||||||||||||
Granted | $ | - | $ | |||||||||||||||||
Exercised | $ | - | $ | |||||||||||||||||
Expired/canceled | $ | - | $ | |||||||||||||||||
Outstanding at September 30, 2024 | $ | - | years | $ | $ | |||||||||||||||
Exercisable at September 30, 2024 | $ | - | years | $ | $ | |||||||||||||||
Nine Months Ended September 30, 2023 | ||||||||||||||||||||
Outstanding at January 1, 2023 | $ | - | years | $ | $ | |||||||||||||||
Granted | $ | - | $ | |||||||||||||||||
Exercised | $ | - | $ | |||||||||||||||||
Expired/canceled | $ | - | $ | |||||||||||||||||
Outstanding at September 30, 2023 | $ | - | years | $ | $ | |||||||||||||||
Exercisable at September 30, 2023 | $ | - | years | $ | $ |
During the three and nine months ended September 30, 2024 and the three and nine months ended September 30, 2023, the Company recognized $ of stock-based compensation expense related to the vesting of stock options.
17 |
Common Stock Warrants
The following schedule summarizes the changes in the Company’s stock warrants:
Warrants Outstanding | Weighted
Average Remaining | Weighted Average | ||||||||||||||||||
Number
Of Shares | Exercise Price Per Share | Contractual Life | Aggregate Intrinsic Value | Exercise
Price Per Share | ||||||||||||||||
Nine Months Ended September 30, 2024 | ||||||||||||||||||||
Outstanding at January 1, 2024 | $ | - | years | $ | $ | |||||||||||||||
Granted | $ | - | $ | - | $ | |||||||||||||||
Exercised | ( | ) | $ | - | $ | - | $ | - | ||||||||||||
Expired/cancelled | $ | - | $ | - | $ | - | ||||||||||||||
Outstanding at September 30, 2024 | $ | years | $ | $ | ||||||||||||||||
Exercisable at September 30, 2024 | $ | years | $ | $ | ||||||||||||||||
Nine Months Ended September 30, 2023 | ||||||||||||||||||||
Outstanding at January 1, 2023 | $ | - | years | $ | $ | |||||||||||||||
Granted | $ | - | $ | - | $ | |||||||||||||||
Redeemed | ( | ) | $ | - | $ | - | $ | - | ||||||||||||
Expired/cancelled | ( | ) | $ | - | $ | - | $ | - | ||||||||||||
Outstanding at September 30, 2023 | $ | - | years | $ | $ | |||||||||||||||
Exercisable at September 30, 2023 | $ | - | years | $ | $ |
Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each option/warrant is estimated using the Black-Scholes valuation model. The following assumptions were used for the periods as follows:
Nine Months Ended | Nine Months Ended | |||||||
September 30, 2024 | September 30, 2023 | |||||||
Expected term | ||||||||
Expected volatility | % | % | ||||||
Expected dividend yield | ||||||||
Risk-free interest rate | % | % |
The Company granted warrants in their Reg A+ funding in April 2023, with an exercise price of $ and a term.
The Company granted warrants in their Regulation A+ Offering in January 2024, with an exercise price of $ and a term and warrants with the same terms on April 1, 2024.
The Company issued shares of Common Stock in the cashless exercise of warrants.
Restricted Stock Units
Number Of Shares | Weighted
Average Grant Date Fair Value | |||||||
Nine Months Ended September 30, 2024 | ||||||||
Outstanding at January 1, 2024 | $ | |||||||
Granted | $ | |||||||
Vested | ( | ) | $ | |||||
Forfeited | $ | |||||||
Outstanding at September 30, 2024 | $ | |||||||
Nine Months Ended September 30, 2023 | ||||||||
Outstanding at January 1, 2023 | $ | |||||||
Granted | $ | |||||||
Vested | ( | ) | $ | |||||
Forfeited | ( | ) | $ | |||||
Outstanding at September 30, 2023 | $ |
18 |
During
the nine months ended September 30, 2024 and 2023, the Company recognized $
On January 1, 2024, the Company granted restricted stock units to its Chief Executive Officer as part of his new employment agreement that vest in four equal installments over a period beginning February 1, 2024. During the nine months ended September 30, 2024, of these restricted stock units vested. In May 2024, the Company granted restricted stock units to consultants that vest through December 31, 2025.
NOTE 5: COMMITMENT
On
June 4, 2019, the Company entered into an Executive Employment Agreement (“Employment Agreement”) with Dr. Michael
K. Korenko, the Company’s Chief Executive Officer.
Under
the terms of the Employment Agreement effective January 1, 2024, the Company shall pay to Dr. Korenko a base compensation of $
NOTE 6: SUBSEQUENT EVENTS
On November 12, 2024, the
Company entered into agreements for the issuance of
19 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Except for statements of historical fact, certain information described in this Quarterly Report on Form 10-Q (“Quarterly Report”) contains “forward-looking statements” that involve substantial risks and uncertainties. You can identify these statements by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “will,” “would” or similar words. The statements that contain these or similar words should be read carefully because these statements discuss the Company’s future expectations, including its expectations of its future results of operations or financial position, or state other “forward-looking” information. Vivos Inc. believes that it is important to communicate its future expectations to its investors. However, there may be events in the future that the Company is not able to accurately predict or to control. Further, the Company urges you to be cautious of the forward-looking statements which are contained in this Quarterly Report because they involve risks, uncertainties and other factors affecting its operations, market growth, service, products and licenses. The risk factors in the section captioned “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K, filed with the SEC on March 18, 2024, as well as other cautionary language in this Quarterly Report, describe such risks, uncertainties and events that may cause the Company’s actual results and achievements, whether expressed or implied, to differ materially from the expectations the Company describes in its forward-looking statements. The occurrence of any of the events described as risk factors could have a material adverse effect on the Company’s business, results of operations and financial position.
Vivos Inc. (the “Company”) was incorporated under the laws of Delaware on December 23, 1994 as Savage Mountain Sports Corporation (“SMSC”). On September 6, 2006, the Company changed its name to Advanced Medical Isotope Corporation, and on December 28, 2017, the Company began operating as Vivos Inc. The Company has authorized capital of 950,000,000 shares of common stock, $0.001 par value per share (“Common Stock”), and 20,000,000 shares of preferred stock, $0.001 par value per share (“Preferred Stock”).
Our principal place of business is located at 1030 North Center Parkway, Kennewick, WA 99336. Our telephone number is (509) 222-2222. Our corporate website address is http://www.radiogel.com. Our Common Stock is currently quoted on the OTC Pink Marketplace under the symbol “RDGL.”
The Company is a radiation oncology medical device company engaged in the development of its yttrium-90 based brachytherapy device, RadioGel™, for the treatment of non-resectable tumors. A prominent team of radiochemists, scientists and engineers, collaborating with strategic partners, including national laboratories, universities and private corporations, lead the Company’s development efforts. The Company’s overall vision is to globally empower physicians, medical researchers, and patients by providing them with new isotope technologies that offer safe and effective treatments for cancer.
In January 2018, the Center for Veterinary Medicine Product Classification Group ruled that RadioGel ™should be classified as a device for animal therapy of feline sarcomas and canine soft tissue sarcomas. Additionally, after a legal review, the Company believes that the device classification obtained from the Food and Drug Administration (“FDA”) Center for Veterinary Medicine is not limited to canine and feline sarcomas, but rather may be extended to a much broader population of veterinary cancers, including all or most solid tumors in animals. We expect the result of such classification and label review will be that no additional regulatory approvals are necessary for the use of IsoPet® for the treatment of solid tumors in animals. The FDA does not have premarket authority over devices with a veterinary classification, and the manufacturers are responsible for assuring that the product is safe, effective, properly labeled, and otherwise in compliance with all applicable laws and regulations.
Based on the FDA’s recommendation, RadioGel™ will be marketed as “IsoPet®” for use by veterinarians to avoid any confusion between animal and human therapy. The Company already has trademark protection for the “IsoPet®” name. IsoPet® and RadioGel™ are used synonymously throughout this document. The only distinction between IsoPet® and RadioGel™ is the FDA’s recommendation that we use “IsoPet®” for veterinarian usage, and reserve “RadioGel™” for human therapy. Based on these developments, the Company has shifted its primary focus to the development and marketing of Isopet® for animal therapy, through the Company’s IsoPet® Solutions division.
20 |
Financing and Strategy
In November 2019, the Securities and Exchange Commission (the “SEC”) qualified the Company’s offering of its Common Stock under Regulation A of Section 3(6) of the Securities Act of 1933, as amended (the “Securities Act”)(“Regulation A”), which offering was and amended from time to time thereafter (the “2019 Regulation A+ Offering”). In September 2021, the SEC qualified the Company’s offering of Common Stock under Regulation A, which offering was amended from time to time thereafter (together with the 2019 Regulation A+ Offering, the “Prior Regulation A+ Offerings”). During the year ended December 31, 2023, $1,179,245 was raised through the sale of 16,132,000 shares of Common Stock and the private placement of 18,797,000 warrants. During the period January 1, 2024 through May 10, 2024, the Company raised $834,000 through the issuance of 13,000,000 shares of Common Stock and the private placement of 2,000,000 warrants. During the nine months ended September 30, 2024, the Company raised $839,000 through the issuance of 13,000,000 shares of Common Stock and 7,000,000 warrants. The Company’s Prior Regulation A Offerings undertaken pursuant to Regulation A+ have raised approximately $6,000,000 from the sale of shares of Common Stock.
On July 17, 2024, the SEC qualified the Company’s offering under Regulation A to offer up to $60,000,000 shares of its Common Stock (the “July 2024 Regulation A+ Offering”).
The Company anticipates using the proceeds from the July 2024 Regulation A+ Offering as follows:
For the animal therapy market:
● | Expand communication on our website, our social media presence, conference, and journals, each to increase the number of certified clinics for small animal and equine therapy and to increase the number of patients; | |
● | Subsidize some IsoPet® therapies, if necessary, to ensure that all viable candidates are treated; and | |
● | Assist a new regional clinic with their license and certification training. |
For the human market:
● | Enhance the pedigree of the Quality Management System; | |
● | Begin automation of product manufacturing; | |
● | Fund liability insurance for human clinical studies; and | |
● | Fund human clinical studies in the U.S. |
Research and development of the Company’s precision radionuclide therapy product line has been funded with proceeds from the sale of equity and debt securities, including from the Prior Regulation A+ Offerings. The Company requires additional funding of approximately $2.5 million annually to maintain operating activities. Over the next 36 months, the Company believes it will cost approximately $8.0 to $9.0 million to: (1) fund the FDA approval process to conduct human clinical trials; (2) conduct Phase I, pilot, clinical trials; (3) activate several regional clinics to administer IsoPet® across the county; (4) create an independent production center within the current production site to create a template for future international manufacturing; and (5) initiate regulatory approval processes outside of the United States. The proceeds raised from the Prior Regulation A+ Offerings were used to fund this development and proceeds from the July 2024 Regulation A+ Offering will used to continue such development efforts.
The continued deployment of the precision radionuclide therapy products and a worldwide regulatory approval effort will require additional resources and personnel. The principal variables in the timing and amount of spending for the precision radionuclide therapy products in the next 12 to 24 months will be the FDA’s classification of the Company’s precision radionuclide therapy products as Class II or Class III devices (or otherwise) and any requirements for additional studies which may possibly include clinical studies. Thereafter, the principal variables in the amount of the Company’s spending and its financing requirements would be the timing of any approvals and the nature of the Company’s arrangements with third parties for manufacturing, sales, distribution, and licensing of those products and the products’ success in the U.S. and elsewhere. The Company intends to fund its activities through strategic transactions such as licensing and partnership agreements or from proceeds raised from the Prior Regulation A+ Offering and from the July 2024 Regulation A+ Offering.
The Company intends to expand the indications for use in phases: first, for lymph nodes associated with thyroid cancer, secondly, cancerous lung nodules, and finally, all non-sectable solid tumors. It is anticipated that the medical community may begin to use RadioGel off-label, we will support but will not encourage that practice.
Following receipt of required regulatory approvals and financing, in the U.S., the Company intends to outsource material aspects of manufacturing, distribution, sales, and marketing. Outside of the U.S., the Company intends to pursue licensing arrangements and/or partnerships to facilitate its global commercialization strategy.
21 |
Long-term, the Company intends to consider resuming research efforts with respect to other products and technologies, such as Gamma Gel and Alpha Gel intended to help improve the diagnosis and treatment of cancer and other illnesses. These long-term goals are subject to the Company: (1) receiving adequate funding; (2) receiving regulatory approval for RadioGel™ and other precision radionuclide therapy products; and (3) being able to successfully commercialize its precision radionuclide therapy products.
Based on the Company’s financial history since inception, the Company’s independent registered public accounting firm has expressed substantial doubt as to the Company’s ability to continue as a going concern. The Company has limited revenue, nominal cash, and has accumulated deficits since inception. If the Company cannot obtain sufficient additional capital, the Company will be required to delay the implementation of its business strategy and may not be able to continue operations.
The Company’s headquarters are in the State of Washington., The initial focus of the animal therapy market has been the Northwestern sector of the U.S. The Company has initiated marketing efforts to the animal therapy market in other regions of the U.S., attempting to increase the exposure to our product and increase revenue opportunities.
As of September 30, 2024, the Company had $1,218,160 cash on hand. There are currently commitments to vendors for products and services purchased. To continue the development of the Company’s products, the current level of cash will be insufficient to cover the fixed and variable obligations of the Company. The Company has focused on operating on minimum overhead, including using a virtual office for the last several years and retaining experienced industry consultants available on an as needed basis. This has helped focus the capital received from the Company’s Regulation A+ Offerings on activities that enhance our objectives.
No assurances can be given that the Company will be able to raise additional funds or to do so on terms advantageous to the Company or its stockholders.
The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability. The Company plans to seek additional funding to maintain its operations through debt and equity financings and to improve operating performance through a focus on strategic products and increased efficiencies in business processes and improvements to the cost structure. There is no assurance that the Company will be successful in its efforts to raise additional working capital or achieve profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Available Information
The Company prepares and files annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and certain other information with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. Moreover, the Company maintains a website at http://www.radiogel.com that contains important information about the Company, including biographies of key management personnel, as well as information about the Company’s business. This information is publicly available and is updated regularly.
Results of Operations
Comparison of the Nine Months Ended September 30, 2024 and 2023
The following table sets forth information from our statements of operations for the nine months ended September 30, 2024 and 2023:
Nine
Months Ended September 30, 2024 | Nine
Months Ended September 30, 2023 | |||||||
Revenues | $ | 23,000 | $ | 19,500 | ||||
Cost of goods sold | (20,699 | ) | (16,536 | ) | ||||
Gross profit | 2,301 | 2,964 | ||||||
Operating expense | (1,944,885 | ) | (1,853,319 | ) | ||||
Operating loss | (1,942,584 | ) | (1,850,355 | ) | ||||
Non-operating income | 55,324 | 31,821 | ||||||
Net loss | $ | (1,887,260 | ) | $ | (1,818,534 | ) |
22 |
Revenues and Cost of Goods Sold
Revenue was $23,000 and $19,500 for the nine months ended September 30, 2024 and 2023, respectively. All revenue recognized in the nine months ended September 30, 2024 and 2023 relate to consulting income with respect to the IsoPet® therapies.
Management does not anticipate that the Company will generate sufficient revenue to sustain operations until such time as the Company secures multiple revenue-generating arrangements with respect to RadioGel™ and/or any of our other brachytherapy technologies.
Operating Expense
Operating expense for the nine months ended September 30, 2024 and 2023, respectively consists of the following:
Nine
months ended September 30, 2024 | Nine
months ended September 30, 2023 | |||||||
Professional fees, including stock-based compensation | $ | 1,310,604 | $ | 1,205,819 | ||||
Payroll expense | 267,153 | 214,083 | ||||||
Research and development | 223,660 | 300,586 | ||||||
General and administrative expense | 143,468 | 132,831 | ||||||
Total operating expense | $ | 1,944,885 | $ | 1,853,319 |
Operating expense for the nine months ended September 30, 2024 and 2023 was $1,944,885 and $1,853,319, respectively. The increase in operating expense from 2023 to 2024 can be attributed to an increase in professional fees from $1,205,819 for the nine months ended September 30, 2023 to $1,310,604 for the nine months ended September 30, 2024, partially attributable to the stock based compensation expense related to the restricted stock units; an increase in general and administrative expense from $132,831 for the nine months ended September 30, 2023 to $143,468 for the nine months ended September 30, 2024; a decrease in research and development expense from $300,586 for the nine months ended September 30, 2023 to $223,660 for the nine months ended September 30, 2024 as the Company ramped up the development of their products in 2023 to include studies that are required to continue to have their products accepted by the FDA, and completed some of those studies for the 2024 period; and an increase in payroll expense related to the CEO’s employment contract and bonus, to $267,153 for the nine months ended September 30, 2024 from $214,083 for the nine months ended September 30, 2023.
Non-Operating Income (Expense)
Non-operating income (expense) for the nine months ended September 30, 2024 and 2023 consists of the following:
Nine
months ended September 30, 2024 | Nine
months ended September 30, 2023 | |||||||
Interest income | $ | 55,324 | $ | 31,821 | ||||
Non-operating income (expense) | $ | 55,324 | $ | 31,821 |
Non-operating income (expense) for the nine months ended September 30, 2024 and 2023 related to interest earned on the Company’s cash accounts.
Net Loss
Our net loss for the nine months ended September 30, 2024 and 2023 was $(1,887,260) and $(1,818,534), respectively.
23 |
Comparison of the Three Months Ended September 30, 2024 and 2023
The following table sets forth information from our statements of operations for the three months ended September 30, 2024 and 2023:
Three
Months Ended September 30, 2024 | Three
Months Ended September 30, 2023 | |||||||
Revenues | $ | 5,000 | $ | 7,000 | ||||
Cost of goods sold | (3,919 | ) | - | |||||
Gross profit | 1,081 | 7,000 | ||||||
Operating expense | (844,226 | ) | (694,633 | ) | ||||
Operating loss | (843,145 | ) | (687,633 | ) | ||||
Non-operating income (expense) | 17,882 | 19,943 | ||||||
Net loss | $ | (825,263 | ) | $ | (667,690 | ) |
Revenues and Cost of Goods Sold
Revenue was $5,000 and $7,000 for the three months ended September 30, 2024 and 2023, respectively. All revenue recognized in the three months ended September 30, 2024 and 2023 relate to consulting income with respect to the IsoPet® therapies.
Management does not anticipate that the Company will generate sufficient revenue to sustain operations until such time as the Company secures multiple revenue-generating arrangements with respect to RadioGel™ and/or any of our other brachytherapy technologies.
Operating Expense
Operating expense for the three months ended September 30, 2024 and 2023, respectively consists of the following:
Three
months ended September 30, 2024 | Three
months ended September 30, 2023 | |||||||
Professional fees, including stock-based compensation | $ | 627,152 | $ | 512,856 | ||||
Payroll expense | 85,400 | 69,562 | ||||||
Research and development | 66,551 | 80,858 | ||||||
General and administrative expense | 65,123 | 31,357 | ||||||
Total operating expense | $ | 844,226 | $ | 694,633 |
Operating expense for the three months ended September 30, 2024 and 2023 was $844,226 and $694,633, respectively. The increase in operating expense from 2023 to 2024 can be attributed to an increase in professional fees from $512,856 for the three months ended September 30, 2023 to $627,152 for the three months ended September 30, 2024, attributable to the stock based compensation expense related to the restricted stock units; an increase in general and administrative expense from $31,357 for the three months ended September 30, 2023 to $65,123 for the three months ended September 30, 2024 related to attendance at various conferences and a marketing campaign commenced in this quarter; a decrease in research and development expense from $80,858 for the three months ended September 30, 2023 to $66,551 for the three months ended September 30, 2024 as the Company ramped up the development of their products in 2023 to include studies that are required to continue to have their products accepted by the FDA, and completed some of those studies for the 2024 period; and an increase in payroll expense related to the CEO’s employment contract and bonus to $85,400 for the three months ended September 30, 2024 from $69,562 for the three months ended September 30, 2023.
Non-Operating Income (Expense)
Non-operating income (expense) for the three months ended September 30, 2024 and 2023 consists of the following:
Three
months ended September 30, 2024 | Three
months ended September 30, 2023 | |||||||
Interest income | $ | 17,882 | $ | 19,943 | ||||
Non-operating income (expense) | $ | 17,882 | $ | 19,943 |
Non-operating income (expense) for the three months ended September 30, 2024 and 2023 related to interest earned on the Company’s cash accounts.
Net Loss
Our net loss for the three months ended September 30, 2024 and 2023 was $(825,263) and $(667,690), respectively.
24 |
Liquidity and Capital Resources
At September 30, 2024, the Company had working capital of $1,195,505, as compared to working capital of $1,365,120 at December 31, 2023. During the nine months ended September 30, 2024 and 2023, the Company experienced negative cash flow from operations of $1,213,127 and $829,886 and had no cash from investing activities. In both 2024 and 2023, there were no investing activities, and in 2024 and 2023, the Company raised $839,000 and $650,665 from the sales of Common Stock and warrants as part of our Regulation A+ Offerings. We also received $10,000 in September 2023 from advances from our CEO that was repaid in October 2023.As of September 30, 2024, the Company did not have any commitments for capital expenditures.
Cash used in operating activities increased from $829,886 for the nine months ended September 30, 2023 to $1,213,127 for the nine months ended September 30, 2024. Cash used in operating activities was primarily a result of the Company’s non-cash items, such as loss from operations, stock-based compensation, as well as the changes in accounts receivable, prepaid expense and accounts payable in 2024 compared to only having net changes from current assets and liabilities and stock-based compensation in 2023.
The Company has generated material operating losses since inception. The Company had a net loss of $1,887,260 and $1,818,534 for the nine months ended September 30, 2024 and 2023, respectively. The Company expects to continue to experience net operating losses for the foreseeable future. Historically, the Company has relied upon investor funds to maintain its operations and develop the Company’s business. The Company anticipates raising additional capital within the next twelve months for working capital as well as business expansion, although no assurances can be given that such additional capital will be available on terms acceptable to the Company, if at all. If the Company is unable to obtain additional financing to meet its working capital requirements, it may have to curtail its business or cease all operations.
The Company requires funding of at least $5 million per year to maintain current operating activities. Over the next 24 months, the Company believes it will cost approximately $9 million to: (1) fund the FDA approval process to conduct human clinical trials; (2) conduct Phase I, pilot, and clinical trials; (3) activate several regional clinics to administer IsoPet® across the county; (4) create an independent production center within the current production site to create a template for future international manufacturing; and (5) initiate regulatory approval processes outside of the United States.
The principal variables in the timing and amount of spending for the brachytherapy products in the next 12 to 24 months will be the FDA’s classification of the Company’s brachytherapy products as Class II or Class III devices (or otherwise) and any requirements for additional studies, which may possibly include clinical studies. Thereafter, the principal variables in the amount of the Company’s spending and its financing requirements would be the timing of any approvals and the nature of the Company’s arrangements with third parties for manufacturing, sales, distribution and licensing of those products and the products’ success in the U.S. and elsewhere. The Company intends to fund its activities through strategic transactions such as licensing and partnership agreements or additional capital raises.
Although the Company is seeking to raise additional capital and has engaged in numerous discussions with investment bankers and investors, to date the Company has not received firm commitments for the required funding. Based upon its discussions, the Company anticipates that if the Company is able to obtain the funding required to retire outstanding debt, pay past due payables and maintain its current operating activities, that the terms and conditions associated with such future funding will result in material dilution to existing shareholders.
Recent geopolitical events, including the inherent instability and volatility in global capital markets, as well as the lack of liquidity in the capital markets, could also impact the Company’s ability to obtain financing and its ability to execute its business plan.
Our Chief Executive Officer currently works from his home office in virtual communication with key personnel. Cadwell Laboratories, which is controlled by Carl Cadwell, a director of the Company, provides office space to management on an as-needed basis until such time as the Company leases permanent office space.
25 |
Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions. During the period ended September 30, 2024, we believe there have been no significant changes to the items disclosed as significant accounting policies in management’s notes to the financial statements in our annual report on Form 10-K for the year ended December 31, 2023, filed on March 18, 2024.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on the Company’s financial condition, revenues, results of operations, liquidity or capital expenditures.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
This item is not applicable to us because we are a smaller reporting company as defined by Rule 12b-2 under the Securities Exchange Act of 1934.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Based on an evaluation as of the date of the end of the period covered by this report, the Company’s Chief Executive Officer and Interim Chief Financial Officer conducted an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as required by Exchange Act Rule 13a-15. Based on that evaluation, the Company’s Chief Executive Officer and Interim Chief Financial Officer concluded that, because of material weakness related to proper segregation of duties, the Company’s disclosure controls and procedures were ineffective as of the end of the period covered by this report to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Company’s reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and the Company’s Interim Chief Financial Officer, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting that occurred during the period ended September 30, 2024 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant’s principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
(a) | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant; | |
(b) | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and | |
(c) | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant’s assets that could have a material effect on the financial statements. |
26 |
PART II
Item 1. Legal Proceedings
The Company may, from time to time, be involved in various legal proceedings incidental to the conduct of our business. Historically, the outcome of all such legal proceedings has not, in the aggregate, had a material adverse effect on our business, financial condition, results of operations or liquidity.
Item 2. Unregistered Sales of Equity Securities
From January 1, 2024 through September 30, 2024, the Company issued 13,000,000 shares of Common Stock and warrants to purchase 7,000,000 shares of Common Stock pursuant to the Regulation A+ Offering for cash proceeds of $839,000.
The Company issued 441,252 shares of Common Stock for services rendered valued at $69,395.
The Company issued 16,919,918 shares of Common Stock in the cashless exercise of 25,034,000 warrants.
The Company settled 500,000 RSUs for common stock.
Item 6. Exhibits.
Exhibit Number |
Description | |
31.1* | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes – Oxley Act of 2002 | |
31.2* | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes – Oxley Act of 2002 | |
32.1* | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 | |
101.INS | Inline XBRL Instance Document | |
101.SCH | Inline XBRL Taxonomy Extension Schema | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
27 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Vivos Inc. | ||
Date: November 13, 2024 | By: | /s/ Michael Korenko |
Name: | Michael K. Korenko | |
Title: | Chief Executive Officer | |
(Principal Executive Officer) |
Date: November 13, 2024 | By: | /s/ Michael Pollack |
Name: | Michael Pollack | |
Title: | Interim Chief Financial Officer | |
(Interim Principal Financial and Accounting Officer) |
28 |
EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael K. Korenko, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of Vivos Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 13, 2024 | |
/s/ Michael K. Korenko | |
Michael K. Korenko | |
Chief Executive Officer | |
(Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION OF INTERIM CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael Pollack, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of Vivos Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 13, 2024 | |
/s/ Michael Pollack | |
Michael Pollack | |
Interim Chief Financial Officer | |
(Interim Principal Financial Officer) |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the accompanying quarterly report of Vivos Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2024 (the “Report”), the undersigned, Michael Korenko, Chief Executive Officer of the Company, and Michael Pollack, Interim Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 13, 2024 | ||
/s/ Michael K. Korenko | ||
Name: | Michael K. Korenko | |
Title: | Chief Executive Officer |
/s/ Michael Pollack | ||
Name: | Michael Pollack | |
Title: | Interim Chief Financial Officer |
Cover - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2024 |
Nov. 13, 2024 |
|
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2024 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2024 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-53497 | |
Entity Registrant Name | VIVOS INC | |
Entity Central Index Key | 0001449349 | |
Entity Tax Identification Number | 80-0138937 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 1030 N Center Parkway | |
Entity Address, City or Town | Kennewick | |
Entity Address, State or Province | WA | |
Entity Address, Postal Zip Code | 99336 | |
City Area Code | (509) | |
Local Phone Number | 222-2222 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 417,592,703 |
Condensed Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2024 |
Sep. 30, 2023 |
Sep. 30, 2024 |
Sep. 30, 2023 |
|
Income Statement [Abstract] | ||||
Revenues, net | $ 5,000 | $ 7,000 | $ 23,000 | $ 19,500 |
Cost of Goods Sold | (3,919) | (20,699) | (16,536) | |
Gross profit | 1,081 | 7,000 | 2,301 | 2,964 |
OPERATING EXPENSES | ||||
Professional fees, including stock-based compensation | 627,152 | 512,856 | 1,310,604 | 1,205,819 |
Payroll expenses | 85,400 | 69,562 | 267,153 | 214,083 |
Research and development | 66,551 | 80,858 | 223,660 | 300,586 |
General and administrative expenses | 65,123 | 31,357 | 143,468 | 132,831 |
Total Operating Expenses | 844,226 | 694,633 | 1,944,885 | 1,853,319 |
OPERATING LOSS | (843,145) | (687,633) | (1,942,584) | (1,850,355) |
NON-OPERATING INCOME (EXPENSE) | ||||
Interest income | 17,882 | 19,943 | 55,324 | 31,821 |
Total Non-Operating Income (Expenses) | 17,882 | 19,943 | 55,324 | 31,821 |
NET LOSS BEFORE PROVISION FOR INCOME TAXES | (825,263) | (667,690) | (1,887,260) | (1,818,534) |
Provision for income taxes | ||||
NET LOSS | $ (825,263) | $ (667,690) | $ (1,887,260) | $ (1,818,534) |
Net loss per share - basic | $ (0.00) | $ (0.00) | $ (0.00) | $ (0.00) |
Net loss per share - diluted | $ (0.00) | $ (0.00) | $ (0.00) | $ (0.00) |
Weighted average common shares outstanding - basic | 418,629,728 | 370,541,528 | 403,860,277 | 367,112,957 |
Weighted average common shares outstanding - diluted | 418,629,728 | 370,541,528 | 403,860,277 | 367,112,957 |
Condensed Statement of Changes in Stockholders' Equity (Unaudited) - USD ($) |
Preferred Stock [Member]
Series A Preferred Stock [Member]
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Preferred Stock [Member]
Additional Paid-In Capital - Series A Preferred [Member]
|
Preferred Stock [Member]
Series B Preferred Stock [Member]
|
Preferred Stock [Member]
Additional Paid-In Capital - Series B Preferred [Member]
|
Preferred Stock [Member]
Series C Preferred Stock [Member]
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Preferred Stock [Member]
Additional Paid-In Capital - Series C Preferred [Member]
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Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Total |
---|---|---|---|---|---|---|---|---|---|---|
Balance at Dec. 31, 2022 | $ 2,071 | $ 8,842,458 | $ 200 | $ 290,956 | $ 385 | $ 500,507 | $ 362,541 | $ 71,217,954 | $ (79,556,028) | $ 1,661,044 |
Balance, shares at Dec. 31, 2022 | 2,071,007 | 200,363 | 385,302 | 362,541,518 | ||||||
Net loss for the period | (248,318) | (248,318) | ||||||||
Balance at Mar. 31, 2023 | $ 2,071 | 8,842,458 | $ 200 | 290,956 | $ 385 | 500,507 | $ 362,541 | 71,217,954 | (79,804,346) | 1,412,726 |
Balance, shares at Mar. 31, 2023 | 2,071,007 | 200,363 | 385,302 | 362,541,518 | ||||||
Balance at Dec. 31, 2022 | $ 2,071 | 8,842,458 | $ 200 | 290,956 | $ 385 | 500,507 | $ 362,541 | 71,217,954 | (79,556,028) | 1,661,044 |
Balance, shares at Dec. 31, 2022 | 2,071,007 | 200,363 | 385,302 | 362,541,518 | ||||||
Net loss for the period | (1,818,534) | |||||||||
Balance at Sep. 30, 2023 | $ 2,071 | 8,842,458 | $ 200 | 290,956 | $ 385 | 500,507 | $ 370,541 | 72,826,594 | (81,374,562) | 1,459,150 |
Balance, shares at Sep. 30, 2023 | 2,071,007 | 200,363 | 385,302 | 370,541,518 | ||||||
Balance at Mar. 31, 2023 | $ 2,071 | 8,842,458 | $ 200 | 290,956 | $ 385 | 500,507 | $ 362,541 | 71,217,954 | (79,804,346) | 1,412,726 |
Balance, shares at Mar. 31, 2023 | 2,071,007 | 200,363 | 385,302 | 362,541,518 | ||||||
Net loss for the period | (902,526) | (902,526) | ||||||||
Cash | $ 8,000 | 632,000 | 640,000 | |||||||
Cash, shares | 8,000,000 | |||||||||
Warrants purchased for cash | 10,665 | 10,665 | ||||||||
RSUs granted to consultants that have vested | 515,975 | 515,975 | ||||||||
Balance at Jun. 30, 2023 | $ 2,071 | 8,842,458 | $ 200 | 290,956 | $ 385 | 500,507 | $ 370,541 | 72,376,594 | (80,706,872) | 1,676,840 |
Balance, shares at Jun. 30, 2023 | 2,071,007 | 200,363 | 385,302 | 370,541,518 | ||||||
Net loss for the period | (667,690) | (667,690) | ||||||||
RSUs granted to consultants that have vested | 450,000 | 450,000 | ||||||||
Balance at Sep. 30, 2023 | $ 2,071 | 8,842,458 | $ 200 | 290,956 | $ 385 | 500,507 | $ 370,541 | 72,826,594 | (81,374,562) | 1,459,150 |
Balance, shares at Sep. 30, 2023 | 2,071,007 | 200,363 | 385,302 | 370,541,518 | ||||||
Balance at Dec. 31, 2023 | $ 2,071 | 8,842,458 | $ 200 | 290,956 | $ 385 | 500,507 | $ 387,894 | 73,791,430 | (82,450,781) | 1,365,120 |
Balance, shares at Dec. 31, 2023 | 2,071,007 | 200,363 | 385,302 | 387,894,033 | ||||||
Net loss for the period | (558,539) | (558,539) | ||||||||
Cash | $ 2,000 | 126,000 | 128,000 | |||||||
Cash, shares | 2,000,000 | |||||||||
Warrants purchased for cash | 2,000 | 2,000 | ||||||||
RSUs granted to consultants that have vested | 361,500 | 361,500 | ||||||||
Services | $ 140 | 9,342 | 9,482 | |||||||
Services, shares | 139,834 | |||||||||
Balance at Mar. 31, 2024 | $ 2,071 | 8,842,458 | $ 200 | 290,956 | $ 385 | 500,507 | $ 390,034 | 74,290,272 | (83,009,320) | 1,307,563 |
Balance, shares at Mar. 31, 2024 | 2,071,007 | 200,363 | 385,302 | 390,033,867 | ||||||
Balance at Dec. 31, 2023 | $ 2,071 | 8,842,458 | $ 200 | 290,956 | $ 385 | 500,507 | $ 387,894 | 73,791,430 | (82,450,781) | 1,365,120 |
Balance, shares at Dec. 31, 2023 | 2,071,007 | 200,363 | 385,302 | 387,894,033 | ||||||
Net loss for the period | (1,887,260) | |||||||||
Services | $ 69,395 | |||||||||
Services, shares | 441,252 | |||||||||
Balance at Sep. 30, 2024 | $ 2,071 | 8,842,458 | $ 200 | 290,956 | $ 385 | 500,507 | $ 417,593 | 75,479,376 | (84,338,041) | $ 1,195,505 |
Balance, shares at Sep. 30, 2024 | 2,071,007 | 200,363 | 385,302 | 417,592,703 | ||||||
Balance at Mar. 31, 2024 | $ 2,071 | 8,842,458 | $ 200 | 290,956 | $ 385 | 500,507 | $ 390,034 | 74,290,272 | (83,009,320) | 1,307,563 |
Balance, shares at Mar. 31, 2024 | 2,071,007 | 200,363 | 385,302 | 390,033,867 | ||||||
Net loss for the period | (503,458) | (503,458) | ||||||||
Cash | $ 11,000 | 693,000 | 704,000 | |||||||
Cash, shares | 11,000,000 | |||||||||
Warrants purchased for cash | 5,000 | 5,000 | ||||||||
RSUs granted to consultants that have vested | 86,250 | 86,250 | ||||||||
Services | $ 22 | 3,728 | 3,750 | |||||||
Services, shares | 22,766 | |||||||||
Cashless exercise of warrants | $ 16,625 | (16,625) | ||||||||
Cashless exercise of warrants, shares | 16,624,612 | |||||||||
Balance at Jun. 30, 2024 | $ 2,071 | 8,842,458 | $ 200 | 290,956 | $ 385 | 500,507 | $ 417,681 | 75,061,625 | (83,512,778) | 1,603,105 |
Balance, shares at Jun. 30, 2024 | 2,071,007 | 200,363 | 385,302 | 417,681,245 | ||||||
Net loss for the period | (825,263) | (825,263) | ||||||||
Cash | ||||||||||
RSUs granted to consultants that have vested | 361,500 | 361,500 | ||||||||
Services | $ 279 | 55,884 | 56,163 | |||||||
Services, shares | 278,652 | |||||||||
Cashless exercise of warrants | $ 295 | (295) | ||||||||
Cashless exercise of warrants, shares | 295,306 | |||||||||
Vested RSUs | $ 500 | (500) | ||||||||
Vested RSUs, shares | 500,000 | |||||||||
Adjustment for vested RSUs | $ (1,162) | 1,162 | ||||||||
Adjustment for vested RSUs, shares | (1,162,500) | |||||||||
Balance at Sep. 30, 2024 | $ 2,071 | $ 8,842,458 | $ 200 | $ 290,956 | $ 385 | $ 500,507 | $ 417,593 | $ 75,479,376 | $ (84,338,041) | $ 1,195,505 |
Balance, shares at Sep. 30, 2024 | 2,071,007 | 200,363 | 385,302 | 417,592,703 |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1: BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying condensed financial statements of Vivos Inc. (the “Company”) have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures required by accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. These condensed financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the results of operations of the Company for the period presented. The results of operations for the nine months ended September 30, 2024, are not necessarily indicative of the results that may be expected for any future period or the fiscal year ending December 31, 2024 and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 18, 2024.
Business Overview
The Company was incorporated under the laws of Delaware on December 23, 1994 as Savage Mountain Sports Corporation (“SMSC”). On September 6, 2006, the Company changed its name to Advanced Medical Isotope Corporation, and on December 28, 2017, the Company began operating as Vivos Inc. The Company has authorized capital of shares of common stock (“Common Stock”), $ par value per share, and shares of preferred stock (“Preferred Stock”), $ par value per share.
Our principal place of business is located at 1030 North Center Parkway, Kennewick, WA 99336. Our telephone number is (509) 222-2222. Our corporate website address is http://www.radiogel.com. Our Common Stock is currently quoted on the OTC Pink Marketplace under the symbol “RDGL.”
The Company is a radiation oncology medical device company engaged in the development of its yttrium-90 based brachytherapy device, RadioGel™, for the treatment of non-resectable tumors. A prominent team of radiochemists, scientists and engineers, collaborating with strategic partners, including national laboratories, universities and private corporations, lead the Company’s development efforts. The Company’s overall vision is to globally empower physicians, medical researchers, and patients by providing them with new isotope technologies that offer safe and effective treatments for cancer.
In January 2018, the Center for Veterinary Medicine Product Classification Group ruled that RadioGel ™should be classified as a device for animal therapy of feline sarcomas and canine soft tissue sarcomas. Additionally, after a legal review, the Company believes that the device classification obtained from the Food and Drug Administration (“FDA”) Center for Veterinary Medicine is not limited to canine and feline sarcomas, but rather may be extended to a much broader population of veterinary cancers, including all or most solid tumors in animals. We expect the result of such classification and label review will be that no additional regulatory approvals are necessary for the use of IsoPet® for the treatment of solid tumors in animals. The FDA does not have premarket authority over devices with a veterinary classification, and the manufacturers are responsible for assuring that the product is safe, effective, properly labeled, and otherwise in compliance with all applicable laws and regulations.
Based on the FDA’s recommendation, RadioGel™ will be marketed as “IsoPet®” for use by veterinarians to avoid any confusion between animal and human therapy. The Company already has trademark protection for the “IsoPet®” name. IsoPet® and RadioGel™ are used synonymously throughout this document. The only distinction between IsoPet® and RadioGel™ is the FDA’s recommendation that we use “IsoPet®” for veterinarian usage, and reserve “RadioGel™” for human therapy. Based on these developments, the Company has shifted its primary focus to the development and marketing of Isopet® for animal therapy, through the Company’s IsoPet® Solutions division.
IsoPet Solutions
The Company’s IsoPet Solutions division was established in May 2016 to focus on the veterinary oncology market, namely engagement of university veterinarian hospitals to develop the detailed therapy procedures to treat animal tumors and ultimately use of the technology in private clinics. The Company has worked with three different university veterinarian hospitals on IsoPet® testing and therapy. Washington State University treated five cats for feline sarcoma and served to develop the procedures which are incorporated in our label. They concluded that the product was safe and effective in killing cancer cells. Colorado State University demonstrated the CT and PET-CT imaging of IsoPet®. A contract was signed with University of Missouri to treat canine sarcomas and equine sarcoids starting in November 2017.
The dogs were treated for canine soft tissue sarcoma. Response evaluation criteria in solid tumors (“RECIST”) is a set of published rules that define when tumors in cancer patients improve (respond), stay the same (stabilize), or worsen (progress) during treatment. The criteria were published by an international collaboration including the European Organisation for Research and Treatment of Cancer (“EORTC”), National Cancer Institute of the United States, and the National Cancer Institute of Canada Clinical Trials Group.
The testing at the University of Missouri met its objective to demonstrate the safety of IsoPet®. Using its advanced CT and PET equipment it was able to demonstrate that the dose calculations were accurate and that the injections perfused into the cell interstices and did not stay concentrated in a bolus. This results in a more homogeneous dose distribution. There was insignificant spread of Y-90 outside the points of injection demonstrating the effectiveness of the particles and the gel to localize the radiation with no spreading to the blood or other organs nor to urine or fecal material. This confirms that IsoPet® is safe for same day therapy.
The effectiveness of IsoPet® for life extension was not the prime objective, but it resulted in valuable insights. Of the cases one is still cancer-free but the others eventually recurred since there was not a strong focus on treating the margins. The University of Missouri has agreed to become a regional center to administer IsoPet® therapy and will incorporate the improvements suggested by the testing program.
The Company anticipates that future profits, if any, will be derived from direct sales of RadioGel™ (under the name IsoPet®) and related services, and from licensing to private medical and veterinary clinics in the United States of America (the “USA”, or, the “U.S.”) and internationally. The Company intends to report the results from the IsoPet® Solutions division as a separate operating segment in accordance with generally accepted accounting principles (“GAAP”).
Commencing in July 2019, the Company recognized its first commercial sale of IsoPet®. A veterinarian from Alaska brought his cat with a re-occurrent spindle cell sarcoma tumor on his face. The cat had previously received external beam therapy, but now the tumor was growing rapidly. He was given a high dose of 400 Gray with heavy therapy at the margins. This sale met the revenue recognition requirements under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606 – Revenue from Contracts with Customers (“ASC 606”) as the performance obligation was satisfied. The Company completed sales for an additional four animals that received the IsoPet® during 2019.
Our plan is to incorporate the data assembled from our work with Isopet® in animal therapy to support the Company’s efforts in the development of our RadioGel™ device candidate, including obtaining approval from the FDA to market and sell RadioGel™ as a Class II medical device. RadioGel™ is an injectable particle-gel for brachytherapy radiation treatment of cancerous tumors in people and animals. RadioGel™ is comprised of a hydrogel, or a substance that is liquid at room temperature and then gels when reaching body temperature after injection into a tumor. In the gel are small particles, less than two microns, of Y-90. Once injected, these inert particles are locked in place inside the tumor by the gel, delivering a very high local radiation dose. The radiation is beta, consisting of high-speed electrons. These electrons only travel a short distance so the device can deliver high radiation to the tumor with minimal dose to the surrounding tissue. Optimally, patients can go home immediately following treatment without the risk of radiation exposure to family members. Since Y-90 has a half-life of 2.7 days, the radioactivity drops to 5% of its original value after ten days.
The Company modified its Indication for Use from skin cancel to cancerous tissue or solid tumors pathologically associated with locoregional papillary thyroid carcinoma and recurrent papillary thyroid carcinoma having discernable tumors associated with metastatic lymph nodes or extranodal disease in patients who are not surgical candidates or who have declined surgery, or patients who require post-surgical remnant ablation (for example, after prior incomplete radioiodine therapy). Papillary thyroid carcinoma belongs to the general class of head and neck tumors for which tumors are accessible by intraoperative direct needle injection. The Company’s Medical Advisory Board felt that demonstrating efficacy in clinical trials was much easier with this new indication.
In the third quarter of 2024, the Company entered the market of treating exotic animals by treating a ferret. The Company also has established important contacts at zoos and used conferences to communicate the effectiveness of Precision Radionuclide Therapy TM to the zoo community.
The Company intends to conduct human trials internationally, initially in Southeast Asia. These trials will be initiated prior to trials in the United States, and will be conducted under a protocol consistent with and complimentary to the IDE and human trial roadmap in the United States.
Intellectual Property
Our original license with Battelle National Laboratory (the “Battelle License”) reached its end of life in 2022. During the past several years, we have expanded our proprietary knowledge, as well as our trademark and patent protection, in anticipation of the Battelle License reaching the end of its term.
Our RadioGel™ trademark protection is in 17 countries. We have expanded our trademark protection from RadioGel™ to now include IsoPet®. We obtained the International Certificate of Registration for ISOPET, which is the first step to file in several countries.
We have filed for trademark protection for the term Precision Radionuclide Therapy™. We believe this term will be increasingly important.
The Company received the Patent Cooperation Treaty (“PCT”) International Search Report on our patent application (No.1811.191). Seven of our claims were immediately ruled as having novelty, inventive step and industrial applicability. This gives us the basis to extend for many years the patent protection for our proprietary Y-90 phosphate particles utilized in Isopet® and Radiogel™.
Our patent team filed our particle patent in more than ten patent offices that collectively cover 63 countries throughout the world. We filed a continuation-in-part applications number 1774054 in the USA to expand the claims on our particle patent. The U.S. Patent office recently gave us the Notice of Allowance for our patent to produce our yttrium phosphate microparticles, U.S. Patent Application Serial No: 16-459,466. We also filed an amendment to correct the wording on our claims at make them consistent with the USE claims. Ref: 4207-0005; European Patent Application NO. 20 834 229.5; VIVOS INC; Our Ref: FS/53791.
We filed a hydrogel utility patent in the USA (16309:17/943,311) and internationally (16389:PCT/US22/4374) based on the last 18 months of development work to optimize our hydrogel component. These include reducing the polymer production time and increasing the output by a factor of three. We have also further reduced the level of trace contaminants to be well below the FDA guidelines.
We filed a provisional patent (Serial Number 63436562) to protect our innovative improvements in our shipping container, our vial shield, our syringe shield, and our Peltier chiller. Our objectives were to reduce shipping costs, decrease radiation exposure, and enhance sterility. These devices will be preferentially used at Mayo Clinics for human clinical studies at our IsoPet regional treatment centers. The Company filed a utility patent in the fourth quarter of 2023 for this therapy support equipment.
We anticipate that Precision Radionuclide Therapy will become increasingly important in the future and expand to other isotope and other indications for use. Therefore, we filed an alternate particle utility patent (Serial number 18/152,137). We will focus our near-term effort on the Y-90 therapy, which we believe is the best beta emitter; however, we leveraged our hydrogel utility patent to incorporate other promising isotopes and compounds for a range of future applications. This includes gamma and alpha particle emitters.
We have trademark protection in several countries on IsoPet®, RadioGel®, Precision Radionuclide TherapyTM, BetaGelTM, GammaGelTM, and AlphaGelTM.
Going Concern
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has suffered recurring losses and used significant cash in support of its operating activities and the Company’s cash position is not sufficient to support the Company’s operations. Research and development of the Company’s brachytherapy product line has been funded with proceeds from the sale of equity and debt securities as well as a series of grants. The Company requires funding of approximately $2.5 million annually to maintain current operating activities.
Financing and Strategy
In November 2019, the SEC qualified the Company’s offering of its Common Stock, under Regulation A of Section 3(6) of the Securities Act of 1933, as amended (the “Securities Act”) (“Regulation A”), which offering was and amended from time to time thereafter (the “2019 Regulation A+ Offering”). In September 2021, the SEC qualified the Company’s offering of Common Stock under Regulation A, which offering was amended from time to time thereafter (together with the 2019 Regulation A+ Offering, the “Prior Regulation A+ Offerings”). During the year ended December 31, 2023, $1,179,245 was raised through the sale of shares of common stock and the private placement of 18,797,000 warrants. During the nine months ended September 30, 2024, the Company raised $839,000 through the issuance of shares of common stock and 7,000,000 warrants. The Company’s Prior Regulation A Offerings undertaken pursuant to Regulation A+ have raised approximately $6,000,000 from the sale of shares of common stock.
On July 17, 2024, the SEC qualified the Company’s offering under Regulation A to offer up to $60,000,000 shares of its Common Stock (the “July 2024 Regulation A+ Offering”).
The Company is using the proceeds generated from the Prior Regulation A+ Offering and the July 2024 Regulation A+ Offering as follows:
Research and development of the Company’s brachytherapy product line has been funded with proceeds from the sale of equity and debt securities. The Company may require additional funding of approximately $5 million annually to maintain current operating activities. Over the next 12 to 48 months, the Company believes it will cost approximately $9 million to: (1) fund the FDA approval process to conduct human clinical trials; (2) conduct Phase I, pilot, and clinical trials; (3) activate several regional clinics to administer IsoPet® across the county; (4) create an independent production center within the current production site to create a template for future international manufacturing; and (5) initiate regulatory approval processes outside of the United States. The proceeds to be raised from the Regulation A+ Offerings will be used to continue to fund this development.
The continued deployment of the brachytherapy products and a worldwide regulatory approval effort will require additional resources and personnel. The principal variables in the timing and amount of spending for the brachytherapy products in the next 12 to 24 months will be the FDA’s classification of the Company’s brachytherapy products as Class II or Class III devices (or otherwise), and any requirements for additional studies (which may possibly include clinical studies). Thereafter, the principal variables in the amount of the Company’s spending and its financing requirements would be: (1) the timing of any approvals; (2) the nature of the Company’s arrangements with third parties for manufacturing, sales, distribution, and licensing of those products; and (3) the products’ success in the U.S. and elsewhere. The Company intends to fund its activities through strategic transactions such as licensing and partnership agreements, as well as proceeds to be raised from the Regulation A+ Offerings.
Following receipt of required regulatory approvals and necessary financing to fund our working capital requirements, the Company intends to outsource material aspects of manufacturing, distribution, sales, and marketing for operations within the U.S. Outside of the U.S., the Company intends to pursue licensing arrangements and/or partnerships to facilitate its global commercialization strategy.
Long-term, the Company intends to consider resuming research efforts with respect to other products and technologies intended to help improve the diagnosis and treatment of cancer and other illnesses. These long-term goals are subject to the Company: (1) receiving adequate funding; (2) receiving regulatory approval for RadioGel™ and other brachytherapy products; and (3) being able to successfully commercialize its brachytherapy products.
Based on the Company’s financial history since inception, the Company’s independent registered public accounting firm has expressed substantial doubt as to the Company’s ability to continue as a going concern. The Company has limited revenue, nominal cash, and has accumulated deficits since inception. If the Company cannot obtain sufficient additional capital, the Company will be required to delay the implementation of its business strategy and may not be able to continue operations.
The Company’s headquarters are in Northeast Washington, however, our focus on the animal therapy market has been the Northwestern sector of the U.S. The Company continues its marketing efforts on the animal therapy market and our attempts to increase the exposure to our product, and generate revenue accordingly.
As of September 30, 2024, the Company had $1,218,160 cash on hand. There are currently commitments to vendors for products and services purchased. To continue the development of the Company’s products, the current level of cash will not be enough to cover the fixed and variable obligations of the Company.
The Company anticipates using the proceeds from the July 2024 Regulation A+ Offering as follows:
For the animal therapy market:
For the human market:
Research and development of the Company’s precision radionuclide therapy product line has been funded with proceeds from the sale of equity and debt securities, including from the Prior Regulation A+ Offerings. The Company requires additional funding of approximately $2.5 million annually to maintain operating activities. Over the next 36 months, the Company believes it will cost approximately $8.0 to $9.0 million to: (1) fund the FDA approval process to conduct human clinical trials; (2) conduct Phase I, pilot, clinical trials; (3) activate several regional clinics to administer IsoPet® across the U.S.; (4) create an independent production center within the current production site to create a template for future international manufacturing; and (5) initiate regulatory approval processes outside of the United States. The proceeds raised from the Prior Regulation A+ Offerings were used to fund this development and proceeds from the July 2024 Regulation A+ Offering will be used to continue such development efforts.
The continued deployment of the precision radionuclide therapy products and a worldwide regulatory approval effort will require additional resources and personnel. The principal variables in the timing and amount of spending for the precision radionuclide therapy products in the next 12 to 24 months will be the FDA’s classification of the Company’s precision radionuclide therapy products as Class II or Class III devices (or otherwise) and any requirements for additional studies which may possibly include clinical studies. Thereafter, the principal variables in the amount of the Company’s spending and its financing requirements would be the timing of any approvals and the nature of the Company’s arrangements with third parties for manufacturing, sales, distribution and licensing of those products and the products’ success in the U.S. and elsewhere. The Company intends to fund its activities through strategic transactions such as licensing and partnership agreements or from proceeds raised from the Prior Regulation A+ Offering and from the July 2024 Regulation A+ Offering.
The Company intends to expand the indications for use in phases: first, for lymph nodes associated with thyroid cancer, secondly, cancerous lung nodules, and finally, all non-sectable solid tumors. It is anticipated that the medical community may begin to use RadioGel off-label, we will support but will not encourage that practice.
Following receipt of required regulatory approvals and financing, in the U.S., the Company intends to outsource material aspects of manufacturing, distribution, sales and marketing. Outside of the U.S., the Company intends to pursue licensing arrangements and/or partnerships to facilitate its global commercialization strategy.
Long-term, the Company intends to consider resuming research efforts with respect to other products and technologies, such as Gamma Gel and Alpha Gel intended to help improve the diagnosis and treatment of cancer and other illnesses. These long-term goals are subject to the Company: (1) receiving adequate funding; (2) receiving regulatory approval for RadioGel™ and other precision radionuclide therapy products; and (3) being able to successfully commercialize its precision radionuclide therapy products.
Based on the Company’s financial history since inception, the Company’s independent registered public accounting firm has expressed substantial doubt as to the Company’s ability to continue as a going concern. The Company has limited revenue, nominal cash, and has accumulated deficits since inception. If the Company cannot obtain sufficient additional capital, the Company will be required to delay the implementation of its business strategy and may not be able to continue operations.
The Company’s headquarters are in the State of Washington., The initial focus of the animal therapy market has been the Northwestern sector of the United States. The Company has initiated marketing efforts to the animal therapy market in other regions of the United States, attempting to increase the exposure to our product and increase revenue opportunities.
There are currently commitments to vendors for products and services purchased. To continue the development of the Company’s products, the current level of cash will not be enough to cover the fixed and variable obligations of the Company. The Company has focused on operating on minimum overhead, including using a virtual office for the last several years and retaining experienced industry consultants available on an as needed basis. This has helped focus the capital received from the Company’s Regulation A+ Offerings on activities that enhance our objectives.
There is no guarantee that the Company will be able to raise additional funds or to do so on terms advantageous to the Company’s stockholders.
The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability. The Company plans to seek additional funding to maintain its operations through debt and equity financing and to improve operating performance through a focus on strategic products and increased efficiencies in business processes and improvements to the cost structure. There can be no assurance that the Company will be successful in its efforts to raise additional working capital or achieve profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Use of Estimates
The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amount of revenue and expense during the reporting period. Estimates the Company considers include criteria for stock-based compensation expense, and valuation allowances on deferred tax assets. Actual results could differ from those estimates.
Financial Statement Reclassification
Certain account balances from prior periods have been reclassified in these financial statements so as to conform to current period classifications.
Cash Equivalents
For the purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.
The Company occasionally maintains cash balances in excess of the FDIC insured limit. The Company does not consider this risk to be material.
Fair Value of Financial Instruments
Fair value of financial instruments requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2024 and December 31, 2023, the balances reported for cash, prepaid expense, accounts receivable, accounts payable, and accrued expense, approximate the fair value because of their short maturities.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting Standards Codification (“ASC”) Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:
Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
The Company measures certain financial instruments including options and warrants issued during the period at fair value on a recurring basis.
Patents and Intellectual Property
While patents are being developed or pending, they are not being amortized. Management has determined that the economic life of the patents to be ten years and amortization, over such 10-year period and on a straight-line basis will begin once the patents have been issued and the Company begins utilization of the patents through production and sales, resulting in revenues.
The Company evaluates the recoverability of intangible assets, including patents and intellectual property on a continual basis. Several factors are used to evaluate intangibles, including, but not limited to, management’s plans for future operations, recent operating results and projected and expected undiscounted future cash flows.
There have been no such capitalized costs in the three and nine months ended September 30, 2024 and 2023, respectively. However, a patent was filed on July 1, 2019 (No. 1811.191) filed by Michael Korenko and David Swanberg and assigned to the Company based on the Company’s proprietary particle manufacturing process. The timing of this filing was important given the Company’s plans to make IsoPet® commercially available, which it did on or about July 9, 2019. This additional patent protection will strengthen the Company’s competitive position. It is the Company’s intention to further extend this patent protection to several key countries within one year, as permitted under international patent laws and treaties.
Revenue Recognition
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). This standard provides a single set of guidelines for revenue recognition to be used across all industries and requires additional disclosures. The updated guidance introduces a five-step model to achieve its core principal of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the updated guidance effective January 1, 2018 using the full retrospective method.
Under ASC 606, in order to recognize revenue, the Company is required to identify an approved contract with commitments to perform respective obligations, identify rights of each party in the transaction regarding goods to be transferred, identify the payment terms for the goods transferred, verify that the contract has commercial substance and verify that collection of substantially all consideration is probable. The adoption of ASC 606 did not have an impact on the Company’s operations or cash flows.
The Company recognized revenue as they (i) identified the contracts with each customer; (ii) identified the performance obligation in each contract; (iii) determined the transaction price in each contract; (iv) were able to allocate the transaction price to the performance obligations in the contract; and (v) recognized revenue upon the satisfaction of the performance obligation. Upon the sales of the product to complete the procedures on the animals, the Company recognized revenue as that was considered the performance obligation.
All revenue recognized in the three and nine months ended September 30, 2024 and 2023 relate to the procedures performed with respect to the IsoPet® therapies.
The Company accounts for its loss per common share by replacing primary and fully diluted earnings per share with basic and diluted earnings per share. Basic loss per share is computed by dividing loss available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period, and does not include the impact of any potentially dilutive Common Stock equivalents since the impact would be anti-dilutive. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares had been issued. For the given periods of loss, of the periods ended in the nine months ended September 30, 2024 and 2023, the basic earnings per share equals the diluted earnings per share.
Research and Development Costs
Research and developments costs, including salaries, research materials, administrative expense and contractor fees, are charged to operations as incurred. The cost of equipment used in research and development activities which has alternative uses is capitalized as part of fixed assets and not treated as an expense in the period acquired. Depreciation of capitalized equipment used to perform research and development is classified as research and development expense in the year computed.
The Company incurred $66,551 and $80,858 in research and development costs for the three months ended September 30, 2024 and 2023, respectively, and $223,660 and $300,586 in research and development costs for the nine months ended September 30, 2024 and 2023, respectively, all of which were recorded in the Company’s operating expense noted on the statements of operations for the periods then ended.
Advertising and Marketing Costs
Advertising and marketing costs are expensed as incurred except for the cost of tradeshows which are deferred until the tradeshow occurs. During the three and nine months ended September 30, 2024 and 2023, the Company incurred nominal advertising and marketing costs.
Contingencies
In the ordinary course of business, the Company is involved in legal proceedings involving contractual and employment relationships, product liability claims, patent rights, and a variety of other matters. The Company records contingent liabilities resulting from asserted and unasserted claims against it, when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. The Company discloses contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. Estimated probable losses require analysis of multiple factors, in some cases including judgments about the potential actions of third-party claimants and courts. Therefore, actual losses in any future period are inherently uncertain. The Company has entered into various agreements that require them to pay certain fees to consultants and/or employees that have been fully accrued for as of September 30, 2024 and December 31, 2023.
Income Taxes
To address accounting for uncertainty in tax positions, the Company clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. The Company also provides guidance on de-recognition, measurement, classification, interest, and penalties, accounting in interim periods, disclosure and transition.
The Company files income tax returns in the U.S. federal jurisdiction. The Company did not have any tax expense for the three and nine months ended September 30, 2024 and 2023. The Company did not have any deferred tax liability or asset on its balance sheets as of September 30, 2024 and December 31, 2023.
Interest costs and penalties related to income taxes, if any, will be classified as interest expense and general and administrative costs, respectively, in the Company’s financial statements. For the three and nine months ended September 30, 2024 and 2023, the Company did not recognize any interest or penalty expense related to income taxes. The Company believes that it is not reasonably possible for the amounts of unrecognized tax benefits to significantly increase or decrease within the next twelve months.
The Company recognizes compensation costs under FASB ASC Topic 718, Compensation – Stock Compensation and ASU 2018-07. Companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.
Recent Accounting Pronouncements
The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.
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RELATED PARTY TRANSACTIONS |
9 Months Ended |
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Sep. 30, 2024 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 2: RELATED PARTY TRANSACTIONS
In September 2023, our Chief Executive Officer advanced $10,000 to the Company, which amount was repaid October 4, 2023.
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STOCKHOLDERS’ EQUITY |
9 Months Ended |
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Sep. 30, 2024 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 3: STOCKHOLDERS’ EQUITY
Common Stock
The Company has authorized shares of Common Stock. As of September 30, 2024 and December 31, 2023, there are and shares of Common Stock issued and outstanding, respectively.
Preferred Stock
The Company has authorized shares of Preferred Stock. There are currently three series of Preferred Stock outstanding; Series A Convertible Preferred Stock, Series B Convertible Preferred Stock and Series C Convertible Preferred Stock. The Company’s Board of Directors is authorized to provide for the issuance of shares of Preferred Stock in one or more series, fix or alter the designations, preferences, rights, qualifications, limitations or restrictions of the shares of each series, including the dividend rights, dividend rates, conversion rights, voting rights, term of redemption including sinking fund provisions, redemption price or prices, liquidation preferences and the number of shares constituting any series or designations of such series without further vote or action by the shareholders. The issuance of Preferred Stock may have the effect of delaying, deferring or preventing a change in control of management without further action by the shareholders and may adversely affect the voting and other rights of the holders of Common Stock. The issuance of Preferred Stock with voting and conversion rights may adversely affect the voting power of the holders of Common Stock, including the loss of voting control to others.
Series A Convertible Preferred Stock
On June 30, 2015, a certificate of designations was filed with the Delaware Secretary of State to designate shares of the Company’s Preferred Stock as Series A Convertible Preferred Stock, par value $ per share (“Series A Preferred”) (the “Series A COD”). Effective March 31, 2016, the Company amended the Series A COD, increasing the maximum number of shares of Series A Preferred from shares to shares. As of September 30, 2024 and December 31, 2023, there are shares of Series A Preferred issued and outstanding, respectively.
The following summarizes the current rights and preferences of the Series A Preferred:
Liquidation Preference. The Series A Preferred has a liquidation preference of $5.00 per share.
Dividends. Shares of Series A Preferred do not have any separate dividend rights.
Conversion. Subject to certain limitations set forth in the Series A COD, each share of Series A Preferred is convertible, at the option of the holder, into that number of shares of Common Stock (the “Series A Conversion Shares”) equal to the liquidation preference thereof, divided by Conversion Price (as such term is defined in the Series A COD), currently $4.00.
In the event the Company completes an equity or equity-based public offering, registered with the SEC, resulting in gross proceeds to the Company totaling at least $5.0 million, all issued and outstanding shares of Series A Preferred at that time will automatically convert into Series A Conversion Shares.
Redemption. Subject to certain conditions set forth in the Series A COD, in the event of a Change of Control (defined in the Series A COD), or at such time as a third party not affiliated with the Company or any holders of the Series A Preferred shall have acquired, in one or a series of related transactions, equity securities of the Company representing more than fifty percent (50%) of the outstanding voting securities of the Company), the Company, at its option, will have the right to redeem all or a portion of the outstanding Series A Preferred in cash at a price per share of Series A Preferred equal to 100% of the Liquidation Preference.
Voting Rights. Holders of Series A Preferred are entitled to vote on all matters, together with the holders of Common Stock, and have the equivalent of five votes for every Series A Conversion Share issuable upon conversion of such holder’s outstanding shares of Series A Preferred. However, the Series A Conversion Shares, when issued, will have all the same voting rights as other issued and outstanding Common Stock of the Company, and none of the rights of the Series A Preferred.
Liquidation. Upon any liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the holders of Series A Preferred shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the liquidation preference of the Series A Preferred before any distribution or payment shall be made to the holders of any junior securities, and if the assets of the Company are insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Series A Preferred shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.
Certain Price and Share Adjustments.
a) Stock Dividends and Stock Splits. If the Company (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock equivalents; (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the conversion price shall be adjusted accordingly.
b) Merger or Reorganization. If the Company is involved in any reorganization, recapitalization, reclassification, consolidation or merger in which the Common Stock is converted into or exchanged for securities, cash or other property than each share of Series A Preferred shall be convertible into the kind and amount of securities, cash or other property that a holder of the number of shares of Common Stock issuable upon conversion of one share of Series A Preferred prior to any such merger or reorganization would have been entitled to receive pursuant to such transaction.
Series B Convertible Preferred Stock
On October 10, 2018, a certificate of designation was filed with the Delaware Secretary of State to designate shares of our Preferred Stock as Series B Convertible Preferred Stock, par value $ per share (“Series B Preferred”) (the “Series B COD”). As of September 30, 2024 and December 31, 2023, there are shares of Series B Preferred issued and outstanding, respectively.
The following summarizes the current rights and preferences of the Series B Preferred:
Liquidation Preference. The Series B Preferred has a liquidation preference of $1.00 per share.
Dividends. Shares of Series B Preferred do not have any separate dividend rights.
Conversion. Subject to certain limitations set forth in the Series B COD, each share of Series B Convertible is convertible, at the option of the holder, into that number of shares of Common Stock (the “Series B Conversion Shares”) equal to the liquidation preference thereof, divided by the Conversion Price (as such term is defined in the Series B COD), currently $0.08.
Redemption. Subject to certain conditions set forth in the Series B COD, in the event of a Change of Control (defined in the Series B COD), or at such as a third party not affiliated with the Company or any holders of the Series B Convertible shall have acquired, in one or a series of related transactions, equity securities of the Company representing more than fifty percent (50%) of the outstanding voting securities of the Company), the Company, at its option, will have the right to redeem all or a portion of the outstanding Series B Preferred in cash at a price per share of Series B Preferred equal to 100% of the Liquidation Preference.
Voting Rights. Holders of Series B Preferred are entitled to vote on all matters, together with the holders of Common Stock, and have the equivalent of two votes for every Series B Conversion Share issuable upon conversion of such holder’s outstanding shares of Series B Preferred. However, the Series B Conversion Shares, when issued, will have the same voting rights as other issued and outstanding shares of Common Stock of the Company, and none of the rights of the Series A Preferred.
Liquidation. Upon any liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the holders of Series B Preferred shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the liquidation preference of the Series B Preferred before any distribution or payment shall be made to the holders of any junior securities, and if the assets of the Company are insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Series B Preferred shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.
Certain Price and Share Adjustments.
a) Stock Dividends and Stock Splits. If the Company (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock equivalents; (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the conversion price shall be adjusted accordingly.
b) Merger or Reorganization. If the Company is involved in any reorganization, recapitalization, reclassification, consolidation or merger in which the Common Stock is converted into or exchanged for securities, cash or other property than each share of Series B Preferred shall be convertible into the kind and amount of securities, cash or other property that a holder of the number of shares of Common Stock issuable upon conversion of one share of Series B Preferred prior to any such merger or reorganization would have been entitled to receive pursuant to such transaction.
Series C Convertible Preferred Stock
On March 27, 2019, a certificate of designation was filed with the Delaware Secretary of State to designate shares of our Preferred Stock as Series C Convertible Preferred Stock, par value $ per share (“Series C Preferred”) (the “Series C COD”). As of September 30, 2024 and December 31, 2023, there were shares of Series C Preferred issued and outstanding, respectively.
The following summarizes the current rights and preferences of the Series C Preferred:
Liquidation Preference. The Series C Preferred has a liquidation preference of $1.00 per share.
Dividends. Shares of Series C Preferred do not have any separate dividend rights.
Conversion. Subject to certain limitations set forth in the Series C COD, each share of Series C Preferred is convertible, at the option of the holder, into that number of shares of Common Stock (the “Series C Conversion Shares”) equal to the liquidation preference thereof, divided by Conversion Price (as such term is defined in the Series C COD), currently $0.08.
The Series C Preferred will only be convertible at any time after the date that the Company shall have amended its Certificate of Incorporation to increase the number of shares of Common Stock authorized for issuance thereunder or effect a reverse stock split of the outstanding shares of Common Stock by a sufficient amount to permit the conversion of all Series C Preferred into shares of Common Stock (“Authorized Share Approval”) (such date, the “Initial Convertibility Date”), each share of Series C Preferred shall be convertible into validly issued, fully paid and non-assessable shares of Common Stock on the terms and conditions set forth in the Series C COD under the definition “Conversion Rights”.
Redemption. Subject to certain conditions set forth in the Series C COD, in the event of a Change of Control (defined in the Series C COD), or at such time as a third party not affiliated with the Company or any holders of the Series C Preferred shall have acquired, in one or a series of related transactions, equity securities of the Company representing more than fifty percent (50%) of the outstanding voting securities of the Company), the Company, at its option, will have the right to redeem all or a portion of the outstanding Series C Preferred in cash at a price per share of Series C Preferred equal to 100% of the Liquidation Preference.
Voting Rights. Holders of Series C Preferred are entitled to vote on all matters, together with the holders of Common Stock, and have the equivalent of thirty-two votes for every Series C Conversion Share issuable upon conversion of such holder’s outstanding shares of Series C Preferred. However, the Series C Conversion Shares, when issued, will have the same voting rights as other issued and outstanding shares of Common Stock of the Company, and none of the rights of the Series C Preferred.
Liquidation. Upon any liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the holders of Series C Preferred shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the liquidation preference of the Series C Preferred before any distribution or payment shall be made to the holders of any junior securities, and if the assets of the Company are insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Series C Preferred shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.
Certain Price and Share Adjustments.
a) Stock Dividends and Stock Splits. If the Company (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock equivalents; (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the conversion price shall be adjusted accordingly.
b) Merger or Reorganization. If the Company is involved in any reorganization, recapitalization, reclassification, consolidation or merger in which the Common Stock is converted into or exchanged for securities, cash or other property than each share of Series C Preferred shall be convertible into the kind and amount of securities, cash or other property that a holder of the number of shares of Common Stock issuable upon conversion of one share of Series C Preferred prior to any such merger or reorganization would have been entitled to receive pursuant to such transaction.
Common and Preferred Stock Issuances
Common and Preferred Stock Issuances - 2024
From January 1, 2024 through September 30, 2024, the Company issued 7,000,000 shares of Common Stock pursuant to the Regulation A+ Offerings for cash proceeds of $839,000. shares of Common Stock and warrants to purchase
The Company issued 69,395. shares of Common Stock for services rendered valued at $
The Company issued 25,034,000 warrants. shares of Common Stock in the cashless exercise of
The Company settled RSUs for Common Stock.
The Company adjusted their common shares for vested RSUs in prior periods that were cancelled.
Common and Preferred Stock Issuances – 2023
In April 2023, the Company issued 640,000. The Company sold the warrants for $10,665. shares of Common Stock, Series A warrants and Series B warrants in their Regulation A+ Offerings for $
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COMMON STOCK OPTIONS, WARRANTS AND RESTRICTED STOCK UNITS |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMON STOCK OPTIONS, WARRANTS AND RESTRICTED STOCK UNITS |
Common Stock Options
The Company recognizes in the financial statements compensation related to all stock-based awards, including stock options and warrants, based on their estimated grant-date fair value. The Company has estimated expected forfeitures and is recognizing compensation expense only for those awards expected to vest. All compensation is recognized by the time the award vests.
During the three and nine months ended September 30, 2024 and the three and nine months ended September 30, 2023, the Company recognized $ of stock-based compensation expense related to the vesting of stock options.
Common Stock Warrants
The following schedule summarizes the changes in the Company’s stock warrants:
Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each option/warrant is estimated using the Black-Scholes valuation model. The following assumptions were used for the periods as follows:
The Company granted warrants in their Reg A+ funding in April 2023, with an exercise price of $ and a term.
The Company granted warrants in their Regulation A+ Offering in January 2024, with an exercise price of $ and a term and warrants with the same terms on April 1, 2024.
The Company issued shares of Common Stock in the cashless exercise of warrants.
Restricted Stock Units
During the nine months ended September 30, 2024 and 2023, the Company recognized $809,250 and $965,975 in expense related to the vesting of its restricted stock units. As of September 30, 2024, the Company had $951,595 worth of expense yet to be recognized for restricted stock units not yet vested.
On January 1, 2024, the Company granted restricted stock units to its Chief Executive Officer as part of his new employment agreement that vest in four equal installments over a period beginning February 1, 2024. During the nine months ended September 30, 2024, of these restricted stock units vested. In May 2024, the Company granted restricted stock units to consultants that vest through December 31, 2025.
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COMMITMENT |
9 Months Ended |
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Sep. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENT | NOTE 5: COMMITMENT
On June 4, 2019, the Company entered into an Executive Employment Agreement (“Employment Agreement”) with Dr. Michael K. Korenko, the Company’s Chief Executive Officer. The employment term under the Employment Agreement commenced with an effective date of June 11, 2019 and expires on December 31, 2020, and December 31 of each successive year if the Employment Agreement is extended, unless terminated earlier as set forth in the Employment Agreement. On December 31, 2020, the Company extended the Employment Agreement through December 31, 2021 while renegotiating terms of a new Employment Agreement. On May 3, 2021, the Company and the Chief Executive Officer agreed the terms of a new Employment Agreement with an effective date of January 1, 2021 that has a term of three years and expired December 31, 2023. The Company renewed the Employment Agreement for a term of two years expiring December 31, 2025.
Under the terms of the Employment Agreement effective January 1, 2024, the Company shall pay to Dr. Korenko a base compensation of $295,500. In addition, there is a discretionary bonus to be earned in the amount of $10,000 per quarter upon the satisfaction of conditions to be determined by the Board of Directors of the Company. In addition, the Company granted Dr. Korenko restricted stock units on January 1, 2024 that vest over the period.
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SUBSEQUENT EVENTS |
9 Months Ended |
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Sep. 30, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 6: SUBSEQUENT EVENTS
On November 12, 2024, the Company entered into agreements for the issuance of 1,434,000 under the Regulation A+. The Company additionally entered into agreements for the sale of warrants, 30% of which expire December 31, 2024 at an exercise price of $0.01 and 70% of which expire December 31, 2027 at an exercise price of $0.15 for $11,950 which were not part of the Regulation A+. The shares and warrants will be issued upon receipt of fully executed agreements and receipt of all funds. shares of common stock for $ |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Business Overview | Business Overview
The Company was incorporated under the laws of Delaware on December 23, 1994 as Savage Mountain Sports Corporation (“SMSC”). On September 6, 2006, the Company changed its name to Advanced Medical Isotope Corporation, and on December 28, 2017, the Company began operating as Vivos Inc. The Company has authorized capital of shares of common stock (“Common Stock”), $ par value per share, and shares of preferred stock (“Preferred Stock”), $ par value per share.
Our principal place of business is located at 1030 North Center Parkway, Kennewick, WA 99336. Our telephone number is (509) 222-2222. Our corporate website address is http://www.radiogel.com. Our Common Stock is currently quoted on the OTC Pink Marketplace under the symbol “RDGL.”
The Company is a radiation oncology medical device company engaged in the development of its yttrium-90 based brachytherapy device, RadioGel™, for the treatment of non-resectable tumors. A prominent team of radiochemists, scientists and engineers, collaborating with strategic partners, including national laboratories, universities and private corporations, lead the Company’s development efforts. The Company’s overall vision is to globally empower physicians, medical researchers, and patients by providing them with new isotope technologies that offer safe and effective treatments for cancer.
In January 2018, the Center for Veterinary Medicine Product Classification Group ruled that RadioGel ™should be classified as a device for animal therapy of feline sarcomas and canine soft tissue sarcomas. Additionally, after a legal review, the Company believes that the device classification obtained from the Food and Drug Administration (“FDA”) Center for Veterinary Medicine is not limited to canine and feline sarcomas, but rather may be extended to a much broader population of veterinary cancers, including all or most solid tumors in animals. We expect the result of such classification and label review will be that no additional regulatory approvals are necessary for the use of IsoPet® for the treatment of solid tumors in animals. The FDA does not have premarket authority over devices with a veterinary classification, and the manufacturers are responsible for assuring that the product is safe, effective, properly labeled, and otherwise in compliance with all applicable laws and regulations.
Based on the FDA’s recommendation, RadioGel™ will be marketed as “IsoPet®” for use by veterinarians to avoid any confusion between animal and human therapy. The Company already has trademark protection for the “IsoPet®” name. IsoPet® and RadioGel™ are used synonymously throughout this document. The only distinction between IsoPet® and RadioGel™ is the FDA’s recommendation that we use “IsoPet®” for veterinarian usage, and reserve “RadioGel™” for human therapy. Based on these developments, the Company has shifted its primary focus to the development and marketing of Isopet® for animal therapy, through the Company’s IsoPet® Solutions division.
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IsoPet Solutions | IsoPet Solutions
The Company’s IsoPet Solutions division was established in May 2016 to focus on the veterinary oncology market, namely engagement of university veterinarian hospitals to develop the detailed therapy procedures to treat animal tumors and ultimately use of the technology in private clinics. The Company has worked with three different university veterinarian hospitals on IsoPet® testing and therapy. Washington State University treated five cats for feline sarcoma and served to develop the procedures which are incorporated in our label. They concluded that the product was safe and effective in killing cancer cells. Colorado State University demonstrated the CT and PET-CT imaging of IsoPet®. A contract was signed with University of Missouri to treat canine sarcomas and equine sarcoids starting in November 2017.
The dogs were treated for canine soft tissue sarcoma. Response evaluation criteria in solid tumors (“RECIST”) is a set of published rules that define when tumors in cancer patients improve (respond), stay the same (stabilize), or worsen (progress) during treatment. The criteria were published by an international collaboration including the European Organisation for Research and Treatment of Cancer (“EORTC”), National Cancer Institute of the United States, and the National Cancer Institute of Canada Clinical Trials Group.
The testing at the University of Missouri met its objective to demonstrate the safety of IsoPet®. Using its advanced CT and PET equipment it was able to demonstrate that the dose calculations were accurate and that the injections perfused into the cell interstices and did not stay concentrated in a bolus. This results in a more homogeneous dose distribution. There was insignificant spread of Y-90 outside the points of injection demonstrating the effectiveness of the particles and the gel to localize the radiation with no spreading to the blood or other organs nor to urine or fecal material. This confirms that IsoPet® is safe for same day therapy.
The effectiveness of IsoPet® for life extension was not the prime objective, but it resulted in valuable insights. Of the cases one is still cancer-free but the others eventually recurred since there was not a strong focus on treating the margins. The University of Missouri has agreed to become a regional center to administer IsoPet® therapy and will incorporate the improvements suggested by the testing program.
The Company anticipates that future profits, if any, will be derived from direct sales of RadioGel™ (under the name IsoPet®) and related services, and from licensing to private medical and veterinary clinics in the United States of America (the “USA”, or, the “U.S.”) and internationally. The Company intends to report the results from the IsoPet® Solutions division as a separate operating segment in accordance with generally accepted accounting principles (“GAAP”).
Commencing in July 2019, the Company recognized its first commercial sale of IsoPet®. A veterinarian from Alaska brought his cat with a re-occurrent spindle cell sarcoma tumor on his face. The cat had previously received external beam therapy, but now the tumor was growing rapidly. He was given a high dose of 400 Gray with heavy therapy at the margins. This sale met the revenue recognition requirements under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606 – Revenue from Contracts with Customers (“ASC 606”) as the performance obligation was satisfied. The Company completed sales for an additional four animals that received the IsoPet® during 2019.
Our plan is to incorporate the data assembled from our work with Isopet® in animal therapy to support the Company’s efforts in the development of our RadioGel™ device candidate, including obtaining approval from the FDA to market and sell RadioGel™ as a Class II medical device. RadioGel™ is an injectable particle-gel for brachytherapy radiation treatment of cancerous tumors in people and animals. RadioGel™ is comprised of a hydrogel, or a substance that is liquid at room temperature and then gels when reaching body temperature after injection into a tumor. In the gel are small particles, less than two microns, of Y-90. Once injected, these inert particles are locked in place inside the tumor by the gel, delivering a very high local radiation dose. The radiation is beta, consisting of high-speed electrons. These electrons only travel a short distance so the device can deliver high radiation to the tumor with minimal dose to the surrounding tissue. Optimally, patients can go home immediately following treatment without the risk of radiation exposure to family members. Since Y-90 has a half-life of 2.7 days, the radioactivity drops to 5% of its original value after ten days.
The Company modified its Indication for Use from skin cancel to cancerous tissue or solid tumors pathologically associated with locoregional papillary thyroid carcinoma and recurrent papillary thyroid carcinoma having discernable tumors associated with metastatic lymph nodes or extranodal disease in patients who are not surgical candidates or who have declined surgery, or patients who require post-surgical remnant ablation (for example, after prior incomplete radioiodine therapy). Papillary thyroid carcinoma belongs to the general class of head and neck tumors for which tumors are accessible by intraoperative direct needle injection. The Company’s Medical Advisory Board felt that demonstrating efficacy in clinical trials was much easier with this new indication.
In the third quarter of 2024, the Company entered the market of treating exotic animals by treating a ferret. The Company also has established important contacts at zoos and used conferences to communicate the effectiveness of Precision Radionuclide Therapy TM to the zoo community.
The Company intends to conduct human trials internationally, initially in Southeast Asia. These trials will be initiated prior to trials in the United States, and will be conducted under a protocol consistent with and complimentary to the IDE and human trial roadmap in the United States.
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Intellectual Property | Intellectual Property
Our original license with Battelle National Laboratory (the “Battelle License”) reached its end of life in 2022. During the past several years, we have expanded our proprietary knowledge, as well as our trademark and patent protection, in anticipation of the Battelle License reaching the end of its term.
Our RadioGel™ trademark protection is in 17 countries. We have expanded our trademark protection from RadioGel™ to now include IsoPet®. We obtained the International Certificate of Registration for ISOPET, which is the first step to file in several countries.
We have filed for trademark protection for the term Precision Radionuclide Therapy™. We believe this term will be increasingly important.
The Company received the Patent Cooperation Treaty (“PCT”) International Search Report on our patent application (No.1811.191). Seven of our claims were immediately ruled as having novelty, inventive step and industrial applicability. This gives us the basis to extend for many years the patent protection for our proprietary Y-90 phosphate particles utilized in Isopet® and Radiogel™.
Our patent team filed our particle patent in more than ten patent offices that collectively cover 63 countries throughout the world. We filed a continuation-in-part applications number 1774054 in the USA to expand the claims on our particle patent. The U.S. Patent office recently gave us the Notice of Allowance for our patent to produce our yttrium phosphate microparticles, U.S. Patent Application Serial No: 16-459,466. We also filed an amendment to correct the wording on our claims at make them consistent with the USE claims. Ref: 4207-0005; European Patent Application NO. 20 834 229.5; VIVOS INC; Our Ref: FS/53791.
We filed a hydrogel utility patent in the USA (16309:17/943,311) and internationally (16389:PCT/US22/4374) based on the last 18 months of development work to optimize our hydrogel component. These include reducing the polymer production time and increasing the output by a factor of three. We have also further reduced the level of trace contaminants to be well below the FDA guidelines.
We filed a provisional patent (Serial Number 63436562) to protect our innovative improvements in our shipping container, our vial shield, our syringe shield, and our Peltier chiller. Our objectives were to reduce shipping costs, decrease radiation exposure, and enhance sterility. These devices will be preferentially used at Mayo Clinics for human clinical studies at our IsoPet regional treatment centers. The Company filed a utility patent in the fourth quarter of 2023 for this therapy support equipment.
We anticipate that Precision Radionuclide Therapy will become increasingly important in the future and expand to other isotope and other indications for use. Therefore, we filed an alternate particle utility patent (Serial number 18/152,137). We will focus our near-term effort on the Y-90 therapy, which we believe is the best beta emitter; however, we leveraged our hydrogel utility patent to incorporate other promising isotopes and compounds for a range of future applications. This includes gamma and alpha particle emitters.
We have trademark protection in several countries on IsoPet®, RadioGel®, Precision Radionuclide TherapyTM, BetaGelTM, GammaGelTM, and AlphaGelTM.
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Going Concern | Going Concern
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has suffered recurring losses and used significant cash in support of its operating activities and the Company’s cash position is not sufficient to support the Company’s operations. Research and development of the Company’s brachytherapy product line has been funded with proceeds from the sale of equity and debt securities as well as a series of grants. The Company requires funding of approximately $2.5 million annually to maintain current operating activities.
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Financing and Strategy | Financing and Strategy
In November 2019, the SEC qualified the Company’s offering of its Common Stock, under Regulation A of Section 3(6) of the Securities Act of 1933, as amended (the “Securities Act”) (“Regulation A”), which offering was and amended from time to time thereafter (the “2019 Regulation A+ Offering”). In September 2021, the SEC qualified the Company’s offering of Common Stock under Regulation A, which offering was amended from time to time thereafter (together with the 2019 Regulation A+ Offering, the “Prior Regulation A+ Offerings”). During the year ended December 31, 2023, $1,179,245 was raised through the sale of shares of common stock and the private placement of 18,797,000 warrants. During the nine months ended September 30, 2024, the Company raised $839,000 through the issuance of shares of common stock and 7,000,000 warrants. The Company’s Prior Regulation A Offerings undertaken pursuant to Regulation A+ have raised approximately $6,000,000 from the sale of shares of common stock.
On July 17, 2024, the SEC qualified the Company’s offering under Regulation A to offer up to $60,000,000 shares of its Common Stock (the “July 2024 Regulation A+ Offering”).
The Company is using the proceeds generated from the Prior Regulation A+ Offering and the July 2024 Regulation A+ Offering as follows:
Research and development of the Company’s brachytherapy product line has been funded with proceeds from the sale of equity and debt securities. The Company may require additional funding of approximately $5 million annually to maintain current operating activities. Over the next 12 to 48 months, the Company believes it will cost approximately $9 million to: (1) fund the FDA approval process to conduct human clinical trials; (2) conduct Phase I, pilot, and clinical trials; (3) activate several regional clinics to administer IsoPet® across the county; (4) create an independent production center within the current production site to create a template for future international manufacturing; and (5) initiate regulatory approval processes outside of the United States. The proceeds to be raised from the Regulation A+ Offerings will be used to continue to fund this development.
The continued deployment of the brachytherapy products and a worldwide regulatory approval effort will require additional resources and personnel. The principal variables in the timing and amount of spending for the brachytherapy products in the next 12 to 24 months will be the FDA’s classification of the Company’s brachytherapy products as Class II or Class III devices (or otherwise), and any requirements for additional studies (which may possibly include clinical studies). Thereafter, the principal variables in the amount of the Company’s spending and its financing requirements would be: (1) the timing of any approvals; (2) the nature of the Company’s arrangements with third parties for manufacturing, sales, distribution, and licensing of those products; and (3) the products’ success in the U.S. and elsewhere. The Company intends to fund its activities through strategic transactions such as licensing and partnership agreements, as well as proceeds to be raised from the Regulation A+ Offerings.
Following receipt of required regulatory approvals and necessary financing to fund our working capital requirements, the Company intends to outsource material aspects of manufacturing, distribution, sales, and marketing for operations within the U.S. Outside of the U.S., the Company intends to pursue licensing arrangements and/or partnerships to facilitate its global commercialization strategy.
Long-term, the Company intends to consider resuming research efforts with respect to other products and technologies intended to help improve the diagnosis and treatment of cancer and other illnesses. These long-term goals are subject to the Company: (1) receiving adequate funding; (2) receiving regulatory approval for RadioGel™ and other brachytherapy products; and (3) being able to successfully commercialize its brachytherapy products.
Based on the Company’s financial history since inception, the Company’s independent registered public accounting firm has expressed substantial doubt as to the Company’s ability to continue as a going concern. The Company has limited revenue, nominal cash, and has accumulated deficits since inception. If the Company cannot obtain sufficient additional capital, the Company will be required to delay the implementation of its business strategy and may not be able to continue operations.
The Company’s headquarters are in Northeast Washington, however, our focus on the animal therapy market has been the Northwestern sector of the U.S. The Company continues its marketing efforts on the animal therapy market and our attempts to increase the exposure to our product, and generate revenue accordingly.
As of September 30, 2024, the Company had $1,218,160 cash on hand. There are currently commitments to vendors for products and services purchased. To continue the development of the Company’s products, the current level of cash will not be enough to cover the fixed and variable obligations of the Company.
The Company anticipates using the proceeds from the July 2024 Regulation A+ Offering as follows:
For the animal therapy market:
For the human market:
Research and development of the Company’s precision radionuclide therapy product line has been funded with proceeds from the sale of equity and debt securities, including from the Prior Regulation A+ Offerings. The Company requires additional funding of approximately $2.5 million annually to maintain operating activities. Over the next 36 months, the Company believes it will cost approximately $8.0 to $9.0 million to: (1) fund the FDA approval process to conduct human clinical trials; (2) conduct Phase I, pilot, clinical trials; (3) activate several regional clinics to administer IsoPet® across the U.S.; (4) create an independent production center within the current production site to create a template for future international manufacturing; and (5) initiate regulatory approval processes outside of the United States. The proceeds raised from the Prior Regulation A+ Offerings were used to fund this development and proceeds from the July 2024 Regulation A+ Offering will be used to continue such development efforts.
The continued deployment of the precision radionuclide therapy products and a worldwide regulatory approval effort will require additional resources and personnel. The principal variables in the timing and amount of spending for the precision radionuclide therapy products in the next 12 to 24 months will be the FDA’s classification of the Company’s precision radionuclide therapy products as Class II or Class III devices (or otherwise) and any requirements for additional studies which may possibly include clinical studies. Thereafter, the principal variables in the amount of the Company’s spending and its financing requirements would be the timing of any approvals and the nature of the Company’s arrangements with third parties for manufacturing, sales, distribution and licensing of those products and the products’ success in the U.S. and elsewhere. The Company intends to fund its activities through strategic transactions such as licensing and partnership agreements or from proceeds raised from the Prior Regulation A+ Offering and from the July 2024 Regulation A+ Offering.
The Company intends to expand the indications for use in phases: first, for lymph nodes associated with thyroid cancer, secondly, cancerous lung nodules, and finally, all non-sectable solid tumors. It is anticipated that the medical community may begin to use RadioGel off-label, we will support but will not encourage that practice.
Following receipt of required regulatory approvals and financing, in the U.S., the Company intends to outsource material aspects of manufacturing, distribution, sales and marketing. Outside of the U.S., the Company intends to pursue licensing arrangements and/or partnerships to facilitate its global commercialization strategy.
Long-term, the Company intends to consider resuming research efforts with respect to other products and technologies, such as Gamma Gel and Alpha Gel intended to help improve the diagnosis and treatment of cancer and other illnesses. These long-term goals are subject to the Company: (1) receiving adequate funding; (2) receiving regulatory approval for RadioGel™ and other precision radionuclide therapy products; and (3) being able to successfully commercialize its precision radionuclide therapy products.
Based on the Company’s financial history since inception, the Company’s independent registered public accounting firm has expressed substantial doubt as to the Company’s ability to continue as a going concern. The Company has limited revenue, nominal cash, and has accumulated deficits since inception. If the Company cannot obtain sufficient additional capital, the Company will be required to delay the implementation of its business strategy and may not be able to continue operations.
The Company’s headquarters are in the State of Washington., The initial focus of the animal therapy market has been the Northwestern sector of the United States. The Company has initiated marketing efforts to the animal therapy market in other regions of the United States, attempting to increase the exposure to our product and increase revenue opportunities.
There are currently commitments to vendors for products and services purchased. To continue the development of the Company’s products, the current level of cash will not be enough to cover the fixed and variable obligations of the Company. The Company has focused on operating on minimum overhead, including using a virtual office for the last several years and retaining experienced industry consultants available on an as needed basis. This has helped focus the capital received from the Company’s Regulation A+ Offerings on activities that enhance our objectives.
There is no guarantee that the Company will be able to raise additional funds or to do so on terms advantageous to the Company’s stockholders.
The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability. The Company plans to seek additional funding to maintain its operations through debt and equity financing and to improve operating performance through a focus on strategic products and increased efficiencies in business processes and improvements to the cost structure. There can be no assurance that the Company will be successful in its efforts to raise additional working capital or achieve profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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Use of Estimates | Use of Estimates
The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amount of revenue and expense during the reporting period. Estimates the Company considers include criteria for stock-based compensation expense, and valuation allowances on deferred tax assets. Actual results could differ from those estimates.
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Financial Statement Reclassification | Financial Statement Reclassification
Certain account balances from prior periods have been reclassified in these financial statements so as to conform to current period classifications.
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Cash Equivalents | Cash Equivalents
For the purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.
The Company occasionally maintains cash balances in excess of the FDIC insured limit. The Company does not consider this risk to be material.
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Fair Value of Financial Instruments | Fair Value of Financial Instruments
Fair value of financial instruments requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2024 and December 31, 2023, the balances reported for cash, prepaid expense, accounts receivable, accounts payable, and accrued expense, approximate the fair value because of their short maturities.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting Standards Codification (“ASC”) Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:
Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
The Company measures certain financial instruments including options and warrants issued during the period at fair value on a recurring basis.
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Patents and Intellectual Property | Patents and Intellectual Property
While patents are being developed or pending, they are not being amortized. Management has determined that the economic life of the patents to be ten years and amortization, over such 10-year period and on a straight-line basis will begin once the patents have been issued and the Company begins utilization of the patents through production and sales, resulting in revenues.
The Company evaluates the recoverability of intangible assets, including patents and intellectual property on a continual basis. Several factors are used to evaluate intangibles, including, but not limited to, management’s plans for future operations, recent operating results and projected and expected undiscounted future cash flows.
There have been no such capitalized costs in the three and nine months ended September 30, 2024 and 2023, respectively. However, a patent was filed on July 1, 2019 (No. 1811.191) filed by Michael Korenko and David Swanberg and assigned to the Company based on the Company’s proprietary particle manufacturing process. The timing of this filing was important given the Company’s plans to make IsoPet® commercially available, which it did on or about July 9, 2019. This additional patent protection will strengthen the Company’s competitive position. It is the Company’s intention to further extend this patent protection to several key countries within one year, as permitted under international patent laws and treaties.
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Revenue Recognition | Revenue Recognition
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). This standard provides a single set of guidelines for revenue recognition to be used across all industries and requires additional disclosures. The updated guidance introduces a five-step model to achieve its core principal of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the updated guidance effective January 1, 2018 using the full retrospective method.
Under ASC 606, in order to recognize revenue, the Company is required to identify an approved contract with commitments to perform respective obligations, identify rights of each party in the transaction regarding goods to be transferred, identify the payment terms for the goods transferred, verify that the contract has commercial substance and verify that collection of substantially all consideration is probable. The adoption of ASC 606 did not have an impact on the Company’s operations or cash flows.
The Company recognized revenue as they (i) identified the contracts with each customer; (ii) identified the performance obligation in each contract; (iii) determined the transaction price in each contract; (iv) were able to allocate the transaction price to the performance obligations in the contract; and (v) recognized revenue upon the satisfaction of the performance obligation. Upon the sales of the product to complete the procedures on the animals, the Company recognized revenue as that was considered the performance obligation.
All revenue recognized in the three and nine months ended September 30, 2024 and 2023 relate to the procedures performed with respect to the IsoPet® therapies.
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Loss Per Share |
The Company accounts for its loss per common share by replacing primary and fully diluted earnings per share with basic and diluted earnings per share. Basic loss per share is computed by dividing loss available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period, and does not include the impact of any potentially dilutive Common Stock equivalents since the impact would be anti-dilutive. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares had been issued. For the given periods of loss, of the periods ended in the nine months ended September 30, 2024 and 2023, the basic earnings per share equals the diluted earnings per share.
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Research and Development Costs | Research and Development Costs
Research and developments costs, including salaries, research materials, administrative expense and contractor fees, are charged to operations as incurred. The cost of equipment used in research and development activities which has alternative uses is capitalized as part of fixed assets and not treated as an expense in the period acquired. Depreciation of capitalized equipment used to perform research and development is classified as research and development expense in the year computed.
The Company incurred $66,551 and $80,858 in research and development costs for the three months ended September 30, 2024 and 2023, respectively, and $223,660 and $300,586 in research and development costs for the nine months ended September 30, 2024 and 2023, respectively, all of which were recorded in the Company’s operating expense noted on the statements of operations for the periods then ended.
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Advertising and Marketing Costs | Advertising and Marketing Costs
Advertising and marketing costs are expensed as incurred except for the cost of tradeshows which are deferred until the tradeshow occurs. During the three and nine months ended September 30, 2024 and 2023, the Company incurred nominal advertising and marketing costs.
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Contingencies | Contingencies
In the ordinary course of business, the Company is involved in legal proceedings involving contractual and employment relationships, product liability claims, patent rights, and a variety of other matters. The Company records contingent liabilities resulting from asserted and unasserted claims against it, when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. The Company discloses contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. Estimated probable losses require analysis of multiple factors, in some cases including judgments about the potential actions of third-party claimants and courts. Therefore, actual losses in any future period are inherently uncertain. The Company has entered into various agreements that require them to pay certain fees to consultants and/or employees that have been fully accrued for as of September 30, 2024 and December 31, 2023.
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Income Taxes | Income Taxes
To address accounting for uncertainty in tax positions, the Company clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. The Company also provides guidance on de-recognition, measurement, classification, interest, and penalties, accounting in interim periods, disclosure and transition.
The Company files income tax returns in the U.S. federal jurisdiction. The Company did not have any tax expense for the three and nine months ended September 30, 2024 and 2023. The Company did not have any deferred tax liability or asset on its balance sheets as of September 30, 2024 and December 31, 2023.
Interest costs and penalties related to income taxes, if any, will be classified as interest expense and general and administrative costs, respectively, in the Company’s financial statements. For the three and nine months ended September 30, 2024 and 2023, the Company did not recognize any interest or penalty expense related to income taxes. The Company believes that it is not reasonably possible for the amounts of unrecognized tax benefits to significantly increase or decrease within the next twelve months.
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Stock-Based Compensation |
The Company recognizes compensation costs under FASB ASC Topic 718, Compensation – Stock Compensation and ASU 2018-07. Companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.
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Recent Accounting Pronouncements | Recent Accounting Pronouncements
The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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SCHEDULE OF DILUTIVE EARNINGS PER SHARE |
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COMMON STOCK OPTIONS, WARRANTS AND RESTRICTED STOCK UNITS (Tables) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE OF CHANGES IN STOCK OPTION |
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SCHEDULE OF CHANGES IN STOCK WARRANTS | The following schedule summarizes the changes in the Company’s stock warrants:
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SCHEDULE OF ASSUMPTIONS USED IN FAIR VALUE MEASUREMENT |
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SCHEDULE OF CHANGES IN RESTRICTED STOCK UNITS |
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SCHEDULE OF DILUTIVE EARNINGS PER SHARE (Details) - shares |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2024 |
Dec. 31, 2023 |
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Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potential dilutive securities | 32,262,379 | 39,746,379 |
Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potential dilutive securities | 9,909,570 | 9,909,570 |
Restricted Stock Units (RSUs) [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potential dilutive securities | 12,000,000 | 1,450,000 |
Equity Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potential dilutive securities | 2,252,809 | 2,252,809 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potential dilutive securities | 8,100,000 | 26,134,000 |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Jul. 17, 2024 |
Sep. 30, 2024 |
Sep. 30, 2023 |
Sep. 30, 2024 |
Sep. 30, 2023 |
Dec. 31, 2023 |
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Property, Plant and Equipment [Line Items] | ||||||
Common stock, shares authorized | 950,000,000 | 950,000,000 | 950,000,000 | |||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||
Current operating activities | $ 2,500,000 | |||||
Sale of common stock | 6,000,000 | |||||
Current operating activities | (1,213,127) | $ (829,886) | ||||
Cash on hand | $ 1,218,160 | $ 1,218,160 | ||||
Economic life of the patent | 10 years | 10 years | ||||
Research and development costs | $ 66,551 | $ 80,858 | $ 223,660 | $ 300,586 | ||
Brachytherapy Product Line [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Current operating activities | $ 5,000,000 | |||||
Offering term | Over the next 12 to 48 months, the Company believes it will cost approximately $9 million to: (1) fund the FDA approval process to conduct human clinical trials; (2) conduct Phase I, pilot, and clinical trials; (3) activate several regional clinics to administer IsoPet® across the county; (4) create an independent production center within the current production site to create a template for future international manufacturing; and (5) initiate regulatory approval processes outside of the United States. The proceeds to be raised from the Regulation A+ Offerings will be used to continue to fund this development. | |||||
Radionuclide Therapy Product Line [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Current operating activities | $ 2,500,000 | |||||
Offering term | Over the next 36 months, the Company believes it will cost approximately $8.0 to $9.0 million to: (1) fund the FDA approval process to conduct human clinical trials; (2) conduct Phase I, pilot, clinical trials; (3) activate several regional clinics to administer IsoPet® across the U.S.; (4) create an independent production center within the current production site to create a template for future international manufacturing; and (5) initiate regulatory approval processes outside of the United States. | |||||
Warrant [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Number of warrants issued | 7,000,000 | 7,000,000 | 18,797,000 | |||
Common Stock [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Number of common stock shares issued, value | $ 839,000 | |||||
Number of common stock shares issued, shares | 13,000,000 | |||||
Common Stock [Member] | Maximum [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Number of common stock shares issued, value | $ 60,000,000 | |||||
Private Placement [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Number of common stock shares issued, value | $ 1,179,245 | |||||
Number of common stock shares issued, shares | 16,132,000 |
RELATED PARTY TRANSACTIONS (Details Narrative) |
Sep. 30, 2023
USD ($)
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Chief Executive Officer [Member] | |
Advance from officer | $ 10,000 |
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 27, 2019 |
Oct. 10, 2018 |
Jun. 30, 2015 |
Apr. 30, 2023 |
Sep. 30, 2024 |
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
Sep. 30, 2024 |
Sep. 30, 2023 |
Dec. 31, 2023 |
Mar. 31, 2016 |
Mar. 30, 2016 |
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Class of Stock [Line Items] | |||||||||||||
Common stock, shares authorized | 950,000,000 | 950,000,000 | 950,000,000 | ||||||||||
Common stock, shares issued | 417,592,703 | 417,592,703 | 387,894,033 | ||||||||||
Common stock, shares outstanding | 417,592,703 | 417,592,703 | 387,894,033 | ||||||||||
Preferred stock shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | ||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Proceeds from issuance or sale of equity | $ 839,000 | $ 650,665 | |||||||||||
Issued for services, shares | 441,252 | ||||||||||||
Issued for services, value | $ 56,163 | $ 3,750 | $ 9,482 | $ 69,395 | |||||||||
Number of shares issued, value | $ 704,000 | $ 128,000 | $ 640,000 | ||||||||||
Restricted Stock Units (RSUs) [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Issued for common stock RSU | 500,000 | ||||||||||||
Common Stock and Warrants [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Number of shares issued | 13,000,000 | ||||||||||||
Warrant [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Warrant purchase | 7,000,000 | 7,000,000 | 18,797,000 | ||||||||||
Issued for common stock warrant exercise | 16,919,918 | ||||||||||||
Issued for cashless exercise, warrants | 25,034,000 | 25,034,000 | |||||||||||
Common Stock [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Number of shares issued | 8,000,000 | 11,000,000 | 2,000,000 | 8,000,000 | |||||||||
Issued for services, shares | 278,652 | 22,766 | 139,834 | ||||||||||
Issued for services, value | $ 279 | $ 22 | $ 140 | ||||||||||
Issued for common stock warrant exercise | 16,919,918 | ||||||||||||
Issued for common stock RSU | 500,000 | ||||||||||||
Number of shares issued, value | $ 640,000 | $ 11,000 | $ 2,000 | $ 8,000 | |||||||||
Proceeds from issuance of warrants | $ 10,665 | ||||||||||||
Series A Convertible Preferred Stock [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock shares authorized | 2,500,000 | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | 2,500,000 | |||||||
Preferred stock, par value | $ 0.001 | ||||||||||||
Preferred stock shares outstanding | 2,071,007 | 2,071,007 | 2,071,007 | ||||||||||
Preferred stock, liquidation preference per share | 5.00 | ||||||||||||
Conversion price per share | $ 4.00 | ||||||||||||
Gross proceeds from preferred stock | $ 5,000,000.0 | ||||||||||||
Preferred stock redemption, description | Subject to certain conditions set forth in the Series A COD, in the event of a Change of Control (defined in the Series A COD), or at such time as a third party not affiliated with the Company or any holders of the Series A Preferred shall have acquired, in one or a series of related transactions, equity securities of the Company representing more than fifty percent (50%) of the outstanding voting securities of the Company), the Company, at its option, will have the right to redeem all or a portion of the outstanding Series A Preferred in cash at a price per share of Series A Preferred equal to 100% of the Liquidation Preference. | ||||||||||||
Redemption percentage | 100.00% | ||||||||||||
Voting percentage | Holders of Series A Preferred are entitled to vote on all matters, together with the holders of Common Stock, and have the equivalent of five votes for every Series A Conversion Share issuable upon conversion of such holder’s outstanding shares of Series A Preferred. However, the Series A Conversion Shares, when issued, will have all the same voting rights as other issued and outstanding Common Stock of the Company, and none of the rights of the Series A Preferred. | ||||||||||||
Preferred stock shares issued | 2,071,007 | 2,071,007 | 2,071,007 | ||||||||||
Series B Convertible Preferred Stock [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | |||||||||
Preferred stock, par value | $ 0.001 | ||||||||||||
Preferred stock shares outstanding | 200,363 | 200,363 | 200,363 | ||||||||||
Preferred stock, liquidation preference per share | 1.00 | ||||||||||||
Conversion price per share | $ 0.08 | ||||||||||||
Preferred stock redemption, description | Subject to certain conditions set forth in the Series B COD, in the event of a Change of Control (defined in the Series B COD), or at such as a third party not affiliated with the Company or any holders of the Series B Convertible shall have acquired, in one or a series of related transactions, equity securities of the Company representing more than fifty percent (50%) of the outstanding voting securities of the Company), the Company, at its option, will have the right to redeem all or a portion of the outstanding Series B Preferred in cash at a price per share of Series B Preferred equal to 100% of the Liquidation Preference | ||||||||||||
Redemption percentage | 100.00% | ||||||||||||
Voting percentage | Holders of Series B Preferred are entitled to vote on all matters, together with the holders of Common Stock, and have the equivalent of two votes for every Series B Conversion Share issuable upon conversion of such holder’s outstanding shares of Series B Preferred. However, the Series B Conversion Shares, when issued, will have the same voting rights as other issued and outstanding shares of Common Stock of the Company, and none of the rights of the Series A Preferred. | ||||||||||||
Preferred stock shares issued | 200,363 | 200,363 | 200,363 | ||||||||||
Series C Convertible Preferred Stock [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | |||||||||
Preferred stock, par value | $ 0.001 | ||||||||||||
Preferred stock shares outstanding | 385,302 | 385,302 | 385,302 | ||||||||||
Preferred stock, liquidation preference per share | 1.00 | ||||||||||||
Conversion price per share | $ 0.08 | ||||||||||||
Preferred stock redemption, description | Subject to certain conditions set forth in the Series C COD, in the event of a Change of Control (defined in the Series C COD), or at such time as a third party not affiliated with the Company or any holders of the Series C Preferred shall have acquired, in one or a series of related transactions, equity securities of the Company representing more than fifty percent (50%) of the outstanding voting securities of the Company), the Company, at its option, will have the right to redeem all or a portion of the outstanding Series C Preferred in cash at a price per share of Series C Preferred equal to 100% of the Liquidation Preference | ||||||||||||
Redemption percentage | 100.00% | ||||||||||||
Voting percentage | Holders of Series C Preferred are entitled to vote on all matters, together with the holders of Common Stock, and have the equivalent of thirty-two votes for every Series C Conversion Share issuable upon conversion of such holder’s outstanding shares of Series C Preferred. However, the Series C Conversion Shares, when issued, will have the same voting rights as other issued and outstanding shares of Common Stock of the Company, and none of the rights of the Series C Preferred. | ||||||||||||
Preferred stock shares issued | 385,302 | 385,302 | 385,302 | ||||||||||
Series A Warrant [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Number of shares issued | 2,665,000 | ||||||||||||
Series B Warrant [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Number of shares issued | 8,000,000 |
SCHEDULE OF ASSUMPTIONS USED IN FAIR VALUE MEASUREMENT (Details) |
9 Months Ended | |
---|---|---|
Sep. 30, 2024 |
Sep. 30, 2023 |
|
Equity [Abstract] | ||
Expected term | ||
Expected volatility | ||
Expected dividend yield | ||
Risk-free interest rate |
SCHEDULE OF CHANGES IN RESTRICTED STOCK UNITS (Details) - Restricted Stock Units [Member] - $ / shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2024 |
Sep. 30, 2023 |
|
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of Shares, RSU's Beginning balance | 1,450,000 | 10,262,500 |
Weighted Average Grant Date Fair Value, RSU's Outstanding Beginning | $ 0.09 | $ 0.08 |
Number of Shares, RSU's granted | 21,050,000 | 2,900,000 |
Weighted Average Grant Date Fair Value, RSU's granted | $ 0.077 | $ 0.091 |
Number of Shares, RSU's vested | (10,500,000) | (10,725,000) |
Weighted Average Grant Date Fair Value, RSU's vested | ||
Number of Shares, RSU's forfeited | 262,500 | |
Weighted Average Grant Date Fair Value, RSU's forfeited | ||
Number of Shares, RSU's Ending balance | 12,000,000 | 2,175,000 |
Weighted Average Grant Date Fair Value, RSU's Outstanding Ending | $ 0.08 | $ 0.09 |
Number of Shares, RSU's forfeited | (262,500) |
COMMITMENT (Details Narrative) - Dr. Michael K. Korenko [Member] - USD ($) |
Jan. 01, 2024 |
Jun. 04, 2019 |
---|---|---|
Employment Agreement [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Agreement term description | The employment term under the Employment Agreement commenced with an effective date of June 11, 2019 and expires on December 31, 2020, and December 31 of each successive year if the Employment Agreement is extended, unless terminated earlier as set forth in the Employment Agreement. On December 31, 2020, the Company extended the Employment Agreement through December 31, 2021 while renegotiating terms of a new Employment Agreement. On May 3, 2021, the Company and the Chief Executive Officer agreed the terms of a new Employment Agreement with an effective date of January 1, 2021 that has a term of three years and expired December 31, 2023. The Company renewed the Employment Agreement for a term of two years expiring December 31, 2025. | |
Compensation amount | $ 295,500 | |
Discretionary bonus | $ 10,000 | |
Vest period | 2 years | |
Restricted Stock Units (RSUs) [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Granted restricted stock units | 20,000,000 |
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