10-Q: Vivos Inc. Q3 2025: Losses Widen Amidst Strategic Shifts

Vivos Inc. reported increased net losses and cash burn in Q3 2025, while advancing strategic initiatives in human and animal therapies and facing FDA regulatory hurdles.

Summary

• Net loss for the nine months ended September 30, 2025, increased to $1,987,503 from $1,887,260 in the prior year period.
• Revenue for the nine months ended September 30, 2025, grew to $43,627 from $23,000 in the prior year, primarily from IsoPet therapies, sales, and clinic licensing.
• Gross profit shifted to a loss of $56,650 for the nine months ended September 30, 2025, compared to a gross profit of $2,301 in the same period of 2024, driven by a significant increase in Cost of Goods Sold to $100,277.
• Operating expenses increased to $2,012,678 for the nine months ended September 30, 2025, from $1,944,885 in the prior year, mainly due to higher research and development, general and administrative, and payroll expenses.
• Cash used in operating activities increased to $1,518,189 for the nine months ended September 30, 2025, up from $1,213,127 in the same period of 2024.
• The company raised $1,507,750 from financing activities during the nine months ended September 30, 2025, through common stock and warrant sales.
• Cash on hand as of September 30, 2025, was $2,202,109, a slight decrease from $2,212,548 at December 31, 2024.
• The FDA rejected the company's Investigational Device Exemption (IDE) for RadioGel on August 13, 2025, citing deficiencies, prompting a shift to a pre-submission process.
• Vivos Scientific India LLP was established on October 1, 2025, to expand human therapies, establish a manufacturing center, and generate clinical trial data in India.
• The company aims to achieve breakeven status for its Animal Therapy Division in 2026.

Sentiment

Score: 3

Explanation: The sentiment is low due to significant and increasing net losses, a shift to gross loss, increased cash burn, and an explicit 'going concern' warning from auditors. The FDA's rejection of the IDE is a major setback, despite the Breakthrough Device designation. While strategic initiatives and capital raises are ongoing, the fundamental financial health and regulatory progress are concerning.

Positives

• Revenue increased by 89.68% to $43,627 for the nine months ended September 30, 2025, compared to $23,000 in the prior year, indicating growing sales and licensing activities.
• The company secured $1,507,750 in financing during the nine months ended September 30, 2025, demonstrating continued investor support through Regulation A+ Offerings.
• RadioGel received Breakthrough Device designation from the FDA in December 2023, which could accelerate the regulatory review process.
• Strategic expansion into India with the creation of Vivos Scientific India LLP on October 1, 2025, aims to establish a manufacturing center, expand human therapies, and generate additional human trial data.
• The company is actively developing alternate production facilities, including a contract for space at Applied Process Engineering Laboratory (APEL) in Richland, Washington, to mitigate single-site risk and enable automation.
• New product line, PrecisionGel, a hydrogel component, has been commercialized with a contract signed with Akina, Inc. and initial sales to a university and pharmaceutical company.
• The company has expanded its intellectual property portfolio with new provisional patents for PrecisionGel and trademarks for various product lines and chillers.

Negatives

• Net loss increased to $1,987,503 for the nine months ended September 30, 2025, from $1,887,260 in the prior year, indicating widening losses.
• Gross profit turned into a loss of $56,650 for the nine months ended September 30, 2025, compared to a profit of $2,301 in the prior year, primarily due to a substantial increase in Cost of Goods Sold.
• Cash used in operating activities increased by 25.15% to $1,518,189 for the nine months ended September 30, 2025, reflecting an accelerated cash burn.
• The company's independent registered public accounting firm has expressed substantial doubt about its ability to continue as a going concern.
• The FDA rejected the Investigational Device Exemption (IDE) for RadioGel on August 13, 2025, due to cited deficiencies, requiring further pre-submission work and resubmission.
• Disclosure controls and procedures were deemed ineffective as of September 30, 2025, due to a material weakness related to proper segregation of duties.
• The company has limited revenue and an accumulated deficit of $87,348,732 as of September 30, 2025.

Risks

• The company's ability to continue as a going concern is in significant doubt due to recurring losses and insufficient cash to support operations.
• Failure to obtain sufficient additional capital (estimated $3 million annually for current operations, $9 million over 36 months for expansion) will delay business strategy and may lead to cessation of operations.
• The FDA rejected the IDE for RadioGel, and there is no guarantee that subsequent pre-submission efforts and resubmission will lead to approval for human clinical trials.
• The timing and amount of spending for precision radionuclide therapy products are highly dependent on FDA classification (Class II or Class III) and potential requirements for additional studies, including clinical trials.
• The company relies on a few customers, with three customers accounting for all revenue and 100% of accounts receivable as of September 30, 2025, posing a concentration risk.
• Material weakness in disclosure controls and procedures due to lack of proper segregation of duties could adversely affect the company's ability to record, process, summarize, and report financial information accurately.
• Geopolitical events, global capital market instability, and lack of liquidity could impact the company's ability to obtain financing.
• The company's long-term goals are contingent on receiving adequate funding, regulatory approval for RadioGel and other brachytherapy products, and successful commercialization.

Future Outlook

The company anticipates requiring approximately $3.0 million annually to maintain current operating activities and an additional $9.0 million over the next 36 months to fund the FDA approval process for human clinical trials, conduct Phase I pilot clinical trials, activate regional IsoPet clinics, establish an independent production center, and initiate regulatory approval processes outside the U.S. The company intends to fund these activities through strategic transactions like licensing and partnership agreements or additional capital raises. Future plans include expanding indications for use to include lymph nodes associated with thyroid cancer, cancerous lung nodules, and eventually all non-resectable solid tumors, while also exploring alternate isotopes like P-32, Lu-177, and Ac-225. The company also plans to continue developing its PrecisionGel technology for broader agent delivery and aims for the Animal Therapy Division to reach breakeven status in 2026.

Management Comments

• Management believes the device classification obtained from the FDA Center for Veterinary Medicine is not limited to canine and feline sarcomas but may be extended to a much broader population of veterinary cancers, including all or most solid tumors in animals.
• We expect that no additional regulatory approvals are necessary for the use of IsoPet for the treatment of solid tumors in animals.
• 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.
• The company is taking advantage of the FDA's sprint rapid review process for IDE comments to resolve detailed questions on a variety of topics.
• The company's intent is to submit one more pre-submission document on activity containment, then resubmit the IDE, receiving guidance from their new regulatory advisory group.
• The government shutdown is stretching FDA resources so this process may take a bit longer than expected.
• The company believes it will require approximately $9.0 million in additional capital over the next 36 months to fund FDA approval, clinical trials, activate clinics, create production centers, and initiate international regulatory processes.

Industry Context

Vivos Inc. operates in the highly specialized and regulated radiation oncology medical device sector, focusing on yttrium-90 (Y-90) based precision radionuclide therapy. The dual focus on human and veterinary oncology (RadioGel and IsoPet) positions the company to leverage research and development across both markets. The pursuit of FDA Breakthrough Device designation and international clinical trials (India) reflects a common strategy for early-stage medical device companies seeking to accelerate market entry and validate efficacy. The exploration of alternative isotopes and broader applications for its hydrogel technology (PrecisionGel) indicates an effort to diversify its product pipeline and address a wider range of cancer types and delivery mechanisms, aligning with broader trends in personalized and targeted cancer therapies.

Comparison to Industry Standards

• The company's significant accumulated deficit of over $87 million and recurring net losses are typical for early-stage medical device companies engaged in extensive R&D and regulatory processes, similar to many biotech startups prior to commercialization.
• The FDA's Breakthrough Device designation for RadioGel is a positive signal, placing the company in a category with other innovative medical technologies that address unmet medical needs, potentially offering a faster path to market compared to standard device approvals.
• The rejection of the IDE, while a setback, is not uncommon in the rigorous FDA approval process for novel medical devices. Companies like Medtronic or Boston Scientific often face iterative reviews and data requests during their device development cycles.
• The company's cash position of $2.2 million and stated need for $3 million annually for current operations and $9 million over 36 months highlights a common challenge for development-stage companies, which typically rely heavily on external capital raises until products achieve commercial scale and profitability, unlike established players with diversified revenue streams.
• The material weakness in internal controls related to segregation of duties is a governance concern that would be considered below industry best practices for publicly traded companies, regardless of size, and is an area where more mature companies have robust systems in place.

Management Changes

Corporate Governance

Legal Proceedings

• The company may, from time to time, be involved in various legal proceedings incidental to the conduct of its business. Historically, the outcome of all such legal proceedings has not, in the aggregate, had a material adverse effect on the business, financial condition, results of operations or liquidity.

Related Party Transactions

• In December 2024, the Chief Executive Officer advanced $40,949 to the company, which was repaid within ten days.

Stakeholder Impact

• **Shareholders:** Face significant risk due to the 'going concern' warning, increasing losses, and the need for substantial future capital, which could lead to further dilution. The FDA IDE rejection adds regulatory uncertainty.
• **Employees:** The company's ability to continue operations and fund activities is dependent on securing additional capital, which could impact job security if funding is not obtained.
• **Customers (Veterinarians/Clinics):** Continued development and commercialization of IsoPet and RadioGel could provide new treatment options, but regulatory delays and financial instability could affect product availability and support.
• **Suppliers/Vendors:** Commitments to vendors exist, but the company's cash position is insufficient to cover fixed and variable obligations, potentially impacting timely payments if additional funding is not secured.
• **Creditors:** The 'going concern' doubt and accumulated deficit indicate a higher risk for creditors, as the company's ability to satisfy liabilities in the normal course of business is uncertain.

Next Steps

• Resubmit the Investigational Device Exemption (IDE) to the FDA after addressing deficiencies through the pre-submission process, including documents on sterility and activity containment.
• Generate additional human trial data in India to support the FDA process and pursue commercialization of therapies in India through Vivos Scientific India LLP.
• Expand communication, social media presence, conferences, and journals for the animal therapy market to increase certified clinics and patient numbers.
• Subsidize certain IsoPet therapies if necessary and assist new regional clinics with license and certification training.
• Enhance the Quality Management System, construct and validate two new production facilities, and fund human clinical studies in the US and India.
• Continue efforts to raise additional capital, estimated at $3 million annually for operations and $9 million over 36 months for strategic initiatives.
• Conduct laboratory testing, then animal and human studies in India for alternate isotopes (P-32, Lu-177, Ac-225) and expanded indications for use.
• Focus on automotive production development at the APEL site for higher volumes in the future.
• Address the material weakness in disclosure controls and procedures related to proper segregation of duties.

Key Dates

Recommendation

The company faces severe financial distress, evidenced by increasing net losses, a negative gross profit, and a significant increase in cash used in operating activities. The explicit 'going concern' warning from the independent auditors highlights fundamental doubts about the company's ability to continue operations without substantial, uncertain future funding. Furthermore, the FDA's rejection of the Investigational Device Exemption (IDE) for RadioGel represents a major regulatory setback for its human therapy product, introducing significant delays and uncertainty in its primary development pathway. While strategic initiatives and capital raises are ongoing, the combination of critical financial instability, a material weakness in internal controls, and a key regulatory hurdle makes the stock a high-risk investment with a strong likelihood of further value erosion.

Keywords

Radiation Oncology, Medical Device, Yttrium-90, RadioGel, IsoPet, Precision Radionuclide Therapy, Cancer Treatment, FDA Approval, Clinical Trials, Veterinary Oncology, Biotechnology, SEC Filing, 10-Q, Going Concern, Capital Raise