10-Q: Vivos Inc. Reports First Quarter 2024 Results, Focuses on IsoPet Commercialization and Regulatory Approvals

Vivos Inc. reported a net loss of $558,539 for the first quarter of 2024, while continuing to advance its IsoPet veterinary therapy and pursue regulatory approvals for its RadioGel human therapy.

Summary

• Vivos Inc. reported a net loss of $558,539 for the three months ended March 31, 2024, compared to a net loss of $248,318 for the same period in 2023.
• The company's revenue was $4,500 for the quarter, down from $6,000 in the prior year, all related to IsoPet veterinary therapies.
• Operating expenses increased significantly to $575,629, primarily due to higher professional fees, including stock-based compensation, and increased research and development costs.
• The company raised $130,000 through the issuance of 2,000,000 shares of common stock and warrants during the quarter.
• Vivos Inc. is focused on commercializing its IsoPet veterinary product and obtaining regulatory approval for its RadioGel human therapy.
• The company's cash balance was $1,370,829 as of March 31, 2024, and they may require additional funding of approximately $5 million annually to maintain current operating activities.
• The company believes it will cost approximately $9 million over the next 12 to 48 months to fund human clinical trials, activate regional clinics, and initiate international regulatory approvals.

Sentiment

Score: 3

Explanation: The document highlights significant financial losses and the need for substantial additional funding, raising concerns about the company's viability. While there is progress in product development and regulatory pathways, the financial challenges and the lack of revenue generation overshadow the positives.

Positives

• The company continues to make progress in the development of its IsoPet veterinary therapy.
• Vivos has established relationships with several university veterinary hospitals for IsoPet testing and therapy.
• The company has expanded its intellectual property portfolio with new patents and trademarks.
• The company has a clear plan for the use of proceeds from its Regulation A+ offering.
• The FDA has classified the company as a Breakthrough device for their proposed Indication for Use.

Negatives

• The company experienced a significant increase in net loss compared to the same period last year.
• Revenue remains low and insufficient to sustain operations.
• Operating expenses have increased substantially, primarily due to professional fees and R&D.
• The company has a history of operating losses and has expressed substantial doubt about its ability to continue as a going concern.
• The company's cash position may not be sufficient to cover fixed and variable obligations.
• There is no guarantee that the company will be able to raise additional funds or to do so at an advantageous price.

Risks

• The company's ability to continue as a going concern is dependent on its ability to raise additional capital.
• The company may face delays in obtaining regulatory approvals for its RadioGel human therapy.
• The company may not be able to successfully commercialize its products.
• The company faces competition from other companies in the pharmaceutical and biotechnology industries.
• The company's financial results are subject to uncertainty and may be affected by various factors, including market conditions and regulatory changes.
• The company's internal controls over financial reporting have been deemed ineffective.

Future Outlook

The company plans to continue developing and commercializing its IsoPet veterinary therapy and to pursue regulatory approval for its RadioGel human therapy. They anticipate needing approximately $9 million over the next 12 to 48 months to fund these activities.

Management Comments

• Management believes that the device classification obtained from the 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.
• Management 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 and internationally.
• Management believes that its submissions to the FDA to date have addressed all the FDA staffs feedback over the past four years.

Industry Context

The company operates in the competitive radiation oncology medical device market, which is characterized by technological innovation and extensive research efforts. The company's focus on brachytherapy and its use of Y-90 is a niche area within this market. The company is competing with established players in the brachytherapy market, as well as companies developing other cancer therapies.

Comparison to Industry Standards

• Vivos Inc.'s revenue of $4,500 for the quarter is significantly lower than that of established medical device companies, which often report revenues in the millions or billions of dollars.
• The company's net loss of $558,539 is also indicative of an early-stage company that is still in the development phase and has not yet achieved profitability.
• Compared to companies like Sirtex and IsoRay, which have FDA-approved Y-90 and Cs-131 therapies, Vivos is still in the process of obtaining regulatory approvals for its RadioGel product.
• The company's reliance on equity financing is common for early-stage biotech and medical device companies, but the need for $5 million annually to maintain operations highlights the financial challenges it faces.
• The company's focus on the veterinary market with IsoPet is a strategic move to generate revenue while pursuing human therapy approvals, which is a common approach for companies in this sector.

Management Changes

Related Party Transactions

• In September 2023, the CEO advanced $10,000 to the Company which was repaid October 4, 2023.

Stakeholder Impact

• Shareholders face the risk of dilution due to potential future capital raises.
• Employees may be impacted by the company's financial instability.
• Customers (veterinarians and pet owners) may benefit from the availability of IsoPet therapy.
• Suppliers may be affected by the company's ability to pay for goods and services.
• Creditors face the risk of non-payment if the company is unable to raise additional capital.

Next Steps

• The company plans to continue developing and commercializing its IsoPet veterinary therapy.
• The company plans to pursue regulatory approval for its RadioGel human therapy.
• The company plans to activate several regional clinics to administer IsoPet.
• The company plans to create an independent production center.
• The company plans to initiate regulatory approval processes outside of the United States.

Key Dates

Keywords

RadioGel, IsoPet, brachytherapy, cancer therapy, veterinary oncology, FDA approval, Y-90, clinical trials, medical device, regulatory approval