10-Q: Vivos Inc. Reports Third Quarter 2024 Financial Results, Cites Ongoing Development of RadioGel Technology

Vivos Inc. reported its financial results for the third quarter of 2024, highlighting ongoing efforts in the development of its RadioGel technology and its application in both animal and human therapies.

Summary

• Vivos Inc. reported a net loss of $1.89 million for the nine months ended September 30, 2024, compared to a net loss of $1.82 million for the same period in 2023.
• The company's revenue for the nine months ended September 30, 2024, was $23,000, up from $19,500 in the same period of 2023.
• Operating expenses increased to $1.94 million for the nine months ended September 30, 2024, from $1.85 million in the same period of 2023, primarily due to higher professional fees and payroll expenses.
• The company's cash balance was $1.22 million as of September 30, 2024, down from $1.59 million at the end of 2023.
• Vivos Inc. is focused on developing its RadioGel technology for cancer treatment, with a current emphasis on the veterinary market under the name IsoPet.
• The company is also planning human clinical trials internationally, with a focus on Southeast Asia initially.
• Vivos Inc. has raised $839,000 through the issuance of common stock and warrants during the nine months ended September 30, 2024.
• The company anticipates needing approximately $8 to $9 million over the next 36 months to fund clinical trials, activate regional clinics, and initiate regulatory approvals.

Sentiment

Score: 3

Explanation: The document highlights significant financial losses, a decreasing cash balance, and substantial doubt about the company's ability to continue as a going concern. While there are positive developments in product development and intellectual property, the overall financial situation and the need for significant future funding create a negative sentiment.

Positives

• The company has expanded its intellectual property portfolio with new trademarks and patents.
• Vivos Inc. has established contacts at zoos and is exploring the exotic animal market.
• The company has a clear plan for expanding its indications for use of RadioGel in phases.
• The company has secured a new employment agreement with its CEO, including a base compensation and stock options.
• The company has made progress in developing its IsoPet product for animal therapy, including testing at university veterinary hospitals.

Negatives

• The company has incurred significant net losses, with a net loss of $1.89 million for the nine months ended September 30, 2024.
• The company has limited revenue, with only $23,000 in revenue for the nine months ended September 30, 2024.
• The company's cash balance has decreased to $1.22 million as of September 30, 2024.
• The company's independent auditor has expressed substantial doubt about its ability to continue as a going concern.
• The company's disclosure controls and procedures were deemed ineffective due to a material weakness related to proper segregation of duties.
• The company requires significant additional funding to maintain operations and pursue its development plans.

Risks

• The company's ability to continue as a going concern is dependent on securing additional funding.
• The company faces risks related to the FDA approval process for its RadioGel technology.
• The company's success depends on the commercialization of its brachytherapy products.
• The company may experience material dilution to existing shareholders if it obtains future funding.
• The company's financial statements do not include adjustments that might result from the uncertainty of its ability to continue as a going concern.
• The company's disclosure controls and procedures are ineffective due to a material weakness.

Future Outlook

The company plans to continue developing its RadioGel technology, expand its presence in the animal therapy market, and initiate human clinical trials internationally. The company anticipates needing $8 to $9 million over the next 36 months to fund these activities.

Management Comments

• 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 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.

Industry Context

The company operates in the radiation oncology medical device industry, focusing on brachytherapy. The company's shift to the veterinary market with IsoPet reflects a strategy to generate revenue while pursuing human applications. The company's focus on precision radionuclide therapy aligns with a growing trend in targeted cancer treatments.

Comparison to Industry Standards

• Vivos Inc.'s revenue of $23,000 for the nine months ended September 30, 2024, is significantly lower than established medical device companies, such as Elekta or Varian Medical Systems, which report revenues in the hundreds of millions or billions of dollars.
• The company's net loss of $1.89 million for the nine months ended September 30, 2024, is typical for early-stage biotech companies that are still in the research and development phase, but it highlights the need for significant capital raises.
• The company's focus on veterinary applications is similar to other companies that have explored niche markets to generate early revenue, such as PetDx in the veterinary diagnostics space.
• The company's plans for international human trials, starting in Southeast Asia, are a common strategy for companies seeking to reduce regulatory hurdles and costs, similar to companies like OncoSec Medical.
• The company's reliance on Regulation A+ offerings for funding is a common approach for smaller companies, but it also indicates a higher risk profile compared to companies with access to institutional funding.

Management Changes

Legal Proceedings

• The Company may, from time to time, be involved in various legal proceedings incidental to the conduct of our business.

Related Party Transactions

• In September 2023, our Chief Executive Officer advanced $10,000 to the Company, which amount was repaid October 4, 2023.

Stakeholder Impact

• Shareholders face the risk of material dilution due to future capital raises.
• Employees may be impacted by the company's financial instability.
• Customers (veterinarians and pet owners) may be affected by the company's ability to deliver its products and services.
• Suppliers and creditors face the risk of non-payment due to the company's financial challenges.

Next Steps

• The company plans to expand communication on its website and social media to increase the number of certified clinics for animal therapy.
• The company intends to subsidize some IsoPet therapies to ensure all viable candidates are treated.
• The company will assist a new regional clinic with their license and certification training.
• The company plans to enhance the pedigree of its Quality Management System.
• The company will begin automation of product manufacturing.
• The company will fund liability insurance for human clinical studies.
• The company will fund human clinical studies in the U.S.
• The company intends to expand the indications for use of RadioGel in phases.
• The company plans to pursue licensing arrangements and/or partnerships outside of the U.S.

Key Dates

Keywords

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