10-Q: Vivos Inc. Reports Unaudited Financial Results for the Quarter Ended June 30, 2024

Vivos Inc. reports a net loss of $1.06 million for the six months ended June 30, 2024, while continuing to develop its RadioGel technology and seeking additional funding.

Summary

• Vivos Inc. reported a net loss of $1.06 million for the six months ended June 30, 2024, compared to a net loss of $1.15 million for the same period in 2023.
• The company's revenue for the six months ended June 30, 2024, was $18,000, up from $12,500 in the same period of 2023.
• Operating expenses decreased to $1.1 million for the six months ended June 30, 2024, from $1.16 million in the same period of 2023.
• The company's cash balance was $1.72 million as of June 30, 2024, compared to $1.59 million at the end of 2023.
• Vivos Inc. is focused on developing its RadioGel brachytherapy device for cancer treatment in both humans and animals.
• The company is seeking additional funding of approximately $2.5 million annually to maintain current operating activities.
• The company estimates it will need $8 to $9 million over the next 36 months for FDA approvals, clinical trials, and expansion of its operations.

Sentiment

Score: 3

Explanation: The document indicates a struggling company with low revenue, significant losses, and a going concern warning. While there are some positive developments, the overall financial situation and the need for substantial additional funding create a negative sentiment.

Positives

• Revenue increased to $18,000 for the six months ended June 30, 2024, compared to $12,500 for the same period in 2023.
• Operating expenses decreased to $1.1 million for the six months ended June 30, 2024, from $1.16 million in the same period of 2023.
• The company's cash balance increased to $1.72 million as of June 30, 2024, from $1.59 million at the end of 2023.
• The company has secured a new Regulation A+ offering for up to $60 million.
• The company has expanded its intellectual property portfolio with new patents and trademarks.

Negatives

• The company reported a net loss of $1.06 million for the six months ended June 30, 2024.
• The company has limited revenue and has accumulated deficits since inception.
• The company's independent auditor has expressed substantial doubt about its ability to continue as a going concern.
• The company requires significant additional funding to maintain operations and pursue its business strategy.
• The company's disclosure controls and procedures were deemed ineffective due to a material weakness related to proper segregation of duties.

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 disclosure controls and procedures are ineffective due to a material weakness.

Future Outlook

The company intends to fund its activities through strategic transactions, licensing agreements, partnerships, and proceeds from the July 2024 Regulation A+ Offering. The company plans to expand the indications for use of RadioGel in phases, starting with lymph nodes associated with thyroid cancer, then cancerous lung nodules, and finally, all non-resectable solid tumors. The company also intends to outsource material aspects of manufacturing, distribution, sales, and marketing in the U.S. and pursue licensing arrangements and partnerships outside of the U.S.

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 has focused on operating on minimum overhead, including using a virtual office for the last several years and experienced industry consultants available on an as needed basis.
• 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.

Industry Context

Vivos Inc. 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 for RadioGel. The company's focus on precision radionuclide therapy aligns with broader trends in targeted cancer treatments.

Comparison to Industry Standards

• Vivos Inc.'s revenue of $18,000 for the first six months of 2024 is very low compared to established medical device companies, which often report revenues in the millions or billions.
• The company's net loss of $1.06 million for the first six months of 2024 is typical for early-stage biotech companies that are still in the development phase.
• Companies like ViewRay and Accuray, which are also in the radiation oncology space, have significantly higher revenues and are further along in the commercialization process.
• Vivos Inc.'s reliance on equity financing is common for early-stage companies, but the need for $8-9 million over the next 36 months highlights the significant capital requirements in the medical device industry.
• The company's focus on both human and animal applications is a unique approach, as most companies focus on one or the other.

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 if the company secures additional funding.
• Employees face uncertainty due to the company's financial instability.
• Customers (veterinarians and pet owners) may benefit from the availability of IsoPet therapy.
• Suppliers and creditors face the risk of non-payment if the company fails to secure additional funding.

Next Steps

• The company will continue to seek additional funding through strategic transactions, licensing agreements, partnerships, and proceeds from the July 2024 Regulation A+ Offering.
• The company will continue to develop its RadioGel technology for both human and animal applications.
• The company will pursue FDA approval for human clinical trials.
• The company will activate regional clinics to administer IsoPet.
• The company will create an independent production center.
• The company will initiate regulatory approval processes outside of the United States.

Key Dates

Keywords

RadioGel, IsoPet, brachytherapy, cancer treatment, yttrium-90, medical device, FDA approval, clinical trials, veterinary oncology, Regulation A+, fundraising, financial results