SEC Info - Vivos Inc. - ‘10-Q’ for 9/30/22

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		Alternative Formats (Word, et al.) Condensed Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021 Condensed Financial Statements Condensed Statement of Changes in Stockholders' Equity for the Nine Months Ended September 30, 2022 and 2021 (unaudited) Condensed Statements of Cash Flow for the Nine Months ended September 30, 2022 and 2021 (unaudited) Condensed Statements of Operations for the Nine and Three Months ended September 30, 2022 and 2021 (unaudited) Controls and Procedures Exhibits Financial Information Legal Proceedings Management's Discussion and Analysis of Financial Condition and Results of Operations Notes to Condensed Financial Statements (unaudited) Other Information Part I -- Financial Information Part Ii -- Other Information Quantitative and Qualitative Disclosures About Market Risk Signatures Testing at the University of Missouri met its objective to demonstrate the safety of IsoPet (R), The The testing at the University of Missouri met its objective to demonstrate the safety of IsoPet (R) Unregistered Sales of Equity Securities and Use of Proceeds
1	1st Page – Filing Submission
"	Part I -- Financial Information
"	Condensed Financial Statements
"	Condensed Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021
"	Condensed Statements of Operations for the Nine and Three Months ended September 30, 2022 and 2021 (unaudited)
"	Condensed Statement of Changes in Stockholders' Equity for the Nine Months Ended September 30, 2022 and 2021 (unaudited)
"	Condensed Statements of Cash Flow for the Nine Months ended September 30, 2022 and 2021 (unaudited)
"	Notes to Condensed Financial Statements (unaudited)
"	Management's Discussion and Analysis of Financial Condition and Results of Operations
"	The testing at the University of Missouri met its objective to demonstrate the safety of IsoPet (R)
"	Quantitative and Qualitative Disclosures About Market Risk
"	Controls and Procedures
"	Part Ii -- Other Information
"	Legal Proceedings
"	Unregistered Sales of Equity Securities and Use of Proceeds
"	Exhibits
"	Signatures

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i ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

i ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

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. i Yes ☒ No ☐

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). i Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting 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):

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 ☐ i No ☒

As of October 18, 2022, there were i 359,891,255 shares of the registrant’s common stock outstanding, 2,071,007 shares of the registrant’s Series A Convertible Preferred Stock outstanding, 200,363 of the registrant’s Series B Convertible Preferred Stock outstanding and 385,302 of the registrant’s Series C Convertible Preferred Stock outstanding.

The accompanying notes are an integral part of these condensed financial statements.

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 Form 10-Q 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 Form 10-Q 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 previously filed Form 10-K, as well as other cautionary language in this Form 10-Q 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. is a radiation oncology medical device company engaged in the development of its yttrium-90 (“Y-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 2013 the FDA issued the determination that RadioGel™ is a device for human therapy for non-resectable cancers in humans. This should result in a faster path than a drug for final approval.

In January 2018, the Center for Veterinary Medicine Product Classification Group ruled that RadioGel^TMshould 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^TM 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^TM are used synonymously throughout this document. The only distinction between IsoPet^®and RadioGel^TM is the FDA’s recommendation that we use “IsoPet^®” for veterinarian usage, and reserve “RadioGel^TM” 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.

The Company’s IsoPet Solutions division was established in May 2016 to focus on the veterinary oncology market, namely engagement of university veterinarian hospital 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 U.S. and internationally. The Company intends to report the results from the IsoPet^® Solutions division as a separate operating segment in accordance with 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 400Gy with heavy therapy at the margins. This sale met the revenue recognition requirements under 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, less than two microns, Y-90 phosphate particles. 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.

Recently, 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.

The Company’s lead brachytherapy products, including RadioGel™, incorporate patented technology developed for Battelle Memorial Institute (“Battelle”) at Pacific Northwest National Laboratory, a leading research institute for government and commercial customers. Battelle has granted the Company an exclusive license to patents covering the manufacturing, processing and applications of RadioGel™ (the “Battelle License”). This exclusive license is to terminate upon the expiration of the last patent included in this agreement (May 2022). Other intellectual property protection includes proprietary production processes and trademark protection in 17 countries.

Our original license with Battelle National Laboratory reached its end of life. During the past several years, in anticipation of this we have expanded our proprietary knowledge and our trademark and patent protection.

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.

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 Yttrium-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 US Patent office recently gave us the Notice of Allowance for our patent to produce our yttrium phosphate microparticles, US 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 and PCT based on the last eighteen 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 are continuously improving our injection system. We completed the development of a syringe shield and vial holder. We are now testing an advanced cooling system to hold the vial and syringes. We are also testing commercially available systems for deep injections, which will be useful in treating lung and pancreatic caners. We are considering filing a provisional patent on these injection system developments.

Vista Veterinary Hospital (“Vista”) was selected as the pilot private clinic to initiate commercial sales of IsoPet^®. It is good management practice to implement and learn from a pilot program before spreading to regional clinics across the country. Vista is located in the Tri-Cities Washington area which is convenient for interactions with key personnel of the Company. The pilot is being used to

Vista Veterinary Hospital has done well on two audits by the Washington State Department of Health. The Company is working closely with the Washington State Department of Health to refine and improve the radioactive material license. The Company has added several detailed procedures, which will benefit future regional clinics. In addition, a second veterinarian has completed all the preliminary requirements to become certified. All that remains is to demonstrate proficiency in three therapies.

The testing at the universities and at Vista Veterinary Hospital have demonstrated that IsoPet^® is effective on killing cancer tissue in close proximity to the injections. It is most effective in early cases before the cancer has begun to spread. Later stage cancers are more difficult to treat since the tendrils from the primary cancer site are not well defined and therefore can lead to recurrence.

There has been 97 expressions of interest in IsoPet^® therapy from across the United States, but only about 10% of these were treated and they were very advanced cases. The reasons are instructive. Most of the cases were for so advanced that the pet parents found out about IsoPet^® on the Internet as a last hope. Several others were internal cancers that could not be reached, for example deep in the throat. Several cases were treatable, but the pets weighed more than 20 pounds and the pet parents were not willing to fly them in the “Safe Cargo” holds. Those patients would have been treated by regional clinics once we implement that strategy. Several cases were mast cell cancers. The Company is confident that those tumors could have been treated, but once killed they release mast cells in a process called granulation. This could cause a shock to the animal’s system. The Company will focus one of our clinical studies on the optimum approach for those therapies.

Vista Veterinary Hospital accepted advanced cancer cases and has gained experience to extend the animal’s lives. The first cat was terminally ill and had previously had external beam, surgery and chemotherapy. The facial tumor was treated with 400 Gy and the biopsy confirmed that the cancer was killed. In about seven months the cancer returned in the throat and could not be treated so the cat had to be put down. Dr. Bauder, the veterinarian pet parent, was still elated about the life extension and is asking us to use him as a reference. The other cases were also very advanced with multiple tumors and they recurred since they had already spread before therapy. One animal, Yukon had a large tumor on his leg that was recommended for amputation. The tumor size decreased 50% after the first treatment, but then stopped decreasing. For the first time a second therapy was administered and the tumor has continued to decrease in size. Yukon’s life was extended for more than a year until she finally succumbed to metastatic cancer in another location.

Since IsoPet^® has shown to be effective in killing cancer at the site of injection the current focus is in optimizing the techniques to help the pet resorb the necrotic tissue rapidly. In addition, IsoPet^® was used to treat a mast cell tumor. When these cancers are destroyed, they release their mast cell. The animal was treated with a steroid to counter this effect and to date is doing well.

The Company’s efforts are now to obtain more early-stage cancer patients. The biggest obstacle is to convince the veterinarians of the pet parents to agree with IsoPet^® therapy rather than using a more traditional method such as surgery. This is a slow process due to the conservative nature of the veterinarian professions. This is the prime motivation to continue with additional clinical trials and to publish the results.

The Company worked closely with FX Masse to develop nine certification training modules for use in potential regional clinics. These modules are necessary to satisfy the radioactive material handling licenses. This approach is very cost effective.

Johns Hopkins University VCTN, Veterinary Clinical Trials Network, is now an Isopet^®regional clinic. Additionally, Johns Hopkins will also perform new Isopet® animal studies on various specific cancers. They have the required radioactive material license and have completed their training certification for Isopet®. This important relationship will also help meet our objective of obtaining high quality data on a range of cancers that can be published in leading journals. These publications are the optimal way to increase awareness of Isopet® and to gain broader acceptance from the veterinarian/oncology community.

Our objective is to open several regional clinics by the end of 2022 and to participate in a minimum of three conferences to spread the word about IsoPet in the veterinarian community for treating tumors in small animals and horses. We just created a Marketing Steering Board to provide advice on obtaining new pet patients.

RadioGel™ has a long regulatory history with the Food and Drug Administration (“FDA”). Initially, the Company submitted a presubmission (Q130140) to obtain FDA feedback about the proposed product. The FDA requested that the Company file a request for designation with the Office of Combination Products (RFD130051), which led to the determination that RadioGel™ is a device for human therapy for non-resectable cancers, which must be reviewed and ultimately regulated by the Center for Devices and Radiological Health (“CDRH”). The Company then submitted a 510(k) notice for RadioGel™ (K133368), which was found Not Substantially Equivalent due to the lack of a suitable predicate, and RadioGel™ was assigned to the Class III product code NAW (microspheres). Class III products or devices are generally the highest risk devices and are therefore subject to the highest level of regulatory review, control and oversight. Class III products or devices must typically be approved by FDA before they are marketed. Class II devices represent lower risk products or devices than Class III and require fewer regulatory controls to provide reasonable assurance of the product’s or device’s safety and effectiveness. In contrast, Class I products and devices are deemed to be lower risk than Class I or II, and are therefore subject to the least regulatory controls.

A pre-submission meeting (Q140496) was held with the FDA on June 17, 2014, during which the FDA maintained that RadioGel™ should be considered a Class III device and therefore subject to pre-market approval. On December 29, 2014, the Company submitted a de novo petition for RadioGel™ (DEN140043). The de novo petition was denied by the FDA on June 1, 2015, with the FDA providing numerous comments and questions. On September 29, 2015, the Company submitted a follow-up pre-submission informational meeting request with the FDA (Q151569). This meeting took place on November 9, 2015, at which time the FDA indicated acceptance of the Company’s applied dosimetry methods and clarified the FDA’s outstanding questions regarding RadioGel™. Following the November 2015 pre-submission meeting, the Company prepared a new pre-submission package to obtain FDA feedback on the proposed testing methods, intended to address the concerns raised by the FDA staff and to address the suitability of RadioGel™ for de novo reclassification. This pre-submission package was presented to the FDA in a meeting on August 29, 2017. During the August 2017 meeting, the FDA clarified their position on the remaining pre-clinical testing needed for RadioGel™. Specifically, the FDA addressed proposed dosimetry calculating techniques, dosimetry distribution between injections, hydrogel viscoelastic properties, and the details of the Company’s proposed animal testing.

The Company believes that its submissions to the FDA to date have addressed all the FDA staff’s feedback over the past four years. Of particular importance, the Company has provided corresponding supporting data for proposed future testing of RadioGel™ to address any remaining questions raised by the FDA. We believe, although no assurances can be given, that the clinical testing modifications presented to the FDA in August 2017 will result in a de novo reclassification for RadioGel™ by the FDA. In addition, in previous FDA submittals, the Company proposed applying RadioGel™ for a very broad range of cancer therapies, referred to as Indication for Use. The FDA requested that the Company reduce its Indications for Use. To comply with that request, the Company expanded its Medical Advisory Board (“MAB”) and engaged doctors from respected hospitals who have evaluated the candidate cancer therapies based on three criteria: (1) potential for FDA approval and successful therapy; (2) notable advantage over current therapies; and (3) probability of wide-spread acceptance by the medical community.

In November 2020 the Company submitted a request for a Breakthrough Device Designation. Ultimately, this was denied, but the FDA acknowledged, “The FDA does believe that RadioGel™ meets criterion #2a: Device represents breakthrough technology. Your device does meet this criterion because it is a novel application of a brachytherapy device outside of the liver.” More importantly the process resulted in a rapid review of our existing data and approach. It led to a redirection of our efforts on writing the IDE and saved the Company much time in the review of that future application.

Based on advice from the FDA the Company has scheduled a Pre-Submission meeting on November 30, 2021 to discuss a draft of an Investigational Device Exemptions (IDEs) for Early Feasibility Medical Device Clinical Studies, Including Certain First in Human (FIH) Studies. Using this process results in more rapid feedback to prepare the final IDE.

The FDA was very supportive and had suggested this Q-Submission path for rapid turnaround and dialog. The Mayo Clinic physicians did an excellent job presenting the need for Radiogel^™ to treat recurrent thyroid cancer and to answer a range of questions from the new FDA review team. The FDA provided many helpful suggestions on a range of subjects from labeling to dosimetry to the Mayo protocol for clinical testing, and the need for some additional specific testing. They suggested having another Q-Sub Review and conference call dedicated to the details of the dosimetry calculations.

In May of 2022 the Company held another Pre-Sub meeting with the FDA. They concurred with our dosimetry techniques and requested one more animal test to confirm that the Y-90 stays at the injection site. We will be proposed a Pre-Sub meeting to discuss this new animal test of VX-2 tumors in rabbits at Johns Hopkins University. We have a meeting scheduled with the FDA in October to obtain their feedback on our new animal test plan. In the meantime, the Company is working to complete all the other required pre-clinical testing, such as biocompatibility since they are required for the submittal of the IDE.

In parallel the Company working with the Mayo Clinic’s principal investigators to improve the clinical trial protocol for their Institutional Review Board.

The MAB selected eighteen applications for RadioGel™, each of which meet the criteria described above. This large number confirms the wide applicability of the device and defines the path for future business growth. The Company’s application establishes a single Indication for Use - treatment of cancerous tissue or solid tumors pathologically associated with locoregional papillary thyroid carcinoma and recurrent papillary thyroid carcinoma. We anticipate that this initial application will facilitate each subsequent application for additional Indications for Use, and the testing for many of the subsequent applications could be conducted in parallel, depending on available resources. We are in initial discussions with Mayo Clinic physicians about the potential for RadioGel to treat lung and pancreatic cancers.

The Company’s stock offering under Regulation A+ was qualified by the Securities and Exchange Commission (“SEC”) on June 3, 2020. A second Regulation A+ was qualified by the SEC on September 15, 2021 to raise capital for 50,000,000 shares at a price of $0.10 for a maximum of $5,000,000. The Company amended this and was able to raise $1,200,000 in July 2022 at $0.08 per share (15,000,0000 shares) and sold 20,000,000 warrants for $20,000. An amended Regulation A+ was filed in October 2022 to raise the remaining $3,800,000 of the $5,000,000.

The Company’s Regulation A+’s raised approximately $5,200,000 from the sale of shares and is using the proceeds generated 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 $2 million annually to maintain current operating activities. Over the next 12 to 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, 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 recent qualified Regulation A+ 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 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 to be raised from the recent qualified Regulation A+.

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.

In the longer-term, subject to the Company receiving adequate funding, regulatory approval for RadioGel™ and other brachytherapy products, and thereafter being able to successfully commercialize its brachytherapy products, 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.

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 has been impacted from the effects of COVID-19. The Company’s headquarters are in Northeast Washington however there focus of the animal therapy market has been the Northwestern sector of the United States. The Company continues their marketing to the animal therapy market and attempt to increase the exposure to their product and generate revenue accordingly.

As of September 30, 2022, the Company has $1,987,732 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 may not be enough to cover the fixed and variable obligations of the Company.

There is no guarantee that the Company will be able to raise additional funds or to do so at an advantageous price.

During the next two years, the Company intends to outsource material aspects of manufacturing and distribution. As future product volume increases, the Company will reassess its make-buy decision on manufacturing and will analyze the cost/benefit of a centrally located facility.

RadioGel^™is manufactured with a proprietary process under ventilated sterile hood by following strict Good Laboratory Practices (“GLP”) procedures. It is made in large batches that are frozen for up to three months. When the product is ready to ship, a small quantity of the gel is dissolved in a sterile saline solution. It is then passed through an ultra-fine filter to ensure sterility.

The Y-90 particles are produced with simple ingredients via a proprietary process, again following strict GLP procedures. They are then mixed into a phosphate-buffered saline solution. They can be produced in large batches for several shipments. The number of particles per shipment is determined by the dose prescribed by the doctor.

RadioGel™ is shipped in two containers, one with a solution of the gel and the other with a solution of the particles. Before shipment they are subjected to sterility testing, again by strict procedures. The vial with the Y-90 is put through a special radiation calibrator, which measures beta particles. The vials can be shipped via FedEx or UPS by following the proper protocols.

The user receives the two vials. The solution containing the RadioGel^™ is mixed with the solution containing the Y-90 particles. This is then shaken to ensure homogeneity and withdrawn into a syringe. The quantities that are mixed are calculated from the information on the product label.

The specific injection technique depends on the Indication for Use. For small tumors, one centimeter in diameter or less, the cancer is treated with a single injection. For larger tumors, the cancer is treated with a series of small injections from the same syringe or multiple syringes.

The Company is currently pursuing two synergistic business sectors, medical and veterinary, each of which are summarized below.

RadioGel^™is currently fully developed, requiring only FDA approval before commercialization. The Company has been seeking FDA approval of RadioGel™ for almost five years. Recent progress has been delayed due to a lack of adequate funding. The principal issue preventing approval is that the Company attempted to obtain regulatory approval for a broad range of Indications for Use, including all non-resectable cancers, without sufficient supporting data.

Building on the FDA’s ruling of RadioGel^™ as a device, the Company is currently developing test plans to address issues raised in the Company’s prior FDA submittal regarding RadioGel^™. The Company intends to request FDA approval to submit RadioGel™ for de novo classification, which would reclassify the device from a Class III device to a Class II device and accelerate the regulatory approval path.

After analyzing the Company’s data and the last five years of communication from the FDA, the Company has taken the following steps:

The critical path is the required testing – in vitro, animal testing, human clinical studies – all of which is resource dependent.

In previous submittals, the Company proposed applying a very broad range of cancer therapies, referred to as Indications for Use, to RadioGel^™. The FDA has strongly advised the Company to reduce its Indications for Use. To comply with that request, the Company has expanded its MAB, consisting of Drs. Barry D. Pressman (Chairman), Albert DeNittis, and Howard Sandler.

The MAB evaluated the candidate cancer therapies based on three criteria: (i) the potential for FDA approval and successful therapy; (ii) notable advantages of RadioGel^™ over current therapies; and (iii) the likelihood that RadioGel^™ can be widely accepted by the medical community and profitably commercialized.

The MAB selected eighteen Indications for Use for RadioGel^™, each of which meets the above-mentioned criteria. These eighteen Indications for Use are listed below. This large number confirms the wide applicability of the device and defines the path for future growth. The Company intends to apply to the FDA for a single Indication for Use, followed by subsequent applications for additional Indications for Use. The initial application should facilitate each subsequent application, and the testing for many of the subsequent applications could be conducted in parallel, depending on available resources.

There are approximately 150 million pet dogs and cats in the United States. Nearly one-half of dogs and one-third of cats are diagnosed with cancer at some point in their lifetime. The Veterinary Oncology & Hematology Center in Norwalk, Connecticut, reports that cancer is the number one natural cause of death in older cats and dogs, accounting for nearly 50 percent of pet deaths each year. The American Veterinary Medical Association reports that half of the dogs ten years or older will die because of cancer. The National Cancer Institute reports that about six million dogs are diagnosed with cancer each year, translating to more than 16,000 a day.

The Company’s IsoPet^® operating division focuses on the veterinary oncology market. Dr. Alice Villalobos, a founding member of the Veterinary Cancer Society and the Chair of our Veterinary Medicine Advisory Board, has been providing guidance to management regarding this market. The Veterinary Medicine Advisory Board gives us recommendations regarding the overall strategy for our animal business sector. Specially, they recommended the university veterinary hospitals for demonstration therapies, the specific cancers to be treated, and have provided business contact information to the private clinics.

Development of the product and application techniques and animal testing is allowed under FDA regulation. Commercial sales of RadioGel^TMfor animals requires confirmation by the FDA Center for Veterinary Medicine (“CVM”). In January 2018, the Center for Veterinary Medicine Product Classification Group, the entity within the CVM that is responsible for determining the classification of a product, ruled that RadioGel^TM 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 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 all solid tumors in animals. We expect the result of such classification and label approval will be that no additional regulatory approvals are necessary for the use of RadioGel^TM 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.

The Company currently intends to utilize university veterinary hospitals for therapy development, given that veterinary hospitals offer superior and plentiful veterinarians and students, a large number of animal patients, radioactive material handling licenses, and are respected by private veterinary centers and hospitals.

The Company competes in a market characterized by technological innovation, extensive research efforts, and significant competition.

The pharmaceutical and biotechnology industries are intensely competitive and subject to rapid and significant technological changes. A number of companies are pursuing the development of pharmaceuticals and products that target the same diseases and conditions that our products target. We cannot predict with accuracy the timing or impact of the introduction of potentially competitive products or their possible effect on our sales. Certain potentially competitive products to our products may be in various stages of development. Also, there may be many ongoing studies with currently marketed products and other developmental products, which may yield new data that could adversely impact the use of our products in their current and potential future Indications for Use. The introduction of competitive products could significantly reduce our sales, which, in turn would adversely impact our financial and operating results.

There are a wide variety of cancer treatments approved and marketed in the U.S. and globally. General categories of treatment include surgery, chemotherapy, radiation therapy and immunotherapy. These products have a diverse set of success rates and side effects. The Company’s products, including RadioGel^™, fall into the brachytherapy treatment category. There are a number of brachytherapy devices currently marketed in the U.S. and globally. The traditional iodine-125 (I-125) and palladium-103 (Pd-103) technologies for brachytherapy are well entrenched with powerful market players controlling the market. The industry-standard I-125-based therapy was developed by Oncura, which is a unit of General Electric Company. Additionally, C.R. Bard, a major industry player competes in the I-125 brachytherapy marketplace. These market competitors are also involved in the distribution of Pd-103 based products. Cs-131 brachytherapy products are sold by IsoRay. Several Y-90 therapies have been FDA approved including SIR-Spheres by Sirtex, TheraSphere by Biocompatibles UK and Zevalin by Spectrum Pharmaceuticals.

The Company currently subcontracts the manufacturing of RadioGel^TM at IsoTherapeutics. Prior to 2021, Eckert and Ziegler was the only supplier of Y-90 in the United States, and was the sole supplier of the Y-90 used by IsoTherapeutics to manufacture the Company’s RadioGel^™. The Company obtains supplies, hardware, handling equipment and packaging from several different U.S. suppliers.

During 2021, utilized Akina, Inc. as an alternate supplier of its hydrogel polymer component.

The Company anticipates that potential customers for our potential brachytherapy products likely would include those institutions and individuals that currently purchase brachytherapy products or other oncology treatment products.

The Company’s present and future intended activities in the development, manufacturing and sale of cancer therapy products, including RadioGel^™, are subject to extensive laws, regulations, regulatory approvals and guidelines. Within the United States, the Company’s therapeutic radiological devices must comply with the U.S. Federal Food, Drug and Cosmetic Act, which is enforced by FDA. The Company is also required to adhere to applicable FDA Quality System Regulations, also known as the Good Manufacturing Practices, which include extensive record keeping and periodic inspections of manufacturing facilities.

In the United States, the FDA regulates, among other things, new product clearances and approvals to establish the safety and efficacy of these products. We are also subject to other federal and state laws and regulations, including the Occupational Safety and Health Act and the Environmental Protection Act.

The Federal Food, Drug, and Cosmetic Act and other federal statutes and regulations govern or influence the research, testing, manufacture, safety, labeling, storage, record keeping, approval, distribution, use, reporting, advertising and promotion of such products. Noncompliance with applicable requirements can result in civil penalties, recall, injunction or seizure of products, refusal of the government to approve or clear product approval applications, disqualification from sponsoring or conducting clinical investigations, preventing us from entering into government supply contracts, withdrawal of previously approved applications, and criminal prosecution.

In the United States, medical devices are classified into three different categories over which the FDA applies increasing levels of regulation: Class I, Class II, and Class III. Most Class I devices are exempt from premarket notification 510(k); most Class II devices require premarket notification 510(k); and most Class III devices require premarket approval. RadioGel^™ is currently classified as a Class III device.

Approval of new Class III medical devices is a lengthy procedure and can take a number of years and require the expenditure of significant resources. There is a shorter FDA review and clearance process for Class II medical devices, the premarket notification or 510(k) process, whereby a company can market certain Class II medical devices that can be shown to be substantially equivalent to other legally marketed devices.

The Company intends to apply for a de novo with an anticipated expenditure of $10.0 million over the next four years. This expenditure estimate includes anticipated costs associated with in vitro and in vivo pre-clinical testing, our application for an Investigational Device Exemption, Phase I and Phase II clinical trials and our application for a de novo.

As a registered medical device manufacturer with the FDA, we are subject to inspection to ensure compliance with FDA’s current Good Manufacturing Practices, or cGMP. These regulations require that we and any of our contract manufacturers design, manufacture and service products, and maintain documents in a prescribed manner with respect to manufacturing, testing, distribution, storage, design control, and service activities. Modifications or enhancements that could significantly affect the safety or effectiveness of a device or that constitute a major change to the intended use of the device require a new 510(k) premarket notification for any significant product modification.

The Medical Device Reporting regulation requires that we provide information to the FDA on deaths or serious injuries alleged to be associated with the use of our devices, as well as product malfunctions that are likely to cause or contribute to death or serious injury if the malfunction were to recur. Labeling and promotional activities are regulated by the FDA and, in some circumstances, by the Federal Trade Commission.

As a medical device manufacturer, we are also subject to laws and regulations administered by governmental entities at the federal, state and local levels. For example, our facility is licensed as a medical device manufacturing facility in the State of Washington and is subject to periodic state regulatory inspections. Our customers are also subject to a wide variety of laws and regulations that could affect the nature and scope of their relationships with us.

In the United States, as a manufacturer of medical devices and devices utilizing radioactive byproduct material, we are subject to extensive regulation by not only federal governmental authorities, such as the FDA and FAA, but also by state and local governmental authorities, such as the Washington State Department of Health, to ensure such devices are safe and effective. In Washington State, the Department of Health, by agreement with the federal Nuclear Regulatory Commission (“NRC”), regulates the possession, use, and disposal of radioactive byproduct material as well as the manufacture of radioactive sealed sources to ensure compliance with state and federal laws and regulations. RadioGel^™ constitutes both medical devices and radioactive sealed sources and are subject to these regulations.

Moreover, our use, management, and disposal of certain radioactive substances and wastes are subject to regulation by several federal and state agencies depending on the nature of the substance or waste material. We believe that we are in compliance with all federal and state regulations for this purpose.

Our business does not require us to comply with any extraordinary environmental regulations. Our RadioGel^™ product is manufactured in an independently owned and operated facility. Any environmental effects or contamination event that could result would be from the shipping company during shipment and misuse by the treatment facility upon arrival.

As of September 30, 2022, the Company had one full-time personnel. The Company utilizes several independent contractors to assist with its operations. The Company does not have a collective bargaining agreement with any of its personnel and believes its relations with its personnel are good.

The following table sets forth information from our statements of operations for the nine months ended September 30, 2022 and 2021:

Revenue was $30,000 and $14,887 for the nine months ended September 30, 2022 and 2021, respectively. All revenue recognized in the nine months ended September 30, 2022 and 2021 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 expenses for the nine months ended September 30, 2022 and 2021, respectively consists of the following:

Operating expenses for the nine months ended September 30, 2022 and 2021 was $1,824,043 and $2,292,245, respectively. The decrease in operating expenses from 2021 to 2022 can be attributed to the decrease in professional fees ($1,786,028 for the nine months ended September 30, 2021 versus $1,191,807 for the nine months ended September 30, 2022) related to the vesting of the RSUs in 2022 versus 2021; the increase in general and administrative expense ($82,635 for the nine months ended September 30, 2021 versus $111,352 for the nine months ended September 30, 2022); the increase in research and development ($221,154 for the nine months ended September 30, 2021 versus $312,066 for the nine months ended September 30, 2022) as the Company ramped up the development of their products to include studies that are required to continue to have their products accepted by the FDA, and an increase in payroll expenses ($202,428 for the nine months ended September 30, 2021 versus $208,818 for the nine months ended September 30, 2022) related to the CEOs employment contract.

Non-operating income (expense) for the nine months ended September 30, 2022 and 2021 consists of the following:

Non-operating income (expense) for the nine months ended September 30, 2022 varied from the nine months ended September 30, 2021 primarily due to a decrease in interest expense from $19,628 for the nine months ended September 30, 2021 to $0 for the nine months ended September 30, 2022 as a result of conversions and repayments of notes payable. In addition, the Company converted a note in January 2021 which resulted in a loss on conversion and recognized a gain on forgiveness of debt on old payables as they satisfied agreements with vendors to pay a portion of the payable with the remaining amount forgiven in both 2021 and 2022.

Our net loss for the nine months ended September 30, 2022 and 2021 was $(1,764,508) and $(2,349,536), respectively.

The following table sets forth information from our statements of operations for the three months ended September 30, 2022 and 2021:

Revenue was $6,500 and $14,887 for the three months ended September 30, 2022 and 2021, respectively. All revenue recognized in the three months ended September 30, 2022 and 2021 relate to consulting income with respect to the IsoPet^® therapies.

Operating expenses for the three months ended September 30, 2022 and 2021, respectively consists of the following:

Operating expenses for the three months ended September 30, 2022 and 2021 was $270,530 and $203,470, respectively. The increase in operating expenses from 2021 to 2022 can be attributed to the increase in professional fees ($55,583 for the three months ended September 30, 2021 versus $93,300 for the three months ended September 30, 2022) related to the vesting of the RSUs in 2022 versus 2021 and amending the Regulation A+; the increase in general and administrati0ve expense ($22,131 for the three months ended September 30, 2021 versus $38,302 for the three months ended September 30, 2022); the increase in research and development ($60,831 for the three months ended September 30, 2021 versus $70,765 for the three months ended September 30, 2022) as the Company ramped up the development of their products to include studies that are required to continue to have their products accepted by the FDA, and an increase in payroll expenses ($64,925 for the three months ended September 30, 2021 versus $68,163 for the three months ended September 30, 2022) related to the CEOs employment contract and bonus in 2021.

Non-operating income (expense) for the three months ended September 30, 2022 and 2021 consists of the following:

Non-operating income (expense) for the three months ended September 30, 2022 varied from the three months ended September 30, 2021 primarily due to a decrease in interest expense from $6,577 for the three months ended September 30, 2021 to $0 for the three months ended September 30, 2022 as a result of conversions and repayments of notes payable. In addition, the Company recognized a gain on forgiveness of debt on old payables as they satisfied agreements with vendors to pay a portion of the payable with the remaining amount forgiven in 2022.

Our net loss for the three months ended September 30, 2022 and 2021 was $(277,065) and $(201,160), respectively.

At September 30, 2022, the Company had working capital of $1,885,197, as compared to working capital of $1,467,383 at December 31, 2021. During the nine months ended September 30, 2022 and 2021, the Company experienced negative cash flow from operations of $838,391 and $728,351 and realized $1,220,000 and $1,811,238 of cash flows from financing activities. As of September 30, 2022, the Company did not have any commitments for capital expenditures.

Cash used in operating activities increased from $728,351 for the nine months ended September 30, 2021 to $838,391 for the nine months ended September 30, 2022. Cash used in operating activities was primarily a result of the Company’s non-cash items, such as loss from operations, stock based compensation, loss conversion of debt as well as forgiveness of debt as well as the changes in prepaid expenses and accounts payable. Cash provided from financing activities decreased from $1,811,238 for the nine months ended September 30, 2021 to $1,220,000 for the nine months ended September 30, 2022. The decrease in cash provided from financing activities was primarily a result of increase in proceeds from the Regulation A+ where the Company raised $1,811,238 from common stock and warrant issuances in 2021 versus, $1,220,000 in 2022.

The Company has generated material operating losses since inception. The Company had a net loss of $1,764,508 for the nine months ended September 30, 2022, and a net loss of $2,349,536 for the nine months ended September 30, 2021. 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 the Company can provide no assurance that 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.

In July 2022, the Company raised $1,220,000 through the sale of common stock and warrants through the Regulation A+, and in October 2022 amended the Regulation A+ in an attempt to raise the additional $3,800,000.

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 fund: (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 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 associated with such 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 impact the Company’s ability to obtain financing and its ability to execute its business plan.

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, 2022, 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, 2021, filed on March 7, 2022.

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.

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.

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 the disclosed material weaknesses in the Company’s internal control over financial reporting, 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.

There have been no changes in the Company’s internal control over financial reporting that occurred during the period ended September 30, 2022 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:

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.

In March 2022, the Company issued 299,577 shares of common stock in the cashless exercise of 825,000 warrants, and 76,250 shares of common stock for services rendered to the CEO.

On July 7, 2022, the Company sold 15,000,000 shares under the Regulation A+ at $0.08 for $1,200,000, and 20,000,000 warrants (15,000,000 at $0.08 expiring June 2025 and 5,000,000 at $0.01 expiring December 2022) for $20,000.

In September 2022, the Company issued 984,840 shares of common stock valued at $49,242 in settlement of accounts payable.

In connection with the above stock sales, we did not pay any underwriting discounts or commissions. None of the sales of securities described or referred to above was registered under the Securities Act of 1933, as amended (the “Securities Act”). For sales made pursuant to an exemption from registration contained in Section 4(a)(2) of the Securities Act, no general solicitation was used in connection with the sales.

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.

	Large accelerated filer ☐	Accelerated filer ☐

	i Non-accelerated filer ☒	Smaller reporting company i ☒

		Emerging growth company i ☐

	SEPTEMBER 30,			DECEMBER 31,
	2022			2021
	(UNAUDITED)
ASSETS

Current Assets:
Cash	$	i 1,987,732		$	i 1,606,123
Accounts receivable		i 13,000			-
Prepaid expenses		i 45,418			i 28,175

Total Current Assets		i 2,046,150			i 1,634,298

TOTAL ASSETS	$	i 2,046,150		$	i 1,634,298

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES
Current Liabilities:
Accounts payable and accrued expenses	$	i 160,953		$	i 166,915

Total Current Liabilities		i 160,953			i 166,915

Total Liabilities		i 160,953			i 166,915

Commitments and contingencies		-			-

STOCKHOLDERS’ EQUITY
Preferred stock, par value, $ i i 0.001 / , i i 20,000,000 / shares authorized, Series A Convertible Preferred, i i 5,000,000 / shares authorized, i i i i 2,071,007 / / / shares issued and outstanding, respectively		i 2,071			i 2,071
Additional paid in capital - Series A Convertible preferred stock		i 8,842,458			i 8,842,458
Series B Convertible Preferred, i i 5,000,000 / shares authorized, i i i i 200,363 / / / shares issued and outstanding, respectively		i 200			i 200
Additional paid in capital - Series B Convertible preferred stock		i 290,956			i 290,956
Series C Convertible Preferred, i i 5,000,000 / shares authorized, i i i i 385,302 / / / shares issued and outstanding, respectively		i 385			i 385
Preferred stock value		i 385			i 385
Additional paid in capital - Series C Convertible preferred stock		i 500,507			i 500,507
Additional paid in capital - Convertible preferred stock		i 500,507			i 500,507
Common stock, par value, $ i i 0.001 / , i i 950,000,000 / shares authorized, i i 359,891,255 / and i i 343,530,678 / issued and outstanding, respectively		i 359,891			i 343,531
Additional paid in capital - common stock		i 70,739,104			i 68,573,142
Accumulated deficit		( i 78,850,375	)		( i 77,085,867	)

Total Stockholders’ Equity		i 1,885,197			i 1,467,383

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	i 2,046,150		$	i 1,634,298

	2022			2021
CASH FLOW FROM OPERTING ACTIVIITES
Net loss	$	( i 1,764,508	)	$	( i 2,349,536	)
Adjustments to reconcile net loss to net cash used in operating activities
Common stock, stock options and warrants for services		i 4,880			-
RSUs issued for services		i 908,200			i 1,614,000
(Gain) loss on conversion of debt		( i 47,588	)		i 176,295
Forgiveness of debt		-			( i 129,745	)
Changes in assets and liabilities
Accounts receivable		( i 13,000	)		( i 8,887	)
Prepaid expenses and other assets		( i 17,243	)		( i 14,480	)
Accounts payable and accrued expenses		i 90,868			i 30,517
Payroll liabilities		-			( i 66,143	)
Accrued interest		-			i 19,628
Total adjustments		i 926,117			i 1,621,185

Net cash used in operating activities		( i 838,391	)		( i 728,351	)

CASH FLOWS FROM FINANCING ACTIVITES
Proceeds from common stock and warrants		i 1,220,000			i 1,811,238
Net cash provided by financing activities		i 1,220,000			i 1,811,238

NET INCREASE IN CASH		i 381,609			i 1,082,887

CASH- BEGINNING OF PERIOD		i 1,606,123			i 903,704

CASH - END OF PERIOD	$	i 1,987,732		$	i 1,986,591

CASH PAID DURING THE PERIOD FOR:
Interest expense	$	-		$	-

Income taxes	$	-		$	-

SUPPLEMENTAL INFORMATION - NON-CASH INVESTING AND FINANCING ACTIVITIES:

Conversion of notes payable and accrued interest into common stock	$	-		$	i 50,370
Common stock issued in cashless exercise of warrants	$	i 300		$	i 4,708
RSUs vested into common stock	$	-		$	i 12,000
Accounts payable converted into shares of common stock	$	i 49,242		$	i 90,000
Stock options exercised for recission of common and preferred stock	$	-		$	i 60,000

	●	Fund the effort to communicate the benefits of IsoPet® to the veterinary community and the pet parents.
	●	Conduct additional clinical studies to generate more data for the veterinary community
	●	Subsidize some IsoPet^®therapies, if necessary, to ensure that all viable candidates are treated.
	●	Assist new regional clinics with their license and certification training.

	●	Enhance the pedigree of the Quality Management System.
	●	Complete the previously defined pre-clinical testing and additional testing on an animal model closely aligned with our revised indication for use. Report the results to the FDA in a pre-submission meeting.
	●	Use the feedback from that meeting to write the IDE (Investigational Device Exemption), which is required to initiate clinical trials.

Vivos Inc. – ‘10-Q’ for 9/30/22

On: Wednesday, 10/19/22, at 4:02pm ET · For: 9/30/22 · Accession #: 1493152-22-28874 · File #: 0-53497

Previous ‘10-Q’: ‘10-Q’ on 7/25/22 for 6/30/22 · Next: ‘10-Q’ on 5/4/23 for 3/31/23 · Latest: ‘10-Q’ on 11/6/23 for 9/30/23

Quarterly Report — Form 10-Q

Filing Table of Contents

‘10-Q’ — Quarterly Report

Document Table of Contents

This is an HTML Document rendered as filed. [ Alternative Formats ]

Dates Referenced Herein and Documents Incorporated by Reference

Title of Each Class		Trading Symbol		Name of Each Exchange on which registered

		Page
	PART I – FINANCIAL INFORMATION

Item 1.	Condensed Financial Statements	1

	Condensed Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021	1

	Condensed Statements of Operations for the Nine and Three Months ended September 30, 2022 and 2021 (unaudited)	2

	Condensed Statement of Changes in Stockholders’ Equity for the Nine Months Ended September 30, 2022 and 2021 (unaudited)	3

	Condensed Statements of Cash Flow for the Nine Months ended September 30, 2022 and 2021 (unaudited)	4

	Notes to Condensed Financial Statements (unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38

Item 4.	Controls and Procedures	38

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	39

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39

Item 6.	Exhibits	39

SIGNATURES		40

Production equipment:		i 3 to i 7 years
Office equipment:		i 2 to i 5 years
Furniture and fixtures:		i 2 to i 5 years

	September 30, 2022		December 31, 2021
Preferred stock		i 9,909,570		i 9,909,570
Restricted stock units		i 25,362,500		i 25,262,500
Common stock options		i 2,252,809		i 2,252,809
Common stock warrants		i 50,037,500		i 31,862,500
Total potential dilutive securities		i 87,562,379		i 69,287,379

	Nine Months Ended			Year Ended
	September 30, 2022			December 31, 2021
Expected term		i .5 – i 3 years			i 2 - i 5 years
Expected volatility		i 66	%		i 109 - i 147	%
Expected dividend yield		-			-
Risk-free interest rate		i 3	%		i 0.20 - i 0.58	%

	Number			Weighted Average
	Of			Grant Date
	Shares			Fair Value

Balance at December 31, 2020 and 2019		i 262,500		$	i 0.59

RSU’s granted		i 42,700,000		$	i 0.08
RSU’s vested		( i 17,700,000	)	$	-
RSU’s forfeited		-		$	-

Balance at December 31, 2021		i 25,262,500		$	i 0.08
RSUs granted		i 100,000		$	i 0.082
RSUs vested		( i 10,100,000	)	$	-
Balance at September 30, 2022		i 15,262,500		$	i 0.08

	●	Vista Veterinary Hospital – Kennewick, WA
	●	University of Missouri – Columbia, MO
	●	Johns Hopkins University – Baltimore, MD
	●	New England Equine Practice – Patterson, NY

	●	Refine the Memorandum of Understanding to define all the germane interfaces, roles and liabilities between Vista Inc and the private clinics, including the pilot responsivity to document and share the key aspects of all therapies with the Company;
	●	Create and implement proprietary certification training packages;
	●	Amend the production center radioactive material license at IsoTherapeutics, the Company’s IsoPet^® production center, to allow distribution for commercial applications;
	●	Work with the pilot program to obtain a radioactive material licensing in an NRC agreement state;
	●	Create equipment and supplies list;
	●	Create and post regulatory signage;
	●	Explore different IsoPet^® pricing options;
	●	Evaluate different approaches to obtain patients;
	●	Optimize patient scheduling practices to reduce cost to the pet owners;
	●	Develop communication material and a liability document for the pet owners; and
	●	Further refine the therapy techniques for advanced cancers.

	●	Fund the effort to communicate the benefits of IsoPet^® to the veterinary community and the pet parents.
	●	Conduct additional clinical studies to generate more data for the veterinary community
	●	Subsidize some IsoPet^® therapies, if necessary, to ensure that all viable candidates are treated.
	●	Assist a new regional clinic with their license and certification training.

	●	Beta particles only travel a short distance so the device can deliver high radiation to the tumor with minimal dose to the nearby normal tissues. In medical terms Y-90 beta emitter has a high efficacy rate;

	●	Benefitting from the short penetration distance, the patient can go home immediately with no fear of exposure to family members, and there is a greatly reduced radiation risk to the doctor. A simple plastic tube around the syringe, gloves and safety glasses are all that is required. Other gamma emitting products require much more protection;

	●	A 2.7-day half-life means that only 5% of the radiation remains after ten days. This is in contrast to the industry-standard gamma irradiation product, which has a half-life of 17 days;

	●	The short half-life also means that any medical waste can be stored for thirty days then disposed as normal hospital waste;

	●	RadioGel™ can be administered with small diameter needles (27-gauge) so there is minimal damage to the normal tissue. This is in contrast to the injection of metal seeds, which does considerable damage; and

	●	After about 120 days the gel resorbs by a normal biological cycle, called the Krebs Cycle. The only remaining evidence of the treatment are phosphate particles so small in diameter that it requires a high-resolution microscope to find them. This is in contrast to permanent presence of metal seeds.

	1.	Under new leadership, the Company is implementing all past recommendations from the FDA. The Company intends to narrow the Indications for Use, will provide test plans for FDA review to respond to answer all previous FDA questions, and will request a pre-submission meeting;

	2.	Prepare a pre-submission request document and FDA meeting request to obtain feedback on the test plans in order to initiate testing, to present the proposed content for the final application and to request permission to submit a de novo;

	3.	Submit an Investigational Device Exemption (“IDE”) to obtain permission to conduct human clinical studies; and

	4.	File a de novo or Pre-Market Approval application.

●	Skin cancer	●	Non-dendritic brain
●	Involved lymph nodes	●	Pediatric cancers – several types
●	Bladder	●	Rectal
●	Liver	●	Gynecological
●	Localized prostate	●	Spinal
●	Pancreas	●	Recurrent esophageal
●	Head and neck (including sino-nasal and oropharyngeal)	●	Breast cancer resection cavity
●	Ocular melanoma	●	Anaplastic thyroid

	Nine Months Ended September 30, 2022			Nine Months Ended September 30, 2021
Revenues	$	30,000		$	14,887
Cost of goods sold		(18,053	)		(6,000	)
Gross profit		11,947			8,887
Operating expenses		(1,824,043	)		(2,292,245	)
Operating loss		(1,812,096	)		(2,283,358	)
Non-operating income (expense)		47,588			(66,178	)
Net loss	$	(1,764,508	)	$	(2,349,536	)

	Nine months ended September 30, 2022		Nine months ended September 30, 2021
Professional fees, including stock-based compensation	$	1,191,807	$	1,786,028
Payroll expenses		208,818		202,428
Research and development		312,066		221,154
General and administrative expenses		111,352		82,635
Total operating expenses	$	1,824,043	$	2,292,245

	Nine months ended September 30, 2022		Nine months ended September 30, 2021
Interest expense	$	-	$	(19,628	)
Forgiveness of debt		47,588		129,745
Loss on debt extinguishment		-		(176,295
Non-operating income (expense)	$	47,588	$	(66,178	)

	Three Months Ended September 30, 2022			Three Months Ended September 30, 2021
Revenues	$	6,500		$	14,887
Cost of goods sold		(13,035	)		(6,000	)
Gross profit		(6,535	)		8,887
Operating expenses		(270,530	)		(203,470	)
Operating loss		(277,065	)		(194,583	)
Non-operating income (expense)		-			(6,577	)
Net loss	$	(277,065	)	$	(201,160	)

	(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.

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)

	Vivos Inc.

Date: October 19, 2022	By:	/s/ Michael Korenko
	Name:	Michael K. Korenko
	Title:	Chief Executive Officer
		(Principal Executive Officer)