SEC Comment Letter for VIVOS INC (RDGL) (CIK 0001449349) (RDGL) — Apr 6, 2017
VIVOS INC (RDGL) (CIK 0001449349)
Date: April 6, 2017 · CIK: 0001449349 · Accession: 0000000000-17-011844
AI Filing Summary & Sentiment
Reasoning
Letter
April 6, 2017 Via E -mail Dr. Michael Korenko Chief Executive Officer Advanced Medical Isotope Corporation 1021 N Kellogg Street Kennewick, WA 99336 Form 10 -K for Fiscal Year Ended December 31, 2016 File No. 000 -53497
Re: Advanced Medical Isotope Corporation Registration Statement on Form S -1 Filed March 10, 2017 File No. 333 -216588
Dear Dr. Korenko :
We have reviewed your registration statement and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to this letter by amending your registration statement and providing the requested information . If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response.
After reviewing any amendment to your registration statement and the information you provide in response to these comments, we may have additional comments.
General
1. You appear to be offering Units since you are registering the offer and sale of shares of common stock and warrants to purchase common stock which you state can only be purchased together. If you are offering Units, please revise your prospectus cover page, description of securities and otherwise throughout your registration statement to describe the Units. In addition, your fee table should cover the Units, common stock, warrants and the shares underlying the warrants. For additional guidance on the fee tab le, please refer to our Compliance and Disclosure Interpretations, Securities Act Rules, Questions 240.05 and 240.06, available on our website.
Dr. Michael Korenko Advanced Medical Isotope Corporation April 6, 2017 Page 2
2. Please clarify whether this is a best efforts offering with no minimum or a firm underwritten offering. To the extent that this is an underwritten offering, then please identify your lead underwriter(s) in your next amendment. We intend to defer further review of the filing until the registration statement is amended to include the name of the lead underwriter(s) .
3. It appears that you may be contemplating an at -the-market offering. You are not eligible under Rule 415 of the Securities Act of 1933 to conduct an at -the-market offering. Please revise your offering to sell shares at a fixed price for the duration of the offering, or advise . Similarly, you discuss increasing or decreasing the number of shares that you are offering. Pleas e note that you may not increase the number of securities you are publicly offering without filing to register those additional securities, and revise accordingly.
4. If you intend to conduct this offering on a best -efforts basis, then p lease revis e your use of proceeds and dilution sections to provide the information assuming the sale of 25%, 50%, 75% and 100% of the offering.
5. Please provide disclosure requirements pursuant to Item 505 of Regulation S -K.
Outside Front Cover Page, page i
6. Please limit the prospectus cover page to one page. See Item 501(b) of Regulation S -K.
Prospectus Summary, page 2
7. Please revise to disclose that you have received a going concern opinion from your auditor.
8. We note your disclosure that the FDA classifie d RadioGel as a medical device. Please revise to clarify whether the FDA classified your RadioGel as a Class III medical device. Please briefly discuss the process and implications of being classified as Class I, Class II, and Class III.
9. We note that yo u repeatedly indicate that you intend to seek de novo review of your RadioGel. However, on page 8 you disclose that in 2015 the FDA notified you that your 2014 de novo application was not granted. Please reconcile. Please disclose what the company’s plans are given that the 2014 de novo application was not granted.
Risk Factors, page 7
Dr. Michael Korenko Advanced Medical Isotope Corporation April 6, 2017 Page 3
The Company’s new products…, page 8
10. We note here, and throughout your registration statement, that you discuss the Company’s product Y -90 RadioGel. We note that you menti on Y -90 Fast -Resorbable Polymer Seeds and Y -90 Polymer Topical Paste products in your risk factor section. Please clarify whether these products are currently in production and whether you are seeking FDA approval for these products. Please revise your b usiness section as appropriate.
The Company’s common stock is listed on the OTC Bulletin Board…, page 14
11. Please revise here and elsewhere to clarify that your stock is quoted on the OTC Pink.
Use of Proceeds, page 17
12. You list the discharge of outstanding debt as a probable use of the proceeds of this offering. Please indicate the interest rate and maturity of the indebtedness to which you may apply these proceeds to and any other information required by Instruction 4 to Item 504 of Regulation S-K.
Dilution, page 21
13. Please enhance your disclosures to clarify how you determine the net tangible book value of approximately $3 million as of December 31, 2016.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, p age
Revenue, page 22
14. You disclose that consulting revenue generated $8,108 and $24,108 for the years ended December 31, 2016 and December 31, 2015, respectively, and that consulting revenues consisted of providing services to your company. Please cla rify how providing services to your company generated revenues rather than resulting in operating expenses.
Business, page 29
Overview, page 29
15. Please update your disclosure in this section, in your summary, and elsewhere in your document as appropriate to disclose (i) the initial FDA submission and outcome, (ii) your 2014 de novo submission and outcome; and (iii) the status of any other submissions. See Item 101(h)(4)(iii) of Regulation S -K. Please revise to state clearly that in the event the
Dr. Michael Korenko Advanced Medical Isotope Corporation April 6, 2017 Page 4
FDA den ies your initial 510(k) application and subsequently determines during the de novo review that your device cannot be classified as a Class I or Class II device, you will then need to submit a PMA application to obtain the necessary regulatory approval.
Veterinary Sector, page 34
16. Please disclose the role of the Veterinary Advisory Board in the operation of your business.
17. Please disclose the materials terms of your engagement with each of the four university veterinarian hospitals.
18. We note your disclosure that Dr. Villalobos has agreed that her private clinic will be the first to implement the company’s veterinary therapies. Please disclose the material terms of your arrangement with Dr. Villalobos.
Government Regulation, page 35
19. Please signif icantly expand the disclosure in this section to discuss in detail the material government regulations that are applicable to your business, including standard processing times for approval to test and market your products. In addition, provide an anticipa ted timeline for any submissions to the FDA and other anticipated actions by you before regulatory bodies. We note your disclosure on page 8 that the company will explore steps toward seeking appro val for the device as a Class I II medical device. Please d iscuss in detail the processes and anticipated costs associated with seeking this approval.
Raw Materials, page 35
20. Please expand your disclosure to provide the availability and the names of your principal suppliers of raw materials. We note your disclos ure that some of your products require purchasing raw materials from a limited number of suppliers. See Item 101(h)(4)(v) of Regulation S -K.
Management, page 37
Identification of Significant Employees and Consultants, page 38
21. Please provide for Dr. Ali ce Villalobos and all other “Veterinarian Advisory Board” and “Medical Advisory Board” members the appropriate biographical disclosure required by Item 401(c) of Regulation S -K.
Executive Compensation, page 39
Dr. Michael Korenko Advanced Medical Isotope Corporation April 6, 2017 Page 5
22. Please revise your Summary Compensation Tabl e to be in the format required by Item 402(n) of Regulation S -K.
23. We note your disclosure on options granted to the named executive officers in footnotes 3 and 5 to your Summary Compensation Table. Please include in your table the aggregate grant date fair value of the options computed in accordance with FASB ASC Topic 718. Please refer to Item 402(n)(2)(vi) of Regulation S -K and the instructions to that item .
Compensation of Directors, page 40
24. You state that non -employee directors were not paid any compensation during FYE 2016. You also disclose, however, that during June 2016 you granted to Directors Cadwell and Clement options to purchase 100,000 shares at an exercise price of $1.00 per share . Please reconcile your disclosure and provide the director compensation table required by Item 402(r)(1) of Regulation S -K.
Security Ownership of Certain Beneficial Owners and Management, page 41
Beneficial Ownership of the Company’s Common Stock, page 41
25. We note your disclosure on page 43 that Carlton M. Cadwell is a beneficial owner of more than 10% of the Company’s common stock. Please revise your beneficial ownership table and notes to the table to account for the amount of shares of common stock w ith respect to which each holder would have the right to acquire beneficial ownership through conversion of your preferred stock.
Description of Securities, page 44
Delaware Laws, page 47
26. Please direct us to the Delaware General Corporation Law provisio n governing “Acquisition of Controlling Interest.”
Financial Statements for the Year Ended December 31, 2016
Consolidated Statements of Cash Flows, page F -6
27. You disclose here that you recognized a gain on the settlement of debt in the amount of $3,562,067 for the year ended December 31, 2016; however, per your income statement for the year ended December 31, 2016, the amount of the gain is act ually $3,108,342. Please revise accordingly.
Dr. Michael Korenko Advanced Medical Isotope Corporation April 6, 2017 Page 6
Note 11: Stockholders’ Equity
28. You indicate that effective June 2015, you designated the Series A Preferred as a new series of preferred stock. Please disclose the specific terms of your Series A Preferred including redemption features and preferred dividends, as applicable. Please also help us better understand how you determined the appropria te accounting treatment for your Series A Preferred stock . Please reference the specific clauses of you r agreements that relate to the redemption features and tell us how you determined the appropriate classification of the preferred stock in light of these. Refer to ASC 480 -10-S99.
Item 14. Indemnification of Directors and Officers, page II -1
29. Please revise to remove references to Innovus.
Item 15. Recent Sales of Unregistered Securities, page II -2
30. For each transaction involving t he sale of unregistered securities, please give the date of sale and name the person(s) or identify the class of person(s) to whom the securities were sold. See Item 701 (a)-(b) of Regulation S -K.
Exhibit Index
31. Please file as an exhibit a form of subscription agreement for securities of your company that you are registering under the present registration statement, or advise. See Items 601(b)(4) and 601(b)(10) of Regulation S -K.
32. We note your disclosure in Note 6 to the Financial Statements and elsewhere of promissory notes outstanding. Please file as exhibits agreements representing any outstanding promissory notes and agreements representing all other outstanding material indebtedness. See Item 601(b)(10) of Regulation S -K.
33. Please file as an exhibit the legality opinion in respect of each category of s ecurity being registered, and related consent of counsel, with your next pre -effective amendment. See Items 601(b)(5) and 601(b)(23) of Regulation S -K.
34. Please file as an exhibit any contracts representing the agreement pursuant to which Battelle Memorial Institute granted your company an exclusive license to patents covering the manufacturing, processing and applications of RadioGel™. See Item 601(b)(10)(ii)(B ) of Regulation S -K.
35. Please file as an exhibit any contract representing your employment agreement with Dr. Fu Min -Su. See Item 601(b)(10) of Regulation S -K.
Dr. Michael Korenko Advanced Medical Isotope Corporation April 6, 2017 Page 7
Form 10 -K for the Year Ended December 31, 2016
Item 9A. Controls and P rocedures, page 29
Management’s Annual Report on Internal Control Over Financial Reporting, page 29
36. Please revise future filings to clarify which version, 1992 or 2013, of the criteria set forth by the Committee of Sponsoring Organizations of the Treadwa y Commission’s Internal Control — Integrated Framework you utilized when performing your assessment of internal control over financial reporting .
Certifications
37. We note that the certifications filed as Exhibits 31.2 and 32.1 are dated March 8, 2016 instead of 2017. In future filings, please ensure that your certifications are currently dated.
We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration . Please allow adequate time for us to review any amendment prior to the requested effective date of the registration statement.
You m ay contact Jeff Gordon, Staff Accountant, at (202) 551 -3866 or Ernest Greene, Staff Accountant, at (202) 551 -3733 if you have questions regarding comments on the financial statements and related matters. Please contact Christopher Ronne, Staff Attorney, at (202) 551- 6156 or me at (202) 551 -3754 with any other questions.
Sincerely,
/s/ Asia Timmons -Pierce, for
Show Raw Text
Mail Stop 4631
April 6, 2017
Via E -mail
Dr. Michael Korenko
Chief Executive Officer
Advanced Medical Isotope Corporation
1021 N Kellogg Street
Kennewick, WA 99336
Re: Advanced Medical Isotope Corporation
Registration Statement on Form S -1
Filed March 10, 2017
File No. 333 -216588
Form 10 -K for Fiscal Year Ended December 31, 2016
File No. 000 -53497
Dear Dr. Korenko :
We have reviewed your registration statement and have the following comments. In
some of our comments, we may ask you to provide us with information so we may better
understand your disclosure.
Please respond to this letter by amending your registration statement and providing the
requested information . If you do not believe our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
After reviewing any amendment to your registration statement and the information you
provide in response to these comments, we may have additional comments.
General
1. You appear to be offering Units since you are registering the offer and sale of shares of
common stock and warrants to purchase common stock which you state can only be
purchased together. If you are offering Units, please revise your prospectus cover page,
description of securities and otherwise throughout your registration statement to describe
the Units. In addition, your fee table should cover the Units, common stock, warrants
and the shares underlying the warrants. For additional guidance on the fee tab le, please
refer to our Compliance and Disclosure Interpretations, Securities Act Rules, Questions
240.05 and 240.06, available on our website.
Dr. Michael Korenko
Advanced Medical Isotope Corporation
April 6, 2017
Page 2
2. Please clarify whether this is a best efforts offering with no minimum or a firm
underwritten offering. To the extent that this is an underwritten offering, then please
identify your lead underwriter(s) in your next amendment. We intend to defer further
review of the filing until the registration statement is amended to include the name of the
lead underwriter(s) .
3. It appears that you may be contemplating an at -the-market offering. You are not eligible
under Rule 415 of the Securities Act of 1933 to conduct an at -the-market offering. Please
revise your offering to sell shares at a fixed price for the duration of the offering, or
advise . Similarly, you discuss increasing or decreasing the number of shares that you are
offering. Pleas e note that you may not increase the number of securities you are publicly
offering without filing to register those additional securities, and revise accordingly.
4. If you intend to conduct this offering on a best -efforts basis, then p lease revis e your use
of proceeds and dilution sections to provide the information assuming the sale of 25%,
50%, 75% and 100% of the offering.
5. Please provide disclosure requirements pursuant to Item 505 of Regulation S -K.
Outside Front Cover Page, page i
6. Please limit the prospectus cover page to one page. See Item 501(b) of Regulation S -K.
Prospectus Summary, page 2
7. Please revise to disclose that you have received a going concern opinion from your
auditor.
8. We note your disclosure that the FDA classifie d RadioGel as a medical device. Please
revise to clarify whether the FDA classified your RadioGel as a Class III medical device.
Please briefly discuss the process and implications of being classified as Class I, Class II,
and Class III.
9. We note that yo u repeatedly indicate that you intend to seek de novo review of your
RadioGel. However, on page 8 you disclose that in 2015 the FDA notified you that your
2014 de novo application was not granted. Please reconcile. Please disclose what the
company’s plans are given that the 2014 de novo application was not granted.
Risk Factors, page 7
Dr. Michael Korenko
Advanced Medical Isotope Corporation
April 6, 2017
Page 3
The Company’s new products…, page 8
10. We note here, and throughout your registration statement, that you discuss the
Company’s product Y -90 RadioGel. We note that you menti on Y -90 Fast -Resorbable
Polymer Seeds and Y -90 Polymer Topical Paste products in your risk factor section.
Please clarify whether these products are currently in production and whether you are
seeking FDA approval for these products. Please revise your b usiness section as
appropriate.
The Company’s common stock is listed on the OTC Bulletin Board…, page 14
11. Please revise here and elsewhere to clarify that your stock is quoted on the OTC Pink.
Use of Proceeds, page 17
12. You list the discharge of outstanding debt as a probable use of the proceeds of this
offering. Please indicate the interest rate and maturity of the indebtedness to which you
may apply these proceeds to and any other information required by Instruction 4 to Item
504 of Regulation S-K.
Dilution, page 21
13. Please enhance your disclosures to clarify how you determine the net tangible book value
of approximately $3 million as of December 31, 2016.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, p age
22
Revenue, page 22
14. You disclose that consulting revenue generated $8,108 and $24,108 for the years ended
December 31, 2016 and December 31, 2015, respectively, and that consulting revenues
consisted of providing services to your company. Please cla rify how providing services
to your company generated revenues rather than resulting in operating expenses.
Business, page 29
Overview, page 29
15. Please update your disclosure in this section, in your summary, and elsewhere in your
document as appropriate to disclose (i) the initial FDA submission and outcome, (ii) your
2014 de novo submission and outcome; and (iii) the status of any other submissions. See
Item 101(h)(4)(iii) of Regulation S -K. Please revise to state clearly that in the event the
Dr. Michael Korenko
Advanced Medical Isotope Corporation
April 6, 2017
Page 4
FDA den ies your initial 510(k) application and subsequently determines during the de
novo review that your device cannot be classified as a Class I or Class II device, you will
then need to submit a PMA application to obtain the necessary regulatory approval.
Veterinary Sector, page 34
16. Please disclose the role of the Veterinary Advisory Board in the operation of your
business.
17. Please disclose the materials terms of your engagement with each of the four university
veterinarian hospitals.
18. We note your disclosure that Dr. Villalobos has agreed that her private clinic will be the
first to implement the company’s veterinary therapies. Please disclose the material terms
of your arrangement with Dr. Villalobos.
Government Regulation, page 35
19. Please signif icantly expand the disclosure in this section to discuss in detail the material
government regulations that are applicable to your business, including standard
processing times for approval to test and market your products. In addition, provide an
anticipa ted timeline for any submissions to the FDA and other anticipated actions by you
before regulatory bodies. We note your disclosure on page 8 that the company will
explore steps toward seeking appro val for the device as a Class I II medical device.
Please d iscuss in detail the processes and anticipated costs associated with seeking this
approval.
Raw Materials, page 35
20. Please expand your disclosure to provide the availability and the names of your principal
suppliers of raw materials. We note your disclos ure that some of your products require
purchasing raw materials from a limited number of suppliers. See Item 101(h)(4)(v) of
Regulation S -K.
Management, page 37
Identification of Significant Employees and Consultants, page 38
21. Please provide for Dr. Ali ce Villalobos and all other “Veterinarian Advisory Board” and
“Medical Advisory Board” members the appropriate biographical disclosure required by
Item 401(c) of Regulation S -K.
Executive Compensation, page 39
Dr. Michael Korenko
Advanced Medical Isotope Corporation
April 6, 2017
Page 5
22. Please revise your Summary Compensation Tabl e to be in the format required by Item
402(n) of Regulation S -K.
23. We note your disclosure on options granted to the named executive officers in footnotes 3
and 5 to your Summary Compensation Table. Please include in your table the aggregate
grant date fair value of the options computed in accordance with FASB ASC Topic 718.
Please refer to Item 402(n)(2)(vi) of Regulation S -K and the instructions to that item .
Compensation of Directors, page 40
24. You state that non -employee directors were not paid any compensation during FYE 2016.
You also disclose, however, that during June 2016 you granted to Directors Cadwell and
Clement options to purchase 100,000 shares at an exercise price of $1.00 per share .
Please reconcile your disclosure and provide the director compensation table required by
Item 402(r)(1) of Regulation S -K.
Security Ownership of Certain Beneficial Owners and Management, page 41
Beneficial Ownership of the Company’s Common Stock, page 41
25. We note your disclosure on page 43 that Carlton M. Cadwell is a beneficial owner of
more than 10% of the Company’s common stock. Please revise your beneficial
ownership table and notes to the table to account for the amount of shares of common
stock w ith respect to which each holder would have the right to acquire beneficial
ownership through conversion of your preferred stock.
Description of Securities, page 44
Delaware Laws, page 47
26. Please direct us to the Delaware General Corporation Law provisio n governing
“Acquisition of Controlling Interest.”
Financial Statements for the Year Ended December 31, 2016
Consolidated Statements of Cash Flows, page F -6
27. You disclose here that you recognized a gain on the settlement of debt in the amount of
$3,562,067 for the year ended December 31, 2016; however, per your income statement
for the year ended December 31, 2016, the amount of the gain is act ually $3,108,342.
Please revise accordingly.
Dr. Michael Korenko
Advanced Medical Isotope Corporation
April 6, 2017
Page 6
Note 11: Stockholders’ Equity
28. You indicate that effective June 2015, you designated the Series A Preferred as a new
series of preferred stock. Please disclose the specific terms of your Series A Preferred
including redemption features and preferred dividends, as applicable. Please also help us
better understand how you determined the appropria te accounting treatment for your
Series A Preferred stock . Please reference the specific clauses of you r agreements that
relate to the redemption features and tell us how you determined the appropriate
classification of the preferred stock in light of these. Refer to ASC 480 -10-S99.
Item 14. Indemnification of Directors and Officers, page II -1
29. Please revise to remove references to Innovus.
Item 15. Recent Sales of Unregistered Securities, page II -2
30. For each transaction involving t he sale of unregistered securities, please give the date of
sale and name the person(s) or identify the class of person(s) to whom the securities were
sold. See Item 701 (a)-(b) of Regulation S -K.
Exhibit Index
31. Please file as an exhibit a form of subscription agreement for securities of your company
that you are registering under the present registration statement, or advise. See Items
601(b)(4) and 601(b)(10) of Regulation S -K.
32. We note your disclosure in Note 6 to the Financial Statements and elsewhere of
promissory notes outstanding. Please file as exhibits agreements representing any
outstanding promissory notes and agreements representing all other outstanding material
indebtedness. See Item 601(b)(10) of Regulation S -K.
33. Please file as an exhibit the legality opinion in respect of each category of s ecurity being
registered, and related consent of counsel, with your next pre -effective amendment. See
Items 601(b)(5) and 601(b)(23) of Regulation S -K.
34. Please file as an exhibit any contracts representing the agreement pursuant to which
Battelle Memorial Institute granted your company an exclusive license to patents
covering the manufacturing, processing and applications of RadioGel™. See Item
601(b)(10)(ii)(B ) of Regulation S -K.
35. Please file as an exhibit any contract representing your employment agreement with Dr.
Fu Min -Su. See Item 601(b)(10) of Regulation S -K.
Dr. Michael Korenko
Advanced Medical Isotope Corporation
April 6, 2017
Page 7
Form 10 -K for the Year Ended December 31, 2016
Item 9A. Controls and P rocedures, page 29
Management’s Annual Report on Internal Control Over Financial Reporting, page 29
36. Please revise future filings to clarify which version, 1992 or 2013, of the criteria set forth
by the Committee of Sponsoring Organizations of the Treadwa y Commission’s Internal
Control — Integrated Framework you utilized when performing your assessment of
internal control over financial reporting .
Certifications
37. We note that the certifications filed as Exhibits 31.2 and 32.1 are dated March 8, 2016
instead of 2017. In future filings, please ensure that your certifications are currently
dated.
We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration . Please allow adequate
time for us to review any amendment prior to the requested effective date of the registration
statement.
You m ay contact Jeff Gordon, Staff Accountant, at (202) 551 -3866 or Ernest Greene,
Staff Accountant, at (202) 551 -3733 if you have questions regarding comments on the financial
statements and related matters. Please contact Christopher Ronne, Staff Attorney, at (202) 551-
6156 or me at (202) 551 -3754 with any other questions.
Sincerely,
/s/ Asia Timmons -Pierce, for
Pamela A. Long
Assistant Director
Office of Manufacturing and
Construction