RTGN 10-K

RetinalGenix Technologies Inc. (RTGN)

10-K 2022-04-15 For: 2021-12-31

View Original

Added on April 06, 2026

1450 North McDowell Boulevard, Suite 150, Petaluma, CA		94954
(Address of principal executive offices)		(Zip code)

Part I
Item 1.	Business	6
Item 1A.	Risk Factors	11
Item 1B.	Unresolved Staff Comments	27
Item 2.	Properties	27
Item 3.	Legal Proceedings	27
Item 4.	Mine Safety Disclosures	27
Part II
Item 5.	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	28
Item 6.	[Reserved]	28
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	35
Item 8.	Financial Statements and Supplementary Data	35
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	37
Item 9A.	Controls and Procedures	37
Item 9B.	Other Information	37
Item 9C.	Disclosure Regarding Foreign Jurisdiction that Prevent Inspections	37
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	38
Item 11.	Executive Compensation	39
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	42
Item 13.	Certain Relationships and Related Transactions, and Director Independence	43
Item 14.	Principal Accountant Fees and Services	43
Part IV
Item 15.	Exhibit and Financial Statement Schedules	44
Item 16.	Form 10-K Summary	44
Signatures		45

	●	our business strategies;

	●	the timing of regulatory submissions;

	●	our ability to obtain and maintain regulatory approval of our existing product candidates and any other product candidates we may develop, and the labeling under any approval we may obtain;

	●	risks relating to the timing and costs of clinical trials and the timing and costs of other expenses;

	●	risks related to market acceptance of products;

	●	intellectual property risks;

	●	risks associated to our reliance on third party organizations;

	●	our competitive position;

	●	our industry environment;

	●	our anticipated financial and operating results, including anticipated sources of revenues;

	●	assumptions regarding the size of the available market, benefits of our products, product pricing and timing of product launches;

	●	management’s expectation with respect to future acquisitions;

	●	statements regarding our goals, intentions, plans and expectations, including the introduction of new products and markets; and

	●	our cash needs and financing plans.

	●	The marketing approval process is lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain marketing approval for the product candidates we intend to develop, our business may be substantially harmed.

	●	We may encounter substantial delays in completing our clinical studies which in turn will require additional costs, or we may fail to demonstrate adequate safety and efficacy to the satisfaction of applicable regulatory authorities. If we are not able to obtain any required regulatory approvals for our product candidates, we will not be able to commercialize our product candidates and our ability to generate revenue will be limited.

	●	Conducting successful clinical studies may require the enrollment of large numbers of patients, and suitable patients may be difficult to identify and recruit.

	●	We rely on and intend to rely on third parties to conduct our clinical trials, to assist us with pre-clinical development and for manufacturing and marketing of our proposed product candidates. If we are not able to secure favorable arrangements with such third parties, or such third parties do not perform as contractually required or expected, we may not be able to obtain regulatory approval for or commercialize our products and our business and financial condition could be harmed.

	●	Even if our product candidates are approved by regulatory authorities, if we or our suppliers fail to comply with ongoing U.S. Food and Drug Administration regulations or if we experience unanticipated problems with our products, these products could be subject to restrictions or withdrawal from the market.

	●	Our revenue stream will depend upon third-party reimbursement.

	●	Our products will face significant competition, and if they are unable to compete successfully, our business will suffer.

	●	If we fail to comply with healthcare regulations, we could face substantial enforcement actions, including civil and criminal penalties and our business, operations and financial condition could be adversely affected.

	●	Our business depends upon us securing and protecting critical intellectual property.

	●	We rely upon licenses granted to us by various licensors, and if such licensors do not adequately defend such licenses, our business may be harmed.

	●	Patent positions in our industry are highly uncertain and involve complex legal and factual questions.

	●	We have expanded and may continue to expand, our business through the acquisition of rights to new drug candidates that could disrupt our business, harm our financial condition and may also dilute current shareholders’ ownership interests in our Company.

	●	If a product liability claim is successfully brought against us for uninsured liabilities, or such claim exceeds our insurance coverage, we could be forced to pay substantial damage awards that could materially harm our business.

	●	Any international operations we undertake may subject us to risks inherent with operations outside of the United States.

	●	Our Amended and Restated Bylaws provide that the Eighth Judicial District Court of Clark County, Nevada will be the sole and exclusive forum for certain disputes which could limit shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

	●	Market and economic conditions may negatively impact our business, financial condition and share price.

	●	Future sales and issuances of our securities could result in additional dilution of the percentage ownership of our shareholders and could cause our share price to fall.

	●	We do not intend to pay cash dividends on our shares of common stock so any returns will be limited to the value of our shares.

	●	cost of treatment;

	●	pricing and availability of alternative products;

	●	the extent of available third-party coverage or reimbursement;

	●	perceived efficacy of our products relative to other products and medical solutions; and

	●	prevalence and severity of adverse side effects associated with treatment.

	●	decreased demand for our products;

	●	injury to our reputation and significant negative media attention;

	●	significant costs to defend the related litigation;

	●	substantial monetary awards;

	●	loss of revenue;

	●	diversion of management and scientific resources from our business operations; and

	●	the inability to commercialize any products that we may develop.

	●	paying monetary damages related to the legal expenses of the third party;

	●	facing additional competition that may have a significant adverse effect on our product pricing, market share, business operations, financial condition and the commercial viability of our product; and

	●	restructuring our company or delaying or terminating select business opportunities, including, but not limited to, research and development and commercialization activities, due to a potential deterioration of our financial condition or market competitiveness.

	●	take a significant, indeterminate amount of time;

	●	result in product shortages due to regulatory delays;

	●	require the expenditure of substantial resources;

	●	involve modifications, repairs or replacements of our products;

	●	require design changes of our products;

	●	result in limitations on the indicated uses of our products; and

	●	result in our never being granted the regulatory approval we seek.

	●	our ability to execute our business plan;

	●	changes in our industry;

	●	competitive pricing pressures;

	●	our ability to obtain working capital financing;

	●	additions or departures of key personnel;

	●	sales of our common stock;

	●	operating results that fall below expectations;

	●	regulatory developments;

	●	economic and other external factors;

	●	period-to-period fluctuations in our financial results;

	●	the public’s response to press releases or other public announcements by us or third parties, including filings with the SEC;

	●	changes in financial estimates or ratings by any securities analysts who follow our common stock, our failure to meet these estimates or failure of those analysts to initiate or maintain coverage of our common stock;

	●	the development and sustainability of an active trading market for our common stock;

	●	any future sales of our common stock by our officers, directors and significant stockholders; and

	●	other events or factors, many of which may be out of our control, including, but not limited to, pandemics such as COVID-19, war, or other acts of God.

	●	impeding a merger, consolidation, takeover or other business combination involving us; or

	●	discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.

	●	the scope, rate of progress, expense and results of product development, as well as of any future clinical trials of other product candidates and other research and development activities that we may conduct;

	●	the actual probability of success for our product candidates, including their safety and efficacy, early clinical data, competition, manufacturing capability and commercial viability;

	●	significant and changing government regulation and regulatory guidance;

	●	the timing and receipt of any marketing approvals; and

	●	the expense of filing, prosecuting, defending, and enforcing any patent claims and other intellectual property rights.

	For The Years Ended
	December 31,
	2021			2020			Change			% Change

Revenue	$	-		$	-
Expenses
Administrative expenses		1,188,464			1,426,230			(237,766	)		-17	%
Research and development		680,293			431,557			248,736			58	%
Stock-based compensation		307,918			220,206			87,712			40	%

Total Expenses		2,176,675			2,077,993			98,682			5	%

Interest expense		2,619			-			2,619			100	%

Net Loss	$	(2,179,294	)	$	(2,077,993	)		101,301			5	%

	Years Ended December 31,
	2021			2020
Net cash used in operating activities	$	(1,210,758	)	$	(1,422,303	)
Net cash used in/provided by investing activities		-			-
Net cash provided by financing activities		1,213,486			1,370,141
Net (decrease) increase in cash		2,728			(52,162	)
Cash at beginning of the year		2,219			54,381
Cash at end of the year	$	4,947		$	2,219

		Page No.

Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm		F-1

Balance Sheets as of December 31, 2021 and 2020		F-2

Statements of Operations for the years ended December 31, 2021 and 2020		F-3

Statements of Changes in Stockholders’ Equity for the years ended December 31, 2021 and 2020		F-4

Statements of Cash Flows for the years ended December 31, 2021 and 2020		F-5

Notes to Financial Statements		F-6

	2021			2020
ASSETS
Current Assets
Cash	$	4,947		$	2,219
Due from Sanovas		-			15,069
Deferred offering costs		-			43,787
Total Current Assets		4,947			61,075

TOTAL ASSETS	$	4,947		$	61,075
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Liabilities
Current Liabilities	$			$
Accounts payable and accrued liabilities		251,282			141,431
Due to Sanovas		142,721			-
Notes payable to stockholders		73,000			-
Accrued interest payable		2,619			-
Total Liabilities		469,622			141,431
Stockholders’ Deficit:
Preferred stock, $0.0001 par value; 40,000,000 shares authorized; Series F preferred stock - 3,000,000 shares designated, 0 and 3,000,000 shares, issued and outstanding at December 31, 2021 and 2020, respectively		-			300
Common stock, $0.0001 par value; 80,000,000 shares authorized; 14,221,814 shares issued and outstanding at December 31, 2021 and 40,678,323 shares issued and outstanding at December 31, 2020		1,423			4,067
Additional paid in capital		4,638,218			2,840,599
Preferred stock subscription receivable		-			(300	)
Accumulated deficit		(5,104,316	)		(2,925,022	)
Total Stockholders’ Deficit		(464,675	)		(80,356	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	4,947		$	61,075

	2021			2020

Revenues	$	-		$	-
Operating expenses
General and administrative expenses		1,188,464			1,426,230
Research and development		680,293			431,557
Stock-based compensation		307,918			220,206

Total operating expenses		2,176,675			2,077,993

Interest expense		2,619			-

Net Loss	$	(2,179,294	)	$	(2,077,993	)

Net Loss per share - basic and diluted	$	(0.05	)	$	(0.05	)

Weighted average number of common shares outstanding during the period- basic and diluted		41,246,915			39,696,697

	Shares			Par Value			Shares			Par Value			Preferred Stock			Paid-in Capital		Accumulated Deficit			Total
	Common Stock						Preferred Stock Series F						Subscription Receivable			Additional
	Shares			Par Value			Shares			Par Value			Preferred Stock			Paid-in Capital		Accumulated Deficit			Total

Balance as at December 31, 2019		38,915,056			3,892			3,000,000			300			(300	)		867,301		(847,029	)		24,164

Stock purchased by investors		1,405,141			140			-			-			-			1,395,001		-			1,395,141
Stock-based compensation		-			-			-			-			-			220,206		-			220,206
Retirement of due to Sanovas through the issuance of shares of common stock to Sanovas Ophthalmology LLC		358,126			35			-			-			-			358,091		-			358,126
Net loss		-			-			-			-			-			-		(2,077,993	)		(2,077,993	)

Balance as at December 31, 2020		40,678,323		$	4,067			3,000,000			300			(300	)	$	2,840,599	$	(2,925,022	)	$	(80,356	)
Balance, value		40,678,323		$	4,067			3,000,000			300			(300	)	$	2,840,599	$	(2,925,022	)	$	(80,356	)
Stock purchased by investors, net of $70,974 costs incurred.		1,154,173			117			-			-			-			1,083,082		-			1,083,199
Stock purchased by investors		1,154,173			117			-			-			-			1,083,082		-			1,083,199
Stock-based compensation		-			-			-			-			-			307,918		-			307,918
Retirement of due to Sanovas through the issuance of shares of common stock to Sanovas Ophthalmology LLC		390,358			39			-			-			-			390,319		-			390,358
Exercise of warrants		13,500			1			-			-			-			13,499		-			13,500
Exchange of shares owned by Sanovas Ophthalmology LLC for pre-funded warrants		(28,014,540	)		(2,801	)		-			-			-			2,801		-			-
Recission of preferred stock		-			-			(3,000,000	)		(300	)		300			-		-			-
Net loss		-			-			-			-			-			-		(2,179,294	)		(2,179,294	)

Balance as at December 31, 2021		14,221,814		$	1,423			-			-			-		$	4,638,218	$	(5,104,316	)	$	(464,675	)
Balance, value		14,221,814		$	1,423			-			-			-		$	4,638,218	$	(5,104,316	)	$	(464,675	)

	2021			2020
Cash Flows From Operating Activities
Net Loss	$	(2,179,294	)	$	(2,077,993	)
Adjustments to reconcile net (loss) to net cash used in operating activities
Stock-based compensation expense		307,918			220,206
Expenses paid by Sanovas on behalf of Company, net		548,148			343,057
Increase in accounts payable and accrued liabilities		109,851			136,214
(Increase) decrease in deferred offering costs		43,787			(43,787	)
Increase in accrued interest payable		2,619			-
Total adjustments		1,012,323			655,690
Net cash used in operating activities		(1,166,971	)		(1,422,303	)

Cash Flows From Financing Activities
Proceeds from the sale of common stock, net of costs		1,083,199			1,395,141
Proceeds from exercise of warrants		13,500			-
Proceeds from notes payable to stockholders		73,000			-
Decrease in stockholders’ refund payable		-			(25,000	)
Net cash provided by financing activities		1,169,699			1,370,141
Net increase (decrease) in cash		2,728			(52,162	)
Cash at beginning of period		2,219			54,381
Cash at end of period	$	4,947		$	2,219

Supplemental information:
Retirement of due to Sanovas through the issuance of common stock to Sanovas Ophthalmology LLC (Note C)	$	390,358		$	358,126
Exchange of common stock by Sanovas Ophthalomology
LLC for pre-funded warrants	$	2,801			-
Exchange of common stock by Sanovas Ophthalomology LLC for pre-funded warrants	$	2,801			-

	Options Issued		Weighted- Average Exercise Price

Options outstanding – December 31, 2019		1,800,000	$	1.00
Granted		-		-
Canceled		-		-
Exercised		-		-
Options outstanding – December 31, 2020		1,800,000		1.00
Granted		82,500		1.00
Canceled		-		-
Exercised		-		-

Options outstanding – December 31, 2021		1,882,500	$	1.00

Risk-free interest rates		1.2% - 2.42	%
Expected life in years		5.0
Expected volatility		73.1	%
Expected dividend yield		0	%
Fair value common stock	$	1.00

Risk-free interest rates		2.42	%
Expected life in years		3.5
Expected volatility		73.1	%
Expected dividend yield		0	%
Fair value common stock	$	1.00

	Warrants Issued			Weighted- Average Exercise Price

Warrants outstanding – December 31, 2019		62,500		$	1.00
Granted		-			-
Canceled		-			-
Exercised		-			-

Warrants outstanding – December 31, 2020		62,500		$	1.00
Granted		150,000		$	1.10
Canceled		-			-
Exercised		(13,500	)	$	1.00

Warrants outstanding – December 31, 2021		199,000		$	1.07

Exercise Price		Number Outstanding		Weighted Average Remaining Contractual Life	Number Exercisable
$	1.00		49,000	1.7 Years		49,000
$	1.10		150,000	6.2 Years		150,000

NAME	AGE	POSITION
Jerry Katzman	68	Chief Executive Officer, President and Director
Herbert Gould	93	Director

	●	Enabling us to continue to attract and retain the services of key service providers who would be eligible to receive grants;

	●	Aligning participants’ interests with stockholders’ interests through incentives that are based upon the performance of our common stock;

	●	Motivating participants, through equity incentive awards, to achieve long-term growth in our business, in addition to short-term financial performance; and

	●	Providing a long-term equity incentive program that is competitive as compared to other companies with whom we compete for talent.

	●	If not terminated earlier by our board of directors, the 2017 Plan will terminate on December 1, 2027.

	●	Up to a maximum aggregate of 10,000,000 shares of common stock may be issued under the 2017 Plan. The maximum aggregate fair market value with respect to ISOs are exercisable for the first time by such grantee during any calendar year may not exceed $100,000.

	●	The 2017 Plan will generally be administered by a committee (the “Committee”), comprised of two or more directors who may be appointed by the board from time to time.

	●	Employees, consultants and board members are eligible to receive awards, provided that the Committee has the discretion to determine (i) who shall receive any awards, and (ii) the terms and conditions of such awards.

	●	Awards may consist of ISOs, NQSOs, restricted shares, deferred stock, RSUs and SARs.

	●	Stock options and SARs may not be granted at a per share exercise price below the fair market value of a share of our common stock on the date of grant. If stock options or SARs are granted to a ten percent owner, they may not be granted at a per share exercise price below 110% of the fair market value of a share of our common stock on the date of grant.

	●	The maximum exercisable term of stock options and SARs may not exceed ten years (five years if the grantee is a ten percent owner).

	●	Select the individuals who will receive awards;

	●	Determine the terms and conditions of awards (including the number of shares to which an award will relate, any option price, grant price or purchase price, any limitation or restriction, any performance conditions, forfeiture restrictions, any performance goals and/or vesting schedules and the terms of the grants);

	●	Determine whether or not specific awards shall be granted in connection with other specific awards, and if so, whether they shall be exercisable cumulatively with, or alternatively to, such other specific awards and all other matters to be determined in connection with an award;

	●	Offer to exchange or buy out any previously granted award for a payment of cash, shares or other award; and

	●	Interpret the provisions of the 2017 Plan and outstanding awards.

Beneficial Owner⁽¹⁾	Shares of Common Stock Beneficially Owned			Percentage⁽²⁾
Directors and Named Executive Officers:
Jerry Katzman		34,001,540	(3)		80.18	%
Herbert Gould		350,000			2.45	%
All Officers and Directors as a Group		34,261,540			81.00	%
5% or Greater Shareholders:
Sanovas Ophthalmology, LLC (4)		28,014,540	(5)		66.23	%
Bayern Capital, LLC (6)		5,067,000			35.48	%
Capital Funding Partners, LLC (7)		5,897,000			41.29	%

(1)	The address of each person is c/o RetinalGenix Technologies Inc., 1450 North McDowell Boulevard, Suite 150, Petaluma, CA 94954 unless otherwise indicated herein.

(2)	The calculation in this column is based upon 14,282,314 shares of common stock outstanding on April 14, 2022. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currently exercisable or convertible within 60 days of April 14, 2022 are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of any other person.

(3)	Represents (i) 5,987,000 shares of common stock held by Capital Funding Partners, LLC and (ii) pre-funded warrants to purchase up to 28,014,540 shares of common stock held by Sanovas Ophthalmology. Jerry Katzman is the Sole Member of Capital Funding Partners, LLC and in such capacity has the right to vote and dispose of the securities held by such entity. Jerry Katzman is the Manager of Sanovas Ophthalmology and in such capacity has the right to vote and dispose of the securities held by such entity.

(4)	Jerry Katzman is the Manager of Sanovas Ophthalmology and in such capacity has the right to vote and dispose of the securities held by such entity.

(5)	Represents pre-funded warrants to purchase up to 28,014,540 shares of the Company’s common stock.

(6)	Steven Bayern is the Manager of Bayern Capital, LLC and in such capacity has the right to vote and dispose of the securities held by such entity. The address of Bayern Capital, LLC is 403 East Boardwalk, Suite 601, Long Beach, NY 11561.

(7)	Jerry Katzman is the Sole Member of Capital Funding Partners, LLC and in such capacity has the right to vote and dispose of the securities held by such entity. The address of Capital Funding Partners, LLC is P.O. Box 24866, Tampa, FL 33623.