RetinalGenix Technologies Inc 10-K for FY2022

RetinalGenix Technologies Inc. (RTGN)

10-K 2023-03-31 For: 2022-12-31

Added on April 06, 2026

About this 10-K

RetinalGenix Technologies Inc filed this 10-K on March 31, 2023, covering the fiscal year ended December 31, 2022 (FY2022).

Headline figures

Fiscal year ended December 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $3.91M; compared with a net loss of $2.18M a year earlier

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

Part I

Item 1.	Business	6
Item 1A.	Risk Factors	12
Item 1B.	Unresolved Staff Comments	24
Item 2.	Properties	24
Item 3.	Legal Proceedings	24
Item 4.	Mine Safety Disclosures	24

Part II

Item 5.	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	25
Item 6.	Reserved	25
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	30
Item 8.	Financial Statements and Supplementary Data	30
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	31
Item 9A.	Controls and Procedures	31
Item 9B.	Other Information	31
Item 9C.	Disclosure Regarding Foreign Jurisdiction that Prevent Inspections	31

Part III

Item 10.	Directors, Executive Officers and Corporate Governance	32
Item 11.	Executive Compensation	35
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	37
Item 13.	Certain Relationships and Related Transactions, and Director Independence	39
Item 14.	Principal Accountant Fees and Services	40

Part IV

Item 15.	Exhibit and Financial Statement Schedules	41
Item 16.	Form 10-K Summary	41

Signatures		42

	●	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.

	●	We have generated no revenue from commercial sales and our future profitability is uncertain.
	●	If we fail to obtain the capital necessary to fund our operations.
	●	Raising additional capital may cause dilution to our existing stockholders.
	●	There is substantial doubt about our ability to continue as a going concern.
	●	We have incurred net losses every year and expect to continue to incur increased expenses.

Title of each class		Trading symbol(s)		Name of each exchange on which registered

	●	Our revenues from sales of our products will be dependent upon pricing and reimbursement guidelines.
	●	We will depend upon our suppliers to provide the components we require.
	●	Our commercial and financial success depends on our products being accepted in the market.
	●	We may face substantial competition in the future.
	●	Product liability lawsuits against us could cause us to incur substantial liabilities.
	●	We are dependent on information technology systems.
	●	If the quality or delivery of our products does not meet our customers’ expectations, our reputation could suffer and ultimately our sales and operating earnings could be negatively impacted.
	●	Failure to comply with data privacy and security laws could have a material adverse effect on us
	●	We may not be successful in hiring and retaining key employees, including executive officers.
	●	Our management overlaps substantially with the management and our principal stockholder.
	●	We may acquire other businesses that could negatively affect our operating results and dilute our stockholders’ ownership.
	●	Our failure to accurately forecast demand for our products could result in additional costs.
	●	If our facilities were to experience catastrophic loss, our operations would be seriously harmed.
	●	Changes in general economic conditions and geopolitical and other conditions may adversely impact our business and operating results.
	●	We will be dependent upon third parties for the distribution of our products.
	●	Our board of directors rescinded the 3,000,000 shares of Series F Preferred Stock issued to Halo Management LLC (“Halo”) and Halo may dispute such decision.

	●	Our intellectual property may not be sufficient to protect our products from competition.
	●	We may become involved in future lawsuits to protect or enforce our patents.
	●	We may not be able to enforce our intellectual property rights throughout the world.
	●	Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets.
	●	We may be unable to adequately prevent disclosure of trade secrets and other proprietary information.

	●	Our failure to obtain and maintain FDA clearances or approvals on a timely basis, or at all, would prevent us from commercializing our products in the U.S., which could severely harm our business.
	●	Our promotional practices will be subject to extensive government scrutiny.
	●	Legislative or regulatory reform of the health care system in the U.S. may adversely impact our business.
	●	We are subject to stringent domestic and foreign medical device regulations.

	●	We will also be subject to stringent government regulation in foreign countries.
	●	Failure by us or our distributors to comply with foreign regulations applicable to the products we design, manufacture, install or distribute could expose us to enforcement actions or other adverse consequences.
	●	We will be subject to ongoing requirements and inspections.
	●	We could be subject to substantial fines or damages and possible exclusion from participation in federal or state health care programs if we fail to comply with the laws and regulations applicable to our business.
	●	If we fail to develop and successfully introduce new products our operating results may suffer.

	●	Our stock price may be volatile.
	●	Future sales and issuances of our securities could result in additional dilution.
	●	We have never paid cash dividends and have no plans to pay cash dividends in the future.
	●	The “penny stock” rules of the SEC makes transactions in our stock cumbersome.
	●	Certain of our stockholders control a significant number of shares of our common stock.
	●	We have availed ourselves of reduced disclosure requirements applicable to emerging growth companies, which could make our common stock less attractive to investors.
	●	Our First Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”) and our Bylaws (the “Bylaws”) and Delaware law may have anti-takeover effects that could discourage, delay or prevent a change in control, which may cause our stock price to decline.
	●	Financial reporting obligations of being a public company in the U.S. are expensive and time-consuming.
	●	Failure to maintain effective internal control over our financial reporting in accordance with Section 404 of Sarbanes-Oxley could cause our financial reports to be inaccurate.
	●	Our Certificate of Incorporation and Bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

	●	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,
	2022			2021			Change			% Change

Revenues	$	-		$	-		$
Expenses
General and Administrative Expenses		807,406			1,120,949			(313,543	)		(28	)%
Research and Development		809,255			747,808			61,447			8	%
Acquired In-process research and development		2,032,889			-			2,032,889			100	%
Stock-based compensation		259,300			307,918			(48,618	)		(16	)%

Total Expenses		3,908,850			2,176,675			1,732,175			80	%

Interest expense		5,140			2,619			2,521			96	%

Net Loss	$	(3,913,990	)	$	(2,179,294	)		(1,734,696	)		80	%

	For The Year Ended
	December 31,
	2022			2021

Net cash used in operating activities	$	(199,287	)	$	(1,166,971	)
Net cash used in investing activities		(307	)		-
Net cash provided by financing activities		194,685			1,169,699

Net (decrease) increase in cash		(4,909	)		2,728
Cash at beginning of the period		4,947			2,219
Cash at end of the period	$	38		$	4,947

		Page No.

Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm		F-2

Consolidated Balance Sheets as of December 31, 2022 and 2021		F-3

Consolidated Statements of Operations for the years ended December 31, 2022 and 2021		F-4

Consolidated Statements of Changes in Stockholders’ Deficit for the years ended December 31, 2022 and 2021		F-5

Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021		F-6

Notes to Consolidated Financial Statements		F-7

	December 31, 2022			December 31, 2021
ASSETS
Current Assets
Cash	$	38		$	4,947
Total Current Assets		38			4,947
Equipment, net of accumulated depreciation of $52		256			-

TOTAL ASSETS	$	294		$	4,947
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Liabilities
Current Liabilities
Accounts payable and accrued liabilities		475,480			251,282
Due to Sanovas		427,933			142,721
Due to related parties		109,185			-
Shareholders’ notes payable		49,000			73,000
Accrued interest payable		7,759			2,619
Total Liabilities		1,069,357			469,622
Stockholders’ Deficit:
Preferred stock, $0.0001 par value; 40,000,000 shares authorized; Series F preferred stock - 3,000,000 shares designated, 0 issued and outstanding at December 31, 2022 and December 31, 2021		-			-
Common stock, $0.0001 par value; 80,000,000 shares authorized; 17,272,116 shares issued and outstanding at December 31, 2022 and 14,221,814 shares issued and outstanding at December 31, 2021		1,783			1,423
Additional paid in capital		7,947,460			4,638,218
Accumulated deficit		(9,018,306	)		(5,104,316	)
Total Stockholders’ Deficit		(1,069,063	)		(464,675	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	294		$	4,947

	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, 2020		40,678,323		$	4,067			3,000,000		$	300		$	(300	)	$	2,840,599	$	(2,925,022	)	$	(80,356	)

Stock purchased by investors		1,154,173			117												1,083,082					1,083,199
Stock based compensation																	307,918					307,918
Exercise of warrants		13,500			1												13,499					13,500
Retirement of due to Sanovas through the issuance of shares of common stock to Sanovas Ophthalmology LLC		390,358			39												390,319					390,358
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	)
Beginning balance		14,221,814		$	1,423			-		$	-		$	-		$	4,638,218	$	(5,104,316	)	$	(464,675	)


Stock based compensation		-			-			-			-			-			259,300		-			259,300
Stock purchased by investors		60,500			61			-			-			-			60,439		-			60,500
Retirement of due to Sanovas through the issuance of shares of common stock to Sanovas Ophthalmology LLC		939,802			94			-			-			-			939,708		-			939,802
Exercise of warrants and options		50,000			5												49,995					50,000
Issuance of shares upon acquisition of in process research and development		2,000,000			200												1,999,800					2,000,000
Net loss		-			-			-			-			-			-		(3,913,990	)		(3,913,990	)
Balance as at December 31, 2022		17,272,116		$	1,783			-			-			-		$	7,947,460	$	(9,018,306	)	$	(1,069,063	)
Ending balance		17,272,116		$	1,783			-			-			-		$	7,947,460	$	(9,018,306	)	$	(1,069,063	)


	Years Ended
	December 31,			December 31,
	2022			2021

Balance due to (from) Sanovas – beginning of year	$	142,721		$	(15,069	)

Costs paid by Sanovas on the Company’s behalf		79,290			68,073
Costs of Sanovas allocated to the Company		453,047			803,997
Proceeds from (repayment of) costs charged by Sanovas to the Company, net		692,677			(323,922	)
Retirement of due to Sanovas through the issuance of common stock to Sanovas Ophthalmology		(939,802	)		(390,358	)

Balance due to Sanovas - end of year	$	427,933		$	142,721

	Options Issued			Weighted-Average Exercise Price

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
Granted		502,500			1.00
Canceled		-			-
Exercised		(25,000	)		1.00

Options outstanding – December 31, 2022		2,360,000		$	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		2.19	%
Expected life in years		3.5
Expected volatility		80	%
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, 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

Granted		-			-
Canceled		(12,500	)		1.00
Exercised		(25,000	)		1.00

Warrants outstanding – December 31, 2022		161,500		$	1.09

Exercise Price		Number Outstanding		Weighted Average Remaining Contractual Life		Number Exercisable
$	1.00		11,500		.7 Years		11,500
$	1.10		150,000		5.7 Years		150,000
			161,500				161,500

NAME	AGE	POSITION
Jerry Katzman	68	Chief Executive Officer, President and Director
Herbert Gould	93	Director
Vinay Mehindru	55	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).