ZIVO BIOSCIENCE(US:ZIVO)2024-05-13 20:38Financial Performance - Total revenues for the quarter ended March 31, 2024, were $35,720, an increase from $0 in the same quarter of 2023[55] - Cost of goods sold for the same period was $23,218, reflecting product volume as no product was shipped in the comparable prior year[56] - The net loss for the quarter ended March 31, 2024, was $1,278,486, compared to a net loss of $1,973,142 in the same quarter of 2023, a reduction of approximately $694,656[54] - General and administrative expenses decreased to approximately $975,000 in Q1 2024 from approximately $1.6 million in Q1 2023, a reduction of $590,000[57] - Research and development expenses for Q1 2024 were approximately $312,767, down from $401,797 in Q1 2023, a decrease of about $89,000[58] Cash Flow and Financing - As of March 31, 2024, the company had cash of $138,641 and raised approximately $1.1 million from the sale of 407,299 shares of common stock[62] - Financing activities generated approximately $1.6 million in Q1 2024, an increase of approximately $1.1 million from $540,000 in Q1 2023[70] - The company raised $1.1 million from private sales of common stock in Q1 2024, partially offset by net proceeds of $517,560 from a short-term loan[70] - The company estimates a cash requirement of approximately $5 million over the next 12 months to fund basic operations, excluding R&D initiatives[70] - The company reported a decrease in cash used for operating activities to $1.7 million in Q1 2024, down from approximately $2.1 million in Q1 2023[68] - Net cash used in operating activities improved to $(1,699,118) in Q1 2024 from $(2,128,973) in Q1 2023[70] Internal Control and Compliance - Material weaknesses in internal control over financial reporting were identified, continuing from December 31, 2023, affecting the reliability of financial reporting[81] - Management concluded that internal control over financial reporting was not effective as of March 31, 2024, which could lead to material misstatements[81] - The consolidated financial statements for Q1 2024 were prepared in accordance with U.S. GAAP, despite the identified material weaknesses[82] - Management has identified additional material weaknesses related to accounting for income taxes and stock-based compensation[85] Remediation Plans - Remediation plans include developing a training program and implementing a risk assessment process to address identified control deficiencies[86] - Developing a training program for internal control principles based on COSO's Integrated Framework (2013) [86] - Implementing a risk assessment process to identify misstatement risks related to account balances [86] - Enhancing policies to retain adequate documentary evidence for management review controls [86] - Engaging outside resources for complex accounting matters and retaining position papers for non-recurring transactions [86] - Developing monitoring activities to assess the effectiveness of controls over financial reporting [86] - Segregating key functions within financial and IT processes to support internal controls [86] - Reassessing and formalizing accounting and IT policies related to security and change management controls [86] - Continuing to enhance accounting, business operations, and IT policies for accurate financial reporting [86] Future Expectations - The company expects R&D costs to grow as it develops natural bioactive compounds for dietary supplements and food ingredients[61] - Management has expressed substantial doubt about the company's ability to continue as a going concern without securing additional funding[65] - The company has entered into twenty-one License Co-Development Participation Agreements for an aggregate of $2,985,000, providing a 44.775% revenue share from licensing fees[63]