The financial report presents the financial statements of the company for the fiscal year ended December 31, 2023, as well as the six months ended June 30, 2024, and the nine months ended September 24, 2024. The company reported total assets of $[amount] and total liabilities of $[amount] as of December 31, 2023. The company’s net income for the fiscal year ended December 31, 2023, was $[amount], and its net income for the six months ended June 30, 2024, was $[amount]. The company’s cash and cash equivalents increased by $[amount] during the fiscal year ended December 31, 2023, and its accounts payable and accrued expenses increased by $[amount] during the same period. The company also reported a significant increase in its convertible loan and security purchase agreements during the fiscal year ended December 31, 2023.
Financial Performance Overview
Product Distribution Corp., now known as SSGI, Inc. and operating through its wholly-owned subsidiary ViCapsys, Inc. (the “Company”), reported its financial results for the year ended December 31, 2023. The Company did not generate any revenues in 2023 or 2022, as it continues to focus on developing and commercializing its intellectual property related to encapsulated products incorporating proprietary derivatives of the chemokine CXCL12.
Expenses and Net Loss
The Company’s total operating expenses for 2023 were $1,046,978, up from $984,790 in 2022, an increase of $62,189. This was primarily due to higher professional fees related to the Company’s efforts to uplist to the Nasdaq stock exchange, as well as increases in general and administrative expenses and personnel costs to support its operations as a public company. Research and development costs also increased slightly to $15,267 in 2023 from $13,097 in 2022.
In addition to the higher operating expenses, the Company incurred $19,969 in interest expense and $115,165 in financing costs related to a D&O insurance policy and a short-term note payable. As a result, the Company reported a net loss of $1,182,112 for the year ended December 31, 2023, compared to a net loss of $984,790 in 2022.
Liquidity and Capital Resources
The Company’s financial position remains challenging, as it is not currently generating any revenues. As of December 31, 2023, the Company had $9,422 in cash on hand, a working capital deficit of $1,928,682, and an accumulated deficit of $16,300,075.
To address its liquidity needs, the Company has taken the following actions:
Despite these capital raises, the Company states that it will require an additional $1 million in the next 12 months to sustain its base operations, excluding any development work. The Company warns that it may need to raise additional capital through the sale of equity or debt securities, which could result in dilution to existing shareholders or restrictive covenants.
The Company’s recurring losses, working capital deficit, and need for additional financing raise substantial doubt about its ability to continue as a going concern. This “going concern” qualification could impair the Company’s ability to raise future capital.
Strengths and Weaknesses
Strengths:
Weaknesses:
Outlook and Future Plans
The Company’s primary focus is to continue developing and commercializing its VICAPSYN™ product line, which incorporates its proprietary CXCL12 derivatives for therapeutic applications in the transplantation field. To achieve this, the Company will need to secure additional financing, either through equity or debt offerings, to fund its ongoing operations and research and development activities.
The Company’s ability to continue as a going concern is heavily dependent on its success in raising the necessary capital. If the Company is unable to do so, it may be forced to cease business operations, which would result in a complete loss for investors.
Additionally, the Company will need to continue navigating the regulatory and operational requirements associated with being a publicly traded company, which could further strain its limited resources and management’s time. The Company’s ability to execute its business plan and achieve its goals will be heavily influenced by its success in managing these challenges.
Overall, the Company’s financial performance and future outlook remain highly uncertain, with significant risks and challenges that must be addressed to ensure its long-term viability and the potential success of its VICAPSYN™ product line.