10-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K/A

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2016

or

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to _________

Commission file number: 0-53497

VIVOS INC.

(Exact name of registrant as specified in its charter)

Delaware	80-0138937
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

719 Jadwin Avenue ● Richland, Washington 99352

(Address of principal executive offices) (Zip Code)

(509) 736-4000

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 Par Value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes [  ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	[  ]	Accelerated Filer	[  ]
Non-Accelerated Filer	[  ]	Smaller Reporting Company	[X]
(Do not check if a smaller reporting company)		Emerging growth company	[  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [  ] No [X]

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter was approximately $7,280,000. Shares of common stock held by each executive officer and director and by each person who owns 10% or more of the outstanding common stock of the registrant have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes. Without acknowledging that any individual director of registrant is an affiliate, all directors have been included as affiliates with respect to shares owned by them.

As of January 23, 2018, there were 65,695,213 shares of the registrant’s Common Stock and 3,778,622 shares of the registrant’s Series A Convertible Preferred Stock outstanding.

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-K/A (the “Amendment”) amends the Annual Report on Form 10-K of Vivos Inc., formerly known as Advanced Medical Isotope Corp. (the “Company,” “our” or “we”), for the year ended December 31, 2016, originally filed with the Securities and Exchange Commission (“SEC”) on March 9, 2017 (the “Original Filing”). The purpose of this Amendment is to amend and restate certain narrative disclosures contained in the Original Filing, including Items 1, 1A, 7, 9A, 10, 11, 12, 15, and Footnotes to Consolidated Financial Statements, in response to certain comments received by the Company from the SEC with respect to the Original Filing. In addition, we have updated the Original Filing to reflect the change in the Company’s name. Other than with respect to the foregoing, this Amendment does not modify or update in any way the disclosures made in the Original Filing.

In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), this Amendment also includes currently dated certifications from the Company’s Chief Executive Officer and Chief Financial Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002.

This Amendment should be read in conjunction with the Original Filing and the Company’s other filings made with the SEC subsequent to the filing of the Original Filing on March 9, 2017. This Amendment is not intended to, nor does it, reflect events occurring after the filing of the Original Filing, and does not modify or update the disclosures therein in any way other than as required to reflect the changes described above.

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Vivos Inc.

Report on Form 10-K

TABLE OF CONTENTS

PART I.
Item 1.	Business	1
Item 1A.	Risk Factors	10
Item 1B.	Unresolved Staff Comments	19
Item 2.	Properties	19
Item 3.	Legal Proceedings	19
Item 4.	Mine Safety Disclosures	19
PART II.
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	20
Item 6.	Selected Financial Data	22
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 8.	Financial Statements and Supplementary Data	28
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	28
Item 9A.	Controls and Procedures	28
Item 9B.	Other Information	29
PART III.
Item 10.	Directors, Executive Officers and Corporate Governance	30
Item 11.	Executive Compensation	34
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	36
Item 13.	Certain Relationships and Related Transactions, and Director Independence	38
Item 14.	Principal Accountant Fees and Services	39
PART IV.
Item 15.	Exhibits and Financial Statement Schedules	39

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PART I

FORWARD LOOKING STATEMENTS

Except for statements of historical fact, certain information described in this Form 10-K report contains “forward-looking statements” that involve substantial risks and uncertainties. You can identify these statements by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “will,” “would” or similar words. The statements that contain these or similar words should be read carefully because these statements discuss the Company’s future expectations, including its expectations of its future results of operations or financial position, or state other “forward-looking” information. Vivos Inc. believes that it is important to communicate its future expectations to its investors. However, there may be events in the future that the Company is not able to accurately predict or to control. Further, the Company urges you to be cautious of the forward-looking statements which are contained in this Form 10-K report because they involve risks, uncertainties and other factors affecting its operations, market growth, service, products and licenses. The risk factors in the section captioned “Risk Factors” in Item 1A of the Company’s Form 10-K, as well as other cautionary language in this Form 10-K report, describe such risks, uncertainties and events that may cause the Company’s actual results and achievements, whether expressed or implied, to differ materially from the expectations the Company describes in its forward-looking statements. The occurrence of any of the events described as risk factors could have a material adverse effect on the Company’s business, results of operations and financial position.

ITEM 1. BUSINESS.

Vivos Inc. (the “Company” or “we”) was incorporated under the laws of Delaware on December 23, 1994 as Savage Mountain Sports Corporation (“SMSC”). On December 28, 2017, the Company changed its name from Advanced Medical Isotope Corp. to Vivos Inc. The Company has authorized capital of 2,000,000,000 shares of common stock, $0.001 par value per share, and 20,000,000 shares of preferred stock, $0.001 par value per share.

Our principal place of business is 719 Jadwin Avenue, Richland, Washington 99352. Our telephone number is (509) 736-4000. Our corporate website address is http://www.radiogel.com. Our common stock is currently listed for quotation on the OTC Pink Marketplace under the symbol “RDGL.”

Overview

The Company is a radiation oncology medical device company engaged in the development of its yttrium-90 based brachytherapy device, RadioGel™, for the treatment of non-resectable tumors. A prominent team of radiochemists, scientists and engineers, collaborating with strategic partners, including national laboratories, universities and private corporations, lead the Company’s development efforts. The Company’s overall vision is to globally empower physicians, medical researchers and patients by providing them with new isotope technologies that offer safe and effective treatments for cancer.

The Company’s current focus is on the development of our RadioGel™ device candidate, including obtaining approval from the Food and Drug Administration (“FDA”) to market and sell RadioGel™ as a Class II medical device. RadioGel™ is an injectable particle-gel for brachytherapy radiation treatment of cancerous tumors in people and animals. RadioGel™ is comprised of a hydrogel, or a substance that is liquid at room temperature and then gels when reaching body temperature after injection into a tumor. In the gel are small, one micron, yttrium-90 phosphate particles (“Y-90”). Once injected, these inert particles are locked in place inside the tumor by the gel, delivering a very high local radiation dose. The radiation is beta, consisting of high-speed electrons. These electrons only travel a short distance so the device can deliver high radiation to the tumor with minimal dose to the surrounding tissue. Optimally, patients can go home immediately following treatment without the risk of radiation exposure to family members. Since Y-90 has a half-life of 2.7 days, the radioactively drops to 5% of its original value after ten days.

The Company’s lead brachytherapy products, including RadioGel™, incorporate patented technology developed for Battelle Memorial Institute (“Battelle”) at Pacific Northwest National Laboratory, a leading research institute for government and commercial customers. Battelle has granted the Company an exclusive license to patents covering the manufacturing, processing and applications of RadioGel™ (the “Battelle License”). Other intellectual property protection includes proprietary production processes and trademark protection in 17 countries. The Company plans to continue efforts to develop new refinements on the production process, and the product and application hardware, as a basis for future patents.

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The Company is currently focusing on obtaining approval from the FDA to market and sell RadioGel™ as a Class II medical device. The Company first requested FDA approval of RadioGel™ in June 2013, at which time the FDA classified RadioGel™ as a medical device. The Company then followed with a 510(k) submission which the FDA responded, in turn, with a request for a physician letter of substantial equivalence and a reformatted 510(k) summary, which the Company provided in January 2014. In February 2014, the FDA ruled the device as not substantially equivalent due to a lack of a predicate device and it was therefore classified as a Class III device. Class III devices are generally the highest risk devices and are therefore subject to the highest level of regulatory review, control and oversight. Class III devices must typically be approved by the FDA before they are marketed. Class II devices represent lower risk devices than Class III and require fewer regulatory controls to provide reasonable assurance of the device’s safety and effectiveness. In contrast, Class I devices are deemed to be lower risk than Class II or III, and are therefore subject to the least regulatory controls.

The Company is currently developing test plans to address issues raised by the FDA in connection with the Company’s previous submissions regarding RadioGel™, including developing specific test plans and specific indication of use. The Company intends to request that the FDA grant approval to re-apply for de novo classification of RadioGel™, which would reclassify the device from a Class III device to a Class II device, further simplifying the path to FDA approval. In the event the FDA denies the Company’s application and subsequently determines during the de novo review that RadioGel™ cannot be classified as a Class I or Class I1 device, the Company will then need to submit a pre-market approval application to obtain the necessary regulatory approval as a Class III device. See also Business – Regulatory History for a discussion regarding the Company’s application for FDA approval of RadioGel™.

IsoPet Solutions

The Company’s, IsoPet Solutions division was established in May 2016 to focus on the veterinary oncology market, namely engagement of university veterinarian hospital to develop the detailed therapy procedures to treat animal tumors and ultimately use of the technology in private clinics. The Company has engaged four different university veterinarian hospitals to begin using RadioGel™ for treatment of four different cancer types in dogs and cats. Washington State University Veterinary Hospital has tested one cat to demonstrate the procedures and the absence of any significant toxicity effect. The other three centers are expected to begin therapy during the second quarter of 2017 after their internal administrative review process is completed.

These animal therapies will focus on creating labels that describe the procedures in detail as a guide to future veterinarians. The labels will be voluntarily submitted to the FDA for review. They will then be used as data for future FDA applications in the medical sector and as key intellectual property for licensing to private veterinary clinics.

The Company anticipates that future profit will be derived from direct sales of RadioGel™ and related services, and from licensing to private medical and veterinary clinics in the U.S. and internationally.

Regulatory History

RadioGel™ has a long regulatory history with the FDA. Initially, the Company submitted a presubmission (Q130140) to obtain FDA feedback about the proposed product. The FDA requested that the Company file a request for designation with the Office of Combination Products (RFD130051), which led to the determination that RadioGel™ is a device to be reviewed and regulated by the Center for Devices and Radiological Health (CDRH). The Company then submitted a 510(k) notice for RadioGel™ (K133368), which was found Not Substantially Equivalent due to the lack of a suitable predicate, and RadioGel™ was assigned to the Class III product code NAW (microspheres). Class III products or devices are generally the highest risk devices and are therefore subject to the highest level of regulatory review, control and oversight. Class III products or devices must typically be approved by FDA before they are marketed. Class II devices represent lower risk products or devices than Class III and require fewer regulatory controls to provide reasonable assurance of the product’s or device’s safety and effectiveness. In contrast, Class I products and devices are deemed to be lower risk than Class I or II and are therefore subject to the least regulatory controls.

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A presubmission meeting (Q140496) was held with the FDA on June 17, 2014, during which the FDA maintained that RadioGel™ should be considered a Class III device and therefore subject to pre-market approval. On December 29, 2014, the Company submitted a de novo petition for RadioGel™ (DEN140043). The de novo petition was denied by the FDA on June 1, 2015, with the FDA providing numerous comments and questions. On September 29, 2015, the Company submitted a follow-up pre-submission informational meeting request with the FDA (Q151569). At such meeting on November 9, 2015, the FDA indicated acceptance of the Company’s applied dosimetry methods and clarified the FDA’s outstanding questions regarding RadioGel™. The Company intends to prepare a new pre-submission to obtain FDA feedback on the proposed testing to address the concerns raised by the FDA staff, as well as the suitability of RadioGel™ for de novo reclassification.

In the event the FDA denies the Company’s application for de novo review, and therefore determines that RadioGel™ cannot be classified as a Class I or Class I1 device, the Company will then need to submit a pre-market approval application to obtain the necessary regulatory approval as a Class III device.

In previous FDA submittals, the Company proposed applying RadioGel™ for a very broad range of cancer therapies, referred to as Indication for Use. The FDA has requested that the Company reduce its Indications for Use. To comply with that request, the Company has expanded its Medical Advisory Board (“MAB”) and engaged doctors from respected hospitals who have evaluated the candidate cancer therapies based on three criteria: (1) potential for FDA approval and successful therapy; (2) notable advantage over current therapies; and (3) probability of wide spread acceptance by the medical community. 

The MAB selected eighteen applications for RadioGel™, each of which meet the criteria described above. This large number confirms the wide applicability of the device and defines the path for future business growth. The Company intends to apply to the FDA for a single Indication for Use, followed by subsequent applications for additional Indications for Use. The initial application should facilitate each subsequent application, and the testing for many of the subsequent applications could be conducted in parallel, depending on available resources.

The MAB selected the treatment of basal cell and squamous cell skin cancers for the first Indication for Use to be submitted to the FDA. According to the American Cancer Society, one out of every three new cancers diagnosed in the U.S. is a cancerous skin lesion of this type, representing 5.5 million tumors diagnosed annually. The MAB believes RadioGel™ has the potential to be the preferred treatment in a reasonable number of cases in a very large market.

Financing and Strategy

Research and development of RadioGel™ and other products in the Company’s brachytherapy product line has been funded with proceeds from the sale of equity and debt securities as well as a series of grants. The Company requires funding of approximately $1.5 million annually to maintain current operating activities. Over the next 12 to 24 months, the Company believes it will cost approximately $5.0 million to $10.0 million to fund: (1) the FDA approval process and initial deployment of RadioGel™ and other brachytherapy products, and (2) initiate regulatory approval processes outside of the United States. The continued deployment of RadioGel™ and the Company’s other brachytherapy products and a worldwide regulatory approval effort will require additional resources and personnel. The principal variables in the timing and amount of spending for the brachytherapy products in the next 12 to 24 months will be the FDA’s classification of the Company’s brachytherapy products, including RadioGel™, as Class II or Class III devices (or otherwise) and any requirements for additional studies which may possibly include clinical studies. Thereafter, the principal variables in the amount of the Company’s spending and its financing requirements would be the timing of any approvals and the nature of the Company’s arrangements with third parties for manufacturing, sales, distribution and licensing of those products and the products’ success in the U.S. and elsewhere. The Company intends to fund its activities through strategic transactions such as licensing and partnership agreements or additional capital raises.

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Following receipt of required regulatory approvals and financing in the U.S., the Company intends to outsource material aspects of manufacturing, distribution, sales and marketing. Outside of the U.S., the Company intends to pursue licensing arrangements and/or partnerships to facilitate its global commercialization strategy.

In the longer-term, subject to the Company receiving adequate funding, regulatory approval for RadioGel™ and other brachytherapy products, and thereafter being able to successfully commercialize its brachytherapy products, the Company intends to consider resuming research efforts with respect to other products and technologies intended to help improve the diagnosis and treatment of cancer and other illnesses

Based on the Company’s financial history since inception, its auditor has expressed substantial doubt as to the Company’s ability to continue as a going concern. The Company has limited revenue, nominal cash, and has accumulated deficits since inception. If the Company cannot obtain sufficient additional capital, the Company will be required to delay the implementation of its business strategy and may not be able to continue operations.

Product Features

The Company’s RadioGel™ device has the following product features:

● Beta particles only travel a short distance so the device can deliver high radiation to the tumor with minimal dose to the nearby normal tissues. In medical terms Y-90 beta emitter has a high efficacy rate;

● Benefitting from the short penetration distance, the patient can go home immediately with no fear of exposure to family members, and there is a greatly reduced radiation risk to the doctor. A simple plastic tube around the syringe, gloves and safety glasses are all that is required. Other gamma emitting products require much more protection;

● A 2.7-day half-life means that only 5% of the radiation remains after ten days. This is in contrast to the industry-standard gamma irradiation product, which has a half-life of 17 days;

● The short half-life also means that any medical waste can be stored for thirty days then disposed as normal hospital waste;

● RadioGel™ can be administered with small diameter needles (27-gauge) so there is minimal damage to the normal tissue. This is in contrast to the injection of metal seeds, which does considerable damage; and

● After about 120 days the gel resorbs by a normal biological cycle, called the Krebs Cycle. The only remaining evidence of the treatment are phosphate particles so small in diameter that it requires a high-resolution microscope to find them. This is in contrast to permanent presence of metal seeds.

Steps from Production to Therapy

Device Production

During the next two years, the Company intends to outsource material aspects of manufacturing and distribution. As future product volume increases, the Company will reassess its make-buy decision on manufacturing and will analyze the cost/benefit of a centrally located facility.

Production of the Hydrogel

RadioGel™ is manufactured with a proprietary process under ventilated sterile hood by following strict Good Laboratory Practices, or GLP, procedures. It is made in large batches that are frozen for up to three months. When the product is ready to ship, a small quantity of the gel is dissolved in a sterile saline solution. It is then passed through an ultra-fine filter to ensure sterility.

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Production of the Yttrium-90 Phosphate Particles

The Y-90 particles are produced with simple ingredients via a proprietary process, again following strict GLP procedures. They are then mixed into a phosphate-buffered saline solution. They can be produced in large batches for several shipments. The number of particles per shipment is determined by the dose prescribed by the doctor.

Shipment

RadioGel™ is shipped in two containers, one with a solution of the gel and the other with a solution of the particles. Before shipment they are subjected to sterility testing, again by strict procedures. The vial with the Y-90 is put through a special radiation calibrator, which measures beta particles. The vials can be shipped via FedEx or UPS by following the proper protocols.

At the User

The user receives the two vials. The solution containing the RadioGel™ is mixed with the solution containing the Y-90 particles. This is then shaken to ensure homogeneity and withdrawn into a syringe. The quantities that are mixed are calculated from the information on the product label.

The specific injection technique depends on the Indication for Use. For small tumors, one centimeter in diameter or less, the cancer is treated with a single injection. For larger tumors, the cancer is treated with a series of small injections from the same syringe.

Principal Markets

The Company is currently pursuing two synergistic business sectors, medical and veterinary, each of which are summarized below.

Medical Sector

Brachytherapy is the use of radiation to destroy cancerous tumors by placing a radiation source inside or next to the treatment area. According to the 2014 MEDraysintell report, the global market for brachytherapy reached US$ 680 million in 2013 and is projected to reach $2.4 billion by 2030. It is estimated that the U.S. market represents approximately half of the global market. The Company believes there are significant opportunities in prostate, breast, liver, pancreatic, head and neck cancers. The 2014 U.S. estimated new cases of cancer according to the American Cancer Society are 233,000 prostate, 235,030 breast, 31,190 liver, and 46,420 pancreas.

RadioGel™ is currently fully developed, requiring only FDA approval before commercialization. The Company has been seeking FDA approval of RadioGel™ for almost four years. The principal issue preventing approval is that the Company attempted to obtain regulatory approval for a broad range of Indications for Use, including all non-resectable cancers, without sufficient supporting data.

Building on the FDA’s ruling of RadioGel™ as a device, the Company is currently developing test plans to address issues raised in the Company’s prior FDA submittal regarding RadioGel™. The Company intends to request FDA approval to submit RadioGel™ for de novo classification, which would reclassify the device from a Class III device to a Class II device, and accelerate the regulatory approval path.

After analyzing the Company’s data and the last four years of communication from the FDA, the Company has taken the following steps:

1.	Under new leadership, the Company is implementing all past recommendations from the FDA. The Company intends to narrow the Indications for Use, will provide test plans for FDA review to respond to answer all previous FDA questions, and will request a pre-submission meeting;
2.	Prepare a pre-submission request document and FDA meeting request to obtain feedback on the test plans in order to initiate testing, to present the proposed content for the final application and to request permission to submit a de novo;

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3.	Submit an Investigational Device Exemption (“IDE”) to obtain permission to conduct human clinical studies; and
4.	File a de novo or Pre-Market Approval application.

The critical path is the required testing – in vitro, animal testing, human clinical studies – all of which is resource dependent.

In previous submittals, the Company proposed applying a very broad range of cancer therapies, referred to as Indications for Use, to RadioGel™. The FDA has strongly advised the Company to reduce its Indications for Use. To comply with that request, the Company has expanded its MAB, consisting of Drs. Barry D. Pressman (Chairman), Albert DeNittis, Howard Sandler, and Darrell Fisher.

The MAB evaluated the candidate cancer therapies based on three criteria: (i) the potential for FDA approval and successful therapy; (ii) notable advantages of RadioGel™ over current therapies; and (iii) the likelihood that RadioGel™ can be widely accepted by the medical community and profitably commercialized.

The MAB selected eighteen Indications for Use for RadioGel™, each of which meets the above-mentioned criteria. These eighteen Indications for Use are listed below. This large number confirms the wide applicability of the device and defines the path for future growth. The Company intends to apply to the FDA for a single Indication for Use, followed by subsequent applications for additional Indications for Use. The initial application should facilitate each subsequent application, and the testing for many of the subsequent applications could be conducted in parallel, depending on available resources.

● Skin cancer ● Involved lymph nodes ● Bladder ● Liver ● Localized prostate ● Pancreas ● Head and neck (including sino-nasal and oropharyngeal) ● Ocular melanoma ● Non-dendritic brain ● Pediatric cancers – several types ● Rectal ● Gynecological ● Spinal ● Recurrent esophageal ● Breast cancer resection cavity ● Anaplastic thyroid

After thorough review to prioritize indications, the MAB has selected basal cell and squamous cell carcinoma (skin cancers) as the first Indication for Use to be presented to the FDA. According to American Cancer Society, one out of every three new cancers diagnosed in the U.S. is a cancerous skin lesion of this type, representing 5.5 million tumors annually. The MAB believes RadioGel™ will be the preferred treatment in a reasonable number of cases in a very large market.

Veterinary Sector

There are about 150 million pet dogs and cats in the United States. Nearly one-half of dogs and one-third of cats are diagnosed with cancer at some point in their lifetime. The Veterinary Oncology & Hermatology Center in Norwalk, Connecticut, reports that cancer is the number one natural cause of death in older cats and dogs, accounting for nearly 50 percent of pet deaths each year. The American Veterinary Medical Association reports that half of the dogs ten years or older will die because of cancer. The National Cancer Institute reports that about six million dogs are diagnosed with cancer each year, translating to more than 16,000 a day. The average cost of treating tumors in dogs using radiation is $5,000 to 7,000, according to petcarerx.com.

The Company’s IsoPet operating division focuses on the veterinary oncology market. Dr. Alice Villalobos, a founding member of the Veterinary Cancer Society and the Chair of our Veterinary Medicine Advisory Board, has been providing guidance to management regarding this market. The Veterinary Medicine Advisory Board gives us recommendations regarding the overall strategy for our animal business sector. Specifically, they recommended the university veterinary hospitals for demonstration therapies, the specific cancers to be treated, and have provided business contact information to the private clinics.

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Since the FDA has classified RadioGel™ as a device, the Company can implement future improvements in the product and the application techniques to further benefit animals and to strengthen our intellectual property, without any further FDA approvals.

The Company currently intends to utilize university veterinary hospitals for therapy development, given that veterinary hospitals offer superior and plentiful veterinarians and students, a large number of animal patients, radioactive material handling licenses, and are respected by private veterinary centers and hospitals.

The Company has recently engaged four different university veterinarian hospitals to begin using RadioGel™ for four different cancer types in dogs and cats. Each veterinary hospital will focus on a different cancer therapy:

● Washington State University – feline sarcoma, possibly followed by canine sarcoma;

● University of Missouri – soft tissue carcinoma, possibly followed by localized prostate;

● University of Florida – lymph nodes, followed by liver cancer; and

● Colorado State University – oral squamous cancer.

Washington State University Veterinary Hospital has tested one cat to demonstrate the procedures and the absence of any significant toxicity effect. The others typically take about two months to complete their internal review before they can begin therapy. In each case, they will treat several animals with the objective of creating a detailed therapy procedure, which will be incorporated into product information for RadioGel™, known as a Label. The Company will then voluntarily ask the FDA to review this Label, as suggested by their guidance. These Labels will be used as part of our medical application to the FDA. A number of these animal cancers also occur in humans, so there is a direct benefit to our FDA applications when we get to that particular Indication for Use. The Labels and the animal experience will also be used to transfer the therapies to the private clinics and hospitals.

After completing the first set of therapies, each university veterinary hospital will select additional Indications for Use.

The engagement with each university hospital includes: (i) an agreement of interest; (ii) the creation of detailed protocols defining the specific cancers to be treated and the recommended therapy procedures; (iii) submittal of the protocols to the internal independent review committee that addresses safety and animal welfare; and (iv) the execution of a formal contact. Washington State University has completed all four steps and is treating cats for feline sarcoma. The remaining university hospitals are in combined steps (ii) and (iii).

Pursuant to the terms of the contract with Washington State University, it will be responsible for conducting studies regarding studies regarding in vivo dosimetry and toxicity of intralesional Y-90 phosphate nanoparticles for the treatment of spontaneous canine sarcomas and equine sarcoids. The term of the contract is October 1, 2016 through February 1, 2018. The Company provides the university with the RadioGel required to complete the studies, as well as technical support for dosimetry calculations. All payments provided to Washington State University in relation to the contract shall be made by Washington State Life Sciences Discovery Fund pursuant to a grant, and shall not be paid by the Company.

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Competitors

The Company competes in a market characterized by technological innovation, extensive research efforts, and significant competition.

The pharmaceutical and biotechnology industries are intensely competitive and subject to rapid and significant technological changes. A number of companies are pursuing the development of pharmaceuticals and products that target the same diseases and conditions that our products target. We cannot predict with accuracy the timing or impact of the introduction of potentially competitive products or their possible effect on our sales. Certain potentially competitive products to our products are possibly in various stages of development. Also, there may be many ongoing studies with currently marketed products and other developmental products, which may yield new data that could adversely impact the use of our products in their current and potential future Indications for Use. The introduction of competitive products could significantly reduce our sales, which, in turn would adversely impact our financial and operating results.

There are a wide variety of cancer treatments approved and marketed in the U.S. and globally. General categories of treatment include surgery, chemotherapy, radiation therapy and immunotherapy. These products have a diverse set of success rates and side effects. The Company’s products, including RadioGel™, fall into the brachytherapy treatment category. There are a number of brachytherapy devices currently marketed in the U.S. and globally. The traditional iodine-125 (I-125) and palladium-103 (Pd-103) technologies for brachytherapy are well entrenched with powerful market players controlling the market. The industry-standard I-125-based therapy was developed by Oncura, which is a unit of General Electric Company. Additionally, C.R. Bard, a major industry player competes in the I-125 brachytherapy marketplace. These market competitors are also involved in the distribution of Pd-103 based products. Cs-131 brachytherapy products are sold by IsoRay. Several Y-90 therapies have been FDA approved including SIR-Spheres by Sirtex, TheraSphere by Biocompatibles UK and Zevalin by Spectrum Pharmaceuticals.

Raw Materials

The Company currently subcontracts the manufacturing of RadioGel™ at IsoTherapeutics. Perkin Elmer Inc., the only supplier of Y-90 in the United States, is the sole supplier of the Y-90 used by IsoTherapeutics to manufacture the Company’s RadioGel™. The Company obtains supplies, hardware, handling equipment and packaging from several different U.S. suppliers.

Customers

The Company anticipates that potential customers for our potential brachytherapy products likely would include those institutions and individuals that currently purchase brachytherapy products or other oncology treatment products.

Government Regulation

The Company’s present and future intended activities in the development, manufacturing and sale of cancer therapy products, including RadioGel™, are subject to extensive laws, regulations, regulatory approvals and guidelines. Within the United States, the Company’s therapeutic radiological devices must comply with the U.S. Federal Food, Drug and Cosmetic Act, which is enforced by FDA. The Company is also required to adhere to applicable FDA Quality System Regulations, also known as the Good Manufacturing Practices, which include extensive record keeping and periodic inspections of manufacturing facilities.

In the United States, the FDA regulates, among other things, new product clearances and approvals to establish the safety and efficacy of these products. We are also subject to other federal and state laws and regulations, including the Occupational Safety and Health Act and the Environmental Protection Act.

The Federal Food, Drug, and Cosmetic Act and other federal statutes and regulations govern or influence the research, testing, manufacture, safety, labeling, storage, record keeping, approval, distribution, use, reporting, advertising and promotion of such products. Noncompliance with applicable requirements can result in civil penalties, recall, injunction or seizure of products, refusal of the government to approve or clear product approval applications, disqualification from sponsoring or conducting clinical investigations, preventing us from entering into government supply contracts, withdrawal of previously approved applications, and criminal prosecution.

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In the United States, medical devices are classified into three different categories over which the FDA applies increasing levels of regulation: Class I, Class II, and Class III. Most Class I devices are exempt from premarket notification 510(k); most Class II devices require premarket notification 510(k); and most Class III devices require premarket approval. RadioGel™ is currently classified as a Class III device.

Approval of new Class III medical devices is a lengthy procedure and can take a number of years and require the expenditure of significant resources. There is a shorter FDA review and clearance process for Class II medical devices, the premarket notification or 510(k) process, whereby a company can market certain Class II medical devices that can be shown to be substantially equivalent to other legally marketed devices.

The Company intends to apply for a de novo with an anticipated expenditure of $4.0 million over the next four years. This expenditure estimate includes anticipated costs associated with in vitro and in vivo pre-clinical testing, our application for an Investigational Device Exemption, Phase I and Phase II clinical trials and our application for a de novo.

As a registered medical device manufacturer with the FDA, we are subject to inspection to ensure compliance with FDA’s current Good Manufacturing Practices, or cGMP. These regulations require that we and any of our contract manufacturers design, manufacture and service products, and maintain documents in a prescribed manner with respect to manufacturing, testing, distribution, storage, design control, and service activities. Modifications or enhancements that could significantly affect the safety or effectiveness of a device or that constitute a major change to the intended use of the device require a new 510(k) premarket notification for any significant product modification.

The Medical Device Reporting regulation requires that we provide information to the FDA on deaths or serious injuries alleged to be associated with the use of our devices, as well as product malfunctions that are likely to cause or contribute to death or serious injury if the malfunction were to recur. Labeling and promotional activities are regulated by the FDA and, in some circumstances, by the Federal Trade Commission.

As a medical device manufacturer, we are also subject to laws and regulations administered by governmental entities at the federal, state and local levels. For example, our facility is licensed as a medical device manufacturing facility in the State of Washington and is subject to periodic state regulatory inspections. Our customers are also subject to a wide variety of laws and regulations that could affect the nature and scope of their relationships with us.

In the United States, as a manufacturer of medical devices and devices utilizing radioactive byproduct material, we are subject to extensive regulation by not only federal governmental authorities, such as the FDA and FAA, but also by state and local governmental authorities, such as the Washington State Department of Health, to ensure such devices are safe and effective. In Washington State, the Department of Health, by agreement with the federal Nuclear Regulatory Commission (“NRC”), regulates the possession, use, and disposal of radioactive byproduct material as well as the manufacture of radioactive sealed sources to ensure compliance with state and federal laws and regulations. RadioGel™ constitutes both medical devices and radioactive sealed sources and are subject to these regulations.

Moreover, our use, management, and disposal of certain radioactive substances and wastes are subject to regulation by several federal and state agencies depending on the nature of the substance or waste material. We believe that we are in compliance with all federal and state regulations for this purpose.

Environmental Regulation

Our business does not require us to comply with any extraordinary environmental regulations.

Employees

As of December 31, 2016, the Company had three full-time personnel. The Company utilizes several independent contractors to assist with its operations. The Company does not have a collective bargaining agreement with any of its personnel, and believes its relations with its personnel are good.

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Available Information

The Company prepares and files annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and certain other information with the United States Securities and Exchange Commission (the “SEC”). Persons may read and copy any materials the Company files with the SEC at the SEC’s public reference room at 100 F Street, NE, Washington D.C. 20549, on official business days during the hours of 10 a.m. to 3 p.m. Eastern Time. Information may be obtained on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. Moreover, the Company maintains a website at http://www.radiogel.com that contains important information about the Company, including biographies of key management personnel, as well as information about the Company’s business. This information is publicly available and is updated regularly. The content on any website referred to in this Form 10-K report is not incorporated by reference into this Form 10-K report, unless (and only to the extent) expressly so stated herein.

ITEM 1A. RISK FACTORS.

Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below, as well as the other information in this Form 10-K, including our consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before deciding whether to invest in our securities. The occurrence of any of the events or developments described below could harm our business, financial condition, operating results, and growth prospects. In such an event, the market price of our common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.

RISKS ASSOCIATED WITH THE COMPANY’S BUSINESS

Our independent registered public accounting firms’ reports on its financial statements questions the Company’s ability to continue as a going concern.

The Company’s independent registered public accounting firms’ reports on the Company’s financial statements for the years ended December 31, 2016 and 2015 express doubt about the Company’s ability to continue as a going concern. The reports include an explanatory paragraph stating that the Company has suffered recurring losses, used significant cash in support of its operating activities and, based on its current operating levels, require additional capital or significant restructuring to sustain its operation for the foreseeable future. There is no assurance that the Company will be able to obtain sufficient additional capital to continue its operations and to alleviate doubt about its ability to continue as a going concern. If the Company obtains additional financing, such funds may not be available on favorable terms and likely would entail considerable dilution to existing shareholders. Any debt financing, if available, may involve restrictive covenants that restrict its ability to conduct its business. It is extremely remote that the Company could obtain any financing on any basis that did not result in considerable dilution for shareholders. Inclusion of a “going concern qualification” in the report of its independent accountants or in any future report may have a negative impact on its ability to obtain debt or equity financing and may adversely impact its stock price.

A combination of our current financial condition and the FDA’s determinations to date regarding our brachytherapy products raise material concerns about ability to continue as a going concern.

The Company will not be able to continue as a going concern unless the Company obtains financing. Depending upon the amount of financing, if any, the Company is able to obtain, the Company may not receive adequate funds to continue the approval process for RadioGel™ or other brachytherapy products with the FDA.

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The Company has generated operating losses since inception, which are expected to continue, and has increasing cash requirements, which it may be unable to satisfy.

The Company has generated material operating losses since inception. The Company has had recurring net losses since inception which has resulted in an accumulated deficit of $57,869,440 as of December 31, 2016, including a net loss of $9,854,895 for the year ended December 31, 2016 and a net income of $6,232,686 for the year ended December 31, 2015. Historically, the Company has relied upon investor funds to maintain its operations and develop its business. The Company needs to raise additional capital within the next quarter from investors for working capital as well as business expansion, and there is no assurance that additional investor funds will be available on terms acceptable to the Company, or at all. If the Company is unable to unable to obtain additional financing to meet its working capital requirements, the Company likely would cease operations.

The Company requires funding of at least $1.5 million per year to maintain current operating activities. Over the next 12 to 24 months, the Company believes it will cost approximately $5.0 million to $10.0 million to fund: (1) the FDA approval process and initial deployment of the brachytherapy products and (2) initiate regulatory approval processes outside of the United States. The continued deployment of the brachytherapy products and a worldwide regulatory approval effort will require additional resources and personnel. The principal variables in the timing and amount of spending for the brachytherapy products in the next 12 to 24 months will be the FDA’s classification of the Company’s brachytherapy products as Class II or Class III devices (or otherwise) and any requirements for additional studies, which may possibly include clinical studies. Thereafter, the principal variables in the amount of the Company’s spending and its financing requirements would be the timing of any approvals and the nature of the Company’s arrangements with third parties for manufacturing, sales, distribution and licensing of those products and the products’ success in the U.S. and elsewhere. The Company intends to fund its activities through strategic transactions such as licensing and partnership agreements or additional capital raises.

Recent economic events, including the inherent instability in global capital markets, as well as the lack of liquidity in the capital markets, could adversely impact the Company’s ability to obtain financing and its ability to execute its business plan.

The Company has a limited operating history, which may make it difficult to evaluate its business and prospects.

The Company has a limited operating history upon which one can base an evaluation of its business and prospects. As a company in the development stage, there are substantial risks, uncertainties, expenses and difficulties to which its business is subject. To address these risks and uncertainties, the Company must do the following:

● successfully develop and execute the business strategy;

● respond to competitive developments; and

● attract, integrate, retain and motivate qualified personnel.

There is no assurance that the Company will achieve or maintain profitable operations or that the Company will obtain or maintain adequate working capital to meet its obligations as they become due. The Company cannot be certain that its business strategy will be successfully developed and implemented or that the Company will successfully address the risks that face its business. In the event that the Company does not successfully address these risks, its business, prospects, financial condition, and results of operations could be materially and adversely affected.

The Company’s new products are regulated and require appropriate clearances and approvals to be marketed in the U.S. and globally.

There is no assurance the FDA or other global regulatory authorities will grant the Company permission to market the Company’s brachytherapy Y-90 RadioGel™ device.

There is no assurance the FDA or other global regulatory authorities will grant the Company permission to market its brachytherapy Y-90 RadioGel^TM device.

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The Company has been working with the FDA to obtain clearance for its brachytherapy Y-90 RadioGel^TM device, but no assurances have been received. On December 23, 2014, the Company announced that it submitted a de novo to the FDA for marketing clearance for its patented Y-90 RadioGel^TM device pursuant to Section 513(f)(2) of the U.S. Food, Drug and Cosmetic Act (the “Act”). In June 2015, the FDA notified the Company the de novo was not granted. In February 2014, the FDA found the same device under Section 510(k) of the Act not substantially equivalent, and concluded that the device is classified by statute as a Class III medical device, unless the device is reclassified. The Company is seeking reclassification of the product to Class II. If the Company is successful in seeking reconsideration of the Company’s de novo application, as a regulatory matter, the device could be on an easier and faster path to market in the United States. However, there would still be the requirements to complete the in vitro and in vivo testing, and then some human clinical trials. That testing date is submitted in a de novo pre-market application and if accepted we could then go to market. As a practical matter, the Company would still need to secure funding and commercial arrangements before marketing could commence. If the de novo is declined and if the Company obtains funding to permit it to continue operations, the Company will explore steps toward seeking approval for the device as a Class III medical device. Generally, the time period and cost of seeking approval as a Class III medical device is materially greater than the time period and cost of seeking approval as a Class II medical device. If the Company seeks approval as a Class III device, human clinical trials will be necessary. Generally, human trials for Class III products are larger, of longer duration and costlier than those for Class II devices. If human clinical trials are necessary, there will be additional cost and time to reach marketing clearance or approval. Unless the Company obtains sufficient funding, it will be unable to do the foregoing activities. There can be no assurance that the product will be approved as either a Class II or Class III device by the FDA even if additional data is provided. There can be no assurance that the Company will receive FDA approval, or if it does, the timing thereof.

If the Company is successful in increasing the size of its organization, the Company may experience difficulties in managing growth.

The Company is a small organization with a minimal number of employees. If the Company is successful, it may experience a period of significant expansion in headcount, facilities, infrastructure and overhead and further expansion may be required to address potential growth and market opportunities. Any such future growth will impose significant added responsibilities on members of management, including the need to improve the Company’s operational and financial systems and to identify, recruit, maintain and integrate additional managers. The Company’s future financial performance and its ability to compete effectively will depend, in part, on the ability to manage any future growth effectively.

The Company’s business is dependent upon the continued services of the Company’s Chief Executive Officer, Michael Korenko. Should the Company lose the services of Mr. Korenko, the Company’s operations will be negatively impacted.

The Company’s business is dependent upon the expertise of its Chief Executive Officer, Michael Korenko. Mr. Korenko is essential to the Company’s operations. Accordingly, an investor must rely on Mr. Korenko’s management decisions that will continue to control the Company’s business affairs. The Company does not maintain key man insurance on Mr. Korenko’s life. The loss of the services of Mr. Korenko would have a material adverse effect upon the Company’s business.

The Company is heavily dependent on consultants for many of the services necessary to continue operations. The loss of any of these consultants could have a material adverse effect on the Company’s business, results of operations and financial condition.

The Company’s success is heavily dependent on the continued active participation of certain consultants and collaborating scientists. Certain key employees and consultants have no written employment contracts. Loss of the services of any one or more of its consultants could have a material adverse effect upon the Company’s business, results of operations and financial condition.

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If the Company is unable to hire and retain additional qualified personnel, the business and financial condition may suffer.

The Company’s success and achievement of its growth plans depend on its ability to recruit, hire, train and retain highly qualified technical, scientific, regulatory and managerial employees, consultants and advisors. Competition for qualified personnel among pharmaceutical and biotechnology companies is intense, and an inability to attract and motivate additional highly skilled personnel required for the expansion of the Company’s activities, or the loss of any such persons, could have a material adverse effect on its business, results of operations and financial condition.

The Company’s revenues have historically been derived from sales made to a small number of customers. The Company has discontinued prior operations related to its core business. To succeed, we will need to recommence our operations and achieve sales to a materially larger number of customers.

During 2014, the Company ceased all previous manufacturing and sales activities. Our sales for the year ended December 31, 2016 and 2015 consisted of only consulting revenue. The Company’s consulting revenues for the years ended December 31, 2016 and 2015 were made to one customer, and those sales constituted 100.0% of total revenues for those years. At such time as the Company recommences active operations, no assurances can be given that the Company will be successful in commercializing its products or expanding the number of customers purchasing its products and services.

Many of the Company’s competitors have greater resources and experience than the Company has.

Many of the Company’s competitors have greater financial resources, longer history, broader experience, greater name recognition, and more substantial operations than the Company has, and they represent substantial long-term competition for us. The Company’s competitors may be able to devote more financial and human resources than the Company can to research, new product development, regulatory approvals, and marketing and sales. The Company’s competitors may develop or market products that are viewed by customers as more effective or more economical than the Company’s products. There is no assurance that the Company will be able to compete effectively against current and future competitors, and such competitive pressures may adversely affect the Company’s business and results of operations.

The Company’s future revenues depend upon acceptance of its current and future products in the markets in which they compete.

The Company’s future revenues depend upon receipt of financing, regulatory approval and the successful production, marketing, and sales of the various isotopes the Company might market in the future. The rate and level of market acceptance of each of these products, if any, may vary depending on the perception by physicians and other members of the healthcare community of its safety and efficacy as compared to that of any competing products; the clinical outcomes of any patients treated; the effectiveness of its sales and marketing efforts in the United States, Europe, Far East, Middle East, and Russia; any unfavorable publicity concerning its products or similar products; the price of the Company’s products relative to other products or competing treatments; any decrease in current reimbursement rates from the Centers for Medicare and Medicaid Services or third-party payers; regulatory developments related to the manufacture or continued use of its products; availability of sufficient supplies to either purchase or manufacture its products; its ability to produce sufficient quantities of its products; and the ability of physicians to properly utilize its products and avoid excessive levels of radiation to patients. Any material adverse developments with respect to the commercialization of any such products may adversely affect revenues and may cause the Company to continue to incur losses in the future.

The Company will in the future rely heavily on a limited number of suppliers.

Some of the products the Company might market and components thereof are currently available only from a limited number of suppliers, several of which are international suppliers. Failure to obtain deliveries from these sources could have a material adverse effect on the Company’s ability to operate.

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The Company may incur material losses and costs as a result of product liability claims that may be brought against it.

The Company faces an inherent business risk of exposure to product liability claims in the event that products supplied by the Company fail to perform as expected or such products result, or is alleged to result, in bodily injury. Any such claims may also result in adverse publicity, which could damage the Company’s reputation by raising questions about the safety and efficacy of its products, and could interfere with its efforts to market its products. A successful product liability claim against the Company in excess of its available insurance coverage or established reserves may have a material adverse effect on its business. Although the Company currently maintains liability insurance in amounts it believes are commercially reasonable, any product liability the Company may incur may exceed its insurance coverage.

The Company is subject to the risk that certain third parties may mishandle the Company’s products.

If the Company markets products, the Company likely will rely on third parties, such as commercial air courier companies, to deliver the products, and on other third parties to package the products in certain specialized packaging forms requested by customers. The Company thus would be subject to the risk that these third parties may mishandle its product, which could result in material adverse effects, particularly given the radioactive nature of some of the products.

The Company’s operations expose it to the risk of material environmental liabilities.

The Company is subject to potentially material liabilities related to the remediation of environmental hazards and to personal injuries or property damages that may be caused by hazardous substance releases and exposures. The Company is subject to various federal, state, local and foreign government requirements regulating the discharge of materials into the environment or otherwise relating to the protection of the environment. These laws and regulations can impose substantial fines and criminal sanctions for violations and can require installation of costly equipment or operational changes to limit emissions and/or decrease the likelihood of accidental hazardous substance releases. The Company expects to incur capital and operating costs to comply with these laws and regulations. In addition, changes in laws, regulations and enforcement of policies, the discovery of previously unknown contamination or new technology or information related to individual sites, or the imposition of new clean-up requirements or remedial techniques may require the Company to incur costs in the future that would have a negative effect on its financial condition or results of operations. Operational hazards could result in the spread of contamination within the Company’s facility and require additional funding to correct.

The Company is subject to uncertainties regarding reimbursement for use of its products.

Hospitals and freestanding clinics may be less likely to purchase the Company’s products if they cannot be assured of receiving favorable reimbursement for treatments using its products from third-party payers, such as Medicare and private health insurance plans. Third-party payers are increasingly challenging the pricing of certain medical services or devices, and there is no assurance that they will reimburse the Company’s customers at levels sufficient for it to maintain favorable sales and price levels for the Company’s products. There is no uniform policy on reimbursement among third-party payers, and there is no assurance that the Company’s products will continue to qualify for reimbursement from all third-party payers or that reimbursement rates will not be reduced. A reduction in or elimination of third-party reimbursement for treatments using the Company’s products would likely have a material adverse effect on the Company’s revenues.

The Company’s future growth is largely dependent upon its ability to develop new technologies that achieve market acceptance with appropriate margins.

The Company’s business operates in global markets that are characterized by rapidly changing technologies and evolving industry standards. Accordingly, future growth rates depend upon a number of factors, including the Company’s ability to (i) identify emerging technological trends in the Company’s target end-markets, (ii) develop and maintain competitive products, (iii) enhance the Company’s products by adding innovative features that differentiate the Company’s products from those of its competitors, and (iv) develop, manufacture and bring products to market quickly and cost-effectively. The Company’s ability to develop new products based on technological innovation can affect the Company’s competitive position and requires the investment of significant resources. These development efforts divert resources from other potential investments in the Company’s business, and they may not lead to the development of new technologies or products on a timely basis or that meet the needs of the Company’s customers as fully as competitive offerings. In addition, the markets for the Company’s products may not develop or grow as it currently anticipates. The failure of the Company’s technologies or products to gain market acceptance due to more attractive offerings by the Company’s competitors could significantly reduce the Company’s revenues and adversely affect the Company’s competitive standing and prospects.

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The Company may rely on third parties to represent it locally in the marketing and sales of its products in international markets and its revenue may depend on the efforts and results of those third parties.

The Company’s future success may depend, in part, on its ability to enter into and maintain collaborative relationships with one or more third parties, the collaborator’s strategic interest in the Company’s products and the Company’s products under development, and the collaborator’s ability to successfully market and sell any such products. The Company intends to pursue collaborative arrangements regarding the marketing and sales of its products; however, it may not be able to establish or maintain such collaborative arrangements, or if it is able to do so, the Company’s collaborators may not be effective in marketing and selling its products. To the extent that the Company decides not to, or is unable to, enter into collaborative arrangements with respect to the sales and marketing of its products, significant capital expenditures, management resources and time will be required to establish and develop an in-house marketing and sales force with technical expertise. To the extent that the Company depends on third parties for marketing and distribution, any revenues received by the Company will depend upon the efforts and results of such third parties, which may or may not be successful.

The Company may pursue strategic acquisitions that may have an adverse impact on its business.

Executing the Company’s business strategy may involve pursuing and consummating strategic transactions to acquire complementary businesses or technologies. In pursuing these strategic transactions, even if the Company does not consummate them, or in consummating such transactions and integrating the acquired business or technology, the Company may expend significant financial and management resources and incur other significant costs and expenses. There is no assurance that any strategic transactions will result in additional revenues or other strategic benefits for the Company’s business. The Company may issue the Company’s stock as consideration for acquisitions, joint ventures or other strategic transactions, and the use of stock as purchase consideration could dilute the interests of its current stockholders. In addition, the Company may obtain debt financing in connection with an acquisition. Any such debt financing may involve restrictive covenants relating to capital-raising activities and other financial and operational matters, which may make it more difficult for the Company to obtain additional capital and pursue business opportunities, including potential acquisitions. In addition, such debt financing may impair the Company’s ability to obtain future additional financing for working capital, capital expenditures, acquisitions, general corporate or other purposes, and a substantial portion of cash flows, if any, from the Company’s operations may be dedicated to interest payments and debt repayment, thereby reducing the funds available to the Company for other purposes.

The Company will need to hire additional qualified accounting personnel in order to remediate a material weakness in its internal control over financial accounting, and the Company will need to expend any additional resources and efforts that may be necessary to establish and to maintain the effectiveness of its internal control over financial reporting and its disclosure controls and procedures.

As a public company, the Company is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, and the Sarbanes-Oxley Act of 2002. The Company’s management is required to evaluate and disclose its assessment of the effectiveness of the Company’s internal control over financial reporting as of each year-end, including disclosing any “material weakness” in the Company’s internal control over financial reporting. A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. As a result of its assessment, management has determined that there is a material weakness due to the lack of segregation of duties and, due to this material weakness, management concluded that, as of December 31, 2016 and 2015, the Company’s internal control over financial reporting was ineffective. This material weakness was first identified in the Company’s Form 10-K/A amended annual report for the year ended December 31, 2008. This material weakness has the potential of adversely impacting the Company’s financial reporting process and the Company’s financial reports. Because of this material weakness, management also concluded that the Company’s disclosure controls and procedures were ineffective as of December 31, 2016 and 2015. The Company needs to hire additional qualified accounting personnel in order to resolve this material weakness. The Company also will need to expend any additional resources and efforts that may be necessary to establish and to maintain the effectiveness of the Company’s internal control over financial reporting and disclosure controls and procedures.

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The Company may be unable to make timely license and patent payments

Patent costs associated with existing and new technology are significant. Existing patent and license fees must be paid for the Company to maintain rights to the technology. The Company would forfeit its exclusive rights to licensed technologies without paying patent and rights fees in a timely fashion. There is no assurance of sufficient capital to meet ongoing legal costs associated with the patent costs for the Company’s technology.

The Company’s patented or other technologies may infringe on other patents, which may expose it to costly litigation.

It is possible that the Company’s patented or other technologies may infringe on patents or other rights owned by others. The Company may have to alter its products or processes, pay licensing fees, defend infringement actions or challenge the validity of the patents in court, or cease activities altogether because of patent rights of third parties, thereby causing additional unexpected costs and delays to the Company. Patent litigation is costly and time consuming, and the Company may not have sufficient resources to pursue such litigation. If the Company does not obtain a license under such patents, if it is found liable for infringement, or if it is not able to have such patents declared invalid, the Company may be liable for significant money damages, may encounter significant delays in bringing products to market or may be precluded from participating in the manufacture, use or sale of products or methods of treatment requiring such licenses.

Protecting the Company’s intellectual property is critical to its innovation efforts.

The Company owns or has a license to use several U.S. and foreign patents and patent applications, trademarks and copyrights. The Company’s intellectual property rights may be challenged, invalidated or infringed upon by third parties, or it may be unable to maintain, renew or enter into new licenses of third party proprietary intellectual property on commercially reasonable terms. In some non-U.S. countries, laws affecting intellectual property are uncertain in their application, which can adversely affect the scope or enforceability of the Company’s patents and other intellectual property rights. Any of these events or factors could diminish or cause the Company to lose the competitive advantages associated with the Company’s intellectual property, subject the Company to judgments, penalties and significant litigation costs, or temporarily or permanently disrupt its sales and marketing of the affected products or services.

The Company may not be able to protect its trade secrets and other unpatented proprietary technology, which could give competitors an advantage.

The Company relies upon trade secrets and other unpatented proprietary technology. The Company may not be able to adequately protect its rights with regard to such unpatented proprietary technology, or competitors may independently develop substantially equivalent technology. The Company seeks to protect trade secrets and proprietary knowledge, in part through confidentiality agreements with its employees, consultants, advisors and collaborators. Nevertheless, these agreements may not effectively prevent disclosure of the Company’s confidential information and may not provide the Company with an adequate remedy in the event of unauthorized disclosure of such information, and as a result the Company’s competitors could gain a competitive advantage.

General economic conditions in markets in which the Company does business can impact the demand for the Company’s goods and services. Decreased demand for the Company’s products and services could have a negative impact on its financial performance and cash flow.

Demand for the Company’s products and services, in part, depends on the general economic conditions affecting the countries and industries in which the Company does business. A downturn in economic conditions in a country or industry that the Company serves may adversely affect the demand for the Company’s products and services, in turn negatively impacting the Company’s operations and financial results. Further, changes in demand for the Company’s products and services can magnify the impact of economic cycles on the Company’s businesses. Unanticipated contract terminations by current customers can negatively impact operations, financial results and cash flow. The Company’s earnings, cash flow and financial position are exposed to financial market risks worldwide, including interest rate and currency exchange rate fluctuations and exchange rate controls. Fluctuations in domestic and world financial markets could adversely affect interest rates and impact the Company’s ability to obtain credit or attract investors.

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The Company is subject to extensive government regulation in jurisdictions around the world in which it does business. Regulations address, among other things, environmental compliance, import/export restrictions, healthcare services, taxes and financial reporting, and those regulations can significantly increase the cost of doing business, which in turn can negatively impact operations, financial results and cash flow.

If the Company is successful in developing manufacturing capability, the Company will be subject to extensive government regulation and intervention both in the U.S. and in all foreign jurisdictions in which it conducts business. Compliance with applicable laws and regulations will result in higher capital expenditures and operating costs, and changes to current regulations with which the Company complies can necessitate further capital expenditures and increases in operating costs to enable continued compliance. Additionally, from time to time, the Company may be involved in proceedings under certain of these laws and regulations. Foreign operations are subject to political instabilities, restrictions on funds transfers, import/export restrictions, and currency fluctuation.

Volatility in raw material and energy costs, interruption in ordinary sources of supply, and an inability to recover from unanticipated increases in energy and raw material costs could result in lost sales or could increase significantly the cost of doing business.

Market and economic conditions affecting the costs of raw materials, utilities, energy costs, and infrastructure required to provide for the delivery of the Company’s products and services are beyond the Company’s control. Any disruption or halt in supplies, or rapid escalations in costs, could adversely affect the Company’s ability to manufacture products or to competitively price the Company’s products in the marketplace. To date, the ultimate impact of energy costs increases has been mitigated through price increases or offset through improved process efficiencies; however, continuing escalation of energy costs could have a negative impact upon the Company’s business and financial performance.

RISKS RELATED TO THE COMPANY’S COMMON STOCK

The Company’s common stock is currently quoted on the OTC Pink Marketplace. Failure to develop or maintain a more active trading market may negatively affect the value of the Company’s common stock, may deter some potential investors from purchasing the Company’s common stock or other equity securities, and may make it difficult or impossible for stockholders to sell their shares of common stock.

The Company’s average daily volume of shares traded for the years ended December 31, 2016 and 2015 was 113,034 and 403,927, respectively. Failure to develop or maintain an active trading market may negatively affect the value of the Company’s common stock, may make some potential investors unwilling to purchase the Company’s common stock or equity securities that are convertible into or exercisable for the Company’s common stock, and may make it difficult or impossible for the Company’s stockholders to sell their shares of common stock and recover any part of their investment.

The Company’s outstanding securities, the stock or securities that it may become obligated to issue under existing agreements, and certain provisions of those securities, may cause immediate and substantial dilution to existing stockholders and may make it more difficult to raise additional equity capital.

The Company had 37,541,697 shares of common stock outstanding on March 6, 2017. The Company also had outstanding on that date derivative securities consisting of options, warrants, and convertible notes that if they had been exercised and converted in full on March 6, 2017, would have resulted in the issuance of up to 11,637,245 additional shares of common stock. The issuance of shares upon the exercise of options or the conversion of convertible notes may result in substantial dilution to each stockholder by reducing that stockholder’s percentage ownership of the Company’s total outstanding common stock. Additionally, the Company has outstanding notes that if not prepaid by specific dates entitle the holder to convert the principal and accrued interest into common stock at 60% of the lowest trading price during the previous thirty-day trading period of the Company’s common stock prior to conversion as provided in the notes. See Note 11 of the footnotes to the Consolidated Financial Statements for the years ended December 31, 2016 and 2015 beginning on page F-2 of this report regarding the equity issuable upon conversion. The issuance of some or all of those warrants and any exercise of those warrants will have the effect of further diluting the percentage ownership of the Company’s other stockholders. That agreement also provides for stock compensation for consulting services. The existence and terms of these derivative securities and other obligations may make it more difficult for the Company to raise additional capital through the sale of stock or other equity securities.

 - 17 -

Future sales of the Company’s stock, including sales following exercise or conversion of derivative securities, or the perception that such sales may occur, may depress the price of common stock and could encourage short sales.

The sale or availability for sale of substantial amounts of the Company’s shares in the public market, including shares issuable upon exercise of options or warrants or upon the conversion of convertible securities, or the perception that such sales may occur, may adversely affect the market price of the Company’s common stock. Any decline in the price of the Company’s common stock may encourage short sales, which could place further downward pressure on the price of the Company’s common stock.

The Company’s stock price is likely to be volatile.

For the year ended December 31, 2016, the reported low closing price for the Company’s common stock was $0.07 per share, and the reported high closing price was $0.96 per share. For the year ended December 31, 2015, the reported low closing price for the Company’s common stock was $0.03 per share, and the reported high closing price was $0.49 per share. There is generally significant volatility in the market prices, as well as limited liquidity, of securities of early stage companies, particularly early stage medical product companies. Contributing to this volatility are various events that can affect the Company’s stock price in a positive or negative manner. These events include, but are not limited to: governmental approvals, refusals to approve, regulations or other actions; market acceptance and sales growth of the Company’s products; litigation involving the Company or the Company’s industry; developments or disputes concerning the Company’s patents or other proprietary rights; changes in the structure of healthcare payment systems; departure of key personnel; future sales of its securities; fluctuations in its financial results or those of companies that are perceived to be similar to us; investors’ general perception of us; and general economic, industry and market conditions. If any of these events occur, it could cause the Company’s stock price to fall, and any of these events may cause the Company’s stock price to be volatile.

The Company’s common stock is subject to the “Penny Stock” rules of the SEC and the trading market in its securities is limited, which makes transactions in its common stock cumbersome and may reduce the value of an investment in the Company’s stock.

The Securities and Exchange Commission has adopted Rule 3a51-1 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, Rule 15g-9 requires that a broker or dealer approve a person’s account for transactions in penny stocks and that the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience and objectives of the person and must make a reasonable determination that the transactions in penny stocks are suitable for that person and that the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which sets forth the basis on which the broker or dealer made the suitability determination, and that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

 - 18 -

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of the Company’s common stock and may cause a decline in the market value of its stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

As a result of the Company issuing preferred stock, the rights of holders of the Company’s common stock and the value of the Company’s common stock may be adversely affected.

The Company’s board of directors is authorized to issue classes or series of preferred stock, without any action on the part of the stockholders. The Company’s board of directors also has the power, without stockholder approval, to set the terms of any such classes or series of preferred stock, including voting rights, dividend rights and preferences over the common stock with respect to dividends or upon the liquidation, dissolution or winding-up of its business, and other terms. The Company has issued preferred stock that has a preference over the common stock with respect to the payment of dividends or upon liquidation, dissolution or winding-up, and with respect to voting rights. In accordance with that and with the issuance of preferred stock the voting rights the common stockholders voting rights have been diluted and it is possible that the rights of holders of the common stock or the value of the common stock have been adversely affected.

The Company does not expect to pay any dividends on common stock for the foreseeable future.

The Company has not paid any cash dividends on its common stock to date and does not anticipate it will pay cash dividends on its common stock in the foreseeable future. Accordingly, stockholders must be prepared to rely on sales of their common stock after price appreciation to earn an investment return, which may never occur. Any determination to pay dividends in the future will be made at the discretion of the Company’s board of directors and will depend on the Company’s results of operations, financial conditions, contractual restrictions, restrictions imposed by applicable law, and other factors that the Company’s board deems relevant.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

This item is not applicable to the Company because the Company is a smaller reporting company as defined by Rule 12b-2 under the Securities Exchange Act of 1934.

ITEM 2. PROPERTIES.

The Company is headquartered in Kennewick, Washington and maintains a lease at a cost of $1,500 per month from an entity controlled by Carlton M. Cadwell, Chairman of the Company’s Board of Directors and one of the Company’s significant shareholders. This lease initially expired in December 2014, however the Company continues to rent the space on a month-to-month basis.

ITEM 3. LEGAL PROCEEDINGS.

On March 6, 2015, Robert and Maribeth Myers filed a lawsuit against the Company and BancLeasing, Inc., owner of a linear accelerator and other equipment leased by the Company, in the Superior Court of the State of Washington, in and for Benton County (Case No. 15-2-0054101), asserting various claims related to the Company’s five-year lease of production center space owned by Mr. and Mrs. Myers. The Company subsequently filed counterclaims against Mr. and Mrs. Myers, BancLeasing and Washington Trust Bank, alleging misapplication of lease payments to the principal loan amount for a linear accelerator and other equipment stored on the production center property, as well as certain building improvements made by the Company. During 2016, the Company entered into a Settlement Agreement with Robert and Maribeth Myers, pursuant to which the Company agreed to pay a settlement amount of $438,830 in exchange for the release of all claims related to the matter, which amount was paid by the Company during the year ended December 31, 2016.

In 2016, the Company was awarded in the Superior Court of the State of Washington a total sum of $527,876 against BancLeasing. The Company is pursuing its options for collection of the awarded amount, however there can be no assurance as to any eventual collection.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information

The Company’s common stock is traded on the OTC Pink Marketplace under the symbol “RDGL.” The following table sets forth, in U.S. dollars the high and low closing prices for each of the calendar quarters indicated, as reported by the OTC Pink Marketplace for the past two fiscal years. The prices in the table may not represent actual transactions and do not include retail markups, markdowns or commissions. All prices listed below reflect the Company’s 1:100 reverse stock split implemented on October 7, 2016.

	High		Low
2016
Quarter ended December 31	$	0.24	$	0.07
Quarter ended September 30	$	0.40	$	0.14
Quarter ended June 30	$	0.96	$	0.20
Quarter ended March 31	$	0.96	$	0.07
2015
Quarter ended December 31	$	0.48	$	0.11
Quarter ended September 30	$	0.49	$	0.05
Quarter ended June 30	$	0.19	$	0.03
Quarter ended March 31	$	0.27	$	0.03

Holders

As of March 6, 2017 there were 37,541,697 shares of common stock outstanding and approximately 200 stockholders of record.

Dividend Policy

The Company has not paid any cash dividends on its common stock to date and do not anticipate it will pay cash dividends on its common stock in the foreseeable future. The payment of dividends in the future will be contingent upon revenues and earnings, if any, capital requirements, and its general financial condition. The payment of any dividends will be within the discretion of the board of directors. It is the present intention of the board of directors to retain all earnings, if any, for use in the business operations. Accordingly, the board does not anticipate declaring any dividends on its common stock in the foreseeable future.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table sets forth information as of December 31, 2016 with respect to the Company’s equity compensation plans previously approved by stockholders and equity compensation plans not previously approved by stockholders.

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	Equity Compensation Plan Information
Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights			Weighted- average exercise price of outstanding options, warrants and rights			Number of securities remaining available for future issuance under Equity compensation plans (excluding securities reflected in column (a))
	(a)			(b)			(c)
Equity compensation plans approved by stockholders		-		$	-			3,993,868
Equity compensation plans not approved by stockholders		5,135,000		$	0.15			-
Total		5,135,000	(1)	$	0.15	(1)		-

(1) In addition to the 2015 Plan (defined below), the Company has individual compensation arrangements under which equity securities are authorized for issuance in exchange for consideration in the form of goods or services of certain individuals.

2015 Omnibus Securities and Incentive Plan

In October 2015, our Board of Directors and stockholders approved the adoption of the 2015 Omnibus Securities and Incentive Plan (the “2015 Plan”). The 2015 Plan authorizes an aggregate number of shares of common stock for issuance to all employees of the Company or any subsidiary of the Company, any non-employee director, consultants and independent contractors of the Company or any subsidiary, and any joint venture partners (including, without limitation, officers, directors and partners thereof) of the Company or any subsidiary. The aggregate number of shares that may be issued under the Plan shall not exceed twenty percent (20%) of the issued and outstanding shares of common stock on an as converted primary basis on a rolling basis. For calculation purposes, the As Converted Primary Shares shall include all shares of common stock and all shares of common stock issuable upon the conversion of outstanding preferred stock and other convertible securities but shall not include any shares of common stock issuable upon the exercise of options, warrants and other convertible securities issued pursuant to the 2015 Plan. As of December 31, 2016, the Converted Primary Shares calculation results in 9,835,788 aggregate shares that may be issued under the 2015 Plan. The 2015 Plan is administered by the Company’s Compensation Committee, who may issue awards in the form of stock options and/or restricted stock awards. As of December 31, 2016, no awards have been issued pursuant to the 2015 Plan.

Recent Sales of Unregistered Securities

Below is a description of all unregistered securities issued by the Company during and subsequent to the quarter ended December 31, 2016, through the date of this report. Each of the issuances identified below were issued in transactions exempt from registration under the Securities Act of 1933, as amended, in reliance on Section 3(a)(9) and/or 4(2) thereof.

Issuances During the Quarter Ended December 31, 2016

During October, November and December 2016, the Company issued 347,400 shares of Series A Convertible Preferred Stock (“Series A Preferred”) as a commitment fee payable on $547,500 in convertible debt.

During November 2016, the Company issued 563,523 shares of common stock in exchange for $126,640 of convertible debt, and $25,300 of accrued interest.

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During November 2016, the Company issued 52,000 shares of Series A Preferred in exchange for $93,011 of convertible debt, and $23,462 of accrued interest.

During October 2016, the Company issued 150,000 shares of Series A Preferred as payment for certain consulting services.

During the months of October, November and December 2016, the Company issued 11,180,289 shares of common stock upon conversion of 1,118,024 shares of Series A Preferred.

Issuances Subsequent to December 31, 2016

During January and February, and through March 6, 2017, the Company issued 5,517,900 shares of common stock upon conversion of 531,790 shares of Series A Preferred.

During February 2017, the Company issued 280,000 shares of common stock in exchange for $140,000 of accounts payable.

ITEM 6. SELECTED FINANCIAL DATA.

This item is not applicable to the Company because the Company is a smaller reporting company as defined by Rule 12b-2 under the Securities Exchange Act of 1934, as amended.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis is intended as a review of significant factors affecting the Company’s financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with the Company’s financial statements and the notes presented herein. In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. The Company’s actual results could differ significantly from those anticipated in these forward-looking statements as a result of the risk factors set forth above in Item 1A and other factors discussed in this Annual Report on Form 10-K.

Results of Operations

Comparison for the Year Ended December 31, 2016 and December 31, 2015

The following table sets forth information from the Company’s statements of operations for the years ended December 31, 2016 and 2015.

	Year Ended December 31, 2016			Year Ended December 31, 2015
Revenues	$	8,108		$	24,108
Operating expense		4,444,578			2,065,371
Operating loss		(4,436,470	)		(2,041,263	)
Non-operating income (expense)		(5,418,425	)		8,273,949
Net income (loss)	$	(9,854,895	)	$	6,232,686

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Revenue

Consulting revenue was $8,108 and $24,108 for the years ended December 31, 2016 and 2015, respectively. Consulting revenue consists of the Company providing assistance in strategic targetry services, and research into production of radiophamaceuticals and the operations of radioisotope production facilities.

Operating Expense

Operating expense for the twelve months ended December 31, 2016 and 2015 consists of the following:

	Twelve months ended December 31, 2016		Twelve months ended December 31, 2015
Cost of materials	$	-	$	474
Sales and marketing expense		284,138		-
Depreciation and amortization expense		2,947		5,672
Professional fees		2,068,796		741,375
Stock options and warrants granted		675,324		80,635
Payroll expense		652,877		679,259
Research and development		328,026		149,650
General and administrative expense		432,470		408,306
	$	4,444,578	$	2,065,371

Operating expense for the twelve months ended December 31, 2016 and 2015 was $4,444,578 and $2,065,371, respectively. The increase in operating expense from 2015 to 2016 is largely attributable to professional fees ($2,068,796 for the twelve months ended December 31, 2016 versus $741,375 for the twelve months ended December 31, 2015). The increase in professional fees was due to hiring consultants to assist in raising capital to pay off debt and for operating expenses.

The increase in operating expense from 2015 to 2016 can also be attributed to research and development ($328,026 for the twelve months ended December 31, 2016 versus $149,650 for the twelve months ended December 31, 2015), and stock options granted and warrant expense ($675,324 for the twelve months ended December 31, 2016 versus $80,635 for the twelve months ended December 31, 2015).

Non-Operating Income (Expense)

Non-Operating income (expense) for the twelve months ended December 31, 2016 and 2015 consists of the following:

	Twelve months ended December 31, 2016			Twelve months ended December 31, 2015
Interest expense	$	(6,259,467	)	$	(3,196,153	)
Net gain (loss) on settlement of debt		3,108,342			3,562,067
Recognized income from grants		21,010			21,010
Gain (loss) on derivative liability		(2,244,353	)		7,887,025
Loss on impaired assets		(43,957	)		-
	$	(5,418,425	)	$	8,273,949

Non-operating income (expense) for the twelve months ended December 31, 2016 varied from the twelve months ended December 31, 2015 primarily due to the difference in the gain (loss) on derivative liability of $10,131,378 (a $7,887,025 gain on derivative liability in 2015 versus a $2,244,353 loss on derivative liability in 2016). Additionally, there was an increase in interest expense of $3,063,314, attributable to loan fees incurred ($5,098,094 for the twelve months ended December 31, 2016 versus $536,347 for the twelve months ended December 31, 2015).

 - 23 -

Income from Grants

On September 1, 2015, the Company received notification that it had been awarded from Washington State University $42,019 grant funds from the sub-award project entitled “Optimized Injectable Radiogels for High-dose Therapy of Non-Resectable Solid Tumors”. The Company received $21,010 of the total grant award in December 2015 and $21,009 of the total grant award in October 2016.

Net Loss

The Company’s net income (loss) for the twelve months ended December 31, 2016 and 2015 was $(9,854,895) and $6,232,686, respectively, as a result of the items described above.

Liquidity and Capital Resources

At December 31, 2016, the Company had negative working capital of $3,022,417, as compared to $9,755,128 at December 31, 2015. During the twelve months ended December 31, 2016, the Company experienced negative cash flow from operations of $1,926,713 and it expended $0 for investing activities while adding $1,775,570 of cash flows from financing activities. As of December 31, 2016, the Company had $0 commitments for capital expenditures.

Cash used in operating activities increased from $1,193,105 for the twelve-month period ending December 31, 2015 to $1,926,713 for the twelve-month period ending December 31, 2016. Cash used in operating activities was primarily a result of the Company’s non-cash items, such as loss from operations, loss on preferred and common stock and stock options and warrants issued for services and other expenses, offset by the net gain and the gain realized from derivative liabilities and settlement of debt, preferred stock converted to common stock, and the penalties resulting from short term debt. Cash provided from financing activities increased from $1,371,934 for the twelve-month period ending December 31, 2015 to $1,775,570 for the twelve-month period ending December 31, 2016. The increase in cash provided from financing activities was primarily a result of increase in proceeds from related party notes, shareholder advances, and sale of preferred shares.

The Company has generated material operating losses since inception. The Company had a net income of $6,232,686 for the twelve months ended December 31, 2015, and a net loss of $9,854,895 for the twelve months ended December 31, 2016. The Company expects to continue to experience net operating losses. Historically, the Company has relied upon investor funds to maintain its operations and develop the Company’s business. The Company anticipates raising additional capital within the next twelve months for working capital as well as business expansion, although the Company can provide no assurance that additional capital will be available on terms acceptable to the Company, if at all. If the Company is unable to obtain additional financing to meet its working capital requirements, it may have to curtail its business or cease all operations.

The Company requires funding of at least $1.5 million per year to maintain current operating activities. Over the next 12 to 24 months, the Company believes it will cost approximately $5.0 million to $10.0 million to fund: (1) the FDA approval process and initial deployment of RadioGel™ and other brachytherapy products and (2) initiate regulatory approval processes outside of the United States. The continued deployment of the Company’s brachytherapy products, including RadioGel™, and a worldwide regulatory approval effort will require additional resources and personnel. The principal variables in the timing and amount of spending for the brachytherapy products in the next 12 to 24 months will be the FDA’s classification of the Company’s brachytherapy products as Class II or Class III devices (or otherwise) and any requirements for additional studies, which may possibly include clinical studies. Thereafter, the principal variables in the amount of the Company’s spending and its financing requirements would be the timing of any approvals and the nature of the Company’s arrangements with third parties for manufacturing, sales, distribution and licensing of those products and the products’ success in the U.S. and elsewhere. The Company intends to fund its activities through strategic transactions such as licensing and partnership agreements or additional capital raises.

 - 24 -

Although the Company is seeking to raise additional capital and has engaged in numerous discussions with investment bankers and investors, the Company has not received firm commitments for the required funding. Based upon its discussions, the Company anticipates that if the Company is able to obtain the funding required to retire outstanding debt, pay past due payables and maintain its current operating activities, that the terms thereof will be materially dilutive to existing shareholders.

Recent geopolitical events, including the inherent instability and volatility in global capital markets, as well as the lack of liquidity in the capital markets, could impact the Company’s ability to obtain financing and its ability to execute its business plan.

Contractual Obligations (payments due by period as of December 31, 2016)

Contractual Obligation	Total Payments Due		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
License Agreement with Battelle Memorial Institute	$	100,000	$	25,000	$	25,000	$	25,000	$	25,000 per year
Corporate Office Lease – begins January 1, 2014	$	18,000	$	18,000	$	-	$	-	$	-

In January 2014, the Company entered into a new 12-month lease for its corporate offices for a monthly rent of $1,500 from an entity controlled by Carlton M. Cadwell, a significant shareholder and a Director of the Company. The Company continued to rent this facility in 2015 and 2016 on a month-to-month basis. The Company incurred $18,000 rent expense for this facility for each of the twelve months ended December 31, 2016 and 2015.

Off-Balance Sheet Arrangements

The Company does not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on the Company’s financial condition, revenues, results of operations, liquidity or capital expenditures.

Accounting Policies

Use of Estimates

The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fixed Assets

Fixed assets are carried at the lower of cost or net realizable value. Production equipment with a cost of $2,500 or greater and other fixed assets with a cost of $1,500 or greater are capitalized. Major betterments that extend the useful lives of assets are also capitalized. Normal maintenance and repairs are charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in operations.

Depreciation is computed using the straight-line method over the following estimated useful lives:

Production equipment:	3 to 7 years
Office equipment:	2 to 5 years
Furniture and fixtures:	2 to 5 years

Leasehold improvements and capital lease assets are amortized over the shorter of the life of the lease or the estimated life of the asset.

 - 25 -

Management of the Company reviews the net carrying value of all of its equipment on an asset by asset basis whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. These reviews consider the net realizable value of each asset, as measured in accordance with the preceding paragraph, to determine whether impairment in value has occurred, and the need for any asset impairment write-down.

License Fees

License fees are stated at cost, less accumulated amortization. Amortization of license fees is computed using the straight-line method over the estimated economic useful life of the asset.

The Company periodically reviews the carrying values of capitalized license fees and any impairments are recognized when the expected future operating cash flows to be derived from such assets are less than their carrying value.

Patents and Intellectual Property

The Company had a total $35,482 of capitalized patents and intellectual property costs at December 31, 2015 for the patent rights in the area of a Brachytherapy seed with a Fast-dissolving Matrix for Optimized Delivery of Radionuclides. Effective December 31, 2016 the Company agreed to terminate this non-utilized patent license for which the $35,482 of capitalized patent and intellectual costs applied and therefore the Company wrote off $35,482 of capitalized costs in the twelve months ending December 31, 2016.

While patents are being developed or pending, they are not being amortized. Management has determined that the economic life of the patents to be ten years and amortization, over such 10-year period and on a straight-line basis will begin once the patents have been issued and the Company begins utilization of the patents through production and sales, resulting in revenues.

The Company evaluates the recoverability of intangible assets, including patents and intellectual property on a continual basis. Several factors are used to evaluate intangibles, including, but not limited to, management’s plans for future operations, recent operating results and projected and expected undiscounted future cash flows.

Revenue Recognition

The Company recognized revenue related to product sales when (i) persuasive evidence of the arrangement exists, (ii) shipment has occurred, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured.

Revenue for the fiscal years ended December 31, 2016 and 2015 consisted of consulting revenue. The Company recognizes revenue as consulting services have been performed. Prepayments, if any, received from customers prior to the services being performed are recorded as deferred revenue. In these cases, when the services are performed, the amount recorded as deferred revenue is recognized as revenue. The Company does not accrue for sales returns and other allowances as it has not experienced any returns or other allowances.

Income from Grants and Deferred Income

Government grants are recognized when all conditions of such grants are fulfilled or there is reasonable assurance that they will be fulfilled. The Company has chosen to recognize income from grants as it incurs costs associated with those grants, and until such time as it recognizes the grant as income those funds received will be classified as deferred income on the balance sheet.

Net Income (Loss) Per Share

The Company accounts for its income (loss) per common share by replacing primary and fully diluted earnings per share with basic and diluted earnings per share. Basic earnings/loss per share is computed by dividing income (loss) available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period, and does not include the impact of any potentially dilutive common stock equivalents. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares had been issued.

 - 26 -

Research and Development Costs

Research and developments costs, including salaries, research materials, administrative expenses and contractor fees, are charged to operations as incurred. The cost of equipment used in research and development activities which has alternative uses is capitalized as part of fixed assets and not treated as an expense in the period acquired. Depreciation of capitalized equipment used to perform research and development is classified as research and development expense in the year computed.

Income Taxes

To address accounting for uncertainty in tax positions, the Company clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. The Company also provides guidance on de-recognition, measurement, classification, interest, and penalties, accounting in interim periods, disclosure and transition.

The Company files income tax returns in the U.S. federal jurisdiction, and Delaware.

Interest costs and penalties related to income taxes, if any, will be classified as interest expense and general and administrative costs, respectively, in the Company’s financial statements. For the years ended December 31, 2016 and 2015, the Company did not recognize any interest or penalty expense related to income taxes. The Company believes that it is not reasonably possible for the amounts of unrecognized tax benefits to significantly increase or decrease within the next 12 months.

Fair Value of Financial Instruments

The Company adopted ASC Topic 820 (originally issued as SFAS 157, “Fair Value Measurements”) as of January 1, 2008 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

- Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

- Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

- Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Stock-Based Compensation

The Company recognizes in the financial statements compensation related to all stock-based awards, including stock options, based on their estimated grant-date fair value. The Company has estimated expected forfeitures and is recognizing compensation expense only for those awards expected to vest. All compensation is recognized by the time the award vests.

 - 27 -

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from non-employees. Costs are measured at the fair market value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of the date on which there first exists a firm commitment for performance by the provider of goods or services or on the date performance is complete. The Company recognizes the fair value of the equity instruments issued that result in an asset or expense being recorded by the company, in the same period(s) and in the same manner, as if the Company has paid cash for the goods or services.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

This item is not applicable to the Company because the Company is a smaller reporting company as defined by Rule 12b-2 under the Securities Exchange Act of 1934.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

All financial information required by this Item is included on the pages immediately following the Index to Financial Statements appearing on page F-1, and is hereby incorporated by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

On, August 18, 2016 (the “Resignation Date”), Haynie & Company, Salt Lake City, Utah, resigned as the Company’s independent registered public accounting firm. On September 1, 2016, the Company engaged Fruci & Associates II, PLLC (“Fruci”), as its new independent registered public accounting firm. The change of the Company’s independent registered public accounting firm from Haynie & Company to Fruci was approved unanimously by our Board of Directors.

The report of Haynie & Company on the Company’s financial statements for the fiscal year ended December 31, 2015 did not contain an adverse or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles, except the report did contain an explanatory paragraph related to the Company’s ability to continue as a going concern.

During the two most recent fiscal years and through the Resignation Date, there were (i) no disagreements between the Company and Haynie & Company or Fruci on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreement, if not resolved to the satisfaction of Haynie & Company and Fruci, would have caused Haynie & Company or Fruci to make reference thereto in their reports on the consolidated financial statements for such years, and (ii) with the exception of material weaknesses related to our internal control over financial reporting, no “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation S-K.

ITEM 9A. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

Based on an evaluation as of the date of the end of the period covered by this report, the Company’s Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as required by Exchange Act Rule 13a-15. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, because of the disclosed material weaknesses in the Company’s internal control over financial reporting, the Company’s disclosure controls and procedures were ineffective as of the end of the period covered by this report to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Company’s reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, to allow timely decisions regarding required disclosure.

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Management’s Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Exchange Act Rule 13a-15(f). Management conducted an evaluation of the effectiveness of the internal control over financial reporting as of December 31, 2016, using the criteria established in Internal Control – Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. As a result of management’s assessment, management has determined that there are material weaknesses due to the lack of segregation of duties and, due to the limited resources based on the size of the Company. Due to the material weaknesses management concluded that as of December 31, 2016, the Company’s internal control over financial reporting was ineffective. In order to address and resolve the weaknesses, the Company will endeavor to locate and appoint additional qualified personnel to the board of directors and pertinent officer positions as the Company’s financial means allow. To date, the Company’s limited financial resources have not allowed the Company to hire the additional personnel necessary to address the material weaknesses.

Attestation Report of the Registered Public Accounting Firm

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant’s principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

(a)	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;
(b)	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and
(c)	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant’s assets that could have a material effect on the financial statements.

ITEM 9B. OTHER INFORMATION.

None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The Company’s current directors and executive officers are as follows:

NAME	AGE	POSITION
Michael K. Korenko	71	Interim President and Chief Executive Officer
L. Bruce Jolliff	67	Chief Financial Officer
Carlton M. Cadwell	72	Chairman of the Board and Secretary
Thomas J. Clement	60	Director
James C. Katzaroff	60	Director

Term of Office

All of the Company’s directors hold office until the next annual meeting of the stockholders or until their successors is elected and qualified. The Company’s executive officers are appointed by the Company’s board of directors and hold office until their resignation, removal, death or retirement.

Background and Business Experience

The business experience during the past five years of each of the Company’s directors and executive officers is as follows:

Dr. Michael K. Korenko, interim President and Chief Executive Officer of the Company since December 2016, joined the Company as an Advisor to the Board of the Company during 2009 and served as member of the Board from May 2009 to March 2010. Dr. Korenko has also served on the Hanford Advisory Board since 2009. Dr. Korenko served as Business Development Manager for Curtiss-Wright from 2006 to 2009, as Chief Operating Officer for Curtiss-Wright from 2000 to 2005 and was Executive Vice President of Closure for Safe Sites of Colorado at Rocky Flats from 1994 to 2000. Dr. Korenko served as Vice President of Westinghouse from 1987 to 1994 and was responsible for the 300 and 400 areas, including the Fast Flux Testing Facility (“FFTF”) and all engineering, safety analysis, and projects for the Hanford site. Dr. Korenko is the author of 28 patents and has received many awards, including the National Energy Resources Organization Research and Development Award, the U.S. Steelworkers Award for Excellence in Promoting Safety, and the Westinghouse Total Quality Award for Performance Manager of the Year. Dr. Korenko has a Doctor of Science from MIT, was a NATO Postdoctoral Fellow at Oxford University, and was selected as a White House Fellow for the Department of Defense, reporting to Secretary Cap Weinberger.

Carlton M. Cadwell, Chairman of the Board and Secretary since December 2016, joined the Company as a director in 2006. Dr. Cadwell brings over 30 years of experience in business management, strategic planning, and implementation. He co-founded Cadwell Laboratories, Inc. in 1979 and has served as its President since its inception. Cadwell Laboratories, Inc. is a major international provider of neurodiagnostic medical devices. After receiving his bachelor’s degree from the University of Oregon in 1966 and a doctoral degree from the University of Washington in 1970, he began his career serving in the United States Army as a dentist for three years. From 1973 to 1980, Dr. Cadwell practiced dentistry in private practice and since has started several businesses.

Mr. Cadwell brings to the Board over ten years of service on the Board and over forty-five years of experience as a successful entrepreneur, as well as medical expertise.

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Leonard Bruce Jolliff, the Chief Financial Officer, joined the Company as chief financial officer in 2006. For nine years prior to joining the Company, Mr. Jolliff was a sole practitioner in the role of CFO for Hire and as a Forensic Accountant, working with companies ranging from Fortune 500 to small family operations. Mr. Jolliff is a CPA and a member of the Washington Society of CPAs. He is also a CFE and a member of the Association of Certified Fraud Examiners.

Mr. Jolliff has held CFO and Controller positions in an array of industries and has worked as a CPA in public practice.

James C. Katzaroff, a director, was the Chief Executive Officer of the Company from its inception in 2006 to December 2016. Mr. Katzaroff is the founder of the Company. Initially a financial consultant with Wall Street firms Bateman Eichler, Smith Barney and EF Hutton, Mr. Katzaroff has been responsible for senior-level corporate strategy, fostering investment banking relationships, and served as a senior financial advisor for numerous start-ups and development-stage companies. From 1998 to 2016, Mr. Katzaroff held senior positions including Chief Executive Officer, Chief Financial Officer, Senior Vice President of Finance, Senior Vice President, and Corporate Secretary of Telemac Corporation, an international communications company active in the wireless telephony market. In 2001 he became Chairman and CEO of Apogee Biometrics, and in 2004 became President of Manakoa Services Corporation, serving as its interim CEO. He holds a Bachelor’s Degree in Business Economics from the University of California, Santa Barbara, and has completed advanced management courses at the University of Washington.

Mr. Katzaroff brings to the Board experience working with Wall Street banking firms as well as experience in numerous start-ups and development-stage companies.

Thomas J. Clement, a director, joined the Company as a director in 2013. Mr. Clement has over 30 years’ experience in product development engineering, engineering management, and senior management. He has participated in two Company startups through full production. He was responsible for development of seven novel medical devices through commercial launch; one device was the leading royalty generator for the University of Washington for nearly ten years, and in another, generated revenues of more than $140 million for a leading medical device company. Mr. Clement since 2013 has held the position of Founder and CEO of Aquaduct Critical Care, Inc, a private, pre-revenue medical device company.

Mr. Clement brings to the Board previous experience in bringing two startups from development through production as well as substantial experience in the development of medical devices.

Identification of Significant Employees and Consultants

David J. Swanberg, M.S., P.E. Chief Technical Officer, has over 30 years’ experience in radiochemical processing, medical isotope production, nuclear waste management, materials science, regulatory affairs, and project management. He has worked in diverse organizations ranging from small start-up businesses to corporations with multi-billion dollar annual revenues. He previously served as Executive Vice President of Operations for IsoRay Medical Inc. managing day-to-day operations, R&D, and New Product Development. Mr. Swanberg was a co-founder of IsoRay and led the initial Cs-131 brachytherapy seed product development, FDA 510(k) submission/clearance, and NRC Sealed Source review and registration. He led the radiation dosimetry evaluations to meet American Association of Physicists in Medicine guidelines and is a current member of the AAPM. Mr. Swanberg served on the IsoRay Board of Directors and participated in several capital financing rounds totaling over $30.0 million. He holds a BA in Chemistry from Bethel University (MN) and an MS in Chemical Engineering from Montana State University. He has numerous technical publications and holds several patents.

Fu-Min Su, Ph.D. was appointed as the Company’s Chief Radiochemist and Radiation Safety Officer in 2007. With over 20 years’ experience in medical isotope R&D and manufacturing, Dr. Su is also experienced in the area of coordinating and conducting clinical trials. He has worked as a senior scientist for a several bio-technology firms, including NeoRx Corporation from 1987 through 1998, Nycomed-Amersham Imaging in 1999, Bristol-Myers Squibb from 2000 to 2006, and Cellectar, LLC in 2007, during which time he developed various radiopharmaceuticals, isotope production methods and generator systems. Dr. Su has authored a number of scientific papers, and has written numerous abstracts for the Journal of Nuclear Medicine. He also holds several patents relating to radionuclide production and preparation. Dr. Su received his Ph.D. from the University of Washington.

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Alan E. Waltar, Ph.D., Chairman of the Company’s Medical Advisory Board. Dr. Waltar served as director of Nuclear Energy for the Pacific Northwest National Laboratory (“PNNL”) in Richland, Washington. Since 2004, he has continued his affiliation with PNNL as a senior advisor. Waltar’s other professional appointments include director of international programs at Advanced Nuclear Medical Systems; manager of various fast reactor safety and fuels organizations of Westinghouse Hanford Company; and as professor and department head of Nuclear Engineering at Texas A&M University. His other teaching experience includes stints at the Joint Center for Graduate Study in Richland Washington, the University of Virginia, and Los Alamos National Laboratory. Formerly the president of the American Nuclear Society, Dr. Waltar has served on a number of international nuclear science and radiation panels, societies, and committees. He is the author of three books: Fast Breeder Reactors, America the Powerless: Facing Our Nuclear Energy Dilemma, and Radiation and Modern Life: Fulfilling Marie Curie’s Dream, and has penned over 70 open literature papers.

Dr. Waltar earned his M.S. in Nuclear Engineering from M.I.T. and his PhD in Engineering Science from the University of California, Berkeley.

Nigel R. Stevenson, Ph.D., is a world-renowned expert in the production of medical isotopes. He holds a Ph.D. in Nuclear Physics from the University of London and has directed many corporate innovations for imaging and therapeutic nuclide agents. For the past five years he has served as Chief Operating Officer for Clear Vascular Inc. and was previously Chief Operating Officer of Trace Life Sciences, which produced a range of medical radiochemicals and radiopharmaceuticals. Prior to this, he had been VP Production and Research for Theragenics Corp. and directed operations in Atlanta for the world’s largest cyclotron facility (14 cyclotrons) that produced brachytherapy seeds. Dr. Stevenson was also Head of Isotope Production and Research at TRIUMF (Canadian National Accelerator Laboratory) where he managed the production of medical radioisotopes for MDS Nordion.

Donald A. Ludwig, Ph.D., Special Projects Manager and IsoPet Business Development Manager. Dr. Ludwig is an expert in particle accelerator applications in radiation therapy, nuclear medicine and radioisotope production. Since 1988 he has served as an advisor to numerous entities in the field, both domestic and foreign. Among these are the Atomic Energy of Canada, the U. S. Department of Energy Labs at Los Alamos, Berkeley, Fermi, Hanford and Oak Ridge, the Israel Atomic Energy Agency, the Australian Nuclear Science and Technology Organization, the Kurchatov Russian Research Institute in Moscow and the Bhabha Atomic Research Center in Mumbai, India. He holds a Ph.D. from UCLA in Medical Physics as well as an MS in Nuclear Physics from Cal Tech, a BS in Physics from the U. S. Military Academy at West Point and an MBA in Theoretical Marketing from the University of Southern California.

Medical and Veterinarian Advisory Boards

Dr. Barry D. Pressman MD, FACR - Chairman Medical Advisory Board. Dr. Pressman is Professor and Chairman of the S. Mark Taper Foundation Imaging Centre and Department, and Chief of the Section of Neuroradiology and Head and Neck Radiology at Cedars-Sinai Medical Center, located in Los Angeles, California.

Dr. Pressman is a past President of The American College of Radiology, the Western Neuroradiological Society, as well as past President of the California Radiological Society. Currently he is a member of the American Society of Neuroradiology and the American Society of Pediatric Neuroradiology.

Dr. Pressman earned his medical degree Cum Laude from Harvard Medical School after graduating Summa Cum Laude from Dartmouth College. After a surgical internship at Harvard’s Peter Bent Brigham Hospital in Boston, he completed a diagnostic radiology residency at Columbia-Presbyterian Medical Center in New York and a Neuroradiology fellowship at George Washington University Hospital. During this period, he wrote many original papers for Computer Tomography (CT).

Dr. Albert S. DeNittis MD, MS, FCPP - Medical Advisory Board. Dr. Albert S. DeNittis is currently is the Chief of Radiation Oncology at Lankenau Medical Center and Clinical Professor at Lankenau Institute for Medical Research in Wynnewood, Pennsylvania and the Director of Radiation Oncology at Brodesseur Cancer Center in New Jersey. He is also the Principal Investigator and in charge of a grant awarded by the NIH for its National Cancer Oncology Research Program (NCORP) at Main Line Health. Dr. DeNittis’ practice experience includes image-guided radiosurgery, stereotactic body radiation therapy (SBRT), intensity modulated radiation therapy (IMRT), image guided radiation therapy (IGRT), high-dose rate (HDR) brachytherapy, cranial and extracranial stereotactic radiosurgery, respiratory gating, and Cyberknife.

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Dr. DeNittis has served on numerous regional, national and government committees related to key issues in Dr. DeNittis earned a BA and a MS at Rutgers University and a MD from the Robert Wood Johnson Medical School at the University of Medicine and Dentistry of New Jersey. He completed postdoctoral training internships and residency at the Department of Radiation Oncology at the Hospital of the University of Pennsylvania. Dr. DeNittis is board certified by the American Board of Radiology and Licensed in New Jersey and Pennsylvania.

Dr. Alice Villalobos, DVM, FNAP - Chair of the Veterinary Medicine Advisory Board. Dr. Alice Villalobos is a well-known pioneer in the field of cancer care for companion animals and a founding member of the Veterinary Cancer Society. A 1972 graduate of UC Davis, she completed Dr. Gordon Theilen’s first mock residency program in oncology and has served the profession by consulting, writing and lecturing in the rapidly growing field of veterinary oncology and end of life care.

Dr. Alice Villalobos is President Emeritus of the Society for Veterinary Medical Ethics, Past President of the American Association of Human Animal Bond Veterinarians and Chair of the Veterinary Academy for the National Academies of Practice. She operated Coast Pet Clinic/Animal Cancer Center for 25 years, which is now VCA Coast Animal Hospital. She is the author of numerous articles, papers, and including her classic veterinarian textbook, Canine and Feline Geriatric Oncology: Honoring the Human-Animal Bond. She has lectured worldwide on oncology, quality of life, the human-animal bond and end of life care and bioethics. She founded Pawspice, an end of life care program that embraces kinder, gentler palliative cancer medicine and integrative care for pets with cancer and terminal illness (www.Pawspice.com). Dr. Alice is Director of Animal Oncology Consultation Service in Woodland Hill, California and Pawspice at VCA Coast Animal Hospital in Hermosa Beach, California. Dr. Alice was elected 2016 Hermosa Beach Woman of the Year.

Dr. Villalobos’ role with the Company is to support the commercialization of the Company’s yttrium-90 brachytherapy products for use in companion animals.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s executive officers, directors and persons who own more than 10% of the Company’s common stock to file with the SEC initial reports of beneficial ownership on Form 3, changes in beneficial ownership on Form 4, and an annual statement of beneficial ownership on Form 5. Such executive officers, directors and greater than 10% stockholders are required by SEC rules to furnish the Company with copies of all such forms that they have filed.

Based solely on its review of such forms filed with the SEC and received by the Company and representations from certain reporting persons, the Company believes that each of its executive officers and directors failed to report at least one transaction during the year ended December 31, 2016.

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Code of Ethics

The Company’s Board of Directors has not adopted a code of ethics that applies to the principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, because of the Company’s limited number of executive officers and employees that would be covered by such a code and the Company’s limited financial resources. The Company anticipates that it will adopt a code of ethics after it increases the number of executive officers and employees and obtain additional financial resources.

Audit Committee and Audit Committee Financial Expert

As of the date of this report, the Company has not established an audit committee, and therefore, the Company’s board of directors performs the functions that customarily would be undertaken by an audit committee. The Company’s board of directors during 2016 was comprised of three directors, two of whom the Company has determined satisfied the general independence standards of the NASDAQ listing requirements. See Item 13 of this Form 10-K.

The Company’s Board of Directors has determined that none of its current members qualifies as an “audit committee financial expert,” as defined by the rules of the SEC. In the future, the Company intends to establish board committees and to appoint such persons to those committees as are necessary to meet the corporate governance requirements imposed by a national securities exchange, although it is not required to comply with such requirements until the Company elects to seek listing on a national securities exchange.

ITEM 11. EXECUTIVE COMPENSATION.

Summary Compensation Table

The following table sets forth the compensation paid to the Company’s Chief Executive Officer and those executive officers that earned in excess of $100,000 during the twelve-month periods ended December 31, 2016 and 2015 (collectively, the “Named Executive Officers”):

Name and Principal Position	Year		Salary ($)			Bonus ($)			Stock Awards ($)		Option Awards ($)(3)			Total ($)
Dr. Michael K. Korenko		2016	$	-	(1)	$	-		$	-	$	-		$	-
CEO, President and Director		2015	$	-	(1)	$	-		$	-	$	-		$	-
James C. Katzaroff		2016	$	250,000	(2)	$	-		$	-	$	408,165	(4)	$	658,165
Former CEO and Chairman		2015	$	250,000	(5)	$	-		$	-	$	-		$	250,000
L. Bruce Jolliff		2016	$	180,000		$	-				$	110,389	(6)	$	290,389
CFO		2015	$	180,000	(7)		11,357	(8)	$	-	$	-		$	190,357

⁽¹⁾ Mr. Korenko began serving as our Chief Executive Officer and President on December 14, 2016 and, as such, did not receive any compensation during 2016 or 2015.

⁽²⁾ Mr. Katzaroff resigned as Chief Executive Officer in December 2016.

⁽³⁾ The amounts in this column represent the grant date fair value of stock option awards, computed in accordance with FASB ASC Topic 718.

⁽⁴⁾ In June 2016, Mr. Katzaroff received 100,000, three-year common stock options at $1.00, and 1,000,000, five-year common stock options at $0.50. Additionally, Mrs. Katzaroff received 100,000, five-year common stock options at $0.50, vested equally over 24 months. These options have a grant date fair value of $34,771 and $363,776, respectively.

⁽⁵⁾ Of this amount, $150,000 was exchanged for 100,000 shares of Series A Preferred and $75,144 was not paid in 2015, but was accrued as of December 31, 2015.

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⁽⁶⁾ In June 2016, Mr. Jolliff received 240,000, five-year common stock options at $0.50 and another 240,000, five-year common stock options at $0.50 vesting equally over 24 months.

⁽⁷⁾ Of this amount $112,500 was exchanged for 75,000 shares of Series A Preferred.

⁽⁸⁾ Mr. Jolliff received the additional $11,357 in 2015 to compensate for additional duties performed that were not originally contemplated.

Narrative Disclosure to Summary Compensation Table

L. Bruce Jolliff. Mr. Jolliff has a May 2007 employment agreement with the Company that provides for a salary of $100,000 per year, which amount was increased on January 1, 2012 to $156,000, and again adjusted beginning January 1, 2013 to $180,000. In 2015, Mr. Jolliff received $67,500, and exchanged $112,500 for 75,000 shares of Series A Preferred. In 2016, Mr. Jolliff received $96,721 and an additional $83,279 was accrued as of December 31, 2016. The Company may terminate the agreement without cause at any time upon 30 days’ written notice. Upon termination, the Company will pay Mr. Jolliff a severance allowance of two month’s salary.

James C. Katzaroff. The Company’s former Chief Executive Officer, James C. Katzaroff, did not have a written employment agreement and, therefore, no contracted amount or schedule of pay. However, his annual compensation was $250,000 and, accordingly, accruals were made for his compensation in 2016 and 2015 to bring his recorded salary to $250,000. In 2016, Mr. Katzaroff received $43,928 and an additional $206,072 was accrued as of December 31, 2016. In 2015, Mr. Katzaroff received $24,856, exchanged $150,000 for 100,000 shares of Series A Preferred, and an additional $75,144 was accrued as of December 31, 2015.

The Company paid bonuses to certain employees based on their performance, the Company’s need to retain such employees, and funds available. All bonus payments were approved by the Company’s Board of Directors.

Outstanding Equity Awards at Fiscal Year-End Table

The following table sets forth all outstanding equity awards held by the Company’s Named Executive Officers as of the end of last fiscal year.

Name	Number of Securities Underlying Unexercised Options(#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price ($)		Option Exercise Date
James C. Katzaroff		32,500		-	$	15.00	2/11/23
James C. Katzaroff		100,000		-	$	1.00	6/21/19
James C. Katzaroff		1,000,000		-	$	0.50	6/21/21
L. Bruce Jolliff		480,000		176,548	$	0.50	6/21/21

Employment Agreement with Significant Employee

Employment Agreement with Dr. Fu Min-Su

In January 2008, the Company entered into a five-year employment agreement with Dr. Fu Min-Su pursuant to which the Company agreed to pay Dr. Fu Min-Su an annual salary equal to $90,000, which was increased to $95,000 on January 1, 2010, to $110,000 on January 1, 2011, and to $125,000 effective June 1, 2016.

In the event the employment is terminated by the Company without cause, by Dr. Fu Min-Su for good reason or a change in control, the Company will have to provide Dr. Fu Min-Su with one month of his base salary and any portion of an annual bonus allocated by the Board of Directors, disability and other welfare plan benefits for a period of one year from the date of termination and pro-rated vesting of all outstanding options, stock grants, shares of restricted stock and any other equity incentive compensation; provided, that the stock options shall be exercisable only until the earlier to occur of (i) two years from the date of the termination, or (ii) the date the option would have otherwise expired if Dr. Fu Min-Su had not terminated employment.

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During the term of the employment agreement, including any extension thereof, and for a period of one year thereafter, Dr. Fu Min-Su shall not provide services that he provides for the Company for a business in the production, import for resale, and distribution of radioisotopes for use in the medical industries.

Compensation of Directors

The table below summarizes the compensation paid to our independent directors for the fiscal year ended December 31, 2016:

		Fees earned or paid in cash		Stock awards		Option awards (1)		Total
Name		($)		($)		($)		($)
Carlton M. Cadwell	$	–	$	–	$	352	$	352
Thomas J. Clement (2)	$	–	$	–	$	352	$	352

(1)	Represents the grant date fair value of stock option awards computed in accordance with FASB guidance, excluding the effect of estimated forfeitures under which the director has the right to purchase, subject to vesting, shares of the Company’s common stock.
(2)	Mr. Clement did not stand in reelection at the Company’s 2017 Annual meeting of Shareholders held on August 1, 2017.

The following table sets forth, for each of the Company’s non-employee directors who served during 2016, the aggregate number of stock awards and the aggregate number of stock option awards that were outstanding as of December 31, 2016:

	Outstanding		Outstanding
	Stock		Stock
Name	Awards (#)		Options (#)
Carlton M. Cadwell		-		100,000
Thomas J. Clement		-		100,000

During June 2016, the Company granted to Messrs. Cadwell and Clement options to purchase 100,000 shares of common stock at an exercise price of $1.00 per share. The options are fully vested and expire June 21, 2019.

There are no employment contracts or compensatory plans or arrangements with respect to any director that would result in payments by the Company to such person because of his or her resignation as a director or any change in control of the Company.

Compensation Committee Interlocks and Insider Participation

None of our officers currently serves, or has served during the last completed fiscal year, on the compensation committee or board of directors of any other entity that has one or more officers serving as a member of our board of directors.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Beneficial Ownership of The Company’s Common Stock

The following table sets forth, as of March 6, 2017, the number of shares of common stock beneficially owned by the following persons: (i) all persons the Company knows to be beneficial owners of at least 5% of the Company’s common stock, (ii) the Company’s directors, (iii) the Company’s executive officers, both of whom are named in the Summary Compensation Table above, and (iv) all current directors and executive officers as a group.

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As of March 6, 2017, there were 37,541,697 shares outstanding and up to 11,637,245 shares issuable upon exercise of outstanding options, warrants, and conversion of outstanding convertible securities, assuming exercise and conversion occurred as of that date, for a total of 49,178,942 shares.

Name and Address of Beneficial Owner(1)	Amount and Nature of Beneficial Ownership(2)		Percent of Class
Cadwell Family Irrevocable Trust		169,839		0.5	%
Carlton M. Cadwell (3)		1,268,844		3.4	%
James C. Katzaroff (4)		1,409,860		3.7	%
Thomas J. Clement (3)		100,000		0.3	%
L. Bruce Jolliff (5)		635,034		1.7	%
All Current Directors and Executive Officers as a group (5 individuals)		3,583,577		7.1	%

(1)	The address of each of the beneficial owners above is c/o Vivos Inc., 719 Jadwin Avenue, Richland, WA 99352, except that the address of the Cadwell Family Irrevocable Trust (the “Cadwell Trust “) is 909 North Kellogg Street, Kennewick, WA 99336.
(2)	In determining beneficial ownership of the Company’s common stock as of a given date, the number of shares shown includes shares of common stock which may be acquired upon exercise of options or conversion of convertible securities within 60 days of that date. In determining the percent of common stock owned by a person or entity on February 1, 2017, (a) the numerator is the number of shares of the class beneficially owned by such person or entity, including shares which may be acquired within 60 days on exercise of options and conversion of convertible securities, and (b) the denominator is the sum of (i) the total shares of common stock outstanding on February 1, 2017, and (ii) the total number of shares that the beneficial owner may acquire upon conversion of the convertible securities and upon exercise of the options. Subject to community property laws where applicable, the Company believes that each beneficial owner has sole power to vote and dispose of its shares, except that Mr. Cadwell under the terms of the Cadwell Trust does not have or share voting or investment power over the shares beneficially owned by the Cadwell Trust.
(3)	Includes 100,000 shares each issuable under options to Mr. Cadwell and Mr. Clements.
(4)	Includes 1,232,500 shares issuable under options held by Mr. Katzaroff.
(5)	Includes 480,000 shares issuable under options held by Mr. Jolliff.

Beneficial Ownership of The Company’s Preferred Stock

The following table sets forth, as of March 6, 2017, the number of shares of preferred stock beneficially owned by the following persons: (i) all persons the Company known to be beneficial owners of at least 5% of the Company’s preferred stock, (ii) the Company’s directors, (iii) the Company’s executive officers, both of whom are named in the Summary Compensation Table above, and (iv) all current directors and executive officers as a group.

Name and Address of Beneficial Owner (1)	Amount and Nature of Beneficial Ownership (2)		Percent of Class
Cadwell Family Irrevocable Trust		148,309		4.5	%
Carlton M. Cadwell		908,910		27.6	%
James C. Katzaroff		-		-	%
Thomas J. Clement		-		-	%
L. Bruce Jolliff		114,700		3.5	%
All Current Directors and Executive Officers as a group (5 individuals)		1,171,919		35.5	%

 - 37 -

(1)

The address of each of the beneficial owners above is c/o Vivos Inc., 719 Jadwin Avenue, Richland, WA 99352, except that the address of the Cadwell Family Irrevocable Trust (the “Cadwell Trust ”) is 909 North Kellogg Street, Kennewick, WA 99336.

(2)

In determining beneficial ownership of the Company’s common stock as of a given date, the number of shares shown includes shares of common stock which may be acquired upon exercise of options or conversion of convertible securities within 60 days of that date. In determining the percent of common stock owned by a person or entity on February 13, 2017, (a) the numerator is the number of shares of the class beneficially owned by such person or entity, including shares which may be acquired within 60 days on exercise of options and conversion of convertible securities, and (b) the denominator is the sum of (i) the total shares of common stock outstanding on February 13, 2017, and (ii) the total number of shares that the beneficial owner may acquire upon conversion of the convertible securities and upon exercise of the options. Subject to community property laws where applicable, the Company believes that each beneficial owner has sole power to vote and dispose of its shares, except that Mr. Cadwell under the terms of the Cadwell Trust does not have or share voting or investment power over the shares beneficially owned by the Cadwell Trust.

Changes in Control

The Company does not know of any arrangements, including any pledges of the Company’s securities that may result in a change in control of the Company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Indebtedness from Related Parties

Beginning in December, 2008, the Company has obtained financing from Carlton M. Cadwell, one of our directors and a beneficial owner of more than 10% of the Company’s common stock, in transactions which involved the Company’s issuance of convertible notes and common stock. On September 4, 2015, the Company exchanged $1,414,100 of convertible notes plus $810,538 of accrued interest into 148,311 shares of Series A Preferred and another $2,224,466 of convertible notes plus $889,838 of accrued interest into 207,620 shares of Series A Preferred. Additionally, the Company exchanged the remaining $906,572 of convertible notes plus $148,960 accrued interest into a $1,055,532 demand note, 8% interest rate, due on demand at any time after March 31, 2017. Such note was converted into 73,546 shares of Series A Preferred on May 19, 2016. At December 31, 2016 Mr. Cadwell has an aggregate total of $332,195 in promissory notes.

Independent Directors

The Company’s common stock is traded on the OTC Pink Marketplace, which does not impose any independence requirements on the board of directors or the board committees of the companies whose stock is traded on that market. The Company has decided to adopt the independence standards of the NASDAQ listing rules in determining whether the Company’s directors are independent. Generally, under those rules a director does not qualify as an independent director if the director or a member of the director’s immediate family has had in the past three years certain relationships or affiliations with the Company, the Company’s auditors, or other companies that do business with the Company. The Company’s board of directors has determined that Mr. Cadwell and Mr. Clement each qualified as an independent director under those NASDAQ rules, and accordingly, each would have been qualified under those rules to serve on a compensation committee or a nominating committee, if the Company had established such committees of the Company’s Board of Directors. Mr. Katzaroff is not an independent director due to his employment by the Company as an executive officer.

 - 38 -

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees

The aggregate fees incurred by the Company’s principal accountant for the audit of the Company’s annual financial statements, review of financial statements included in the quarterly reports and other fees that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal years ended December 31, 2016 and 2015 were $13,500, all of which was paid to Fruci & Associates II, PLLC, and $156,000 ($71,000 was to HJ & Associates, LLC and $85,000 was to Haynie & Company), respectively.

Tax Fees

The aggregate fees billed for professional services rendered by principal accountant for tax compliance, tax advice and tax planning during the fiscal years ended December 31, 2016 and 2015 were $0, all of which was paid to Fruci & Associates II, PLLC, and $3,000, respectively, all of which was paid to HJ & Associates, LLC. These fees related to the preparation of federal income tax returns.

All Other Fees

There were no other fees billed for products or services provided by the Company’s principal accountant during the fiscal years ended December 31, 2016 and 2015.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Documents filed as part of this Report.

1.	Financial Statements. The Vivos Inc. Balance Sheets as of December 31, 2016 and 2015, the Statements of Operations for the years ended December 31, 2016 and 2015, the Statements of Changes in Stockholders’ Equity (Deficit) for the years ended December 31, 2016 and December 31, 2015, and the Statements of Cash Flows for the years ended December 31, 2016 and 2015, together with the notes thereto and the reports of Haynie & Company and with Fruci & Associates II as required by Item 8 are included in this 2016 Annual Report on Form 10-K as set forth in Item 8 above.
2.	Financial Statement Schedules. All financial statement schedules have been omitted since they are either not required or not applicable, or because the information required is included in the financial statements or the notes thereto.
3.	Exhibits. The following exhibits are either filed as a part hereof or are incorporated by reference. Exhibit numbers correspond to the numbering system in Item 601 of Regulation S-K. Exhibits 10.3, 10.5, 10.7 and 10.10 relate to compensatory plans included or incorporated by reference as exhibits hereto.

Exhibit
Number	Description
3.1	Certificate of Incorporation of Savage Mountain Sports Corporation, dated January 11, 2000 (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497) filed on November 12, 2008).
3.2	By-Laws (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497) filed on November 12, 2008).
3.3	Articles and Certificate of Merger of HHH Entertainment Inc. and Savage Mountain Sports Corporation, dated April 3, 2000 (incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497) filed on November 12, 2008).
3.4	Articles and Certificate of Merger of Earth Sports Products Inc. and Savage Mountain Sports Corporation, dated May 11, 2000 (incorporated by reference to Exhibit 3.4 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497) filed on November 12, 2008).

 - 39 -

3.5	Certificate of Amendment of Certificate of Incorporation changing the name of the Company to Advanced Medical Isotope Corporation, dated May 23, 2006 (incorporated by reference to Exhibit 3.5 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497) filed on November 12, 2008).
3.6	Certificate of Amendment of Certificate of Incorporation increasing authorized capital dated September 26, 2006 (incorporated by reference to Exhibit 3.6 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497) filed on November 12, 2008).
3.7	Certificate of Amendment to the Certificate of Incorporation increasing authorized common stock and authorizing preferred stock, dated May 18, 2011 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 18, 2011).
3.8	Certificate of Amendment to the Certificate of Incorporation authorizing a series of Preferred Stock to be named “Series A Convertible Preferred Stock”, consisting of 2,500,000 shares, which series shall have specific designations, powers, preferences and relative and other special rights, qualifications, limitations and restrictions as outlined in the Certificate of Designations, filed June 30, 2015 (incorporated by reference to Exhibit 3.4).
3.9	Certificate of Amendment to the Certificate of Incorporation increasing the authorized series of “Series A Convertible Preferred Stock” to 5,000,000 shares, filed June 31, 2016 (incorporated by reference to Exhibit 3.5).
10.1	Agreement and Plan of Reorganization, dated as of December 15, 1998, by and among HHH Entertainment, Inc. and Earth Sports Products, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497) filed on November 12, 2008).
10.2	Agreement and Plan of Merger of HHH Entertainment, Inc. and Savage Mountain Sports Corporation, dated as of January 6, 2000 (incorporated by reference to Exhibit 10.2 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497), filed on November 12, 2008).
10.3	Agreement and Plan of Acquisition by and between Neu-Hope Technologies, Inc., UTEK Corporation and Advanced Medical Isotope Corporation, dated September 22, 2006 (incorporated by reference to Exhibit 10.4 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497), filed on November 12, 2008).
10.4	Employment Agreement dated May 16, 2007 with Leonard Bruce Jolliff (incorporated by reference to Exhibit 10.5 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497), filed on November 12, 2008).
10.5	Agreement and Plan of Acquisition by and between Isonics Corporation and Advanced Medical Isotope Corporation dated June 13, 2007 (incorporated by reference to Exhibit 10.6 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497), filed on November 12, 2008).
10.6	Employment Agreement dated January 15, 2008 with Dr. Fu-Min Su (incorporated by reference to Exhibit 10.7 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497), filed on November 12, 2008).
10.7	Master Lease Agreement dated September 20, 2007 between BancLeasing, Inc. and Advanced Medical Isotope Corporation, and related documents (incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K/A filed on December 2, 2011).
10.8	Lease Agreement dated July 17, 2007 between Robert L. and Maribeth F. Myers and Advanced Medical Isotope Corporation (incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K/A filed on December 2, 2011).
10.9	Form of Non-Statutory Stock Option Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 15, 2012).
10.10	Promissory Note dated December 16, 2008 between Advanced Medical Isotope Corporation and Carlton M. Cadwell (incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K filed on March 3, 2012).
10.11	Memorandum of Agreement for Strategic Relationship dated August 19, 2011 between Advanced Medical Isotope Corporation and Spivak Management Inc. (incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K filed on March 3, 2012).
10.12	2015 Omnibus Securities and Incentive Plan (incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K, filed May 25, 2016).
10.13*	Amended and Restated License Agreement, dated March 14, 2017, by and among Battelle Memorial Institute and Advanced Medical Isotope Corporation.
10.14	Form of Convertible Promissory Note (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed November 21, 2016).
10.15	Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed November 21, 2016).
23	Consent of Independent Accountants, dated January 24, 2018
31.1*	Certification of Chief Executive Officer pursuant to Sec. 302 of the Sarbanes-Oxley Act of 2002 (4)
31.2*	Certification of Chief Financial Officer pursuant to Sec. 302 of the Sarbanes-Oxley Act of 2002 (4)
32.1*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 (4)
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase
101.DEF*	XBRL Taxonomy Extension Definition Linkbase
101.LAB*	XBRL Taxonomy Extension Label Linkbase
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase

* Filed herewith.

 - 40 -

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	VIVOS INC.
Date: January 24, 2018	By:	/s/ Michael K. Korenko
	Name:	Michael K. Korenko
	Title:	Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Date: January 24, 2018	By:	/s/ Michael K. Korenko
	Name:	Michael K. Korenko
	Title:	Chief Executive Officer (Principal Executive Officer)
Date: January 24, 2018	By:	/s/ L. Bruce Jolliff
	Name:	L. Bruce Jolliff
	Title:	Chief Financial Officer (Principal Financial and Accounting Officer)
Date: January 24, 2018	By:	/s/ Carlton M. Cadwell
	Name:	Carlton M. Cadwell
	Title:	Secretary and Chairman of the Board

 - 41 -

Vivos Inc.

Index to Financial Statements

	Pages
Report of Independent Registered Public Accounting Firm for 2016	F-2
Report of Independent Registered Public Accounting Firm for 2015	F-3
Financial Statements:
Consolidated Balance Sheets as of December 31, 2016 and 2015	F-4
Consolidated Statements of Operations for the years ended December 31, 2016 and 2015	F-5
Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the years ended December 31, 2016 and 2015	F-6
Consolidated Statements of Cash Flow for the years ended December 31, 2016 and 2015	F-7
Notes to Consolidated Financial Statements	F-8

 F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Advanced Medical Isotope Corp.

We have audited the accompanying consolidated balance sheet of Advanced Medical Isotope Corp. as of December 31, 2016, and the related consolidated statement of operations, stockholders’ equity (deficit), and cash flows for the year ended December 31, 2016. Advanced Medical Isotope Corp.’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Advanced Medical Isotope Corp. as of December 31, 2016, and the results of its operations and its cash flows for the year ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has a history of recurring losses, has limited cash, resources, and, based upon current operating levels, its viability is dependent upon its ability to meet future financing requirements or restructuring to sustain its operations. These issues raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Fruci & Associates II, PLLC

Fruci & Associates II, PLLC

Spokane, WA

March 8, 2017

 F-2

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

Advanced Medical Isotope Corp.

We have audited the accompanying balance sheet of Advanced Medical Isotope Corp. as of December 31, 2015, and the related statements of operations, stockholders’ equity (deficit), and cash flow for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Advanced Medical Isotope Corp. as of December 31, 2015, and the results of its operations and its cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses, used significant cash in support of its operating activities, and, based upon current operating levels, requires additional capital or significant restructuring to sustain its operations for the foreseeable future. These issues raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Haynie & Company

Salt Lake City, Utah

May 25, 2016

 F-3

Advanced Medical Isotope Corporation

Consolidated Balance Sheets

	2016			2015
ASSETS
Current assets:
Cash	$	27,889		$	179,032
Prepaid expenses		11,990			26,211
Inventory		-			8,475
Total current assets		39,879			213,718
Fixed assets, net of accumulated depreciation		1,473			4,420
Other assets:
Patents and intellectual property		-			35,482
Deposits		644			644
Total other assets		644			36,126
Total assets	$	41,996		$	254,264
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses	$	1,137,086		$	1,182,112
Related party accounts payable		109,718			102,647
Accrued interest payable		114,755			229,246
Payroll liabilities payable		499,502			298,900
Convertible notes payable, net		544,508			1,788,384
Derivative liability		324,532			4,235,016
Related party promissory note		332,195			1,280,450
Liability for lack of authorized shares		-			852,091
Total current liabilities		3,062,296			9,968,846
Total liabilities		3,062,296			9,968,846
Commitments and contingencies
MEZZANINE EQUITY
Preferred stock, $.001 par value, 20,000,000 shares of authorized preferred stock, $.001 par value, 5,000,000 Series A shares authorized; 3,773,592 and 1,627,000 - shares issued and outstanding, respectively		14,144,571			4,617,052
Total mezzanine equity		14,144,571			4,617,052
Stockholders’ equity (deficit):
Common stock, $.001 par value; 2,000,000,000 shares authorized; 31,743,797 and 19,969,341 shares issued and outstanding, respectively		31,744			19,969
Paid in capital		40,672,825			33,662,942
Accumulated deficit		(57,869,440	)		(48,014,545	)
Total stockholders’ equity (deficit)		(17,164,871	)		(14,331,634	)
Total liabilities and stockholders’ equity (deficit)	$	41,996		$	254,264

The accompanying notes are an integral part of these consolidated financial statements.

 F-4

Advanced Medical Isotope Corporation

Consolidated Statements of Operations

	Year ended
	December 31,
	2016			2015
Consulting revenues	$	8,108		$	24,108
Operating expenses
Cost of materials		-			474
Sales and marketing expenses		284,138			-
Depreciation and amortization expense		2,947			5,672
Professional fees		2,068,796			741,375
Stock based compensation		675,324			80,635
Payroll expenses		652,877			679,259
Research and development		328,026			149,650
General and administrative expenses		432,470			408,306
Total operating expenses		4,444,578			2,065,371
Operating loss		(4,436,470	)		(2,041,263	)
Non-operating income (expense):
Interest expense		(6,259,467	)		(3,196,153	)
Gain on settlement of debt		3,108,342			3,562,067
Grant income		21,010			21,010
Gain (loss) on derivative liability		(2,244,353	)		7,887,025
Loss on impaired assets		(43,957	)		-
Non-operating income (expense), net		(5,418,425	)		8,273,949
Income (loss) before income taxes		(9,854,895	)		6,232,686
Income tax provision		-			-
Net income (loss)	$	(9,854,895	)	$	6,232,686
Earnings (loss) per common share	$	(0.46	)	$	0.34
Weighted average number of common shares outstanding		21,497,069			18,505,467

The accompanying notes are an integral part of these consolidated financial statements.

 F-5

Advanced Medical Isotope Corporation

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

	Common Stock						Paid in			Accumulated
	Shares			Amount			Capital			Deficit			Total
Balances at December 31, 2014		17,053,825			17,054			34,068,009			(54,247,231	)		(20,162,168	)
Common stock issued for:
Exercise of options and warrants		1,995,000			1,995			(1,995	)		-			-
Loan fees on convertible debt		43,326			43			6,344			-			6,387
Conversion of debt		920,516			920			108,892			-			109,812
Classified to liability due to lack of authorized shares		(43,326	)		(43	)		(598,943	)		-			(598,986	)
Options issued for services		-			-			80,635			-			80,635
Net income		-			-			-			6,232,686			6,232,686
Balances at December 31, 2015		19,969,341		$	19,969		$	33,662,942		$	(48,014,545	)	$	(14,331,634	)
Common stock issued for:
Exercise of options and warrants		30,644			31			(31	)		-			-
Settlement of debt		563,523			564			70,299			-			70,863
Conversion of preferred stock		11,180,289			11,180			4,817,024			-			4,828,204
Classified to liability due to lack of authorized shares		-			-			852,092			-			852,092
Options and warrants issued for services		-			-			1,270,499			-			1,270,499
Net loss		-			-			-			(9,854,895	)		(9,854,895	)
Balances at December 31, 2016		31,743,797			31,744			40,672,825			(57,869,440	)		(17,164,871	)

The accompanying notes are an integral part of these consolidated financial statements.

 F-6

Advanced Medical Isotope Corporation

Consolidated Statements of Cash Flows

	Year ended December 31,
	2016			2015
CASH FLOW FROM OPERATING ACTIVITIES:
Net income (loss)	$	(9,854,895	)	$	6,232,686
Adjustments to reconcile net income (loss) to net cash used by operating activities:
Depreciation of fixed assets		2,947			4,333
Amortization of licenses and intangible assets		-			1,339
Amortization of convertible debt discount		604,042			1,080,771
Amortization of prepaid expenses paid with stock		(2,500	)		-
Amortization of debt issuance costs		-			13,917
(Gain) loss on derivative liability		2,244,353			(7,887,025	)
(Gain) on settlement of debt		(3,108,342	)		(3,562,067	)
Loss on impaired assets		43,957			-
Preferred stock issued for services		1,003,814			334,880
Preferred stock issued for loan fees		162,456			527,325
Stock options and warrants issued for services		1,270,499			80,635
New derivatives recorded as loan fees		4,935,638			-
Penalties on notes payable		-			1,148,997
Changes in operating assets and liabilities:
Prepaid expenses		16,721			(4,501	)
Accounts payable		102,954			151,607
Payroll liabilities		200,602			252,240
Accrued interest		451,041			431,758
Net cash used by operating activities		(1,926,713	)		(1,193,105	)
CASH FLOWS FROM INVESTING ACTIVITIES		-			-
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital lease		-			(39,481	)
Proceeds from convertible note		1,273,534			1,666,415
Proceeds from related party notes		723,308			-
Proceeds from shareholder advances		132,533			-
Proceeds from warrant exercised for preferred stock		250			-
Proceeds from sale of preferred stock		70,000			-
Payments on convertible debt		(419,055	)		-
Payments on shareholder advances		(5,000	)		-
Payments on short term debt		-			(255,000	)
Net cash provided by financing activities		1,775,570			1,371,934
Net increase in cash		(151,143	)		178,829
Cash, beginning of period		179,032			203
CASH, END OF PERIOD	$	27,889		$	179,032
Supplemental disclosures of cash flow information:
Cash paid for interest	$	105,758		$	9,920
Cash paid for income taxes	$	-		$	-

The accompanying notes are an integral part of these consolidated financial statements.

 F-7

Advanced Medical Isotope Corporation

Notes to Consolidated Financial Statements

For the years ended December 31, 2016 and 2015

NOTE 1: ORGANIZATION & BASIS OF PRESENTATION

Business Overview

The Company was incorporated under the laws of Delaware on December 23, 1994 as Savage Mountain Sports Corporation (“SMSC”). On September 6, 2006, the Company changed its name to Advanced Medical Isotope Corporation, and on December 28, 2017, the Company began operating as Vivos Inc. The Company has authorized capital of 2,000,000,000 shares of common stock, $0.001 par value per share, and 20,000,000 shares of preferred stock, $0.001 par value per share.

Our principal place of business is 719 Jadwin Avenue, Richland, WA 99352. Our telephone number is (509) 736-4000. Our corporate website address is http://www.radiogel.com. Our common stock is currently quoted on the OTC Pink Marketplace under the symbol “RDGL.”

The Company is a radiation oncology medical device company engaged in the development of its yttrium-90 based brachytherapy device RadioGel™ for the treatment of non-resectable tumors. A prominent team of radiochemists, scientists and engineers, collaborating with strategic partners, including national laboratories, universities and private corporations, lead the Company’s development efforts. The Company’s overall vision is to globally empower physicians, medical researchers and patients by providing them with new isotope technologies that offer safe and effective treatments for cancer.

The Company’s current focus is on the development of its RadioGel™ device. RadioGel™ is an injectable particle-gel, for brachytherapy radiation treatment of cancerous tumors in people and animals. RadioGel™ is comprised of a hydrogel, or a substance that is liquid at room temperature and then gels when reaching body temperature after injection into a tumor. In the gel are small, one micron, yttrium-90 phosphate particles (“Y-90”). Once injected, these inert particles are locked in place inside the tumor by the gel, delivering a very high local radiation dose. The radiation is beta, consisting of high-speed electrons. These electrons only travel a short distance so the device can deliver high radiation to the tumor with minimal dose to the surrounding tissue. Optimally, patients can go home immediately following treatment without the risk of radiation exposure to family members. Since Y-90 has a half-life of 2.7 days, the radioactively drops to 5% of its original value after ten days.

The Company’s lead brachytherapy products, including RadioGel™, incorporate patented technology developed for Battelle Memorial Institute (“Battelle”) at Pacific Northwest National Laboratory, a leading research institute for government and commercial customers. Battelle has granted the Company an exclusive license to patents covering the manufacturing, processing and applications of RadioGel™ (the “Battelle License”). Other intellectual property protection includes proprietary production processes and trademark protection in 17 countries. The Company plans to continue efforts to develop new refinements on the production process, and the product and application hardware, as a basis for future patents.

The Company is currently focusing on obtaining approval from the FDA to market and sell RadioGel™ as a Class II medical device. The Company first requested FDA approval of RadioGel™ in June 2013, at which time the FDA classified RadioGel™ as a medical device. The Company then followed with a 510(k) submission which the FDA responded, in turn, with a request for a physician letter of substantial equivalence and a reformatted 510(k) summary, which the Company provided in January 2014. In February 2014, the FDA ruled the device as not substantially equivalent due to a lack of a predicate device and it was therefore classified as a Class III device. Class III devices are generally the highest risk devices and are therefore subject to the highest level of regulatory review, control and oversight. Class III devices must typically be approved by the FDA before they are marketed. Class II devices represent lower risk devices than Class III and require fewer regulatory controls to provide reasonable assurance of the device’s safety and effectiveness. In contrast, Class I devices are deemed to be lower risk than Class II or III, and are therefore subject to the least regulatory controls.

 F-8

The Company is currently developing test plans to address issues raised by the FDA in connection with the Company’s previous submissions regarding RadioGel™, including developing specific test plans and specific indication of use. The Company intends to request that the FDA grant approval to re-apply for de novo classification of RadioGel™, which would reclassify the device from a Class III device to a Class II device, further simplifying the path to FDA approval. In the event the FDA denies the Company’s application and subsequently determines during the de novo review that RadioGel™ cannot be classified as a Class I or Class I1 device, the Company will then need to submit a pre-market approval application to obtain the necessary regulatory approval as a Class III device. See also Business – Regulatory History for a discussion regarding the Company’s application for FDA approval of RadioGel™.

IsoPet Solutions

The Company’s, IsoPet Solutions division was established in May 2016 to focus on the veterinary oncology market, namely engagement of university veterinarian hospital to develop the detailed therapy procedures to treat animal tumors and ultimately use of the technology in private clinics. The Company has engaged four different university veterinarian hospitals to begin using RadioGel™ for treatment of four different cancer types in dogs and cats. Washington State University Veterinary Hospital has tested one cat to demonstrate the procedures and the absence of any significant toxicity effect. The other three centers are expected to begin therapy during the second quarter of 2017 after their internal administrative review process is completed.

These animal therapies will focus on creating labels that describe the procedures in detail as a guide to future veterinarians. The labels will be voluntarily submitted to the FDA for review. They will then be used as data for future FDA applications in the medical sector and as key intellectual property for licensing to private veterinary clinics.

The Company anticipates that future profit will be derived from direct sales of RadioGel™ and related services, and from licensing to private medical and veterinary clinics in the U.S. and internationally.

Regulatory History

RadioGel™ has a long regulatory history with the Food and Drug Administration (“FDA”). Initially, the Company submitted a presubmission (Q130140) to obtain FDA feedback about the proposed product. The FDA requested that the Company file a request for designation with the Office of Combination Products (RFD130051), which led to the determination that RadioGel™ is a device to be reviewed and regulated by the Center for Devices and Radiological Health (CDRH). The Company then submitted a 510(k) notice for RadioGel™ (K133368), which was found Not Substantially Equivalent due to the lack of a suitable predicate, and RadioGel™ was assigned to the Class III product code NAW (microspheres). Class III products or devices are generally the highest risk devices and are therefore subject to the highest level of regulatory review, control and oversight. Class III products or devices must typically be approved by FDA before they are marketed. Class II devices represent lower risk products or devices than Class III and require fewer regulatory controls to provide reasonable assurance of the product’s or device’s safety and effectiveness. In contrast, Class I products and devices are deemed to be lower risk than Class I or II, and are therefore subject to the least regulatory controls.

A presubmission meeting (Q140496) was held with the FDA on June 17, 2014, during which the FDA maintained that RadioGel™ should be considered a Class III device and therefore subject to pre-market approval. On December 29, 2014, the Company submitted a de novo petition for RadioGel™ (DEN140043). The de novo petition was denied by the FDA on June 1, 2015, with the FDA providing numerous comments and questions. On September 29, 2015, the Company submitted a follow-up pre-submission informational meeting request with the FDA (Q151569). At such meeting on November 9, 2015, the FDA indicated acceptance of the Company’s applied dosimetry methods and clarified the FDA’s outstanding questions regarding RadioGel™. The Company intends to prepare a new pre-submission to obtain FDA feedback on the proposed testing to address the concerns raised by the FDA staff, as well as the suitability of RadioGel™ for de novo.

 F-9

In the event the FDA denies the Company’s application for de novo review, and therefore determines that RadioGel™ cannot be classified as a Class I or Class I1 device, the Company will then need to submit a pre-market approval application to obtain the necessary regulatory approval as a Class III device.

In previous FDA submittals, the Company proposed applying RadioGel™ for a very broad range of cancer therapies, referred to as Indication for Use. The FDA has requested that the Company reduce its Indications for Use. To comply with that request, the Company has expanded its Medical Advisory Board (“MAB”) and engaged doctors from respected hospitals who have evaluated the candidate cancer therapies based on three criteria: (1) potential for FDA approval and successful therapy; (2) notable advantage over current therapies; and (3) probability of wide spread acceptance by the medical community. 

The MAB selected eighteen applications for RadioGel™, each of which meet the criteria described above. This large number confirms the wide applicability of the device and defines the path for future business growth. The Company intends to apply to the FDA for a single Indication for Use, followed by subsequent applications for additional Indications for Use. We anticipate that this initial application will facilitate each subsequent application for additional Indications for Use, and the testing for many of the subsequent applications could be conducted in parallel, depending on available resources.

The MAB selected the treatment of basal cell and squamous cell skin cancers for the first Indication for Use to be submitted to the FDA. According to the American Cancer Society, one out of every three new cancers diagnosed in the U.S. is a cancerous skin lesion of this type, representing 5.5 million tumors diagnosed annually. The MAB believes RadioGel™ has the potential to be the preferred treatment in a reasonable number of cases in a very large market.

Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has suffered recurring losses and used significant cash in support of its operating activities and the Company’s cash position is not sufficient to support the Company’s operations. Research and development of the Company’s brachytherapy product line has been funded with proceeds from the sale of equity and debt securities as well as a series of grants. The Company requires funding of approximately $1.5 million annually to maintain current operating activities. Over the next 12 to 24 months, the Company believes it will cost approximately $5.0 million to $10.0 million to fund: (1) the FDA approval process and initial deployment of the brachytherapy products, and (2) initiate regulatory approval processes outside of the United States. The continued deployment of the brachytherapy products and a worldwide regulatory approval effort will require additional resources and personnel. The principal variables in the timing and amount of spending for the brachytherapy products in the next 12 to 24 months will be the FDA’s classification of the Company’s brachytherapy products as Class II or Class III devices (or otherwise) and any requirements for additional studies which may possibly include clinical studies. Thereafter, the principal variables in the amount of the Company’s spending and its financing requirements would be the timing of any approvals and the nature of the Company’s arrangements with third parties for manufacturing, sales, distribution and licensing of those products and the products’ success in the U.S. and elsewhere. The Company intends to fund its activities through strategic transactions such as licensing and partnership agreements or additional capital raises.

Following receipt of required regulatory approvals and financing, in the U.S., the Company intends to outsource material aspects of manufacturing, distribution, sales and marketing. Outside of the U.S., the Company intends to pursue licensing arrangements and/or partnerships to facilitate its global commercialization strategy.

In the longer-term, subject to the Company receiving adequate funding, regulatory approval for RadioGel™ and other brachytherapy products, and thereafter being able to successfully commercialize its brachytherapy products, the Company intends to consider resuming research efforts with respect to other products and technologies intended to help improve the diagnosis and treatment of cancer and other illnesses

Based on the Company’s financial history since inception, its auditor has expressed substantial doubt as to the Company’s ability to continue as a going concern. The Company has limited revenue, nominal cash, and has accumulated deficits since inception. If the Company cannot obtain sufficient additional capital, the Company will be required to delay the implementation of its business strategy and may not be able to continue operations.

As of December 31, 2016 the Company has $27,889 cash on hand. There are currently commitments to vendors for products and services purchased, plus, the employment agreements of the CFO and other employees of the Company and the Company’s current lease commitments that will necessitate liquidation of the Company if it is unable to raise additional capital. The current level of cash is not enough to cover the fixed and variable obligations of the Company.

 F-10

Assuming the Company is successful in the Company’s sales/development effort, it believes that it will be able to raise additional funds through strategic agreements or the sale of the Company’s stock to either current or new stockholders. There is no guarantee that the Company will be able to raise additional funds or to do so at an advantageous price.

The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability. The Company plans to seek additional funding to maintain its operations through debt and equity financing and to improve operating performance through a focus on strategic products and increased efficiencies in business processes and improvements to the cost structure. There is no assurance that the Company will be successful in its efforts to raise additional working capital or achieve profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Advanced Medical Isotope Corporation and its wholly-owned subsidiary IsoPet Solutions Corporation (“Iso-Pet”). All significant inter-company balances and transactions have been eliminated in consolidation.

Financial Statement Reclassification

Certain account balances from prior periods have been reclassified in these audited consolidated financial statements so as to conform to current period classifications.

Cash Equivalents

For the purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.

Inventory

Inventory is reported at the lower of cost or market, determined using the first-in, first-out basis, or net realizable value. All inventories consist of finished goods. The Company had no raw materials or work in process. The Company had been carrying inventory consisting of two bottles of O-18 water for a value of $8,475. The Company determined this water was no longer usable and wrote off the $8,475 value as of December 31, 2016.

Fair Value of Financial Instruments

Fair Value of Financial Instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of December 31, 2016 and December 31, 2015, the balances reported for cash, prepaid expenses, accounts receivable, accounts payable, and accrued expenses, approximate the fair value because of their short maturities.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

 F-11

Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The Company measures certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis were calculated using the Black-Scholes pricing model and are as follows at December 31, 2016:

	Total		Level 1		Level 2		Level 3
Assets:
Total Assets Measured at Fair Value	$	-	$	-	$	-	$	-
Liabilities:
Derivative Liability		324,532		-		-		324,532
Total Liabilities Measured at Fair Value	$	324,532	$	-	$	-	$	324,532

Assets and liabilities measured at fair value on a recurring basis are as follows at December 31, 2015:

	Total		Level 1		Level 2		Level 3
Assets
Total Assets Measured at Fair Value	$	-	$	-	$	-	$	-
Liabilities
Liability for lack of authorized shares		852,091		-		-		852,091
Derivative Liability		4,235,016		-		-		4,235,016
Total Liabilities Measured at Fair Value	$	5,087,107	$	-	$	-	$	5,087,107

Fixed Assets

Fixed assets are carried at the lower of cost or net realizable value. Production equipment with a cost of $2,500 or greater and other fixed assets with a cost of $1,500 or greater are capitalized. Major betterments that extend the useful lives of assets are also capitalized. Normal maintenance and repairs are charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in operations.

Depreciation is computed using the straight-line method over the following estimated useful lives:

Production equipment:	3 to 7 years
Office equipment:	2 to 5 years
Furniture and fixtures:	2 to 5 years

Leasehold improvements and capital lease assets are amortized over the shorter of the life of the lease or the estimated life of the asset.

 F-12

Management of the Company reviews the net carrying value of all of its equipment on an asset by asset basis whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. These reviews consider the net realizable value of each asset, as measured in accordance with the preceding paragraph, to determine whether impairment in value has occurred, and the need for any asset impairment write-down.

License Fees

License fees are stated at cost, less accumulated amortization. Amortization of license fees is computed using the straight-line method over the estimated economic useful life of the assets.

The Company made a $10,000 investment in 2010 for an exclusive license with Battelle Memorial Institute regarding its technology for the production of a Brachytherapy seed. In August 2010 the Company entered into a License Agreement for the Patent Rights in the area of a Brachytherapy seed with a Fast-dissolving Matrix for Optimized Delivery of Radionuclides. This Agreement calls for a $10,000 nonrefundable fee upon execution, a royalty agreement on sales and on funds received from any sublicenses. The $10,000 nonrefundable fee paid upon execution was capitalized as License Fees and is amortized on the straight-line basis over a three-year life. Additionally the Agreement calls for a minimum annual fee.

The Company agreed for a mutual termination of this license effective December 31, 2016 and that the $25,000 minimum annual fee for 2016 due January 2017 would not be owed. The Company was carrying $35,482 in patent costs relating to this license, which was written off as impaired assets during the twelve months ended December 31, 2016. The Company still has a $7,026 balance owed for patent expense accrued during 2016.

Calendar Year	Minimum Royalties per Calendar Year
2010	$	-
2011	$	-
2012	$	2,500
2013	$	5,000	(1)
2014	$	7,500	(2)
2015	$	10,000	(3)
2016 and each calendar year thereafter	$	25,000	(4)

(1) Paid February, 2014

(2) Paid February, 2015

(3) Paid February, 2016

(4) No longer owed due to termination of license agreement effective December 31, 2016

The Company made a $5,000 investment in February 2011 for a one-year option agreement to negotiate an exclusive license agreement with Battelle Memorial Institute regarding its patents for the production of RadioGel™. This option agreement calls for a $5,000 upfront fee for the option, which expired February 2012 and was fully expensed in the twelve months ended December 31, 2011. Effective March 2012, the Company entered into an exclusive license agreement with Battelle Memorial Institute regarding the use of its patented RadioGel™ technology. This license agreement calls for a $17,500 nonrefundable license fee and a royalty based on a percent of gross sales for licensed products sold; the license agreement also contains a minimum royalty amount to be paid each year starting with 2013.

Calendar Year	Minimum Royalties per Calendar Year
2012	$	-
2013	$	5,000	(1)
2014	$	7,500	(2)
2015	$	10,000	(3)
2016	$	10,000	(4)
2017 and each calendar year thereafter	$	25,000

(1) Paid February, 2014

(2) Paid February, 2015

(3) Paid February, 2016

(4) $5,399 was paid January 2017 and the remaining $4,601 was paid February 2017.

 F-13

The Company periodically reviews the carrying values of capitalized license fees and any impairments are recognized when the expected future operating cash flows to be derived from such assets are less than their carrying value.

Amortization is computed using the straight-line method over the estimated useful live of three years. Amortization of license fees was $0, and $1,339 for the years ended December 31, 2016, and 2015, respectively.

Patents and Intellectual Property

The Company had a total $35,482 of capitalized patents and intellectual property costs at December 31, 2015 for the patent rights in the area of a Brachytherapy seed with a Fast-dissolving Matrix for Optimized Delivery of Radionuclides. Effective December 31, 2016 the Company agreed to terminate this non-utilized patent license for which the $35,482 of capitalized patent and intellectual costs applied and therefore the Company wrote off $35,482 of capitalized costs in the twelve months ending December 31, 2016.

Revenue Recognition

The Company recognized revenue related to product sales when (i) persuasive evidence of the arrangement exists, (ii) shipment has occurred, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured.

Revenue for the fiscal year ended December 31, 2016 and December 31, 2015 consisted of consulting revenue. The Company recognizes revenue once an order has been received and shipped to the customer or services have been performed. Prepayments, if any, received from customers prior to the time products are shipped are recorded as deferred revenue. In these cases, when the related products are shipped, the amount recorded as deferred revenue is recognized as revenue. The Company does not accrue for sales returns and other allowances as it has not experienced any returns or other allowances.

Income from Grants and Deferred Income

Government grants are recognized when all conditions of such grants are fulfilled or there is reasonable assurance that they will be fulfilled. The Company has chosen to recognize income from grants as it incurs costs associated with those grants, and until such time as it recognizes the grant as income those funds received will be classified as deferred income on the balance sheet.

On September 1, 2015, the Company received notification it had been awarded from Washington State University, $42,019 grant funds from the sub-award project entitled “Optimized Injectable Radiogels for High-dose Therapy of Non-Resectable Solid Tumors”. The Company received $21,010 and $21,009 of the grand award in the twelve months ended December 31, 2016 and 2015, respectively.

 F-14

Earnings (Loss) Per Share

The Company accounts for its earnings (loss) per common share by replacing primary and fully diluted earnings per share with basic and diluted earnings per share. Basic earnings (loss) per share is computed by dividing income (loss) available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period, and does not include the impact of any potentially dilutive common stock equivalents since the impact would be anti-dilutive. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares had been issued. However, since the Company does not have sufficient authorized shares of common stock, we did not include these in our calculation.

Securities, all of which represent common stock equivalents, that could be dilutive in the future as of December 31, 2016 and 2015, are as follows:

	December 31, 2016		December 31, 2015
Convertible debt		6,441,644		7,848,421
Preferred stock		37,735,920		16,270,000
Common stock options		2,402,500		51,350
Common stock warrants		3,579,505		6,791,003
Total potential dilutive securities		50,159,569		30,960,774

Research and Development Costs

Research and developments costs, including salaries, research materials, administrative expenses and contractor fees, are charged to operations as incurred. The cost of equipment used in research and development activities which has alternative uses is capitalized as part of fixed assets and not treated as an expense in the period acquired. Depreciation of capitalized equipment used to perform research and development is classified as research and development expense in the year computed.

The Company incurred $328,026 and $149,650 research and development costs for the years ended December 31, 2016, and 2015, respectively, all of which were recorded in the Company’s operating expenses noted on the income statements for the years then ended.

Advertising and Marketing Costs

Advertising and marketing costs are expensed as incurred except for the cost of tradeshows which are deferred until the tradeshow occurs. Tradeshow expenses incurred and not expensed as of the years ended December 31, 2016, and 2015 were $0 and $14,800, respectively. During the twelve months ended December 31, 2016 and 2015, the Company incurred $284,138 and $0, respectively, in advertising and marketing costs.

Shipping and Handling Costs

Shipping and handling costs are expensed as incurred and included in cost of materials.

Legal Contingencies

In the ordinary course of business, the Company is involved in legal proceedings involving contractual and employment relationships, product liability claims, patent rights, and a variety of other matters. The Company records contingent liabilities resulting from asserted and unasserted claims against it, when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. The Company discloses contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. Estimated probable losses require analysis of multiple factors, in some cases including judgments about the potential actions of third-party claimants and courts. Therefore, actual losses in any future period are inherently uncertain. Currently, the Company does not believe any probable legal proceedings or claims will have a material impact on its financial position or results of operations. However, if actual or estimated probable future losses exceed the Company’s recorded liability for such claims, it would record additional charges as other expense during the period in which the actual loss or change in estimate occurred.

 F-15

There had been an ongoing dispute with the landlord, Rob and Maribeth Myers, regarding the production center rent. During 2016, the Company reached a Settlement Agreement with regards to this dispute resulting in a payment of $438,830 for rent, interest, and costs.

There is an ongoing dispute with BancLeasing and Washington Trust Bank regarding application of lease payments to the principal loan amount for the linear accelerator, and the Company believed it overpaid by approximately $300,000. In 2016 the Company was awarded in the Superior Court of the State of Washington a total sum of $527,876 against BancLeasing. The Company is pursuing its options for collection of the awarded amount, however there can be no assurance as to any eventual collection.

Income Taxes

To address accounting for uncertainty in tax positions, the Company clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. The Company also provides guidance on de-recognition, measurement, classification, interest, and penalties, accounting in interim periods, disclosure and transition.

The Company files income tax returns in the U.S. federal jurisdiction, and Delaware. The Company did not have any tax expense for the years ended December 31, 2016 and 2015. The Company did not have any deferred tax liability or asset on its balance sheet on December 31, 2016 and 2015.

Interest costs and penalties related to income taxes, if any, will be classified as interest expense and general and administrative costs, respectively, in the Company’s financial statements. For the years ended December 31, 2016 and 2015, the Company did not recognize any interest or penalty expense related to income taxes. The Company believes that it is not reasonably possible for the amounts of unrecognized tax benefits to significantly increase or decrease within the next 12 months.

Stock-Based Compensation

The Company recognizes in the financial statements compensation related to all stock-based awards, including stock options, based on their estimated grant-date fair value. The Company has estimated expected forfeitures and is recognizing compensation expense only for those awards expected to vest. All compensation is recognized by the time the award vests.

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from non-employees. Costs are measured at the fair market value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of the date on which there first exists a firm commitment for performance by the provider of goods or services or on the date performance is complete. The Company recognizes the fair value of the equity instruments issued that result in an asset or expense being recorded by the Company, in the same period(s) and in the same manner, as if the Company has paid cash for the goods or services.

Recent Accounting Pronouncements

There are no recently issued accounting pronouncements that the Company believes are applicable or would have a material impact on the financial statements of the Company.

Reclassifications

Certain prior-year amounts have been reclassified to conform with current year’s presentation.

 F-16

NOTE 3: FIXED ASSETS

Fixed assets consist of the following at December 31, 2016 and 2015:

	December 31, 2016			December 31, 2015
Production equipment	$	15,182		$	1,938,532
Building		-			446,772
Leasehold improvements		-			3,235
Office equipment		14,594			32,769
		29,776			2,421,308
Less accumulated depreciation		(28,303	)		(2,416,888	)
	$	1,473		$	4,420

Depreciation expense for the above fixed assets for the years ended December 31, 2016 and 2015, respectively, was $2,947 and $4,332.

During the year ended December 31, 2016, the Company abandoned production equipment, building, leasehold improvements, and office equipment with an original cost totaling $1,016,532 that had been located in the production center. Additionally the Company removed the linear accelerator form the production center and has placed the equipment into storage. The $1,375,000 original cost of the linear accelerator was also written off during the year ended December 31, 2016. All of the equipment written off during the year ended December 31, 2016 had been fully depreciated.

NOTE 4: INTANGIBLE ASSETS

Intangible assets consist of the following at December 31, 2016 and December 31, 2015:

	December 31, 2016			December 31, 2015
License Fee	$	112,500		$	112,500
Less accumulated amortization		(112,500	)		(112,500	)
		-			-
Patents and intellectual property		-			35,482
	$	-		$	35,482

Amortization expense for the above intangible assets for the years ended December 31, 2016 and 2015, respectively, was $0 and $1,339.

NOTE 5: DEBT ISSUANCE COSTS

During the years ending December 31, 2016 and 2015, the Company paid $0 and $5,000, respectively, in cash for debt arrangements.

The Company amortizes debt issuance costs on a straight-line basis over the life of the debt arrangements and recognized $0, and $18,917, during the years ending December 31, 2016, and 2015, respectively.

During the twelve months ending December 31, 2016 and 2015 the Company had the following activity in their debt issuance cost account:

 F-17

Debt issuance costs at December 31, 2014	$	13,917
Cash paid as fees for debt arrangements		5,000
Amortization of debt issuance costs		(18,917	)
Debt issuance costs at December 31, 2015		-
Cash paid as fees for debt arrangements		-
Amortization of debt issuance costs		-
Debt issuance costs at December 31, 2016	$	-

NOTE 6: RELATED PARTY TRANSACTIONS

Related Party Promissory Notes

As of December 31, 2016 and 2015, the Company had the following related party promissory notes outstanding:

	December 31, 2016				December 31, 2015
	Principal (net)		Accrued Interest		Principal (net)		Accrued Interest
September 2015 $1,055,535 Note, 8% interest, due on demand after March 2017	$	-	$	-	$	1,055,535		27,299
September 2015 $142,415 Note, 10% interest, due May 2016		-		-		142,415		4,669
October 2015 $82,500 Note, 10% interest due October 2016		82,500		10,239		82,500		1,966
February 2016 $50,000 Note, 10% interest, due February 2017		50,000		4,192		-		-
May 2016 $109,695 Note, 10% interest, due July 2017		109,695		7,093		-		-
May 2016 $90,000 Note, 10% interest, due May 2017		90,000		5,425		-		-
Total Convertible Notes Payable, Net	$	332,195	$	26,949	$	1,280,450	$	33,934

During the year ending December 31, 2016, the Company received proceeds from new related party promissory notes of $249,695 and recorded conversions of $1,197,950 for related party note principal.

During the year ending December 31, 2015 the Company received proceeds from new related party promissory notes of $224,915. Additionally, in September of 2015 multiple convertible notes were rolled in together for a total new non-convertible promissory note of $1,055,532.

Related Party Convertible Notes Payable

During the year ending December 31, 2016, the Company received proceeds from new related party convertible notes of $473,613 and, at inception, issued 37,906 shares of Series A Convertible Preferred Stock (“Series A Preferred”) as loan fees valued at $29,156. Each of the Company’s related party convertible notes have a conversion rate that is variable, therefore the Company has accounted for such conversion features as derivative instruments (see Note 9). As a result of recording the preferred stock and the derivative liabilities at note inception, the Company increased the debt discount recorded on their convertible notes by $473,613 and recorded $1,912,587 in additional interest expense. During the year ending December 31, 2016, the Company recorded amortization of $25,000 on their related party convertible note debt discounts, recorded conversions of $473,613 for related party note principal, and recorded $448,613 of debt discount write-offs for early debt conversion. As a result of all related party convertible notes being converted during the year ending December 31, 2016, the related party convertible notes payable balance was $0 as of December 31, 2016.

 F-18

During the year ending December 31, 2015, the Company received proceeds from new related party convertible notes of $156,500. Of that $156,500, $113,500 was convertible at a fixed rate and $43,000 was convertible at a variable rate.

The new related party convertible notes of $113,500 were convertible into the Company’s common stock at $0.001 per share. The convertible notes were issued with 43,326 shares of common stock (see Note 11), therefore the Company recorded debt discounts at inception of $4,896 to allocate the convertible note proceeds to the common stock. In September of 2015, the $113,500 of new convertible notes were rolled in together with multiple other notes for a total new promissory note of $1,055,532 which was not convertible. The $4,896 of debt discounts were fully amortized prior to the convertible notes being rolled into the promissory note.

The new related party convertible notes of $43,000 were issued with 3,440 shares of Series A preferred stock as loan fees valued at $17,401 (see Note 11). Each of these related party convertible notes have a conversion rate that is variable, therefore the Company has accounted for such conversion features as derivative instruments (see Note 9). As a result of recording the preferred stock and the derivative liabilities at note inception, the Company increased the debt discount recorded on these convertible notes by $43,000 and recorded $17,401 in additional interest expense. During the year ending December 31, 2016 the Company recorded amortization of $43,000 on these related party convertible note debt discounts and recorded conversions of $43,000 for related party note principal.

During the year ending December 31, 2015 the Company recorded additional conversions of $3,638,566 of note principal and amortization of $6,328 of debt discounts for related party convertible notes that had been outstanding as of December 31, 2014.

As a result of all related party convertible notes being rolled into a non-convertible promissory note or converted during the year ending December 31, 2015 the related party convertible notes payable balance was $0 as of December 31, 2015.

Preferred Shares Issued to Officers

During 2016, the Company issued 10,000 shares of its Series A Preferred to its CFO, representing $54,152, for services (see Note 11).

During 2015, the Company issued the CEO and CFO a combined total of 175,000 shares of Series A Preferred in exchange for a combined total of $262,500 of accrued and unpaid wages (see Note 11).

Rent Expenses

On July 17, 2007, the Company entered into a five-year lease for its production center from a less than 5% shareholder. Subsequent to July 31, 2012, the Company was renting this space on a month-to-month basis at $11,904 per month. Effective January 1, 2015, the Company’s lease was terminated. There has been an ongoing dispute with the landlord, Rob and Maribeth Myers, regarding the production center rent. During 2016, the Company reached a Settlement Agreement with regards to this dispute resulting in a payment of $438,830 for rent, interest, and costs.

The Company rents office space from a significant shareholder and director of the Company on a month-to-month basis with a monthly payment of $1,500.

Rental expense for the years ended December 31, 2016 and 2015 consisted of the following:

	Year ended December 31, 2016		Year ended December 31, 2015
Office and warehouse space	$	40,000	$	155,306
Corporate office		18,000		18,000
Total Rental Expense	$	58,000	$	173,306

 F-19

NOTE 7: CAPITAL LEASE OBLIGATIONS

During September 2007, the Company obtained two master lease agreements for $1,875,000 and $631,000, with interest on both leases accruing at 8.6% annually, secured by equipment and personal guarantee of two of the major stockholders. These long-term agreements shall be deemed capital lease obligations for purposes of financial statement reporting. The purpose of the lease is to acquire a Pulsar 10.5 PET Isotope Production System plus ancillary equipment.

This capital lease and its resulting obligation is recorded at an amount equal to the present value at the beginning of the lease term of minimum lease payments during the lease term, excluding any portion of the payments representing taxes to be paid by the Company. This amount does not exceed the fair value of the leased property at the lease inception, so the recorded amount is the fair value.

The lease requires the Company to maintain a minimum debt service coverage ratio of 1:1 measured at fiscal year-end. Non-compliance with this provision shall constitute a default and guarantors must contribute capital sufficient to fund any deficit in the debt service coverage ratio.

The Company fully paid this capital lease obligations during the twelve months ending December 31, 2015; however there is an ongoing dispute with the lessor as the Company believes it has overpaid its lease obligations.

 F-20

NOTE 8: CONVERTIBLE NOTES PAYABLE

As of December 31, 2016 and 2015, the Company had the following convertible notes outstanding:

	December 31, 2016				December 31, 2015
	Principal (net)		Accrued Interest		Principal (net)		Accrued Interest
July and August 2012 $1,060,000 Notes convertible into common stock at $4.60 per share, 12% interest, due December 2013 and January 2014	$	95,000	$	50,365	$	165,000		69,712
January 2014 $50,000 Note convertible into common stock at a variable conversion price, 8% interest, due January 2015		-		-		50,000		7,682
January 2014 $55,500 Note convertible into common stock at a variable conversion price, 10% interest, due October 2014		-		-		10,990		5,457
February 2014 $46,080 Note convertible into common stock at a variable conversion price, 10% interest, due February 2015		-		-		-		2,358
February 2014 $27,800 Note convertible into common stock at a variable conversion price, 10% one-time interest, due February 2015		-		-		20,000		-
March 2014 $50,000 Note convertible into common stock at a variable conversion price, 10% interest, due March 2015		-		-		36,961		6,572
March 2014 $165,000 Note convertible into common stock at a variable conversion price, 10% interest, due April 2015		-		-		61,301		24,109
April 2014 $32,000 Note convertible into common stock at a variable conversion price, 10% interest, due April 2015		-		-		22,042		3,034
April 2014 $46,080 Note convertible into common stock at a variable conversion price, 10% interest due April 2015		-		-		5,419		4,608
May 2014 $55,000 Note convertible into common stock at a variable conversion price, 12% interest, due May 2015		-		-		25,000		1,836
June 2014 $28,800 Note convertible into common stock at a variable conversion price, 10% interest due June 2015		-		-		28,800		2,880
June 2014 $40,000 Note convertible into common stock at a variable conversion price, 10% interest, due June 2015		-		-		40,000		6,049
June 2014 $40,000 Note convertible into common stock at a variable conversion price, 10% interest, due June 2015		-		-		38,689		5,851
June 2014 $56,092 Note convertible into common stock at a variable conversion price, 16% interest, due July 2015		-		-		56,092		13,462
July 2014 $37,500 Note convertible into common stock at a variable conversion price, 12% interest, due July 2015		-		-		37,015		6,377
August 2014 $36,750 Note convertible into common stock at a variable conversion price, 10% interest, due April 2015		-		-		36,750		5,538
August 2014 $33,500 Note convertible into common stock at a variable conversion price, 4% interest, due February 2015		-		-		33,500		-
September 2014 $37,500 Note convertible into common stock at a variable conversion price, 12% interest, due September 2015		-		-		36,263		5,576
May through October 2015 $605,000 Notes convertible into preferred stock at $1 per share, 8-10% interest, due September 30, 2015		-		17,341		-		18,264
October through December 2015 $613,000 Notes convertible into preferred stock at $1 per share, 8% interest, due June 30, 2016, net of debt discount of $0 and $560,913, respectively		-		5,953		52,087		2,519
January through March 2016 $345,000 Notes convertible into preferred stock at $1 per share, 8% interest, due June 30, 2016		-		696		-		-
November 2016 $979,162 Notes convertible into common stock at a variable conversion price, 10% interest, due May 2017, net of debt discounts of $540,720 and $0, respectively		438,442		12,397		-		-
Penalties on notes in default		11,066		-		1,032,475		-
Total Convertible Notes Payable, Net	$	544,508	$	86,752	$	1,788,384	$	191,884

 F-21

During the year ending December 31, 2016, the Company received proceeds from new convertible notes of $1,273,534, obtained advances from shareholders of $127,533 that were reclassified into convertible notes payable, and reclassified $455,150 of accrued interest into convertible notes payable. The Company recorded original issue discounts and loan fees on new convertible notes of $193,831 and $6,000, respectively, which also increased the debt discounts recorded on the convertible notes. The Company recorded $419,055 of payments on their convertible notes, conversions of $1,444,950 of convertible note principal, a total gain on settlement of $1,456,113 representing the write-off of convertible note principal, and $814,625 of debt discount write-offs for early debt conversion or extinguishment. Each of the Company’s convertible notes have a conversion rate that is variable. The Company therefore has accounted for such conversion features as derivative instruments (see Note 9). As a result of recording derivative liabilities at note inception, the Company increased the debt discount recorded on their convertible notes by $809,835 during the year ending December 31, 2016. The Company also recorded amortization of $579,042 on their convertible note debt discounts. Lastly, the Company issued 347,400 shares of Series A Preferred as loan fees with their new convertible notes. The Company therefore increased their convertible note debt discount by $363,807, which represented the portion of the convertible note proceeds that were allocated to preferred stock.

During the year ending December 31, 2015, the Company received proceeds from new convertible notes of $1,285,000, recorded default penalties on new convertible notes of $116,521, and recorded original issue discounts of $5,000, which also increased the debt discounts recorded on the convertible notes. The Company recorded $255,000 of payments on their convertible notes conversions of $584,700 of convertible note principal, a total loss on settlement of $967,038 representing the write-off of convertible note principal, and $3,035 of debt discount write-offs for early debt conversion or extinguishment. Each of the Company’s convertible notes have a conversion rate that is variable. The Company therefore has accounted for such conversion features as derivative instruments (see Note 9). As a result of recording derivative liabilities at note inception, the Company has increased the debt discount recorded on their convertible notes by $1,285,000 during the year ending December 31, 2015. The Company also recorded amortization of $1,031,443 on their convertible note debt discounts.

NOTE 9: DERIVATIVE LIABILITY

During the years ending December 31, 2016 and 2015, the Company had the following activity in their derivative liability account:

	Warrants			Conversion Feature			Total
Derivative Liability at December 31, 2014		1,263,929			10,238,451			11,502.380
Derivative Liability Recorded on New Instruments		-			698,705			698,705
Elimination of Liability on Conversion		-			(79,044	)		(79,044	)
Change in Fair Value		(549,528	)		(7,337,497	)		(7,887,025	)
Derivative Liability at December 31, 2015		714,401			3,520,615			4,235,016
Derivative Liability Recorded on New Instruments		-			6,150,026			6,150,026
Elimination of Liability on Conversion		(1,266,795	)		(10,381,138	)		(11,647,933	)
(Gain) on Settlement of Debt		-			(656,930	)		(656,930	)
Change in Fair Value		552,452			1,691,901			(2,244,353	)
Derivative Liability at December 31, 2016		58			324,474			324,532

The Company uses the Black-Scholes pricing model to estimate fair value for those instruments convertible into common stock at inception, at conversion date, and at each reporting date. During the year ending December 31, 2016, and 2015, the Company used the following assumptions in their Black-Scholes model:

	December 31, 2016						December 31, 2015
	Warrants			Conversion Feature			Warrants			Conversion Feature
Risk-free interest rate		0.46% - 1.38	%		0.12% - 0.85	%		0.65% - 1.31	%		0.02% - 0.25	%
Expected life in years		0.53 - 4.08			0.01 - 1.00			0.70 - 4.00			0.07 - 0.94
Dividend yield		0	%		0	%		0	%		0	%
Expected volatility		156.29% - 273.70	%		115.46% - 239.93	%		197.83% - 263.33	%		279.01% - 555.60	%

NOTE 10: INCOME TAXES

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 F-22

Net deferred tax assets consist of the following components as of December 31, 2016 and 2015:

	December 31, 2016			December 31, 2015
Deferred tax assets:
Net operating loss carryover	$	8,854,900		$	8,007,900
Depreciation		-			247,900
Related party accrual		179,400			113,400
Capital Loss Carryover		5,500			5,500
Deferred tax liabilities
Depreciation		(197,200	)		-
Valuation allowance		(8,842,600	)		(8,374,700	)
Net deferred tax asset	$	-		$	-
Net deferred tax asset	$	-		$	-

The income tax provision differs from the amount of income tax determined by applying the U.S. Federal income tax rate to pretax income from continuing operations for the years ended December 31, 2016 and 2015 due to the following:

	December 31, 2016			December 31, 2015
Book income (loss)	$	(3,350,700	)	$	2,119,100
Grant income		(7,100	)		(7,100	)
Depreciation		(25,300	)		(41,500	)
Intangible asset impairment		12,100			-
Related party accrual		65,900			(516,100	)
Meals and entertainment		1,600			1,600
Stock for services		341,300			113,900
Options expense		229,600			9,700
Non-cash interest expense		1,976,300			581,500
Other non-deductible expenses		(90,600	)		(3,112,100	)
Valuation allowance		846,900			851,000
Income tax expense	$	-		$	-

At December 31, 2016, the Company had net operating loss carryforwards of approximately $26,043,700 that may be offset against future taxable income from the year 2017 through 2036.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.

Topic 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company’s financial statements. Topic 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. At the adoption date of January 1, 2007, the Company had no unrecognized tax benefit, which would affect the effective tax rate if recognized.

The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of December 31, 2016, the Company had no accrued interest or penalties related to uncertain tax positions.

 F-23

The Company files income tax returns in the U.S. federal jurisdiction. The Company is located in the state of Washington and Washington state does not require the filing of income taxes. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2013.

NOTE 11: STOCKHOLDERS’ EQUITY

Common Stock

 The Company has 2,000,000,000 shares of common stock authorized, with a par value of $0.001, and as of December 31, 2016 and 2015, the Company has 31,743,797 and 19,969,341 shares issued and outstanding, respectively. The Company’s Board of Directors is authorized to provide for the issuance of shares of preferred stock in one or more series, fix or alter the designations, preferences, rights, qualifications, limitations or restrictions of the shares of each series, including the dividend rights, dividend rates, conversion rights, voting rights, term of redemption including sinking fund provisions, redemption price or prices, liquidation preferences and the number of shares constituting any series or designations of such series without further vote or action by the shareholders. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of management without further action by the shareholders and may adversely affect the voting and other rights of the holders of common stock. The issuance of preferred stock with voting and conversion rights may adversely affect the voting power of the holders of common stock, including the loss of voting control to others.

As of December 31, 2015, there was an insufficient amount of the Company’s authorized common stock to satisfy the potential number of shares that would be required to satisfy the outstanding options, warrants and convertible debt into common stock. As a result, the Company recorded a liability in the amount of $852,091, offset by $852,091 of equity for the year ending December 31, 2015. Effective October 2016, the Company filed a Certificate of Amendment to perform a 1:100 reverse stock split which eliminated the shortage of sufficient authorized common shares. Additionally, the Company removed the $852,091 liability for lack of authorized shares and increased paid in capital. The Company’s financial statements have been retroactively adjusted for all periods presented to reflect the reverse stock split.

Preferred Stock

As of December 31, 2016 and 2015, the Company has 20,000,000 shares of Series A Preferred authorized with a par value of $0.001. The Company’s Board of Directors is authorized to provide for the issuance of shares of preferred stock in one or more series, to establish the number of shares in each series, and to determine the designations, preferences and rights through a resolution of the Board of Directors.

We currently have one series of preferred stock authorized, the Series A Preferred. The following is a summary of the rights and preferences of the Series A Preferred, which summary is not meant to be a complete description of those terms. For a complete description of the rights and preferences attributable to the Series A Preferred, please see the Certificate of Designations, Preferences and Rights of the Series A Convertible Preferred Stock (the “Series A Certificate of Designation”), attached as Exhibit 4.1 to our Current Report on Form 8-K filed with the SEC on July 8, 2015.

Series A Convertible Preferred Stock

In June 2015, the Series A Certificate of Designation was filed with the Delaware Secretary of State to designate 2.5 million shares of our preferred stock as Series A Preferred. Effective March 31, 2016, the Company amended the Certificate of Designations, Preferences and Rights of Series A Convertible Preferred of the Registrant, increasing the maximum number of shares of Series A Preferred from 2,500,000 shares to 5,000,000 shares. The following summarizes the current rights and preferences of the Series A Preferred:

Liquidation Preference. The Series A Preferred has a liquidation preference of $5.00 per share.

Dividends. Shares of Series A Preferred do not have any separate dividend rights.

 F-24

Conversion. Subject to certain limitations set forth in the Series A Certificate of Designation, each share of Series A Preferred is convertible, at the option of the holder, into that number of shares of common stock (the “Series A Conversion Shares”) equal to the liquidation preference thereof, divided by Conversion Price (as such term is defined in the Series A Certificate of Designation), currently $0.50.

In the event the Company completes an equity or equity-based public offering, registered with the SEC, resulting in gross proceeds to the Company totaling at least $5.0 million, all issued and outstanding shares of Series A Preferred at that time will automatically convert into Series A Conversion Shares.

Redemption. Subject to certain conditions set forth in the Series A Certificate of Designation, in the event of a Change of Control (defined in the Series A Certificate of Designation as the time at which as a third party not affiliated with the Company or any holders of the Series A Preferred shall have acquired, in one or a series of related transactions, equity securities of the Company representing more than fifty percent 50% of the outstanding voting securities of the Company), the Company, at its option, will have the right to redeem all or a portion of the outstanding Series A Preferred in cash at a price per share of Series A Preferred equal to 100% of the Liquidation Preference.

Voting Rights. Holders of Series A Preferred are entitled to vote on all matters, together with the holders of common stock, and have the equivalent of five (5) votes for every Series A Conversion Share issuable upon conversion of such holder’s outstanding shares of Series A Preferred. However, the Series A Conversion Shares, when issued, will have all of the same voting rights as other issued and outstanding common stock of the Company, and none of the rights of the Series A Preferred.

Liquidation. Upon any liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary (a “Liquidation ”), the holders of Series A Preferred shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the liquidation preference of the Series A Preferred before any distribution or payment shall be made to the holders of any junior securities, and if the assets of the Company is insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Series A Preferred shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.

Certain Price and Share Adjustments.

a) Stock Dividends and Stock Splits. If the Company (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of common stock on shares of common stock or any other common stock equivalents; (ii) subdivides outstanding shares of common stock into a larger number of shares; (iii) combines (including by way of a reverse stock split) outstanding shares of common stock into a smaller number of shares; or (iv) issues, in the event of a reclassification of shares of the common stock, any shares of capital stock of the Company, then the conversion price shall be adjusted accordingly.

b) Merger or Reorganization. If the Company is involved in any reorganization, recapitalization, reclassification, consolidation or merger in which the Common Stock is converted into or exchanged for securities, cash or other property than each share of Series A Preferred shall be convertible into the kind and amount of securities, cash or other property that a holder of the number of shares of common stock issuable upon conversion of one share of Series A Preferred prior to any such merger or reorganization would have been entitled to receive pursuant to such transaction.

Common Stock Issued for the Exercise of Options and Warrants

During 2015, the Company issued 1,995,000 shares of common stock for cashless warrants exercise.

During 2016, the Company issued 30,644 shares of common stock for cashless warrants exercise.

 F-25

Common Stock Issued for Loan Fees on Convertible Debt

During the year ending December 31, 2016, the Company did not issue any common stock for loan fees.

During the year ending December 31, 2015, the Company issued 43,326 shares of common stock for loan fees when entering into related party convertible notes. The shares were valued at $6,387, of which $4,896 was allocated to a debt discount (see Note 6) and $1,491 was recorded as interest expense.

Common Stock Issued for Settlement and Conversion of Debt

During 2016, the Company issued 563,523 shares of common stock in conjunction with the settlement of convertible debt that was paid in cash. The shares were valued at $70,863 and were recognized as a loss on the settlement of debt.

During 2015, the Company issued 920,516 shares of common stock valued at $109,812 in exchange for convertible debt raised in 2014 resulting in a reduction in debt of $31,721, a reduction in derivative liability of $79,044, with an offset of $3,035 to debt discount and a $2,083 gain on extinguishment of debt.

Common Stock Issued for Conversion of Preferred Stock

During 2016, the Company issued 11,180,289 shares of common stock valued at $1,590,801 in exchange for 1,118,024 shares of Series A Preferred valued at $4,828,204, resulting in an increase in retained earnings of $3,237,403.

Common Stock Options

The following schedule summarizes the changes in the Company’s stock options:

						Weighted				Weighted
	Options Outstanding					Average				Average
	Number			Exercise		Remaining		Aggregate		Exercise
	Of			Price		Contractual		Intrinsic		Price
	Shares			Per Share		Life		Value		Per Share
Balance at December 31, 2014		87,850		$	9.00-15.00		3.42 years	$	-	$	14.00
Options granted		-		$	-		-			$	-
Options exercised		-		$	-		-			$	-
Options expired		(36,500	)	$	9.00-21.00		-
Balance at December 31, 2015		51,350		$	12.00-15.00		7.12 years	$	-	$	15.00
Options granted		2,370,000		$	0.50-1.00		-			$	0.62
Options exercised		-		$	-		-			$	-
Options expired		(18,850	)	$	0.12-0.15		-			$	14.84
Balance at December 31, 2016		2,402,500		$	0.50-15		4.05 years	$	-	$	0.81
Exercisable at December 31, 2016		1,939,062		$	0.50-15		3.95 years	$	-	$	0.88

During the year ending December 31, 2016 and 2015, the Company recognized $675,324 and $80,635, respectively, worth of stock based compensation related to the vesting of it stock options.

 F-26

Common Stock Warrants

The following schedule summarizes the changes in the Company’s common stock warrants:

						Weighted				Weighted
	Warrants Outstanding					Average				Average
	Number			Exercise		Remaining		Aggregate		Exercise
	Of			Price		Contractual		Intrinsic		Price
	Shares			Per Share		Life		Value		Per Share
Balance at December 31, 2014		23,107,701		$	0.01-25		2.86 years	$	-	$	1
Warrants granted		312,500		$	0.10-0.15		2.94 years			$	0.13
Warrants exercised		(2,856,041	)	$	0.30		-			$	0.30
Warrants adjusted (1)		(13,601,951	)	$	0.10-0.15		-			$	0.01
Warrants expired/cancelled		(158,706	)	$	6.00-25.00		-			$	8.76
Balance at December 31, 2015		6,803,503		$	0.1-10		1.90 years	$	2,052,699	$	0.81
Warrants granted		233,334		$	0.40		1.71 years			$	0.34
Warrants exercised		(202,500	)	$	0.10		-			$	0.10
Warrants expired/cancelled		(3,254,832	)	$	0.01-6.00		-			$	0.13
Balance at December 31, 2016		3,579,505		$	0.01-10		0.52 years	$	749	$	4.45
Exercisable at December 31, 2016		3,579,505		$	0.01-10		0.52 years	$	749	$	4.45

(1) Based upon Delaware law and on the terms and conditions set forth in the applicable warrant agreement, any adjustments to the warrants were limited to a floor price of $0.001. Pursuant to the defective warrant exercise notice using an exercise price below $0.001, the Company issued at total of 1,473,777 shares of common stock to the warrant holders, which the Company believes are voidable, and also recorded 16,009,450 warrants outstanding to the holder on the Company’s financial statements for the year ended December 31, 2014, and for the periods ending March 31 and June 30, 2015. Management believes that the warrants were recorded in error during the periods presented, and has recorded the revised number of warrants outstanding at September 30, 2015 at 2,407,500, which reflects the number of shares of common stock purchase warrants outstanding and exercisable under the terms of the warrants at an exercise price of $0.001 per share. This net adjustment of 13,601,951 warrants has been reflected in the schedule for the twelve months ending December 31, 2015. The Company reached a Settlement Agreement in 2016 with this warrant holder to cancel all the remaining 2,407,500 warrants in exchange for 50,000 shares of Series A Preferred.

During the year ending December 31, 2016 and 2015, the Company recognized $595,175 and $0, respectively, worth of expense related to warrants granted for services.

Preferred Stock Issued for Cash

During 2016, the Company issued 46,666 shares of Series A Preferred for $70,000 cash.

Preferred Stock Issued for Exercise of Warrants

During 2016, the Company issued 250,000 shares of Series A Preferred for $250 for the exercise of warrants.

 F-27

Preferred Stock Issued for Warrants Surrendered

During 2016, the Company issued 62,854 shares of Series A Preferred, representing $407,973, in exchange for the surrender of 2,407,500 warrants. This resulted in the Company writing off $1,179,710 worth of derivative liabilities and recognizing a gain on debt extinguishment of $771,737.

Preferred Stock Issued for Services

During 2016, the Company issued 218,000 shares of its Series A Preferred, representing $942,644, for services valued at $949,661, therefore recognizing $7,018 of a gain on settlement of debt. During 2016, the Company issued 10,000 shares of its Series A Preferred to its CFO, representing $54,152, for services (see Note 6).

During 2015, the Company issued 100,000 shares of its Series A Preferred, representing $334,880, for services.

Preferred Stock Issued for Loan Fees

During 2016, the Company issued 30,000 shares of its Series A Preferred, valued at $162,456, as a finders fee and issued 37,906 shares of its Series A Preferred, valued at $29,156 (see Note 6), as loan fees on related party convertible notes. The Company also issued 347,400 shares of its Series A Preferred, valued at $363,807, as loan fees on convertible notes recorded as debt discount (see Note 8), and issued 47,840 shares of its Series A Preferred, valued at $39,904, as loan fees on convertible notes recorded as derivative liabilities.

During 2015, the Company issued 133,833 shares of its Series A Preferred, valued at $527,325, as loan fees on convertible notes and issued 3,440 shares of its Series A Preferred, valued at $17,401 (see Note 6), as loan fees on related party convertible notes.

Preferred Stock Issued for Debt Extinguishment

During 2016, the Company issued 215,961 shares of Series A Preferred, valued at $1,401,760, in exchange for $1,197,950 of related party debt, and $59,671 of accrued interest (see Note 6). This resulted in the Company recognizing $144,139 as a loss on debt extinguishment.

During 2016, the Company issued 473,830 shares of Series A Preferred, valued at $2,330,876, in exchange for $473,613 of related party convertible debt, and $0 of accrued interest (see Note 6). This resulted in the Company writing off $2,330,154 in derivative liabilities, $448,613 in debt discounts, and recognizing $24,278 as a gain on debt extinguishment.

During 2016, the Company issued 1,460,600 shares of Series A Preferred, valued at $8,552,746 in exchange for $1,444,950 of convertible debt, and $50,711 of accrued interest (see Note 8). This resulted in the Company writing off $8,138,070 in derivative liabilities, $814,625 in debt discounts, and recognizing $266,358 as a gain on debt extinguishment.

In September 2015, the Company issued 148,310 shares of Series A Preferred in exchange for $1,414,100 of related party debt plus $810,538 of accrued interest and 207,620 shares of Series A preferred stock in exchange for $2,224,466 of related party debt plus $889,838 of accrued interest, to the major shareholder and director of the Company (see Note 6).

In September 2015, the Company issued 43,000 shares of Series A Preferred in exchange for $43,000 of related party convertible debt raised during 2015 (see Note 6).

In November and December 2015, the Company issued 99,000 shares of Series A Preferred in exchange for $22,700 of convertible debt, $9,812 of accrued interest, and extension of a due date for a payment on a debt settled. In September 2015 the Company issued 552,000 shares of Series A Preferred in exchange for $552,000 of convertible debt raised during 2015. In October 2015 the Company issued 10,000 shares of Series A Preferred in exchange for $10,000 of convertible debt raised during 2015 (see Note 8).

 F-28

Preferred Stock Issued for Accounts Payable and Accrued Liabilities

In December 2015, the Company issued 100,000 and 75,000 shares of Series A Preferred to the CEO and CFO, in exchange for $150,000 and $112,500, respectively, of accrued payroll (see Note 6). In December 2015, the Company issued 246,797 shares of Series A Preferred in exchange for $370,197 of accounts payable.

NOTE 12: CONCENTRATIONS OF CREDIT AND OTHER RISKS

Accounts Receivable

The Company had one customer that represented 100% of the Company’s total revenues for each of the years ended December 31, 2016 and 2015. The customer that represented 100% of the Company’s total revenue for the years ended December 31, 2016 and 2015, and accounted for 100% of the consulting revenue for that year. The Company had no net accounts receivable balance at December 31, 2016 and 2015.

The loss of a significant customer representing the percentage of total revenue as represented for the years ended December 31, 2016 and 2015 would have a temporary adverse effect on the Company’s revenue, which would continue until the Company located new customers to replace them.

The Company routinely assesses the financial strength of its customers and provides an allowance for doubtful accounts as necessary. As of December 31, 2016 and 2015, the Company had no allowance or bad debt expense recorded.

NOTE 13: SUPPLEMENTAL CASH FLOW INFORMATION

During the year ended December 31, 2016, the Company had the following non-cash investing and financing activities:

- Issued 30,644 shares of common stock valued at $0 for the issuance of cashless warrants.

- Decreased related party notes by $1,197,950, decrease related party convertible notes by $473,613, offset by a decrease $448,613 in debt discount decreased convertible notes payable by $1,444,950, offset by a decrease $814,624 in debt discount, decreased accrued interest by $110,382, decreased derivative liabilities by $10,468,224, and increased Series A Preferred by $12,431,882 due to 2,150,391 shares issued in conjunction with the settlement of convertible notes.

- Increased convertible notes payable and decreased accrued interest by $455,150 for the reclassification of accrued interest to principal.

- Issued 62,854 shares of Series A Preferred, valued at $407,973, which decreased derivative liabilities by $1,179,710 and for which a gain on debt extinguishment was recorded for $771,737.

- Increased derivative liabilities for $1,283,448 to record a debt discount on related party convertible notes of $473,613 and a debt discount on convertible notes of $809,835.

- Increased paid in capital and decreased liability for lack of authorized shares for $852,092.

- Increased convertible notes payable and decreased loan from shareholder by $127,533 to roll proceeds from shareholder advances to a formal convertible note payable.

- Issued 433,146 shares of Series A Preferred, valued at $432,866, for loan fees that increased the convertible note debt discount by $363,807 and increased derivative liabilities by $69,059.

- Issued 11,180,289 shares of common stock valued at $1,590,801 in exchange for 1,118,024 shares of Series A Preferred valued at $4,828,204, resulting in an increase in retained earnings of $3,237,403.

 F-29

During the year ended December 31, 2015, the Company had the following non-cash investing and financing activities:

- Issued 1,995,000 shares of common stock valued at $0 for the issuance of cashless warrants.

- Issued 43,326 shares of common stock as loan fees on convertible debt.

- Issued 108,833 shares of preferred stock as loan fees on convertible debt.

- Issued 920,516 shares of common stock for an extinguishment of $31,721 worth of principal on convertible notes payable $0 worth of accrued interest, $79,044 worth of derivative liabilities and $3,035 worth of debt discount.

- Issued 74,000 shares of preferred stock for an extinguishment of $22,700 worth of principal on convertible notes payable $0 worth of accrued interest, $0 worth of derivative liabilities and $0 worth of debt discount.

- Issued 960,929 shares of preferred stock valued at $2,201,963 in exchange for $4,243,566 of notes.

- Issued 421,797 shares of preferred stock valued at $1,358,726 in exchange for $370,197 of accounts payable and $262,500 of accrued payroll.

- Issued 25,000 shares of preferred stock as loan extension fees.

NOTE 14: SUBSEQUENT EVENTS

In January, February and through March 6, 2017, the Company issued 5,517,900 shares of common stock for 531,790 shares of Series A Preferred.

In February 2017, the Company issued 280,000 shares of common stock shares in exchange for $140,000 of accounts payable.

In March 2017, the Company received $25,000 as a shareholder loan.

The Company has evaluated subsequent events pursuant to ASC Topic 855 and has determined that there are no additional subsequent events to disclose.

 F-30

EX-10.13

AMENDED AND RESTATED

LICENSE AGREEMENT NO. 525855

BETWEEN

BATTELLE MEMORIAL INSTITUTE

AND

ADVANCED MEDICAL ISOTOPE CORPORATION

March 2017

BUSINESS SENSITIVE

License Agreement No. 525855 – Amended and Restated (Amendment 1)

Advanced Medical Isotope Corporation

March 14, 2017

Version 1

LICENSE AGREEMENT 525855

AMENDED AND RESTATED

THIS AGREEMENT made and entered into at Richland, Washington, as the amended and restated Agreement between the Parties concerning the subject matter hereof, by and between Advanced Medical Isotope Corporation having a principal place of business in Kennewick, Washington, herein called “LICENSEE”, and Battelle Memorial Institute, having a place of business in Richland, Washington, herein called “BATTELLE”. This Amended and Restated Agreement is effective on the date affixed hereto by the party last signing this Agreement (the “Effective Date”). This Amended and Restated Agreement is meant to supersede the prior Agreement between the Parties regarding all obligations not yet accrued.

WITNESSETH THAT:

WHEREAS, BATTELLE is an incorporated charitable trust exempt from federal income taxes under Section 501(c)(3) of the United States Internal Revenue Code; and

WHEREAS, BATTELLE has certain rights in patents relating to radiogel technology; and

WHEREAS, LICENSEE recognizes that BATTELLE owns inventions and intellectual property useful in the conduct of LICENSEE’s business; and

WHEREAS, LICENSEE recognizes that its anticipated business activity will encompass the practice of technology that requires a license under patents owned or controlled by BATTELLE; and

WHEREAS, LICENSEE wishes to acquire the right to practice the inventions of such patents.

NOW, THEREFORE in consideration of the mutual covenants herein contained and intending to be legally bound hereby, the parties agree as follows:

1. DEFINITIONS

As used herein, the following terms shall have the meanings set forth below:

A.

AFFILIATE or AFFILIATES means any entity that controls, is controlled by, or is under common control of LICENSEE where control consists of ownership of at least fifty percent (50%) of the outstanding voting securities or other ownership interest of the entity.

B.

GROSS SALES means any and all forms of consideration, monetary or otherwise, received by LICENSEE from the sale, lease, rental, transfer, or other disposition of LICENSED PRODUCTS without deduction, or the fair market value for LICENSED PRODUCTS if such LICENSED PRODUCTS are sold, leased, rented, transferred, or otherwise disposed of at less than the fair market value. For purposes of this Agreement, “fair market value” is the consideration received by LICENSEE for equivalent products or services in arms-length transactions. In the event any LICENSED PRODUCTS are sold, leased, rented, transferred or otherwise disposed of between LICENSEE and one of its AFFILIATES or between two of LICENSEE’s AFFILIATES, or such LICENSED PRODUCT is used by LICENSEE or one of its AFFILIATES, LICENSEE shall calculate and pay royalties to BATTELLE based on the fair market value for such LICENSED PRODUCT.

BUSINESS SENSITIVE

License Agreement No. 525855 – Amended and Restated (Amendment 1)

Advanced Medical Isotope Corporation

March 14, 2017

Version 1

C.	LICENSED FIELD means, and is limited to, medical and veterinary therapeutic radioisotope delivery.
D.	LICENSED PRODUCT(S) means any and all products incorporating or services utilizing one or more claims of the licensed PATENTS.
E.	LICENSED TERRITORY means the United States of America and Canada.
F.	NET SALES means GROSS SALES less shipping charges, returns, and taxes, for the sale, lease, rental, transfer, or other disposition or provision of LICENSED PRODUCTS, or the fair market value for LICENSED PRODUCTS if such LICENSED PRODUCTS are sold, leased, rented, transferred, or otherwise provided at less than the fair market value. For purposes of this Agreement, “fair market value” is the consideration received by LICENSEE for equivalent products or services in arms-length transactions. In the event any LICENSED PRODUCTS or LICENSED PROCESSES are sold, leased, rented, transferred or otherwise provided between LICENSEE and one of its AFFILIATES or between two of LICENSEE’s AFFILIATES, or such LICENSED PRODUCT or LICENSED PROCESS is used by LICENSEE or one of its AFFILIATES, LICENSEE shall calculate and pay royalties to BATTELLE based on the fair market value for such LICENSED PRODUCTS or LICENSED PROCESS.
G.	PATENT or PATENTS means the following patents, and all reissues, reexaminations, substitutes, and extensions thereof:

Issued Patents

Title	Country		Patent Number		Date Granted
Stimulus Sensitive Gel with Radioisotope and Methods of Making (BATTELLE IPID 11505-E Master Patent ID 1201)*		U.S.		6,296,831	October 2, 2001
Stimulus Sensitive Gel with Radioisotope and Methods of Making (BATTELLE IPID 11505-E CON Master Patent ID 1204)*		U.S.		6,869,588	March 22, 2005
Stimulus Sensitive Gel with Radioisotope and Methods of Making (BATTELLE IPID 11505-E   Master Patent ID 1197)*		Canada		2,327,325	January 24, 2006
Thermogelling Biodegradable Aqueous Polymer Solution (BATTELLE IPID 12483-B Master   Patent ID 1892)†		U.S.		6,841,617	January 11, 2005
Thermogelling Oligopeptide Polymers (BATTELLE IPID 12483-   B CIP Master Patent ID 1893) †		U.S.		7,087,244	August 8, 2006
Thermogelling Biodegradable Aqueous Polymer Solution (BATTELLE IPID 12483-B Master   Patent ID 1889) †		Canada		2,423,488	July 13, 2010
Multiple Stimulus Reversible Hydrogels (BATTELLE IPID 12575-E Master Patent ID 1963)*		U.S.		6,660,247	December 9, 2003
Multiple Stimulus Reversible Hydrogels (BATTELLE IPID 12575-E CON Master Patent ID 4425)*		U.S.		7,033,571	April 25, 2006

*These Patents arose under funding of the U.S. Government.

†These Patents arose under private funding.

2. PATENT LICENSE

A.	BATTELLE hereby grants to LICENSEE and AFFILIATES, to the extent of the LICENSED FIELD and LICENSED TERRITORY, an exclusive license to make, have made, use and sell LICENSED PRODUCTS.
B.	The license granted pursuant to Paragraph A hereof shall be subject to any rights the Government of the United States of America may presently have or may assert in the future for any reason including, but not limited to, those rights set forth in 35 USC§202 and §203 and 37 C.F.R. 401, et seq.
C.	BATTELLE reserves the right to (i) practice the PATENTS for research, development and demonstration purposes for itself and others, (ii) nonexclusively license the PATENTS to nonprofit institutions that collaborate with BATTELLE for research, development, and demonstration purposes only, and (iii) license the PATENTS in fields not exclusively licensed herein.

BUSINESS SENSITIVE

License Agreement No. 525855 – Amended and Restated (Amendment 1)

Advanced Medical Isotope Corporation

March 14, 2017

Version 1

3. CONSIDERATION

A.	In consideration for the License Grant described in Article 2, LICENSEE agrees to comply with all the provisions of this Agreement, to pay all fees, costs, and meet all other requirements set forth in this Agreement.
B.	LICENSEE shall pay to BATTELLE a royalty of one percent (1%) of NET SALES.
C.	If as a result of litigation related to this Agreement financed by LICENSEE, damages, royalties, or other consideration is received by LICENSEE, BATTELLE shall receive the greater of: (i) a royalty as set forth above as applied to the level of infringing sales determined by a court or as a result of settlement of such claims, or (ii) twenty- five percent (25%) of all monies received by LICENSEE, after LICENSEE deducts all reasonable out-of-pocket costs of prosecuting such litigation.
D.	No royalty shall be paid to BATTELLE for the practice of any PATENT on behalf of the U.S. Government for which the U.S. Government has a royalty-free right to use such PATENT, but LICENSEE shall continue to pay the agreed-upon royalty set forth above on any PATENT for which use the U.S. Government does not have such a royalty-free right.

4. ANNUAL LICENSE MAINTENANCE FEE/MINIMUM ROYALTY

A.

LICENSEE shall pay to BATTELLE an annual license maintenance fee/minimum royalty as set forth in Table 1 below. Such annual license maintenance fee/minimum royalty shall be due and payable on the last day of January. If LICENSEE does not pay the amount (if any) required to be paid hereunder to satisfy the annual license maintenance fee/minimum royalty obligation, BATTELLE may, in its sole discretion, elect to convert the exclusive license of Paragraph 2A to a nonexclusive license, terminate this Agreement under the provisions of Paragraph 10C, or waive this requirement in whole or in part.

B.

Beginning in the first calendar year in which LICENSEE makes its first NET SALES of a LICENSED PRODUCT, the annual license maintenance fee as set forth in Table 1 below shall become a minimum royalty. It is understood by the parties that LICENSEE shall pay annually either a license maintenance fee or a minimum royalty. LICENSEE shall pay to BATTELLE royalties as stated in Article 3, but in no event shall royalties for any calendar year be less than the amounts set forth in Table 1 below during each of the calendar years indicated. The minimum royalty shall be due and payable on the last day of January.

BUSINESS SENSITIVE

Table 1.

Calendar Year	License Maintenance Fee/Minimum Royalties US $ Per Calendar Year
2017	$	10,000
2018	$	10,000
2019	$	25,000
2020	$	50,000
2021	$	100,000
2022	$	100,000

C. If this Agreement expires or is terminated for any reason, except for breach of contract by BATTELLE, during any year that an annual license maintenance fee or minimum royalties are due to BATTELLE, upon expiration or termination, LICENSEE shall immediately pay to BATTELLE the proportionate amount of annual license maintenance fee or minimum royalties owed to BATTELLE that represents that portion of the year elapsed prior to expiration or termination. For example, if LICENSEE terminates without breach by BATTELLE after the expiration of three (3) months of the new year, LICENSEE shall pay to BATTELLE one-fourth (1/4) of the annual license maintenance fee or minimum royalty due for that year.

5. DILIGENCE

A. For veterinary use LICENSEE shall achieve the following:

(i)	On or before the last day of August 2017, LICENSEE shall obtain all necessary regulatory approvals to begin animal testing, and begin such testing; and
(ii)	On or before the last day of January 2019, LICENSEE shall have a commercial sale of a LICENSED PRODUCT for veterinary use.

If LICENSEE does not meet the diligence obligations of this Paragraph 5A, BATTELLE may, in its sole discretion, extend the due dates set forth herein, or terminate this Agreement.

B. For medical use LICENSEE shall achieve the following:

(i)	On or before the last day of August 2017, LICENSEE shall have filed pre- submission paperwork with Food and Drug Administration (FDA);
(ii)	On or before the last day of June 2018, approval of investigational device exemption (IDE) by FDA;

BUSINESS SENSITIVE

License Agreement No. 525855 – Amended and Restated (Amendment 1)

Advanced Medical Isotope Corporation

March 14, 2017

Version 1

(iii)	On or before the last day of October 2018, LICENSEE shall conclude human trials; and
(iv)	On or before the last day of January 2020, LICENSEE shall have a commercial sale of a LICENSED PRODUCT for medical use.

If LICENSEE does not meet the diligence obligations of this Paragraph 5B, BATTELLE may, in its sole discretion, extend the due dates set forth herein, or terminate this Agreement.

C. LICENSEE shall pay to BATTELLE an additional fee, as a milestone payment, in the amount of Five Thousand United States Dollars ($5,000 US) upon FDA approval to sell LICENSED PRODUCTS for medical purposes and in any event no later than the last day of January 2020.

6. U.S. MANUFACTURING

In order to enhance U.S. industrial competitiveness, LICENSEE shall ensure that products embodying the PATENTS which are manufactured for use or sale in the United States under the exclusive license granted hereunder shall be substantially manufactured in the United States.

7. SUBLICENSING

LICENSEE shall not have the right to sublicense.

8. REPORTS AND PAYMENTS

A.

Not later than the last day of each January, LICENSEE shall furnish to BATTELLE, at the address set forth in Article 25, a written statement in a form provided by BATTELLE (Attachment 1) to determine the amounts due and the appropriateness of the royalties paid pursuant to Article 3 for the annual periods ended the last day of the preceding December, and shall pay to BATTELLE all amounts due to BATTELLE. Such amounts are due at the dates the statements are due. If no amount is accrued during any semiannual period, a written statement to that effect shall be furnished. All written statements provided to BATTELLE by LICENSEE shall be executed by an individual having actual authority to bind LICENSEE.

B.

Not later than the last day of each July and January, LICENSEE shall furnish to BATTELLE, at the address set forth in Article 25, a written progress report summarizing LICENSEE’s progress towards commercializing the LICENSED PRODUCTS during the preceding semiannual periods ended the last days of the preceding June and December, respectively. Such progress report shall include the following information, where relevant: progress in the development and commercial deployment of the LICENSED PRODUCT; key business achievements; projects or transactions that resulted from, or were enabled by, the LICENSED PRODUCT; and quantitative or qualitative information that characterizes the contribution of the LICENSED PRODUCT to the U.S. economy. Such report will be provided to BATTELLE solely to enable BATTELLE to understand LICENSEE’s progress towards commercializing the LICENSED PRODUCT and to assist BATTELLE in determining the contribution of the LICENSED PRODUCT in improving LICENSEE’s business.

BUSINESS SENSITIVE

License Agreement No. 525855 – Amended and Restated (Amendment 1)

Advanced Medical Isotope Corporation

March 14, 2017

Version 1

C.	Royalties earned on sales by LICENSEE in any country outside the United States shall not be reduced by LICENSEE for any taxes, fees, or other charges imposed by the government of such country on the payment of royalty income.
D.	Payments provided for in this Agreement, shall when overdue, bear interest at a rate per annum equal to three percent (3%) in excess of the “Prime Rate” published by The Wall Street Journal at the time such payment is due until payment is received by BATTELLE.
E.	All payments made to BATTELLE under this Agreement are nonrefundable.
F.	If LICENSEE makes payments to BATTELLE by Electronic Funds Transfers, LICENSEE shall provide a written report to BATTELLE to the address set forth in Article 25 as required in Paragraph 8A, above, along with a statement indicating that payments have been made by Electronic Funds Transfers. Such payments shall be made to the following account (for international transfers, use Swift Code: USBKUS44IMT):

U. S. Bank of Washington

Account Name: Battelle Memorial Institute

ABA No. 125000105

Account No. 153502962134

9. REPRESENTATIONS, HOLD HARMLESS AND LIMITATION OF BATTELLE’S LIABILITY

A.	This Agreement is entered into by BATTELLE in its private capacity. It is understood and agreed that the U.S. Government is not a party to this Agreement and in no manner whatsoever shall be liable for nor assume any responsibility or obligation for any claim, cost or damages arising out of or resulting from this Agreement or the subject matter licensed.
B.	(i) Nothing in this Agreement shall be deemed to be a representation or warranty, except as set forth in Paragraph 9C and 9F below, by BATTELLE, or the U.S. Government, of the validity of any of the PATENTS or the accuracy, safety or usefulness for any purpose, of any technical information, techniques, or practices at any time made available by BATTELLE.
	(ii)Neither the U.S. Government nor BATTELLE nor any affiliated company of BATTELLE shall have any liability whatsoever to LICENSEE or any other person for or on account of any injury, loss, or damage, of any kind or nature sustained by, or any damage assessed or asserted against, or any other liability incurred by or imposed upon LICENSEE or any other person, arising out of or in connection with or resulting from (1) the production, use or sale of any apparatus or product, or the practice of the PATENTS by LICENSEE; (2) the use by LICENSEE of any technical information, techniques, or practices disclosed by BATTELLE; or (3) any advertising or other promotional activities by LICENSEE with respect to any of the foregoing; and

BUSINESS SENSITIVE

License Agreement No. 525855 – Amended and Restated (Amendment 1)

Advanced Medical Isotope Corporation

March 14, 2017

Version 1

(iii)	LICENSEE shall hold the U.S. Government, BATTELLE, and any affiliated company of BATTELLE, harmless in the event the U.S. Government, BATTELLE, or any affiliated company of BATTELLE, is held liable as a result of actions by LICENSEE as set forth in Paragraphs 9B(ii)(1), 9B(ii)(2), and 9B(ii)(3) above.
(iv)	Further, LICENSEE agrees to assume the defense of (1) any suit brought against BATTELLE or any affiliated company of BATTELLE resulting from any action of LICENSEE undertaken under this License Agreement, and (2) any action brought against LICENSEE or BATTELLE resulting from any action of LICENSEE relating to the licensed PATENTS.

C.	BATTELLE represents that it has the right to grant all of the rights granted herein, except as to such rights as the Government of the United States of America may have or may assert.
D.	LICENSEE understands and acknowledges that the subject matter of this Agreement has not yet been commercially demonstrated, and agrees to accept the risks incident to designing, manufacturing and operating a nascent technology.
E.	LICENSEE acknowledges that LICENSEE has evaluated the PATENTS and deems them suitable for LICENSEE’s purposes for entering into this Agreement.
F.	Nothing in this Agreement may be construed as: a warranty or representation by BATTELLE as to the validity of any of BATTELLE’s rights in the PATENTS; a warranty or representation that anything made, used, sold or otherwise disposed of under any license granted in this Agreement is or will be free from infringement of any patents other than PATENTS; a grant by implication, estoppel or otherwise of any license or rights under any patents of BATTELLE other than PATENTS, regardless of whether such patents are dominate or subordinate to PATENTS; or an obligation to furnish any information not provided in PATENTS.

10. TERMINATION

A	The PATENT License of Article 2 shall end upon the expiration of the last to expire of the PATENTS included herein, or upon a final adjudication of invalidity of all PATENTS included herein, whichever is later.
B.	LICENSEE may terminate this Agreement at any time upon sixty (60) days written notice in advance to BATTELLE, and LICENSEE shall thereafter discontinue the practice and use of the licensed PATENTS.
C.	Except as provided below in Paragraph 10D, if either party shall be in breach of any obligation hereunder, the other party may terminate this Agreement by giving Notice of Termination by personal delivery, telefax, electronic mail transmission or by United States mail, express mail, or courier service, with postage or fees prepaid, to the party in breach, specifying the basis for termination. Notice by personal delivery, telefax or electronic mail is deemed to have been given when delivered or transmitted. Notice sent by U.S. mail, express mail or courier service is deemed to have been given when mailed. If within sixty (60) days after the receipt of such Notice of Termination, the party in breach shall remedy the condition forming the basis for termination, such Notice of Termination shall cease to be operative, and this Agreement shall continue in full force; provided that if Notice of Termination is given by BATTELLE to LICENSEE for the third time then this grace period shall not be available unless permitted in such third Notice of Termination, and this Agreement shall be finally terminated. LICENSEE understands and acknowledges that the remedy set forth herein is not available to LICENSEE if LICENSEE does not meet the diligence requirements of Paragraphs 5A and 5B.

BUSINESS SENSITIVE

License Agreement No. 525855 – Amended and Restated (Amendment 1)

Advanced Medical Isotope Corporation

March 14, 2017

Version 1

D.	If any report or payment due to BATTELLE is overdue for a third time, then any subsequent Notice of Termination is not subject to the sixty (60) day cure provision of Paragraph 10C.
E.	LICENSEE hereby agrees that, in the event LICENSEE by its own actions, or the action of any of its shareholders or creditors if applicable, files or has filed against it (with an order for relief being entered) a case under the Bankruptcy Code of 1978, as previously or hereafter amended, BATTELLE shall be entitled to relief from the automatic stay of Section 362 of Title 11 of the U.S. Code, as amended, on or against the exercise of the rights and remedies available to BATTELLE and LICENSEE hereby waives the benefits of such automatic stay and consents and agrees to raise no objection to such relief.
F.	Termination of this Agreement shall not extinguish any rights of BATTELLE or obligations of LICENSEE accrued hereunder at the time of termination; and obligations undertaken independent of the license granted under Article 2 shall survive termination to the extent necessary to permit their complete fulfillment or discharge.
G.	If this Agreement is for any reason terminated before all of the payments required to be made by LICENSEE as set forth herein have been made to BATTELLE, LICENSEE shall immediately pay to BATTELLE any unpaid amounts due as of the date of such termination even though the due dates provided in Articles 8 and 12 have not been reached.

11. LITIGATION

A.

LICENSEE shall notify BATTELLE of any suspected infringement of the PATENTS in the LICENSED FIELD and the LICENSED TERRITORY, and shall inform BATTELLE of any evidence of such infringement(s).

B.

After LICENSEE or BATTELLE provides probative evidence of an actual infringement of the PATENTS in the LICENSED FIELD and LICENSED TERRITORY, the parties shall confer to discuss the actions to be taken to abate the infringement, up to and including full legal action in a court of competent jurisdiction. If after such conference BATTELLE provides written notice to LICENSEE instructing LICENSEE to pursue a designated course of action against the infringer, and LICENSEE fails to act as instructed within ninety (90) days after receipt of such written notice, then BATTELLE may, in its sole discretion, convert the exclusive license granted under Paragraph 2A to a nonexclusive license and take whatever action against the infringer that BATTELLE deems appropriate. In the event LICENSEE receives any monies or other consideration from a third party as a result of exercising LICENSEE’s rights under this Agreement, BATTELLE shall receive its payment under Article 3 as applied to all such monies or other consideration whether such monies or other consideration are denoted as “royalties”, “damages”, “release” from prior acts, or any other designation.

BUSINESS SENSITIVE

License Agreement No. 525855 – Amended and Restated (Amendment 1)

Advanced Medical Isotope Corporation

March 14, 2017

Version 1

C. Challenges.

(i) If LICENSEE or any of LICENSEE’s AFFILIATES, subsidiaries, joint venturers, or other similarly situated persons, entities, or organizations initiates an action or proceeding or assists any third party initiating an action or proceeding against BATTELLE seeking a declaration or ruling that any claim of the PATENTS is invalid or unenforceable:

1.	during the pendency of any such action or proceeding, the royalty rates and annual minimum royalty due under this Agreement shall double;
2.	if the outcome of such action or proceeding results in a determination that any issued claim of the PATENTS is found to be valid and infringed by LICENSED PRODUCTS, then the royalty rates and annual minimum royalty due under this Agreement shall triple and LICENSEE shall pay BATTELLE’s costs incurred for defending the validity of the PATENTS, including but not limited to attorneys fees, expert witness fees, court costs, and other costs incidental to such defense;
3.	LICENSEE shall have no right to recoup, claim, or otherwise recover any royalties, fees, or other forms of consideration paid to BATTELLE as required in this Agreement before such action or proceeding is initiated or during the period in which the action or proceeding is pending or under appeal; and
4.	LICENSEE shall pay royalties, fees, or any forms of consideration required under this Agreement directly to BATTELLE during the pendency of such action or proceeding and shall not pay any deposits or payments of royalties, fees, or any forms of consideration required under this Agreement into any escrow account.

(ii) LICENSEE shall provide BATTELLE with at least ninety (90) days written notice to the address set forth in Article 25 before LICENSEE or any of LICENSEE’s AFFILIATES, subsidiaries, joint venturers, or other similarly situated persons, entities, or organizations initiates any action or proceeding or assists any third party initiating an action or proceeding against BATTELLE seeking a declaration or ruling that any claim of the PATENTS is invalid or unenforceable or that but for this Agreement, LICENSED PRODUCTS will not infringe any claim of the PATENTS. LICENSEE shall include with its written notice to BATTELLE a copy of all relevant prior art which will form the basis for arguments and causes advanced in such action or proceeding.

BUSINESS SENSITIVE

License Agreement No. 525855 – Amended and Restated (Amendment 1)

Advanced Medical Isotope Corporation

March 14, 2017

Version 1

(iii) Any action or proceeding filed by LICENSEE or any of LICENSEE’s AFFILIATES, subsidiaries, joint venturers, or other similarly situated persons, entities, or organizations or any third party assisted thereby seeking a declaration or ruling that any claim of the PATENTS is invalid or unenforceable or that but for this Agreement LICENSED PRODUCTS will not infringe any claim of the PATENTS shall be litigated exclusively in the U.S. District Court for the Eastern District of Washington situated in Richland, Washington, and the parties hereby agree to submit to the exclusive jurisdiction of such court and waive any objection to venue for such purposes.

D. If LICENSEE’s exclusive license under Paragraph 2A is converted to a nonexclusive license, then the sole right to institute a suit for infringement of the PATENTS occurring thereafter shall rest with BATTELLE, and BATTELLE shall retain all the proceeds thereof. LICENSEE agrees to cooperate with BATTELLE in all respects, to have any of LICENSEE’s employees testify when requested by BATTELLE, and to make available any records, papers, information, specimens, and the like. Any recovery received pursuant to such suit shall be retained by BATTELLE.

12. PATENTS

A.

BATTELLE shall have the sole right and discretion to file, prosecute, maintain, reexamine, and participate in any proceedings before a patent office, domestic or foreign, for all of the PATENTS and shall have the right to determine whether or not to abandon the prosecution of any PATENT, or to discontinue the maintenance of any PATENT. All reasonable expenses incurred by BATTELLE for the activities described in this Paragraph 12A shall be reimbursed to BATTELLE by LICENSEE within sixty (60) days of LICENSEE’s receipt of notice setting forth such expenses.

B.

If LICENSEE elects not to pay its share of expenses incurred by BATTELLE under Paragraph 12A for a particular PATENT, LICENSEE shall so notify BATTELLE in writing. LICENSEE shall be obligated to reimburse BATTELLE for its share of expenses for such PATENT up to the date BATTELLE receives such written notification, as well as any additional costs BATTELLE may incur if it abandons such patent application or PATENT, and at that time, LICENSEE’s rights related to such PATENT shall be terminated, and such PATENT shall be removed from this Agreement.

13. RECORDS

A. LICENSEE shall keep accurate records of all operations affecting LICENSEE’s duties and obligations hereunder, including but not limited to payment of royalties and fees, and shall permit BATTELLE or its duly authorized agent to inspect all such records and to make copies of or extracts from such records during regular business hours throughout the term of this Agreement and for a period of not less than three (3) years thereafter. BATTELLE shall bear its costs to conduct such audit; provided, however, LICENSEE shall reimburse BATTELLE for BATTELLE’s and/or its duly authorized agent’s actual costs to conduct the audit if as part of the audit it is deemed that LICENSEE has failed to perform its material obligations under this Agreement (including its underreporting of NET SALES and earned royalties in a reporting period by five percent (5%) or more).

BUSINESS SENSITIVE

License Agreement No. 525855 – Amended and Restated (Amendment 1)

Advanced Medical Isotope Corporation

March 14, 2017

Version 1

B. If such audit shows an underreporting or underpayment in excess of five percent (5%) in a reporting period as set forth in Paragraph 13A, then LICENSEE shall pay the cost of such audit as set forth in Paragraph 13A, as well as any other additional sum that would have been payable to BATTELLE had LICENSEE reported correctly, plus interest on said sum at the rate set forth and owing in accordance with Paragraph 8D.

14. ASSIGNABILITY

A.	Upon written consent of BATTELLE, such consent not to be unreasonably withheld, LICENSEE may assign its rights under this Agreement in connection with a merger or consolidation or to a third party purchaser of all or substantially all of the assets of LICENSEE relative to the rights granted hereunder. BATTELLE may assign its rights hereunder.
B.	Prior to any assignment of this Agreement, LICENSEE shall pay to BATTELLE at the address set forth in Article 25, a nonrefundable assignment fee of Seventy-Five Thousand United States Dollars ($75,000 US).

15. REFORM

A.	The parties agree that if any part, term, or provision of this Agreement shall be found illegal or in conflict with any valid controlling law, the validity of the remaining provisions shall not be affected thereby.
B.	In the event the legality of any provision of this Agreement is brought into question because of a decision by a court of competent jurisdiction of any country in which this Agreement applies, BATTELLE, by written notice to LICENSEE, may revise the provision in question or may delete it entirely so as to comply with the decision of said court.

16. NO ENDORSEMENT; USE OF BATTELLE’S NAME; USE OF PNNL

BATTELLE does not endorse products or services. Therefore, LICENSEE agrees that unless required by law, or unless otherwise agreed in advance in writing by BATTELLE, LICENSEE will not use or imply the name “BATTELLE”, or any affiliated company of BATTELLE, or “Pacific Northwest National Laboratory”, or “PNNL”, or associated trademarks, or other trade dress, or use BATTELLE or PNNL reports, for advertising, promotional purposes, raising of capital, recommending investments, or in any way that implies endorsement by BATTELLE or PNNL. However, LICENSEE may publicly disclose the fact that an agreement has been entered into with BATTELLE, including the name of BATTELLE. LICENSEE may disclose in a factual manner that is accurate and not misleading, material facts pertaining to the nature of this Agreement to the extent such disclosure complies with or is required by applicable U.S. Federal and state securities and other laws or the rules and regulations of any public stock exchange, provided that such disclosure does not, in whole or in part, imply any endorsement by BATTELLE or PNNL. LICENSEE further agrees to indemnify and hold BATTELLE, its directors, officers, agents and employees harmless for any damage, loss, claim or suit arising from or relating to LICENSEE’s use of the BATTELLE name.

BUSINESS SENSITIVE

License Agreement No. 525855 – Amended and Restated (Amendment 1)

Advanced Medical Isotope Corporation

March 14, 2017

Version 1

17. WAIVER AND ALTERATION

A.	The waiver of a breach hereunder may be effected only by a writing signed by the waiving party and shall not constitute a waiver of any other breach.
B.	A provision of this Agreement may be altered only by a writing signed by both parties, except as provided in Article 15, above.
C.	(i) To amend this Agreement in a manner that alters any of BATTELLE’s rights or LICENSEE’s duties under this Agreement, LICENSEE shall provide BATTELLE with a written request to amend this Agreement at least thirty (30) calendar days before BATTELLE’s rights or LICENSEE’s duties accrue. LICENSEE’s request shall: (1) specifically identify the clauses to be amended; (2) identify the requested amendments; and (3) provide BATTELLE with documentary evidence that the requested amendments are in BATTELLE’s and LICENSEE’s best interests.

(ii)	If BATTELLE determines that any or all of LICENSEE’s requested amendments are in the Parties’ best interests, then the Parties shall initiate good faith negotiations to address the amendments consistent with BATTELLE’s determination. Such negotiations shall conclude within ninety (90) days after the date BATTELLE actually receives LICENSEE’s request to amend the Agreement as set forth above in Paragraph 17C(i) (the “Renegotiation Period”). The Parties shall enter into these negotiations with the understanding that they may not reach mutually acceptable terms within the Renegotiation Period. BATTELLE’s rights shall continue to accrue and LICENSEE’s obligations shall remain in force during the Renegotiation Period.
(iii)	If BATTELLE and LICENSEE agree to mutually acceptable terms during the Renegotiation Period, then such renegotiated terms shall be reflected in a formal amendment of this Agreement executed by both BATTELLE and LICENSEE and shall apply to any of BATTELLE’s rights or LICENSEE’s obligations that accrue during the Renegotiation Period or at any time thereafter during the remaining term of this Agreement.
(iv)	If BATTELLE and LICENSEE do not agree to mutually acceptable terms during the Renegotiation Period then BATTELLE may enforce the original terms and conditions of this Agreement or rely upon other remedies as permitted by the terms of this Agreement.

BUSINESS SENSITIVE

License Agreement No. 525855 – Amended and Restated (Amendment 1)

Advanced Medical Isotope Corporation

March 14, 2017

Version 1

D. LICENSEE acknowledges that BATTELLE, by virtue of its status as an incorporated charitable trust exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code, cannot renegotiate any terms of this Agreement in a manner which may create an impermissible private benefit or private inurement.

18. MARKING

LICENSEE shall place in a conspicuous location on any LICENSED PRODUCT made or sold under any PATENT coming with this Agreement, a patent notice in accordance with the laws concerning the marking of patented articles. However, in no event shall LICENSEE mark any LICENSED PRODUCT made or sold under this Agreement with an expired licensed PATENT.

19. IMPLEMENTATION

Each party shall execute any instruments necessary to implement the provisions of this Agreement.

20. CONSTRUCTION

This Agreement shall be construed in accordance with the laws of the State of Washington of The United States of America and in the English language, and any action brought to enforce any provision or obligation hereunder shall be brought in a court of competent jurisdiction in the State of Washington.

21. EXPORTATION OF TECHNICAL INFORMATION

LICENSEE represents and warrants that it shall not export from The United States of America directly or indirectly, any technical information (or the direct product thereof) furnished to LICENSEE either directly or indirectly by BATTELLE, without first complying with all requirements of the Export Administration Regulations, including the requirement for obtaining any export license, if applicable. LICENSEE agrees to indemnify, defend and hold harmless BATTELLE, its officers, agents and employees from all liability involving the violation of such export regulations, either directly or indirectly, by LICENSEE.

22. CERTIFICATION

LICENSEE hereby certifies that no principal of LICENSEE has been an employee of BATTELLE or any of its affiliated companies in the two (2) years prior to the date of execution of this Agreement.

23. NO PRESUMPTION

No provision of this Agreement shall be interpreted for or against any party to this Agreement on the basis that that party was the drafting party of the provision and no presumption or burden of proof shall arise disfavoring or favoring any party by virtue of the authorship of any of the provisions of this Agreement.

BUSINESS SENSITIVE

License Agreement No. 525855 – Amended and Restated (Amendment 1)

Advanced Medical Isotope Corporation

March 14, 2017

Version 1

24. ENTIRE UNDERSTANDING

This Agreement represents the entire understanding between the parties, and supersedes all other agreements, express or implied, between the parties concerning the subject matter of this Agreement. Specifically, no future representations made by BATTELLE staff shall be effective to alter any provision herein unless such representation shall be made in writing by an authorized representative of BATTELLE having the power to do so.

25. ADDRESSES

For the purpose of all written communications between the parties, their addresses shall be:

Advanced Medical Isotope Corporation

Attention Dr. Michael K. Korenko, President & CEO 11316 W. Court Street

Pasco, WA 99301

Mobile: (509) 551-9281

Fax: (509) 736-4007

Email: mkorenko@isotopeworld.com

Email: mkkor@aol.com

Battelle Memorial Institute Technology Deployment and Outreach Attention PNNL IP Compliance Office

P.O. Box 999, Mailstop K1-71 902 Battelle Blvd.

Richland, WA 99352

Telephone: (509) 375-2075

Fax: (509) 372-4589

Email: complianceoffice@pnnl.gov

or any other addresses of which either party shall notify the other party in writing.

BUSINESS SENSITIVE

License Agreement No. 525855 – Amended and Restated (Amendment 1)

Advanced Medical Isotope Corporation

March 14, 2017

Version 1

26. EXPIRATION

The offer to execute this Agreement shall expire if this Agreement is not signed by both parties and returned to BATTELLE on or before March 30, 2017.

IN WITNESS WHEREOF the parties have caused this Agreement to be executed by their duly authorized officers on the respective dates and at the respective places hereinafter set forth.

BATTELLE MEMORIAL INSTITUTE		ADVANCED MEDICAL ISOTOPE  CORPORATION
BY	/s/ Peter C. Christensen	BY	/s/ Michael Korenk
	PRINTED		PRINTED
NAME	Peter C. Christensen	NAME	Michael Korenko
TITLE	Manager, Technology Commercialization	TITLE	President & CEO AMI
DATE	03/17/17	DATE	03/17/17

BUSINESS SENSITIVE

License Agreement No. 525855 – Amended and Restated (Amendment 1)

Advanced Medical Isotope Corporation

March 14, 2017

Version 1

ATTACHMENT 1

ROYALTY REPORT TO BATTELLE

From:	Advanced Medical Isotope Corporation – 525855 Amended and Restated
	(Company Name and License Agreement Number)

Reporting Period:

From To (6 Month Period Ending June 30 and December 31, to be Reported by the Following July 31 and January 31).

1. Article 3

NET SALES of LICENSED PRODUCTS
Veterinary use:	$
		X 1%
$ Amount of Royalties Owed:	$
Medical use:	$
		X 1%
$ Amount of Royalties Owed:	$
Total Royalties Due	$

Signed by
Printed name	Telephone No.

BUSINESS SENSITIVE

EX-23

 

Consent of Independent Registered Public Accounting Firm

We consent to the use in the Registration Statement on Form S-8 (No. 333-222494) pertaining to the 2015 Omnibus Securities and Incentive Plan and Form S-8 (No. 333-216588) and our audit report dated March 8, 2017, with respect to the consolidated balance sheet of Vivos, Inc. (f/k/a Advanced Medical Isotope Corporation) as of December 31, 2016, and the consolidated related statements of stockholders’ equity (deficit), operations, and cash flows for the period then ended. Our report dated March 8, 2017, relating to those financial statements, includes an emphasis of matter paragraph relating to uncertainty as to Vivos Inc.’s ability to continue as a going concern, which report is included in this Annual Report on Form 10-K/A. 

 

Fruci & Associates II, PLLC

Spokane, Washington

January 24, 2018

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael K. Korenko, certify that:

1.	I have reviewed this annual report on Form 10-K/A of Vivos Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 24, 2018

/s/ Michael K. Korenko

Michael K. Korenko

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, L. Bruce Jolliff, certify that:

1.	I have reviewed this annual report on Form 10-K/A of Vivos Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 24, 2018

/s/ L. Bruce Jolliff

L. Bruce Jolliff

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Amendment No. 1 to the annual report of Vivos Inc. (the “Company”) on Form 10-K/A for the year ended December 31, 2016 (the “Report”), the undersigned, Michael K. Korenko, Chief Executive Officer of the Company, and L. Bruce Jolliff, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: January 24, 2018

/s/ Michael K. Korenko
Name:	Michael K. Korenko
Title:	Chief Executive Officer

/s/ L. Bruce Jolliff
Name:	L. Bruce Jolliff
Title:	Chief Financial Officer

XML

Document and Entity Information - USD ($)

12 Months Ended

Dec. 31, 2016

Jan. 23, 2018

Jun. 30, 2016

Document And Entity Information

Entity Registrant Name

VIVOS INC

Entity Central Index Key

0001449349

Document Type

10-K/A

Document Period End Date

Dec. 31, 2016

Amendment Flag

true

Amendment Description

This Amendment No. 1 on Form 10-K/A (the “Amendment”) amends the Annual Report on Form 10-K of Vivos Inc., formerly known as Advanced Medical Isotope Corp. (the “Company,” “our” or “we”), for the year ended December 31, 2016, originally filed with the Securities and Exchange Commission (“SEC”) on March 9, 2017 (the “Original Filing”). The purpose of this Amendment is to amend and restate certain narrative disclosures contained in the Original Filing, including Items 1, 1A, 7, 9A, 10, 11, 12, 15, and Footnotes to Consolidated Financial Statements, in response to certain comments received by the Company from the SEC with respect to the Original Filing. In addition, we have updated the Original Filing to reflect the change in the Company’s name. Other than with respect to the foregoing, this Amendment does not modify or update in any way the disclosures made in the Original Filing.

In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), this Amendment also includes currently dated certifications from the Company’s Chief Executive Officer and Chief Financial Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002.

This Amendment should be read in conjunction with the Original Filing and the Company’s other filings made with the SEC subsequent to the filing of the Original Filing on March 9, 2017. This Amendment is not intended to, nor does it, reflect events occurring after the filing of the Original Filing, and does not modify or update the disclosures therein in any way other than as required to reflect the changes described above.

Current Fiscal Year End Date

--12-31

Entity Well-known Seasoned Issuer

No

Entity Voluntary Filer

No

Entity Current Reporting Status

Yes

Entity Filer Category

Smaller Reporting Company

Entity Public Float

$ 7,280,000

Entity Common Stock, Shares Outstanding

65,695,213

Trading Symbol

RDGL

Document Fiscal Period Focus

FY

Document Fiscal Year Focus

2016

XML

Consolidated Balance Sheets - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Current assets:
Cash	$ 27,889	$ 179,032
Prepaid expenses	11,990	26,211
Inventory		8,475
Total current assets	39,879	213,718
Fixed assets, net of accumulated depreciation	1,473	4,420
Other assets:
Patents and intellectual property		35,482
Deposits	644	644
Total other assets	644	36,126
Total assets	41,996	254,264
Current liabilities:
Accounts payable and accrued expenses	1,137,086	1,182,112
Related party accounts payable	109,718	102,647
Accrued interest payable	114,755	229,246
Payroll liabilities payable	499,502	298,900
Convertible notes payable, net	544,508	1,788,384
Derivative liability	324,532	4,235,016
Related party promissory note	332,195	1,280,450
Liability for lack of authorized shares		852,091
Total current liabilities	3,062,296	9,968,846
Total liabilities	3,062,296	9,968,846
MEZZANINE EQUITY
Preferred stock, $.001 par value, 20,000,000 shares of authorized preferred stock, $.001 par value, 5,000,000 Series A shares authorized; 3,773,592 and 1,627,000 - shares issued and outstanding, respectively	14,144,571	4,617,052
Total mezzanine equity	14,144,571	4,617,052
Stockholders’ equity (deficit):
Common stock, $.001 par value; 2,000,000,000 shares authorized; 31,743,797 and 19,969,341 shares issued and outstanding, respectively	31,744	19,969
Paid in capital	40,672,825	33,662,942
Accumulated deficit	(57,869,440)	(48,014,545)
Total stockholders’ equity (deficit)	(17,164,871)	(14,331,634)
Total liabilities and stockholders’ equity (deficit)	$ 41,996	$ 254,264

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2016	Dec. 31, 2015
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	20,000,000	20,000,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	2,000,000,000	2,000,000,000
Common stock, shares issued	31,743,797	19,969,341
Common stock, shares outstanding	31,743,797	19,969,341
Series A Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	3,773,592	1,627,000
Preferred stock, shares outstanding	3,773,592	1,627,000

XML

Consolidated Statements of Operations - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Income Statement [Abstract]
Consulting revenues	$ 8,108	$ 24,108
Operating expenses
Cost of materials		474
Sales and marketing expenses	284,138
Depreciation and amortization expense	2,947	5,672
Professional fees	2,068,796	741,375
Stock based compensation	675,324	80,635
Payroll expenses	652,877	679,259
Research and development	328,026	149,650
General and administrative expenses	432,470	408,306
Total operating expenses	4,444,578	2,065,371
Operating loss	(4,436,470)	(2,041,263)
Non-operating income (expense):
Interest expense	(6,259,467)	(3,196,153)
Gain on settlement of debt	3,108,342	3,562,067
Grant income	21,010	21,010
Gain (loss) on derivative liability	(2,244,353)	7,887,025
Loss on impaired assets	(43,957)
Non-operating income (expense), net	(5,418,425)	8,273,949
Income (loss) before income taxes	(9,854,895)	6,232,686
Income tax provision
Net income (loss)	$ (9,854,895)	$ 6,232,686
Earnings (loss) per common share	$ (0.46)	$ 0.34
Weighted average number of common shares outstanding	21,497,069	18,505,467

XML

Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($)	Common Stock [Member]	Paid in Capital [Member]	Accumulated Deficit [Member]	Total
Balance at Dec. 31, 2014	$ 17,054	$ 34,068,009	$ (54,247,231)	$ (20,162,168)
Balance, shares at Dec. 31, 2014	17,053,825
Common stock issued for: Exercise of options and warrants	$ 1,995	(1,995)
Common stock issued for: Exercise of options and warrants, shares	1,995,000
Common stock issued for: Loan fees on convertible debt	$ 43	6,344		6,387
Common stock issued for: Loan fees on convertible debt, shares	43,326
Common stock issued for: Conversion of debt	$ 920	108,892		109,812
Common stock issued for: Conversion of debt, shares	920,516
Common stock issued for: Classified to liability due to lack of authorized shares	$ (43)	(598,943)		(598,986)
Common stock issued for: Classified to liability due to lack of authorized shares, shares	(43,326)
Options and warrants issued for services		80,635		80,635
Net income loss			6,232,686	6,232,686
Balance at Dec. 31, 2015	$ 19,969	33,662,942	(48,014,545)	(14,331,634)
Balance, shares at Dec. 31, 2015	19,969,341
Common stock issued for: Exercise of options and warrants	$ 31	(31)
Common stock issued for: Exercise of options and warrants, shares	30,644
Common stock issued for: Settlement of debt	$ 564	70,299		$ 70,863
Common stock issued for: Settlement of debt, shares	563,523
Common stock issued for: Conversion of debt, shares				347,400
Common stock issued for: Conversion of preferred stock	$ 11,180	4,817,024		$ 4,828,204
Common stock issued for: Conversion of preferred stock	11,180,289
Common stock issued for: Classified to liability due to lack of authorized shares		852,092		852,092
Options and warrants issued for services		1,270,499		1,270,499
Net income loss			(9,854,895)	(9,854,895)
Balance at Dec. 31, 2016	$ 31,744	$ 40,672,825	$ (57,869,440)	$ (17,164,871)
Balance, shares at Dec. 31, 2016	31,743,797

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Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
CASH FLOW FROM OPERATING ACTIVITIES:
Net income (loss)	$ (9,854,895)	$ 6,232,686
Adjustments to reconcile net income (loss) to net cash used by operating activities:
Depreciation of fixed assets	2,947	4,333
Amortization of licenses and intangible assets		1,339
Amortization of convertible debt discount	604,042	1,080,771
Amortization of prepaid expenses paid with stock	(2,500)
Amortization of debt issuance costs		13,917
(Gain) loss on derivative liability	2,244,353	(7,887,025)
(Gain) on settlement of debt	(3,108,342)	(3,562,067)
Loss on impaired assets	43,957
Preferred stock issued for services	1,003,814	334,880
Preferred stock issued for loan fees	162,456	527,325
Stock options and warrants issued for services	1,270,499	80,635
New derivatives recorded as loan fees	4,935,638
Penalties on notes payable		1,148,997
Changes in operating assets and liabilities:
Prepaid expenses	16,721	(4,501)
Accounts payable	102,954	151,607
Payroll liabilities	200,602	252,240
Accrued interest	451,041	431,758
Net cash used by operating activities	(1,926,713)	(1,193,105)
CASH FLOWS FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital lease		(39,481)
Proceeds from convertible note	1,273,534	1,666,415
Proceeds from related party notes	723,308
Proceeds from shareholder advances	132,533
Proceeds from warrant exercised for preferred stock	250
Proceeds from sale of preferred stock	70,000
Payments on convertible debt	(419,055)
Payments on shareholder advances	(5,000)
Payments on short term debt		(255,000)
Net cash provided by financing activities	1,775,570	1,371,934
Net increase in cash	(151,143)	178,829
Cash, beginning of period	179,032	203
CASH, END OF PERIOD	27,889	179,032
Supplemental disclosures of cash flow information:
Cash paid for interest	105,758	9,920
Cash paid for income taxes

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Organization & Basis of Presentation

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Organization & Basis of Presentation

NOTE 1: ORGANIZATION & BASIS OF PRESENTATION

Business Overview

The Company was incorporated under the laws of Delaware on December 23, 1994 as Savage Mountain Sports Corporation (“SMSC”). On September 6, 2006, the Company changed its name to Advanced Medical Isotope Corporation, and on December 28, 2017, the Company began operating as Vivos Inc. The Company has authorized capital of 2,000,000,000 shares of common stock, $0.001 par value per share, and 20,000,000 shares of preferred stock, $0.001 par value per share.

Our principal place of business is 719 Jadwin Avenue, Richland, WA 99352. Our telephone number is (509) 736-4000. Our corporate website address is http://www.radiogel.com. Our common stock is currently quoted on the OTC Pink Marketplace under the symbol “RDGL.”

The Company is a late stage radiation oncology medical device company engaged in the development of its yttrium-90 based brachytherapy device RadioGel™ for the treatment of non-resectable tumors. A prominent team of radiochemists, scientists and engineers, collaborating with strategic partners, including national laboratories, universities and private corporations, lead the Company’s development efforts. The Company’s overall vision is to globally empower physicians, medical researchers and patients by providing them with new isotope technologies that offer safe and effective treatments for cancer.

The Company’s current focus is on the development of its RadioGel™ device. RadioGel™ is an injectable particle-gel, for brachytherapy radiation treatment of cancerous tumors in people and animals. RadioGel™ is comprised of a hydrogel, or a substance that is liquid at room temperature and then gels when reaching body temperature after injection into a tumor. In the gel are small, one micron, yttrium-90 phosphate particles (“Y-90”). Once injected, these inert particles are locked in place inside the tumor by the gel, delivering a very high local radiation dose. The radiation is beta, consisting of high-speed electrons. These electrons only travel a short distance so the device can deliver high radiation to the tumor with minimal dose to the surrounding tissue. Optimally, patients can go home immediately following treatment without the risk of radiation exposure to family members. Since Y-90 has a half-life of 2.7 days, the radioactively drops to 5% of its original value after ten days.

The Company’s lead brachytherapy products, including RadioGel™, incorporate patented technology developed for Battelle Memorial Institute (“Battelle”) at Pacific Northwest National Laboratory, a leading research institute for government and commercial customers. Battelle has granted the Company an exclusive license to patents covering the manufacturing, processing and applications of RadioGel™ (the “Battelle License”). Other intellectual property protection includes proprietary production processes and trademark protection in 17 countries. The Company plans to continue efforts to develop new refinements on the production process, and the product and application hardware, as a basis for future patents.

The Company is currently working towards obtaining approval from the FDA to market and sell RadioGel™ as a Class II medical device. The Company first requested FDA approval of RadioGel™ in June 2013, at which time the FDA classified RadioGel™ as a medical device. The Company then followed with a 510(k) submission which the FDA responded, in turn, with a request for a physician letter of substantial equivalence and a reformatted 510(k) summary, which the Company provided in January 2014. In February 2014, the FDA ruled the device as not substantially equivalent due to a lack of a predicate device and it was therefore classified as a Class III device. Class III devices are generally the highest risk devices and are therefore subject to the highest level of regulatory review, control and oversight. Class III devices must typically be approved by the FDA before they are marketed. Class II devices represent lower risk devices than Class III and require fewer regulatory controls to provide reasonable assurance of the device’s safety and effectiveness. In contrast, Class I devices are deemed to be lower risk than Class II or III, and are therefore subject to the least regulatory controls.

The Company is currently developing test plans to address issues raised by the FDA in connection with the Company’s previous submissions regarding RadioGel™, including developing specific test plans and specific indication of use. The Company intends to request that the FDA grant approval to re-apply for de novo classification of RadioGel™, which would reclassify the device from a Class III device to a Class II device, further simplifying the path to FDA approval. In the event the FDA denies the Company’s application and subsequently determines during the de novo review that RadioGel™ cannot be classified as a Class I or Class I1 device, the Company will then need to submit a pre-market approval application to obtain the necessary regulatory approval as a Class III device. See also Business – Regulatory History for a discussion regarding the Company’s application for FDA approval of RadioGel™.

IsoPet Solutions

The Company’s, IsoPet Solutions division was established in May 2016 to focus on the veterinary oncology market, namely engagement of university veterinarian hospital to develop the detailed therapy procedures to treat animal tumors and ultimately use of the technology in private clinics. The Company has engaged three different university veterinarian hospitals to begin using RadioGel™ for treatment of three different cancer types in dogs and cats. Washington State University Veterinary Hospital has tested one cat to demonstrate the procedures and the absence of any significant toxicity effect. The other two centers are expected to begin therapy during the second quarter of 2017 after their internal administrative review process is completed.

These animal therapies will focus on creating labels that describe the procedures in detail as a guide to future veterinarians. The labels will be voluntarily submitted to the FDA for review. They will then be used as data for future FDA applications in the medical sector and as key intellectual property for licensing to private veterinary clinics.

The Company anticipates that future profit will be derived from direct sales of RadioGel™ and related services, and from licensing to private medical and veterinary clinics in the U.S. and internationally.

Regulatory History

RadioGel™ has a long regulatory history with the Food and Drug Administration (“FDA”). Initially, the Company submitted a presubmission (Q130140) to obtain FDA feedback about the proposed product. The FDA requested that the Company file a request for designation with the Office of Combination Products (RFD130051), which led to the determination that RadioGel™ is a device to be reviewed and regulated by the Center for Devices and Radiological Health (CDRH). The Company then submitted a 510(k) notice for RadioGel™ (K133368), which was found Not Substantially Equivalent due to the lack of a suitable predicate, and RadioGel™ was assigned to the Class III product code NAW (microspheres). Class III products or devices are generally the highest risk devices and are therefore subject to the highest level of regulatory review, control and oversight. Class III products or devices must typically be approved by FDA before they are marketed. Class II devices represent lower risk products or devices than Class III and require fewer regulatory controls to provide reasonable assurance of the product’s or device’s safety and effectiveness. In contrast, Class I products and devices are deemed to be lower risk than Class I or II, and are therefore subject to the least regulatory controls.

A presubmission meeting (Q140496) was held with the FDA on June 17, 2014, during which the FDA maintained that RadioGel™ should be considered a Class III device and therefore subject to pre-market approval. On December 29, 2014, the Company submitted a de novo petition for RadioGel™ (DEN140043). The de novo petition was denied by the FDA on June 1, 2015, with the FDA providing numerous comments and questions. On September 29, 2015, the Company submitted a follow-up pre-submission informational meeting request with the FDA (Q151569). At such meeting on November 9, 2015, the FDA indicated acceptance of the Company’s applied dosimetry methods and clarified the FDA’s outstanding questions regarding RadioGel™. The Company has prepared a new pre-submission to obtain FDA feedback on the proposed testing to address the concerns raised by the FDA staff, as well as the suitability of RadioGel™ for de novo reclassification and was presented to the FDA in a meeting on August 29, 2017. The FDA provided valuable clarification on the remaining pre-clinical testing.

The Company believes that its submission properly takes into account all of the FDA staff’s feedback over the more than three years that the Company has been working to obtain FDA authorization to market RadioGel^TM. Of particular importance, the Company has provided corresponding supporting data for proposed future testing to address any remaining questions raised by the FDA. As described in detail in the Company’s pre-submission package, we believe that with these modifications, RadioGel™ is appropriate for de novo reclassification. In addition, in previous FDA submittals, the Company proposed applying RadioGel™ for a very broad range of cancer therapies, referred to as Indication for Use. The FDA requested that the Company reduce its Indications for Use. To comply with that request, the Company expanded its Medical Advisory Board (“MAB”) and engaged doctors from respected hospitals who have evaluated the candidate cancer therapies based on three criteria: (1) potential for FDA approval and successful therapy; (2) notable advantage over current therapies; and (3) probability of wide spread acceptance by the medical community.

The MAB selected eighteen applications for RadioGel™, each of which meet the criteria described above. This large number confirms the wide applicability of the device and defines the path for future business growth. The Company’s application establishes a single Indication for Use - treatment of basal cell and squamous cell skin cancers. We anticipate that this initial application will facilitate each subsequent application for additional Indications for Use, and the testing for many of the subsequent applications could be conducted in parallel, depending on available resources.

In the event the FDA denies the Company’s application for de novo review, and therefore determines that RadioGel™ cannot be classified as a Class I or Class I1 device, the Company will then need to submit a pre-market approval application to obtain the necessary regulatory approval as a Class III device.

Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has suffered recurring losses and used significant cash in support of its operating activities and the Company’s cash position is not sufficient to support the Company’s operations. Research and development of the Company’s brachytherapy product line has been funded with proceeds from the sale of equity and debt securities as well as a series of grants. The Company requires funding of approximately $1.5 million annually to maintain current operating activities. Over the next 12 to 24 months, the Company believes it will cost approximately $5.0 million to $10.0 million to fund: (1) the FDA approval process and initial deployment of the brachytherapy products, and (2) initiate regulatory approval processes outside of the United States. The continued deployment of the brachytherapy products and a worldwide regulatory approval effort will require additional resources and personnel. The principal variables in the timing and amount of spending for the brachytherapy products in the next 12 to 24 months will be the FDA’s classification of the Company’s brachytherapy products as Class II or Class III devices (or otherwise) and any requirements for additional studies which may possibly include clinical studies. Thereafter, the principal variables in the amount of the Company’s spending and its financing requirements would be the timing of any approvals and the nature of the Company’s arrangements with third parties for manufacturing, sales, distribution and licensing of those products and the products’ success in the U.S. and elsewhere. The Company intends to fund its activities through strategic transactions such as licensing and partnership agreements or additional capital raises.

Following receipt of required regulatory approvals and financing, in the U.S., the Company intends to outsource material aspects of manufacturing, distribution, sales and marketing. Outside of the U.S., the Company intends to pursue licensing arrangements and/or partnerships to facilitate its global commercialization strategy.

In the longer-term, subject to the Company receiving adequate funding, regulatory approval for RadioGel™ and other brachytherapy products, and thereafter being able to successfully commercialize its brachytherapy products, the Company intends to consider resuming research efforts with respect to other products and technologies intended to help improve the diagnosis and treatment of cancer and other illnesses

Based on the Company’s financial history since inception, its auditor has expressed substantial doubt as to the Company’s ability to continue as a going concern. The Company has limited revenue, nominal cash, and has accumulated deficits since inception. If the Company cannot obtain sufficient additional capital, the Company will be required to delay the implementation of its business strategy and may not be able to continue operations.

As of December 31, 2016 the Company has $27,889 cash on hand. There are currently commitments to vendors for products and services purchased, plus, the employment agreements of the CFO and other employees of the Company and the Company’s current lease commitments that will necessitate liquidation of the Company if it is unable to raise additional capital. The current level of cash is not enough to cover the fixed and variable obligations of the Company.

Assuming the Company is successful in the Company’s sales/development effort, it believes that it will be able to raise additional funds through strategic agreements or the sale of the Company’s stock to either current or new stockholders. There is no guarantee that the Company will be able to raise additional funds or to do so at an advantageous price.

The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability. The Company plans to seek additional funding to maintain its operations through debt and equity financing and to improve operating performance through a focus on strategic products and increased efficiencies in business processes and improvements to the cost structure. There is no assurance that the Company will be successful in its efforts to raise additional working capital or achieve profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Advanced Medical Isotope Corporation and its wholly-owned subsidiary IsoPet Solutions Corporation (“Iso-Pet”). All significant inter-company balances and transactions have been eliminated in consolidation.

Financial Statement Reclassification

Certain account balances from prior periods have been reclassified in these audited consolidated financial statements so as to conform to current period classifications.

Cash Equivalents

For the purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.

Inventory

Inventory is reported at the lower of cost or market, determined using the first-in, first-out basis, or net realizable value. All inventories consist of finished goods. The Company had no raw materials or work in process. The Company had been carrying inventory consisting of two bottles of O-18 water for a value of $8,475. The Company determined this water was no longer usable and wrote off the $8,475 value as of December 31, 2016.

Fair Value of Financial Instruments

Fair Value of Financial Instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of December 31, 2016 and December 31, 2015, the balances reported for cash, prepaid expenses, accounts receivable, accounts payable, and accrued expenses, approximate the fair value because of their short maturities.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The Company measures certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis were calculated using the Black-Scholes pricing model and are as follows at December 31, 2016:

	Total		Level 1		Level 2		Level 3
Assets:
Total Assets Measured at Fair Value	$	-	$	-	$	-	$	-
Liabilities:
Derivative Liability		324,532		-		-		324,532
Total Liabilities Measured at Fair Value	$	324,532	$	-	$	-	$	324,532

Assets and liabilities measured at fair value on a recurring basis are as follows at December 31, 2015:

	Total		Level 1		Level 2		Level 3
Assets
Total Assets Measured at Fair Value	$	-	$	-	$	-	$	-
Liabilities
Liability for lack of authorized shares		852,091		-		-		852,091
Derivative Liability		4,235,016		-		-		4,235,016
Total Liabilities Measured at Fair Value	$	5,087,107	$	-	$	-	$	5,087,107

Fixed Assets

Fixed assets are carried at the lower of cost or net realizable value. Production equipment with a cost of $2,500 or greater and other fixed assets with a cost of $1,500 or greater are capitalized. Major betterments that extend the useful lives of assets are also capitalized. Normal maintenance and repairs are charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in operations.

Depreciation is computed using the straight-line method over the following estimated useful lives:

Production equipment:	3 to 7 years
Office equipment:	2 to 5 years
Furniture and fixtures:	2 to 5 years

Leasehold improvements and capital lease assets are amortized over the shorter of the life of the lease or the estimated life of the asset.

Management of the Company reviews the net carrying value of all of its equipment on an asset by asset basis whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. These reviews consider the net realizable value of each asset, as measured in accordance with the preceding paragraph, to determine whether impairment in value has occurred, and the need for any asset impairment write-down.

License Fees

License fees are stated at cost, less accumulated amortization. Amortization of license fees is computed using the straight-line method over the estimated economic useful life of the assets.

The Company made a $10,000 investment in 2010 for an exclusive license with Battelle Memorial Institute regarding its technology for the production of a Brachytherapy seed. In August 2010 the Company entered into a License Agreement for the Patent Rights in the area of a Brachytherapy seed with a Fast-dissolving Matrix for Optimized Delivery of Radionuclides. This Agreement calls for a $10,000 nonrefundable fee upon execution, a royalty agreement on sales and on funds received from any sublicenses. The $10,000 nonrefundable fee paid upon execution was capitalized as License Fees and is amortized on the straight-line basis over a three-year life. Additionally the Agreement calls for a minimum annual fee.

The Company agreed for a mutual termination of this license effective December 31, 2016 and that the $25,000 minimum annual fee for 2016 due January 2017 would not be owed. The Company was carrying $35,482 in patent costs relating to this license, which was written off as impaired assets during the twelve months ended December 31, 2016. The Company still has a $7,026 balance owed for patent expense accrued during 2016.

Calendar Year	Minimum Royalties per Calendar Year
2010	$	-
2011	$	-
2012	$	2,500
2013	$	5,000	(1)
2014	$	7,500	(2)
2015	$	10,000	(3)
2016 and each calendar year thereafter	$	25,000	(4)

(1) Paid February, 2014

(2) Paid February, 2015

(3) Paid February, 2016

(4) No longer owed due to termination of license agreement effective December 31, 2016

The Company made a $5,000 investment in February 2011 for a one-year option agreement to negotiate an exclusive license agreement with Battelle Memorial Institute regarding its patents for the production of RadioGel™. This option agreement calls for a $5,000 upfront fee for the option, which expired February 2012 and was fully expensed in the twelve months ended December 31, 2011. Effective March 2012, the Company entered into an exclusive license agreement with Battelle Memorial Institute regarding the use of its patented RadioGel™ technology. This license agreement calls for a $17,500 nonrefundable license fee and a royalty based on a percent of gross sales for licensed products sold; the license agreement also contains a minimum royalty amount to be paid each year starting with 2013.

Calendar Year	Minimum Royalties per Calendar Year
2012	$	-
2013	$	5,000	(1)
2014	$	7,500	(2)
2015	$	10,000	(3)
2016	$	10,000	(4)
2017 and each calendar year thereafter	$	25,000

(1) Paid February, 2014

(2) Paid February, 2015

(3) Paid February, 2016

(4) $5,399 was paid January 2017 and the remaining $4,601 was paid February 2017.

The Company periodically reviews the carrying values of capitalized license fees and any impairments are recognized when the expected future operating cash flows to be derived from such assets are less than their carrying value.

Amortization is computed using the straight-line method over the estimated useful live of three years. Amortization of license fees was $0, and $1,339 for the years ended December 31, 2016, and 2015, respectively.

Patents and Intellectual Property

The Company had a total $35,482 of capitalized patents and intellectual property costs at December 31, 2015 for the patent rights in the area of a Brachytherapy seed with a Fast-dissolving Matrix for Optimized Delivery of Radionuclides. Effective December 31, 2016 the Company agreed to terminate this non-utilized patent license for which the $35,482 of capitalized patent and intellectual costs applied and therefore the Company wrote off $35,482 of capitalized costs in the twelve months ending December 31, 2016.

Revenue Recognition

The Company recognized revenue related to product sales when (i) persuasive evidence of the arrangement exists, (ii) shipment has occurred, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured.

Revenue for the fiscal year ended December 31, 2016 and December 31, 2015 consisted of consulting revenue. The Company recognizes revenue once an order has been received and shipped to the customer or services have been performed. Prepayments, if any, received from customers prior to the time products are shipped are recorded as deferred revenue. In these cases, when the related products are shipped, the amount recorded as deferred revenue is recognized as revenue. The Company does not accrue for sales returns and other allowances as it has not experienced any returns or other allowances.

Income from Grants and Deferred Income

Government grants are recognized when all conditions of such grants are fulfilled or there is reasonable assurance that they will be fulfilled. The Company has chosen to recognize income from grants as it incurs costs associated with those grants, and until such time as it recognizes the grant as income those funds received will be classified as deferred income on the balance sheet.

On September 1, 2015, the Company received notification it had been awarded from Washington State University, $42,019 grant funds from the sub-award project entitled “Optimized Injectable Radiogels for High-dose Therapy of Non-Resectable Solid Tumors”. The Company received $21,010 and $21,009 of the grand award in the twelve months ended December 31, 2016 and 2015, respectively.

Earnings (Loss) Per Share

The Company accounts for its earnings (loss) per common share by replacing primary and fully diluted earnings per share with basic and diluted earnings per share. Basic earnings (loss) per share is computed by dividing income (loss) available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period, and does not include the impact of any potentially dilutive common stock equivalents since the impact would be anti-dilutive. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares had been issued. However, since the Company does not have sufficient authorized shares of common stock, we did not include these in our calculation.

Securities, all of which represent common stock equivalents, that could be dilutive in the future as of December 31, 2016 and 2015, are as follows:

	December 31, 2016		December 31, 2015
Convertible debt		6,441,644		7,848,421
Preferred stock		37,735,920		16,270,000
Common stock options		2,402,500		51,350
Common stock warrants		3,579,505		6,791,003
Total potential dilutive securities		50,159,569		30,960,774

Research and Development Costs

Research and developments costs, including salaries, research materials, administrative expenses and contractor fees, are charged to operations as incurred. The cost of equipment used in research and development activities which has alternative uses is capitalized as part of fixed assets and not treated as an expense in the period acquired. Depreciation of capitalized equipment used to perform research and development is classified as research and development expense in the year computed.

The Company incurred $328,026 and $149,650 research and development costs for the years ended December 31, 2016, and 2015, respectively, all of which were recorded in the Company’s operating expenses noted on the income statements for the years then ended.

Advertising and Marketing Costs

Advertising and marketing costs are expensed as incurred except for the cost of tradeshows which are deferred until the tradeshow occurs. Tradeshow expenses incurred and not expensed as of the years ended December 31, 2016, and 2015 were $0 and $14,800, respectively. During the twelve months ended December 31, 2016 and 2015, the Company incurred $284,138 and $0, respectively, in advertising and marketing costs.

Shipping and Handling Costs

Shipping and handling costs are expensed as incurred and included in cost of materials.

Legal Contingencies

In the ordinary course of business, the Company is involved in legal proceedings involving contractual and employment relationships, product liability claims, patent rights, and a variety of other matters. The Company records contingent liabilities resulting from asserted and unasserted claims against it, when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. The Company discloses contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. Estimated probable losses require analysis of multiple factors, in some cases including judgments about the potential actions of third-party claimants and courts. Therefore, actual losses in any future period are inherently uncertain. Currently, the Company does not believe any probable legal proceedings or claims will have a material impact on its financial position or results of operations. However, if actual or estimated probable future losses exceed the Company’s recorded liability for such claims, it would record additional charges as other expense during the period in which the actual loss or change in estimate occurred.

There had been an ongoing dispute with the landlord, Rob and Maribeth Myers, regarding the production center rent. During 2016, the Company reached a Settlement Agreement with regards to this dispute resulting in a payment of $438,830 for rent, interest, and costs.

There is an ongoing dispute with BancLeasing and Washington Trust Bank regarding application of lease payments to the principal loan amount for the linear accelerator, and the Company believed it overpaid by approximately $300,000. In 2016 the Company was awarded in the Superior Court of the State of Washington a total sum of $527,876 against BancLeasing. The Company is pursuing its options for collection of the awarded amount, however there can be no assurance as to any eventual collection.

Income Taxes

To address accounting for uncertainty in tax positions, the Company clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. The Company also provides guidance on de-recognition, measurement, classification, interest, and penalties, accounting in interim periods, disclosure and transition.

The Company files income tax returns in the U.S. federal jurisdiction, and Delaware. The Company did not have any tax expense for the years ended December 31, 2016 and 2015. The Company did not have any deferred tax liability or asset on its balance sheet on December 31, 2016 and 2015.

Interest costs and penalties related to income taxes, if any, will be classified as interest expense and general and administrative costs, respectively, in the Company’s financial statements. For the years ended December 31, 2016 and 2015, the Company did not recognize any interest or penalty expense related to income taxes. The Company believes that it is not reasonably possible for the amounts of unrecognized tax benefits to significantly increase or decrease within the next 12 months.

Stock-Based Compensation

The Company recognizes in the financial statements compensation related to all stock-based awards, including stock options, based on their estimated grant-date fair value. The Company has estimated expected forfeitures and is recognizing compensation expense only for those awards expected to vest. All compensation is recognized by the time the award vests.

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from non-employees. Costs are measured at the fair market value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of the date on which there first exists a firm commitment for performance by the provider of goods or services or on the date performance is complete. The Company recognizes the fair value of the equity instruments issued that result in an asset or expense being recorded by the Company, in the same period(s) and in the same manner, as if the Company has paid cash for the goods or services.

Recent Accounting Pronouncements

There are no recently issued accounting pronouncements that the Company believes are applicable or would have a material impact on the financial statements of the Company.

Reclassifications

Certain prior-year amounts have been reclassified to conform with current year’s presentation.

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Fixed Assets

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment [Abstract]

Fixed Assets

NOTE 3: FIXED ASSETS

Fixed assets consist of the following at December 31, 2016 and 2015:

	December 31, 2016			December 31, 2015
Production equipment	$	15,182		$	1,938,532
Building		-			446,772
Leasehold improvements		-			3,235
Office equipment		14,594			32,769
		29,776			2,421,308
Less accumulated depreciation		(28,303	)		(2,416,888	)
	$	1,473		$	4,420

Depreciation expense for the above fixed assets for the years ended December 31, 2016 and 2015, respectively, was $2,947 and $4,332.

During the year ended December 31, 2016, the Company abandoned production equipment, building, leasehold improvements, and office equipment with an original cost totaling $1,016,532 that had been located in the production center. Additionally the Company removed the linear accelerator form the production center and has placed the equipment into storage. The $1,375,000 original cost of the linear accelerator was also written off during the year ended December 31, 2016. All of the equipment written off during the year ended December 31, 2016 had been fully depreciated.

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Intangible Assets

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

NOTE 4: INTANGIBLE ASSETS

Intangible assets consist of the following at December 31, 2016 and December 31, 2015:

	December 31, 2016			December 31, 2015
License Fee	$	112,500		$	112,500
Less accumulated amortization		(112,500	)		(112,500	)
		-			-
Patents and intellectual property		-			35,482
	$	-		$	35,482

Amortization expense for the above intangible assets for the years ended December 31, 2016 and 2015, respectively, was $0 and $1,339.

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Debt Issuance Costs

12 Months Ended

Dec. 31, 2016

Debt Disclosure [Abstract]

Debt Issuance Costs

NOTE 5: DEBT ISSUANCE COSTS

During the years ending December 31, 2016 and 2015, the Company paid $0 and $5,000, respectively, in cash for debt arrangements.

The Company amortizes debt issuance costs on a straight-line basis over the life of the debt arrangements and recognized $0, and $18,917, during the years ending December 31, 2016, and 2015, respectively.

During the twelve months ending December 31, 2016 and 2015 the Company had the following activity in their debt issuance cost account:

Debt issuance costs at December 31, 2014	$	13,917
Cash paid as fees for debt arrangements		5,000
Amortization of debt issuance costs		(18,917	)
Debt issuance costs at December 31, 2015		-
Cash paid as fees for debt arrangements		-
Amortization of debt issuance costs		-
Debt issuance costs at December 31, 2016	$	-

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Related Party Transactions

12 Months Ended

Dec. 31, 2016

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 6: RELATED PARTY TRANSACTIONS

Related Party Promissory Notes

As of December 31, 2016 and 2015, the Company had the following related party promissory notes outstanding:

	December 31, 2016				December 31, 2015
	Principal (net)		Accrued Interest		Principal (net)		Accrued Interest
September 2015 $1,055,535 Note, 8% interest, due on demand after March 2017	$	-	$	-	$	1,055,535		27,299
September 2015 $142,415 Note, 10% interest, due May 2016		-		-		142,415		4,669
October 2015 $82,500 Note, 10% interest due October 2016		82,500		10,239		82,500		1,966
February 2016 $50,000 Note, 10% interest, due February 2017		50,000		4,192		-		-
May 2016 $109,695 Note, 10% interest, due July 2017		109,695		7,093		-		-
May 2016 $90,000 Note, 10% interest, due May 2017		90,000		5,425		-		-
Total Convertible Notes Payable, Net	$	332,195	$	26,949	$	1,280,450	$	33,934

During the year ending December 31, 2016, the Company received proceeds from new related party promissory notes of $249,695 and recorded conversions of $1,197,950 for related party note principal.

During the year ending December 31, 2015 the Company received proceeds from new related party promissory notes of $224,915. Additionally, in September of 2015 multiple convertible notes were rolled in together for a total new non-convertible promissory note of $1,055,532.

Related Party Convertible Notes Payable

During the year ending December 31, 2016, the Company received proceeds from new related party convertible notes of $473,613 and, at inception, issued 37,906 shares of Series A Convertible Preferred Stock (“Series A Preferred”) as loan fees valued at $29,156. Each of the Company’s related party convertible notes have a conversion rate that is variable, therefore the Company has accounted for such conversion features as derivative instruments (see Note 9). As a result of recording the preferred stock and the derivative liabilities at note inception, the Company increased the debt discount recorded on their convertible notes by $473,613 and recorded $1,912,587 in additional interest expense. During the year ending December 31, 2016, the Company recorded amortization of $25,000 on their related party convertible note debt discounts, recorded conversions of $473,613 for related party note principal, and recorded $448,613 of debt discount write-offs for early debt conversion. As a result of all related party convertible notes being converted during the year ending December 31, 2016, the related party convertible notes payable balance was $0 as of December 31, 2016.

During the year ending December 31, 2015, the Company received proceeds from new related party convertible notes of $156,500. Of that $156,500, $113,500 was convertible at a fixed rate and $43,000 was convertible at a variable rate.

The new related party convertible notes of $113,500 were convertible into the Company’s common stock at $0.001 per share. The convertible notes were issued with 43,326 shares of common stock (see Note 11), therefore the Company recorded debt discounts at inception of $4,896 to allocate the convertible note proceeds to the common stock. In September of 2015, the $113,500 of new convertible notes were rolled in together with multiple other notes for a total new promissory note of $1,055,532 which was not convertible. The $4,896 of debt discounts were fully amortized prior to the convertible notes being rolled into the promissory note.

The new related party convertible notes of $43,000 were issued with 3,440 shares of Series A preferred stock as loan fees valued at $17,401 (see Note 11). Each of these related party convertible notes have a conversion rate that is variable, therefore the Company has accounted for such conversion features as derivative instruments (see Note 9). As a result of recording the preferred stock and the derivative liabilities at note inception, the Company increased the debt discount recorded on these convertible notes by $43,000 and recorded $17,401 in additional interest expense. During the year ending December 31, 2016 the Company recorded amortization of $43,000 on these related party convertible note debt discounts and recorded conversions of $43,000 for related party note principal.

During the year ending December 31, 2015 the Company recorded additional conversions of $3,638,566 of note principal and amortization of $6,328 of debt discounts for related party convertible notes that had been outstanding as of December 31, 2014.

As a result of all related party convertible notes being rolled into a non-convertible promissory note or converted during the year ending December 31, 2015 the related party convertible notes payable balance was $0 as of December 31, 2015.

Preferred Shares Issued to Officers

During 2016, the Company issued 10,000 shares of its Series A Preferred to its CFO, representing $54,152, for services (see Note 11).

During 2015, the Company issued the CEO and CFO a combined total of 175,000 shares of Series A Preferred in exchange for a combined total of $262,500 of accrued and unpaid wages (see Note 11).

Rent Expenses

On July 17, 2007, the Company entered into a five-year lease for its production center from a less than 5% shareholder. Subsequent to July 31, 2012, the Company was renting this space on a month-to-month basis at $11,904 per month. Effective January 1, 2015, the Company’s lease was terminated. There has been an ongoing dispute with the landlord, Rob and Maribeth Myers, regarding the production center rent. During 2016, the Company reached a Settlement Agreement with regards to this dispute resulting in a payment of $438,830 for rent, interest, and costs.

The Company rents office space from a significant shareholder and director of the Company on a month-to-month basis with a monthly payment of $1,500.

Rental expense for the years ended December 31, 2016 and 2015 consisted of the following:

	Year ended December 31, 2016		Year ended December 31, 2015
Office and warehouse space	$	40,000	$	155,306
Corporate office		18,000		18,000
Total Rental Expense	$	58,000	$	173,306

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Capital Lease Obligations

12 Months Ended

Dec. 31, 2016

Leases [Abstract]

Capital Lease Obligations

NOTE 7: CAPITAL LEASE OBLIGATIONS

During September 2007, the Company obtained two master lease agreements for $1,875,000 and $631,000, with interest on both leases accruing at 8.6% annually, secured by equipment and personal guarantee of two of the major stockholders. These long-term agreements shall be deemed capital lease obligations for purposes of financial statement reporting. The purpose of the lease is to acquire a Pulsar 10.5 PET Isotope Production System plus ancillary equipment.

This capital lease and its resulting obligation is recorded at an amount equal to the present value at the beginning of the lease term of minimum lease payments during the lease term, excluding any portion of the payments representing taxes to be paid by the Company. This amount does not exceed the fair value of the leased property at the lease inception, so the recorded amount is the fair value.

The lease requires the Company to maintain a minimum debt service coverage ratio of 1:1 measured at fiscal year-end. Non-compliance with this provision shall constitute a default and guarantors must contribute capital sufficient to fund any deficit in the debt service coverage ratio.

The Company fully paid this capital lease obligations during the twelve months ending December 31, 2015; however there is an ongoing dispute with the lessor as the Company believes it has overpaid its lease obligations.

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Convertible Notes Payable

12 Months Ended

Dec. 31, 2016

Debt Disclosure [Abstract]

Convertible Notes Payable

NOTE 8: CONVERTIBLE NOTES PAYABLE

As of December 31, 2016 and 2015, the Company had the following convertible notes outstanding:

	December 31, 2016				December 31, 2015
	Principal (net)		Accrued Interest		Principal (net)		Accrued Interest
July and August 2012 $1,060,000 Notes convertible into common stock at $4.60 per share, 12% interest, due December 2013 and January 2014	$	95,000	$	50,365	$	165,000		69,712
January 2014 $50,000 Note convertible into common stock at a variable conversion price, 8% interest, due January 2015		-		-		50,000		7,682
January 2014 $55,500 Note convertible into common stock at a variable conversion price, 10% interest, due October 2014		-		-		10,990		5,457
February 2014 $46,080 Note convertible into common stock at a variable conversion price, 10% interest, due February 2015		-		-		-		2,358
February 2014 $27,800 Note convertible into common stock at a variable conversion price, 10% one-time interest, due February 2015		-		-		20,000		-
March 2014 $50,000 Note convertible into common stock at a variable conversion price, 10% interest, due March 2015		-		-		36,961		6,572
March 2014 $165,000 Note convertible into common stock at a variable conversion price, 10% interest, due April 2015		-		-		61,301		24,109
April 2014 $32,000 Note convertible into common stock at a variable conversion price, 10% interest, due April 2015		-		-		22,042		3,034
April 2014 $46,080 Note convertible into common stock at a variable conversion price, 10% interest due April 2015		-		-		5,419		4,608
May 2014 $55,000 Note convertible into common stock at a variable conversion price, 12% interest, due May 2015		-		-		25,000		1,836
June 2014 $28,800 Note convertible into common stock at a variable conversion price, 10% interest due June 2015		-		-		28,800		2,880
June 2014 $40,000 Note convertible into common stock at a variable conversion price, 10% interest, due June 2015		-		-		40,000		6,049
June 2014 $40,000 Note convertible into common stock at a variable conversion price, 10% interest, due June 2015		-		-		38,689		5,851
June 2014 $56,092 Note convertible into common stock at a variable conversion price, 16% interest, due July 2015		-		-		56,092		13,462
July 2014 $37,500 Note convertible into common stock at a variable conversion price, 12% interest, due July 2015		-		-		37,015		6,377
August 2014 $36,750 Note convertible into common stock at a variable conversion price, 10% interest, due April 2015		-		-		36,750		5,538
August 2014 $33,500 Note convertible into common stock at a variable conversion price, 4% interest, due February 2015		-		-		33,500		-
September 2014 $37,500 Note convertible into common stock at a variable conversion price, 12% interest, due September 2015		-		-		36,263		5,576
May through October 2015 $605,000 Notes convertible into preferred stock at $1 per share, 8-10% interest, due September 30, 2015		-		17,341		-		18,264
October through December 2015 $613,000 Notes convertible into preferred stock at $1 per share, 8% interest, due June 30, 2016, net of debt discount of $0 and $560,913, respectively		-		5,953		52,087		2,519
January through March 2016 $345,000 Notes convertible into preferred stock at $1 per share, 8% interest, due June 30, 2016		-		696		-		-
November 2016 $979,162 Notes convertible into common stock at a variable conversion price, 10% interest, due May 2017, net of debt discounts of $540,720 and $0, respectively		438,442		12,397		-		-
Penalties on notes in default		11,066		-		1,032,475		-
Total Convertible Notes Payable, Net	$	544,508	$	86,752	$	1,788,384	$	191,884

During the year ending December 31, 2016, the Company received proceeds from new convertible notes of $1,273,534, obtained advances from shareholders of $127,533 that were reclassified into convertible notes payable, and reclassified $455,150 of accrued interest into convertible notes payable. The Company recorded original issue discounts and loan fees on new convertible notes of $193,831 and $6,000, respectively, which also increased the debt discounts recorded on the convertible notes. The Company recorded $419,055 of payments on their convertible notes, conversions of $1,444,950 of convertible note principal, a total gain on settlement of $1,456,113 representing the write-off of convertible note principal, and $814,625 of debt discount write-offs for early debt conversion or extinguishment. Each of the Company’s convertible notes have a conversion rate that is variable. The Company therefore has accounted for such conversion features as derivative instruments (see Note 9). As a result of recording derivative liabilities at note inception, the Company increased the debt discount recorded on their convertible notes by $809,835 during the year ending December 31, 2016. The Company also recorded amortization of $579,042 on their convertible note debt discounts. Lastly, the Company issued 347,400 shares of Series A Preferred as loan fees with their new convertible notes. The Company therefore increased their convertible note debt discount by $363,807, which represented the portion of the convertible note proceeds that were allocated to preferred stock.

During the year ending December 31, 2015, the Company received proceeds from new convertible notes of $1,285,000, recorded default penalties on new convertible notes of $116,521, and recorded original issue discounts of $5,000, which also increased the debt discounts recorded on the convertible notes. The Company recorded $255,000 of payments on their convertible notes conversions of $584,700 of convertible note principal, a total loss on settlement of $967,038 representing the write-off of convertible note principal, and $3,035 of debt discount write-offs for early debt conversion or extinguishment. Each of the Company’s convertible notes have a conversion rate that is variable. The Company therefore has accounted for such conversion features as derivative instruments (see Note 9). As a result of recording derivative liabilities at note inception, the Company has increased the debt discount recorded on their convertible notes by $1,285,000 during the year ending December 31, 2015. The Company also recorded amortization of $1,031,443 on their convertible note debt discounts.

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Derivative Liability

12 Months Ended

Dec. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Liability

NOTE 9: DERIVATIVE LIABILITY

During the years ending December 31, 2016 and 2015, the Company had the following activity in their derivative liability account:

	Warrants			Conversion Feature			Total
Derivative Liability at December 31, 2014		1,263,929			10,238,451			11,502.380
Derivative Liability Recorded on New Instruments		-			698,705			698,705
Elimination of Liability on Conversion		-			(79,044	)		(79,044	)
Change in Fair Value		(549,528	)		(7,337,497	)		(7,887,025	)
Derivative Liability at December 31, 2015		714,401			3,520,615			4,235,016
Derivative Liability Recorded on New Instruments		-			6,150,026			6,150,026
Elimination of Liability on Conversion		(1,266,795	)		(10,381,138	)		(11,647,933	)
(Gain) on Settlement of Debt		-			(656,930	)		(656,930	)
Change in Fair Value		552,452			1,691,901			(2,244,353	)
Derivative Liability at December 31, 2016		58			324,474			324,532

The Company uses the Black-Scholes pricing model to estimate fair value for those instruments convertible into common stock at inception, at conversion date, and at each reporting date. During the year ending December 31, 2016, and 2015, the Company used the following assumptions in their Black-Scholes model:

	December 31, 2016						December 31, 2015
	Warrants			Conversion Feature			Warrants			Conversion Feature
Risk-free interest rate		0.46% - 1.38	%		0.12% - 0.85	%		0.65% - 1.31	%		0.02% - 0.25	%
Expected life in years		0.53 - 4.08			0.01 - 1.00			0.70 - 4.00			0.07 - 0.94
Dividend yield		0	%		0	%		0	%		0	%
Expected volatility		156.29% - 273.70	%		115.46% - 239.93	%		197.83% - 263.33	%		279.01% - 555.60	%

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Income Taxes

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 10: INCOME TAXES

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Net deferred tax assets consist of the following components as of December 31, 2016 and 2015:

	December 31, 2016			December 31, 2015
Deferred tax assets:
Net operating loss carryover	$	8,854,900		$	8,007,900
Depreciation		-			247,900
Related party accrual		179,400			113,400
Capital Loss Carryover		5,500			5,500
Deferred tax liabilities
Depreciation		(197,200	)		-
Valuation allowance		(8,842,600	)		(8,374,700	)
Net deferred tax asset	$	-		$	-
Net deferred tax asset	$	-		$	-

The income tax provision differs from the amount of income tax determined by applying the U.S. Federal income tax rate to pretax income from continuing operations for the years ended December 31, 2016 and 2015 due to the following:

	December 31, 2016			December 31, 2015
Book income (loss)	$	(3,350,700	)	$	2,119,100
Grant income		(7,100	)		(7,100	)
Depreciation		(25,300	)		(41,500	)
Intangible asset impairment		12,100			-
Related party accrual		65,900			(516,100	)
Meals and entertainment		1,600			1,600
Stock for services		341,300			113,900
Options expense		229,600			9,700
Non-cash interest expense		1,976,300			581,500
Other non-deductible expenses		(90,600	)		(3,112,100	)
Valuation allowance		846,900			851,000
Income tax expense	$	-		$	-

At December 31, 2016, the Company had net operating loss carryforwards of approximately $26,043,700 that may be offset against future taxable income from the year 2017 through 2036.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.

Topic 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company’s financial statements. Topic 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. At the adoption date of January 1, 2007, the Company had no unrecognized tax benefit, which would affect the effective tax rate if recognized.

The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of December 31, 2016, the Company had no accrued interest or penalties related to uncertain tax positions.

The Company files income tax returns in the U.S. federal jurisdiction. The Company is located in the state of Washington and Washington state does not require the filing of income taxes. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2013.

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Stockholders' Equity

12 Months Ended

Dec. 31, 2016

Equity [Abstract]

Stockholders' Equity

NOTE 11: STOCKHOLDERS’ EQUITY

Common Stock

As of December 31, 2016 and 2015, the Company has 20,000,000 shares of Series A Preferred authorized with a par value of $0.001. The Company’s Board of Directors is authorized to provide for the issuance of shares of preferred stock in one or more series, to establish the number of shares in each series, and to determine the designations, preferences and rights through a resolution of the Board of Directors.

As of December 31, 2015, there was an insufficient amount of the Company’s authorized common stock to satisfy the potential number of shares that would be required to satisfy the outstanding options, warrants and convertible debt into common stock. As a result, the Company recorded a liability in the amount of $852,091, offset by $852,091 of equity for the year ending December 31, 2015. Effective October 2016, the Company filed a Certificate of Amendment to perform a 1:100 reverse stock split which eliminated the shortage of sufficient authorized common shares. Additionally, the Company removed the $852,091 liability for lack of authorized shares and increased paid in capital. The Company’s financial statements have been retroactively adjusted for all periods presented to reflect the reverse stock split.

Preferred Stock

The Company has 2,000,000,000 shares of common stock authorized, with a par value of $0.001, and as of December 31, 2016 and 2015, the Company has 31,743,797 and 19,969,341 shares issued and outstanding, respectively. The Company’s Board of Directors is authorized to provide for the issuance of shares of preferred stock in one or more series, fix or alter the designations, preferences, rights, qualifications, limitations or restrictions of the shares of each series, including the dividend rights, dividend rates, conversion rights, voting rights, term of redemption including sinking fund provisions, redemption price or prices, liquidation preferences and the number of shares constituting any series or designations of such series without further vote or action by the shareholders. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of management without further action by the shareholders and may adversely affect the voting and other rights of the holders of common stock. The issuance of preferred stock with voting and conversion rights may adversely affect the voting power of the holders of common stock, including the loss of voting control to others.

We currently have one series of preferred stock authorized, the Series A Preferred. The following is a summary of the rights and preferences of the Series A Preferred, which summary is not meant to be a complete description of those terms. For a complete description of the rights and preferences attributable to the Series A Preferred, please see the Certificate of Designations, Preferences and Rights of the Series A Convertible Preferred Stock (the “Series A Certificate of Designation”), attached as Exhibit 4.1 to our Current Report on Form 8-K filed with the SEC on July 8, 2015.

Series A Convertible Preferred Stock

In June 2015, the Series A Certificate of Designation was filed with the Delaware Secretary of State to designate 2.5 million shares of our preferred stock as Series A Preferred. Effective March 31, 2016, the Company amended the Certificate of Designations, Preferences and Rights of Series A Convertible Preferred of the Registrant, increasing the maximum number of shares of Series A Preferred from 2,500,000 shares to 5,000,000 shares. The following summarizes the current rights and preferences of the Series A Preferred:

Liquidation Preference. The Series A Preferred has a liquidation preference of $5.00 per share.

Dividends. Shares of Series A Preferred do not have any separate dividend rights.

Conversion. Subject to certain limitations set forth in the Series A Certificate of Designation, each share of Series A Preferred is convertible, at the option of the holder, into that number of shares of common stock (the “Series A Conversion Shares”) equal to the liquidation preference thereof, divided by Conversion Price (as such term is defined in the Series A Certificate of Designation), currently $0.50.

In the event the Company completes an equity or equity-based public offering, registered with the SEC, resulting in gross proceeds to the Company totaling at least $5.0 million, all issued and outstanding shares of Series A Preferred at that time will automatically convert into Series A Conversion Shares.

Redemption. Subject to certain conditions set forth in the Series A Certificate of Designation, in the event of a Change of Control (defined in the Series A Certificate of Designation as the time at which as a third party not affiliated with the Company or any holders of the Series A Preferred shall have acquired, in one or a series of related transactions, equity securities of the Company representing more than fifty percent 50% of the outstanding voting securities of the Company), the Company, at its option, will have the right to redeem all or a portion of the outstanding Series A Preferred in cash at a price per share of Series A Preferred equal to 100% of the Liquidation Preference.

Voting Rights. Holders of Series A Preferred are entitled to vote on all matters, together with the holders of common stock, and have the equivalent of five (5) votes for every Series A Conversion Share issuable upon conversion of such holder’s outstanding shares of Series A Preferred. However, the Series A Conversion Shares, when issued, will have all of the same voting rights as other issued and outstanding common stock of the Company, and none of the rights of the Series A Preferred.

Liquidation. Upon any liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary (a “Liquidation ”), the holders of Series A Preferred shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the liquidation preference of the Series A Preferred before any distribution or payment shall be made to the holders of any junior securities, and if the assets of the Company is insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Series A Preferred shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.

Certain Price and Share Adjustments.

a) Stock Dividends and Stock Splits. If the Company (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of common stock on shares of common stock or any other common stock equivalents; (ii) subdivides outstanding shares of common stock into a larger number of shares; (iii) combines (including by way of a reverse stock split) outstanding shares of common stock into a smaller number of shares; or (iv) issues, in the event of a reclassification of shares of the common stock, any shares of capital stock of the Company, then the conversion price shall be adjusted accordingly.

b) Merger or Reorganization. If the Company is involved in any reorganization, recapitalization, reclassification, consolidation or merger in which the Common Stock is converted into or exchanged for securities, cash or other property than each share of Series A Preferred shall be convertible into the kind and amount of securities, cash or other property that a holder of the number of shares of common stock issuable upon conversion of one share of Series A Preferred prior to any such merger or reorganization would have been entitled to receive pursuant to such transaction.

Common Stock Issued for the Exercise of Options and Warrants

During 2015, the Company issued 1,995,000 shares of common stock for cashless warrants exercise.

During 2016, the Company issued 30,644 shares of common stock for cashless warrants exercise.

Common Stock Issued for Loan Fees on Convertible Debt

During the year ending December 31, 2016, the Company did not issue any common stock for loan fees.

During the year ending December 31, 2015, the Company issued 43,326 shares of common stock for loan fees when entering into related party convertible notes. The shares were valued at $6,387, of which $4,896 was allocated to a debt discount (see Note 6) and $1,491 was recorded as interest expense.

Common Stock Issued for Settlement and Conversion of Debt

During 2016, the Company issued 563,523 shares of common stock in conjunction with the settlement of convertible debt that was paid in cash. The shares were valued at $70,863 and were recognized as a loss on the settlement of debt.

During 2015, the Company issued 920,516 shares of common stock valued at $109,812 in exchange for convertible debt raised in 2014 resulting in a reduction in debt of $31,721, a reduction in derivative liability of $79,044, with an offset of $3,035 to debt discount and a $2,083 gain on extinguishment of debt.

Common Stock Issued for Conversion of Preferred Stock

During 2016, the Company issued 11,180,289 shares of common stock valued at $1,590,801 in exchange for 1,118,024 shares of Series A Preferred valued at $4,828,204, resulting in an increase in retained earnings of $3,237,403.

Common Stock Options

The following schedule summarizes the changes in the Company’s stock options:

						Weighted				Weighted
	Options Outstanding					Average				Average
	Number			Exercise		Remaining		Aggregate		Exercise
	Of			Price		Contractual		Intrinsic		Price
	Shares			Per Share		Life		Value		Per Share
Balance at December 31, 2014		87,850		$	9.00-15.00		3.42 years	$	-	$	14.00
Options granted		-		$	-		-			$	-
Options exercised		-		$	-		-			$	-
Options expired		(36,500	)	$	9.00-21.00		-
Balance at December 31, 2015		51,350		$	12.00-15.00		7.12 years	$	-	$	15.00
Options granted		2,370,000		$	0.50-1.00		-			$	0.62
Options exercised		-		$	-		-			$	-
Options expired		(18,850	)	$	0.12-0.15		-			$	14.84
Balance at December 31, 2016		2,402,500		$	0.50-15		4.05 years	$	-	$	0.81
Exercisable at December 31, 2016		1,939,062		$	0.50-15		3.95 years	$	-	$	0.88

During the year ending December 31, 2016 and 2015, the Company recognized $675,324 and $80,635, respectively, worth of stock based compensation related to the vesting of it stock options.

Common Stock Warrants

The following schedule summarizes the changes in the Company’s common stock warrants:

						Weighted				Weighted
	Warrants Outstanding					Average				Average
	Number			Exercise		Remaining		Aggregate		Exercise
	Of			Price		Contractual		Intrinsic		Price
	Shares			Per Share		Life		Value		Per Share
Balance at December 31, 2014		23,107,701		$	0.01-25		2.86 years	$	-	$	1
Warrants granted		312,500		$	0.10-0.15		2.94 years			$	0.13
Warrants exercised		(2,856,041	)	$	0.30		-			$	0.30
Warrants adjusted (1)		(13,601,951	)	$	0.10-0.15		-			$	0.01
Warrants expired/cancelled		(158,706	)	$	6.00-25.00		-			$	8.76
Balance at December 31, 2015		6,803,503		$	0.1-10		1.90 years	$	2,052,699	$	0.81
Warrants granted		233,334		$	0.40		1.71 years			$	0.34
Warrants exercised		(202,500	)	$	0.10		-			$	0.10
Warrants expired/cancelled		(3,254,832	)	$	0.01-6.00		-			$	0.13
Balance at December 31, 2016		3,579,505		$	0.01-10		0.52 years	$	749	$	4.45
Exercisable at December 31, 2016		3,579,505		$	0.01-10		0.52 years	$	749	$	4.45

(1) Based upon Delaware law and on the terms and conditions set forth in the applicable warrant agreement, any adjustments to the warrants were limited to a floor price of $0.001. Pursuant to the defective warrant exercise notice using an exercise price below $0.001, the Company issued at total of 1,473,777 shares of common stock to the warrant holders, which the Company believes are voidable, and also recorded 16,009,450 warrants outstanding to the holder on the Company’s financial statements for the year ended December 31, 2014, and for the periods ending March 31 and June 30, 2015. Management believes that the warrants were recorded in error during the periods presented, and has recorded the revised number of warrants outstanding at September 30, 2015 at 2,407,500, which reflects the number of shares of common stock purchase warrants outstanding and exercisable under the terms of the warrants at an exercise price of $0.001 per share. This net adjustment of 13,601,951 warrants has been reflected in the schedule for the twelve months ending December 31, 2015. The Company reached a Settlement Agreement in 2016 with this warrant holder to cancel all the remaining 2,407,500 warrants in exchange for 50,000 shares of Series A Preferred.

During the year ending December 31, 2016 and 2015, the Company recognized $595,175 and $0, respectively, worth of expense related to warrants granted for services.

Preferred Stock Issued for Cash

During 2016, the Company issued 46,666 shares of Series A Preferred for $70,000 cash.

Preferred Stock Issued for Exercise of Warrants

During 2016, the Company issued 250,000 shares of Series A Preferred for $250 for the exercise of warrants.

Preferred Stock Issued for Warrants Surrendered

During 2016, the Company issued 62,854 shares of Series A Preferred, representing $407,973, in exchange for the surrender of 2,407,500 warrants. This resulted in the Company writing off $1,179,710 worth of derivative liabilities and recognizing a gain on debt extinguishment of $771,737.

Preferred Stock Issued for Services

During 2016, the Company issued 218,000 shares of its Series A Preferred, representing $942,644, for services valued at $949,661, therefore recognizing $7,018 of a gain on settlement of debt. During 2016, the Company issued 10,000 shares of its Series A Preferred to its CFO, representing $54,152, for services (see Note 6).

During 2015, the Company issued 100,000 shares of its Series A Preferred, representing $334,880, for services.

Preferred Stock Issued for Loan Fees

During 2016, the Company issued 30,000 shares of its Series A Preferred, valued at $162,456, as a finders fee and issued 37,906 shares of its Series A Preferred, valued at $29,156 (see Note 6), as loan fees on related party convertible notes. The Company also issued 347,400 shares of its Series A Preferred, valued at $363,807, as loan fees on convertible notes recorded as debt discount (see Note 8), and issued 47,840 shares of its Series A Preferred, valued at $39,904, as loan fees on convertible notes recorded as derivative liabilities.

During 2015, the Company issued 133,833 shares of its Series A Preferred, valued at $527,325, as loan fees on convertible notes and issued 3,440 shares of its Series A Preferred, valued at $17,401 (see Note 6), as loan fees on related party convertible notes.

Preferred Stock Issued for Debt Extinguishment

During 2016, the Company issued 215,961 shares of Series A Preferred, valued at $1,401,760, in exchange for $1,197,950 of related party debt, and $59,671 of accrued interest (see Note 6). This resulted in the Company recognizing $144,139 as a loss on debt extinguishment.

During 2016, the Company issued 473,830 shares of Series A Preferred, valued at $2,330,876, in exchange for $473,613 of related party convertible debt, and $0 of accrued interest (see Note 6). This resulted in the Company writing off $2,330,154 in derivative liabilities, $448,613 in debt discounts, and recognizing $24,278 as a gain on debt extinguishment.

During 2016, the Company issued 1,460,600 shares of Series A Preferred, valued at $8,552,746 in exchange for $1,444,950 of convertible debt, and $50,711 of accrued interest (see Note 8). This resulted in the Company writing off $8,138,070 in derivative liabilities, $814,625 in debt discounts, and recognizing $266,358 as a gain on debt extinguishment.

In September 2015, the Company issued 148,310 shares of Series A Preferred in exchange for $1,414,100 of related party debt plus $810,538 of accrued interest and 207,620 shares of Series A preferred stock in exchange for $2,224,466 of related party debt plus $889,838 of accrued interest, to the major shareholder and director of the Company (see Note 6).

In September 2015, the Company issued 43,000 shares of Series A Preferred in exchange for $43,000 of related party convertible debt raised during 2015 (see Note 6).

In November and December 2015, the Company issued 99,000 shares of Series A Preferred in exchange for $22,700 of convertible debt, $9,812 of accrued interest, and extension of a due date for a payment on a debt settled. In September 2015 the Company issued 552,000 shares of Series A Preferred in exchange for $552,000 of convertible debt raised during 2015. In October 2015 the Company issued 10,000 shares of Series A Preferred in exchange for $10,000 of convertible debt raised during 2015 (see Note 8).

Preferred Stock Issued for Accounts Payable and Accrued Liabilities

In December 2015, the Company issued 100,000 and 75,000 shares of Series A Preferred to the CEO and CFO, in exchange for $150,000 and $112,500, respectively, of accrued payroll (see Note 6). In December 2015, the Company issued 246,797 shares of Series A Preferred in exchange for $370,197 of accounts payable.

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Concentrations of Credit and Other Risks

12 Months Ended

Dec. 31, 2016

Risks and Uncertainties [Abstract]

Concentrations of Credit and Other Risks

NOTE 12: CONCENTRATIONS OF CREDIT AND OTHER RISKS

Accounts Receivable

The Company had one customer that represented 100% of the Company’s total revenues for each of the years ended December 31, 2016 and 2015. The customer that represented 100% of the Company’s total revenue for the years ended December 31, 2016 and 2015, and accounted for 100% of the consulting revenue for that year. The Company had no net accounts receivable balance at December 31, 2016 and 2015.

The loss of a significant customer representing the percentage of total revenue as represented for the years ended December 31, 2016 and 2015 would have a temporary adverse effect on the Company’s revenue, which would continue until the Company located new customers to replace them.

The Company routinely assesses the financial strength of its customers and provides an allowance for doubtful accounts as necessary. As of December 31, 2016 and 2015, the Company had no allowance or bad debt expense recorded.

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Supplemental Cash Flow Information

12 Months Ended

Dec. 31, 2016

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

NOTE 13: SUPPLEMENTAL CASH FLOW INFORMATION

During the year ended December 31, 2016, the Company had the following non-cash investing and financing activities:

- Issued 30,644 shares of common stock valued at $0 for the issuance of cashless warrants.

- Decreased related party notes by $1,197,950, decrease related party convertible notes by $473,613, offset by a decrease $448,613 in debt discount decreased convertible notes payable by $1,444,950, offset by a decrease $814,624 in debt discount, decreased accrued interest by $110,382, decreased derivative liabilities by $10,468,224, and increased Series A Preferred by $12,431,882 due to 2,150,391 shares issued in conjunction with the settlement of convertible notes.

- Increased convertible notes payable and decreased accrued interest by $455,150 for the reclassification of accrued interest to principal.

- Issued 62,854 shares of Series A Preferred, valued at $407,973, which decreased derivative liabilities by $1,179,710 and for which a gain on debt extinguishment was recorded for $771,737.

- Increased derivative liabilities for $1,283,448 to record a debt discount on related party convertible notes of $473,613 and a debt discount on convertible notes of $809,835.

- Increased paid in capital and decreased liability for lack of authorized shares for $852,092.

- Increased convertible notes payable and decreased loan from shareholder by $127,533 to roll proceeds from shareholder advances to a formal convertible note payable.

- Issued 433,146 shares of Series A Preferred, valued at $432,866, for loan fees that increased the convertible note debt discount by $363,807 and increased derivative liabilities by $69,059.

- Issued 11,180,289 shares of common stock valued at $1,590,801 in exchange for 1,118,024 shares of Series A Preferred valued at $4,828,204, resulting in an increase in retained earnings of $3,237,403.

During the year ended December 31, 2015, the Company had the following non-cash investing and financing activities:

- Issued 1,995,000 shares of common stock valued at $0 for the issuance of cashless warrants.

- Issued 43,326 shares of common stock as loan fees on convertible debt.

- Issued 108,833 shares of preferred stock as loan fees on convertible debt.

- Issued 920,516 shares of common stock for an extinguishment of $31,721 worth of principal on convertible notes payable $0 worth of accrued interest, $79,044 worth of derivative liabilities and $3,035 worth of debt discount.

- Issued 74,000 shares of preferred stock for an extinguishment of $22,700 worth of principal on convertible notes payable $0 worth of accrued interest, $0 worth of derivative liabilities and $0 worth of debt discount.

- Issued 960,929 shares of preferred stock valued at $2,201,963 in exchange for $4,243,566 of notes.

- Issued 421,797 shares of preferred stock valued at $1,358,726 in exchange for $370,197 of accounts payable and $262,500 of accrued payroll.

- Issued 25,000 shares of preferred stock as loan extension fees.

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Subsequent Events

12 Months Ended

Dec. 31, 2016

Subsequent Events [Abstract]

Subsequent Events

NOTE 14: SUBSEQUENT EVENTS

In January, February and through March 6, 2017, the Company issued 5,517,900 shares of common stock for 531,790 shares of Series A Preferred.

In February 2017, the Company issued 280,000 shares of common stock shares in exchange for $140,000 of accounts payable.

In March 2017, the Company received $25,000 as a shareholder loan.

The Company has evaluated subsequent events pursuant to ASC Topic 855 and has determined that there are no additional subsequent events to disclose.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Advanced Medical Isotope Corporation and its wholly-owned subsidiary IsoPet Solutions Corporation (“Iso-Pet”). All significant inter-company balances and transactions have been eliminated in consolidation.

Financial Statement Reclassification

Financial Statement Reclassification

Certain account balances from prior periods have been reclassified in these audited consolidated financial statements so as to conform to current period classifications.

Cash Equivalents

Cash Equivalents

For the purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.

Inventory

Inventory

Inventory is reported at the lower of cost or market, determined using the first-in, first-out basis, or net realizable value. All inventories consist of finished goods. The Company had no raw materials or work in process. The Company had been carrying inventory consisting of two bottles of O-18 water for a value of $8,475. The Company determined this water was no longer usable and wrote off the $8,475 value as of December 31, 2016.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Fair Value of Financial Instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of December 31, 2016 and December 31, 2015, the balances reported for cash, prepaid expenses, accounts receivable, accounts payable, and accrued expenses, approximate the fair value because of their short maturities.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The Company measures certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis were calculated using the Black-Scholes pricing model and are as follows at December 31, 2016:

	Total		Level 1		Level 2		Level 3
Assets:
Total Assets Measured at Fair Value	$	-	$	-	$	-	$	-
Liabilities:
Derivative Liability		324,532		-		-		324,532
Total Liabilities Measured at Fair Value	$	324,532	$	-	$	-	$	324,532

Assets and liabilities measured at fair value on a recurring basis are as follows at December 31, 2015:

	Total		Level 1		Level 2		Level 3
Assets
Total Assets Measured at Fair Value	$	-	$	-	$	-	$	-
Liabilities
Liability for lack of authorized shares		852,091		-		-		852,091
Derivative Liability		4,235,016		-		-		4,235,016
Total Liabilities Measured at Fair Value	$	5,087,107	$	-	$	-	$	5,087,107

Fixed Assets

Fixed Assets

Fixed assets are carried at the lower of cost or net realizable value. Production equipment with a cost of $2,500 or greater and other fixed assets with a cost of $1,500 or greater are capitalized. Major betterments that extend the useful lives of assets are also capitalized. Normal maintenance and repairs are charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in operations.

Depreciation is computed using the straight-line method over the following estimated useful lives:

Production equipment:	3 to 7 years
Office equipment:	2 to 5 years
Furniture and fixtures:	2 to 5 years

Leasehold improvements and capital lease assets are amortized over the shorter of the life of the lease or the estimated life of the asset.

Management of the Company reviews the net carrying value of all of its equipment on an asset by asset basis whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. These reviews consider the net realizable value of each asset, as measured in accordance with the preceding paragraph, to determine whether impairment in value has occurred, and the need for any asset impairment write-down.

License Fees

License Fees

License fees are stated at cost, less accumulated amortization. Amortization of license fees is computed using the straight-line method over the estimated economic useful life of the assets.

The Company made a $10,000 investment in 2010 for an exclusive license with Battelle Memorial Institute regarding its technology for the production of a Brachytherapy seed. In August 2010 the Company entered into a License Agreement for the Patent Rights in the area of a Brachytherapy seed with a Fast-dissolving Matrix for Optimized Delivery of Radionuclides. This Agreement calls for a $10,000 nonrefundable fee upon execution, a royalty agreement on sales and on funds received from any sublicenses. The $10,000 nonrefundable fee paid upon execution was capitalized as License Fees and is amortized on the straight-line basis over a three-year life. Additionally the Agreement calls for a minimum annual fee.

The Company agreed for a mutual termination of this license effective December 31, 2016 and that the $25,000 minimum annual fee for 2016 due January 2017 would not be owed. The Company was carrying $35,482 in patent costs relating to this license, which was written off as impaired assets during the twelve months ended December 31, 2016. The Company still has a $7,026 balance owed for patent expense accrued during 2016.

Calendar Year	Minimum Royalties per Calendar Year
2010	$	-
2011	$	-
2012	$	2,500
2013	$	5,000	(1)
2014	$	7,500	(2)
2015	$	10,000	(3)
2016 and each calendar year thereafter	$	25,000	(4)

(1) Paid February, 2014

(2) Paid February, 2015

(3) Paid February, 2016

(4) No longer owed due to termination of license agreement effective December 31, 2016

The Company made a $5,000 investment in February 2011 for a one-year option agreement to negotiate an exclusive license agreement with Battelle Memorial Institute regarding its patents for the production of RadioGel™. This option agreement calls for a $5,000 upfront fee for the option, which expired February 2012 and was fully expensed in the twelve months ended December 31, 2011. Effective March 2012, the Company entered into an exclusive license agreement with Battelle Memorial Institute regarding the use of its patented RadioGel™ technology. This license agreement calls for a $17,500 nonrefundable license fee and a royalty based on a percent of gross sales for licensed products sold; the license agreement also contains a minimum royalty amount to be paid each year starting with 2013.

Calendar Year	Minimum Royalties per Calendar Year
2012	$	-
2013	$	5,000	(1)
2014	$	7,500	(2)
2015	$	10,000	(3)
2016	$	10,000	(4)
2017 and each calendar year thereafter	$	25,000

(1) Paid February, 2014

(2) Paid February, 2015

(3) Paid February, 2016

(4) $5,399 was paid January 2017 and the remaining $4,601 was paid February 2017.

The Company periodically reviews the carrying values of capitalized license fees and any impairments are recognized when the expected future operating cash flows to be derived from such assets are less than their carrying value.

Amortization is computed using the straight-line method over the estimated useful live of three years. Amortization of license fees was $0, and $1,339 for the years ended December 31, 2016, and 2015, respectively.

Patents and Intellectual Property

Patents and Intellectual Property

The Company had a total $35,482 of capitalized patents and intellectual property costs at December 31, 2015 for the patent rights in the area of a Brachytherapy seed with a Fast-dissolving Matrix for Optimized Delivery of Radionuclides. Effective December 31, 2016 the Company agreed to terminate this non-utilized patent license for which the $35,482 of capitalized patent and intellectual costs applied and therefore the Company wrote off $35,482 of capitalized costs in the twelve months ending December 31, 2016.

Revenue Recognition

Revenue Recognition

The Company recognized revenue related to product sales when (i) persuasive evidence of the arrangement exists, (ii) shipment has occurred, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured.

Revenue for the fiscal year ended December 31, 2016 and December 31, 2015 consisted of consulting revenue. The Company recognizes revenue once an order has been received and shipped to the customer or services have been performed. Prepayments, if any, received from customers prior to the time products are shipped are recorded as deferred revenue. In these cases, when the related products are shipped, the amount recorded as deferred revenue is recognized as revenue. The Company does not accrue for sales returns and other allowances as it has not experienced any returns or other allowances.

Income from Grants and Deferred Income

Income from Grants and Deferred Income

Government grants are recognized when all conditions of such grants are fulfilled or there is reasonable assurance that they will be fulfilled. The Company has chosen to recognize income from grants as it incurs costs associated with those grants, and until such time as it recognizes the grant as income those funds received will be classified as deferred income on the balance sheet.

On September 1, 2015, the Company received notification it had been awarded from Washington State University, $42,019 grant funds from the sub-award project entitled “Optimized Injectable Radiogels for High-dose Therapy of Non-Resectable Solid Tumors”. The Company received $21,010 and $21,009 of the grand award in the twelve months ended December 31, 2016 and 2015, respectively.

Earnings (Loss) Per Share

Earnings (Loss) Per Share

The Company accounts for its earnings (loss) per common share by replacing primary and fully diluted earnings per share with basic and diluted earnings per share. Basic earnings (loss) per share is computed by dividing income (loss) available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period, and does not include the impact of any potentially dilutive common stock equivalents since the impact would be anti-dilutive. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares had been issued. However, since the Company does not have sufficient authorized shares of common stock, we did not include these in our calculation.

Securities, all of which represent common stock equivalents, that could be dilutive in the future as of December 31, 2016 and 2015, are as follows:

	December 31, 2016		December 31, 2015
Convertible debt		6,441,644		7,848,421
Preferred stock		37,735,920		16,270,000
Common stock options		2,402,500		51,350
Common stock warrants		3,579,505		6,791,003
Total potential dilutive securities		50,159,569		30,960,774

Research and Development Costs

Research and Development Costs

Research and developments costs, including salaries, research materials, administrative expenses and contractor fees, are charged to operations as incurred. The cost of equipment used in research and development activities which has alternative uses is capitalized as part of fixed assets and not treated as an expense in the period acquired. Depreciation of capitalized equipment used to perform research and development is classified as research and development expense in the year computed.

The Company incurred $328,026 and $149,650 research and development costs for the years ended December 31, 2016, and 2015, respectively, all of which were recorded in the Company’s operating expenses noted on the income statements for the years then ended.

Advertising and Marketing Costs

Advertising and Marketing Costs

Advertising and marketing costs are expensed as incurred except for the cost of tradeshows which are deferred until the tradeshow occurs. Tradeshow expenses incurred and not expensed as of the years ended December 31, 2016, and 2015 were $0 and $14,800, respectively. During the twelve months ended December 31, 2016 and 2015, the Company incurred $284,138 and $0, respectively, in advertising and marketing costs.

Shipping and Handling Costs

Shipping and Handling Costs

Shipping and handling costs are expensed as incurred and included in cost of materials.

Legal Contingencies

Legal Contingencies

In the ordinary course of business, the Company is involved in legal proceedings involving contractual and employment relationships, product liability claims, patent rights, and a variety of other matters. The Company records contingent liabilities resulting from asserted and unasserted claims against it, when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. The Company discloses contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. Estimated probable losses require analysis of multiple factors, in some cases including judgments about the potential actions of third-party claimants and courts. Therefore, actual losses in any future period are inherently uncertain. Currently, the Company does not believe any probable legal proceedings or claims will have a material impact on its financial position or results of operations. However, if actual or estimated probable future losses exceed the Company’s recorded liability for such claims, it would record additional charges as other expense during the period in which the actual loss or change in estimate occurred.

There had been an ongoing dispute with the landlord, Rob and Maribeth Myers, regarding the production center rent. During 2016, the Company reached a Settlement Agreement with regards to this dispute resulting in a payment of $438,830 for rent, interest, and costs.

There is an ongoing dispute with BancLeasing and Washington Trust Bank regarding application of lease payments to the principal loan amount for the linear accelerator, and the Company believed it overpaid by approximately $300,000. In 2016 the Company was awarded in the Superior Court of the State of Washington a total sum of $527,876 against BancLeasing. The Company is pursuing its options for collection of the awarded amount, however there can be no assurance as to any eventual collection.

Income Taxes

Income Taxes

To address accounting for uncertainty in tax positions, the Company clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. The Company also provides guidance on de-recognition, measurement, classification, interest, and penalties, accounting in interim periods, disclosure and transition.

The Company files income tax returns in the U.S. federal jurisdiction, and Delaware. The Company did not have any tax expense for the years ended December 31, 2016 and 2015. The Company did not have any deferred tax liability or asset on its balance sheet on December 31, 2016 and 2015.

Interest costs and penalties related to income taxes, if any, will be classified as interest expense and general and administrative costs, respectively, in the Company’s financial statements. For the years ended December 31, 2016 and 2015, the Company did not recognize any interest or penalty expense related to income taxes. The Company believes that it is not reasonably possible for the amounts of unrecognized tax benefits to significantly increase or decrease within the next 12 months.

Stock-Based Compensation

Stock-Based Compensation

The Company recognizes in the financial statements compensation related to all stock-based awards, including stock options, based on their estimated grant-date fair value. The Company has estimated expected forfeitures and is recognizing compensation expense only for those awards expected to vest. All compensation is recognized by the time the award vests.

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from non-employees. Costs are measured at the fair market value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of the date on which there first exists a firm commitment for performance by the provider of goods or services or on the date performance is complete. The Company recognizes the fair value of the equity instruments issued that result in an asset or expense being recorded by the Company, in the same period(s) and in the same manner, as if the Company has paid cash for the goods or services.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

There are no recently issued accounting pronouncements that the Company believes are applicable or would have a material impact on the financial statements of the Company.

Reclassifications

Reclassifications

Certain prior-year amounts have been reclassified to conform with current year’s presentation.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Schedule of Fair Value of Financial Instruments

Assets and liabilities measured at fair value on a recurring basis were calculated using the Black-Scholes pricing model and are as follows at December 31, 2016:

	Total		Level 1		Level 2		Level 3
Assets:
Total Assets Measured at Fair Value	$	-	$	-	$	-	$	-
Liabilities:
Derivative Liability		324,532		-		-		324,532
Total Liabilities Measured at Fair Value	$	324,532	$	-	$	-	$	324,532

Assets and liabilities measured at fair value on a recurring basis are as follows at December 31, 2015:

	Total		Level 1		Level 2		Level 3
Assets
Total Assets Measured at Fair Value	$	-	$	-	$	-	$	-
Liabilities
Liability for lack of authorized shares		852,091		-		-		852,091
Derivative Liability		4,235,016		-		-		4,235,016
Total Liabilities Measured at Fair Value	$	5,087,107	$	-	$	-	$	5,087,107

Schedule of Depreciation Estimated Useful Life

Depreciation is computed using the straight-line method over the following estimated useful lives:

Production equipment:	3 to 7 years
Office equipment:	2 to 5 years
Furniture and fixtures:	2 to 5 years

Schedule of License Minimum Annual Fee

Calendar Year	Minimum Royalties per Calendar Year
2010	$	-
2011	$	-
2012	$	2,500
2013	$	5,000	(1)
2014	$	7,500	(2)
2015	$	10,000	(3)
2016 and each calendar year thereafter	$	25,000	(4)

(1) Paid February, 2014

(2) Paid February, 2015

(3) Paid February, 2016

(4) No longer owed due to termination of license agreement effective December 31, 2016

Schedule of Future Annual Amortization License Fee

Calendar Year	Minimum Royalties per Calendar Year
2012	$	-
2013	$	5,000	(1)
2014	$	7,500	(2)
2015	$	10,000	(3)
2016	$	10,000	(4)
2017 and each calendar year thereafter	$	25,000

(1) Paid February, 2014

(2) Paid February, 2015

(3) Paid February, 2016

(4) $5,399 was paid January 2017 and the remaining $4,601 was paid February 2017.

Schedule of Common Stock from Antidilutive Securities

Securities, all of which represent common stock equivalents, that could be dilutive in the future as of December 31, 2016 and 2015, are as follows:

	December 31, 2016		December 31, 2015
Convertible debt		6,441,644		7,848,421
Preferred stock		37,735,920		16,270,000
Common stock options		2,402,500		51,350
Common stock warrants		3,579,505		6,791,003
Total potential dilutive securities		50,159,569		30,960,774

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Fixed Assets (Tables)

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment [Abstract]

Schedule of Fixed Assets

Fixed assets consist of the following at December 31, 2016 and 2015:

	December 31, 2016			December 31, 2015
Production equipment	$	15,182		$	1,938,532
Building		-			446,772
Leasehold improvements		-			3,235
Office equipment		14,594			32,769
		29,776			2,421,308
Less accumulated depreciation		(28,303	)		(2,416,888	)
	$	1,473		$	4,420

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Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

Intangible assets consist of the following at December 31, 2016 and December 31, 2015:

	December 31, 2016			December 31, 2015
License Fee	$	112,500		$	112,500
Less accumulated amortization		(112,500	)		(112,500	)
		-			-
Patents and intellectual property		-			35,482
	$	-		$	35,482

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Debt Issuance Costs (Tables)

12 Months Ended

Dec. 31, 2016

Debt Disclosure [Abstract]

Schedule of Debt Issuance Cost Account

During the twelve months ending December 31, 2016 and 2015 the Company had the following activity in their debt issuance cost account:

Debt issuance costs at December 31, 2014	$	13,917
Cash paid as fees for debt arrangements		5,000
Amortization of debt issuance costs		(18,917	)
Debt issuance costs at December 31, 2015		-
Cash paid as fees for debt arrangements		-
Amortization of debt issuance costs		-
Debt issuance costs at December 31, 2016	$	-

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Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2016

Related Party Transactions [Abstract]

Schedule of Related Party Transaction

As of December 31, 2016 and 2015, the Company had the following related party promissory notes outstanding:

	December 31, 2016				December 31, 2015
	Principal (net)		Accrued Interest		Principal (net)		Accrued Interest
September 2015 $1,055,535 Note, 8% interest, due on demand after March 2017	$	-	$	-	$	1,055,535		27,299
September 2015 $142,415 Note, 10% interest, due May 2016		-		-		142,415		4,669
October 2015 $82,500 Note, 10% interest due October 2016		82,500		10,239		82,500		1,966
February 2016 $50,000 Note, 10% interest, due February 2017		50,000		4,192		-		-
May 2016 $109,695 Note, 10% interest, due July 2017		109,695		7,093		-		-
May 2016 $90,000 Note, 10% interest, due May 2017		90,000		5,425		-		-
Total Convertible Notes Payable, Net	$	332,195	$	26,949	$	1,280,450	$	33,934

Schedule of Rent Expense

Rental expense for the years ended December 31, 2016 and 2015 consisted of the following:

	Year ended December 31, 2016		Year ended December 31, 2015
Office and warehouse space	$	40,000	$	155,306
Corporate office		18,000		18,000
Total Rental Expense	$	58,000	$	173,306

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Convertible Notes Payable (Tables)

12 Months Ended

Dec. 31, 2016

Debt Disclosure [Abstract]

Schedule of Convertible Notes Payable

As of December 31, 2016 and 2015, the Company had the following convertible notes outstanding:

	December 31, 2016				December 31, 2015
	Principal (net)		Accrued Interest		Principal (net)		Accrued Interest
July and August 2012 $1,060,000 Notes convertible into common stock at $4.60 per share, 12% interest, due December 2013 and January 2014	$	95,000	$	50,365	$	165,000		69,712
January 2014 $50,000 Note convertible into common stock at a variable conversion price, 8% interest, due January 2015		-		-		50,000		7,682
January 2014 $55,500 Note convertible into common stock at a variable conversion price, 10% interest, due October 2014		-		-		10,990		5,457
February 2014 $46,080 Note convertible into common stock at a variable conversion price, 10% interest, due February 2015		-		-		-		2,358
February 2014 $27,800 Note convertible into common stock at a variable conversion price, 10% one-time interest, due February 2015		-		-		20,000		-
March 2014 $50,000 Note convertible into common stock at a variable conversion price, 10% interest, due March 2015		-		-		36,961		6,572
March 2014 $165,000 Note convertible into common stock at a variable conversion price, 10% interest, due April 2015		-		-		61,301		24,109
April 2014 $32,000 Note convertible into common stock at a variable conversion price, 10% interest, due April 2015		-		-		22,042		3,034
April 2014 $46,080 Note convertible into common stock at a variable conversion price, 10% interest due April 2015		-		-		5,419		4,608
May 2014 $55,000 Note convertible into common stock at a variable conversion price, 12% interest, due May 2015		-		-		25,000		1,836
June 2014 $28,800 Note convertible into common stock at a variable conversion price, 10% interest due June 2015		-		-		28,800		2,880
June 2014 $40,000 Note convertible into common stock at a variable conversion price, 10% interest, due June 2015		-		-		40,000		6,049
June 2014 $40,000 Note convertible into common stock at a variable conversion price, 10% interest, due June 2015		-		-		38,689		5,851
June 2014 $56,092 Note convertible into common stock at a variable conversion price, 16% interest, due July 2015		-		-		56,092		13,462
July 2014 $37,500 Note convertible into common stock at a variable conversion price, 12% interest, due July 2015		-		-		37,015		6,377
August 2014 $36,750 Note convertible into common stock at a variable conversion price, 10% interest, due April 2015		-		-		36,750		5,538
August 2014 $33,500 Note convertible into common stock at a variable conversion price, 4% interest, due February 2015		-		-		33,500		-
September 2014 $37,500 Note convertible into common stock at a variable conversion price, 12% interest, due September 2015		-		-		36,263		5,576
May through October 2015 $605,000 Notes convertible into preferred stock at $1 per share, 8-10% interest, due September 30, 2015		-		17,341		-		18,264
October through December 2015 $613,000 Notes convertible into preferred stock at $1 per share, 8% interest, due June 30, 2016, net of debt discount of $0 and $560,913, respectively		-		5,953		52,087		2,519
January through March 2016 $345,000 Notes convertible into preferred stock at $1 per share, 8% interest, due June 30, 2016		-		696		-		-
November 2016 $979,162 Notes convertible into common stock at a variable conversion price, 10% interest, due May 2017, net of debt discounts of $540,720 and $0, respectively		438,442		12,397		-		-
Penalties on notes in default		11,066		-		1,032,475		-
Total Convertible Notes Payable, Net	$	544,508	$	86,752	$	1,788,384	$	191,884

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Derivative Liability (Tables)

12 Months Ended

Dec. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Liability Account Activity

During the years ending December 31, 2016 and 2015, the Company had the following activity in their derivative liability account:

	Warrants			Conversion Feature			Total
Derivative Liability at December 31, 2014		1,263,929			10,238,451			11,502.380
Derivative Liability Recorded on New Instruments		-			698,705			698,705
Elimination of Liability on Conversion		-			(79,044	)		(79,044	)
Change in Fair Value		(549,528	)		(7,337,497	)		(7,887,025	)
Derivative Liability at December 31, 2015		714,401			3,520,615			4,235,016
Derivative Liability Recorded on New Instruments		-			6,150,026			6,150,026
Elimination of Liability on Conversion		(1,266,795	)		(10,381,138	)		(11,647,933	)
(Gain) on Settlement of Debt		-			(656,930	)		(656,930	)
Change in Fair Value		552,452			1,691,901			(2,244,353	)
Derivative Liability at December 31, 2016		58			324,474			324,532

Schedule of Assumptions for Fair Value Determination

During the year ending December 31, 2016, and 2015, the Company used the following assumptions in their Black-Scholes model:

	December 31, 2016						December 31, 2015
	Warrants			Conversion Feature			Warrants			Conversion Feature
Risk-free interest rate		0.46% - 1.38	%		0.12% - 0.85	%		0.65% - 1.31	%		0.02% - 0.25	%
Expected life in years		0.53 - 4.08			0.01 - 1.00			0.70 - 4.00			0.07 - 0.94
Dividend yield		0	%		0	%		0	%		0	%
Expected volatility		156.29% - 273.70	%		115.46% - 239.93	%		197.83% - 263.33	%		279.01% - 555.60	%

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

Schedule of Net Deferred Tax Assets

Net deferred tax assets consist of the following components as of December 31, 2016 and 2015:

	December 31, 2016			December 31, 2015
Deferred tax assets:
Net operating loss carryover	$	8,854,900		$	8,007,900
Depreciation		-			247,900
Related party accrual		179,400			113,400
Capital Loss Carryover		5,500			5,500
Deferred tax liabilities
Depreciation		(197,200	)		-
Valuation allowance		(8,842,600	)		(8,374,700	)
Net deferred tax asset	$	-		$	-
Net deferred tax asset	$	-		$	-

Schedule of Federal Income Tax Rate

The income tax provision differs from the amount of income tax determined by applying the U.S. Federal income tax rate to pretax income from continuing operations for the years ended December 31, 2016 and 2015 due to the following:

	December 31, 2016			December 31, 2015
Book income (loss)	$	(3,350,700	)	$	2,119,100
Grant income		(7,100	)		(7,100	)
Depreciation		(25,300	)		(41,500	)
Intangible asset impairment		12,100			-
Related party accrual		65,900			(516,100	)
Meals and entertainment		1,600			1,600
Stock for services		341,300			113,900
Options expense		229,600			9,700
Non-cash interest expense		1,976,300			581,500
Other non-deductible expenses		(90,600	)		(3,112,100	)
Valuation allowance		846,900			851,000
Income tax expense	$	-		$	-

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Stockholders’ Equity (Tables)

12 Months Ended

Dec. 31, 2016

Equity [Abstract]

Schedule of Changes in Stock Option

The following schedule summarizes the changes in the Company’s stock options:

						Weighted				Weighted
	Options Outstanding					Average				Average
	Number			Exercise		Remaining		Aggregate		Exercise
	Of			Price		Contractual		Intrinsic		Price
	Shares			Per Share		Life		Value		Per Share
Balance at December 31, 2014		87,850		$	9.00-15.00		3.42 years	$	-	$	14.00
Options granted		-		$	-		-			$	-
Options exercised		-		$	-		-			$	-
Options expired		(36,500	)	$	9.00-21.00		-
Balance at December 31, 2015		51,350		$	12.00-15.00		7.12 years	$	-	$	15.00
Options granted		2,370,000		$	0.50-1.00		-			$	0.62
Options exercised		-		$	-		-			$	-
Options expired		(18,850	)	$	0.12-0.15		-			$	14.84
Balance at December 31, 2016		2,402,500		$	0.50-15		4.05 years	$	-	$	0.81
Exercisable at December 31, 2016		1,939,062		$	0.50-15		3.95 years	$	-	$	0.88

Schedule of Changes in Common Stock Warrants

The following schedule summarizes the changes in the Company’s common stock warrants:

						Weighted				Weighted
	Warrants Outstanding					Average				Average
	Number			Exercise		Remaining		Aggregate		Exercise
	Of			Price		Contractual		Intrinsic		Price
	Shares			Per Share		Life		Value		Per Share
Balance at December 31, 2014		23,107,701		$	0.01-25		2.86 years	$	-	$	1
Warrants granted		312,500		$	0.10-0.15		2.94 years			$	0.13
Warrants exercised		(2,856,041	)	$	0.30		-			$	0.30
Warrants adjusted (1)		(13,601,951	)	$	0.10-0.15		-			$	0.01
Warrants expired/cancelled		(158,706	)	$	6.00-25.00		-			$	8.76
Balance at December 31, 2015		6,803,503		$	0.1-10		1.90 years	$	2,052,699	$	0.81
Warrants granted		233,334		$	0.40		1.71 years			$	0.34
Warrants exercised		(202,500	)	$	0.10		-			$	0.10
Warrants expired/cancelled		(3,254,832	)	$	0.01-6.00		-			$	0.13
Balance at December 31, 2016		3,579,505		$	0.01-10		0.52 years	$	749	$	4.45
Exercisable at December 31, 2016		3,579,505		$	0.01-10		0.52 years	$	749	$	4.45

(1) Based upon Delaware law and on the terms and conditions set forth in the applicable warrant agreement, any adjustments to the warrants were limited to a floor price of $0.001. Pursuant to the defective warrant exercise notice using an exercise price below $0.001, the Company issued at total of 1,473,777 shares of common stock to the warrant holders, which the Company believes are voidable, and also recorded 16,009,450 warrants outstanding to the holder on the Company’s financial statements for the year ended December 31, 2014, and for the periods ending March 31 and June 30, 2015. Management believes that the warrants were recorded in error during the periods presented, and has recorded the revised number of warrants outstanding at September 30, 2015 at 2,407,500, which reflects the number of shares of common stock purchase warrants outstanding and exercisable under the terms of the warrants at an exercise price of $0.001 per share. This net adjustment of 13,601,951 warrants has been reflected in the schedule for the twelve months ending December 31, 2015. The Company reached a Settlement Agreement in 2016 with this warrant holder to cancel all the remaining 2,407,500 warrants in exchange for 50,000 shares of Series A Preferred.

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Organization & Basis of Presentation (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Common stock, authorized	2,000,000,000	2,000,000,000
Common stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized	20,000,000	20,000,000
Preferred stock, par value	$ 0.001	$ 0.001
Current operation activities	$ 1,500,000
Cash	27,889	$ 179,032
Minimum [Member]
Current operation activities	5,000,000
Maximum [Member]
Current operation activities	$ 10,000,000

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Summary of Significant Accounting Policies (Details Narrative) - USD ($)		1 Months Ended	12 Months Ended
	Sep. 02, 2015	Jul. 31, 2012	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2011	Feb. 28, 2011	Dec. 31, 2010
Carrying inventory consisting of two bottles of O-18 water				$ 8,475
Inventory write-off			8,475
Production equipment cost			2,500
Fixed assets capitalized cost			1,500
Investment						$ 5,000	$ 10,000
Nonrefundable fee			17,500
Minimum annual fee			25,000
Patent costs relating to this license			35,482
Patent expense accrued			$ 7,026
Upfront fee for option					$ 5,000
Estimated useful life			3 years
Amortization of license fees			$ 0	1,339
Intangible assets amortization period			3 years
Patents and intellectual property				35,482
Terminate non-utilized patent license for capitalized patent			35,482
Wrote off capitalized costs			35,482
Income from grants	$ 42,019		21,010	21,009
Research and development costs			328,026	149,650
Tradeshow expenses			0	14,800
Advertising costs			284,138	$ 0
Payment for rent, interest and costs		$ 11,904	438,830
Overpaid loan amount			300,000
Legal contingencies, disputes amount			527,876
Royalty Agreement [Member]
Nonrefundable fee			10,000
Capitalized License Fees [Member]
Nonrefundable fee			$ 10,000

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Summary of Significant Accounting Policies - Schedule of Fair Value of Financial Instruments (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Total Assets Measured at Fair Value
Liabiity for lack of authorized shares		852,091
Derivative Liability	$ 324,532	4,235,016
Total Liabilities Measured at Fair Value	324,532	5,087,107
Level 1 [Member]
Total Assets Measured at Fair Value
Liabiity for lack of authorized shares
Derivative Liability
Total Liabilities Measured at Fair Value
Level 2 [Member]
Total Assets Measured at Fair Value
Liabiity for lack of authorized shares
Derivative Liability
Total Liabilities Measured at Fair Value
Level 3 [Member]
Total Assets Measured at Fair Value
Liabiity for lack of authorized shares		852,091
Derivative Liability	324,532	4,235,016
Total Liabilities Measured at Fair Value	$ 324,532	$ 5,087,107

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Summary of Significant Accounting Policies - Schedule of Depreciation Estimated Useful Life (Details)	12 Months Ended
	Dec. 31, 2016
ProductionEquipmentMember | Minimum [Member]
Estimated useful life	3 years
ProductionEquipmentMember | Maximum [Member]
Estimated useful life	7 years
Office Equipment [Member] | Minimum [Member]
Estimated useful life	2 years
Office Equipment [Member] | Maximum [Member]
Estimated useful life	5 years
Furniture And Fixtures | Minimum [Member]
Estimated useful life	2 years
Furniture And Fixtures | Maximum [Member]
Estimated useful life	5 years

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Summary of Significant Accounting Policies - Schedule of License Minimum Annual Fee (Details) - Minimum Royalties per Calendar Year	Dec. 31, 2016 USD ($)
2010
2011
2012	2,500
2013	5,000	[1]
2014	7,500	[2]
2015	10,000	[3]
2016 and each calendar year thereafter	$ 25,000	[4]

[1] Paid February 2014

[2] Paid February 2015

[3] Paid February 2016

[4] No longer owed due to termination of license agreement effective December 31, 2016

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Summary of Significant Accounting Policies - Schedule of Future Annual Amortization License Fee (Details)	Dec. 31, 2016 USD ($)
Accounting Policies [Abstract]
2012
2013	5,000	[1]
2014	7,500	[2]
2015	10,000	[3]
2016	10,000	[4]
2017 and each calendar year thereafter	$ 25,000

[1] Paid February 2014

[2] Paid February 2015

[3] Paid February 2016

[4] $5,399 was paid January 2017 and the remaining $4,601 was paid February 2017.

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Summary of Significant Accounting Policies - Schedule of Future Annual Amortization License Fee (Details) (Parenthetical)	12 Months Ended
	Dec. 31, 2016 USD ($)
January 2017 [Member]
Royalties paid	$ 5,399
February 2017 [Member]
Royalties paid	$ 4,601

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Summary of Significant Accounting Policies - Schedule Of Dilutive Securities (Details) - shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Total potential dilutive securities	50,159,569	30,960,774
Convertible Debt [Member]
Total potential dilutive securities	6,441,644	7,848,421
Preferred Stock [Member]
Total potential dilutive securities	37,735,920	16,270,000
Common Stock Options [Member]
Total potential dilutive securities	2,402,500	51,350
Common Stock Warrants [Member]
Total potential dilutive securities	3,579,505	6,791,003

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Fixed Assets (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Depreciation expense	$ 2,947	$ 4,333
Total Fixed assets	29,776	$ 2,421,308
Production Equipment, Building, Leasehold Improvements, and Office Equipment [Member]
Total Fixed assets	1,016,532
Linear Accelerator [Member]
Total Fixed assets	$ 1,375,000

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Fixed Assets - Schedule of Fixed Assets (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Total Fixed assets	$ 29,776	$ 2,421,308
Less accumulated depreciation	(28,303)	(2,416,888)
Net Fixed assets	1,473	4,420
Production Equipment [Member]
Total Fixed assets	15,182	1,938,532
Building [Member]
Total Fixed assets		446,772
Leasehold Improvements [Member]
Total Fixed assets		3,235
Office Equipment [Member]
Total Fixed assets	$ 14,594	$ 32,769

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Intangible Assets (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense of intangible assets		$ 1,339

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Intangible Assets - Schedule of Intangible Assets (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
License Fee	$ 112,500	$ 112,500
Less accumulated amortization	(112,500)	(112,500)
License Fee, Net
Patents and intellectual property		35,482
Intangible assets net of accumulated amortization		$ 35,482

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Debt Issuance Costs (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
Cash paid as fees for debt arrangements	$ 0	$ 5,000
Amortization of debt issuance costs	$ 0	$ 18,917

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Debt Issuance Costs - Schedule of Debt Issuance Cost Account (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
Debt issuance costs beginning balance		$ 13,917
Cash paid as fees for debt arrangements		5,000
Amortization of debt issuance costs		13,917
Debt issuance costs ending balance

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Related Party Transactions (Details Narrative) - USD ($)		1 Months Ended	12 Months Ended
	Jul. 17, 2007	Jul. 31, 2012	Dec. 31, 2016	Dec. 31, 2015	Sep. 30, 2015
Proceeds from related party			$ 723,308
Debt conversion amount				109,812
Interest expense				1,491
amortization of debt discounts				13,917
Debt discount			$ 809,835	$ 1,285,000
Common stock issued for: Conversion of debt, shares			347,400
Number of preferred stock shares issued for services				100,000
Lease term	5 years
Ownership percentage	5.00%
Payment of rent		$ 11,904	$ 438,830
Settlement Agreement [Member]
Payment of rent			438,830
Shareholder and Director [Member]
Payment of rent			1,500
Series A Convertible Preferred Stock [Member]
Debt conversion amount			$ 37,906
Series A Preferred Stock [Member]
Number of preferred stock shares issued for services			218,000
Number of preferred stock shares issued for services, value			$ 942,644
Series A Preferred Stock [Member] | CFO [Member]
Number of preferred stock shares issued for services			10,000
Number of preferred stock shares issued for services, value			$ 54,152
Series A Preferred Stock [Member] | CEO And CFO [Member]
Number of shares issued for exchange of debt				$ 262,500
Number of shares issued for exchange of debt, shares				175,000
Related Party Promissory Notes [Member]
Proceeds from related party			249,695	$ 224,915
Debt conversion amount			1,197,950	1,055,532
Related Party Convertible Notes Payable [Member]
Proceeds from related party			473,613	156,500
Debt conversion amount				113,500
Loan Fees			29,156
Interest expense			1,912,587
amortization of debt discounts			25,000
Debt discount			448,613	4,896
Convertible notes payable			$ 0		$ 113,500
Convertible note variable rate amount				$ 43,000
Common stock conversion price per share				$ 0.001
Common stock issued for: Conversion of debt, shares				43,326
Related Party Convertible Notes Payable One [Member]
Loan Fees				$ 17,401
Interest expense				17,401
amortization of debt discounts				43,000
Convertible notes payable				$ 0
Common stock issued for: Conversion of debt, shares				3,440
Debt principal amount				$ 43,000
Related Party Convertible Notes One [Member]
Debt conversion amount				3,638,566
amortization of debt discounts				$ 6,328

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Related Party Transaction - Schedule of Related Party Promissory Notes (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Principal	$ 332,195	$ 1,280,450
Accrued Interest	26,949	33,934
Related Party Note One [Member]
Principal		1,055,535
Accrued Interest		27,299
Related Party Note Two [Member]
Principal		142,415
Accrued Interest		4,669
Related Party Note Three [Member]
Principal	82,500	82,500
Accrued Interest	10,239	1,966
Related Party Note Four [Member]
Principal	50,000
Accrued Interest	4,192
Related Party Note Five [Member]
Principal	109,695
Accrued Interest	7,093
Related Party Note Six [Member]
Principal	90,000
Accrued Interest	$ 5,425

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Related Party Transaction - Schedule of Related Party Promissory Notes (Details) (Parenthetical) - USD ($)	1 Months Ended
	May 31, 2016	Feb. 29, 2016	Oct. 31, 2015	Sep. 30, 2015	Feb. 09, 2016
Promissory Note One [Member]
Note, amount	$ 90,000			$ 1,055,535
Note, interest rate	10.00%			8.00%
Note due date, description	due May 2017			due on demand after March 2017
Promissory Note Two [Member]
Note, amount				$ 142,415
Note, interest rate				10.00%
Note due date, description				due May 2016
Promissory Note [Member]
Note, amount	$ 109,695		$ 82,500		$ 50,000
Note, interest rate	10.00%		10.00%		10.00%
Note due date, description	due July 2017	due February 2017	due October 2016

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Related Party Transaction - Schedule of Rent Expense (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Related Party Transactions [Abstract]
Office and warehouse space	$ 40,000	$ 155,306
Corporate office	18,000	18,000
Total Rental Expense	$ 58,000	$ 173,306

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Capital Lease Obligations (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Sep. 30, 2007
Percentage of interest on both leases accrued	8.60%
Debt service coverage ratio, description	Debt service coverage ratio of 1:1
Lease Agreement One [Member]
Lease agreements, value		$ 1,875,000
Lease Agreement Two [Member]
Lease agreements, value		$ 631,000

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Convertible Notes Payable (Details Narrrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Gross proceeds of debt and equity finance	$ 1,273,534	$ 1,285,000
Advances from shareholders	127,533	116,521
Accrued interest payable	86,752	191,884
Debt instrument original issue discount		5,000
Payment of remaining debt	419,055	255,000
Debt instrument conversion features	1,444,950	584,700
Gain (loss) on debt restructuring	1,456,113	(967,038)
Debt discount decrease amount	814,625	3,035
Debt discount	809,835	1,285,000
Amortization of convertible note debt discount	$ 579,042	1,031,443
Common stock issued for: Conversion of debt, shares	347,400
Convertible debt instrument accrued interest	$ 363,807
Convertible Notes Payable [Member]
Accrued interest payable	455,150
Debt instrument original issue discount	$ 193,831	$ 6,000

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Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Principal (net)	$ 544,508	$ 1,788,384
Accrued Interest	86,752	191,884
Penalties on notes past due principal (net)	11,066	1,032,475
Penalties on notes in default accrued interest
Convertible Notes Payable One [Member]
Principal (net)	95,000	165,000
Accrued Interest	50,365	69,712
Convertible Notes Payable Two [Member]
Principal (net)		50,000
Accrued Interest		7,682
Convertible Notes Payable Three [Member]
Principal (net)		10,990
Accrued Interest		5,457
Convertible Notes Payable Four [Member]
Principal (net)
Accrued Interest		2,358
Convertible Notes Payable Five [Member]
Principal (net)		20,000
Accrued Interest
Convertible Notes Payable Six [Member]
Principal (net)		36,961
Accrued Interest		6,572
Convertible Notes Payable Seven [Member]
Principal (net)		61,301
Accrued Interest		24,109
Convertible Notes Payable Eight [Member]
Principal (net)		22,042
Accrued Interest		3,034
Convertible Notes Payable Nine [Member]
Principal (net)		5,419
Accrued Interest		4,608
Convertible Notes Payable Ten [Member]
Principal (net)		25,000
Accrued Interest		1,836
Convertible Notes Payable Eleven [Member]
Principal (net)		28,800
Accrued Interest		2,880
Convertible Notes Payable Twelve [Member]
Principal (net)		40,000
Accrued Interest		6,049
Convertible Notes Payable Thirteen [Member]
Principal (net)		38,689
Accrued Interest		5,851
Convertible Notes Payable Fourteen [Member]
Principal (net)		56,092
Accrued Interest		13,462
Convertible Notes Payable Fifteen [Member]
Principal (net)		37,015
Accrued Interest		6,377
Convertible Notes Payable Sixteen [Member]
Principal (net)		36,750
Accrued Interest		5,538
Convertible Notes Payable Seventeen [Member]
Principal (net)		33,500
Accrued Interest
Convertible Notes Payable Eighteen [Member]
Principal (net)		36,263
Accrued Interest		5,576
Convertible Notes Payable Nineteen [Member]
Principal (net)
Accrued Interest	17,341	18,264
Convertible Notes Payable Twenty [Member]
Principal (net)		52,087
Accrued Interest	5,953	2,519
Convertible Notes Payable Twenty One [Member]
Principal (net)
Accrued Interest	696
Convertible Notes Payable Twenty Two [Member]
Principal (net)	438,442
Accrued Interest	$ 12,397

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Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) (Parenthetical) - USD ($)		1 Months Ended										2 Months Ended	3 Months Ended		6 Months Ended
	Feb. 02, 2014	Nov. 30, 2016	Sep. 30, 2014	Aug. 31, 2014	Jul. 31, 2014	Jun. 30, 2014	May 31, 2014	Apr. 30, 2014	Mar. 31, 2014	Feb. 28, 2014	Jan. 31, 2014	Aug. 31, 2012	Mar. 31, 2016	Dec. 31, 2015	Oct. 31, 2015	Dec. 31, 2016	Jul. 30, 2014
Convertible Notes Payable One [Member]
Debt principal amount												$ 1,060,000
Debt conversion price per share												$ 4.60
Debt interest rate												12.00%
Debt maturity date description												December 2013 and January 2014
Convertible Notes Payable Two [Member]
Debt principal amount											$ 50,000
Debt interest rate											8.00%
Debt maturity date description											due January 2015
Convertible Notes Payable Three [Member]
Debt principal amount											$ 55,500
Debt interest rate											10.00%
Debt maturity date description											due October 2014
Convertible Notes Payable Four [Member]
Debt principal amount	$ 46,080
Debt interest rate	10.00%
Debt maturity date description	due February 2015
Convertible Notes Payable Five [Member]
Debt principal amount										$ 27,800
Debt interest rate										10.00%
Debt maturity date description										due February 2015
Convertible Notes Payable Six [Member]
Debt principal amount									$ 50,000
Debt interest rate									10.00%
Debt maturity date description									due March 2015
Convertible Notes Payable Seven [Member]
Debt principal amount									$ 165,000
Debt interest rate									10.00%
Debt maturity date description									due April 2015
Convertible Notes Payable Eight [Member]
Debt principal amount								$ 32,000
Debt interest rate								10.00%
Debt maturity date description								due April 2015
Convertible Notes Payable Nine [Member]
Debt principal amount								$ 46,080
Debt interest rate								10.00%
Debt maturity date description								due April 2015
Convertible Notes Payable Ten [Member]
Debt principal amount							$ 55,000
Debt interest rate							12.00%
Debt maturity date description							due May 2015
Convertible Notes Payable Eleven [Member]
Debt principal amount						$ 28,800
Debt interest rate						10.00%
Debt maturity date description						due June 2015
Convertible Notes Payable Twelve [Member]
Debt principal amount						$ 40,000
Debt interest rate						10.00%
Debt maturity date description						due June 2015
Convertible Notes Payable Thirteen [Member]
Debt principal amount						$ 40,000
Debt interest rate						10.00%
Debt maturity date description						due June 2015
Convertible Notes Payable Fourteen [Member]
Debt principal amount						$ 56,092
Debt interest rate						16.00%
Debt maturity date description						due July 2015
Convertible Notes Payable Fifteen [Member]
Debt principal amount																	$ 37,500
Debt interest rate																	12.00%
Debt maturity date description					due July 2015
Convertible Notes Payable Sixteen [Member]
Debt principal amount				$ 36,750
Debt interest rate				10.00%
Debt maturity date description				due April 2015
Convertible Notes Payable Seventeen [Member]
Debt principal amount				$ 33,500
Debt interest rate				4.00%
Debt maturity date description				due February 2015
Convertible Notes Payable Eighteen [Member]
Debt principal amount			$ 37,500
Debt interest rate			12.00%
Debt maturity date description			due September 2015
Convertible Notes Payable Nineteen [Member]
Debt principal amount															$ 605,000
Debt conversion price per share															$ 1
Debt maturity date description															due September 30, 2015
Convertible Notes Payable Nineteen [Member] | Minimum [Member]
Debt interest rate															8.00%
Convertible Notes Payable Nineteen [Member] | Maximum [Member]
Debt interest rate															10.00%
Convertible Notes Payable Twenty [Member]
Debt principal amount														$ 613,000
Debt conversion price per share														$ 1
Debt interest rate														8.00%
Debt maturity date description														due June 30, 2016
Debt discount														$ 0		$ 560,913
Convertible Notes Payable Twenty One [Member]
Debt principal amount													$ 345,000
Debt conversion price per share													$ 1
Debt interest rate													8.00%
Debt maturity date description													due June 30, 2016
Convertible Notes Payable Twenty Two [Member]
Debt principal amount		$ 979,162
Debt interest rate		10.00%
Debt maturity date description		due May 2017
Debt discount														$ 0		$ 540,720

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Derivative Liability - Schedule of Derivative Liability Account Activity (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Derivative liability Beginning Balance	$ 4,235,016	$ 11,502,380
Derivative Liability Recorded on New Instruments	6,150,026	698,705
Elimination of Liability on Conversion	(11,647,933)	(79,044)
(Gain) on Settlement of Debt	(656,930)
Change in Fair Value at Year End	(2,244,353)	(7,887,025)
Derivative liability, ending balance	324,532	4,235,016
Warrants [Member]
Derivative liability Beginning Balance	714,401	1,263,929
Derivative Liability Recorded on New Instruments
Elimination of Liability on Conversion	(1,266,795)
(Gain) on Settlement of Debt
Change in Fair Value at Year End	552,452	(549,528)
Derivative liability, ending balance	58	714,401
Conversion Feature [Member]
Derivative liability Beginning Balance	3,520,615	10,238,451
Derivative Liability Recorded on New Instruments	6,150,026	698,705
Elimination of Liability on Conversion	(10,381,138)	(79,044)
(Gain) on Settlement of Debt	(656,930)
Change in Fair Value at Year End	1,691,901	(7,337,497)
Derivative liability, ending balance	$ 324,474	$ 3,520,615

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Derivative Liability - Schedule of Assumptions for Fair Value Determination (Details)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Warrants [Member]
Dividend yield	0.00%	0.00%
Warrants [Member] | Minimum [Member]
Risk-free interest rate	0.46%	0.65%
Expected life in years	6 months 10 days	8 months 12 days
Expected volatility	156.29%	197.83%
Warrants [Member] | Maximum [Member]
Risk-free interest rate	1.38%	1.31%
Expected life in years	4 years 29 days	4 years
Expected volatility	273.70%	263.33%
Conversion Feature [Member]
Dividend yield	0.00%	0.00%
Conversion Feature [Member] | Minimum [Member]
Risk-free interest rate	0.12%	0.02%
Expected life in years	4 days	26 days
Expected volatility	115.46%	279.01%
Conversion Feature [Member] | Maximum [Member]
Risk-free interest rate	0.85%	0.25%
Expected life in years	1 year	11 months 8 days
Expected volatility	263.33%	555.60%

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Income Taxes (Details Narrative)	12 Months Ended
	Dec. 31, 2016 USD ($)
Income Tax Disclosure [Abstract]
Net operating loss carryforwards	$ 26,043,700
Net operating loss carryforwards expiration date description	year 2017 through 2036.

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Income Taxes - Schedule of Net Deferred Tax Assets (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Net operating loss carryover	$ 8,854,900	$ 8,007,900
Depreciation		247,900
Related party accrual	179,400	113,400
Capital Loss Carryover	5,500	5,500
Depreciation	(197,200)
Valuation allowance	(8,842,600)	(8,374,700)
Net deferred tax asset
Net deferred tax asset

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Income Taxes - Schedule of Federal Income Tax Rate (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Book income (loss)	$ (3,350,700)	$ 2,119,100
Grant income	(7,100)	(7,100)
Depreciation	(25,300)	(41,500)
Intangible asset impairment	12,100
Related party accrual	65,900	(516,100)
Meals and entertainment	1,600	1,600
Stock for services	341,300	113,900
Options expense	229,600	9,700
Non-cash interest expense	1,976,300	581,500
Other non-deductible expenses	(90,600)	(3,112,100)
Valuation allowance	846,900	851,000
Income tax expense

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Stockholders' Equity (Details Narrative)	1 Months Ended			2 Months Ended	12 Months Ended
	Dec. 31, 2015 USD ($) $ / shares shares	Oct. 31, 2015 USD ($) shares	Sep. 30, 2015 USD ($) shares	Dec. 31, 2015 USD ($) $ / shares shares	Dec. 31, 2016 USD ($) $ / shares shares	Dec. 31, 2015 USD ($) $ / shares shares	Mar. 31, 2016 shares	Jun. 30, 2015 $ / shares shares
Common stock, authorized | shares	2,000,000,000			2,000,000,000	2,000,000,000	2,000,000,000
Common stock, par value | $ / shares	$ 0.001			$ 0.001	$ 0.001	$ 0.001
Common stock, shares issued | shares	19,969,341			19,969,341	31,743,797	19,969,341
Common stock, shares outstanding | shares	19,969,341			19,969,341	31,743,797	19,969,341
Liability for lack of authorized shares	$ 852,091			$ 852,091		$ 852,091
Preferred stock, shares authorized | shares	20,000,000			20,000,000	20,000,000	20,000,000
Preferred stock, par value | $ / shares	$ 0.001			$ 0.001	$ 0.001	$ 0.001
Number of common stock issued for warrants exercise | shares	1,995,000			1,995,000	30,644	1,995,000
Common stock issued for loan fees on convertible debt | shares	43,326			43,326		43,326
Value of common stock issued for loan fees on convertible debt						$ 6,387
Debt discount	$ 4,896			$ 4,896		4,896
Interest expense						$ 1,491
Common stock issued for settlement and conversion of debt | shares					563,523	920,516
Value of common stock issued for settlement and conversion of debt					$ 70,863	$ 109,812
Value of reduction in debt						31,721
Reduction in derivative liability						79,044
Common stock issued for conversion of preferred stock | shares					11,180,289
Value of common stock issued for conversion of preferred stock					$ 1,590,801
Value of preferred stock in exchange					4,828,204
Increase in retained earnings due to stock conversion					3,237,403
Stock based compensation					675,324	80,635
Warrants granted for services					$ 595,175	0
Preferred stock issued for cash | shares					46,666
Perferred stock issued for cash value					$ 70,000
Preferred stock issued for warrants | shares					250,000
Perferred stock issued for warrants value					$ 250
Gain on debt extinguishment					$ 3,108,342	$ 3,562,067
Stock issued during services, shares | shares						100,000
Common stock issued for: Conversion of debt, shares | shares					347,400
Convertible debt instrument accrued interest					$ 363,807
Debt conversion of convertible debt						$ 109,812
Accounts Payable [Member]
Number of stock issued for accrued payroll liabilities | shares	246,797
Number of stock issued for accrued payroll liabilities, value	$ 370,197
Series A Preferred Stock [Member]
Preferred stock, shares authorized | shares	5,000,000			5,000,000	5,000,000	5,000,000
Preferred stock, par value | $ / shares	$ 0.001			$ 0.001	$ 0.001	$ 0.001
Preferred stock redemption					Subject to certain conditions set forth in the Series A Certificate of Designation, in the event of a Change of Control (defined in the Series A Certificate of Designation as the time at which as a third party not affiliated with the Company or any holders of the Series A Preferred shall have acquired, in one or a series of related transactions, equity securities of the Company representing more than fifty percent 50% of the outstanding voting securities of the Company), the Company, at its option, will have the right to redeem all or a portion of the outstanding Series A Preferred in cash at a price per share of Series A Preferred equal to 100% of the Liquidation Preference.
Preferred stock, voting rights					Holders of Series A Preferred are entitled to vote on all matters, together with the holders of common stock, and have the equivalent of five (5) votes for every Series A Conversion Share issuable upon conversion of such holder’s outstanding shares of Series A Preferred. However, the Series A Conversion Shares, when issued, will have all of the same voting rights as other issued and outstanding common stock of the Company, and none of the rights of the Series A Preferred.
Percentage of liquidation preference					1.00
Common stock issued for loan fees on convertible debt | shares	133,833			133,833	37,906	133,833
Value of common stock issued for loan fees on convertible debt					$ 29,156
Debt discount	$ 3,035			$ 3,035	$ 363,807	$ 3,035
Common stock issued for conversion of preferred stock | shares					1,118,024
Gain on debt extinguishment					$ 7,018
Stock issued during services, shares | shares					218,000
Stock issued during services					$ 942,644
Number of shares issued for finders fee | shares					30,000
Value of shares issued for finders fee					$ 162,456
Series A Preferred Stock [Member] | Convertible Debt [Member]
Common stock issued for: Conversion of debt, shares | shares		10,000	552,000	99,000
Convertible debt instrument accrued interest				$ 9,812
Debt conversion of convertible debt		$ 10,000	$ 552,000	$ 22,700
Series A Preferred Stock [Member] | Chief Financial Officer [Member]
Stock issued during services, shares | shares					10,000
Stock issued during services					$ 54,152
Series A Preferred Stock [Member] | CEO [Member]
Number of stock issued for accrued payroll liabilities | shares	100,000
Number of stock issued for accrued payroll liabilities, value	$ 150,000
Series A Preferred Stock [Member] | CFO [Member]
Stock issued during services, shares | shares					10,000
Stock issued during services					$ 54,152
Number of stock issued for accrued payroll liabilities | shares	75,000
Number of stock issued for accrued payroll liabilities, value	$ 112,500
Series A Preferred Stock [Member] | Warrants [Member]
Preferred stock issued for warrants | shares					62,854
Perferred stock issued for warrants value					$ 407,973
Number of shares issued in exchange for surrender of warrants | shares					2,407,500
Derivative liabilities					$ 1,179,710
Gain on debt extinguishment					771,737
Series A Convertible Preferred Stock [Member]
Preferred stock, shares authorized | shares							2,500,000	2,500,000
Preferred stock, liquidation preference | $ / shares								$ 5.00
Common stock conversion price per share | $ / shares								$ 0.50
Debt conversion of convertible debt					$ 37,906
Series A Convertible Preferred Stock [Member] | Maximum [Member]
Preferred stock, shares authorized | shares							5,000,000
Series A Preferred Stock [Member]
Value of common stock issued for loan fees on convertible debt						$ 527,325
Common stock issued for settlement and conversion of debt | shares					47,840
Value of common stock issued for settlement and conversion of debt					$ 39,904
Value of preferred stock in exchange					1,197,950
Gain on debt extinguishment					$ 144,139
Common stock issued for: Conversion of debt, shares | shares					215,961
Convertible debt instrument accrued interest					$ 59,671
Debt conversion of convertible debt					1,401,760
Series A Preferred Stock [Member] | Related Party Convertible Notes [Member]
Common stock issued for loan fees on convertible debt | shares	3,440			3,440		3,440
Value of common stock issued for loan fees on convertible debt						$ 17,401
Debt discount					448,613
Value of preferred stock in exchange					473,613
Derivative liabilities					2,330,154
Gain on debt extinguishment					$ 24,278
Common stock issued for: Conversion of debt, shares | shares					473,830
Convertible debt instrument accrued interest					$ 0
Debt conversion of convertible debt					2,330,876
Series A Preferred Stock [Member] | Convertible Debt [Member]
Debt discount					814,625
Derivative liabilities					8,138,070
Gain on debt extinguishment					$ 266,358
Common stock issued for: Conversion of debt, shares | shares					1,460,600
Convertible debt instrument accrued interest					$ 50,711
Debt conversion of convertible debt					8,552,746
Convertible debt					$ 1,444,950
Series A Preferred Stock [Member] | Related Party Debt [Member]
Common stock issued for: Conversion of debt, shares | shares			148,310
Convertible debt instrument accrued interest			$ 810,538
Debt conversion of convertible debt			$ 1,414,100
Series A Preferred Stock [Member] | Related Party Convertible Debt [Member]
Common stock issued for: Conversion of debt, shares | shares			43,000
Debt conversion of convertible debt			$ 43,000
Series A Preferred Stock [Member] | Major Shareholder and Director [Member] | Related Party Debt [Member]
Common stock issued for: Conversion of debt, shares | shares			207,620
Convertible debt instrument accrued interest			$ 889,838
Debt conversion of convertible debt			$ 2,224,466

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Stockholders' Equity - Schedule of Changes in Stock Option (Details) - Stock Options [Member] - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Number of Shares Options Outstanding Beginning Balance	51,350	87,850
Number of Options granted	2,370,000
Number of Options exercised
Number of Options expired	(18,850)	(36,500)
Number of Shares Options Outstanding Ending Balance	2,402,500	51,350
Number of Shares Options Exercisable	1,939,062
Weighted Average Exercise Price granted
Weighted Average Exercise Price exercised
Weighted Average Remaining Contractual Life (in years) Outstanding, Beginning	7 years 1 month 13 days	3 years 5 months 1 day
Weighted Average Remaining Contractual Life (in years) Outstanding, Ending	4 years 18 days	7 years 1 month 13 days
Weighted Average Remaining Contractual Life (in years) Exercisable	3 years 11 months 12 days
Aggregate Intrinsic Value Outstanding
Aggregate Intrinsic Value Exercisable
Weighted Average Exercise Price Per Share Outstanding Beginning	$ 15.00	$ 14.00
Weighted Average Exercise Price Per Share Options granted	0.62
Weighted Average Exercise Price Per Share Options exercised
Weighted Average Exercise Price Per Share Options expired	14.84
Weighted Average Exercise Price Per Share Outstanding Ending	0.81	15.00
Weighted Average Exercise Price Per Share Exercisable	0.88
Minimum [Member]
Weighted Average Exercise Price Outstanding Beginning Balance	12.00	9.00
Weighted Average Exercise Price granted	0.50
Weighted Average Exercise Price expired	0.12	9.00
Weighted Average Exercise Price Outstanding Ending Balance	0.50	12.00
Exercise Price Per Share Exercisable	0.50
Maximum [Member]
Weighted Average Exercise Price Outstanding Beginning Balance	15.00	15.00
Weighted Average Exercise Price granted	1.00
Weighted Average Exercise Price expired	0.15	21.00
Weighted Average Exercise Price Outstanding Ending Balance	15	$ 15.00
Exercise Price Per Share Exercisable	$ 15

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Stockholders' Equity - Schedule of Changes in Common Stock Warrants (Details) - Warrants [Member] - USD ($)		12 Months Ended
		Dec. 31, 2016	Dec. 31, 2015
Number of Shares, Warrants Outstanding Beginning		6,803,503	23,107,701
Number of Shares, Warrants granted		233,334	312,500
Number of Shares, Warrants exercised		(202,500)	(2,856,041)
Number of Shares, Warrants adjusted	[1]		(13,601,951)
Number of Shares, Warrants expired/cancelled		(3,254,832)	(158,706)
Number of Shares, Warrants Outstanding Ending		3,579,505	6,803,503
Number of Shares, Warrants Exercisable Ending		3,579,505
Exercise Price Per Share Warrants granted		$ 0.40
Exercise Price Per Share Warrants exercised		$ 0.10	$ 0.30
Weighted Average Remaining Contractual Life (in years) Warrants Outstanding, Beginning		1 year 10 months 25 days	2 years 10 months 10 days
Weighted Average Remaining Contractual Life (in years) Warrants Outstanding, Warrants Granted		1 year 8 months 16 days	2 years 11 months 8 days
Weighted Average Remaining Contractual Life (in years) Warrants Outstanding Ending		6 months 7 days	1 year 10 months 25 days
Weighted Average Remaining Contractual Life (in years) Warrants Exercisable		6 months 7 days
Aggregate Intrinsic Value Outstanding		$ 2,052,699
Aggregate Intrinsic Value Outstanding		749	$ 2,052,699
Aggregate Intrinsic Value Exercisable		$ 749
Weighted Average Exercise Price Per Share Exercise Price Warrants Beginning		$ 0.81	$ 1
Weighted Average Exercise Price Per Share Exercise Price Warrants granted		0.34	0.13
Weighted Average Exercise Price Per Share Exercise Price Warrants exercised		0.10	0.30
Weighted Average Exercise Price Per Share Exercise Price Warrants adjusted	[1]		0.01
Weighted Average Exercise Price Per Share Exercise Price Warrants expired/cancelled		0.13	8.76
Weighted Average Exercise Price Per Share Exercise Price Warrants Ending		4.45	0.81
Weighted Average Exercise Price Per Share Exercise Price Warrants Exercisable		4.45
Minimum [Member]
Weighted Average Exercise Price Outstanding		0.1	0.01
Exercise Price Per Share Warrants granted			0.10
Exercise Price Per Share Warrants adjusted	[1]		0.10
Exercise Price Per Share Warrants expired/cancelled		0.01	6.00
Weighted Average Exercise Price Outstanding		0.10	0.1
Exercise Price Per Share Exercisable		0.10
Maximum [Member]
Weighted Average Exercise Price Outstanding		10	25
Exercise Price Per Share Warrants granted			0.15
Exercise Price Per Share Warrants adjusted	[1]		0.15
Exercise Price Per Share Warrants expired/cancelled		6.00	25.00
Weighted Average Exercise Price Outstanding		10	$ 10
Exercise Price Per Share Exercisable		$ 10

[1] Based upon Delaware law and on the terms and conditions set forth in the applicable warrant agreement, any adjustments to the warrants were limited to a floor price of $0.001. Pursuant to the defective warrant exercise notice using an exercise price below $0.001, the Company issued at total of 1,473,777 shares of common stock to the warrant holders, which the Company believes are voidable, and also recorded 16,009,450 warrants outstanding to the holder on the Company’ financial statements for the year ended December 31, 2014, and for the periods ending March 31 and June 30, 2015. Management believes that the warrants were recorded in error during the periods presented, and has recorded the revised number of warrants outstanding at September 30, 2015 at 2,407,500, which reflects the number of shares of common stock purchase warrants outstanding and exercisable under the terms of the warrants at an exercise price of $0.001 per share. This net adjustment of 13,601,951 warrants has been reflected in the schedule for the twelve months ending December 31, 2015. The Company reached a Settlement Agreement in 2016 with this warrant holder to cancel all the remaining 2,407,500 warrants in exchange for 50,000 shares of Series A Preferred.

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Stockholders' Equity - Schedule of Changes in Common Stock Warrants (Details) (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Warrant exercise price per share	$ 0.001		$ 0.001
Number of common stock shares issued		421,797
Warrant outstanding		13,601,951	2,407,500	16,009,450	16,009,450	16,009,450
Cancellation of warrant	2,407,500
Series A Preferred Stock [Member]
Number of common stock shares issued	62,854	960,929
Warrants exchange of shares	50,000
Warrant Holders [Member]
Number of common stock shares issued	1,473,777
Maximum [Member] | Warrant Holders [Member]
Warrant exercise price per share	$ 0.001

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Concentrations of Credit and Other Risks (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Allowance for doubtful accounts receivable
Revenue [Member] | Customer One[Member]
Concentration risk percentage	100.00%	100.00%
Revenue [Member] | Customer [Member]
Concentration risk percentage	100.00%	100.00%
Consulting Revenues [Member]
Concentration risk percentage	100.00%	100.00%

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Supplemental Cash Flow Information (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Number of common stock shares issued for cashless warrants	30,644	1,995,000
Number of common stock issued for cashless warrants	$ 0	$ 0
Decrease in related party debt	1,197,950
Value of decreased related party convertible notes payable	473,613
Decrease in debt discount	448,613
Decrease in convertible note payable	1,444,950
Decrease in offset in debt discount	814,624
Decrease in accrued interest	110,382
Decrease in derivative liabilities	10,468,224
Increase in preferred shares	12,431,882
Shares issued in conjunction with the settlement of convertible notes	2,150,391
Reclassification of accrued interest	455,150
Number of shares issued		421,797
Number of shares issued, value		$ 1,358,726
Increase in additional paid in capital	852,092
Proceeds from shareholder advances a formal convertible note payable	$ 127,533
Number of shares issued for loan fees on convertible promissory notes	433,146
Number of preferred stock issued for loan fees on convertible promissory notes	$ 432,866
Increase in convertible debt discount due to loan fees	363,807
Increase in derivative liabilities due to loan fees	69,059
Value of preferred stock in exchange	4,828,204
Increase in retained earnings due to stock conversion	3,237,403
Issued shares of preferred stock in exchange for accounts payable		370,197
Issued shares of preferred stock in exchange for accrued payroll		$ 262,500
Issued shares of preferred stock as loan extension fees		25,000
Convertible Notes [Member]
Value of decreased related party convertible notes payable	473,613
Decrease in debt discount	809,835
Decrease in derivative liabilities	1,283,448
Series A Preferred Stock [Member]
Decrease in derivative liabilities	$ 1,179,710
Number of shares issued	62,854	960,929
Number of shares issued, value	$ 407,973	$ 2,201,963
Gain on debt extinguishment	$ 771,737
Number of shares issued for loan fees on convertible promissory notes		43,326
Shares of preferred stock due to exchange		4,243,566
Issued shares for extinguishment		74,000
Issued shares for extinguishment worth of principal on convertible notes payable		$ 22,700
Issued shares for extinguishment worth of accrued interest		0
Issued shares for extinguishment worth of derivative liabilities		0
Issued shares for extinguishment worth of debt discount		$ 0
Common Stock [Member]
Number of shares issued	11,180,289
Number of shares issued, value	$ 1,590,801
Number of shares issued for loan fees on convertible promissory notes		108,833
Shares of preferred stock due to exchange	1,118,024
Value of preferred stock in exchange	$ 4,828,204
Increase in retained earnings due to stock conversion	$ 3,237,403
Issued shares for extinguishment		920,516
Issued shares for extinguishment worth of principal on convertible notes payable		$ 31,721
Issued shares for extinguishment worth of accrued interest		0
Issued shares for extinguishment worth of derivative liabilities		79,044
Issued shares for extinguishment worth of debt discount		$ 3,035

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Subsequent Events (Details Narrative) - USD ($)		1 Months Ended			12 Months Ended
	Mar. 06, 2017	Mar. 31, 2017	Feb. 28, 2017	Jan. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Number of common stock shares issued						421,797
Received shareholder loan					$ 132,533
Common Stock [Member]
Number of common stock shares issued					11,180,289
Series A Preferred Stock [Member]
Number of common stock shares issued					62,854	960,929
Subsequent Event [Member]
Number of common stock shares issued			280,000
Accounts payable			$ 140,000
Received shareholder loan		$ 25,000
Subsequent Event [Member] | Common Stock [Member]
Number of common stock shares issued	5,517,900		5,517,900	5,517,900
Subsequent Event [Member] | Series A Preferred Stock [Member]
Number of common stock shares issued	531,790		531,790	531,790