Zivo Bioscience, Inc. (NASDAQ: ZIVO, ZIVOW) (“ZIVO” and the
“Company”), a biotech/agtech R&D company engaged in the
development and commercialization of therapeutic, medicinal and
nutritional product candidates originally derived from proprietary
algal cultures, today issues a letter to shareholders from Chief
Executive Officer Andrew Dahl.
To ZIVO Shareholders, Principals and
Partners
2021 has turned into a watershed moment in the
Company’s history and future outlook. After years of stopgap
funding and on-off R&D, we find ourselves in the strongest
financial position ever and a portfolio of products with great
promise and prospects. The Company’s hybrid approach to R&D,
working both biotech and agtech in parallel, has resulted in a
robust intellectual property portfolio and engagement with some of
the world’s best-known animal and human health brands.
We are committed to moving forward with
commercialization efforts backed by the technical and financial
resources we had worked for years to develop. This could not have
happened without the active support of our investor base, those who
recently joined us and those who’ve stuck with us over the years.
Nor could it have been possible without a small but dedicated core
team of ZIVO employees and external advisors.
Public offering and Nasdaq
Up-listing
On June 2, 2021, the Company successfully
completed its planned capital raise and “up-listing” to the Nasdaq
stock exchange. The Company sold 2,760,000 shares of common stock
and warrants to purchase up to 3,174,000 shares of stock for gross
proceeds of $13.8 million. After offering expenses, the Company
netted $12.2 million in capital funding that will be used to
further the implementation the Company’s biotech and agtech
strategies. As a result of the “up-list”, ZIVO Bioscience stock and
registered warrants now trade on the Nasdaq exchange under the
symbols ZIVO and ZIVOW, respectively.
Shortly after the June public offering, the
Company was informed by Maxim Group, underwriters in the offering,
that Maxim would be partially exercising their option to purchase
additional common shares as allowed by the underwriting agreement.
On July 1, 2021, Maxim purchased 150,000 shares of common stock;
the Company netted proceeds of roughly $688,000. This funding event
was a significant milestone for ZIVO Bioscience, providing the
Company with the financial resources to advance the licensing
effort for poultry gut health and start work on other animal
species. Funds will also be allocated to accelerate production of
the Company’s proprietary algal biomass for human nutritional
applications.
Investor Relations &
Events
The Company retained CORE IR, a New York based
investor relations and public relations firm focused on small to
mid-cap companies, to assist in establishing relationships in the
capital markets, interface with investors and engage in PR
activities that provide greater visibility for the Company and its
mission. The Company participated in an LD Micro virtual investment
seminar on June 9 and will participate in the SNN and Q3 investor
conferences scheduled for August 17 and 19, respectively.
Additional investor events are planned.
The Company has prepared a general investor
presentation, which is posted and available on the ZIVO website
under the News & Media page and accessed by clicking on the
pulldown tab “Presentations”. In addition, the Company is moving
forward to revamp its ZIVO website, add video segments and resume
regular Project Updates postings now that the public offering and
up-list have been concluded.
Poultry gut health -
Biotech
The Company continues to refine its approach to
poultry gut health, having completed another in vivo study in July
at a poultry research facility in Maryland, conducting field trial
#18 to further validate various performance characteristics of its
lead product candidate. Data analysis is in progress.
The Company also tolerance-tested a process to
refine its lead gut health product candidate into a semi-pure
fermentation product at the same facility in July. Preliminary
results were made available by the contract research group in the
last week of July and data analysis by ZIVO R&D principals is
currently underway. In the meantime, plans are progressing for a
larger-scale test of the purification process to yield sufficient
material for definitive performance validation of the purified
product candidate.
In parallel with the above, ZIVO R&D
principals move forward with the preparation of highly purified and
synthesized versions of its poultry gut health product candidate
and expect to commence in vivo studies of these highly refined
actives sometime in August. Over the next few months, the Company
is planning additional studies for its refined immune modulator
product candidate, while simultaneously continuing discussions with
leading animal health companies.
Immunomodulator complex - Biotech
Throughout 2020, the Company worked to develop
production methods to create fermentate containing the Company’s
biologically active molecular complex. Purification of that
fermentate and subsequent analyses began in late fall of 2020. The
initial fermentate manufacturing development work was largely
concluded by the end of June 2021 while the purification process is
still being refined and validated. Notably, production of the
fermentate has been ramped up to 500+ liter scale in
bioreactors.
The poultry in vivo validation of the fermentate
was concluded in July, as mentioned above, with analysis of the
study results pending. Various purification methods are awaiting
validation as schedules permit.
The Company plans to present these processes and
final product formulation to prospective licensees and joint
development partners over the next few months.
Work on expanding ZIVO TLR4 modulator
applications continues, beginning with pathway analyses in mouse
and human cell models currently underway. Also in progress is a
multi-platform in vitro project to identify and validate potential
human applications.
This phenotypic testing panel consists of 12
individual primary human co-culture systems which predictively
model therapeutic effects on multiple tissues and disease states.
Using 148 clinically relevant biomarkers, the panel is used in the
pharmaceutical industry to model vasculature, immune system, skin,
lung, and general tissue biology. The panel evaluates the
biological impact of the ZIVO product on potency, selectivity,
safety, mechanism of action, and potential applicability to
specific disease indications while predicting safety and toxicity
prior to initiating in vivo testing or clinical trials. Results are
expected at the close of Q3 2021.
Porcine immune health - Biotech
With funding now in place, Company principals
have docketed research plans to investigate the use of the
fermentate product candidate and/or purified immune-modulating
molecular complex to address health issues in swine, more
specifically weanlings, which are susceptible to a wide range of
gut and respiratory maladies. This work is scheduled to commence
once a poultry license has been closed.
Bovine mastitis testing - Biotech
Bovine mastitis testing in California has been
curtailed so that Company resources can be directed to the poultry
gut health initiative. Therefore, despite promising results and
interest from industry, ZIVO principals concluded that the bovine
research would best be paused until the poultry opportunity was
fully realized and porcine testing was well underway. Once
reactivated, the mastitis program will be facilitated by the
learnings (e.g., mechanism of action, dose optimization, etc.)
realized in the poultry and swine initiatives.
Algal biomass product development - Agtech
In 2020, ZIVO launched a product development
program to investigate whether the whole of the algal biomass or
components thereof held any promise as a human skin health topical
product. An initial analysis was completed to determine beneficial
properties and nutrients. Based on those results, the Company is
accelerating the effort to develop functional ingredients and
formulated products targeting the skin health market.
The ZIVO agtech product team developed a paste
product candidate using rehydrated algae, which has passed initial
safety tests including the USFDA Stain and Irritant Test (SIT) on
Epiderm tissue and the USP 51 Preservative Efficacy Test (PET).
Focus group testing revealed a viable product that may be used as a
facial and body masque with promising efficacy data. Samples are
being offered to prospective distributors and marketers.
An extract product candidate in the form of a
serum has also been created from dried algal biomass using
high-pressure homogenization. Initial testing suggests similar
properties to that of the algal paste. The extract candidate is
undergoing USP 51 PET, while clinical feasibility testing is
expected to commence in late August and conclude in late
September.
A proprietary facial mist formulation
incorporating rehydrated algal biomass was developed and tested
with positive feedback from an internal focus group. The product is
designed to be applied to clean skin before foundation makeup to
provide more uniform skin tone and texture. Compliance would be
paralleled with the algal paste and extract.
The functional food ingredient applications, as
explored extensively in previous years, are now back on track as
capital has become available to fund expansion of biomass
production capacity.
Algae production - Agtech
In Q4 2020, ZIVO executed a Phase 1 development
agreement with agribusiness Grupo Alimenta and funded the startup
of facility conversion at the Alimenta algae production facility in
Ica, Peru. The facility commenced production immediately and
delivered its first samples of ZIVO algal biomass in early January
2021 for testing in US labs.
Based on positive outcomes and a positive
working relationship over the past 6 months, ZIVO is now poised to
expand the Alimenta facility and build commercial-scale algae ponds
to the Company’s proprietary design. In addition, the Alimenta-ZIVO
team is working to expand post-harvest processing, ranging from
pond harvesting and de-watering through drying and packaging of the
unique ZIVO strain.
Z-Mex Farms, an American company based near
Aguascalientes, Mexico has been working with ZIVO principals to
build an algae production facility at its own expense and license
the ZIVO algal culture and production methods. Over the last 8
months ZIVO has dedicated engineering and processing resources to
design a sustainable production concept, which is intended to grow
to mid-scale production over the next year. Z-Mex principals have
acquired a suitable site near Aguascalientes and expect to break
ground in Q3 2021.
Florida laboratory - Agtech
The commercial scaling and process improvement
laboratory is currently being outfitted with ponds and bioreactors.
The Ft. Myers facility will also house the Company’s living algal
cultures and various lots of dried algal biomass for record and
traceability uses. Dr. Laura Belicka has joined the Company at the
Ft. Myers lab, working on a broad range of internal assignments. A
bio will be made available on the Company’s website.
Additional staff announcements are expected.
COVID-19 Related Delays
ZIVO Bioscience conducts a significant portion
of its research at academic institutions and private laboratories
across the US. Complete or partial closure due to COVID-related
mandates created delays and work stoppages beginning in 2020 which
have had a cumulative and compounding effect on work schedules and
deliverables thus far in 2021. More recently, ZIVO has experienced
supply chain interruptions resulting in both schedule delays and
price inflation. Vendors are cautioning that lead times may
continue to be extended and their supply chains for goods and
materials, particularly computer chips or equipment requiring
computer chips, are backordered. The Company continues to move
forward with its initiatives to the extent conditions permit, and
the general picture has been improving steadily thus far.
About Zivo Bioscience, Inc.
Zivo Bioscience, Inc. (NASDAQ: ZIVO) is a
Michigan-based biotech/agtech company engaged in the investigation
of the health and nutritional benefits of bioactive compounds
derived from its proprietary algal cultures, and the development of
natural bioactive compounds for use as dietary supplements and food
ingredients, as well as biologically derived and synthetic
candidates for medicinal and pharmaceutical applications in humans
and animals, specifically focused on the general benefits of
autoimmune and inflammatory response modulation. Visit
zivobioscience.com to learn more.
Forward Looking Statements
Except for any historical information, the
matters discussed herein contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Although ZIVO
believes that we have a reasonable basis for each forward-looking
statement, we caution you that these statements are based on a
combination of facts and factors currently known by us and our
expectations of the future, about which we cannot be certain. Our
actual future results may be materially different from what we
expect due to factors largely outside our control, including risks
that our strategic partnerships may not facilitate the
commercialization or market acceptance of our products; risks that
our products may not be ready for commercialization in a timely
manner or at all; risks that our products will not perform as
expected based on results of our pre-clinical and clinical trials;
our ability to raise additional funds; uncertainties inherent in
the development process of our products; changes in regulatory
requirements or decisions of regulatory authorities; the size and
growth potential of the markets for our products; the results of
clinical trials, our ability to protect our intellectual property
rights and other risks, uncertainties and assumptions, including
those described under the heading “Risk Factors” in our filings
with the Securities and Exchange Commission. These forward–looking
statements speak only as of the date hereof and ZIVO undertakes no
obligation to revise or update any forward–looking statements for
any reason, even if new information becomes available in the
future.
Contacts:
Investor RelationsCORE
IR516-222-2560Investor@zivobioscience.com
MediaCORE IRJules
Abraham917-885-7378julesa@coreir.com
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