Core Viewpoint - Vivos Therapeutics, Inc. has made a significant acquisition of The Sleep Center of Nevada, which is expected to enhance its revenue generation and patient demand for its obstructive sleep apnea (OSA) treatments. The company is transitioning its business model to focus on direct patient relationships and sleep center alliances [1][3]. Financial Performance - For the second quarter of 2025, Vivos reported revenue of $3.8 million, a decrease from $4.1 million in the same period of 2024. For the six months ended June 30, 2025, revenue was $6.8 million compared to $7.5 million in 2024 [4]. - Gross profit for the second quarter of 2025 was $2.1 million, down from $2.7 million in the second quarter of 2024. For the six months ended June 30, 2025, gross profit was $3.6 million compared to $4.6 million in 2024 [4]. - The gross margin declined to 55% in the second quarter of 2025 from 65% in the same period of 2024, attributed to pricing discounts and the transition to a new sales model [4]. - Operating expenses increased by 52% to $7.0 million in the second quarter of 2025, compared to $4.6 million in the same period of 2024, largely due to costs associated with the acquisition and integration of SCN [4]. Strategic Initiatives - The acquisition of The Sleep Center of Nevada marks a strategic shift in Vivos' sales and marketing approach, moving from a dentist-reliant model to a more comprehensive model that includes direct patient engagement [3]. - Vivos is also developing a new sleep practice management model to partner with sleep centers that are not interested in acquisition but want to offer Vivos' OSA diagnostic and treatment options [5][6]. - The company is actively seeking additional sleep center alliances or acquisitions to scale its new model, as demand at SCN locations has exceeded current capacity [3]. Market Context - OSA affects over 1 billion people globally, with a significant portion remaining undiagnosed. This presents a substantial market opportunity for innovative treatments that address the root causes of OSA [11]. - Vivos' proprietary treatments, including the Complete Airway Repositioning and Expansion (CARE) devices, are FDA-cleared for various severity levels of OSA, positioning the company favorably in the medical device market [10].

[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%2E%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Item%201%2E%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section presents Vivos Therapeutics, Inc.'s unaudited condensed consolidated financial statements for June 30, 2025, and the three and six-month periods then ended, including balance sheets, statements of operations, statements of stockholders' equity, statements of cash flows, and detailed notes on accounting policies, the SCN acquisition, and liquidity issues [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$26.0 million** from **$15.3 million** at year-end 2024, primarily due to the SCN acquisition, while total liabilities rose to **$21.5 million** from **$7.3 million**, mainly from new debt, and stockholders' equity decreased to **$4.6 million** from **$8.0 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $4,402 | $6,260 | | Goodwill | $8,450 | $2,843 | | Total assets | $26,033 | $15,284 | | **Liabilities & Equity** | | | | Total current liabilities | $6,426 | $4,978 | | Debt, net of current portion | $7,760 | $- | | Total liabilities | $21,450 | $7,330 | | Total stockholders' equity | $4,583 | $7,954 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, total revenue slightly decreased to **$3.8 million** from **$4.1 million** year-over-year, while the operating loss significantly widened to **$4.9 million** from **$1.9 million**, primarily due to a **$2.3 million** increase in general and administrative expenses, resulting in a net loss of **$5.0 million** Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $3,820 | $4,054 | $6,835 | $7,473 | | Gross Profit | $2,110 | $2,651 | $3,616 | $4,588 | | Operating Loss | $(4,865) | $(1,936) | $(8,780) | $(5,719) | | Net Loss | $(5,013) | $(1,930) | $(8,877) | $(5,692) | | Net Loss Per Share | $(0.55) | $(0.60) | $(1.00) | $(2.06) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities increased to **$7.3 million**, net cash used in investing activities was **$6.0 million** for the SCN acquisition, and net cash provided by financing activities was **$11.5 million**, resulting in a net decrease in cash of **$1.9 million** and an ending cash balance of **$4.4 million** Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(7,290) | $(5,564) | | Net cash used in investing activities | $(6,028) | $(211) | | Net cash provided by financing activities | $11,460 | $11,035 | | **Net (decrease) increase in cash** | **$(1,858)** | **$5,260** | | Cash and cash equivalents at end of period | $4,402 | $6,903 | [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes detail the company's strategic pivot to an acquisition and alliance model, exemplified by the June 2025 acquisition of The Sleep Center of Nevada (SCN), and address significant accounting policies, revenue recognition changes, new debt structure, and a going concern warning due to recurring losses and negative cash flow - The company is pivoting its business strategy away from its legacy model of enrolling dentists (VIPs) and towards a new model focused on contractual alliances with and acquisitions of sleep centers, intended to align revenue generation more directly with appliance sales[32](index=32&type=chunk)[35](index=35&type=chunk) - On June 10, 2025, the company acquired the operating assets of The Sleep Center of Nevada (SCN) for total consideration of **$8.7 million**, consisting of **$6.0 million** in cash, **$1.3 million** in stock, and **$1.4 million** in contingent consideration, adding **$5.6 million** in goodwill[27](index=27&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk) - The company has incurred losses since inception, with a net loss of **$8.9 million** for the first six months of 2025 and an accumulated deficit of **$113.1 million**, leading management to conclude there is substantial doubt about the company's ability to continue as a going concern without additional financing[78](index=78&type=chunk)[80](index=80&type=chunk) - To fund the SCN acquisition, the company issued a senior secured term note for **$8.2 million** with a 9% annual interest rate and an 18-month maturity, and also raised **$3.65 million** in a private placement of equity instruments[85](index=85&type=chunk)[101](index=101&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's strategic pivot from its legacy VIP dentist enrollment model to a new sales model focused on acquiring and forming alliances with sleep centers, exemplified by the recent acquisition of The Sleep Center of Nevada (SCN), covering the financial impact of this transition, including decreased service revenue, increased G&A expenses, and liquidity challenges that raise substantial doubt about its going concern ability - The company has pivoted its business model away from enrolling individual dentists (VIPs) towards acquiring or forming alliances with sleep centers to drive appliance sales more directly[164](index=164&type=chunk)[165](index=165&type=chunk) - A key milestone in the new strategy was the June 10, 2025 acquisition of The Sleep Center of Nevada (SCN), a seven-location operator, funded through an **$8.2 million** senior secured note and a **$3.7 million** private placement[159](index=159&type=chunk)[160](index=160&type=chunk) - The company faces significant liquidity challenges, with recurring losses and negative operating cash flow, leading management to state there is substantial doubt about the company's ability to continue as a going concern without additional financing[226](index=226&type=chunk)[229](index=229&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) For Q2 2025, revenue decreased **6%** to **$3.8 million** year-over-year, as a **$1.0 million** decline in legacy VIP enrollment revenue was partially offset by new revenue from the SCN acquisition, while gross margin fell from **65%** to **55%**, and general and administrative expenses surged **55%** to **$6.4 million**, primarily due to **$1.8 million** in SCN acquisition costs, leading to a significant increase in the quarterly net loss to **$5.0 million** Financial Performance Comparison (in thousands) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $3,820 | $4,054 | $(234) | | Gross Profit | $2,110 | $2,651 | $(541) | | Gross Profit % | 55% | 65% | -10% | | General and administrative | $6,409 | $4,122 | $2,287 | | Operating Loss | $(4,865) | $(1,936) | $(2,929) | | Net Loss | $(5,013) | $(1,930) | $(3,083) | - The decrease in service revenue was driven by a **$1.0 million** decline in VIP enrollment revenue, reflecting the strategic pivot, partially offset by a **$0.5 million** increase in sleep testing services, primarily from the newly acquired SCN[208](index=208&type=chunk) - The **$2.3 million** increase in G&A expenses for Q2 2025 was primarily caused by **$1.8 million** in costs related to acquiring and integrating SCN, including professional fees, salaries, and infrastructure costs[213](index=213&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces significant liquidity constraints, with an accumulated deficit of **$113.1 million** and net cash used in operations of **$7.3 million** for the first six months of 2025, and as of June 30, 2025, the company had **$4.4 million** in cash, which is insufficient to fund operations for the next twelve months, raising substantial doubt about its ability to continue as a going concern, necessitating reliance on debt and equity financing for operations and the SCN acquisition - As of June 30, 2025, the company had **$4.4 million** in cash, which is not sufficient to fund operations and strategic objectives for the next twelve months[229](index=229&type=chunk) - The company has a history of losses, including a net loss of **$8.9 million** for the first six months of 2025, and an accumulated deficit of **$113.1 million**[226](index=226&type=chunk) - Net cash used in operating activities increased to **$7.3 million** for the first half of 2025, up from **$5.6 million** in the prior-year period[227](index=227&type=chunk)[233](index=233&type=chunk) - The company financed the SCN acquisition and its operations through the issuance of senior secured debt and equity securities, and management is reviewing all options for additional financing[231](index=231&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%203%2E%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable as the company qualifies as a smaller reporting company - Disclosure is not required as the registrant is a smaller reporting company[238](index=238&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204%2E%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025, excluding the internal controls of The Sleep Center of Nevada (SCN), acquired on June 10, 2025, which the company is currently integrating into its framework - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[239](index=239&type=chunk) - The evaluation of disclosure controls excluded The Sleep Center of Nevada (SCN), which was acquired on June 10, 2025, and represented approximately **33%** of consolidated total assets as of June 30, 2025[240](index=240&type=chunk) - The company is in the process of integrating SCN's operations and controls, with completion expected within one year of the acquisition date[242](index=242&type=chunk) [PART II. OTHER INFORMATION](index=53&type=section&id=PART%20II%2E%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=53&type=section&id=Item%201%2E%20Legal%20Proceedings) The company is involved in ongoing litigation with Ortho-Tain, Inc., with Vivos initiating a lawsuit in Colorado for alleged false and defamatory statements, and Ortho-Tain filing a countersuit in Illinois alleging Lanham Act violations, both cases proceeding through various motions and discovery phases - Vivos filed a suit against Ortho-Tain, Inc. in Colorado, alleging false, threatening, and defamatory statements that interfered with a business relationship[245](index=245&type=chunk) - Ortho-Tain filed a countersuit in Illinois against Vivos, its CEO, and others, alleging violations of the Lanham Act and civil conspiracy related to a presentation at a Vivos-sponsored event[247](index=247&type=chunk) - The Illinois case was initially stayed pending the outcome of the Colorado case, but the stay was lifted in March 2023, and both cases are currently active with ongoing discovery and legal motions[249](index=249&type=chunk)[251](index=251&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A%2E%20Risk%20Factors) This section details updated risk factors associated with the company's new business model and the acquisition of The Sleep Center of Nevada (SCN), including the unproven nature of the new sales and distribution model, substantial indebtedness incurred for the SCN acquisition, potential difficulties in integrating SCN's operations, and legal risks related to healthcare regulations such as the corporate practice of medicine and fee-splitting laws - The company's new sales, marketing, and distribution model, centered on acquiring sleep centers like SCN, is unproven and may not produce the anticipated benefits, making future prospects difficult to evaluate[253](index=253&type=chunk)[254](index=254&type=chunk) - The company incurred substantial debt (**$8.25 million** principal) to finance the SCN acquisition, and servicing this debt could adversely affect financial condition, with no guarantee that cash flow will be sufficient to meet debt obligations[258](index=258&type=chunk)[259](index=259&type=chunk) - Integrating SCN's operations may be more difficult, costly, or time-consuming than expected, potentially disrupting business and relationships with patients and employees[260](index=260&type=chunk) - Contractual arrangements with physicians at SCN may be found to violate state laws prohibiting the corporate practice of medicine or fee-splitting, which could require restructuring and result in penalties or loss of revenue[261](index=261&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202%2E%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section is not applicable - Not applicable[273](index=273&type=chunk) [Item 3. Defaults Upon Senior Securities](index=58&type=section&id=Item%203%2E%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[274](index=274&type=chunk) [Item 6. Exhibits, Financial Statement Schedules](index=58&type=section&id=Item%206%2E%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the documents filed as exhibits to the Quarterly Report on Form 10-Q, including certifications from the CEO and CFO and Inline XBRL data files - The exhibits filed with this report include CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906, as well as Inline XBRL documents[277](index=277&type=chunk)[278](index=278&type=chunk)

Core Viewpoint - Vivos Therapeutics, Inc. is set to release its second quarter 2025 financial results and will conduct a conference call to discuss these results and recent developments in the company [1][2][3] Company Overview - Vivos Therapeutics, Inc. specializes in developing and commercializing treatments for sleep-related breathing disorders, particularly obstructive sleep apnea (OSA) [4] - The company’s devices are FDA-cleared for all severity levels of OSA in adults and moderate to severe OSA in children aged 6 to 17 [4] - Vivos' Complete Airway Repositioning and Expansion (CARE) devices are the only FDA 510(k) cleared technology for treating severe OSA in adults and the first for moderate to severe OSA in children [4] Market Context - OSA affects over 1 billion people globally, with 90% undiagnosed, linking it to serious chronic health conditions [5] - Traditional treatments like CPAP often fail to address the root causes of OSA, indicating a need for innovative solutions [5] Strategic Initiatives - Founded in 2016, Vivos aims to empower healthcare providers to better address the needs of OSA patients through innovative technology and collaborations [6] - The company promotes The Vivos Method, a proprietary, clinically effective, nonsurgical, noninvasive, and nonpharmaceutical solution for OSA [7]

Core Insights - Vivos Therapeutics has received approval from the Centers for Medicare & Medicaid Services (CMS) for its VidaSleep™ oral appliance, which is designed to treat mild to moderate obstructive sleep apnea (OSA) and snoring in adults [1][4][5] - The approval allows Vivos to significantly expand its market presence, as it now has two Medicare-covered oral appliances, enhancing its competitive position in the sleep therapy market [5][6] Company Overview - Vivos Therapeutics, Inc. is a medical technology company focused on innovative treatments for OSA and snoring, with its products cleared by the FDA for various severity levels of OSA [10][12] - The company aims to address the structural root causes of OSA through its proprietary oral appliances, which are non-invasive and non-pharmaceutical [13] Market Opportunity - With over 80% of OSA cases in the U.S. undiagnosed and an estimated 80 million Americans affected, Vivos is positioned to capture a significant share of the underpenetrated sleep therapy market [4][11] - The dual-PDAC approval of VidaSleep™ and mmRNA® appliances allows Vivos to serve a broader range of patients, from Medicare beneficiaries to those covered by commercial payers, tapping into the estimated $36 billion sleep therapy market [6][8] Clinical and Commercial Advantages - The VidaSleep™ device is designed to be a standalone therapy or an adjunct to CPAP, providing flexibility for both providers and patients [7][8] - The streamlined design and efficient manufacturing process of VidaSleep™ enable Vivos to offer high-impact therapy at a cost-effective price, increasing adoption across Medicare and commercial insurance networks [8] Health Implications - OSA is linked to severe comorbidities such as heart disease, stroke, and dementia, yet remains largely underdiagnosed [9][11] - Vivos' oral appliances have shown significant improvements in airway patency and symptom resolution, as evidenced by peer-reviewed studies [9]

Core Insights - Vivos Therapeutics has announced a significant study published in the European Journal of Pediatrics, demonstrating the safety and efficacy of its Daytime-Nighttime Appliance (DNA) for treating obstructive sleep apnea (OSA) in children [1][2] - The study indicates that 79% of participants showed improvement in OSA symptoms, with 61.7% improving by 50% or more, and 17% experiencing complete resolution of their OSA [3] - The findings support Vivos' FDA 510(k) clearance for the DNA device, reinforcing its position as a non-surgical alternative to traditional adenotonsillectomy surgery [2][7] Company Overview - Vivos Therapeutics, Inc. is focused on developing non-invasive treatments for OSA, with its DNA device being a key product cleared for use in children aged 6 to 17 [9][12] - The company aims to address the significant number of undiagnosed OSA cases among children, estimated at 10 million in the U.S., with many linked to various health issues [5][10] - Vivos is actively pursuing collaborations and acquisitions to expand access to its treatments, including the recent acquisition of the Sleep Center of Nevada [9][11] Industry Context - The current standard treatment for pediatric OSA is adenotonsillectomy, with over 500,000 surgeries performed annually in the U.S., but with a high relapse rate of 68% within three years [6][7] - The study highlights the need for safer, evidence-based alternatives to invasive procedures, aligning with recent reports warning against overtreatment in pediatric healthcare [7][8] - Vivos' approach offers a non-invasive solution that promotes natural jaw development, potentially reducing the need for costly and traumatic surgeries [7][8]

Core Insights - Vivos Therapeutics has completed the acquisition of The Sleep Center of Nevada (SCN), enhancing its diagnostic revenue and expanding its treatment options for obstructive sleep apnea (OSA) patients in the Las Vegas area [1][2] - The acquisition marks a strategic pivot in Vivos' business model, shifting focus from dental providers to collaborations with medical sleep practices, allowing for immediate revenue capture from OSA diagnostics and consultations [3][6] - Vivos has secured over $11 million in financing, including a senior secured loan and an equity private placement, to support the integration of SCN and future growth initiatives [9][11] Acquisition Details - The SCN transaction is Vivos' first major acquisition of a sleep testing center, expected to generate higher-margin revenue from both diagnostics and sales of Vivos' OSA treatment devices [2][5] - SCN serves approximately 3,000 new patients monthly and has generated annual net revenues in the high seven-figure range, making it the largest sleep testing center in Nevada [5][6] - Vivos will manage SCN's operations and capture diagnostic and consulting revenues, with plans to expand treatment offerings across additional SCN locations over the next 12 to 18 months [7][11] Financial Aspects - The acquisition involved a cash payment of $6 million and $1.5 million in Vivos common stock, with potential future stock payments based on financial milestones [8] - Vivos financed the acquisition through an $8.225 million senior secured loan, which includes a $675,000 original issuance discount, and an additional $3.755 million equity investment from New Seneca Partners [9][10] - The financing will provide essential cash resources for Vivos to integrate SCN and pursue further growth opportunities [11] Strategic Outlook - Vivos is actively seeking additional collaborations or acquisitions to further expand its business in 2025 and beyond [4] - The company anticipates significant benefits from the SCN acquisition, including reduced cash burn and a move towards cash flow positivity as patient volumes increase [12]

Company Performance - Vivos Therapeutics, Inc. reported a quarterly loss of $0.45 per share, slightly worse than the Zacks Consensus Estimate of a loss of $0.44, and an improvement from a loss of $1.63 per share a year ago [1] - The company posted revenues of $3.02 million for the quarter, missing the Zacks Consensus Estimate by 18.49%, and down from $3.42 million in the same quarter last year [2] - Over the last four quarters, Vivos Therapeutics has surpassed consensus EPS estimates two times, but has not beaten consensus revenue estimates [2] Stock Performance - Vivos Therapeutics shares have declined approximately 29.1% since the beginning of the year, contrasting with the S&P 500's gain of 0.2% [3] - The current Zacks Rank for Vivos Therapeutics is 5 (Strong Sell), indicating expectations for the stock to underperform the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.39 on revenues of $4.2 million, and for the current fiscal year, it is -$1.54 on revenues of $16.6 million [7] - The trend for estimate revisions ahead of the earnings release has been unfavorable, which may impact future stock performance [6] Industry Context - The Medical - Drugs industry, to which Vivos Therapeutics belongs, is currently ranked in the top 26% of over 250 Zacks industries, suggesting a relatively strong industry performance [8]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $3 million, down from $3.4 million in Q1 2024, primarily due to lower service revenue from VIP enrollments [20] - Product sales increased by approximately $100,000, while sponsorship, conference, and training revenue rose by $200,000 [20] - Gross profit decreased to $1.5 million in Q1 2025 from $1.9 million in Q1 2024, with gross margin dropping to 50% from 57% [21][22] - Operating loss for Q1 2025 was approximately $3.9 million, slightly higher than the $3.8 million loss in Q1 2024 [24] Business Line Data and Key Metrics Changes - Service revenues declined as the company eliminated its VIP enrollment sales team, while product sales, particularly in pediatric guide appliances, grew significantly, with total arches shipped increasing by 87% [8][20] - The billing intelligence service and myofunctional therapy service revenue remained unchanged at $200,000 for both Q1 2024 and Q1 2025 [20] Market Data and Key Metrics Changes - The company is expecting to close the acquisition of Sleep Center of Nevada (SCN) soon, which sees approximately 3,000 sleep patients monthly, with a significant percentage testing positive for obstructive sleep apnea (OSA) [9][12] - The acquisition is anticipated to be accretive to revenue and gross profit shortly after closing [9] Company Strategy and Development Direction - The company is pivoting to create strategic alliances or acquisitions of sleep medical providers to drive sales of OSA treatment appliances and diversify revenue streams [7][8] - The management believes that the SCN acquisition will be transformational, providing a fast track to increase patient treatment and revenue [10][11] - The company is actively exploring additional acquisition opportunities in the sleep medicine sector, with positive reception from the sleep medicine community [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the new business model and its potential for growth, emphasizing the importance of the SCN acquisition [7][10] - The management team has learned valuable lessons from previous partnerships, which will inform future negotiations and operational strategies [36] Other Important Information - The company has signed a non-binding term sheet for a $7.5 million senior loan to facilitate the SCN acquisition and working capital [9] - Cash used in operations for Q1 2025 was $3.8 million, an increase from $2.5 million in Q1 2024 [24][25] Q&A Session Summary Question: Can you expand on the experience with the Rebus Alliance? - The partnership has progressed slower than expected due to internal issues at Rebus, but the company has proven its thesis that a significant percentage of patients prefer VIVOS treatments over CPAP [28][30] Question: What can be learned from the Rebus experience for future partnerships? - The management has learned to optimize revenue and services in a medical insurance-oriented environment, which will be applied to future partnerships [36] Question: What is the expected impact of the SCN acquisition on the P&L? - The acquisition is expected to add significant revenue and become accretive by Q3 2025, with immediate revenue generation from diagnostic services [44][49] Question: How was the acquisition price of $9 million determined? - The valuation was based on a quality of earnings report and the potential patient volume from SCN, with a fair price offered to the current owners [53][56]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $3 million, down from $3.4 million in Q1 2024, primarily due to lower service revenue from VIP enrollments [20] - Gross profit decreased to $1.5 million in Q1 2025 from $1.9 million in Q1 2024, with a gross margin of 50% compared to 57% in the prior year [21][22] - Net loss for Q1 2025 was $3.9 million, slightly higher than the $3.8 million loss in Q1 2024 [24] Business Line Data and Key Metrics Changes - Service revenues declined as the company eliminated its VIP enrollment sales team, while product sales increased by 8% due to higher volume in pediatric guide appliances [9][20] - The number of oral appliance arches shipped increased by 87%, from 1,996 in Q1 2024 to 3,736 in Q1 2025 [9] Market Data and Key Metrics Changes - The company is expecting to close the acquisition of Sleep Center of Nevada (SCN), which sees approximately 3,000 sleep patients a month, in the next month or two [10][12] - The acquisition is anticipated to be accretive to revenue and gross profit, with a projected net contribution margin of 50% or better from SCN [14] Company Strategy and Development Direction - The company is pivoting to create strategic alliances or acquisitions of sleep medical providers to drive sales of OSA treatment appliances and diversify revenue streams [8][12] - The management believes that the SCN acquisition will be transformational, providing a fast path to increase patient treatment and revenue [12][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the new business model and the potential for significant cash flow and profitability by the end of 2025 [15][47] - The management team has extensive experience in acquiring and integrating professional practices, which they believe will facilitate successful future acquisitions [17][36] Other Important Information - The company has signed a non-binding term sheet for a $7.5 million senior loan to finance the SCN acquisition and working capital [10] - Cash used in operations for Q1 2025 was $3.8 million, an increase from $2.5 million in Q1 2024 [24][25] Q&A Session Summary Question: Can you expand on the experience with the Rebus Alliance and its contribution? - The experience with Rebus has been slower than expected due to internal challenges, but the company proved its thesis that a significant percentage of patients would choose VIVOS treatments over CPAP [28][30] Question: What can be learned from the Rebus experience for future partnerships? - The management has learned to optimize revenues and services in a medical insurance environment and has modified deal structures to ensure a steady patient flow [34][36] Question: What is the expected impact of the SCN acquisition on the P&L? - The SCN acquisition is expected to add legacy revenue and expenses, with the potential for significant revenue generation starting in Q3 2025 [43][47] Question: Will operating expenses increase in Q3 and Q4 due to the acquisition? - Yes, there will be an uptick in operating expenses due to hiring and training new staff, but revenues are expected to quickly outpace these costs [49][50] Question: How was the acquisition price of $9 million determined? - The valuation was based on a quality of earnings report and the potential patient volume from SCN, with a combination of cash and equity as part of the deal [51][56]

[Financial & Operational Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20and%20Operating%20Summary) Vivos Therapeutics reported decreased total revenue but increased product revenue in Q1 2025, with reduced operating expenses Q1 2025 Key Financial Metrics (vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $3.0 million | $3.4 million | -11.8% | | *Product Revenue* | *$1.8 million* | *$1.7 million* | *+8%* | | *Service Revenue* | *$1.2 million* | *$1.7 million* | *-29.5%* | | **Gross Profit** | $1.5 million | $1.9 million | -21.1% | | **Gross Margin** | 50% | 57% | -7 p.p. | | **Operating Expenses** | $5.4 million | $5.7 million | -5% | | **Net Loss** | $3.9 million | $3.8 million | +3% | - The decline in total revenue was expected and is attributed to the company's strategic pivot away from Vivos Integrated Provider (VIP) service revenue towards a new marketing and sales strategy[3](index=3&type=chunk)[4](index=4&type=chunk) Q1 2025 Operational & Balance Sheet Highlights | Metric | As of/For Q1 2025 | As of/For Q1 2024 | | :--- | :--- | :--- | | Oral Appliance Arches Sold | 3,736 | 1,996 | | Revenue from Arches | ~$1.8 million | $1.7 million | | Cash and Cash Equivalents | $2.3 million | N/A | | Stockholders' Equity | $4.4 million | N/A | [Management Commentary](index=2&type=section&id=Management%20Commentary) Management emphasizes operational streamlining, the SCN acquisition, and new CPT codes as key drivers for future growth - The acquisition and integration of SCN are expected to showcase Vivos' transformation and provide access to thousands of OSA patients[5](index=5&type=chunk) - The implementation of CPT medical codes in January 2025 is a significant achievement that simplifies reimbursement and billing for providers and patients[5](index=5&type=chunk) - Vivos is actively engaging with potential partners for profit-sharing alliances and acquisitions of sleep medical practices to expand patient access and diversify revenue streams[5](index=5&type=chunk) [Strategic Initiatives](index=1&type=section&id=Strategic%20Initiatives) Vivos pivots from its legacy VIP model to direct sales and acquisitions, with the SCN acquisition central to expanding patient access - The company is shifting from its legacy VIP fee revenue model to a new marketing and distribution model focused on direct sales and provider partnerships[3](index=3&type=chunk) - On April 15, 2025, Vivos entered a definitive agreement to acquire the operating assets of The Sleep Center of Nevada (SCN) for up to **$9 million** in cash and stock[8](index=8&type=chunk) - The SCN acquisition is a key part of the new strategy, as SCN sees thousands of potential OSA patients monthly who could be candidates for Vivos' treatments, with the transaction expected to close within two months of the announcement[8](index=8&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) The financial statements detail the company's balance sheet and operational performance for the first quarter of 2025 [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheet reflects decreased total assets and stockholders' equity as of March 31, 2025, primarily from reduced cash Condensed Consolidated Balance Sheets (In Thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **ASSETS** | | | | Cash and cash equivalents | $2,342 | $6,260 | | Total current assets | $3,607 | $7,473 | | Total assets | **$11,282** | **$15,284** | | **LIABILITIES & EQUITY** | | | | Total current liabilities | $4,701 | $4,978 | | Total liabilities | $6,875 | $7,330 | | Total stockholders' equity | $4,407 | $7,954 | | **Total liabilities and stockholders' equity** | **$11,282** | **$15,284** | [Unaudited Condensed Consolidated Statements of Operations](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) The statement of operations shows decreased total revenue, a shifted revenue mix, reduced operating expenses, and a slight net loss increase Condensed Consolidated Statements of Operations (In Thousands, Except Per Share Amounts) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Product revenue | $1,813 | $1,674 | | Service revenue | $1,203 | $1,745 | | **Total revenue** | **$3,016** | **$3,419** | | Gross profit | $1,509 | $1,937 | | Total operating expenses | $5,427 | $5,722 | | Operating loss | $(3,918) | $(3,785) | | **Net loss** | **$(3,864)** | **$(3,763)** | | Net loss per share (basic and diluted) | $(0.45) | $(1.63) | [About Vivos Therapeutics, Inc.](index=3&type=section&id=About%20Vivos%20Therapeutics%2C%20Inc.) Vivos Therapeutics is a medical technology company specializing in non-surgical, FDA-cleared treatments for obstructive sleep apnea - Vivos is a medical technology company specializing in diagnostics and treatments for sleep issues like obstructive sleep apnea (OSA)[10](index=10&type=chunk) - The company's CARE devices are the only FDA 510(k) cleared technology for treating severe OSA in adults and the first oral device cleared for moderate to severe OSA in children[10](index=10&type=chunk) - The Vivos Method provides a nonsurgical, noninvasive, and nonpharmaceutical solution for patients[13](index=13&type=chunk) [Conference Call Information](index=3&type=section&id=Conference%20Call) Details for the investor conference call held on May 15, 2025, including replay and webcast archive availability - An investor conference call was held at 5:00 p.m. Eastern time on the day of the release[9](index=9&type=chunk) - A telephone replay is available until May 29, 2025, and a webcast is archived on the company's website[9](index=9&type=chunk)