Vivos Therapeutics(VVOS) - 2024 Q3 - Quarterly Report

Financial Performance - Total revenue for September 2024 was $3,860,000, an increase of 16.9$3,301,000 in September 2023[12] - Product revenue reached $1,958,000 in September 2024, up 33.5$1,466,000 in the same period last year[12] - Service revenue was $1,902,000 for September 2024, slightly up from$1,835,000 in September 2023[12] - Gross profit for the quarter was $2,334,000, representing a gross margin of 60.5$1,747,000 and a margin of 52.9% in the prior year[12] - Operating loss narrowed to $2,645,000 in September 2024 from$3,640,000 in September 2023[12] - Net loss for the quarter was $2,616,000, compared to a net loss of$2,093,000 in the same quarter last year[12] - Total revenue for the nine months ended September 30, 2024, was $11.333 million, an increase from$10.553 million for the same period in 2023, representing a growth of approximately 7.4%[85] - Product revenue for the three months ended September 30, 2024, was $1.958 million, up from$1.466 million in the same period of 2023, reflecting a growth of approximately 33.5%[85] - Service revenue for the three months ended September 30, 2024, was $1.902 million, compared to$1.835 million for the same period in 2023, indicating a slight increase of approximately 3.7%[85] Cash and Assets - Cash and cash equivalents increased significantly to $6,311,000 as of September 30, 2024, from$1,643,000 at the end of 2023[10] - Total assets grew to $15,347,000 as of September 30, 2024, compared to$10,730,000 at the end of 2023[11] - Total liabilities decreased to $7,682,000 from$10,319,000 at the end of 2023, indicating improved financial health[11] - Stockholders' equity increased to $7,665,000 as of September 30, 2024, up from$411,000 at the end of 2023[11] Losses and Expenses - Net loss for the nine months ended September 30, 2024, was $8,309,000, compared to a net loss of$9,324,000 for the same period in 2023, representing a 10.9% improvement[15] - The company reported a net cash used in operating activities of $9,751,000 for the nine months ended September 30, 2024, compared to$9,198,000 for the same period in 2023[15] - The company recognized approximately $0.7 million and$1.0 million of share-based compensation expense for the nine months ended September 30, 2024 and 2023, respectively[116] Revenue Recognition and Accounting - The Company utilizes a five-step model for revenue recognition, ensuring compliance with ASC Topic 606[32] - Revenue from appliance sales is recognized when control is transferred to the VIP, reflecting the expected consideration for those products[45] - The Company recognizes service revenue related to VIP enrollments when the underlying services are performed, with unearned revenue recorded as a contract liability[34] - Contract liabilities decreased from $2.613 million as of September 30, 2023, to$1.491 million as of September 30, 2024, representing a decline of approximately 43%[87] - Revenue recognized from contract liabilities for the nine months ended September 30, 2024, was $1.5 million, compared to$1.4 million for the same period in 2023, indicating a slight increase of about 7%[87] Strategic Initiatives - The Company entered a strategic marketing and distribution alliance in June 2024 to enhance revenue generation by offering comprehensive solutions to OSA patients[24] - A strategic pivot announced in June 2024 aims to drive revenue through contractual alliances with dentists and healthcare providers, moving away from solely relying on enrollments in the VIP program[153] - The company secured a $7.5 million equity growth investment from V-CO Investors LLC, which has strengthened its cash position and facilitated the launch of new strategic alliances[155] Market and Operational Challenges - The company continues to monitor the impact of COVID-19 and inflation on its business, with ongoing uncertainties affecting new enrollments in the dental market[130][131] - The company has adjusted its standard pricing for appliance products due to inflationary pressures, effective May 1, 2022, and may need to do so again in 2024[131] - The company experienced a decline in product sales revenue in late 2023, but this trend began to reverse in Q2 2024, with approximately 32$4,296,000 during the nine months ended September 30, 2024[15] - The company raised approximately $7.4 million from a private placement in January 2023 and$4.0 million from another private placement in November 2023[95][99] - The Company intends to use net proceeds from the Private Placement and Offering for general working capital and corporate purposes[102][108] Clinical and Product Development - The Company offers three clinical pathways for treating obstructive sleep apnea (OSA) and related conditions, including Guided Growth and Development, Lifeline, and Complete Airway Repositioning and Expansion (CARE)[20] - The CARE program features patented appliances that have shown to reverse OSA symptoms in up to 80% of patients in a small study subset[21] - The company is conducting a clinical trial with Stanford University to evaluate the efficacy of its FDA-cleared DNA appliance compared to CPAP for treating sleep apnea, enrolling 150 patients[175]