Vivos Therapeutics(US:VVOS)2025-05-15 22:00Financial 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]