Vivos Therapeutics, Inc.

Previous wording

The Vivos Method is an advanced therapeutic protocol, which often combines the use of customized oral appliance specifications and proprietary clinical treatments which we developed and is prescribed by specially trained dentists in cooperation with their medical colleagues. Published studies have shown that using our customized appliances and clinical treatments led to significantly lower Apnea Hypopnea Index scores and have improved other conditions associated with OSA. Nearly 59,000 patients have been treated to date worldwide with our entire current suite of products by more than 2,000 trained dentists.

Current wording

The Vivos Method is an advanced therapeutic protocol, which often combines the use of customized oral appliance specifications and proprietary clinical treatments which we developed and is prescribed by specially trained dentists in cooperation with their medical colleagues. Published studies have shown that using our customized appliances and clinical treatments led to significantly lower Apnea Hypopnea Index scores and have improved other conditions associated with OSA. Approximately 60,000 patients have been treated to date worldwide with our entire current suite of products by more than 2,000 trained dentists.

Previous wording

With seven operating locations, SCN delivers and promotes sleep wellness and health through its proprietary, non-invasive treatments for OSA and is the largest operator of medical sleep centers in the state of Nevada. The Acquisition represents our first major acquisition of a sleep testing center and associated medical sleep practice. We funded the consideration for the Acquisition at closing by issuing a senior, non-convertible, secured term note to Streeterville Capital, LLC (the “Lender”) in the principal amount of $8.2 million. We also entered into a securities purchase agreement with V-Co Investors 2 LLC, a Wyoming limited liability company and affiliate of an existing significant investor in our company (“V-Co 2”), for a private placement of common stock and warrants in consideration for total gross proceeds of $3.7 million to support ourselves in connection with the Acquisition and for general working capital purposes. Please refer to “*Material Items, Trends and Risks Impacting Our Business - Enrollments (Service Revenue) and Pivot to the Marketing and Distribution Model”and“Material Items, Trends and Risks Impacting Our Business – SCN Integration Update”*below for a further discussion of the Acquisition and our progress on integrating SCN into our business.

Current wording

With seven operating locations, two of which are currently onboarded to provide Vivos diagnostic and treatment services, SCN delivers and promotes sleep wellness and health through its proprietary, non-invasive treatments for OSA and is the largest operator of medical sleep centers in the State of Nevada. The Acquisition represents our first major acquisition of a sleep testing center and associated medical sleep practice. We funded the consideration for the Acquisition at closing by issuing a senior, non-convertible, secured term note to Streeterville Capital, LLC (the “Lender”) in the principal amount of $8.3 million. We also entered into a securities purchase agreement with V-Co Investors 2 LLC, a Wyoming limited liability company and affiliate of an existing significant investor in our company (“V-Co 2”), for a private placement of common stock and warrants in consideration for total gross proceeds of $3.7 million to support ourselves in connection with the Acquisition and for general working capital purposes. Please refer to “*Material Items, Trends and Risks Impacting Our Business - Pivot in Our Sales, Marketing and Distribution Model and Decreased Emphasis on VIP Enrollments”and“Material Items, Trends and Risks Impacting Our Business – SCN Integration Update”*below for a further discussion of the Acquisition and our progress on integrating SCN into our business.

Previous wording

VIP Enrollments (Service Revenue) and Pivot in Our Sales, Marketing and Distribution Model. Enrolling dental practices as VIPs has historically been the first step in our ability to generate new revenue. However, as a result of our strategic pivot away from growing our VIP model and toward contractual alliances with, or the acquisition and operation of, medical and dental sleep medicine centers, we have reduced our sales personnel in connection with our VIP business model and generally ceased recruitment of new VIP dentists. As a result, future revenue from VIP enrollments will decline substantially, and although we will continue to recognize some VIP enrollment revenue going forward in accordance with ASC 606, such revenue will make up proportionately less of our total revenue over time. While we will continue to provide technical and product support to our existing VIP customer base, we have also redeployed and refocused training facilities, programs and personnel on training and supporting the dentists, staff members, nurse practitioners, physician assistants, and medical doctors who work in one of the Company’s Sleep and Airway Medicine Centers as part of our new strategic model.

Current wording

Pivot in Our Sales, Marketing and Distribution Model and Decreased Emphasis on VIP Enrollments*. Enrolling dental practices as VIPs has historically been the first step in our ability to generate new revenue. However, as a result of our strategic pivot away from growing our VIP model and toward contractual alliances with, or the acquisition and operation of, medical and dental sleep medicine centers, we have reduced our sales personnel in connection with our VIP business model and generally ceased recruitment of new VIP dentists. As a result, revenue from VIP enrollments has declined substantially, although we will continue to recognize some VIP enrollment revenue going forward in accordance with ASC 606. VIP enrollment revenue is expected to cease by the end of 2026. While we will continue to provide technical and product support to our existing VIP customer base, we are now fully engaged in maximizing the SCN opportunity through refocused training facilities, programs and personnel aimed at supporting the dentists, staff members, nurse practitioners, physician assistants, and medical doctors who work at our Sleep and Airway Medicine Centers as part of our new strategic model.

Previous wording

As part of our pivot to the new strategic alliance and acquisition model, on April 15, 2025, we entered into the SCN Purchase Agreement with the Seller, pursuant to which we agreed to purchase, among other things, the operating assets related to SCN’s sleep testing, diagnostics, and treatment centers. The below provides a summary of the Acquisition and the contractual arrangements we had entered with SCN in connection with the Acquisition:

Current wording

The below provides a summary of the Acquisition and the contractual arrangements we had entered with SCN in connection with the Acquisition:

Previous wording

On June 10, 2025, we completed the Acquisition, and we had acquired all of the operating assets of the Seller in consideration for a (i) cash payment equal to $6.0 million, (ii) 607,287 shares of restricted common stock our company equal to $1.5 million based on the volume-weighted average price (“VWAP”) of our common stock for the 30 days immediately preceding the Acquisition and (iii) the assumption of certain specific trade accounts payable and liabilities related to specific SCN contracts assigned to us as part of the Acquisition. Pending the achievement of an agreed upon financial milestone, we will pay to Dr. Prabhu a contingent “earn out” consideration in the form of restricted common stock equal to $1.5 million based on the VWAP of the common stock for the 30 days following the date on which such financial milestone is achieved, as determined in accordance with U.S. generally accepted accounting principles.

Current wording

On June 10, 2025, we completed the Acquisition, and we acquired all of the operating assets of the Seller in consideration for a (i) cash payment equal to $6.0 million, (ii) 607,287 shares of restricted common stock our company equal to $1.5 million based on the volume-weighted average price (“VWAP”) of our common stock for the 30 days immediately preceding the Acquisition and (iii) the assumption of certain specific trade accounts payable and liabilities related to specific SCN contracts assigned to us as part of the Acquisition. Pending the achievement of an agreed upon financial milestone, we will pay to Dr. Prabhu a contingent “earn out” consideration in the form of Vivos restricted common stock equal to $1.5 million based on the VWAP of the Vivos common stock for the 30 days following the date on which such financial milestone is achieved, as determined in accordance with U.S. generally accepted accounting principles.

Previous wording

Pursuant to the PAAs, AIM shall provide management, administrative, and non-clinical services to SCN and SCN PLLC, in consideration for monthly administration fees (the “Administration Fees”) of $0.2 million from SCN and $0.1 million from SCN PLLC. The Administration Fees may be adjusted by AIM prospectively after quarterly reviews. Both the PAAs have a term of fifteen years and subject both SCN and SCN PLLC, along with Dr. Prabhu, to an exclusivity provision during the term and for a period of one-year after termination, whereby neither SCN nor SCN PLLC shall operate, participate in, or be connected with any other entity providing similar services within Nevada, except for operating its own medical practice without a third-party provider providing covered programs. In connection with the PAAs, Dr. Prabhu, as an equity owner of and on behalf of SCN and SCN PLLC, has entered into management and succession agreements with AIM for continued operation of their respective medical practices upon occurrence of certain events as described therein and for Dr. Prabhu to comply with the CPM Laws.

Current wording

Pursuant to the PAAs, AIM provides management, administrative, and non-clinical services to SCN and SCN PLLC, in consideration for monthly administration fees (the “Administration Fees”) of $0.2 million from SCN and $0.1 million from SCN PLLC. The Administration Fees may be adjusted by AIM prospectively after quarterly reviews. Both the PAAs have a term of fifteen years and subject both SCN and SCN PLLC, along with Dr. Prabhu, to an exclusivity provision during the term and for a period of one-year after termination, whereby neither SCN nor SCN PLLC shall operate, participate in, or be connected with any other entity providing similar services within Nevada, except for operating its own medical practice without a third-party provider providing covered programs. In connection with the PAAs, Dr. Prabhu, as an equity owner of and on behalf of SCN and SCN PLLC, has entered into management and succession agreements with AIM for continued operation of their respective medical practices upon occurrence of certain events as described therein and for Dr. Prabhu to comply with the CPM Laws.

Previous wording

The Note is secured by all of the tangible and intangible assets of AIM pursuant to that certain Security Agreement, dated June 9, 2025, between AIM and the Lender (the “Security Agreement”) We have also pledged the entirety of AIM’s membership interests to the Lender as collateral for the Loan pursuant to that certain Pledge Agreement dated June 9, 2025, between us and the Lender (“Pledge Agreement”) and caused AIM to enter into the Guaranty Agreement, dated June 9, 2025, in favor of the Lender (“Guaranty Agreement”) to respectively secure the our performance and provide a guarantee of our obligations to the Lender under the Note and the other transaction documents.

Current wording

The Note is secured by all of the tangible and intangible assets of AIM pursuant to that certain Security Agreement, dated June 9, 2025, between AIM and the Lender (the “Security Agreement”). We have also pledged the entirety of AIM’s membership interests to the Lender as collateral for the Loan pursuant to that certain Pledge Agreement dated June 9, 2025, between us and the Lender (“Pledge Agreement”) and caused AIM to enter into the Guaranty Agreement, dated June 9, 2025, in favor of the Lender (“Guaranty Agreement”) to respectively secure our performance and provide a guarantee of our obligations to the Lender under the Note and the other transaction documents.

Previous wording

Commencing six (6) months after the date of issuance of the Note and at any time thereafter until the Note is paid in full, the Lender will have the right to redeem up to $0.6 million of the Principal Amount under the Note per calendar month. We must pay the redeemed amount in cash within three (3) trading days of receiving a redemption notice. We may prepay all or any portion of the outstanding balance of the Note. If we elect to prepay the Note in part within one hundred twenty (120) days from the issuance of Note, we will be required to pay to the Lender an amount in cash equal to one hundred and seven percent (107%) of the portion (the “Prepayment Premium”) of the outstanding balance we elect to prepay. Notwithstanding the foregoing, the Prepayment Premium shall not apply to any outstanding balance of the Note that we elect to prepay on or after the one hundred twenty (120) days after the issuance of the Note. Additionally, if the Note remains outstanding on the one hundred twenty (120) days from the anniversary of the issuance, we will incur a one-time monitoring fee equal to the difference between (i) the outstanding balance of the Note divided by 0.85 (as minuend), and (ii) the outstanding balance of the Note (as subtrahend), which fee will be added to the Principal Amount if incurred.

Current wording

Commencing six (6) months after the date of issuance of the Note and at any time thereafter until the Note is paid in full, the Lender will have the right to redeem up to $0.6 million of the Principal Amount under the Note per calendar month. We must pay the redeemed amount in cash within three (3) trading days of receiving a redemption notice. We may prepay all or any portion of the outstanding balance of the Note. If we elect to prepay the Note in part within one hundred twenty (120) days from the issuance of Note, we will be required to pay to the Lender an amount in cash equal to one hundred and seven percent (107%) of the portion (the “Prepayment Premium”) of the outstanding balance we elect to prepay. Notwithstanding the foregoing, the Prepayment Premium shall not apply to any outstanding balance of the Note that we elect to prepay on or after the one hundred twenty (120) days after the issuance of the Note.

Previous wording

The terms of the PIPE SPA requires us to file a registration statement on Form S-3 or other appropriate form (the “Resale Registration Statement”) registering the PIPE Shares, the PFW Shares and the Warrant Shares (collectively, the “Registerable Securities”) for resale no later than 45 days of the closing of the PIPE Offering and to use commercially reasonable best efforts to cause the Resale Registration Statement to be effective within 90 days of the closing of the PIPE Offering. Subsequently, on July 24, 2025, we and V-Co 2 agreed to extend the respective date for which we file the registration statement and cause such registration statement to be declared effective by 30 days pursuant to an amendment to the June 2025 PIPE SPA. We must also use our commercially reasonable efforts to keep the Resale Registration Statement continuously effective (including by filing a post-effective amendment to the Resale Registration Statement or a new registration statement if the Resale Registration Statement expires) for a period of three (3) years after the date of effectiveness of the Resale Registration Statement or for such shorter period as such securities no longer constitute Registrable Securities, subject to certain limitations specified in the PIPE SPA. The PIPE SPA further provides that we shall pay V-Co 2 in the amount equal to $50,000 for the fees and expenses of V-Co 2’s counsel incurred in connection with the PIPE Offering. The PIPE SPA also includes standard representations, warranties, indemnifications, and covenants of the Company and V-Co 2.

Current wording

The terms of the PIPE SPA requires us to file a registration statement on Form S-3 or other appropriate form (the “Resale Registration Statement”) registering the PIPE Shares, the PFW Shares and the Warrant Shares (collectively, the “Registerable Securities”) for resale no later than 45 days of the closing of the PIPE Offering and to use commercially reasonable best efforts to cause the Resale Registration Statement to be effective within 90 days of the closing of the PIPE Offering. Subsequently, on July 24, 2025, we and V-Co 2 agreed to extend the respective date for which we file the registration statement and cause such registration statement to be declared effective by 30 days pursuant to an amendment to the June 2025 PIPE SPA. As of the date of this Report, we have yet to file the Resale Registration Statement, and V-Co 2 has not required us to. We must also use our commercially reasonable efforts to keep the Resale Registration Statement continuously effective (including by filing a post-effective amendment to the Resale Registration Statement or a new registration statement if the Resale Registration Statement expires) for a period of three (3) years after the date of effectiveness of the Resale Registration Statement or for such shorter period as such securities no longer constitute Registrable Securities, subject to certain limitations specified in the PIPE SPA. The PIPE SPA further provides that we shall pay V-Co 2 in the amount equal to $50,000 for the fees and expenses of V-Co 2’s counsel incurred in connection with the PIPE Offering. The PIPE SPA also includes standard representations, warranties, indemnifications, and covenants of the Company and V-Co 2.

Previous wording

*SCN Integration Update.*Our operational planning for the integration of SCN began in April 2025, when we signed the definitive agreement to purchase SCN. We believe these two months of advance planning has benefited the process of integrating SCN into our business, as our operations team has been able to execute our plan on schedule and under budget with respect to two of SCN’s seven locations in the greater Las Vegas area. Also because of this effort, we expect to recognize a small amount of SCN revenue during our fiscal second quarter (for the period beginning with the June 10, 2025 Acquisition closing date through June 30, 2025), with the goal of increasing this revenue in the second half of 2025 and further in 2026.

Current wording

*SCN Integration Update.*Our operational planning for the integration of SCN began in April 2025, when we signed the definitive agreement to purchase SCN. We believe these two months of advance planning has benefited the process of integrating SCN into our business, as our operations team has been able to execute our plan on schedule and under budget with respect to two of SCN’s seven locations in the greater Las Vegas area. Also, because of this effort, we recognized a small amount of SCN revenue during our fiscal second quarter (for the period beginning with the June 10, 2025 Acquisition closing date through June 30, 2025). For the three months ended September 30, 2025 (the first full quarter of SCN operations), we recognized Sleep Testing Service revenue from SCN of $2.2 million and treatment center revenue of $1.3 million. The goal is to continue to increase diagnostic sleep testing revenue from SCN and related Vivos treatment center revenue in the fourth quarter of 2025 and into 2026 and beyond.

Previous wording

Our operational plan is driven by our deployment of our Sleep Optimization (SO) teams, each consisting of one nurse practitioner (or physician’s assistant), two specially trained dentists, six dental assistants, six administrative support personnel, and one treatment navigator. These SO teams can be dedicated to high demand locations or spread across multiple locations as circumstances dictate. We currently have 1.5 SO teams deployed across two SCN locations and expect to have two additional SO teams deployed during the fourth quarter of 2025. We anticipate an initial ramp of up to 60 days for SO teams to become fully functional, and up to five months or longer before net revenue collections match revenue generating activity (such as OSA diagnostic services or OSA treatment case starts). A fourth SO team is planned for deployment sometime in the first quarter of 2026, giving us an expected total of 4.5 SO teams operating by the end of the first quarter of 2026. Based on the current volume of OSA patient demand, we believe the current markets served by SCN could support up to eight SO teams, and potentially more if certain planned growth initiatives meet expectations. Such initiatives include, but are not limited to, the expansion of diagnostic and treatment services, the establishment and rollout of a pediatric OSA program, and the collaboration with certain specialty medical groups who treat patients with comorbid OSA but who lack the ability to test, evaluate and treat such patients within their existing practice environments.

Current wording

Our operational plan is driven by our deployment of our Sleep Optimization (SO) teams, each consisting of one nurse practitioner (or physician’s assistant), two specially trained dentists, six dental assistants, six administrative support personnel, and one treatment navigator. These SO teams can be dedicated to high demand locations or spread across multiple locations as circumstances dictate. In third quarter, we had 1.5 SO teams deployed across two SCN locations and expect to have two additional SO teams deployed by the end of 2025. We anticipate an initial ramp of 30 to 60 days for SO teams to become fully functional, and up to five months or longer before net revenue collections match revenue generating activity (such as OSA diagnostic services or OSA treatment case starts). A fourth SO team is planned for deployment sometime in the first quarter of 2026, giving us an expected total of 4.5 SO teams operating by the end of the first quarter of 2026. Based on the current volume of OSA patient demand, we believe the current markets served by SCN could support up to eight SO teams, and potentially more if certain planned growth initiatives meet expectations. Such initiatives include, but are not limited to, the expansion of diagnostic and treatment services, the establishment and rollout of a pediatric OSA program, and the collaboration with certain specialty medical groups who treat patients with comorbid OSA but who lack the ability to test, evaluate and treat such patients within their existing practice environments.

Previous wording

Based on our experience to date, we believe our limiting constraints for near-term revenue growth at SCN are (1) physical space to see an optimal number of patients; (2) provider and staff recruiting, training, and onboarding; and (3) customary issues with third party provider credentialing. At the SCN locations we have onboarded, we are currently fully booked for appointments for several weeks, and we are processing what we believe is less than 40% of patients attempting to get appointments for treatment. We expect the current expansion at one facility and relocation of a second facility, coupled with the additional deployments of two new SO teams by mid-October 2025, will help reduce the backlog of patients seeking treatment. However, we do not believe we will be able to fully meet current demand until additional SO teams are fully deployed during 2026.

Current wording

Based on our experience to date, we believe our limiting constraints for near-term revenue growth at SCN are (1) physical space to see an optimal number of patients; (2) provider and staff recruiting, training, and onboarding; and (3) customary issues with third party provider credentialing. At the SCN locations we have onboarded, we are currently fully booked for appointments for several weeks, and we are processing what we believe is less than 40% of patients attempting to get appointments for treatment. We expect the current expansion at one facility and relocation of a second facility, coupled with the additional deployments of the two new SO teams by year-end 2025, will help reduce the backlog of patients seeking treatment. However, we do not believe we will be able to fully meet current demand until additional SO teams are fully deployed during 2026.

Previous wording

Importantly, we expect to apply the lessons learned from our SCN integration activities to future sleep center or medical practice acquisitions or management collaborations we are currently exploring and hope to consummate in the future as described below. We expect to fund costs associated with our SCN integration activities with net proceeds from our June 2024 debt and equity financings, potential future financings, and ultimately cash from operations.

Current wording

We expect to fund costs associated with our SCN integration activities with net proceeds from our June 2025 debt and equity financings, potential future financings, and ultimately cash from operations.

Previous wording

Revised OSA Provider Management Model. In addition to growth through acquisitions of medical sleep providers like SCN, we are actively developing a revised management model that we are implementing in situations where the sleep center or medical practice owners are not interested in being purchased by us, but are interested in making the full range of our OSA treatment options available to their patients. Our plan is to accomplish this type of collaboration through the creation and pro-rata funding of a new management services entity that is jointly owned by the sleep center owners and our company, but where our company retains a supermajority controlling interest. The revised management model incorporates our experience with Rebis Health in Colorado, our first sleep provider collaboration arrangement which we entered into in 2024, and which has not yet performed to our expectations. Under the revised model, through the co-owned management company, we will have more operational control to help ensure that our business model is being properly implemented.

Current wording

Revised OSA Provider Management Model. In addition to growth through acquisitions of medical sleep providers like SCN, we are actively developing a revised strategic alliance or management model that we are implementing in situations where the sleep center or medical practice owners are not interested in being purchased by us, but are interested in making the full range of our OSA treatment options available to their patients. Our plan is to accomplish this type of collaboration through the creation and pro-rata funding of a new management services entity that is jointly owned by the sleep center owners and our company, but where our company retains a supermajority controlling interest. The revised management model incorporates our experience with Rebis Health in Colorado, our first sleep provider collaboration arrangement which we entered into in 2024, and which has not yet performed to our expectations. Under the revised model, through the co-owned management company, we will have more operational control to help ensure that our business model is being properly implemented.

Previous wording

On July 14, 2025, we entered into our first management agreement under this revised approach with MISleep Solution LLC to provide our full suite of Vivos treatments and services to OSA patients at a joint location in Auburn Hills, Michigan (which is near Detroit). Consistent with our new model, our company owns a supermajority equity stake in the management services company, with the sleep doctors having minority ownership interests. Facilities to support these operations are currently under construction, with an estimated opening date in October 2025. We are currently in the process of hiring, training, and onboarding one complete SO team that we expect to deploy as soon as the physical facility is ready for occupancy. Based on our internal analysis and experience, we expect the economics of our Detroit SO team to be similar to the economics described above for our SO teams at SCN, except that net profit distributions from the management services entity will be paid out on a pro-rata basis (with our company receiving the supermajority share). As of this time, we have no direct operating history in the Detroit, Michigan market or with this new model. However, we believe that the overall benefit to our company of this model derives from the limited risks (as opposed to outright acquisitions) and generally low equipment and facility capital expenditures relative to the potential revenue opportunity. This model also obviates the need for us to finance the purchase and other costs associated with our acquisition model.

Current wording

On July 14, 2025, we entered into our first management agreement under this revised approach with MISleep Solution LLC to provide our full suite of Vivos treatments and services to OSA patients at a joint location in Auburn Hills, Michigan (which is near Detroit). Consistent with our new model, our company owns a supermajority equity stake in the management services company, with the sleep doctors having minority ownership interests. The facility to support these operations is currently under construction, with an estimated opening date in early December 2025. We are currently in the process of hiring, training, and onboarding one complete SO team that we expect to deploy as soon as the physical facility is ready for occupancy. Based on our internal analysis and experience, we expect the economics of our Detroit SO team to be similar to the economics described above for our SO teams at SCN, except that net profit distributions from the management services entity will be paid out on a pro-rata basis (with our company receiving the supermajority share). As of this time, we have no direct operating history in the Detroit, Michigan market or with this new model. However, we believe that the overall benefit to our company that this model derives with limited risks (as opposed to outright acquisitions) and generally low equipment and facility capital expenditures relative to the potential revenue opportunity. This model also obviates the need for us to finance the purchase and other costs associated with our acquisition model.

Previous wording

Potential Provider Acquisition or Management Pipeline. We are currently in active discussions with a number of potential acquisition targets to follow our SCN acquisition and Detroit-area management agreement. Every prospect must meet a rigorous set of criteria and standards in order to be considered by our mergers and acquisitions team for acquisition or management. One such acquisition target is currently under an exclusive letter of intent with us. Our pipeline of additional potential acquisition andmanagement opportunities with sleep centers and medical sleep specialists continues to expand. This is happening largely through word of mouth and very little expenditure in terms of marketing efforts to the more than 2,600 American Academy of Sleep Medicine accredited sleep testing centers nationwide. We believe this pipeline of potential acquisition and management activity, together with the experience gained from previous endeavors, will be a key driver of future accretive growth for us.

Current wording

Potential Provider Acquisition or Management Pipeline. We are currently in active discussions with a number of potential acquisition targets and strategic sleep center affiliations to follow our SCN acquisition and Detroit-area management agreement. Every prospect must meet a rigorous set of criteria and standards in order to be considered by our mergers and acquisitions team for acquisition or management. One such acquisition target is currently under an exclusive letter of intent with us. Our pipeline of additional potential acquisition andmanagement opportunities with sleep centers and medical sleep specialists continues to expand. This is happening largely through word of mouth and very little expenditure in terms of marketing efforts to the more than 2,600 American Academy of Sleep Medicine accredited sleep testing centers nationwide. We believe this pipeline of potential acquisition and management activity, together with the experience gained from previous endeavors, will be a key driver of future accretive growth for us.

Previous wording

For example, in October 2023, we announced an exclusive distribution agreement with NOUM DMCC, a Dubai-based company focused on diagnostic testing and treatment product distribution for healthcare providers and hospital networks treating obstructive sleep apnea patients throughout the Middle East-North Africa region. With regulatory approvals pending, there was no revenue from this collaboration in 2024 and thus far in 2025.

Current wording

For example, in October 2023, we announced an exclusive distribution agreement with NOUM DMCC, a Dubai-based company focused on diagnostic testing and treatment product distribution for healthcare providers and hospital networks treating obstructive sleep apnea patients throughout the Middle East-North Africa region. With regulatory approvals pending, there was no revenue from this collaboration in 2024 and no material revenue thus far in 2025.

Previous wording

*Trade Policy/Tarriff Risks.*Certain of our products or components are manufactured outside the United States. Most products imported into the United States is subject to duty and restrictive quotas on the amount of products that can be imported from certain countries into the United States each year. Because of the duty rates and quotas, changes in U.S. trade policy as reflected in the imposition of tariffs, trade legislation, trade preference programs and trade agreements have the potential to materially impact our sourcing strategy and the competitiveness of our contract manufacturers. We manage this risk by continually monitoring U.S. trade policy, analyzing the impact of changes in such policy and adjusting its manufacturing and sourcing strategy accordingly.

Current wording

*Trade Policy/Tarriff Risks.*Certain of our products or components are manufactured outside the United States. Most products imported into the United States are subject to duty and restrictive quotas on the amount of products that can be imported from certain countries into the United States each year. Because of the duty rates and quotas, changes in U.S. trade policy as reflected in the imposition of tariffs, trade legislation, trade preference programs and trade agreements have the potential to materially impact our sourcing strategy and the competitiveness of our contract manufacturers. During 2025, the U.S. has imposed (and in some cases retracted) significant tariffs on a global scale, creating uncertainty and price fluctuations. We seek to manage this risk by continually monitoring U.S. trade policy, analyzing the impact of changes in such policy and adjusting its manufacturing and sourcing strategy accordingly.

Previous wording

An additional inflation-related risk is the Federal Reserve’s response to inflation, which as of the date of this Report, has been to maintain elevated interest rates. Such actions have, in times past, created unintended consequences for housing starts, overall manufacturing, the capital markets, and the banking sector. An uncertain Federal Reserve response to inflation could as a result impact on our revenue, earnings and access to capital.

Current wording

An additional inflation-related risk is the Federal Reserve’s response to inflation, which as of the date of this Report, has been to maintain elevated interest rates. Such actions have, in times past, created unintended consequences for housing starts, overall manufacturing, the capital markets, and the banking sector. An uncertain Federal Reserve response to inflation could, as a result, have an impact on our revenue, earnings and access to capital.

Previous wording

*War in Ukraine and Middle East Hostilities.*In addition, worldwide supply chain constraints and economic and capital markets uncertainty arising out of Russia’s invasion of Ukraine in February 2022, the attacks by Hamas on Israel in October of 2023 and Israel’s responses have disrupted commercial and capital markets and emerged as new barriers to long-term economic recovery. If an economic recession or depression commences and is sustained as a result of such regional armed conflicts, it could have a material adverse effect on our business as demand for our products could decrease. Capital markets uncertainty, with public stock price decreases and volatility, could make it more difficult for us to raise capital when needed.

Current wording

*War in Ukraine and Middle East Hostilities.*In addition, worldwide supply chain constraints and economic and capital markets uncertainty arising out of Russia’s invasion of Ukraine in February 2022 and conflicts and continuing tensions in the Middle East since October of 2023 have disrupted commercial and capital markets and emerged as new barriers to long-term economic recovery. If an economic recession or depression commences and is sustained as a result of such regional armed conflicts, it could have a material adverse effect on our business as demand for our products could decrease. Capital markets uncertainty, with public stock price decreases and volatility, could make it more difficult for us to raise capital when needed.

Previous wording

We are working diligently to ensure our continued compliance with the Equity Requirement, including exploring a potential additional equity capital financing or financings to stay above the minimum threshold of the Equity Requirement. We anticipate that our new strategic marketing and distribution alliance model will also positively impact our revenue growth and stockholders’ equity in upcoming fiscal quarters. However, there is a risk that we will be unable to raise sufficient capital or generate sufficient revenue or operating results to maintain compliance with the Equity Requirement. If we fail to achieve ongoing compliance and its common stock is delisted by Nasdaq, such delisting would likely have a material adverse effect on our stock price, the ability of our stockholders to buy or sell their common stock, our ability to raise capital and on our reputation, all of which could make it significantly more difficult to operate.

Current wording

We are working diligently to ensure our continued compliance with the Equity Requirement, including exploring additional equity capital financings to stay above the minimum threshold of the Equity Requirement. We anticipate that our new strategic marketing and distribution alliance model will also positively impact our revenue growth and stockholders’ equity in upcoming fiscal quarters. However, there is a risk that we will be unable to raise sufficient capital or generate sufficient revenue or operating results to maintain compliance with the Equity Requirement. If we fail to achieve ongoing compliance and our common stock is delisted by Nasdaq, such delisting would likely have a material adverse effect on our stock price, the ability of our stockholders to buy or sell their common stock, our ability to raise capital and on our reputation, all of which could make it significantly more difficult to operate.

Previous wording

Net revenue. Under our legacy VIP model, we recognize revenue when we satisfy our performance obligations over time as our customers receive the benefit of the promised goods and services, which generally occurs over a short period of time. Performance obligations with respect to appliance sales are typically satisfied by shipping or delivering products to our VIPs or to any sleep clinic, through our new marketing and distribution model, in the case of enrollment or service revenue, upon our satisfaction of performance obligations associated with VIP enrollments. Revenue consists of the gross sales price, net of estimated allowances, discounts, and personal rebates that are accounted for as a reduction from the gross sale price. Revenues to date from our new contractual alliance or acquisition management model have been relatively nominal, although we expect revenues generated from SCN and our agreements related to the Acquisition to increase.

Current wording

Legacy VIP Model. Under our legacy VIP model, we recognize revenue when we satisfy our performance obligations over time as our customers receive the benefit of the promised goods and services, which generally occurs over a short period of time. Performance obligations with respect to appliance sales are typically satisfied by shipping or delivering products to our VIPs or to any sleep clinic, through our new marketing and distribution model, in the case of enrollment or service revenue, upon our satisfaction of performance obligations associated with VIP enrollments. Revenue consists of the gross sales price, net of estimated allowances, discounts, and personal rebates that are accounted for as a reduction from the gross sale price.

Previous wording

Cost of sales. Cost of goods sold primarily consists of direct costs attributable to the purchase from third party suppliers and related products. It also includes freight costs, fulfillment, distribution, and warehousing costs related to products sold.

Current wording

Cost of sales. Cost of goods sold primarily consists of direct costs attributable to the purchase from third party suppliers and related products as well as direct payroll costs. It also includes freight costs, fulfillment, distribution, and warehousing costs related to products sold.

Previous wording

Our consolidated statements of operations for the three and six months ended June 30, 2025 and 2024 (which includes incremental revenue recognized from the operations of SCN from June 10, 2025 to June 30, 2025) are presented below (dollars in thousands):

Current wording

Our consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024 (which includes incremental revenue recognized from the operations of SCN from June 10, 2025 to September 30, 2025) are presented below (dollars in thousands):

Previous wording

Revenue decreased by approximately $0.2 million, or 6%, to approximately $3.8 million for the three months ended June 30, 2025 compared to $4.1 million for the three months ended June 30, 2024. The decrease in total revenue during the second quarter of 2025 was impacted by a decrease of approximately $0.1 million in product revenue and approximately $0.1 million in service revenue. The decrease in product revenue is attributable to an increase in appliances discounts of approximately $0.6 million, offset by an increase of approximately $0.5 million in guide sales. The decrease in service revenue is attributable to a decrease of approximately $1.0 million in VIP enrollment revenue offset by an increase of approximately $0.5 million in sleep testing services primarily generated from SCN and $0.4 million from sponsorship, seminar and other service revenue. Revenue growth in the second quarter of 2025 was impacted by a lower incidence of breakage in contracts, this accelerated revenue recognition on several contracts for VIPs who did not complete their training during the first 90 days of their enrollment. Approximately $0.1 million in revenue was attributable to breakage during the three months ended June 30, 2025, when compared to approximately $0.6 million during the three months ended June 30, 2024.

Current wording

Revenue increased by approximately $2.9 million, or 76%, to approximately $6.8 million for the three months ended September 30, 2025 compared to $3.9 million for the three months ended September 30, 2024. The increase in total revenue during the third quarter of 2025 was impacted by an increase of approximately $2.7 million in service revenue and approximately $0.2 million in product revenue. The increase in service revenue is attributable to $2.2 million in sleep testing services primarily generated by SCN and $1.3 million generated from SCN treatment centers (providing the services described under “Key Components of Consolidated Statements of Operations” above) launched at two SCN locations, which was offset by a decrease of $0.8 million in VIP revenue from our legacy business model. VIP revenue in the third quarter of 2025 was impacted by no breakage in contracts, when compared to the same period in 2024. Breakage of contracts accelerated revenue recognition on several contracts for VIPs in 2024 who did not complete their training during the first 90 days of their enrollment. Approximately $0.5 million in revenue was attributable to breakage during the three months ended September 30, 2024. Over the last year, our reliance on VIP enrollment revenue has diminished significantly as such revenues have decreased.

Previous wording

For the three months ended June 20, 2025, we sold 4,116 oral appliance arches for a total of approximately $1.9 million, a 5% decrease in revenue from the three months ended June 30, 2024, when we sold 2,033 oral appliance arches for a total of approximately $2.0 million. The decrease is directly attributable a higher volume mix of Guide sales, which are lower revenue generating products when compared to Vivos C.A.R.E. appliances.

Current wording

For the three months ended September 30, 2025, we sold 4,370 oral appliance arches for a total of approximately $2.2 million, representing a 12% increase in revenue from the three months ended September 30, 2024, when we sold 1,954 oral appliance arches for a total of approximately $2.0 million. The decrease in revenue per appliance is directly attributable a higher volume mix of pediatric and Lifeline sales, which are lower revenue generating products when compared to higher end Vivos C.A.R.E. appliances.

Previous wording

For the three months ended June 30, 2025, gross profit decreased by approximately $0.5 million to $2.1 million. This decrease was attributable to the decrease in revenue of approximately $0.2 million and increase in cost of sales of $0.3 million. Gross margin decreased to 55% for the three months ended June 30, 2025, compared to 65% for the three months ended June 30, 2024 due to the decrease in revenue and increase in cost of sales.

Current wording

For the three months ended September 30, 2025, gross profit increased by approximately $1.6 million to $3.9 million. This increase was attributable to the increase in revenue of approximately $2.9 million offset by an increase in cost of sales of $1.3 million. Gross margin decreased to 58% for the three months ended September 30, 2025, compared to 60% for the three months ended September 30, 2024 due to the higher increase in cost of sales when compared to revenue.

Previous wording

General and administrative expenses increased $2.3 million or 55% to approximately $6.4 million for the three months ended June 30, 2025, as compared to $4.1 million for the three months ended June 30, 2024. The primary cause of this increase was approximately $1.8 million in costs associated with acquiring and integrating SCN including professional fees of approximately $0.9 million, salaries and wages of approximately $0.5 million, infrastructure costs of approximately $0.3 million and travel related expenses of approximately $0.1 million.

Current wording

General and administrative expenses increased by approximately $3.4 million, or 76%, to approximately $7.9 million for the three months ended September 30, 2025, as compared to $4.5 million for the three months ended September 30, 2024. The primary cause of this increase was approximately $1.6 million in costs associated with integrating and running SCN’s operations, approximately $0.6 million related to professional fees, approximately $0.6 million associated with salaries and wages on additional personnel, infrastructure costs of approximately $0.4 million and travel related expenses of approximately $0.1 million, when compared to the three months ended September 30, 2024.

Previous wording

Sales and marketing expenses stayed relatively flat at $0.3 million for the three months ended June 30, 2025, which is attributable in significant part to our one-time focus on the acquisition and commencement of integration of SCN into our operations.

Current wording

Sales and marketing expenses stayed relatively flat at $0.4 million for the three months ended September 30, 2025, which is attributable to our one-time focus on the acquisition and commencement of integration of SCN into our operations offset by cost savings.

Previous wording

Depreciation and amortization expense increased $0.2 million for the three months ended June 30, 2025 due to assets being placed into service.

Current wording

Depreciation and amortization expense increased $0.2 million for the three months ended September 30, 2025 due to depreciation on assets acquired from SCN and being placed into service.

Previous wording

Other (Expense) increased $0.1 million due to interest expense on a note during the three months ended June 30, 2025.

Current wording

Other (Expense) increased $0.7 million due to interest expense on a note during the three months ended September 30, 2025.

Previous wording

Revenue decreased approximately $0.6 million, or 9%, to approximately $6.8 million for the six months ended June 30, 2025 compared to $7.5 million for the six months ended June 30, 2024. The decrease in total revenue during the period was impacted primarily by a decrease of approximately $1.7 million in enrollment revenue due to the pivot in strategy away from enrollment of VIP’s and to affiliations with and acquisitions of sleep centers and OSA medical diagnostic practices. The decrease of enrollment revenue was offset by increases of $0.5 million of sleep testing service revenue primarily generated from SCN and $0.5 million of sponsorship and seminar revenue. Revenue growth in the first half quarter of 2025 was impacted by a lower incidence of breakage in contracts, this accelerated revenue recognition on several contracts for VIPs who did not complete their training during the first 90 days of their enrollment. Approximately $0.1 million in revenue was attributable to breakage during the six months ended June 30, 2025, when compared to approximately $1.0 million during the six months ended June 30, 2024.

Current wording

Revenue increased approximately $2.3 million, or 20%, to approximately $13.6 million for the nine months ended September 30, 2025 compared to $11.3 million for the nine months ended September 30, 2024. The increase in total revenue was impacted by an increase of approximately $2.0 million in service revenue and approximately $0.3 million in product revenue. The increase in services revenue is attributable to $2.8 million in sleep testing services primarily generated by SCN and $1.6 million generated from treatment centers (providing the services described under “Key Components of Consolidated Statements of Operations” above) launched at two SCN locations, which was offset by a decrease of $2.6 million in VIP revenue from our legacy business model. VIP revenue in the first nine months of 2025 was impacted by lower breakage in contracts, when compared to the same period in 2024. Breakage of contracts accelerated revenue recognition on several contracts for VIPs in 2024 who did not complete their training during the first 90 days of their enrollment. Approximately $1.5 million in revenue was attributable to breakage during the nine months ended September 30, 2024. Additionally, there was approximately a $0.3 million increase in sponsorship and seminar revenue. Over the last year, our reliance on VIP enrollment revenue has diminished significantly as such revenues have decreased.

Previous wording

For the six months ended June 30, 2025, we sold 7,852 oral appliance arches for a total of approximately $3.7 million, a 1% increase in revenue from the six months ended June 30, 2024, when we sold 4,029 oral appliance arches for a total of approximately $3.6 million. The increase in revenue was due primarily to an increase in guide sales at a lower average price than CARE devices, offset by an increase in discounts during the six months ended June 30, 2025. Refer to “Material Items, Trends and Risks Impacting Our Business” section above for events that impacted our product sales.

Current wording

For the nine months ended September 30, 2025, we sold 12,222 oral appliance arches for a total of approximately $5.9 million, representing a 5% increase in revenue from the nine months ended September 30, 2024, when we sold 5,993 oral appliance arches for a total of approximately $5.6 million. The decrease in revenue per appliance is directly attributable to an increase in pediatric and Lifeline sales at a lower average price than higher end CARE devices. Refer to “Material Items, Trends and Risks Impacting Our Business” section above for events that impacted our product sales.

Previous wording

For the six months ended June 30, 2025, gross profit decreased by approximately $0.9 million to $3.6 million. This decrease was attributable to the decrease in revenue of approximately $0.6 million and increase in cost of sales of $0.3 million. Gross margin decreased to 53% for the six months ended June 30, 2025, compared to 61% for the six months ended June 30, 2024 due to the decrease in revenue and increase in cost of sales.

Current wording

For the nine months ended September 30, 2025, gross profit increased by approximately $0.6 million to $7.6 million. This increase was attributable to the increase in revenue of approximately $2.3 million offset by an increase in cost of sales of $1.7 million. Gross margin decreased to 55% for the nine months ended September 30, 2025, compared to 61% for the nine months ended September 30, 2024 due to the higher increase in cost of sales when compared to revenue.

Previous wording

Sales and marketing expenses decreased by $0.4 million to $0.6 million for the six months ended June 30, 2025, compared to $1.0 million for the six months ended June 30, 2024. This decrease was primarily driven by our decrease in sales and marketing campaigns, resulting in lower commissions paid to our employees for digital media services and reduction in use of marketing supplies.

Current wording

Sales and marketing expenses decreased by $0.3 million to $1.0 million for the nine months ended September 30, 2025, compared to $1.3 million for the nine months ended September 30, 2024. This decrease was primarily driven by our decrease in sales and marketing campaigns, resulting in lower commissions paid to our employees for digital media services and reduction in use of marketing supplies.

Previous wording

Depreciation and amortization expense increased $0.2 million to approximately $0.5 million for the six months ended June 30, 2025 from $0.3 million for the six months ended June 30, 2024. Depreciation and amortization increased during the period due to assets being placed into service during the period.

Current wording

Depreciation and amortization expense increased $0.4 million to approximately $0.9 million for the nine months ended September 30, 2025 from $0.4 million for the nine months ended September 30, 2024. Depreciation and amortization increased during the period due to depreciation on the assets acquired from SCN and being placed into service.

Previous wording

Other (Expense) increased $0.1 million due to interest expense on a note during the six months ended June 30, 2025.

Current wording

Other (Expense) increased $0.8 million due to interest expense on a note during the nine months ended September 30, 2025.

Previous wording

The financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. We have incurred losses since inception, including $5.0 and $1.9 million for the three months ended June 30, 2025 and 2024, respectively, and $8.9 and $5.7 million for the six months ended June 30, 2025 and 2024, respectively, resulting in an accumulated deficit of approximately $113.1 million as of June 30, 2025.

Current wording

The accompanying unaudited financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. We have incurred losses since inception, including $5.4 and $2.6 million for the three months ended September 30, 2025 and 2024, respectively, and $14.3 and $8.3 million for the nine months ended September 30, 2025 and 2024, respectively, and accumulated deficit of approximately $118.5 million as of September 30, 2025.

Previous wording

Net cash used in operating activities amounted to approximately $7.3 and $5.6 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, we had total liabilities of approximately $21.5 million.

Current wording

Net cash used in operating activities amounted to approximately $11.5 and $9.8 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, we had total liabilities of approximately $23.1 million.

Previous wording

As of June 30, 2025, we had approximately $4.4 million in cash and cash equivalents, which will not be sufficient to fund operations and strategic objectives over the next twelve months from the date of the issuance of these financial statements. Without additional financing, these factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

Current wording

As of September 30, 2025, we had approximately $3.1 million in cash and cash equivalents, which will not be sufficient to fund operations and strategic objectives over the next twelve months from the date of the issuance of the accompanying unaudited financial statements. Without additional financing, these factors raise substantial doubt regarding the Company’s ability to continue as a going concern.