Vivos Therapeutics, Inc.

Previous wording

We are a revenue stage medical technology company focused on the development and commercialization of innovative treatment alternatives for patients with dentofacial abnormalities and/or patients diagnosed with mild to severe obstructive sleep apnea (“OSA”) and snoring in adults. We believe our technologies and conventions represent a significant improvement in the treatment of mild to severe OSA versus other treatments such as continuous positive airway pressure (“CPAP”) or palliative oral appliance therapies. Our alternative treatments are part ofThe Vivos Method*.*

Current wording

We are a revenue stage medical technology and healthcare services company focused on the development and commercialization of innovative treatment alternatives for patients with dentofacial abnormalities and/or patients diagnosed with mild to severe obstructive sleep apnea (“OSA”) and snoring in adults. We believe our technologies and conventions represent a significant improvement in the treatment of mild to severe OSA versus other treatments such as CPAP or palliative oral appliance therapies. Our alternative treatments are part ofThe Vivos Method*.*

Previous wording

The Vivos Method is an advanced therapeutic protocol, which often combines the use of customized oral appliance specifications and proprietary clinical treatments developed by our company and 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 58,000 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 developed by our company and 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 75,000 patients have been treated to date worldwide with our entire current suite of products by more than 2,000 trained dentists.

Previous wording

See Note 1 to the accompanying financial statements for additional background information on our Company and current product and service offerings.

Current wording

See Item 1. Business of this Report for additional background information on our Company and current product and service offerings.

Previous wording

VIP Enrollments (Service Revenue). Enrolling dental practices as VIPs has historically been the first step in our ability to generate new revenue. As part of the VIP enrollment fee, we enter into a service contract with VIPs under which they receive training on the use of the Vivos treatment modalities. VIPs have the ability to start generating revenue for us and themselves after this training. To entice dentists to enroll as VIPs, we have worked with different marketing programs (which we generally call a “discovery track”) with respect to the payment of VIPs enrollment fee, including discounts and payment plans. Once VIPs execute their VIP enrollment agreement, the discovery track allows the VIP 45 to 60 days to obtain financing and pay the enrollment fee. Ongoing support and additional training is provided throughout the year under the services contract, which includes access to our proprietary Airway Intelligence Services, which provides the VIP with resources to help simplify the sleep apnea diagnostic and Vivos treatment planning process.

Current wording

VIP Enrollments (Service Revenue). Enrolling dental practices as VIPs has historically been the first step in our ability to generate new revenue. As part of the VIP enrollment fee, we enter into a service contract with VIPs under which they receive training on the use of the Vivos treatment modalities. VIPs have the ability to start generating revenue for us and themselves after this training.

Previous wording

In addition to enrollment service revenue, we offer additional services, such as our Billing Intelligence Services offering, and MyoCorrect orofacial myofunctional therapy services, which was introduced in April 2021. Revenue for these services is recognized as our performance obligations are satisfied in accordance with ASC 606.

Current wording

In addition to enrollment service revenue, we offer additional services, such as our Billing Intelligence Services offering, and MyoSync (formally MyoCorrect) orofacial myofunctional therapy services, which was introduced in April 2021. Revenue for these services is recognized as our performance obligations are satisfied in accordance with ASC 606.

Previous wording

Because of our 2024 marketing and distribution business model pivot, we have become more focused on engaging in strategic collaborations or acquisitions to market the benefits of the Vivos treatment modalities to dentists and other medical providers, including our cooperative relationships with various medical providers to deliver diagnostic and medical consultation services to people across North America who suffer from OSA. As such, while we will continue to recognize some VIP enrollment revenue going forward, such revenue will become increasing less important to us.

Current wording

Because of our 2024 marketing and distribution business model pivot, we have become more focused on engaging in strategic collaborations or acquisitions to market the benefits of the Vivos treatment modalities to dentists and other medical providers, including our cooperative relationships with various medical providers to deliver diagnostic and medical consultation services to people across North America who suffer from OSA. As such, while we will continue to recognize some VIP enrollment revenue through 2026, we believe such revenue will become immaterial.

Previous wording

Product Sales Revenue. Vivos treatment case starts is paramount, as case starts lead to appliance orders and related revenue. Once a provider is fully trained, we encourage them to start cases. However, our experience has been that VIPs typically start slowly as they introduce The Vivos Method into their practices. The slow acceptance rate Vivos appliances with providers lead Vivos to consider other business models including the alliance marketing and distribution model announced in 2024 to sell additional product. While we work with VIPs to screen their patients for OSA with our SleepImage® home sleep apnea ring test (which we expect will encourage Vivos Method case starts), not all VIPs incorporate our The Vivos Method into their practices at the same rate. We believe VIPs can recoup their investment in VIP enrollment with approximately eight Vivos Method case starts, but as noted above, many VIPs start and also maintain their case starts at a significantly slower rate. We presently have a concentration of active VIPs who regularly start new Vivos Method treatment cases. Approximately 36% of our VIPs initiated a new case as of December 31, 2024. As noted, we believe that reducing our reliance on VIPs and increasing the number of strategic marketing and distribution alliances (or acquiring medical or dental practices) will provide us with a better opportunity to drive appliance sales going forward.

Current wording

Product Sales Revenue. Vivos treatment case starts is paramount, as case starts lead to appliance orders and related revenue. Once a provider is fully trained, we encourage them to start cases. However, our experience has been that VIPs typically start slowly as they introduce The Vivos Method into their practices. The slow acceptance rate Vivos appliances with providers lead Vivos to consider other business models including the medical provider-focused alliance marketing and distribution model announced in 2024 to sell additional product. While we work with VIPs to screen their patients for OSA with our SleepImage® home sleep apnea ring test (which we expect will encourage Vivos Method case starts), not all VIPs incorporate our The Vivos Method into their practices at the same rate. We believe VIPs can recoup their investment in VIP enrollment with approximately eight Vivos Method case starts, but as noted above, many VIPs start and also maintain their case starts at a significantly slower rate. We presently have a low concentration of active VIPs who regularly start new Vivos Method treatment cases. As noted, we believe that reducing our reliance on VIPs and increasing the number of strategic marketing and distribution alliances (or acquiring medical or dental practices) will provide us with a better opportunity to drive appliance sales going forward.

Previous wording

Clinical Trial Work. Our efforts to engage in research to demonstrate the clinical efficacy of our products and obtain additional regulatory clearances for the use of our products is an important aspect of our overall strategy. In this regard, on May 29, 2023, we and Stanford University executed an agreement to commence a sponsored clinical research study to evaluate the efficacy of our FDA-cleared DNA appliance compared to the standard of care, CPAP for treatment of sleep apnea. Our DNA device is currently indicated for the treatment of mild to severe sleep apnea and jaw repositioning in adults (and in the case of severe OSA, along with positive airway pressure and/or myofunctional therapy, as needed) and has an FDA clearance intended to reduce nighttime snoring and to treat moderate and severe obstructive sleep apnea in children, 6- 17 years of age who are diagnosed with snoring and/or moderate or severe obstructive sleep apnea and need orthodontic treatment. Enrollment of 150 patients with moderate to severe sleep apnea (apnea-hypopnea index score of 15 or greater) will be randomly assigned to either treatment with our FDA-cleared DNA appliance or CPAP. The protocol has been finalized, and enrollment began in 2024. Late 2024, our clinical study conducted in collaboration with Stanford University and evaluating the DNA and CPAP for the treatment of OSA, was placed on hold by Stanford University. The decision to pause the study was made due to low recruitment into the study.

Current wording

Clinical Trial Work. Our efforts to engage in research to demonstrate the clinical efficacy of our products and obtain additional regulatory clearances for the use of our products is an important aspect of our overall strategy. In this regard, on May 29, 2023, we and Stanford University executed an agreement to commence a sponsored clinical research study to evaluate the efficacy of our FDA-cleared DNA appliance compared to the standard of care, CPAP for treatment of sleep apnea. Our DNA device is currently indicated for the treatment of mild to severe sleep apnea and jaw repositioning in adults (and in the case of severe OSA, along with positive airway pressure and/or myofunctional therapy, as needed) and has an FDA clearance intended to reduce nighttime snoring and to treat moderate and severe obstructive sleep apnea in children, 6- 17 years of age who are diagnosed with snoring and/or moderate or severe obstructive sleep apnea and need orthodontic treatment. Enrollment of 150 patients with moderate to severe sleep apnea (apnea-hypopnea index score of 15 or greater) will be randomly assigned to either treatment with our FDA-cleared DNA appliance or CPAP. The protocol has been finalized, and enrollment began in 2024. Late 2024, our clinical study conducted in collaboration with Stanford University and evaluating the DNA and CPAP for the treatment of OSA, was placed on hold by Stanford University. The decision to pause the study was made due to low recruitment into the study. The study is still on hold as of 2025.

Previous wording

We are actively working with Stanford University to address the concerns that led to the hold and has continued engaged discussions with the university. While we believe these efforts will facilitate the resumption of the study, there can be no assurance that the hold will be lifted in a timely manner, or at all. Any delay or failure to resolve the issues could impact the development timeline and future prospects for the study. We remain committed to the highest standards of patient safety, scientific integrity, and regulatory compliance and will provide updates as material developments occur. This trial may not meet its designated endpoints, and therefore additional FDA clearances for the DNA device may not be obtained.

Current wording

We are working with Stanford University to address the concerns that led to the hold and has continued engaged discussions with the university. While we believe these efforts will facilitate the resumption of the study, there can be no assurance that the hold will be lifted in a timely manner, or at all. Any delay or failure to resolve the issues could impact the development timeline and future prospects for the study. We remain committed to the highest standards of patient safety, scientific integrity, and regulatory compliance and will provide updates as material developments occur. This trial may not meet its designated endpoints, and therefore additional FDA clearances for the DNA device may not be obtained.

Previous wording

Distribution Agreements. During 2023, we entered into distribution collaborations with third parties to expand access of our products to potential patients. We hope that these strategic initiatives will lead to revenue growth opportunities for us in 2024 and beyond, and our ability to capitalize on these initiatives is expected to be a material aspect of our sales and marketing program going forward.

Current wording

Distribution Agreements. During 2023, we entered into distribution collaborations with third parties to expand access of our products to potential patients. We hope that these strategic initiatives will lead to revenue growth opportunities for us in 2024 and beyond, and our ability to capitalize on these initiatives is expected to be a material aspect of our medical provider-focused sales and marketing program going forward.

Previous wording

Also, 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.

Current wording

Also, 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 or 2025.

Previous wording

An additional inflation-related risk is the Federal Reserve’s response, which up to this point has been to raise interest rates. Such actions have, in times past, created unintended consequences in terms of the impact on housing starts, overall manufacturing, capital markets, and banking. If such disruptions become systemic, as occurred in the recession of 2008, then the impact on our revenue, earnings and access to capital of both inflation and inflation-fighting responses would be impossible to know or calculate.

Current wording

An additional inflation-related risk is the Federal Reserve’s response, which up to this point has been to slightly decrease interest rates, however, the perceived decrease was lower than what was expected. Such actions have, in times past, created unintended consequences in terms of the impact on housing starts, overall manufacturing, capital markets, and banking. If such disruptions become systemic, as occurred in the recession of 2008, then the impact on our revenue, earnings and access to capital of both inflation and inflation-fighting responses would be impossible to know or calculate.

Previous wording

Supply Chain. From time to time, we may experience supply chain challenges due to forces beyond our control. For example, the Suez Canal blockage earlier in 2021 caused some delay in shipments of SleepImage® rings from China. Overall, however, as our appliances are made in the U.S., we have not experienced significant supply chain issues as a result of COVID-19 or otherwise, although this may change in future periods.

Current wording

Supply Chain. From time to time, we may experience supply chain challenges due to forces beyond our control. For example, the Suez Canal blockage earlier in 2021 caused some delay in shipments of SleepImage® rings from China. Changes in U.S. or foreign trade policy, including the imposition of new tariffs, increases in existing tariffs or changes in customs classifications, could increase our costs. Overall, however, as our appliances are made in the U.S., we have not experienced significant supply chain issues as a result of COVID-19 or otherwise, although this may change in future periods.

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 and 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, 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

*Middle East Hostilities.*In addition, geopolitical instability in the Middle East continues to create uncertainty in global economic conditions and commercial activity. Hostilities in the region, including the attacks by Hamas on Israel in October 2023, Israel’s subsequent military responses, and more recent U.S. and Israeli military actions involving Iran, have contributed to heightened regional and global tensions. These developments, combined with the ongoing effects of Russia’s invasion of Ukraine that began in February 2022, have intensified supply chain constraints, increased commodity price volatility, disrupted international trade flows, creating. If an economic recession or depression commences and is sustained, 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

Potential Nasdaq Delisting. As previously reported, we are currently subject to two Nasdaq Stock Market (“Nasdaq”) listing deficiencies, one related to Nasdaq’s $1.00 minimum bid price requirement (the “Minimum Bid Requirement”) and a second related to Nasdaq’s $2,500,000 minimum stockholders’ equity requirement (the “Minimum Stockholders’ Equity Requirement”).

Current wording

We have a history of challenges of maintaining compliance with the Nasdaq’s continuing listing requirements. We have been subject to two Nasdaq listing deficiencies, one related to Nasdaq’s $1.00 minimum bid price requirement (the “Minimum Bid Requirement”) and a second related to the Equity Requirement.

Previous wording

On September 21, 2023, we received a written notice from the Nasdaq staff confirming that since, as of that date, we failed to meet the Minimum Bid Requirement, and because as of the period ended June 30, 2023 we also failed the Minimum Stockholders’ Equity Requirement, Nasdaq would commence delisting proceedings against us. As permitted under Nasdaq rules, we appealed the Nasdaq staff’s determination and requested a hearing (the “Hearing”) before a Nasdaq Hearing Panel (the “Hearing Panel”). The Hearing request stayed any delisting or suspension action by the Nasdaq staff pending the issuance of the Hearing’s Panel decision. The Hearing took place on November 9, 2023.

Current wording

On September 21, 2023, we received a written notice from the Nasdaq staff confirming that since, as of that date, we failed to meet the Minimum Bid Requirement, and because as of the period ended June 30, 2023 we also failed the Equity Requirement, Nasdaq would commence delisting proceedings against us. As permitted under Nasdaq rules, we appealed the Nasdaq staff’s determination and requested a hearing (the “Hearing”) before a Nasdaq Hearing Panel (the “Hearing Panel”). The Hearing request stayed any delisting or suspension action by the Nasdaq staff pending the issuance of the Hearing’s Panel decision. The Hearing took place on November 9, 2023.

Previous wording

At the Hearing on November 9, 2023, we presented our plan to regain compliance with the minimum stockholders’ equity requirement (the “Equity Rule”), which plan includes raising additional equity capital. On November 30, 2023, we received a letter from the Hearings Panel that, subject to certain conditions, the Hearings Panel granted our request to continue to be listed on Nasdaq. These conditions include providing an update as to our plan to regain compliance with the Equity Rule as well as demonstrating compliance by March 19, 2024. On February 23, 2024 we presented our plan of compliance to the Hearings Committee. On May 6, 2024, we received written notice from the Nasdaq staff indicating that the Company had regained compliance with the Equity Rule.

Current wording

At the Hearing on November 9, 2023, we presented our plan to regain compliance with the Equity Requirement, which included raising additional equity capital. On November 30, 2023, we received a letter from the Hearings Panel that, subject to certain conditions, the Hearings Panel granted our request to continue to be listed on Nasdaq. On February 23, 2024 we presented our plan of compliance to the Hearings Committee. On May 6, 2024, we received written notice from the Nasdaq staff indicating that we had regained compliance with the Equity Requirement.

Previous wording

On May 16, 2024, we received a further written notice from Nasdaq indicating that, as of March 31, 2024, we failed to comply with the Equity Requirement. On June 25, 2024, we reported in a Current Report on Form 8-K that it believed it had stockholders’ equity of at least $2.5 million as of the date of the filing of such report as a result of our closing of a $7.5 million equity private placement on June 10, 2024.

Current wording

On May 16, 2024, we received a further written notice from Nasdaq indicating that, as of March 31, 2024, we failed to comply with the Equity Requirement. On June 25, 2024, we reported in a Current Report on Form 8-K that we believed we had stockholders’ equity of at least $2.5 million as of the date of the filing of such report as a result of our closing of a $7.5 million equity private placement on June 10, 2024.

Previous wording

On July 5, 2024, we were notified that the Panel had granted our request for continued listing on Nasdaq, subject to our filing of the Form 10-Q for the quarter ended June 30, 2024, with the Securities and Exchange Commission by August 15, 2024, evidencing our compliance with the Equity Requirement. We made such filing in a timely manner.

Current wording

On July 5, 2024, we were notified that the Panel granted our request for continued listing on Nasdaq, subject to our filing of the Form 10-Q for the quarter ended June 30, 2024, with the Securities and Exchange Commission, evidencing our compliance with the Equity Requirement. We made such filing in a timely manner.

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 additional equity capital financing or financings and cost reductions to stay above the minimum threshold of the Equity Requirement. We anticipate that our new medical provider-focused 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, reduce costs sufficiently 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. 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 the sleep clinic, through our new strategic alliance 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.

Current wording

Net revenue. 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 at a point in time by shipping or delivering products to our VIPs or to the sleep clinic, through our new strategic alliance 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

Revenue increased approximately $1.2 million, or 9%, to approximately $15.0 million for the year ended December 31, 2024 compared to $13.8 million for the year ended December 31, 2023. Revenue during the year ended December 31,2024 was impacted by an increase of approximately $1.6 million in product revenue, coupled with a decrease of approximately $0.4 million in service revenue. The increase in product revenue is attributable to an increase of approximately $2.1 million in Guide sales to VIPs, followed by a decrease of approximately $0.5 million in C.A.R.E. appliance sales to VIPs. Additionally, we had a decrease in service revenue of approximately $1.4 million in our VIP enrollment revenue, and a decrease of approximately $0.3 million from Myofunctional revenue. This was offset by an increase of approximately $1.3 million in sponsorship, conference and training related revenue. BIS revenue decreased by $0.1 million to approximately $0.8 million, which was offset by an increase of $0.1 million from sleep testing services to approximately $1.3 million for the year ended December 31, 2024.

Current wording

Revenue increased approximately $2.4 million, or 16%, to approximately $17.5 million for the year ended December 31, 2025 compared to $15.0 million for the year ended December 31, 2024. This was due to an increase of approximately $4.8 million in Sleep testing services, and an increase of approximately $2.2 million of revenue generated from Vivos treatment to patients launched at two SCN locations. The increase in revenue during the year ended December 31, 2025 was offset by the decline in product revenue attributable to a decrease of approximately $1.4 million in appliance sales to VIPs, followed by an increase of approximately $1.0 million in tooth positioner sales to VIPs. Additionally, we had a decrease in service revenue of approximately $2.0 million in our VIP enrollment revenue, a decrease of approximately $0.7 million in sponsorship, conference and training related revenue, and a decrease of approximately $0.3 million in Myofunctional therapy and $0.2 million in BIS revenue.

Previous wording

During the year ended December 31, 2024, we enrolled 112 VIPs and recognized VIP enrollment revenue of approximately $2.5 million, a decrease of approximately 37% in enrollment revenue, compared to the year ended December 31, 2023, when we enrolled 150 VIPs for a total of approximately $3.9 million. Service revenue decrease in 2024 was due to changes to key inputs in our revenue recognition methodology, primarily estimated customer lives. As part of our annual process, the estimated customer lives are calculated separately for each year and was estimated to be 27 months in 2024, an increase of 17%, compared to 23 months in 2023, and an increase of 50% when compared to 18 months in 2022. Estimated customer lives impacts the amortization of revenue to be spread over a longer period of time, thus decreasing the revenue that is recognized over the same period when compared to December 31, 2023. Although such adjustment to customer lives negatively impacts our revenue recognition, increasing estimated customer lives results in customers staying active for a longer period of time, thus increasing our customer retention year-over-year. Additionally, our revenue was lowered by a sales strategy shift and focus toward sleep center affiliations, coupled with lower enrollments in late 2023 and all of 2024, which resulted in lower service revenue for the year ended December 31, 2024. This was offset by a higher incidence of breakage in contracts, which accelerated revenue recognition on several contracts for VIPs who did not complete their training during the first 90 days of their enrollment. Approximately $1.7 million in revenue was attributable to breakage during the year December 31, 2024, when compared to approximately $0.7 million during the year ended December 31, 2023.

Current wording

During the year ended December 31, 2025, we enrolled no VIPs and recognized VIP enrollment revenue of approximately $0.5 million, a decrease of approximately 80% in enrollment revenue due to the pivot to the new business model, compared to the year ended December 31, 2024, when we enrolled 112 VIPs for a total of approximately $2.5 million. Over the last year, our reliance on VIP enrollment revenue has diminished significantly as such revenues have decreased due to our pivot. Our revenue was impacted by the sales strategy shift and focus toward sleep center affiliations, coupled with lower enrollments in 2024 and 2025, which resulted in lower service revenue for the year ended December 31, 2025.

Previous wording

For the year ended December 31, 2024, we sold 16,182 oral appliance arches and guides for a total of approximately $7.9 million, a 26% increase in revenue from the year ended December 31, 2023, when we sold 8,240 oral appliance arches and guides for a total of approximately $6.3 million. The increase is directly attributable to a 71% decrease in discounts offered during the same period, with less than $0.2 million in discounts offered during the year ended December 31, 2024 when compared to approximately $0.7 million of discounts offered during the year ended December 31, 2023, coupled with an increase in Guide sales, which are lower revenue generating products when compared to Vivos appliances.

Current wording

For the year ended December 31, 2025, we sold 25,441 oral appliance arches and tooth positioners for a total of approximately $6.5 million, a 18% decrease in revenue from the year ended December 31, 2024, when we sold 16,182 oral appliance arches and tooth positioners for a total of approximately $7.9 million. The revenue decrease is directly attributable to an increase in discounts offered during the same period, with $1.6 million in discounts offered during the year ended December 31, 2025 when compared to approximately $0.2 million of discounts offered during the year ended December 31, 2024, coupled with an increase in tooth positioner sales, a lower price point product when compared to Vivos appliances.

Previous wording

Cost of sales increased by approximately $0.5 million, or 9%, to approximately $6.0 million for the year ended December 31, 2024, compared to approximately $5.5 million for the year ended December 31, 2023. This was primarily due to $1.2 million in higher costs directly related to an increase in lab fees from our primary vendors, offset by a decrease of less than $0.3 million related to lower costs associated with the ring lease program and a decrease of slightly over $0.3 million in VIP training, and a decrease of approximately $0.1 million for inventory obsolescence expense.

Current wording

Cost of sales increased by approximately $0.9 million, or 15%, to approximately $6.9 million for the year ended December 31, 2025, compared to approximately $6.0 million for the year ended December 31, 2024. This was primarily due to approximately $1.1 million in higher costs in diagnostic services related to new sleep center affiliations, and an increase of approximately $0.5 million related to additional staff associated with the sleep center affiliations.

Previous wording

For the year ended December 31, 2024, gross profit increased by approximately $0.7 million to $9 million. This increase was attributable to an increase in revenue of approximately $1.2 million offset by an increase in cost of sales of approximately $0.5 million. Gross margin remained constant at 60% for the year ended December 31, 2024, compared year ended December 31, 2023.

Current wording

For the year ended December 31, 2025, gross profit increased by approximately $1.5 million or 17% to $10.5 million. This increase was attributable to an increase in revenue of approximately $2.4 million, offset by an increase in cost of sales of approximately $0.9 million. Gross margin remained constant at 60% for the year ended December 31, 2025, and 2024.

Previous wording

Sales and marketing expense decreased by $0.7 million to approximately $1.7 million for the year ended December 31, 2024, compared to $2.5 million for the year ended December 31, 2023. This decrease was primarily driven by a $0.4 million decrease in commissions, as well as a $0.3 million decrease related to a reduction in website development, materials and product samples as well as print media and marketing supplies, including conventions and tradeshow expenses.

Current wording

Sales and marketing expense decreased by $0.3 million to $1.4 million for the year ended December 31, 2025, compared to approximately $1.7 million for the year ended December 31, 2024. This decrease was primarily driven by a $0.2 million decrease in commissions, as well as a $0.1 million decrease in conventions and tradeshow expenses.

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 $11.1 and $13.6 million for the years ended December 31, 2024 and 2023, respectively, resulting in an accumulated deficit of approximately $104.2 million as of December 31, 2024.

Current 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 $21.2 million and $11.1 million for the years ended December 31, 2025 and 2024, respectively, resulting in an accumulated deficit of approximately $125.4 million as of December 31, 2025.

Previous wording

Net cash used in operating activities amounted to approximately $12.7 and $11.9 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had total liabilities of approximately $7.3 million as compared with $10.3 million as of December 31, 2023.

Current wording

Net cash used in operating activities amounted to approximately $15.3 and $12.7 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had total liabilities of approximately $26.7 million as compared with $7.3 million as of December 31, 2024.

Previous wording

As of December 31, 2024, we had approximately $6.3 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 issuance of these financial statements. Without additional financing, these factors raise substantial doubt regarding our ability to continue as a going concern.

Current wording

As of December 31, 2025, we had approximately $2.0 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 issuance of these financial statements. Without additional financing, these factors raise substantial doubt regarding our ability to continue as a going concern.

Previous wording

We have implemented cost savings measures that lead to reduced impact to cash used in operations. However, sales did not grow in the year ended December 31, 2023 or in 2024 as anticipated, as our product offerings and distribution strategies continue to be improved and refined. As such, we have raised equity capital in late 2023 and throughout 2024 and will be required to obtain additional financing to satisfy our cash needs and bolster our stockholders’ equity for Nasdaq compliance purposes, as management continues to work towards increasing revenue to achieve cash flow positive operations in the foreseeable future.

Current wording

We have implemented cost savings measures that have reduced cash used in operations. However, sales did not grow in the year ended December 31, 2024 or in 2025 as anticipated, as our product offerings and distribution strategies continue to be improved and refined. As such, we raised equity capital throughout 2024 and 2025 and will be required to obtain additional financing to satisfy our cash needs and bolster our stockholders’ equity for Nasdaq compliance purposes, as management continues to work towards increasing revenue to achieve cash flow positive operations in the foreseeable future.

Previous wording

Until a state of cash flow positivity is reached, management is reviewing all options to obtain additional financing to fund operations. This financing is expected to come primarily from the issuance of equity securities in order to sustain operations until we can achieve profitability and positive cash flows, if ever. We expect that our new sales and marketing alliance with Rebis (and similar alliances or acquisitions of sleep centers or other providers we may undertake) have the potential to increase patient volume, drive top line revenue and lower customer acquisition costs and overhead. However, there can be no assurances that this new model will have effects we anticipate, and our relatively low cash on hand could lead us to again requiring additional funding. There is a risk that adequate additional funding will be available on favorable terms, or at all. If such funds are not available in the future, or that if our new model does not result in the patient volume and financial results within the expected timelines, we may also be required to delay, significantly modify or terminate some or all of our operations, all of which could have a material adverse effect on us and our stockholders.

Current wording

Until we attain positive cash flow, our management is reviewing all options to obtain additional financing to fund our operations. We financed the SCN acquisition from the issuance of senior secured debt and equity securities. As reflected in our increase in revenue for the year ended December 31, 2025, we expect the SCN Acquisition will ultimately allow our company to achieve positive cash flows; however, there is a risk this may not occur. We originally expected the Strategic Alliance Agreement (“SAA”) with Rebis Health entered into in June 2024 to increase patient volume, drive top line revenue and lower customer acquisition costs and overhead. However, due to ongoing delays at Rebis Health that are beyond our control, we are currently re-evaluating expectations under this SAA. As such, we seek to acquire other sleep centers in transactions similar to the SCN Acquisition or enter into other strategic alliances with improved terms. There can be no assurances that adequate additional funding will be available on favorable terms, or at all. If such funds are not available in the future, or the SAA or similar alliances or acquisitions do not result in the patient volume, appliance sales and financial results within the timeframes we expect, we may be required to delay, significantly modify or terminate some or all of our operations, all of which could have a material adverse effect on us and our stockholders.

Previous wording

Net cash used in operating activities of approximately $12.7 million for the year ended December 31, 2024 is an increase of approximately $0.7 million compared to net cash used in operating activities of approximately $11.9 million for the year ended December 31, 2023. This increase is due primarily to a decrease of approximately $1.8 million in accounts payable, decrease of approximately $0.5 million in accrued expenses, a decrease of approximately $1.2 million for the employee retention credit liability which was not present in 2024, a decrease in accounts receivable of approximately $0.4 million offset by the decrease in the allowance for doubtful accounts, an decrease in prepaids of approximately $1.0 million, and a decrease in fair value of common stock and warrants issued for services of approximately $0.7 million. This was offset by a decrease in our net loss of approximately $2.5 million, a favorable net change in the fair value of warrant liability of approximately $10.2 million, offset by day-one non-operating warrant expense of approximately $6.5 million.

Current wording

Net cash used in operating activities of approximately $15.3 million for the year ended December 31, 2025 which represents an increase of approximately $2.6 million compared to net cash used in operating activities of approximately $12.7 million for the year ended December 31, 2024. This increase is due primarily to an increase of approximately $3.3 million in accrued expenses, an increase of approximately $1.6 million in accounts payable, an increase of approximately $0.9 million in contract liability, an increase of approximately $0.9 million in other liabilities, an increase of $0.7 million for depreciation and amortization, an increase of approximately $0.2 million for prepaid expenses and other current assets, and an increase of approximately $0.2 million for net operating lease liabilities. These are offset by an increase in our net loss of approximately $10.1 million, a decrease of approximately $0.1 million for stock-based compensation and a decrease of approximately $0.1 million for deposits.

Previous wording

For the year ended December 31, 2024, net cash used in investing activities consisted of capital expenditures for software of $0.6 million related to the development of software for internal use, expected to be placed in service in 2025. This compares to net cash used in investing activities for the year ended December 31, 2023 of $0.9 million due to capital expenditures for internally developed software, as well as a purchase of a patent portfolio in February 2023.

Current wording

For the year ended December 31, 2025, net cash used in investing activities consisted of capital expenditures of approximately $5.2 million for the SCN Acquisition in June 2025, assets placed in service in 2025 related to the integration of SCN and capital expenditures of approximately $2.3 million related to the development of software for internal use that was also placed in service in the first quarter of the fiscal year ended December 31, 2025. This compares to net cash used in investing activities for the year ended December 31, 2024 of $0.6 million due to capital expenditures for the development of software for internal use.

Previous wording

Net cash provided by financing activities of $17.9 million for the years ended December 31, 2024, is attributable to proceeds of $19.2 million from the issuance of Common Stock and Warrants, net of approximately $1.4 million of professional fees and other issuance costs, in our February warrant inducement, as well as the June, September and December private placements. This compares to net cash used in investing financing for the year ended December 31, 2023 of $10.9 million, attributable to gross proceeds of $12.0 million from the issuance of Common Stock, net of approximately $1.1 million of professional fees and other issuance costs, from our private placement in January and November 2023.

Current wording

Net cash provided by financing activities of $18.6 million for the years ended December 31, 2025, is attributable to proceeds of approximately $5.6 million from the issuance of common stock, approximately $10.7 million from the issuance of debt, approximately $2.3 million from the issuance of warrants, and approximately $0.9 million from the exercise of warrants, net of approximately $0.8 million of professional fees and other issuance costs. This compares to net cash provided by investing financing for the year ended December 31, 2024 of $17.9 million, attributable to proceeds of $19.2 million from the issuance of common stock and warrants, net of approximately $1.4 million of professional fees and other issuance costs, in our February 2024 warrant inducement, as well as the June, September and December 2024 private placements.

Previous wording

Our accounting policies are more fully described in Note 1 of the Consolidated Financial Statements. As disclosed in Note 1, the accompanying consolidated financial statements, which include the accounts of the Company and its wholly owned subsidiaries (BioModeling, First Vivos, Vivos Therapeutics (Canada) Inc., Vivos Management and Development, LLC, Vivos Del Mar Management, LLC, Vivos Modesto Management, LLC, Vivos Therapeutics DSO LLC, a Colorado limited liability company, and Vivos Airway Alliances, LLC, a Colorado limited liability company), are prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). All significant intercompany balances and transactions have been eliminated in consolidation.

Current wording

Our accounting policies are more fully described in Note 1 of the Consolidated Financial Statements. As disclosed in Note 1, the accompanying consolidated financial statements, which include the accounts of the Company and its wholly owned subsidiaries (BioModeling, First Vivos, Vivos Therapeutics (Canada) Inc., Vivos Management and Development, LLC, Vivos Therapeutics DSO LLC, a Colorado limited liability company, Vivos Airway Alliance, LLC, a Colorado limited liability company, Vivos Providers Network, LLC, a Colorado limited liability company, Airway Integrated Management Company, LLC and Airway Intelligence Center, LLC. Additionally, Sleep Center of Nevada, Rachakonda & Associates, PLLC, Nevada Sleep and Airway, Patterson & Associates, PLLC, AIM – Detroit, LLC, Sleep Medicine of Detroit, P.C., and Sleep Dentistry of Detroit, P.C.), are not wholly owned but are controlled by Vivos and are prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). All significant intercompany balances and transactions have been eliminated in consolidation.

Previous wording

We are an “emerging growth company” (an “EGC”), as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and as a result, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs. These include, but are not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Current wording

Effective January 1, 2026, the Company is no longer an “emerging growth company” (an “EGC”), as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and must comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).

Previous wording

We generate revenue from the sale of products and services. A significant majority of our revenues are generated from enrolling dentists as either (i) Guided Growth and Development VIPs; (ii) Lifeline VIPs; (iii) combined Guided Growth and Development and Lifeline VIPs; or Premier Vivos Integrated Providers (“Premier VIPs”). Prior to the second quarter of 2023, the majority of VIP enrollments were Premier VIPs. The other, lower priced enrollments were piloted in fiscal quarters prior to second quarter of 2023, and on a limited basis. They were officially adopted during the second quarter of 2023. For each VIP program, revenue is recognized when control of the products or services is transferred to customers (i.e., VIP dentists ordering such products or services for their patients) in a manner that reflects the consideration we expect to be entitled to in exchange for those products and services.

Current wording

We generate revenue from the sale of products and services. Historically, a significant majority of our revenues are generated from enrolling dentists as either (i) Guided Growth and Development VIPs; (ii) Lifeline VIPs; (iii) combined Guided Growth and Development and Lifeline VIPs; or Premier Vivos Integrated Providers (“Premier VIPs”). Prior to the second quarter of 2023, the majority of VIP enrollments were Premier VIPs. The other, lower priced enrollments were piloted in fiscal quarters prior to second quarter of 2023, and on a limited basis. They were officially adopted during the second quarter of 2023. For each VIP program, revenue is recognized when control of the products or services is transferred to customers (i.e., VIP dentists ordering such products or services for their patients) in a manner that reflects the consideration we expect to be entitled to in exchange for those products and services.

Previous wording

We review its VIP enrollment contracts from a revenue recognition perspective using the 5-step method outlined above. All program enrollees, irrespective of their level of enrollment, are commonly referred to as VIPs, unless it is necessary to specify their particular program. Once it is determined that a contract exists (i.e., a VIP enrollment agreement is executed and payment is received), service revenue related to VIP enrollments is recognized when the underlying services are performed. The price of the Premier VIP enrollment that the VIP pays upon execution of the contract is significant, running at approximately $23,200, with different entry levels for the various programs described above. Unearned revenue reported on the balance sheet as contract liability represents the portion of fees paid by VIP customers for services that have not yet been performed as of the reporting date and are recorded as the service is rendered. we recognize this revenue as performance obligations are met. Accordingly, the contract liability for unearned revenue is a significant liability for us. Provisions for discounts are provided in the same period that the related revenue from the products and/or services is recorded.

Current wording

We review our VIP enrollment contracts from a revenue recognition perspective using the 5-step method outlined above. All program enrollees, irrespective of their level of enrollment, are commonly referred to as VIPs, unless it is necessary to specify their particular program. Once it is determined that a contract exists (i.e., a VIP enrollment agreement is executed and payment is received), service revenue related to VIP enrollments is recognized when the underlying services are performed. The price of the Premier VIP enrollment that the VIP pays upon execution of the contract is significant, running at approximately $23,200, with different entry levels for the various programs described above. Unearned revenue reported on the balance sheet as contract liability represents the portion of fees paid by VIP customers for services that have not yet been performed as of the reporting date and are recorded as the service is rendered. we recognize this revenue as performance obligations are met. Accordingly, the contract liability for unearned revenue is a significant liability for us. Provisions for discounts are provided in the same period that the related revenue from the products and/or services is recorded.

Previous wording

The right to sell is similar to a license of intellectual property because without it the VIP cannot purchase appliances from us. The right to sell performance obligation includes the Vivos training and enrollment materials which prepare dentists for treating their patients using The Vivos Method.

Current wording

The right to sell is similar to a license of intellectual property, because without the right, the VIP cannot purchase appliances from us. The right to sell performance obligation includes the Vivos training and enrollment materials which prepare dentists for treating their patients using The Vivos Method.