Vivos Therapeutics, Inc.
For the period ended Mar 31, 2026. Filed May 20, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 20, 2026
VVOS$0.09-8.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-19.
0001493152-25-024253
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-20.
0001493152-26-024650
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 113 previous paragraphs and 76 current paragraphs.
23 unchanged; 25 reworded; 26 added; 64 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
In June 2025, we acquired all assets, including operating assets such as sleep testing, diagnostics, and treatment centers of SCN. The Acquisition marked a milestone in the pivot to our medical provider-focused sales, marketing distribution model for our innovative OSA appliances. Under the new model, SCN will provide sleep disorder patients with the opportunity to be candidates for our advanced, proprietary and FDA-cleared CARE oral medical devices, oral appliances and additional adjunctive therapies and methods. Under customary agreements designed to comply with applicable corporate practice of medicine law, our operation of SCN allows us to manage and capture both diagnostic and diagnostic consulting revenues, representing new higher margin revenue streams for us, as well as potential Vivos appliance and related product and service revenue.
Current report
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.
Current report
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.
Current report
Because of our 2024 marketing and distribution business model pivot, which was accelerated by our June 2025 acquisition of SCN, we have become primarily 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.
Current report
We recognize revenue on VIP enrollments once the contract is executed, payment is received, and as our performance obligations are satisfied in accordance with ASC 606.
Current report
Product Sales Revenue. Vivos treatment “case starts” are paramount to our business, as case starts lead to appliance orders and related revenue. Once a provider is fully trained, we encourage them to start cases. However, our historic experience had been that VIPs typically start slowly as they introduce The Vivos Method into their practices. The slow acceptance rate Vivos appliances with providers led us to consider other business models, most notably the medical provider-focused alliance marketing and distribution model announced in 2024 and the 2025 acquisition of SCN, to provide services and sell appliance product. In our new model, our biggest challenge to date has been hiring, equipping and training personnel at SCN locations in the Vivos Method, as well as insurance reimbursement. Navigating these challenges has led to increases in service revenue (including sleep testing) and our goal is to increase case starts and appliance sales as well. Since our SCN acquisition, we have been unable to generate sufficient revenues to pay for all of our expenses, including debt service, so our business primary goal is to increase revenues through SCN and also consider other acquisitions or alliances as a means of increasing revenue from services and appliance sales.
Current report
In addition, an important aspect of our strategy to increase product revenues relates to the products and related intellectual property we acquired in March 2023 from Advanced Facialdontics, LLC (“AFD”), including a custom single arch device with an FDA 510(k) clearance for treating TMD and/or Bruxism (teeth grinding or clenching). We have rebranded the AFD products as Vivos Versa, Vivos Vida and Vivos Vida Sleep.
Current report
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 2026.
Current report
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.
Current report
Potential Nasdaq Delisting. Given that our stockholders’ equity at December 31, 2025 and March 31, 2026 was less than $2.5 million, we are presently not in compliance with the Nasdaq Stock Market’s (“Nasdaq”) minimum stockholders’ equity requirement (the “Equity Requirement”). We are seeking to regain compliance by raising new funding in the form of equity and reducing costs. However, we will be faced with delisting proceedings which will distract management and cost resources to remedy.
Current report
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.
Current report
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.
Current report
Prior to the date of the Hearing, we effectuated a reverse stock split of our issued and outstanding shares of common stock at a ratio of 1-for-25 (the “Reverse Stock Split”). The Reverse Stock Split became effective on October 25, 2023, and our common stock began trading on a post-Reverse Stock Split basis on the Nasdaq on October 27, 2023. To satisfy the Minimum Bid Requirement, our common stock was required to trade at above $1.00 per share for at least 10 trading days, and this was achieved on November 9, 2023. We therefore have regained compliance with the Minimum Bid Requirement.
Current report
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.
Current report
On April 17, 2026, we received a letter (“Letter”) from the Listing Qualifications Staff (the “Staff”) of Nasdaq indicating that the Company’s stockholders’ equity as reported in its Annual Report on Form 10-K for the year ended December 31, 2025 (the “Form 10-K”), did not satisfy the continued listing requirement under the Equity Requirement. As reported in its Form 10-K, as of December 31, 2025 we had a negative stockholders’ equity of approximately $1.55 million. The Staff’s notice has no immediate impact on the listing of the Company’s common stock on Nasdaq.
Current report
We have taken affirmative steps since December 31, 2025 to remedy the Minimum Stockholders’ Equity Requirement. Specifically, as previously reported, the Company engaged in two equity financing transactions during the first quarter ended March 31, 2026 for aggregate gross proceeds of $6.8 million: a $4.6 million warrant exercise inducement transaction and $2.25 million private placement with an existing investor. While these equity financings do not in and of themselves cure the Minimum Stockholders’ Equity Requirement deficiency, they demonstrate our ability to raise funding to bolster its stockholders’ equity.
Current report
In accordance with the Nasdaq Listing Rules, we have 45 calendar days, or until June 1, 2026, to submit a plan to regain compliance with the Stockholders’ Equity Requirement, which the Company plans to timely submit for the Staff’s consideration. If the plan is accepted, the Staff may grant us an extension period of up to 180 calendar days from the date of the deficiency notice (or through October 14, 2026) to regain compliance with the Minimum Stockholders’ Equity Requirement.
Current report
In the case of product purchased by clinics managed by our subsidiary for inclusion in a treatment protocol, the sales price of the Vivos device is recognized by us and becomes a component of cost of sales of the treatment center service provided to the patient. For the treatment centers, the intercompany account is used to fulfil the account payable obligation and recognize the expense of the goods and services in cost of sales.
Current report
Revenue increased approximately $2.1 million, or 70%, to approximately $5.1 million for the three months ended March 31, 2026 compared to $3.0 million for the three months ended March 31, 2025. This was due to an increase of approximately $2.0 million in sleep testing services and an increase of approximately $0.9 million of revenue generated from Vivos treatment to patients launched at two SCN locations. The increase in revenue during the three months ended March 31, 2026 was offset by the decline in product revenue attributable to a decrease of approximately $0.9 million in appliance sales to VIPs, offset by an increase of approximately $0.5 million in tooth positioner sales to VIPs. Additionally, we had a decrease in service revenue of approximately $0.2 million in our VIP enrollment revenue, a decrease of approximately $0.1 million in sponsorship, conference and training related revenue, and a decrease of approximately $0.1 million in Myofunctional therapy and BIS revenue.
Current report
During the three months ended March 31, 2026, we enrolled no VIPs and recognized VIP enrollment revenue of $37 thousand, a decrease of approximately 84% in enrollment revenue due to the pivot to the new business model, compared to the three months ended March 31, 2025, when we recognized approximately $0.2 million. Over the last year, our reliance on VIP enrollment revenue has diminished significantly as such revenues have decreased due to the pivot. Our revenue was impacted by the sales strategy shift and focus toward sleep center affiliations, coupled with no enrollments in 2025, which resulted in almost no service revenue from VIP enrollments for the three months ended March 31, 2026.
Current report
For the three months ended March 31, 2026, we sold 5,304 oral appliance arches and tooth positioners for a total of approximately $1.4 million, a 21% decrease in revenue from the three months ended March 31, 2025, when we sold 3,735 oral appliance arches and tooth positioners for a total of approximately $1.8 million. The revenue decrease is directly attributable to an increase in discounts offered during the same period, with $0.5 million in discounts offered during the three months ended March 31, 2026 compared to approximately $0.2 million offered during the three months ended March 31, 2025, coupled with an increase in tooth positioner sales at a lower price point product when compared to Vivos appliances.
Current report
Cost of sales increased by approximately $0.6 million, or 38%, to approximately $2.1 million for the three months ended March 31, 2026, compared to approximately $1.5 million for the three months ended March 31, 2025. This was primarily due to approximately $0.7 million in higher costs related to additional staff associated with the sleep center affiliations and an increase of approximately $0.1 million in diagnostic services related to new sleep center affiliations.
Current report
Sales and marketing expense decreased by $0.1 million to $0.2 million for the three months ended March 31, 2026, compared to approximately $0.3 million for the three months ended March 31, 2025. This decrease was primarily driven by a $0.1 million decrease in media marketing and video production expenses as a result of our strategic pivot which allows us to rely less heavily on sales and marketing compared with the legacy VIP model.
Current report
Depreciation and amortization expense was approximately $0.5 million for the three months ended March 31, 2026, compared to approximately $0.2 million for the three months ended March 31, 2025. Depreciation and amortization increased due to an increase in depreciable assets related to the new sleep center asset acquisition and affiliations.
Current report
We have implemented cost savings measures that have reduced cash used in operations. However, sales did not grow in the 2025 and for the three months ended March 31, 2026 as much as we had anticipated or in amounts sufficient to cover our expenses, as we continued to integrate SCN into our operations and refine and improve our product offerings and distribution strategies. As such, notwithstanding that we have raised equity capital throughout the fiscal year ended December 31, 2025 and through the first quarter of 2026, we will be required to obtain additional financing to satisfy our business 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 report
In addition, to bolster our stockholders’ equity for Nasdaq compliance purposes, we are actively evaluating ways to restructure our senior debt (incurred in 2025 in connection with the SCN acquisition) to reduce our debt service obligations and reclassify some of the debt as equity on our balance sheet.
Removed paragraphs (64)
Previous report
In June 2024, as our initial entry into our new sales, marketing and distribution model, we entered into our first contractual alliance with Rebis Health, a sleep center operator in Colorado. Revenues from this arrangement have not developed as we had expected for many reasons beyond our control, but we learned important lessons which have led to changes to this model.
Previous report
In an important milestone in our business model pivot we undertook during 2024 and 2025, on June 10, 2025, we acquired the net operating assets of R.D. Prabhu-Lata K. Shete MDs, LTD., a Nevada professional corporation d/b/a The Sleep Center of Nevada (“SCN”) pursuant to an Asset Purchase Agreement dated April 15, 2025 (the “SCN Purchase Agreement”) whereby we agreed to purchase the net operating assets and liabilities related to SCN’s sleep testing, diagnostics, and treatment centers (the “Acquisition”) from SCN’s shareholders Prabhu Rachakonda, M.D. (“Dr. Prabhu”) and Lata K. Shete, M.D.
Previous report
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 report
Total consideration for SCN equaled to a sum of $8.7 million consisting of $6.0 million in cash consideration, 607,287 shares of Vivos common stock with a fair value of $1.3 million, and contingent “earn out” consideration with a fair value of $1.4 million payable upon the achievement of a financial milestone as specified in the SCN Purchase Agreement.
Previous report
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 report
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. By operating Sleep and Airway Medicine Centers (as we do through SCN), we generate product revenue though the sale of our appliances and oral guides as well as revenue from providing services to patients under the administration arrangement described below. Because of our acquisition of SCN, we generated service revenue which we call “treatment center” revenue, consisting of $1.3 million and $1.5 million for the three and nine months ended September 30, 2025 respectively. Treatment center revenue is expected to entirely replace our reliance on VIP subscription revenue, and we expect to grow treatment center revenue over time as more patients are provided services through our Sleep and Airway Medicine Centers. See Note 4 to the accompanying unaudited financial statements for further information on the composition of our revenues.
Previous report
The below provides a summary of the Acquisition and the contractual arrangements we had entered with SCN in connection with the Acquisition:
Previous report
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 report
As of June 10, 2025, but effective as of June 2, 2025, pursuant to the SCN Purchase Agreement, our wholly-owned subsidiary AIM, entered into Practice Administration Agreements (“PAAs”) respectively with SCN (the “SCN PAA”) and the Sleep Center of Nevada, Rachakonda & Associates, PLLC, a newly formed Nevada professional limited liability company owned and controlled by Dr. Prabhu (“SCN PLLC” and the practice management agreement with SCN PLLC, the “SCN PLLC PAA”). SCN PLLC was formed for the purpose of integrating the medical practices of SCN with the Company in connection with the Acquisition. The principal purpose of the PAAs is to allow AIM to manage the SCN practice in compliance with applicable federal and Nevada laws, rules and regulations relating to the corporate practice of medicine (the “CPM Laws”). AIM intends to conduct an orderly transition of the operation of the SCN practice to SCN PLLC.
Previous report
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 report
Pursuant to the SCN Purchase Agreement, SCN had entered into a physician employment agreement (the “Physician Employment Agreement”) with Dr. Prabhu. Under the Physician Employment Agreement, Dr. Prabhu shall perform his duties as a physician in SCN (or SCN affiliated companies) and comply with all CPM Laws. The Physician Employment Agreement provides an annual compensation of $400,000 and bonus incentives, payable in cash, should SCN achieve certain annual revenue targets in a calendar year. The Physician Employment Agreement also affords Dr. Prabhu a board observation right, whereby Dr. Prabhu is entitled to receive advanced notices and attend our board of directors meetings.
Previous report
Below is a summary of financing arrangements we entered into to fund the Acquisition and our working capital:
Previous report
Senior Secured Loan. On June 9, 2025, concurrently with the Acquisition, we entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with Streeterville Capital, LLC, a Utah limited liability company (“Lender”), pursuant to which we issued and sold to Lender a Secured Promissory Note (the “Note”) in the original principal amount of $8.3 million (the “Principal Amount”, and the financing as described herein, the “Note Financing”). The Principal Amount includes an original issue discount of $0.7 million. We also agreed to pay $50 thousand to the Lender to cover its legal fees, accounting costs, due diligence, monitoring, and other transaction costs, each of which was added to the Principal Amount, resulting in a purchase price of for the Note and gross proceeds to the Company of $7.5 million received by the Company. The Note is not convertible into shares of Common Stock or otherwise.
Previous report
The Note accrues interest at a rate of nine percent (9%) per annum and has a maturity date of eighteen (18) months from the issuance of the Note, unless earlier prepaid, redeemed or accelerated in accordance with its terms prior to such date. We used the net proceeds from the Note Financing for funding the cash portion of the Acquisition purchase price and to support ourselves in connection with the Acquisition. No placement agent was used in connection with the Note Financing.
Previous report
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 report
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 report
Additionally, since the Note remained outstanding on the one hundred twenty (120) days from the anniversary of the issuance, in October 2025 we incurred a one-time monitoring fee equal to $1,495,000, which is 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 was added to the Principal Amount.
Previous report
The Note provides for customary events of default (each as defined in the Note, an “Event of Default”), including, among other things, the event of nonpayment of principal, interest, fees or other amounts, a representation or warranty proving to have been incorrect when made, failure to perform or observe covenants as specified in the Note, failure to obtain prior written consent from the Lender on a fundamental transaction (including consolidations, mergers, and certain changes in control of the Company) undertaken by us, and the occurrence of a bankruptcy, insolvency or similar event affecting us. Upon the occurrence of certain Events of Default related to the occurrence of a bankruptcy, insolvency or similar event affecting us, the outstanding Principal Amount of the Note will become automatically due and payable. Additionally, upon the occurrence of any Events of Default, interest shall begin accruing on the outstanding balance of the Note from the date of the Event of Default equal to the lesser of twenty-two percent (22%) per annum and the maximum rate allowable under law.
Previous report
Private Placement Financing. On June 9, 2025, in connection with the Acquisition, we entered into a Securities Purchase Agreement (the “PIPE SPA”) with V-Co Investors 2 LLC, a Wyoming limited liability company (“V-Co 2”). V-Co 2 is an affiliate of New Seneca Partners Inc., a Michigan corporation (“Seneca”), a leading independent private equity firm and an existing significant investor in our company.
Previous report
Pursuant to the PIPE SPA, we sold to V-Co 2 in a private placement offering (the “PIPE Offering”): (i) 828,000 shares (the “PIPE Shares”) of our common stock, (ii) a pre-funded warrant to purchase 725,258 shares of our common stock (the “Pre-Funded Warrant”, with the shares of common stock underlying the Pre-Funded Warrant being referred to as the “PFW Shares”), and (iii) a Common Stock Purchase Warrant to purchase up to 2,329,886 shares of our common stock (the “Common Stock Purchase Warrant, and together with the Pre-Funded Warrant, the “Warrants”, and with the shares of Common Stock underlying the Common Stock Purchase Warrant being referred to as the “Warrant Shares”).
Previous report
V-Co 2 paid a purchase price of $2.42 for each PIPE Share and Pre-Funded Warrant Share and associated Common Stock Purchase Warrant, with such price being established for purposes of compliance with the listing rules of the Nasdaq Stock Market LLC. The PIPE Offering closed on June 9, 2025. We received $2.7 million in cash proceeds upon the closing of the PIPE Offering. Additionally, the $1.1 million bridge note entered into by the Company and V-Co 2 on May 20, 2025, the terms of which were previously reported on Current Report on Form 8-K filed on May 23, 2025, automatically converted into the PIPE Offering, for total gross proceeds of $3.7 million upon conversion of the bridge note. The gross proceeds exclude an original issue discount of $0.1 million paid by us in connection with issuing the bridge note. We are using the net proceeds from the PIPE Offering to support the integration of SCN into our business and for general working capital purposes. No placement agent was used in connection with the PIPE Offering.
Previous report
The Common Stock Purchase Warrant has a term ending on or before June 9, 2029, an exercise price of $2.23 per share and became exercisable immediately as of the date of issuance. The Pre-Funded Warrant has a term ending on the complete exercise of the Pre-Funded Warrant, an exercise price of $0.0001 per share and became exercisable immediately as of the date of issuance. The Warrants also contain customary stock-based (but not price-based) anti-dilution protection as well as beneficial ownership limitations preventing Seneca or its affiliates from exercising Warrants if such exercise would result in Seneca or its affiliates from owning in excess of 19.99% of our then outstanding common stock.
Previous report
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 report
*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 report
As we had anticipated during the initial stage of SCN integration, patient demand is exceeding our capacity to process and treat patients under our model which includes offering SCN patients Vivos treatment options. Our goal is to ramp up our systems and operations by strategically deploying additional personnel and resources to meet this demand. We currently expect that some of SCN’s locations, including the two already integrated, to be primary treatment hubs with larger patient capacities, with the remaining being referral centers (which could be relocated facilities) requiring less time and effort to integrate.
Previous report
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 report
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 report
Our initial average case revenue and acceptance rate for Vivos treatment at SCN to date suggest that each SO team could potentially generate collections in excess of $500,000 per month, net of adjustments, with contribution margins above 50%. In addition to current Vivos diagnostic and treatment options, we expect to be able to offer SCN patients additional diagnostic and treatment services that could generate additional high-margin revenue. It will take time for each SO team to reach full capacity, if at all, so the above figures should be viewed as our current best estimates based on our limited operating experience and actual performance to date, rather than projections of our future performance. That said, we continue to gather additional data that will allow us to refine our model and optimize operations, and results of operations, in future periods.
Previous report
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. These lessons include our experience with the time needed to train medical providers in the use of Vivos diagnostic and treatment devices, and the challenges associated with validating issuance coverage. Further, we have noticed trends in our SCN operations that provide us with insights into how we can optimize such operations. For example, after a patient elects to proceed with treatment following a diagnosis of OSA, there is typically a delay between the recognition of diagnostic revenue and the subsequent recognition of treatment revenue related to the use of our appliances. Based on our relatively limited experience to date, this lag generally ranges from approximately one month to four and a half months following treatment acceptance. The timing difference is primarily attributable to the completion of prerequisite clinical procedures and the production lead time required to manufacture and fit the appliance.
Previous report
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 report
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 report
We believe this revised management model can provide financial upside for our company with limited capital expenditures, and with what we believe are manageable risks. At the same time, this revised management model creates the potential for economic upside for sleep center or medical practice collaborators who are currently not interested in an outright sale to our company. Moreover, we believe the overall quality of care and service to the OSA patients of our medical provider collaborators can improve by having more treatment options available. The revised management model, as in the previous model, is designed to be compliant with current state and federal healthcare, anti-kickback, and corporate practice of medicine and dentistry regulations.
Previous report
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 report
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 report
*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 report
Potential Nasdaq Delisting. As previously reported, we were previously subject to a Nasdaq Stock Market (“Nasdaq”) listing deficiencies related to Nasdaq’s $2,500,000 minimum stockholders’ equity requirement (the “Minimum Stockholders’ Equity Requirement”).
Previous report
Net revenue
Previous report
New Treatment Center Distribution Model. The quarter ended September 30, 2025 represented the first full quarter of revenues generated from SCN and our agreements related to the Acquisition, leading to a significant increase of year over year revenue. Under this new model, VIP enrollment revenue has been substituted with a new revenue stream we call “treatment center” revenue, consisting of Vivos treatment protocols including head and neck exams, cone beam tomography, laser and myofunctional therapy, and Vivos appliances of approximately $1.3 million in the quarter.
Previous report
Comparison of the three and nine months ended September 30, 2025 and 2024
Previous report
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.
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Reworded paragraphs (25)
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 of what we callThe 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 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.
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 our legacy VIP and current alliance/acquisition sales, marketing and distribution models.
Current wording
See Note 1 to the accompanying financial statements for additional background information on our Company and current product and service offerings.
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 2025 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
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.
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 2025 or year to date, 2025.
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, have an impact on our revenue, earnings and access to capital.
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 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.
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
On May 16, 2024, we received a 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. On June 27, 2024, we met with the Nasdaq Hearing Panel (the “Hearing Panel”) to discuss our past, current, and anticipated future compliance with the Equity Requirement, and requested the continued listing of its securities on Nasdaq. 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 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
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.
Current wording
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
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.
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
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.
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. It also includes freight costs, fulfillment, distribution, and warehousing costs related to products sold.
Previous wording
Other income. Other income relates to interest income and the excess warrant fair value and change in fair value of warrant liability.
Current wording
Other income. Other income relates to the excess warrant fair value and change in fair value of warrant liability.
Previous 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):
Current wording
Our consolidated statements of operations for the three months ended March 31, 2026 and 2025 are presented below (dollars in thousands):
Previous 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.
Current wording
For the three months ended March 31, 2026, gross profit increased by approximately $1.5 million or 103% to $3.1 million. This increase was attributable to an increase in revenue of approximately $2.1 million, offset by an increase in cost of sales of approximately $0.6 million. Gross margin increased to 60% for the three months ended March 31, 2026, when compared to 50% for the three months ended March 31, 2025.
Previous 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.
Current wording
General and Administrative expenses increased $4.1 million to approximately $9.0 million for the three months ended March 31, 2026, compared to approximately $4.9 million for the three months ended March 31, 2025. This increase was primarily due to approximately $1.5 million in costs associated with running SCN’s operations. In addition, approximately $0.9 million related to professional fees, approximately $1.5 million associated with salaries and wages for Vivos personnel and related Vivos treatment centers and infrastructure costs of approximately $0.2 million when compared to the three months ended March 31, 2025.
Previous 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.
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 $7.7 million and $3.9 million for the three months ended March 31, 2026 and 2025, respectively, resulting in an accumulated deficit of approximately $133 million as of March 31, 2026.
Previous 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.
Current wording
Net cash used in operating activities amounted to approximately $6.0 and $3.8 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had total liabilities of approximately $26.3 million as compared with $26.7 million as of December 31, 2025.
Previous 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.
Current wording
As of March 31, 2026, we had approximately $2.1 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 issuance of these financial statements. As of the date of this Report, we have both near and long term cash requirements to operate our business, and without additional financing, these factors raise substantial doubt regarding our ability to continue as a going concern.
Previous 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 during the three months ended September 30, 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.
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 three months ended March 31, 2026, 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 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 if 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
The following table presents a summary of our cash flow for the three and nine months ended September 30, 2025 and 2024 (in thousands):
Current wording
The following table presents a summary of our cash flow for the three months ended March 31, 2026 and 2025 (in thousands):
Previous wording
Net cash used in operating activities of approximately $11.5 million for the nine months ended September 30, 2025 an increase of approximately $1.7 million compared to net cash used in operating activities of approximately $9.8 million for the nine months ended September 30, 2024. This increase is due primarily to a $6.0 million increase in net loss for the nine months ended September 30, 2025 and decrease in contract liabilities of approximately $0.5 million, offset by an increase in depreciation and amortization of approximately $0.4 million, an increase of approximately $2.0 million in accounts payable, an increase of approximately $1.0 million in other liabilities, and an increase of approximately $0.6 million in interest expense on a promissory note.
Current wording
Net cash used in operating activities of approximately $6.0 million for the three months ended March 31, 2026 which represents an increase of approximately $2.4 million compared to net cash used in operating activities of approximately $3.8 million for the three months ended March 31, 2025. This increase is due primarily to an increase of approximately $3.9 million in our net loss, including $0.5 million in fair value of Common Stock issued for services, offset by an increase of approximately $0.6 million in accrued expenses, an increase of approximately $0.4 million in contract liabilities, an increase of $0.3 million for depreciation and amortization, and an increase of approximately $0.2 million in accounts payable.
Previous wording
For the nine months ended September 30, 2025, net cash used in investing activities consisted of approximately $5.1 million for payment of a business acquisition and capital expenditures of $0.8 million related to the development of software for internal use, and assets placed in service in 2025 related to the integration of SCN. This compares to net cash used in investing activities for the nine months ended September 30, 2024 of $0.4 million due to capital expenditures for internally developed software.
Current wording
For the three months ended March 31, 2026, net cash used in investing activities consisted of capital expenditures of less than $0.1 million for leasehold improvements. This compares to net cash used in investing activities for the three months ended March 31, 2025 of $0.1 million due to capital expenditures for the development of software for internal use.
Previous wording
Net cash provided by financing activities of $14.2 million for the nine months ended September 30, 2025, is attributable to proceeds of approximately $9.2 million from the issuance of debt, approximately $1.7 million for the issuance of warrants, approximately $0.6 million form the issuance of pre-funded warrants, approximately $2.8 million from the issuance of common stock, and approximately $0.9 million form the exercise of warrants. This compares to net cash used in investing financing for the nine months ended September 30, 2024 of $14.8 million attributable to proceeds from the issuance of Common Stock, net of approximately $0.9 million of professional fees and other issuance costs, in our February 2024 warrant inducement transaction and the June and September 2024 private placements.
Current wording
Net cash provided by financing activities of $6.1 million for the three months ended March 31, 2026, is attributable to proceeds of approximately $4.6 million from the exercise of warrants, approximately $1.4 million from the issuance of debt, approximately $0.6 million from the issuance of warrants, and approximately $0.3 million from the issuance of common stock, net of approximately $0.4 million repayment of debt and $0.3 million of professional fees and other issuance costs associated with equity and debt financings. This compares to no cash provided by investing financing for the three months ended March 31, 2025.
Previous wording
Our critical accounting policies and estimates are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. We have reviewed and determined that those critical accounting policies and estimates remain our critical accounting policies and estimates as of and for the three and nine months ended September 30, 2025.
Current wording
Our critical accounting policies and estimates are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. We have reviewed and determined that those critical accounting policies and estimates remain our critical accounting policies and estimates as of and for the three months ended March 31, 2026.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
On June 27, 2024, we met with the Panel to discuss our past, current, and anticipated future compliance with the Equity Requirement, and requested the continued listing of its securities on Nasdaq.
Current report — wording carried from elsewhere
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.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Cost of Sales and Gross Profit