# Vivos Therapeutics, Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Vivos Therapeutics, Inc.](/companies/vvos.md) (CIK 1716166)
- Form: 10-Q
- Filed: 2025-05-15
- Accepted by EDGAR: May 15, 2025, 16:05 ET
- Period: 2025-03-31
- Accession: 0001641172-25-010874
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1716166/000164117225010874/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1716166/000164117225010874/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $3.0m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Gross profit | 3 months, 2025-01-01 to 2025-03-31 | $1.5m | us-gaap:GrossProfit |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$3.9m | us-gaap:OperatingIncomeLoss |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$3.9m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.45 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.45 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 8,595,288 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$3.8m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $122.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2025-03-31 | $2.3m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $3.6m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $11.3m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $4.7m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $6.9m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-03-31 | $4.4m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 26,769 characters.

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Some of the numbers included herein have been rounded for the convenience of presentation. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. See “Cautionary Note Regarding Forward-Looking Statements.”*

### Overview

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 ***The Vivos Method.***

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 59,000 patients have been treated to date worldwide with our entire current suite of products by more than 2,000 trained dentists.

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

### Material Items, Trends and Risks Impacting Our Business

We believe that the following items and trends may be useful in better understanding our results of operations.

#### Enrollments (Service Revenue) and Pivot in Marketing and Distribution Model

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

We will continue to shift our efforts away from educating, training and supporting independent VIP dentists and to pivot substantially all our focus and resources towards our new strategic alliance and acquisition model. We will, however, continue to provide technical and product support to our existing VIP customer base.

On April 15, 2025, we signed a definitive agreement to acquire the assets of a sleep testing center business in Las Vegas, Nevada known as Sleep Center of Nevada (“SCN”). We have subsequently signed a non-binding term sheet with a lender who will provide $7,500,000 in net financing, before certain fees and other costs, and expect to close the acquisition in June or July 2025. If consummated, we believe the acquisition will bring our OSA treatment technology and other diagnostic and therapeutic services to numerous patients in that market. Moreover, we expect to realize greater revenue growth and potential for profitability as we integrate our products and services into SCN’s business. In addition to the SCN acquisition, we are seeking other potential transactions (either strategic alliances or outright acquisition) with similar sleep specialty centers.

*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 to 17 years of age who are diagnosed with snoring and/or moderate or severe obstructive sleep apnea who 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.

*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.

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

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

*Inflation*. The U.S. has been experiencing a period of inflation which has increased (and may continue to increase) our and our suppliers’ costs as well as the end cost of our products to consumers. To date, we have been able to manage inflation risk without a material adverse impact on our business or results of operations. However, inflationary pressures (including increases in the price of raw material components of our appliances) made it necessary for us to adjust our standard pricing for our appliance products in 2022 and will be revisited in 2025. The full impact of such price adjustments on sales or demand for our products is not fully known at this time and may require us to adjust other aspects of our business as we seek to grow revenue and, ultimately, achieve profitability and positive cash flow from operations.

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. 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.

*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.

*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.

*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”).

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.

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.

### Key Components of Consolidated Statements of Operations

***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 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.

***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.

***Sales and marketing.*** Sales and marketing costs primarily consist of personnel costs for employees engaged in sales and marketing activities, commissions, advertising and marketing costs, website enhancements, and conferences for our sales and marketing staff.

***General and administrative expenses.*** General and administrative (“G&A”) expenses consist primarily of personnel costs for our administrative, human resources, finance and accounting employees, and executives. General and administrative expenses also include contract labor and consulting costs, travel-related expenses, legal, auditing and other professional fees, rent and facilities costs, repairs and maintenance, and general corporate expenses.

***Depreciation and amortization expense.*** Depreciation and amortization expense is comprised of depreciation expense related to property and equipment, amortization expense related to leasehold improvements, and amortization expense related to identifiable intangible assets.

***Other income.*** Other income relates to interest income and the excess warrant fair value and change in fair value of warrant liability.

### Results of Operations

### Comparison of the three months ended March 31, 2025 and 2024

Our consolidated statements of operations for the three months ended March 31, 2025 and 2024 are presented below (dollars in thousands):

| Revenue | Three Months Ended March 31, 2025 | 2024 | Change |
| --- | ---: | ---: | ---: |
| Product revenue | $1,813 | $1,674 | $139 |
| Service revenue | 1,203 | 1,745 | (542) |
| Total revenue | 3,016 | 3,419 | (403) |
| Cost of sales (exclusive of depreciation and amortization shown separately below) | 1,507 | 1,482 | 25 |
| Gross profit | 1,509 | 1,937 | (428) |
| Gross profit % | 50% | 57% |  |
| Operating expenses |  |  |  |
| General and administrative | 4,892 | 4,921 | (29) |
| Sales and marketing | 358 | 655 | (297) |
| Depreciation and amortization | 177 | 146 | 31 |
| Operating loss | (3,918) | (3,785) | (133) |
| Non-operating income (expense) |  |  |  |
| Other expense | (4) | (1) | (3) |
| Other income | 58 | 23 | 35 |
| Net loss | $(3,864) | $(3,763) | $(101) |

#### Revenue

Revenue decreased approximately $0.4 million, or 12%, to approximately $3.0 million for the three months ended March 31, 2025 compared to $3.4 million for the three months ended March 31, 2024. Revenue during the first three months of 2025 was impacted by a decrease of approximately $0.5 million in service revenue, offset by an increase of $0.1 million in product revenue. The increase in product revenue is attributable to an increase of approximately $0.1 million in C.A.R.E. appliance and Guide sales to VIPs. Additionally, we had a decrease in service revenue of approximately $0.7 million in VIP enrollment, and a decrease of approximately $0.1 million from BIS and Myofunctional revenue. This was offset by an increase of approximately $0.2 million in sponsorship, conference and training related revenue.

During the three months ended March 31, 2025, we recognized VIP enrollment revenue of approximately $0.2 million, a decrease of approximately 75% in enrollment revenue, compared to approximately $0.9 million for the three months ended March 31, 2024. Service revenue overall decreased due to a sales strategy shift and focus toward sleep center affiliations, coupled with lower enrollments in early 2024, and no enrollment since October 2024. This was slightly offset by 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 $0.1 million in revenue was attributable to breakage during the three months ended March 31, 2025, when compared to approximately $0.4 million during the three months ended March 31, 2024.

For the three months ended March 31, 2025, we sold 3,736 oral appliance arches for a total of approximately $1.8 million, an 8% increase in revenue from the three months ended March 31, 2024, when we sold 1,996 oral appliance arches for a total of approximately $1.7 million. The increase is directly attributable a higher volume in Guide sales, which are lower revenue generating products when compared to Vivos C.A.R.E. appliances.

#### Cost of Sales and Gross Profit

Cost of sales remained relatively constant with an increase of less than $0.1 million or 2% at approximately $1.5 million for the three months ended March 31, 2025, compared to slightly under $1.5 million for the three months ended March 31, 2024. This was primarily related to $0.2 million in higher costs associated with appliances, driven by the higher product sales as explained above. This was offset by a decrease of approximately $0.1 million due to lower costs associated with medical reporting expense and membership support costs as a result of no VIP enrollments during the period.

For the three months ended March 31, 2025, gross profit decreased by approximately $0.4 million to $1.5 million. This decrease was attributable to the decrease in revenue of approximately $0.4 million. Gross margin decreased to 50% for the three months ended March 31, 2025, compared to 57% for the three months ended March 31, 2024 due to the decrease in service revenue.

#### General and Administrative Expenses

General and administrative expenses remained relatively constant with a decrease of less than $0.1 million or 1% to approximately $4.9 million for the three months ended March 31, 2025, as compared to slightly over $4.9 million for the three months ended March 31, 2024. The primary cause of this decrease was $0.1 million in travel, meals and entertainment, a decrease of approximately $0.1 million related to being a public company, and a decrease of less than $0.1 million related to change in the allowance for credit losses. This was offset by an increase of approximately $0.1 million in professional fees, including consulting and legal fees and approximately $0.1 million in infrastructure expenses such as communications, development and customization.

#### Sales and Marketing

Sales and marketing expenses decreased by $0.3 million to approximately $0.4 million for the three months ended March 31, 2025, compared to $0.7 million for the three months ended March 31, 2024. This decrease was primarily driven by a $0.3 million decrease in commissions related to lower service revenue.

#### Depreciation and Amortization

Depreciation and amortization expense was approximately $0.2 million for the three months ended March 31, 2025 and approximately $0.1 million for three months ended March 31, 2024, respectively. Depreciation and amortization had a slight increase during the period due to assets being placed into service.

#### Other Income

Other income of less than $0.1 million includes interest income from financial institutions.

### Liquidity and Capital Resources

The financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate our continuation as a going concern. We have incurred losses since inception, including $3.9 and $3.8 million for the three months ended March 31, 2025 and 2024, respectively, resulting in an accumulated deficit of approximately $108 million as of March 31, 2025.

Net cash used in operating activities amounted to approximately $3.8 and $2.5 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, we had total liabilities of approximately $6.9 million.

As of March 31, 2025, we had approximately $2.3 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 the issuance of these financial statements. Without additional financing, these factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

We have implemented cost savings measures that have reduced cash used in operations. However, as our product offerings and strategies continue to be refined, our sales did not grow during either of our fiscal years ended 2023 or 2024, nor the first quarter of 2025 as anticipated. As such, we have raised equity capital in the financial year ended December 31, 2023 and 2024. We intend to obtain additional financing to satisfy our cash needs (including the $6 million in cash required for our acquisition of SCN) and increase our stockholders’ equity for Nasdaq compliance purposes as our management attempts to increase revenue to achieve positive cash flow from our operations.

Until we have attained positive cash flow, our management is reviewing all options to obtain additional financing to fund our operations. This financing is expected to come primarily from the issuance of debt or equity securities in order to sustain operations until we can close our Sleep Center of Nevada acquisition and ultimately achieve positive cash flows, if ever. We originally expected the Strategic Alliance Agreement (“SAA”) with Rebis 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 that are beyond our control, we are currently re-evaluating and lowering our revenue expectations under the SAA and are seeking to make other acquisitions or enter into other strategic alliances (such as our pending acquisition of SCN). 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 agreement 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.

We do not have any off-balance sheet arrangements, as defined by applicable regulations of the SEC, that are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

#### Cash Flows

The following table presents a summary of our cash flow for the three months ended March 31, 2025 and 2024 (in thousands):

| Net cash provided by (used in): | 2025 | 2024 |
| --- | ---: | ---: |
| Operating activities | $(3,796) | $(2,516) |
| Investing activities | (122) | (151) |
| Financing activities | - | 3,635 |

Net cash used in operating activities of approximately $3.8 million for the three months ended March 31, 2025 is an increase of approximately $1.3 million compared to net cash used in operating activities of approximately $2.5 million for the three months ended March 31, 2024. This increase is due primarily to a decrease of approximately $0.9 million in contract liability, a decrease of approximately $0.6 million in accrued expenses, a decrease of approximately $0.2 million in accounts payable, offset by the increase in other liabilities of approximately $0.4 million.

For the three months ended March 31, 2025, net cash used in investing activities consisted of capital expenditures for software of $0.1 million related to the development of software for internal use, which was placed in service in March 2025, as compared to net cash used in investing activities for the three months ended March 31, 2024 of $0.2 million from capital expenditures for internally developed software.

No cash was provided by financing activities for the three months ended March 31, 2025, as compared to net cash provided in financing activities of $3.6 million for the three months ended March 31, 2024, is attributable to proceeds of $3.9 million from the issuance of Common Stock, net of approximately $0.3 million of professional fees and other issuance costs, in our February 2024 warrant inducement.

### Critical Accounting Policies Involving Management Estimates and Assumptions

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 months ended March 31, 2025.

### Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed in Note 1 to the accompanying condensed consolidated financial statements included in this Report, we believe that the impact of recently issued standards that are not yet effective could have a material impact on our financial position or results of operations upon adoption. For additional information on recently issued accounting standards and our plans for adoption of those standards, please refer to the section titled *Recent Accounting Pronouncements* under Note 1 to the accompanying condensed consolidated financial statements included in this Report.

## Controls and procedures

As filed, 1,432 characters.

#### Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) are designed to ensure that information required to be disclosed by us in reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the appropriate time periods, and that such information is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure. We, under the supervision of and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures were effective, at the reasonable assurance level, as of the end of the period covered by this Report.

#### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Filed May 15, 2025.
Source: SEC EDGAR, the filing index for accession 0001641172-25-010874. Last ingested by Listed: Nov 2, 2026, 06:07 ET. No prices; not investment advice.