UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 | |
| For
the Quarterly Period Ended | |
| or | |
| Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 | |
| For the Transition Period from to | |
Commission
File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) | |
| Registrant’s telephone number, including area code: |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of exchange on which registered | ||
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES ☐ NO ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ NO ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, or “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller
reporting company | |
| Emerging
growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO
The registrant had shares of its common stock, $ par value per share, outstanding as of August 13, 2026.
TABLE OF CONTENTS
| i |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) that reflect our current expectations and views of future events. The forward-looking statements are contained principally in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Readers are cautioned that known and unknown risks, uncertainties and other factors, including those over which we may have no control and others listed in this Report and our other public filings, may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.
You can identify some of these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue,” “goal” or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include statements relating to:
| ● | our ability to continue to refine and execute our evolving business plan, including establishing and growing our new medical-provider focused sales, marketing and distribution model where we acquire or create contractual alliances with operators of sleep testing and treatment centers as a means of driving sales of our appliances, including our June 2025 acquisition of The Sleep Center of Nevada (“SCN”); | |
| ● | our ability to implement, generate material revenues from, and grow our medical-provider focused sales, marketing distribution model, which is new and unproven and may not produce the benefits we anticipate, and to fully wind down our legacy dentist-focused model; | |
| ● | our ability to successfully integrate SCN business into our operations, including managing staffing, accounting, insurance reimbursement and other challenges; | |
| ● | our ability to service the substantial indebtedness we incurred in connection with financing the SCN acquisition; | |
| ● | compliance with laws, rules and regulations relating to the corporate practice of medicine; | |
| ● | the acceptance and adoption by sleep specialists, medical doctors and other healthcare professionals of our proprietary oral appliances as a treatment for dentofacial abnormalities and/or mild to severe obstructive sleep apnea (“OSA”) and snoring in adults and moderate to severe OSA in children ages 6-17 as per our U.S. Food and Drug Administration (“FDA”) clearances, including the anticipated benefits of insurance coverage for products; | |
| ● | our expectations concerning the effectiveness and duration of treatment using our appliances and protocols (which we refer to as The Vivos Method) and the potential for side effects including, but not limited to, patient relapse after completion of treatment; | |
| ● | the potential financial benefits to doctors, sleep testing centers, sleep specialists, and other healthcare professionals from treating patients with The Vivos Method; |
| ii |
| ● | our revenues, profit margin and cash flows based on sales or leasing of our appliances and other treatments and services, including our SleepImage® home sleep testing rings; | |
| ● | our ability to formulate, implement and modify as necessary effective sales, marketing and strategic initiatives to drive revenue growth (including, for example, our medical provider-focused strategic alliance and/or acquisition model, our SleepImage® home sleep apnea test and our other arrangements with sleep clinics and/or durable medical equipment companies (“DMEs”); |
| ● | the viability of our current intellectual property and our ability to create and protect new intellectual property in the future; | |
| ● | acceptance of our products and services by the medical and dental communities, as well as the marketplace of the products and services that we market; | |
| ● | government regulations and our ability to obtain applicable regulatory approvals and comply with both state and federal government regulations including under healthcare laws and the rules and regulations of the FDA and non-U.S. equivalent regulatory bodies; | |
| ● | our ability to hire and retain key employees and other service providers (including dentists, medical doctors or other healthcare providers); | |
| ● | the emergence of alternative competing technologies, devices, drugs or other therapies which directly or indirectly impact the marketability of our products and services; | |
| ● | adverse changes in general market conditions for medical devices and the products and services we offer; | |
| ● | our ability to generate cash flow and profitability and continue as a going concern; | |
| ● | our ability to satisfy the criteria for maintaining the listing of our common stock on Nasdaq, which we have faced challenges with; | |
| ● | our immediate and future financing plans; and | |
| ● | our ability to adapt to changes in market conditions (including volatile and difficult to access capital markets) which could impair our operations and financial performance. |
These forward-looking statements involve numerous risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may later be found to be incorrect. Our actual results of operations or the results of other matters that we anticipate herein could be materially different from our expectations. Important risks and factors that could cause our actual results to be materially different from our expectations are generally set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and other sections in this Report as well as the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and our other public filings. You should thoroughly read this Report and the documents that we refer to with the understanding that our actual future results may be materially different from and worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements.
The forward-looking statements made in this Report relate only to events or information as of the date on which the statements are made in this Report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this Report and the documents that we refer to in this Report and have filed as exhibits to this Report, completely and with the understanding that our actual future results may be materially different from what we expect.
| iii |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
VIVOS THERAPEUTICS INC.
Unaudited Condensed Consolidated Balance Sheets
(In Thousands, Except Per Share Amounts)
June 30, 2026 | December 31, 2025 | |||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net
of allowance of $ | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Long-term assets | ||||||||
| Goodwill | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use asset | ||||||||
| Intangible assets, net | ||||||||
| Deposits and other | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT) | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Contract liabilities | ||||||||
| Current portion of operating lease liability | ||||||||
| Current portion of financing lease liability | ||||||||
| Current portion of debt | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities | ||||||||
| Employee retention credit liability | ||||||||
| Operating lease liability, net of current portion | ||||||||
| Financing lease liability, net of current portion | ||||||||
| Debt, net of current portion | ||||||||
| Other liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 12) | ||||||||
| Stockholders’ equity/(deficit) | ||||||||
| Preferred Stock, $ par value per share. Authorized shares; shares issued and outstanding | $ | $ | ||||||
| Preferred Stock – additional paid in capital | ||||||||
| Common Stock, $ par value per share. Authorized shares; issued and outstanding shares as of June 30, 2026 and shares as December 31, 2025 | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity/(deficit) | ( | ) | ( | ) | ||||
| Non-controlling interest | ( | ) | ( | ) | ||||
| Total equity/(deficit) | ( | ) | ( | ) | ||||
| Total liabilities and equity/(deficit) | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 1 |
VIVOS THERAPEUTICS INC.
Unaudited Condensed Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue | ||||||||||||||||
| Product revenue | $ | $ | $ | $ | ||||||||||||
| Service revenue | ||||||||||||||||
| Total revenue | ||||||||||||||||
| Cost of sales (exclusive of depreciation and amortization shown separately below) | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Non-operating income (expense) | ||||||||||||||||
| Other expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income | ||||||||||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss attributable to non-controlling interest | ( | ) | ( | ) | ||||||||||||
| Net loss attributable to stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share (basic and diluted) | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average number of shares of Common Stock outstanding (basic and diluted) | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 2 |
VIVOS THERAPEUTICS INC.
Unaudited Condensed Consolidated Statements of Stockholders’ Equity (Deficit)
(In Thousands, Except Common Stock Amounts)
Six Months Ended June 30, 2026 and 2025 | ||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Additional Paid-in | Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ Equity | Non-controlling | Total Equity | |||||||||||||||||||||||||||||||||
| Shares | Amount | Capital | Shares | Amount | Capital | Deficit | (Deficit) | interest | (Deficit) | |||||||||||||||||||||||||||||||
| Balances, December 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||||||
| Stock-based compensation expense | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Balances, March 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||||||
| Issuance of common stock and warrants in private placement, net of issuance costs | - | |||||||||||||||||||||||||||||||||||||||
| Common stock consideration for acquisition | - | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Balances, June 30, 2025 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||||
| Balances, December 31, 2025 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Issuance of common stock under At-The-Market program, net of issuance costs | - | |||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for consultants for services | - | |||||||||||||||||||||||||||||||||||||||
| Issuance of warrants in private placement, net of issuance costs | - | - | ||||||||||||||||||||||||||||||||||||||
| Issuance of pre-funded warrants in private placement, net of issuance cost | - | - | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of warrants, net of issuance costs | - | |||||||||||||||||||||||||||||||||||||||
| Conversion of debt to equity | - | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balances, March 31, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||
| Issuance of common stock under At-The-Market program, net of issuance costs | ||||||||||||||||||||||||||||||||||||||||
| Issuance of preferred stock, net of issuance costs | - | |||||||||||||||||||||||||||||||||||||||
| Issuance of warrants in private placement, net of issuance costs | - | - | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for consultants for services | ||||||||||||||||||||||||||||||||||||||||
| Conversion of debt to equity | ||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | ||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balances, June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
VIVOS THERAPEUTICS INC.
Unaudited Condensed Consolidated Statements of Cash Flows
(In Thousands)
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation expense | ||||||||
| Non-cash interest expense on promissory note | ||||||||
| Depreciation and amortization | ||||||||
| Fair value of common stock issued for services | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Operating lease liabilities, net | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Deposits and other | ( | ) | ||||||
| Accounts payable | ||||||||
| Accrued expenses | ( | ) | ||||||
| Other liabilities | ( | ) | ) | |||||
| Contract liability | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Payment for acquisition,
net of cash acquired of $ | ( | ) | ||||||
| Acquisitions of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from issuance of debt | ||||||||
| Proceeds from issuance of common stock | ||||||||
| Proceeds from issuance of preferred stock | ||||||||
| Proceeds from issuance of warrants | ||||||||
| Proceeds from issuance of pre-funded warrants | ||||||||
| Proceeds from exercise of warrants | ||||||||
| Payments for issuance costs | ( | ) | ||||||
| Reduction of debt liability | ( | ) | ||||||
| Payments for finance lease liability | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Net (decrease) increase in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents at beginning of year | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Conversion of promissory note | $ | $ | ||||||
| Conversion of debt to common stock | ||||||||
| Common stock issued as consideration for acquisition | ||||||||
| Contingent consideration as consideration for acquisition | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
VIVOS THERAPEUTICS INC.
Notes to Unaudited Condensed Consolidated Financial Statements
For the Three and Six Months Ended June 30, 2026 and 2025
NOTE 1 - ORGANIZATION, DESCRIPTION AND SIGNIFICANT ACCOUNTING POLICIES
Organization
BioModeling Solutions, Inc. (“BioModeling”) was organized on March 20, 2007 as an Oregon limited liability company, and subsequently incorporated in 2013. On August 16, 2016, BioModeling entered into a share exchange agreement (the “SEA”) with First Vivos, Inc. (“First Vivos”), and Vivos Therapeutics, Inc. (“Vivos”), a Wyoming corporation established on July 7, 2016 to facilitate the SEA transaction. Vivos was formerly named Corrective BioTechnologies, Inc. until its name changed on September 6, 2016 to Vivos Biotechnologies and on March 2, 2018 to Vivos Therapeutics, Inc. and had no substantial pre-combination business activities. First Vivos was incorporated in Texas on November 10, 2015. Pursuant to the SEA, all of the outstanding shares of common stock and warrants of BioModeling and all of the shares of common stock of First Vivos were exchanged for newly issued shares of common stock and warrants of Vivos, the legal acquirer.
The transaction was accounted for as a reverse acquisition and recapitalization, with BioModeling as the acquirer for financial reporting and accounting purposes. Upon the consummation of the merger, the historical financial statements of BioModeling became the Company’s historical financial statements and recorded at their historical carrying amounts.
On August 12, 2020, Vivos reincorporated from Wyoming to become a domestic Delaware corporation under Delaware General Corporate Law. Accordingly, as used herein, the term “the Company,” “we,” “us.” “our” and similar terminology refer to Vivos Therapeutics, Inc., a Delaware corporation and its consolidated subsidiaries. As used herein, the term “Common Stock” refers to the common stock, $ par value per share, of Vivos Therapeutics, Inc., a Delaware corporation.
On
June 10, 2025, we acquired all of the operating assets (the “Acquisition”) of R.D. Prabhu-Lata K. Shete MDs, LTD., a Nevada
professional corporation d/b/a The Sleep Center of Nevada (“SCN”) in consideration for a (i) cash payment equal to $
On
July 14, 2025, we entered into a management agreement with MISleep Solution LLC to provide full suite of Vivos treatments and services
to OSA patients at a joint location in Auburn Hills, Michigan. As a result, we formed AIM Detroit, LLC, a Colorado limited liability
company (“AIM Detroit”) to serve as a management services organization to medical and dental clinical sleep practices located
in the Detroit Tri-County metropolitan area, to wit: Wayne County, Oakland County and Macomb County. The Company holds an
Description of Business
We are a medical technology and services company that features a comprehensive suite of proprietary oral appliances and therapeutic treatments. Our products non-surgically treat certain maxillofacial and developmental abnormalities of the mouth and jaws that are closely associated with breathing and sleep disorders such as, mild to severe obstructive sleep apnea (“OSA”) and snoring in adults. We offer three separate clinical pathways or programs to providers: (i) Guided Growth and Development, (ii) Lifeline and (iii) Complete Airway Repositioning and Expansion (“C.A.R.E.”). Each program features certain oral appliances coupled with specific therapeutic treatments, and each clinical pathway is intended to address the specific needs of a diverse patient population with different patient journeys. For example, the Guided Growth and Development program features the Vivos Guide and PEx appliances along with CO2 laser treatments and other adjunctive therapies designed for treating palatal growth and expansion in pediatric patients as they grow. The mid-range priced Lifeline program features a selection of mandibular advancement devices (“MADs”) such as the Versa and Vida Sleep which are U.S. Food and Drug Administration (“FDA”) 510(k) cleared for mild-to-moderate OSA in adults, along with the patented Vida appliance, which is FDA 510(k) cleared as unspecified classification for the alleviation of Temporomandibular Joint Dysfunction (“TMD”) symptoms, bruxism, migraine headaches, and nasal dilation.
| 5 |
We are a medical technology and services company that features a comprehensive suite of proprietary oral appliances and therapeutic treatments. We non-surgically treat certain maxillofacial and developmental abnormalities of the mouth and jaws that are closely associated with breathing and sleep disorders such as, mild to severe obstructive sleep apnea (“OSA”) and snoring in adults.
Our
flagship C.A.R.E. program, which is part of The Vivos Method, features our patented DNA, mRNA and mmRNA appliances, which are also FDA
510(k) cleared for mild-to-severe OSA and snoring in adults. The Vivos Method may also include adjunctive myofunctional, chiropractic/physical
therapy, and laser treatments that, when properly used with the C.A.R.E. appliances, constitute a powerful non-invasive and cost-effective
means of reducing or eliminating OSA symptoms. In a small subset of a study, the data has actually shown that The Vivos Method can reverse
OSA symptoms in a large portion (up to
Although not our current focus due to the pivot in the business model, we have historically offered a suite of diagnostic and support products and services to dental and medical providers and distributors who service patients with OSA or related conditions. Such products and services include (i) VivoScore home sleep screenings and tests (powered by SleepImage® technology), (ii) Treatment Navigator (a concierge service to assist a provider in educating and supporting the doctors as they navigate insurance coverage, diagnostic indications and treatment options), (iii) Billing Intelligence Services (which optimizes medical and dental reimbursement), (iv) advanced training and continuing education courses at our Vivos Institute in Denver, Colorado, and (v) MyoSync (formerly MyoCorrect), a service through which Vivos-trained providers can provide orofacial myofunctional therapy (“OMT”) to patients via a telemedicine platform. Some of these services including home sleep screenings, treatment navigator services and MyoSync are being provided to patients directly under the new sales, marketing and distribution model described below. With this pivot, we shifted our Medical Integration Division (“MID”) to pursue strategic alliances and acquisitions of sleep centers to provide better options using Vivos products for patients who have been diagnosed with OSA.
Legacy Business Model
Our business model has historically been to teach, train, and support dentists, medical doctors, and distributors in the use of our products and services. Dentists who use our products and services typically enroll in a variety of live or online training and educational programs offered through our Vivos Institute; an 18,000 sq. ft. facility located near the Denver International Airport. Dentists are able to select the specific program or clinical pathway that they want to focus on, such as Guided Growth and Development or Lifeline or both. They could also enroll in our Vivos Integrated Provider (“VIP”) program for the complete set training, educational, and support services available in all three clinical pathway programs. Dentists enrolled in the VIP program are referred to as “VIPs.” We historically charged up front enrollment fees to educate and train new VIPs. We also charged for the ancillary support services listed above and view each product and service as a revenue center. We refer to the VIP-focused business model herein as our “legacy” or “historic” business model.
New Sales, Marketing and Distribution Model
Over the course of 2024 and during 2025, we worked to pivot our business strategy and began to steadily decrease our prior dependence on dentists to sell our products and our dependence on VIP enrollment revenue. This new business strategy is focused on contractual alliances with and outright acquisitions of sleep specialty providers, sleep centers and others and is based on a profit-sharing model between us and the provider which aligns our revenue generation more directly to sales of our novel appliances.
| 6 |
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 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 consulting revenues, representing new higher margin revenue streams for us, as well as potential Vivos appliance and related product and service revenue from SCN.
On July 14, 2025, we entered into a management agreement under this revised approach with MISleep Solution LLC to provide full suite of Vivos treatments and services to OSA patients at a joint location in Auburn Hills, Michigan. Consistent with our new model, we own a supermajority equity stake in the management services company, with the sleep doctors having minority ownership interests. AIM Detroit entered into Practice Administration Agreements and Management and Succession Agreements with affiliated Practices (defined as the professional medical and dental practice entities, including Sleep Dentistry of Detroit, P.C. and Sleep Medicine of Detroit, P.C., each owned and controlled by their respective licensed professionals) under which AIM Detroit provides business, administrative, and other non-clinical management services, while all clinical and professional services remain exclusively under the authority and control of the Practices and their licensed professionals.
We are exploring and seeking to implement additional acquisitions of, or collaborations with, medical sleep and similar healthcare practices to expand our business model in an effort to grow our revenues.
We refer to this new model herein alternatively as our new sales, marketing and distribution model or our strategic alliance and/or acquisition model.
Basis of Presentation and Consolidation
The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with current United States generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).
In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly the Company’s financial position, results of operations, and cash flows. The condensed consolidated balance sheet at December 31, 2025 has been derived from audited financial statements at that date. The interim results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to instructions, rules, and regulations prescribed by the United States Securities and Exchange Commission (“SEC”).
The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited condensed consolidated financial statements are read in conjunction with the December 31, 2025 audited consolidated financial statements contained in the Company’s 2025 Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on April 15, 2026.
We evaluate our interests in legal entities to determine whether such entities should be consolidated under the voting interest entity model or the variable interest entity (“VIE”) model. When we determine that it is the primary beneficiary of a VIE, we consolidate the entity and includes its assets, liabilities, revenues, and expenses in the consolidated financial statements. Ownership interests not held by Vivos are reflected as noncontrolling interests within equity. All significant intercompany balances and transactions have been eliminated in consolidation. See Note 17 for additional information regarding Vivos’ involvement with AIM Detroit.
| 7 |
Purchase Price Allocation
We account for business combinations in accordance with ASC Topic 805, Business Combinations, which requires the assets acquired and liabilities assumed in business combinations based on their estimated fair values at the date of acquisition, which involves a number of assumptions, estimates, and judgments, which are inherently uncertain and subject to refinement. We determine the estimated fair values with the assistance of valuations performed by third party specialists, discounted cash flow analysis, and estimates made by management derived from comparable market data and cash flow projections used to value the acquired business. Our ability to realize the future cash flows used in our fair value estimates may be affected by changes in our financial condition, financial performance, or business strategies. Our assumptions and estimates are also used to allocate goodwill to our reporting units that are expected to benefit from the business combination.
Emerging Growth Company Status
Effective December 31, 2025, the Company was no longer an “emerging growth company” (an “EGC”), as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As a result, the Company has lost some of the benefits of being an EGC, although the Company remains a “smaller reporting company” and therefore can avoid the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) (assuming the Company remains a smaller reporting company at December 31, 2026.)
Use of Estimates
The preparation of financial statements and related disclosures in conformity with GAAP requires us to make judgments, assumptions, and estimates that affect the amounts reported in its consolidated financial statements and accompanying notes. We base our estimates and assumptions on existing facts, historical experience, and various other factors that we believe are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. Our significant accounting estimates include, but are not necessarily limited to, assessing collectability on accounts receivable, determining customer life and breakage related to recognizing revenue for VIP contracts, impairment of goodwill and long-lived assets; valuation assumptions for assets acquired in asset acquisitions and business combinations; valuation assumptions for stock options, warrants, warrant liabilities and equity instruments issued for goods or services; deferred income taxes and the related valuation allowances; and the evaluation and measurement of contingencies. We believe we have made appropriate accounting estimates based on the facts and circumstances available as of the reporting date. To the extent there are material differences between our estimates and the actual results, our future consolidated results of operations will be affected.
Accounting Pronouncements
Presented below is a discussion of new accounting standards including deadlines for adoption.
Recent Accounting Pronouncements Yet to be Adopted
In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”). The standard’s purpose is “to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development).” Public companies will be required to disclose in the notes to financial statements specified information about certain costs and expenses at each interim and annual reporting period. Specifically, they will be required to:
| 1. | Disclose the amounts of (a) purchases of inventory; (b) employee compensation; (c) depreciation; (d) intangible asset amortization; and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption. |
| 2. | Include certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements. |
| 8 |
| 3. | Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. | |
| 4. | Disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. |
The amendments in the ASU are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the effect of this new guidance on our consolidated financial statements and disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which updates the accounting for internal-use software by removing project stage references and introduces a new capitalization threshold based on management authorization and project completion probability. The guidance requires evaluation of significant development uncertainty, including novel functionality and unresolved performance requirements. ASU 2025-06 also requires website-specific development costs to be evaluated under the same framework as other internal-use software and clarifies that capitalized internal-use software costs are subject to the property, plant and equipment disclosure requirements under ASC 360-10. The amendments in the ASU are effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Early adoption permitted. The Company is currently evaluating the impact of ASU 2025-06 on our consolidated financial statements and disclosures.
We have reviewed and considered all other recent accounting pronouncements that have not yet been adopted and believe there are none that could potentially have a material impact on our business practices, financial condition, results of operations, or disclosures.
NOTE 2 - LIQUIDITY AND ABILITY TO CONTINUE AS A GOING CONCERN
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 $
Net
cash used in operating activities amounted to approximately $
As
of June 30, 2026, we had approximately $
We have implemented cost savings measures that lead to reduced impact to cash used in operations. However, sales did not grow in the financial year ended December 31, 2025 and the first six months of 2026 as anticipated as we continued to refine our product offerings and strategies. As such, notwithstanding that we have raised equity capital throughout the fiscal year ended December 31, 2025 and through the first half of 2026, we will be required to obtain additional financing to satisfy the cash needs for our business 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
The 2025 acquisition of SCN has increased patient volume and increased top line revenue and also lowered customer acquisition costs. However, revenues have not been sufficient to cover expenses fully, and until a state of increased revenues and cash flow positivity is reached, management will continue to review all options to obtain additional financing to fund operations. This financing is expected to come primarily from the issuance of equity securities in order to sustain operations until we can achieve positive cash flows and profitability, if ever. However, 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 that SCN will not result in the patient volume and financial results within the expected timeline and 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.
| 9 |
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.
NOTE 3 - REVENUE, CONTRACT ASSETS AND CONTRACT LIABILITIES
Net Revenue
For the three and six months ended June 30, 2026 and 2025, the components of revenue from contracts with customers and the related timing of revenue recognition is set forth in the table below (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Product revenue | ||||||||||||||||
| Appliances | $ | $ | $ | $ | ||||||||||||
| Tooth Positioners | ||||||||||||||||
| Total product revenue | (1) | (1) | (1) | (1) | ||||||||||||
| Service revenue | ||||||||||||||||
| Sleep testing services | $ | (3) | $ | (3) | $ | (3) | $ | (3) | ||||||||
| Treatment centers | (2) | (2) | (2) | (2) | ||||||||||||
| VIP | (2) | (2) | (2) | (2) | ||||||||||||
| Billing intelligence services | (3) | (3) | (3) | (3) | ||||||||||||
| Myofunctional therapy services | (2) | (2) | (2) | (2) | ||||||||||||
| Sponsorship/seminar/other | (3) | (3) | (3) | (3) | ||||||||||||
| Total service revenue | ||||||||||||||||
| Total revenue | $ | $ | $ | $ | ||||||||||||
| (1) | |
| (2) |
|
| (3) |
| 10 |
Changes in Contract Liabilities
The key components of changes in contract liabilities related to our legacy model for the six months ended June 30, 2026 and 2025 are as follows (in thousands):
| 2026 | 2025 | |||||||
| Beginning balance, January 1 | $ | $ | ||||||
| New contracts, net of cancellations | ||||||||
| Revenue recognized | ( | ) | ( | ) | ||||
| Ending balance, June 30 | $ | $ | ||||||
The
current portion of deferred revenue is approximately $
Changes in Accounts Receivable
Our
customers are billed based on fees agreed upon in each customer contract. Receivables from customers, which are stated at the net amount
expected to be collected, were $
NOTE 4 - PROPERTY AND EQUIPMENT, NET
As of June 30, 2026 and December 31, 2025, property and equipment consist of the following (in thousands):
June 30, 2026 | December 31, 2025 | |||||||
| Furniture and equipment | $ | $ | ||||||
| Leasehold improvements | ||||||||
| Molds and other | ||||||||
| Gross property and equipment | ||||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||
| Net Property and equipment | $ | $ | ||||||
Leasehold
improvements relate to the Vivos Institute (a
NOTE 5 - GOODWILL AND INTANGIBLE ASSETS
Goodwill
Goodwill
of $
| Acquisitions | June 30, 2026 | December 31, 2025 | ||||||
| The Sleep Center of Nevada | $ | $ | ||||||
| BioModeling | ||||||||
| Empowered Dental | ||||||||
| Lyon Dental | ||||||||
| Total goodwill | $ | $ | ||||||
| 11 |
Intangible Assets
Intangible
assets consist of assets acquired from First Vivos and costs paid to (i) MyoSync, from whom we acquired certain assets related to its
OMT service in March 2021, (ii) Lyon Dental, from whom we acquired certain medical billing and practice management software, licenses
and contracts in April 2021 (including the software underlying AireO2) for work related our acquired patents, intellectual property and
customer contracts and (iii) AFD, from whom we acquired certain U.S. and international patents, trademarks, product rights, and other
miscellaneous intellectual property in March 2023, and (iv) SCN, from whom we acquired tradenames and referral relationships. Internal-use
software of $
The
identifiable intangible assets acquired from First Vivos and Lyon Dental for customer contracts are amortized using the
straight-line method over the estimated life of the assets, which approximates five years. The costs paid to MyoSync, Lyon Dental
and AFD for patents and intellectual property are amortized over the life of the underlying patents, which approximates
As of June 30, 2026, and December 31, 2025, identifiable intangible assets were as follows (in thousands):
June 30, 2026 | December 31, 2025 | |||||||
| Patents and developed technology | $ | $ | ||||||
| Internal-use software | ||||||||
| Trade name | ||||||||
| Other | ||||||||
| Total intangible assets | ||||||||
| Less accumulated amortization | ( | ) | ( | ) | ||||
| Net intangible assets | $ | $ | ||||||
Amortization
expense of identifiable intangible assets was $
| Six Months Ending June 30, | ||||
| 2026 (remaining six months) | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ | |||
| 12 |
NOTE 6 – OTHER FINANCIAL INFORMATION
Accrued Expenses
As of June 30, 2026 and December 31, 2025, accrued expenses consist of the following (in thousands):
June 30, 2026 | December 31, 2025 | |||||||
| Accrued payroll | $ | $ | ||||||
| Accrued interest expense | ||||||||
| Accrued royalties | ||||||||
| Accrued sales tax | ||||||||
| Accrued legal and other | ||||||||
| Total accrued liabilities | $ | $ | ||||||
NOTE 7 – DEBT AND OTHER LIABILITIES
Debt
We had the following outstanding Note Payable balance as of June 30, 2026 and December 31, 2025, excluding equipment financing:
| June 30, 2026 | December 31, 2025 | |||||||
| Principal amount | $ | $ | ||||||
| Less: Unamortized debt issuance costs and original issue discount | ( | ) | ( | ) | ||||
| Total notes payable | $ | $ | ||||||
On
June 9, 2025, we entered into a note purchase agreement the Lender secured by the assets of Airway Integrated Management Company, LLC,
a Colorado limited liability company and a wholly-owned subsidiary of the Company (“AIM”), pursuant to which we agreed to
issue and sell to the Lender the Note in an aggregate initial principal amount of $
Interest
on the Note accrues at a rate of
A
monitoring fee of
Beginning
on the sixth month anniversary of the issuance, which was December 9, 2025, the Lender shall have the right to redeem up to $
| 13 |
On
December 5, 2025, we entered into a Note Purchase Agreement with Avondale Capital, LLC, a Utah limited liability company (“Avondale”),
pursuant to which we issued and sold to Avondale a Promissory Note in the original principal amount of $
The
Avondale Note does not bear interest and no interest will accrue on the Avondale Note unless an event of default occurs as further described
below. We have made weekly payments of approximately $
The Avondale Note is unsecured. In connection with the Avondale Note Financing, the Company has caused Company’s wholly-owned subsidiary, AIM to enter into the Guaranty Agreement, dated December 5, 2025, in favor of Avondale to provide a guarantee of the Company’s obligations to Avondale under the Avondale Note and the other transaction documents.
Equipment Financing
At June 30, 2026 and December 31, 2025, we had the following outstanding notes payable for equipment financing as follows (in thousands):
| June 30, 2026 | December 31, 2025 | |||||||
| Principal amount | $ | $ | ||||||
| Total | $ | $ | ||||||
The maturity of notes payable for equipment financing is as follows (in thousands):
| Six Months Ended June 30, | ||||
| 2026 (remaining six months) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ | |||
Interest
expense recognized on the condensed consolidated statement of operations was $
| 14 |
Other Liabilities
As of June 30, 2026 and December 31, 2025, other liabilities consist of the following (in thousands):
June 30, 2026 | December 31, 2025 | |||||||
| Contingent consideration on acquisition of SCN | $ | $ | ||||||
| Total | $ | $ | ||||||
The
fair value of the contingent consideration was determined using a Monte Carlo simulation of potential outcomes. The contingent consideration
is payable in the form of restricted Common Stock equal to $
This
contingent consideration liability is recognized as a liability due to the variability of the potential share settlement and will be
remeasured at fair value each reporting period until the contingency is resolved, with changes in fair value recognized in operating
expenses. During the three and six months ended June 30, 2026, we recognized a gain in other income for the change in fair value of contingent
consideration of approximately $
NOTE 8 – PREFERRED STOCK
As of June 30, 2026, our Board of Directors continues to have the authority to designate up to shares of Preferred Stock in various series that provide for liquidation preferences, and voting, dividend, conversion, and redemption rights as determined at the discretion of the Board of Directors.
June 2026 PIPE Offering and Conversion of V-CO 4 Bridge Note
On June 30, 2026, we entered into a Securities Purchase Agreement (the “PIPE SPA”) with V-Co 4 and Bigger Capital Fund, LP (“Bigger” and collectively, the “Investors”).
Pursuant
to the PIPE SPA, the Company sold an aggregate of units (the “Units”), at a purchase price of $ per Unit,
with each Unit consisting of (i) one share of Series A Convertible Preferred Stock, par value $
The
$per Unit purchase price comprises $ attributable to the share of Preferred Stock included in such Unit and $ attributable
to the Warrant included in such Unit. Such $
| 15 |
NOTE 9 – COMMON STOCK
We
are authorized to issue shares of Common Stock.
The following is a description of Common Stock transactions since December 31, 2025:
January 2026 Warrant Inducement Transaction
On
January 15, 2026, we entered into a warrant inducement letter agreement (the “January 2026 Inducement Agreement”) with an
institutional investor (the “Holder”), pursuant to which the Holder agreed to exercise for cash the entirety of its January
2023 Warrants, November 2023 Series A Warrants and February 2024 Inducement Warrants at a reduced exercise price of $
January 2026 V-CO Investors 3 LLC Note
On
January 15, 2026, we entered into an unsecured convertible promissory note in favor of V-CO Investors 3 LLC (“V-CO 3”) in
the maximum principal amount of up to $
The
purpose of the V-CO 3 Note is to provide advanced funding and support to the Company in connection with a proposed equity financing of
the Company in the aggregate amount of up to $
On
January 15, 2026 and March 26, 2026, V-CO funded an initial $
The
V-CO 3 Note does not bear any interest, except in the case of an event of default, which is defined as
In the event of a Subsequent Financing prior to the Outside Date, all principal under the V-CO 3 Note shall automatically convert dollar-to-dollar, without any further action required on the part of V-CO or the Company, into such equity instruments of the Company as are issued in the Subsequent Financing. The Subsequent Financing may, but is not required to be, led by V-CO. Following the Outside Date, the Company may repay all or any portion of the outstanding principal amount and any accrued interest of the V-CO 3 Note in whole or in part without penalty.
On
March 31, 2026, we entered into an equity financing with V-CO 3 and accordingly, $
| 16 |
March 2026 PIPE Offering
On March 31, 2026, the Company entered into a Securities Purchase Agreement (the “March 2026 PIPE SPA”) with V-CO 3.
Pursuant to the March 2026 PIPE SPA, the Company sold to V-CO 3 in a private placement offering (the “March 2026 PIPE Offering”): (i) shares (the “March 2026 PIPE Shares”) of Common Stock, (ii) a pre-funded warrant to purchase shares of Common Stock (the “March 2026 Pre-Funded Warrant”, with the shares of Common Stock underlying the Pre-Funded Warrant being referred to as the “March 2026 PFW Shares”), (iii) a Series A Common Stock Purchase Warrant (the “March 2026 Series A Warrant”) to purchase up to shares of Common Stock and (iv) a Series B Common Stock Purchase Warrant to purchase up to shares of Common Stock (the “March 2026 Series B Warrant”, and together with the Series A Warrant, the “March 2026 Common Stock Purchase Warrants”, and together with the Pre-Funded Warrant, the “March 2026 Warrants”, and with the shares of Common Stock underlying the Common Stock Purchase Warrants being referred to as the “March 2026 Warrant Shares”).
V-CO
3 paid a purchase price of $ for each March 2026 PIPE Share and March 2026 Pre-Funded Warrant Share and associated March 2026 Common
Stock Purchase Warrants, with such price being established for purposes of compliance with the listing rules of the Nasdaq Stock Market
LLC. The March 2026 PIPE Offering closed on March 31, 2026. The Company received $
Both
March 2026 Common Stock Purchase Warrants have an exercise price of $
The terms of the March 2026 PIPE SPA require the Company to file a registration statement on Form S-3 or other appropriate form registering the March 2026 PIPE Shares, the March 2026 PFW Shares and the March 2026 Warrant Shares (collectively, the “March 2026 Registerable Securities”) for resale no later than 45 days of the closing of the March 2026 PIPE Offering and to use commercially reasonable best efforts to cause such resale registration statement to be effective within 90 days of the closing of the March 2026 PIPE Offering. The Company must also use its commercially reasonable efforts to keep such resale registration statement continuously effective (including by filing a post-effective amendment to such resale registration statement or a new registration statement if such resale registration statement expires) for a period of three (3) years after the date of effectiveness of such resale registration statement or for such shorter period as such securities no longer constitute March 2026 Registrable Securities, subject to certain limitations specified in the March 2026 PIPE SPA.
The
March 2026 PIPE SPA further provides that the Company shall pay V-CO 3 in the amount equal to $
“At-the-Market” Equity Offering
As previously reported on a Current Report on From 8-K filed on February 14, 2025 (the “February 8-K”), on February 14, 2025, pursuant to a prospectus supplement to the Company’s previously filed shelf registration statement on Form S-3 (File No. 333-262554) (the “Prior Shelf Registration”), the Company entered into an At The Market Offering Agreement (the “ATM Sales Agreement”) with HCW, pursuant to which the Company may offer and sell shares of Common Stock from time to time through HCW. The Company did not sell any shares of Common Stock under the Prior Shelf Registration pursuant to the ATM Sales Agreement.
| 17 |
On
September 12, 2025, the Company filed a prospectus supplement (the “ATM Pro Supp”) with the SEC pursuant to which the Company
may continue, under the ATM Sales Agreement, to sell, from time to time, up to an aggregate sales price of $
The offer and sale of the ATM Shares have been made pursuant to a shelf registration statement on Form S-3 (File No. 333-284834), as amended (the “New Shelf Registration”), initially filed by the Company with the SEC on February 11, 2025 and declared effective by the SEC on September 10, 2025, as supplemented by the ATM Pro Supp filed with the SEC pursuant to Rule 424(b) under the Securities Act.
During
the six months ended June 30, 2026, the Company sold an aggregate of ATM Shares at an average price of $ per share through
the ATM Sales Agreement, resulting in proceeds of approximately $
As of June 30, 2026 and December 31, 2025. all warrants outstanding have been classified as equity and recorded at fair values of the date of issuance on the Company’s consolidated balance sheets and there have been no further adjustments to their issuance date valuation. To better ascertain the nature of the equity, ASC 815, Derivatives and Hedging and ASC 480, Distinguishing Liabilities from Equity were referenced.
Stock Options
On November 26, 2024, our shareholders approved and adopted the Vivos Therapeutics, Inc. 2024 Omnibus Equity Incentive Plan (or the “2024 Omnibus Plan”). The 2024 Omnibus Plan automatically replaced and superseded the 2019 Plan. Under the 2024 Omnibus Plan, a total of shares are available for future use. awards are to be granted under the 2019 Plan or any other prior plan on or after the effective date of the 2024 Omnibus Plan and after the 2024 Omnibus Plan became effective any unused shares left in the 2019 Plan are to be retired. On November 4, 2025, the Company conducted its 2025 annual meeting of stockholders (the “Annual Meeting”). At the Annual Meeting, the Company’s stockholders approved and adopted an amendment to the 2024 Omnibus Plan to increase the number of shares of our Common Stock authorized to be issued pursuant to the 2024 Omnibus Plan from shares to shares in the aggregate.
The purpose of the 2024 Omnibus Plan is to promote the success and enhance the value of the Company by linking the personal interest of the participants to those of our stockholders by providing the participants with an incentive for outstanding performance. Any non-employee director, officer, employee or consultant of the Company or its subsidiaries or affiliates will be eligible to participate in the 2024 Omnibus Plan. The 2024 Omnibus Plan provides for the grant of options to purchase shares of our Common Stock, including stock options intended to qualify as incentive stock options (“ISOs”) under Section 422 of the Code and nonqualified stock options that are not intended to so qualify (“NQSOs”), stock appreciation rights (“SARs”), restricted stock awards, and other equity-based or equity-related awards including restricted stock units and performance units (each, an “Award”). As of June 30, 2026, awards (in the form of options and restricted stock units (“RSU”) for an aggregate of shares of Common Stock have been issued under our 2024 Omnibus Plan.
| 18 |
The following table summarizes all stock options as of June 30, 2026 (shares in thousands):
| 2026 | ||||||||||||
| Shares | Price (1) | Term (2) | ||||||||||
| Outstanding, at December 31, 2025 | $ | |||||||||||
| Granted | ||||||||||||
| Forfeited | ( | ) | ||||||||||
| Exercised | ||||||||||||
| Outstanding, at June 30 2026 | (3) | $ | ||||||||||
| Exercisable, at June 30 2026 | (4) | $ | ||||||||||
| (1) | |
| (2) | |
| (3) | |
| (4) |
There were stock options granted for the three and six months ended June 30, 2026 or 2025. For the three and six months ended June 30, 2026, the Company recognized approximately $ million and $ million of share-based compensation expense, respectively, compared with $ million and $ million for the three and six months ended June 30, 2025, respectively.
Unrecognized
expense relating to these awards as of June 30, 2026 was approximately $ million, which will be recognized over the weighted average
remaining term of years.
Restricted Stock Units
For the six months ended June 30, 2026, restricted stock units were granted. RSU’s are priced on the date of grant and vest over years at the end of the first and second years respectively. As of June 30, 2026, there are thousand RSUs outstanding.
| 19 |
Warrants
The following table sets forth activity with respect to the Company’s warrants to purchase Common Stock for the six months ended June 30, 2026 (shares in thousands):
| 2026 | ||||||||||||
| Shares | Price (1) | Term (2) | ||||||||||
| Outstanding, at December 31, 2025 | $ | |||||||||||
| Granted | ||||||||||||
| Private placement | ||||||||||||
| Warrant Inducement | ||||||||||||
| Forfeited | ( | ) | - | |||||||||
| Exercised | ( | ) | - | |||||||||
| Outstanding, at June 30, | (3) | $ | ||||||||||
| Exercisable, at June 30, | (4) | |||||||||||
| (1) | |
| (2) | |
| (3) | |
| (4) |
| 2026 | ||||
| Measurement date closing price of Common Stock (1) | $ | |||
| Contractual term (years) (2) | ||||
| Risk-free interest rate | % | |||
| Volatility | % | |||
| Dividend yield | % | |||
| (1) | |
| (2) |
NOTE 11 - INCOME TAXES
Income
tax expense during interim periods is based on applying an estimated annual effective income tax rate to year-to-date income, plus any
significant unusual or infrequently occurring items which are recorded in the interim period. The provision for income taxes for the
three and six months ended June 30, 2026 and 2025 differs from the amount that would be provided by applying the statutory U.S. federal
income tax rate of
Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred since inception. Such objective evidence limits the ability to consider other subjective evidence such as the Company’s projections for future growth. On the basis of this evaluation, a full valuation allowance has been recorded at June 30, 2026 and December 31, 2025 to record the deferred tax asset that is not likely to be realized.
| 20 |
The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgement including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in various jurisdictions, permanent and temporary differences, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is obtained, additional information becomes known or as the tax environment changes.
NOTE 12 - COMMITMENTS AND CONTINGENCIES
On March 13, 2026, we entered into a confidential joint settlement and release agreement (the “Settlement Agreement”) with Ortho-Tain for the full release, waiver and dismissal-resolution of all claims asserted by the parties against each other in the lawsuit we filed in federal district court in Colorado, Case No. 20 cv 1637 and the lawsuit Orth-Tain, Inc. filed in the United States District Court for the Northern District of Illinois on July 22, 2020.
In June of 2020, we filed a lawsuit in federal district court in Colorado, Case No. 20 cv 1637. Our Complaint alleged that we had suffered economic injuries, including lost profits/sales and an injury to its business reputation, as a result of allegedly false, misleading, and defamatory statements made by Ortho-Tain, Inc.’s CEO and legal counsel. In July of 2020, Ortho-Tain, Inc. filed a lawsuit in federal district court in Illinois, Case No. 20 cv 0301. Ortho-Tain’s Complaint alleged that it had suffered economic injuries, including lost profits/sales and an injury to its business reputation, as a result of allegedly unlawful marketing conduct by agents of Vivos.
The Settlement Agreement resolves any claim for relief that was, or could have been alleged, in the foregoing litigation matters. Pursuant to the Settlement Agreement, we will pay Ortho-Tain a confidential sum and, among other considerations, not make use of the phrase “Guide” or “Guides” in the formal product name of any of our oral appliance products and cease direct solicitation and training of independent dental professionals in the use of any Vivos pre-formed tooth positioner products that are competitive with Ortho-Tain. The settlement was paid late March 2026.
There were no new other material commitments or contingencies entered into as of the six months ended June 30, 2026.
NOTE 13 – RELATED PARTY TRANSACTIONS
We have certain office space leases whereby the entity leasing the office space as the lessor is controlled or owned by Dr. Prabhu Rachakonda, the founder of SCN and an employee of the Company. The details of these leases are as follows:
Lease
#1 – In November 2024, SCN entered into an amended office lease agreement for $
Lease
#2 – In January 2024, SCN entered into an office lease agreement when the previous agreement expired. The monthly amount for the
lease is $
Lease
#3 – As of December 31, 2025, the Company has an office lease with
On June 30, 2026, our Chairman and Chief Executive Officer, R. Kirk
Huntsman purchased $
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Basic and diluted net loss per share of Common Stock (“EPS”) is computed by dividing (i) net loss (the “Numerator”), by (ii) the weighted average number of shares of Common Stock outstanding during the period (the “Denominator”).
The calculation of diluted EPS is also required to include the dilutive effect, if any, of stock options, unvested restricted stock awards, convertible debt and Preferred Stock, and other Common Stock equivalents such as pre-funded warrants computed using the treasury stock method, in order to compute the weighted average number of shares outstanding. As of June 30, 2026 and 2025, all Common Stock equivalents were antidilutive.
For the Three Months Ended June 30, | For The Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Calculation of Numerator: | ||||||||||||||||
| Net loss | $ | ( | ) | ( | ) | $ | ( | ) | ( | ) | ||||||
| Loss applicable to common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Calculation of Denominator: | ||||||||||||||||
| Weighted average number of shares of Common Stock outstanding | ||||||||||||||||
| Net loss per share of Common Stock (basic and diluted) | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Common stock warrants | ||||||||
| Restricted stock units | ||||||||
| Common stock options | ||||||||
| Total | ||||||||
NOTE 15 - FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS
Fair Value Measurements
Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, we consider the principal or most advantageous market in which it transacts and considers assumptions that market participants would use when pricing the asset or liability. We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the measurement of fair value:
Level 1 - Quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date
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Level 2 - Other than quoted prices included in Level 1 that are observable for the asset and liability, either directly or indirectly through market collaboration, for substantially the full term of the asset or liability
Level 3 - Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any market activity for the asset or liability at measurement date
As of June 30, 2026 and 2025, the fair value of our cash and cash equivalents, accounts receivable, accounts payable, and other accrued liabilities approximated their carrying values due to the short-term nature of these instruments.
Recurring Fair Value Measurements
For the three months ended June 30, 2026 and 2025, only the contingent consideration liability discussed in Note 7 was identified as Level 1, Level 2 or Level 3. Level 3 techniques were used in the non-recurring measurement of assets and liabilities acquired in the SCN acquisition.
Our policy is to recognize asset or liability transfers among Level 1, Level 2 and Level 3 as of the actual date of the events or change in circumstances that caused the transfer. During the three months ended June 30, 2026 and 2025 we had no transfers of assets or liabilities between levels of the fair value hierarchy.
Significant Concentrations
Credit Risk
We
maintain our cash and cash equivalents primarily in depository and money market accounts within three large financial institutions in
the United States. Cash balances deposited at these major financial banking institutions exceed the insured limits. We have not experienced
any losses on our bank deposits and believe these deposits do not expose us to any significant credit risk. If we were unable to access
cash and cash equivalents as needed, the financial position and ability to operate the business could be adversely affected. As of June
30, 2026, we had cash and cash equivalents with five financial institutions in the United States with an aggregate balance of $
Generally, credit risk with respect to accounts receivable is diversified due to the number of entities comprising our customer base and their dispersion across different geographies and industries. We perform ongoing credit evaluations on certain customers and generally do not require collateral on accounts receivable. No single customer represented more than 10% of our sales or accounts receivable as of June 30, 2026. We maintain reserves for potential bad debts.
Supplier Concentration
As
previously disclosed, we rely on third-party suppliers and contract manufacturers for the raw materials and components used in our appliances
and to manufacture and assemble our products. As of June 30, 2026, we had five suppliers that accounted for approximately
NOTE 16 – SEGMENT INFORMATION
We
operate our business as
Our CODM uses consolidated revenue, gross profit, gross margin and operating loss as the measure of profit or loss. Our CODM assesses performance for the segment and allocates resources and monitors budget versus actual results using consolidated revenue, gross profit, gross margin and operating loss, as disclosed in the statement of operations. The monitoring of budget versus actual results are used in establishing management’s compensation. The measure of segment assets is reported on the balance sheet as total consolidated assets. Revenue and long-lived tangible assets are all located in the U.S.
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NOTE 17 – Variable Interest Entities
Variable Interest Entities
We evaluate our involvement with variable interest entities (“VIEs”) to determine whether it is required to consolidate such entities and to provide related disclosures.
Consolidated Variable Interest Entity
AIM Detroit, LLC (“AIM Detroit”) is a limited liability company formed to provide management and administrative services to affiliated clinical practices. We hold an 80% ownership interest in AIM Detroit.
We have determined that AIM Detroit is a variable interest entity because, by design, AIM Detroit’s equity at risk is not sufficient to permit it to finance its activities without additional subordinated financial support. Such support includes, among other things, as-needed member funding during the start-up period and credit support arrangements related to equipment financing.
We are the primary beneficiary of AIM Detroit because we have substantive decision-making authority over the activities that most significantly affect AIM Detroit’s economic performance and have the obligation to absorb losses or the right to receive benefits that could potentially be significant. Accordingly, AIM Detroit is consolidated in the Vivos’ consolidated financial statements.
| June 30, 2026 | December 31, 2025 | |||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net of allowance | ||||||||
| Total current assets | ||||||||
| Long-term assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use asset | ||||||||
| Deposits and other | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT) | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Current portion of operating lease liability | ||||||||
| Current portion of debt | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities | ||||||||
| Operating lease liability, net of current portion | ||||||||
| Debt, net of current portion | ||||||||
| Total liabilities | $ | $ | ||||||
NOTE 18 – SUBSEQUENT EVENTS
We entered into two short-term agreements, collateralized by a portion
of our accounts receivable, for $
Effective July 31, 2026, Bradford Amman voluntarily resigned as Chief Financial Officer and Secretary of the Company. Mr. Amman’s resignation was not the result of any disagreement with the Company on any matter relating to its operations, accounting policies or practices, financial reporting, internal controls, or disclosures. Concurrently, the Board of Directors appointed Roman Franklin as Chief Financial Officer and principal financial officer pursuant to a managed services agreement with The CFO Portal, LLC. Mr. Franklin is CEO of The CFO Portal, LLC. Mr. Amman agreed to provide transitional and advisory services for a period following his resignation under specified compensation terms.
On June 5, 2026, the
Company entered into an Exchange Agreement with Streeterville Capital, LLC pursuant to which Streeterville agreed to exchange up to
approximately $
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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 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 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 75,000 patients have been treated to date worldwide with our entire current suite of products by more than 2,000 trained dentists.
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.
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.
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.
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.
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.
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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.
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.
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.
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.
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.
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.
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, 2026.
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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 2026. 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, 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.
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.
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.
Potential Nasdaq Delisting. Given that our stockholders’ equity at December 31, 2025 and June 30, 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.
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.
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.
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.
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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.
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.
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.
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.
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.
On June 5, 2026, the Company received a notice from the Listing Qualifications Staff of Nasdaq indicating that, based on the closing bid price of the Company’s common stock from April 23, 2026 through June 4, 2026, the Company was no longer in compliance with the Minimum Bid Requirement.
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. The Company also engaged in a $2 million private placement in the second quarter ended June 30, 2026 with one new and one 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.
In accordance with the Nasdaq Listing Rules, we timely submitted a plan to regain compliance with the Stockholders’ Equity Requirement 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.
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.
CFO Transition. Effective July 31, 2026, Bradford Amman voluntarily resigned as Chief Financial Officer and Secretary of the Company. Mr. Amman’s resignation was not the result of any disagreement with the Company on any matter relating to its operations, accounting policies or practices, financial reporting, internal controls, or disclosures. Concurrently, the Board of Directors appointed Roman Franklin as Chief Financial Officer and principal financial officer pursuant to a managed services agreement with The CFO Portal, LLC, a related-party arrangement. Mr. Amman agreed to provide transitional and advisory services for a period following his resignation under specified compensation terms.
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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 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.
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.
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 the excess warrant fair value and change in fair value of warrant liability and contingent consideration for the purchase of SCN.
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Results of Operations
Comparison of the three and six months ended June 30, 2026 and 2025
Our consolidated statements of operations for the three and six months ended June 30, 2026 and 2025 (which includes incremental revenue recognized from the operations of SCN since June 10, 2025) are presented below (dollars in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||||
| Revenue | ||||||||||||||||||||||||
| Product revenue | $ | 1,355 | $ | 1,885 | $ | (530 | ) | $ | 2,795 | $ | 3,698 | $ | (903 | ) | ||||||||||
| Service revenue | 3,798 | 1,935 | 1,863 | 7,499 | 3,137 | 4,362 | ||||||||||||||||||
| Total revenue | 5,153 | 3,820 | 1,333 | 10,294 | 6,835 | 3,459 | ||||||||||||||||||
| Cost of sales (exclusive of depreciation and amortization shown separately below) | 2,200 | 1,710 | 490 | 4,282 | 3,219 | 1,063 | ||||||||||||||||||
| Gross profit | 2,953 | 2,110 | 843 | 6,012 | 3,616 | 2,396 | ||||||||||||||||||
| Gross profit % | 57 | % | 55 | % | 58 | % | 53 | % | ||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||
| General and administrative | 7,113 | 6,409 | 704 | 16,083 | 11,298 | 4,785 | ||||||||||||||||||
| Sales and marketing | 155 | 260 | (105 | ) | 404 | 615 | (211 | ) | ||||||||||||||||
| Depreciation and amortization | 510 | 306 | 204 | 965 | 483 | 482 | ||||||||||||||||||
| Operating loss | (4,825 | ) | (4,865 | ) | 40 | (11,440 | ) | (8,780 | ) | (2,660 | ) | |||||||||||||
| Non-operating income (expense) | ||||||||||||||||||||||||
| Other expense | (1,050 | ) | (163 | ) | (887 | ) | (2,218 | ) | (170 | ) | (2,048 | ) | ||||||||||||
| Other income | 352 | 15 | 337 | 384 | 73 | 311 | ||||||||||||||||||
| Net loss | $ | (5,523 | ) | $ | (5,013 | ) | $ | (510 | ) | $ | (13,274 | ) | $ | (8,877 | ) | $ | (4,397 | ) | ||||||
Comparison of the three months ended June 30, 2026 and 2025
Revenue
Revenue increased by approximately $1.3 million, or 35%, to approximately $5.2 million for the three months ended June 30, 2026 compared to $3.8 million for the three months ended June 30, 2025. The increase in total revenue during the second quarter of 2026 was impacted by an increase of approximately $1.9 million in service revenue and a decrease of approximately $0.5 million in product revenue. The decrease in product revenue is attributable to a decrease in appliance sales to VIPs of approximately $1.1 million. offset by a decrease of approximately $0.5 million in discounts offered and an increase in diagnostic reports of $0.1 million. The increase in service revenue is attributable to approximately $1.5 million in sleep testing services primarily generated from SCN and an increase of approximately $0.6 million of revenue generated from Vivos treatment to patients launched at two SCN locations, offset by a decrease of approximately $0.1 million in VIP enrollment revenue and approximately $0.1 million from sponsorship, seminar and other service revenue.
For the three months ended June 30, 2026, we sold 5,180 oral appliance arches for a total of approximately $1.4 million, a 28% decrease in revenue from the three months ended June 30, 2025, when we sold 4,116 oral appliance arches for a total of approximately $1.9 million. The decrease is directly attributable a higher volume mix of preformed appliance 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 increased $0.5 million or 29% to approximately $2.2 million for the three months ended June 30, 2026, compared to $1.7 million for the three months ended June 30, 2025. This was primarily attributable to higher costs associated with diagnostic services and patient therapy, including the addition of staff at the Vivos treatment centers.
For the three months ended June 30, 2026, gross profit increased by approximately $0.8 million to $3.0 million. This increase was attributable to the increase in revenue of approximately $1.3 million and increase in cost of sales of $0.5 million. Gross margin increased to 57% for the three months ended June 30, 2026, compared to 55% for the three months ended June 30, 2025 due to the increase in higher margins on Service Revenue.
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General and Administrative Expenses
General and administrative expenses increased $0.7 million or 11% to approximately $7.1 million for the three months ended June 30, 2026, as compared to $6.4 million for the three months ended June 30, 2025. The primary cause of this increase was approximately $0.6 million in salaries and wages related to acquiring SCN and opening Vivos treatment centers, and approximately $0.3 million in higher rent expense, offset by a reduction of approximately $0.2 million in bad debt and allowances.
Sales and Marketing
Sales and marketing expenses decreased $0.1 million to approximately $0.2 million for the three months ended June 30, 2026, as compared to $0.3 million for the three months ended June 30, 2025, which is attributable in significant part to our focus on reducing costs.
Depreciation and Amortization
Depreciation and amortization expense increased $0.2 million for the three months ended June 30, 2026 due to assets being placed into service.
Other Income/(Expense)
Other (Expense) increased $0.9 million due to additional interest expense on a note during the three months ended June 30, 2026, offset by an increase in Other Income of $0.3 million related to the valuation change in the contingent earnout related to the acquisition of SCN.
Comparison of the six months ended June 30, 2026 and 2025
Revenue
Revenue increased by approximately $3.5 million, or 51%, to approximately $10.3 million for the six months ended June 30, 2026 compared to $6.8 million for the six months ended June 30, 2025. The increase in total revenue during the period was impacted by an increase of approximately $4.4 million in service revenue and a decrease of approximately $0.9 million in product revenue. The decrease in product revenue is attributable to a decrease in appliance sales of approximately $2.0 million, offset by a decrease of approximately $0.2 million in discounts offered, an increase of $0.4 million in sales of tooth positioners, and an increase in diagnostic reports and other clinical sales of $0.5 million. The increase in service revenue is attributable to approximately $3.5 million in sleep testing services primarily generated from SCN and an increase of approximately $1.4 million of revenue generated from Vivos treatment to patients launched at two SCN locations, offset by a decrease of approximately $0.3 million in VIP enrollment revenue and approximately $0.2 million from sponsorship, seminar and other service revenue.
For the six months ended June 30, 2026, we sold 10,484 oral appliance arches for a total of approximately $2.8 million, a 24% decrease in revenue from the six months ended June 30, 2025, when we sold 7,852 oral appliance arches for a total of approximately $3.7 million. The decrease is directly attributable a higher volume mix of preformed appliance 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 increased $1.1 million or 33% to approximately $4.3 million for the six months ended June 30, 2026, compared to $3.2 million for the six months ended June 30, 2025. This was primarily related to higher costs associated with diagnostic services and patient therapy, including the addition of staff at the Vivos treatment centers.
For the six months ended June 30, 2026, gross profit increased by approximately $2.4 million to $6.0 million. This increase was attributable to the increase in revenue of approximately $3.5 million and increase in cost of sales of $1.1 million. Gross margin increased to 58% for the six months ended June 30, 2026, compared to 53% for the six months ended June 30, 2025 due to the increase in revenue and smaller increase in cost of sales.
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General and Administrative Expenses
General and administrative expenses increased by approximately $4.8 million, or approximately 42%, to approximately $16.1 million for the six months ended June 30, 2026, as compared to $11.3 million for the six months ended June 30, 2025. The primary driver of this increase related to the costs associated with acquiring and integrating SCN and establishing the Vivos treatment centers, including an increase in salaries and related compensation of approximately $3.0 million, an increase of approximately $0.9 million for professional fees, and an increase in rent of $0.6 million and other costs of $0.3 million.
Sales and Marketing
Sales and marketing expenses decreased by $0.2 million to $0.4 million for the six months ended June 30, 2026, compared to $0.6 million for the six months ended June 30, 2025. This decrease was primarily driven by our decrease in sales and marketing campaigns, lower commissions paid to our employees for digital media services and reduction in use of marketing supplies.
Depreciation and Amortization
Depreciation and amortization expense increased $0.5 million to approximately $1.0 million for the six months ended June 30, 2026 from $0.5 million for the six months ended June 30, 2025. Depreciation and amortization increased during the period due to assets being placed into service during the period.
Other Income/(Expense)
Other (Expense) increased $2.0 million due primarily to interest expense on a note during the six months ended June 30, 2026, offset by an increase in Other Income of $0.3 million related to the valuation change in the contingent earnout related to the acquisition of SCN.
Liquidity and Capital Resources
The financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. We have incurred losses since inception, including $5.5 and $5.0 million for the three months ended June 30, 2026 and 2025, respectively, and $13.3 and $8.9 million for the six months ended June 30, 2026 and 2025, respectively, resulting in an accumulated deficit of approximately $138.5 million as of June 30, 2026.
Net cash used in operating activities amounted to approximately $9.2 and $7.3 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had total liabilities of approximately $28.1 million.
On June 5, 2026, the Company entered into an Exchange Agreement with Streeterville Capital, LLC pursuant to which Streeterville agreed to exchange up to approximately $4.5 million of outstanding senior secured debt for a combination of perpetual non-convertible preferred stock and shares of common stock, contingent upon the Company completing certain qualifying equity financings. On June 18, 2026, the parties entered into a letter agreement extending the outside date for completion of the initial qualifying financing of at least $2.6 million from June 15, 2026 to August 31, 2026. See Note 18 to the accompanying financial statements for additional information.
On June 30, 2026, the Company closed a private placement with V-Co Investors 4 LLC and Bigger Capital Fund, LP for aggregate proceeds of approximately $2.1 million through the sale of units consisting of Series A Convertible Preferred Stock and warrants at a purchase price of $0.582 per unit. In connection with the transaction, the Company filed a Certificate of Designation creating the Series A Convertible Preferred Stock and entered into a registration rights agreement. A portion of the proceeds reflected the conversion of previously outstanding bridge financing.
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As of June 30, 2026, we had approximately $1.8 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 in our legacy business that have reduced cash used in operations. During the first six months of 2025, many one-time costs related to the acquisition of SCN were recognized and were not recurring in 2026.
As such, we have funded our operations through equity raises in the period ended June 30, 2026 and fiscal year ended December 31, 2025. We were required to obtain additional financing to satisfy our cash needs, including funding the SCN acquisition, and increasing our stockholders’ equity for Nasdaq compliance purposes as we seek to increase revenue with a view towards ultimately achieving positive cash flow operations. For a discussion of the financings to fund the SCN acquisition, please refer to the section “Material Items, Trends and Risks Impacting Our Business - Enrollments (Service Revenue) and Pivot to the Marketing and Distribution Model.”
Until we have attained 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. 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 and lowering our revenue expectations under the SAA. As such, we seek to acquire other sleep centers in transactions similar to the SCN acquisition or enter into other strategic alliances. 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.
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 six months ended June 30, 2026 and 2025 (in thousands):
| 2026 | 2025 | |||||||
| Net cash provided by (used in): | ||||||||
| Operating activities | $ | (9,158 | ) | $ | (7,290 | ) | ||
| Investing activities | (434 | ) | (6,028 | ) | ||||
| Financing activities | 9,337 | 11,460 | ||||||
Net cash used in operating activities of approximately $9.2 million for the six months ended June 30, 2026 an increase of approximately $1.9 million compared to net cash used in operating activities of approximately $7.3 million for the six months ended June 30, 2025. This increase is due primarily to a $4.4 million increase in net loss for the six months ended June 30, 2026, a decrease in other liabilities of $0.6 million, a decrease in stock-based compensation expense of approximately $0.4 million, offset by an increase of approximately $0.7 million in accounts payable, an increase of approximately $1.2 million in accrued expenses, an increase in depreciation and amortization of $0.5 million, an increase of $0.4 million in accounts receivable and an increase of approximately $0.6 million related to the fair value of common stock issued for services.
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For the six months ended June 30, 2026, net cash used in investing activities consisted of approximately $0.4 million related to the acquisition of property, plant and equipment. This compares to net cash used in investing activities for the six months ended June 30, 2025 of approximately $5.1 million for payment of a business acquisition and capital expenditures of $0.9 million related to internally developed software.
Net cash provided by financing activities of $9.3 million for the six months ended June 30, 2026, is attributable to proceeds of approximately $4.6 million from the exercise of warrants, approximately $3.0 million from the issuance of debt and $1.0 million for the issuance of preferred stock, offset by a decrease of approximately $6.6 million of proceeds from debt and a decrease of approximately $0.6 million from the issuance of warrants.
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, 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 and six months ended June 30, 2026.
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.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable to smaller reporting companies.
Item 4. Controls and Procedures.
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 June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Below is a description of our outstanding pending litigation matters. Litigation is subject to inherent uncertainties and an adverse result in the below described or other matters may arise from time to time that may harm our business.
On June 5, 2020, we filed suit against Ortho-Tain, Inc. (“Ortho-Tain”) in the United States District Court for the District of Colorado seeking relief from certain false, threatening, and defamatory statements to our business affiliate, Benco Dental (“Benco”). We believed such statements have interfered with our business relationship and contract with Benco, causing harm to our reputation, loss of goodwill, and unspecified monetary damages. On February 12, 2021, we amended our complaint to add claims for false advertising and unfair business practices, as well as additional variants of the original claims to address Ortho-Tain’s alleged false advertising campaign against us in the fall of 2020. Our amended complaint sought permanent injunctive relief to prevent what we believe are defamatory statements and interference with our business relationships by Ortho-Tain.
On July 22, 2020, Ortho-Tain, Inc. filed a complaint in the United States District Court for the Northern District of Illinois against the Company, our Chairman and Chief Executive Officer, R. Kirk Huntsman, Benco Dental Supply Co., Dr. Brian Kraft, Dr. Ben Miraglia, and Dr. Mark Musso (the “Illinois Ortho-Tain Case”). The complaint in the Illinois Ortho-Tain Case addressed the same events as the suit we filed against Ortho-Tain in June 2020 as described above. The complaint in the Illinois Ortho-Tain Case alleged violation of the Lanham Act and an alleged civil conspiracy among the defendants to violate the Lanham Act by an alleged false designation of origin related to a presentation given by Dr. Brian Kraft at an event sponsored by us and Benco Dental.
Ortho-Tain also alleged that the actions of the defendants diverted sales from Ortho-Tain, deprived Ortho-Tain of advertising value and resulted in a loss of goodwill to Ortho-Tain. Ortho-Tain further alleges two separate breach of contract actions against Dr. Brian Kraft and Mr. Huntsman. Ortho-Tain’s allegation of breach of contract against Mr. Huntsman, relates to a Non-Disclosure Agreement entered into in October 2013 with Mr. Huntsman’s prior entity, Xenith Practices, LLC, which Non-Disclosure Agreement expired pursuant to its terms in October 2016.
On September 9, 2020, we moved to dismiss the claims against it in the Illinois Ortho-Tain Case. On October 23, 2020, we filed a motion requesting, in the alternative, that if the case is not dismissed, it be transferred to the Colorado action described above or stayed. On May 14, 2021, the United States District Judge entered an order granting our motion to stay this case pending the outcome of a substantially similar, first-filed suit by us is pending in the United States District Court. In light of the stay, the District Court denied, without prejudice, our pending motion to dismiss. On March 2, 2023, the District Court lifted the stay.
The Defendants renewed their motions to dismiss. On August 23, 2024, the District Court of Colorado issued its order partially granting the motions to dismiss, including dismissing Defendants Benco Dental Supply Co. and Dr. Mark Musso. Ortho-Tain subsequently sought leave to amend its Complaint to try and address the deficiencies identified by the District Court of Colorado in its August 23, 2024 order. The Defendants opposed the Motion for Leave to Amend, and, on October 9, 2024, the District Court of Colorado held a hearing to address the Motion for Leave to Amend. The District Court of Colorado denied Plaintiff’s Motion for Leave to File an Amended Complaint without Prejudice.
The Parties submitted a Joint Discovery Plan to the District Court on October 21, 2024. On October 22, 2024, the District Court ordered the parties to exchange Rule 26(a)(1) initial disclosures by November 22, 2024 and Initial Written Discovery to Be Issued by the same date, which the parties completed. The parties continued with discovery and have provided additional status reports to the District Court on January 6, 2025, February 24, April 7, May 5, June 11, July 9, August 6, 2025, August 26, 2025, and September 16, 2025. On October 23, 2025, the parties attended a mediation in an effort to resolve their disputes and agreed upon principal terms of a confidential settlement.
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On March 13, 2026, we entered into a confidential joint settlement and release agreement (the “Settlement Agreement”) with Ortho-Tain.
The Settlement Agreement resolved any claim for relief that was, or could have been alleged in the foregoing litigation matters. Pursuant to the Settlement Agreement, we will pay Ortho-Tain a confidential sum and, among other considerations, not make use of the phrase “Guide” or “Guides” in the formal product name of any of our oral appliance products and cease direct solicitation and training of independent dental professionals in the use of any Vivos pre-formed tooth positioner products that are competitive with Ortho-Tain.
Item 1A. Risk Factors
We are voluntarily providing in this Item 1A. updated risk factors associated with SCN, the Acquisition and related matters.
In 2025 and 2026, we worked to pivot our sales, marketing distribution model, including via the acquisition of the Sleep Center of Nevada (the “Acquisition”). However, this new model is unproven and may not produce the benefits we anticipate. This makes it difficult to evaluate our future prospects and may increase the risk of your investment.
In June 2025, we acquired all assets, including operating assets such as sleep testing, diagnostics, and treatment centers, of SCN. The Acquisition marked the completion in a pivot to our 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 consulting revenues, representing new higher margin revenue streams for us, as well as potential Vivos appliance sales revenue from SCN. We are exploring and seeking to implement additional acquisitions of, or collaborations with, medical sleep and similar healthcare practices to expand our business model in an effort to grow our revenues.
We are placing significant emphasis on establishing and growing this new model as means of increasing our revenue. However, this new model is unproven, and we have limited operating history associated with this new model. Our prior collaboration with Rebis Health in Colorado entered into in 2024 has not met our expectations and differed materially from the SCN acquisition in that we did not have adequate control over patient processing, systems and protocols, dentist hiring and management, staff hiring and management, patient education, hours of operation, or medical provider training and education. As a result, the Rebis Health collaboration has not benefited us as we had anticipated. There is therefore a lack of information for you to evaluate our future prospects utilizing this new model. Moreover, there is a material risk that this new model will not increase our revenues or gross margins in the manner we anticipate. In addition, we may be unable to find additional sleep medical providers to incorporate into our business, and even if we do, the is a risk we may not derive the benefits from additional acquisition that we intend to. Our inability to implement and scale this marketing and distribution model would materially harm our business and operating results and likely cause our stock price to suffer.
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Additionally, if the benefits of the Acquisition or similar acquisitions or collaborations we may undertake do not meet the expectations of our shareholders, the market price of our securities may decline. Fluctuations, including declines, in the price of our common stock could contribute to the loss of all or part of your investment. Certain factors, including, but not limited to, the factors listed below could have a material adverse effect on the price of our common stock:
| ● | actual or anticipated fluctuations in financial results post-Acquisition or following the execution of similar transactions; | |
| ● | changes in the market’s expectations about our operating results post-Acquisition or following the execution of similar transactions; | |
| ● | announcements of technological innovation, or new products, by our competition; and | |
| ● | the success of our competitors. |
As such, no assurances can be given that the Acquisition or similar transactions will benefit our operating results or stock price.
We have incurred substantial indebtedness in connection with financing the SCN acquisition, the cost of servicing that debt could adversely affect our business, financial condition, and results of operation, and we may not be able in the future to service that debt.
Concurrently with the SCN Acquisition, we entered into a 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 in the original principal amount of $8,250,000 (the “Note”). The Note is secured by our wholly-owned subsidiary AIM, which manages SCN in accordance with the corporate practice of medicine. The Company has also pledged the entirety of AIM’s membership interests to the Lender as collateral for the Loan pursuant and caused AIM to provide a guarantee of our obligations to the Lender under the Note and the other transaction documents.
In June 2026, we entered into an Exchange Agreement with Streeterville under which Streeterville agreed to exchange a portion of the outstanding indebtedness under the Note for shares of our preferred stock and common stock, contingent on our completion of a qualifying financing of at least $2.6 million. In August 2026, the financing condition was satisfied and subsequently the exchange was completed. See Note 18 to the accompanying financial statements for additional information. Notwithstanding the exchange, a portion of the original Note remains outstanding and continues to be secured by the collateral and guarantees described above. In addition, Series B Non-Convertible Preferred Stock issued in the exchange carries preferential rights (including with respect to dividends, liquidation, and other terms) that rank senior to our common stock, resulted in dilution to existing common stockholders, and makes us subject to certain affirmative and negative covenants in favor of Streeterville, including a requirement that we obtain Streeterville’s consent for future debt and equity financings over $2.5 million in the aggregate, which may restrict our ability to access capital or require us to access capital on terms that are not as favorable as would otherwise have been available.
Our ability to make scheduled payments under the Note or any alternative debt financing arrangements we may enter into in connection with our growth strategy to acquire additional medical sleep practices will depend on our financial and operating performance, which will be affected by economic, financial, competitive, business, and other factors, some or all of which are beyond our control. The indebtedness we incurred in connection with the Acquisition will require us to dedicate a portion of our cash flow to servicing this debt, thereby reducing the availability of cash to fund other business initiatives. There can be no assurance that our business, inclusive of SCN, will generate sufficient cash flow from operations to service our indebtedness or to fund our other liquidity needs. If we are unable to meet our debt obligations or fund our other liquidity needs, we may need to restructure or refinance all or a portion of our indebtedness on or before maturity or sell certain of our assets. There can be no assurance that we will be able to restructure or refinance any of our indebtedness on commercially reasonable terms, if at all, which could cause us to default on our debt obligations and impair our liquidity. Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. If we are unable to generate or borrow sufficient cash to make payments on our indebtedness, our business, financial condition, and results of operations could be adversely affected.
Integrating SCN’s operations may be more difficult, costly, or time-consuming than expected.
The ongoing integration of Vivos and SCN could result in the disruption of our ongoing business, and inconsistencies in standards, controls, procedures and policies that adversely affect our ability to maintain relationships with patients and employees or achieve the anticipated benefits of the Acquisition. As with any acquisition, there also may be disruptions that cause us to lose patients or cause patients to elect alternative form of sleep treatment. We may also face other unintended consequences from the Acquisition (including adverse effects on our business reputation, supply chain issues, and similar matters) that that could have a material adverse effect on our results of operations, financial condition and stock price.
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If our contractual arrangements between AIM and our physicians at SCN are found to constitute the improper rendering of medical services or fee splitting under applicable state laws, our business, financial condition and our ability to operate in those states could be adversely impacted.
Our contractual relationships between AIM and our physicians at SCN (and similar arrangements we may enter into in the future in connection with other sleep provider acquisitions) may implicate certain state laws that generally prohibit non-professional entities from providing licensed medical services or exercising control over medical practitioners or other healthcare professionals (such activities generally referred to as the “corporate practice of medicine”, and laws, rules and regulations relating to the corporate practice of medicine, the “CPM Laws”) or engaging in certain practices such as fee-splitting with such licensed professionals. The interpretation and enforcement of CPM Laws vary significantly from state to state. There can be no assurance that CPM Laws will be interpreted in a manner consistent with our practices or that other laws or regulations will not be enacted in the future that could have a material and adverse effect on our business, financial condition and results of operations. Regulatory authorities, state boards of medicine, state attorneys general and other parties may assert that, despite the agreements through which we operate, we are engaged in the provision of medical services and/or that our arrangements with our medical practitioners constitute unlawful fee-splitting. If a jurisdiction’s prohibition on the corporate practice of medicine or fee-splitting is interpreted in a manner that is inconsistent with our practices, we would be required to restructure or terminate our arrangements with our medical practitioner at SCN to bring our activities into compliance with such CPM Laws. A determination of non-compliance, or the termination of or failure to successfully restructure these relationships could result in disciplinary action, penalties, damages, fines, and/or a loss of revenue, any of which could have a material and adverse effect on our business, financial condition and results of operations. State corporate practice and fee-splitting prohibitions also often impose penalties our medical practitioners for aiding in the improper rendering of professional services, which could discourage medical practitioners and other healthcare professionals from providing clinical services at SCN or other sleep centers we may operate in the future.
As a result of our business model pivot which includes the acquisition of sleep centers like SCN, we may become a party to lawsuits, demands, claims, qui tam suits, governmental investigations and audits and other legal matters, any of which could result in, among other things, substantial financial and other penalties, damage to our reputation or adverse effects on our ability to conduct business.
As a result of our 2025 business model pivot, which includes acquisitions of sleep medical providers like SCN as a means of driving sales of our OSA treatments, our business has (subject to compliance with CPM laws as described above) become more associated with diagnosing and treating OSA patients. Given the nature of this business, we may in the future be subject to investigations and audits by governmental agencies, private civil qui tam complaints and other lawsuits, demands, claims, legal proceedings and/or other actions alleging our, or the medical practices we manage, failure to comply with applicable rules, regulations, laws or the practice of medicine.
For example, we and sleep medical providers we manage (like SCN) could become subject to audits from the government concerning the billing of patients. If, following the conclusion of any audit, the government were to require refunds and/or modifications to our business practices, and such amounts or changes are significant, it could have a material adverse effect on our business, results of operations, financial condition and cash flows. In addition, any allegation against us, our medical providers we manage or related personnel, representatives, third party vendors, or operations in such matters or matters that involve patients suffering adverse health outcomes, may, among other things harm our reputation, stock price, and adversely affect our relationships and/or contracts related to our business, among other things.
Responding to subpoenas, investigations and other lawsuits, claims and legal proceedings, as well as defending ourselves in such matters, would require management’s attention and cause us to incur significant legal expense. Negative developments, findings or terms and conditions that we might agree to accept as part of a negotiated resolution of pending or future legal or regulatory matters, or have been forced upon us, could result in, among other things, harm to our or our medical providers’ reputation, substantial financial penalties or awards against us, substantial payments made by us, required changes to our business practices, impacts on our various relationships and/or contracts related to our business, exclusion from future participation in Medicare, Medicaid and other healthcare programs and, in certain cases, criminal penalties, any of which could have a material adverse effect on us.
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Changes in the structure of and payment rates under private insurance, Medicare, Medicaid or other non-Medicare government-based programs or payment rates related to our business could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Sleep center providers like SCN or other medical sleep providers we may acquire and manage or do business with rely on various forms of insurance held by patients for payment for products and services. These include private insurance, Medicare, Medicaid and other government programs. As such, the business of the medical sleep providers we manage and our business and results of operations could be adversely impacted by matters related to insurance coverage including, without limitation:
| ● | The risk that reimbursement rates are reduced by private insurance carriers or government insurance providers; |
| ● | The risk that changes in insurance policies or regulatory mandates could limit the ability to either be paid for covered services or bill for treatments or services or otherwise impact reimbursement; |
| ● | The risk that interpretations of existing regulations, manual provisions and/or guidance, or the implementation or enforcement of new interpretations, will be inconsistent with how we and the medical sleep providers we manage have interpreted regulations, manual provisions and/or guidance; |
| ● | The risk that data and related reporting requirements are implemented that result in decreased reimbursement, increased technology and operational costs, or reputational harm; |
| ● | The risk that increases in our operating costs will outpace any Medicare or other rate increases we receive; |
| ● | The risk of federal budget sequestration cuts or other disruptions in federal government operations and funding; and |
| ● | The risk of ensuring that the sleep medical providers we manage remain compliant with applicable requirements, including marketing and education requirements and restrictions, as well as contractual terms with associated insurance plans. |
If we are faced with these or similar risks, we could face material adverse consequences on our business, results of operations, financial condition and cash flows.
Our business and the medical practices we manage are labor intensive. Our inability to recruit qualified talent and manage labor costs or shortages result could result significant increases in our operating costs, decreases in productivity, and disruptions in our business operations.
Our business and the business of the medical practices we manage is labor intensive. This is particularly true with respect to the Sleep Optimization (SO) teams we are putting in place at SCN, 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. Labor requirements also exist, albeit to a lesser extent, for contractual alliances with medical sleep providers we may enter into. We face increased labor costs and the risk of difficulties in hiring skilled clinical personnel. The healthcare labor market for the talent we require is challenging and experiences volatility, uncertainty and labor supply shortages. We may be unable to achieve the financial results we desire from the SCN acquisition, the acquisition of other medical sleep providers or our contractual alliances due to variations in labor-related costs and the productivity our personnel.
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We have incurred and, as we seek to scale our business, expect to continue to incur increased labor costs, including through elevated compensation levels to our personnel, the ultimate extent of which will depend on the needs at SCN or other medical sleep providers we acquire as well as macroeconomic conditions and ancillary impacts on the labor market, among other things.
We compete for qualified talent with hospitals and other healthcare providers. Furthermore, changes in certification requirements could adversely impact our ability to maintain sufficient staff levels, including to the extent our personnel are not able to meet new requirements. In addition, if we experience a higher than normal turnover rate for our skilled clinical personnel, our operations and ability to meet patient demand may be negatively impacted, which could adversely affect our business, results of operations, financial condition and cash flows.
Also, political or other efforts at the national or local level could result in actions or proposals that increase the likelihood of success of union organizing activities at the facilities we manage. If a significant portion of our personnel were to become unionized, we could experience, among other things, potential additional work stoppages or other business disruptions; adverse impacts to our financial results due to the costs of bargaining or implementing a grievance procedure and processing grievances, decreases in our operational flexibility and efficiency, or negative impacts on our employee culture. Any of these events or circumstances, including our responses to such events or circumstances, could have a material adverse effect on our employee relations, treatment growth, productivity, business, results of operations, financial condition, cash flows and reputation.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None, except as otherwise included in a Current Report on Form 8-K filed with the SEC.
Item 3. Default Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits, Financial Statement Schedules.
The following documents are filed as exhibits to this Quarterly Report on Form 10-Q.
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| (1) | Incorporated by reference to the Company’s Registration Statement on Form S-1, filed with the SEC on October 9, 2020. |
| (2) | Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on October 27, 2023. |
| (3) | Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on July 7, 2026. |
| (4) | Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on June 8, 2026. |
| (5) | Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on June 25, 2026. |
| (6) | Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 3, 2026. |
| 41 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Vivos Therapeutics, Inc. | ||
| Date: August 14, 2026 | By: | /s/ R. Kirk Huntsman |
| R. Kirk Huntsman | ||
| Chairman of the Board and Chief Executive Officer | ||
| (principal executive officer) | ||
| Date: August 14, 2026 | By: | /s/ Roman Franklin |
| Roman Franklin | ||
Chief Financial Officer | ||
| (principal financial officer) | ||
| 42 |