Q2 2024 Vivos Therapeutics Inc Earnings Call

Operator: Good day, everyone, and welcome, second quarter 2024 area is calm Next time, all participants are in a listen-only mode. A question-and-answer session will follow management remarks. Conference is being recorded and a replay today's call will be available in the best relations section. Vivos website. The remaining posted, for the next 30. I will now hand the call over to John Lee, Vivos Executive Vice President. Instructions and the reading of the safe harbors, Thank you, operator.

Good day, everyone in the world.

The second quarter 'twenty 'twenty four earnings conference call.

Operator: At this time, all participants are in a listen-only mode.

Speaker Change: At this time all participants are in a listen only mode.

Operator: A question and answer session will follow management remarks. This conference is being recorded, and a replay of today's call will be available in the next 30 days.

Speaker Change: <unk> and answer session will follow management's remarks. This conference is being recorded and a replay of today's call will be available in Investor Relations section of the boat's website and will be a remaining close Ted there for the next 30 days.

John Lee: I will now hand a call over to John Lee, Vivos Executive Vice President of Marketing, for instructions and the reading of the safe harbor statement. Please go ahead.

Speaker Change: I will now hand, the call over to John Lee Peoples Executive Vice President.

Marketing.

Speaker Change: Our instructions and the reading of the Safe Harbor statement. Please go ahead.

John Lee: Thank you, operator.

John Lee: Hello, everyone, and welcome to our. Copy of our earnings press release is available on the Investor Relations, of our website at www, with us on call today, are Curt Kuntzman, Vivos Chairman and Chief Executive Officer, and Brad Amman, Chief Financial Officer. Today we'll review the highlights and financial results for the second quarter 2024, as well as more recent development and Vivos' plan for the rest of 2024. Following these formal remarks, we will be happy to.

Speaker Change: Thank you operator, Hello, everyone and welcome to our conference call a copy of our earnings press release is available on the Investor Relations section of our website at www.

John Lee: Hello, everyone, and welcome to our conference call. A copy of our earnings press release is available on the investor relations section of our website at www.divos.com. With us on call today are Kurt Kuntzman, Vivos Chairman and Chief Executive Officer, and Brad Amman, Chief Financial Officer. Today, we'll review the highlights and financial results for the second quarter 2024, as well as more recent developments and Vivos's plan for the rest of 2024 following these formal remarks. We will be happy to take questions.

Speaker Change: Dot com.

Speaker Change: This on call today.

Kirk Huntsman, Devos, Chairman and Chief Executive Officer, and Brad Anderson, Chief Financial Officer Today, We'll review the highlights and financial results for the second quarter 2024.

Speaker Change: As well as more recent development and peoples is planned for the rest of 2024. Following these formal remarks, we will be happy to take questions.

John Lee: I would also like to remind everyone that today's call will contain certain forward-looking statements from our management made within the meaning of Section 27 A of the Securities Act of 1933, as amended, and Section 21 E of the Securities and Exchange Act of 1934, as amended. Concerning future events, words such as aim, may, could, should, projects, expects, intends, plans, believes, anticipates, hopes, estimates, goal, and variation of such words and similar expressions are intended to identify forward looking statements. These statements involve significant known and unknown risks and are based upon a number of assumptions and estimates, which are inherently subject to significant risks, uncertainties, and contingencies, many of which are beyond the company's control.

Unknown Executive: I would also like to remind everyone that today's call will contain certain forward-looking statements from our management made within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as, Concerning future events, words such as aim, may, could, should, project, expect, intends, plans, believes, anticipates, hopes, estimates. Goal and variations of such words and similar expressions are intended to identify forward, These statements involve significant known and unknown risks and are based upon a number of assumptions, which are inherently subject to significant, Uncertainties and contingencies.

Speaker Change: I'd also like to remind everyone that today's call will contain certain forward looking statements from our man. It's been made within the meaning of section 27, a of the Securities Act of 1933 as amended and section 21 E of the Securities and Exchange Act of 1934 as them.

Speaker Change: It did.

Unknown Executive: Many of which are beyond company's control. Actual results, including without limitation, the results of Vivos' growth strategy. Unknown Operational, including sales, marketing, distribution, product acquisition and integration, research and development, regulatory initiatives, cost savings plan, and plans to generate revenue. As well as future potential results of operations or operating metrics, such as the potential for Vivos to achieve future positive cash flow or profitability, and other matters to be addressed by Vivos management in this conference call may differ materially and adversely from those expressed or implied by such a forward look.

Speaker Change: Concerning future events word such as aim may could should projects expects intends plans believes anticipates hopes estimates go and variations of such words and similar expressions are intended to identify.

Unknown Executive: Factors that could cause actual results to differ materially include, but are not limited to, the risk factors described and other disclosures contained in Vivos' filing with the Securities and Exchange Commission, including the risk factors and other disclosures in our Form 10-K for the year ended December 31, 2023, and other filings with the SEC, including our second quarter 10-Q filed with the SEC today. All of which are, or will be accessible on the investor relations section of Vivos' website, as well as the. Accept to spend, required by law, Vivos assumes no obligation to update statements as circumstantial.

Speaker Change: Forward looking statements.

Speaker Change: These statements involve significant known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant risks uncertainties and contingencies, many of which are beyond company's control.

John Lee: Actual results, including, without limitation, the results of Vivos's growth strategies, operational plans, including sales, marketing, distribution, product acquisition and integration, research and development, regulatory initiatives, cost savings plan, and plans to generate revenue, as well as future potential results of operations or operating metrics such as the potential of the process. The potential for Vivos's Vivos to achieve future positive cash flow or profitability and other matters to be addressed by Vivos management in this conference call may differ materially and adversely from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the risk factors described and other disclosures contained in Vivos's filing with the Securities and Exchange Commission, including the risk factors and other disclosures in our Form 10-K for the year ended December 31, 2023.

Speaker Change: Actual results, including without limitation the results of the votes this growth strategies.

Speaker Change: Operational plans.

Speaker Change: Including sales marketing distribution product acquisition, and integration research and development regulatory initiatives cost savings plan and plans to generate revenue as well as future potential results of operations or operating metrics such as the potential for <unk>.

Speaker Change: He was devos to achieve future positive cash flow or profitability.

Speaker Change: And other matters to be addressed by vivo span that's been in this conference call may differ materially and adversely from those expressed or implied by such forward looking statements.

Speaker Change: Factors that could cause actual results to differ materially include but are not limited to the risk factors described and other disclosures contained in reverse this filing with the securities and Exchange Commission, including the risk factors and other disclosures in our Form 10-K for the.

Speaker Change: Year ended December 31, 2023, and other filings with the SEC, including our second quarter 10-Q filed with the SEC today.

John Lee: And other filings with the SEC, including our second quarter 10-Q filed with the SEC today. All of which are or will be accessible on the Investor Relations section of Vivos's website as well as the SEC's website, except to the extent required by law. Vivos assumes no obligation to update statements as circumstances change.

Speaker Change: All of which are.

Speaker Change: Or it will be accessible on the Investor Relations section of the bushes website.

Speaker Change: As well as the Sec's website.

Speaker Change: Except to extent.

Speaker Change: It required by law Devos assumes no obligation to update statements as circumstances change.

John Lee: Finally, please feel aware that the U.S. Food and Drug Administration has given certain specific Vivos appliances to treat mild to severe OSA. With the FDA clearance for severe last November, treatment of patients with severe OSA with these specific appliances is no longer needed to be performed off-label at the clinical discussion of the treating doctor and is now an integral part of the Vivo's treatment protocol. Treatment of OSA of any severity or any other condition with any other Vivo's FDA-cleared devices remains at the clinical discussion of the treating doctor.

Unknown Executive: Finally, please be aware that the U.S. Food and Drug Administration, given certain Vivos Appliances 510K Clearing, Treat, Mild to Severe OSA. With the FDA clearance for severe last November. Treatment of, with Severe OSA with these specific appliances is no longer needed to be performed off label, at the clinical discretion of the treating doctor and is now an integral part of the Vivos treatment protocol. Treatment of OSA of any severity or any other condition, with any other Vivos FDA cleared devices. Patrick Renekov.

Speaker Change: Finally, please be aware that the U S food and drug administration has given certain specific devos appliances, five 10-K clearance to treat mild to severe OSA with the FDA clearance for severe last November treatment of patients with severe OSA with these.

Speaker Change: Appliances is no longer needed to be performed off label Ethically list clinical discretion of the treating doctor and is now an integral part of the Veeva treatment protocol treatment of the lets say of any severity or any other condition.

Speaker Change: With any other Eva is FDA cleared devices remains at the clinical discretion of the treating doctor.

Brad Amman: Now, at this time, it's my pleasure to introduce Brad Amman, CFO of Vivos. Brad, please go ahead.

John Lee: [inaudible] Now at this time, it's my pleasure to introduce Brad Amman, CFO of Vivos. Brad, please go ahead. Thank you, John. And good afternoon, everyone. Today, I will review the highlights of our financial results for the second quarter of 2024. For further information on our results for the three and six month periods into June 30, 2024, please see our earnings release, which was distributed earlier today, and our quarterly report on Form 10-Q, which is available on the SEC filings portion of the investor relations section of our website, as John mentioned, at www.vivos.com.

Brad Edmunds: Now at this time, it's my pleasure to introduce Brad Edmunds CFO of evils Brad. Please go ahead.

Brad Amman: Thank you, John.

John Lee: Today, we are pleased to report second quarter 2024 total revenue of $4.1 million compared to $3.4 million for the both the second quarter of 2023 and the first quarter of 2024, a 19% increase both sequentially and year over year. This year-over-year growth was due to an increase of approximately $400,000 in product revenue from higher sales and fewer discounts of Vivos appliances and guides, coupled with an increase of $200,000 in service revenue, reflecting an increase in Vivos Integrated Provider, or VIP, enrollment revenue, which you will recall we recognize over time, as well as Vivos Integrated Provider, an increase of $100,000 in sponsorship, seminar, and other service revenue. This was partially offset by a decrease of $100,000 in Myofunctional Therapy revenue. Billing Intelligence Service and Home Sleep Testing Service revenue remained relatively unchanged year over year.

Brad Edmunds: Thank you John and good afternoon, everyone. Today I will review the highlights of our financial results for the second quarter of 2024.

Brad Amman: In good afternoon, everyone. Today, I will review the highlights of our financial results for the second quarter of 2024. For further information on our results for the three and six month periods into June 30, 2024, please see our earnings release, which was distributed earlier today, and our quarterly report on Form 10-Q, which is available on the SEC filings portion of the Investor Relations section of our website, as John mentioned at www.vivos.com. Today, we are pleased to report second quarter of 2024 total revenue of $4.1 million compared to $3.4 million for both the second quarter of 2023 and the first quarter of 2024, a 19% increase both sequentially and year over year.

Brad Edmunds: For further information on our results for the three and six month periods ended June 32024, Please see our earnings release, which was distributed earlier today and our quarterly report on Form 10-Q, which is available on the SEC filings portion of the Investor Relations section of <unk>.

Brad Edmunds: Our website as John mentioned at Www Dot vivo Dot com.

Speaker Change: Today, we are pleased to report second quarter 2024, total revenue of $4 $1 million compared to $3 $4 million for both the second quarter of 2023, and the first quarter of 2024% to 19% increase both sequentially and year over year.

Brad Amman: This year-over-year growth was due to an increase of approximately $400,000 in product revenue from higher sales and fewer discounts of Vivo's appliances and guides, coupled with an increase of 200,000 in service revenue, reflecting an increase in Vivo's integrated provider or VIP enrollment revenue, which you will recall we recognize over time. As well as an increase of 100,000 in sponsorship, seminar, and other service revenue. This was partially offset by a decrease of 100,000 in my functional therapy revenues. Billing intelligent service and home sleep testing service revenue remained relatively unchanged year over year. For the six months ended June 30, 2024, total revenue was $7.5 million compared to $7.3 million.

Speaker Change: This year over year growth was due to an increase of approximately $400000 in product revenue from higher sales and fewer discounts of veeva.

Speaker Change: Clients isn't guides, coupled with an increase of 200000 in service revenue, reflecting an increase in vivo integrated provider or VIP enrollment revenue, which you will recall, we recognized over time as well as.

Speaker Change: An increase of 100000 in sponsorship seminar and other service revenue.

Speaker Change: This was partially offset by a decrease of 100000 in Miami functional therapy revenues.

Speaker Change: Billing intelligence service at home sleep testing service revenue remained relatively unchanged year over year.

Brad Amman: For the six months ended June 30, 2024, total revenue was seven and a half million compared to 7.3 million for the comparable period in 2023. During the second quarter of 2024, we enrolled 32 VIPs and recognized VIP enrollment revenue of $1.2 million, a revenue increase of 28% compared to the second quarter of 2023, when we enrolled 43 VIPs for a total of $900,000 in revenue. Approximately $600,000 in revenue was attributable to accelerated revenue recognition on several contracts for VIPs who did not complete their required training during the first 90 days of their enrollment.

Speaker Change: For the six months ended June 32024, total revenue was $7 5 million compared to $7 3 million for the comparable period in 2023.

Brad Amman: For the comparable period in 2023. During the second quarter of 2024, we enrolled 32 VIPs and recognized VIP enrollment revenue of $1.2 million, a revenue increase of 28% compared to the second quarter of 2023, when we enrolled 43 VIPs for a total of $900,000 in revenue. A approximately 600,000 in revenue was attributable to accelerated revenue recognition on several contracts for VIPs who did not complete their required training during the first 90 days of their enrollment. Please refer to our 10-Q for further details, particularly on our revenue recognition policy for enrollments. For the six months ended June 30th, 2024, we enrolled 82 VIPs and recognized VIP enrollment revenue of approximately 2.1 million, a revenue decrease of 6% compared to the same period last year when we enrolled 81 VIPs for a total of $2.2 million.

Speaker Change: During the second quarter of 2024, we enrolled 32, Vips and recognize VIP enrollment revenue of $1 $2 million, a revenue increase of 28% compared to the second quarter of 2023, when we enrolled 43 Vips for a total of 900000 in revenue.

Speaker Change: Approximately 600000 in revenue was attributable to accelerated revenue recognition on several contracts for Vips, who did not complete the required training during the first 90 days of their enrollment.

Speaker Change: Please refer to our 10-Q for further details, particularly on our revenue recognition policy for enrollments.

Brad Amman: Please refer to our 10-Q for further details, particularly on our revenue recognition policy for enrollment. For the six months ended June 30, 2024, we enrolled 82 VIPs and recognized VIP enrollment revenue of approximately $2.1 million, a revenue decrease of 6% compared to the same period last year, when we enrolled 81 VIPs for a total of $2.2 million. Well, the number of VIP enrollments increased slightly revenue was impacted by updates to key inputs in our revenue recognition methodology, primarily estimated customer lives in the addition of new entry levels into the VIP program at lower price points.

Speaker Change: For the six months ended June 30th 2024, we enrolled 82, Vips and recognize VIP enrollment revenue of approximately $2 1 million a revenue decrease of 6% compared to the same period last year. When we enrolled 81 Vips for a total of $2 $2 million.

Brad Amman: Well, the number of VIP enrollments increased slightly. Revenue was impacted by updates to key inputs in our revenue recognition methodology, primarily estimated customer lives in the addition of new entry levels into the VIP program at lower price points. We sold 2033 oral appliance arches during the second quarter of 2024 for a total of 2 million, a 28% increase in revenue compared to 2083 oral appliances during the second quarter of 2023 for 1.5 million. The increase in revenue is directly attributable to a 71% decrease in discounts offered during the second quarter of 2024 compared to the same period last year.

Well the number of VIP enrollments increased slightly revenue was impacted by updates to key inputs and our revenue recognition methodology, primarily estimated customer lives and the addition of new entry levels into the VIP program at lower price points.

Brad Amman: We sold 2033 oral appliance arches during the second quarter of 2024 for a total of $2 million, a 28% increase in revenue compared to 2083 oral appliances during the second quarter of 2023 for $1.5 million. The increase in revenue is directly attributable to a 71% decrease on in discounts offered during the second quarter of 2024 compared to the same period last year. For the six months into June 30, 2024, we sold 4029 oral appliance arches, for a total of $2.9 million, a 5% increase in revenue compared to the same period in 2023, when we sold 4,452 oral appliance arches for $2.8 million. The increase is directly attributable to a 45% decrease in discounts offered during the six month period in 2024 compared to the comparable period in 2023.

Speaker Change: We saw 2033 oral appliance arches during the second quarter of 2024 for a total of 2 million% to 28% increase in revenue compared to 2083 oral appliances. During the second quarter of 2023 for $1 5 million.

Speaker Change: The increase in revenue is directly attributable to a 71% decrease in discounts offered during the second quarter of 2024 compared to the same period last year.

Brad Amman: For the six months ended June 30th, 2024, we sold 4,029 oral appliance arches for a total of $2.9 million, a 5% increase in revenue compared to the same period in 2023, when we sold 4,452 oral appliance arches for $2.8 million. The increase is directly attributable to a 45% decrease in discounts offered during the sixth month period in 2024 compared to the comparable period in 2023. As Kirk will discuss in more detail, in late July, we began to see patients from our strategic marketing and distribution alliance with an operator of several sleep testing and treatment centers in Colorado.

Speaker Change: For the six months ended June 30th 'twenty 'twenty four we sold 4029 oral clients arches for a total of $2 $9 million.

Speaker Change: 5% increase in revenue compared to the same period in 2023, when we sold 4450 to all our clients arches for $2 $8 million.

Speaker Change: The increase is directly attributable to a 45% decrease in discounts offered during the six month period in 2024 compared to the comparable period in 2023.

Brad Amman: As Kirk will discuss in more detail, in late July, we began to see patients from our Strategic Marketing and Distribution Alliance with an operator of several sleep testing and treatment centers in Colorado. As a result, the fourth quarter of this year will be the first full quarter of operations with this new strategic revenue initiative, which is based on collaborations to better align our interests with referring medical professionals. We expect this will materially broaden the number of OSA patients who have access to Vivos products and make our revenue less reliant on VIP enrollments going forward. Gross profit was $2.7 million for the second quarter of 2024, compared to gross profit of 2.1 million for the comparable period in 2023. The increase was primarily attributable to an increase in revenue.

Speaker Change: As Kirk will discuss in more detail in late July we began to see patients from our strategic marketing and distribution alliance with an operator of several sleep testing and treatment centers in Colorado.

Brad Amman: As a result, the fourth quarter of this year will be the first full quarter of operations with this new strategic revenue initiative, which is based on collaborations to better align our interests with referring medical professionals. We expect this will be materially broadened the number of OSA patients who have access to Vivo's products and make our revenue less reliant on VIP enrollments going forward. Gross profit was $2.7 million for the second quarter of 2024 compared to gross profit of $2.1 million for the comparable period in 2023. The increase was primarily attributable to the increase in revenue.

Kirk: As a result, the fourth quarter of this year will be the first full quarter of operations with this new strategic revenue initiatives, which is based on collaborations to better align our interest with referring medical professionals.

Kirk: We expect this will be materially broadened the number of OSA patients who have access to leave us products and make our revenue less reliant on VIP enrollments going forward.

Brad Amman: Gross Margin for the second quarter of 2024 was 65% compared to 62% for the second quarter of 2023. For the six months ended June 30 2024 gross profit was $4.6 million compared to gross profit of 4.4 million in the same period in 2023 attributable to the increase in revenue again. Gross profit for the six month period ended June 30, 2024, remain constant at 61% compared to the same period in 2023. Sales and marketing expenses decreased by about 300,000 or 46% to 300,000 for the second quarter of 2024, compared to $600,000 for the second quarter of 2023. This decrease was primarily driven by lower sales commissions, as well as sales-related and digital marketing expenses.

Kirk: Gross profit was $2 $7 million for the second quarter of 2024 compared to gross profit of $2 1 million for the comparable period in 2023. The increase was primarily attributable to the increase in revenue.

Brad Amman: Gross margin for the second quarter of 2024 was 65% compared to 62% for the second quarter of 2023. For the six months ended June 30 of 2024, gross profit was $4.6 million compared to gross profit of $4.4 million in the same period in 2023. Attributable to the increase in revenue again. . Gross profit for the six month period ended June 30th, 2024, remain constant at 61% compared to the same period in 2023. Sales and marketing expenses decreased by about 300,000 or 46% to 300,000 for the second quarter of 2024 compared to 600,000 for the second quarter of 2023.

Kirk: Gross margin for the second quarter of 2024 was 65% compared to 62% for the second quarter of 2023.

Kirk: For the six months ended June 32024, gross profit was $4 $6 million compared to gross profit of $4 4 million in the same period in 2023 attributable to the increase in revenue again.

Kirk: Gross profit for the six months period ended June 32024 remained constant at 61% compared to the same period in 2023.

Kirk: Sales and marketing expenses decreased by about 300000 or 46% to 300000 for the second quarter of 2024.

Kirk: Compared to 600000 for the second quarter of 2023.

Brad Amman: This decrease was primarily driven by lower sales commissions as well as sales-related in digital marketing expenses. For the six months ended June 30th, 2024, sales and marketing expense decreased to a million compared to slightly over $1.2 million for the same period in 2023. This decrease was primarily driven by the same factors I mentioned earlier. As we've said previously, we are committed to increasing efficiencies in significantly lowering our cash burn rate as we seek to prudently use our capital resources and to achieve our main goal of cash flow positive operations. This trend continued in the second quarter as we again achieved a significant reduction in GNA expenses.

Kirk: This decrease was primarily driven by lower sales commissions as well as sales related in digital marketing expenses.

Brad Amman: For the six months ended June 30, 2024, sales and marketing expense decreased to $1.2 million compared to slightly over $1.2 million for the same period in 2023. This decrease was primarily driven by the same factors I mentioned earlier. As we've said previously, we are committed to increasing efficiencies and significantly lowering our cash burn rate as we seek to prudently use our capital resources and to achieve our main goal of a cashflow positive operation. This trend continued in the second quarter as we again achieved a significant reduction in GNA expenses.

Kirk: For the six months ended June 30th 2024 sales and marketing expense decreased $2 million compared to slightly over $1 2 million for the same period. In 2023. This decrease was primarily driven by the same factors I mentioned earlier.

Kirk: As we've said previously we are committed to increasing efficiencies and <unk>.

Kirk: Significantly lowering our cash burn rate as we seek to prudently use our capital resources and to achieve our main goal of cash flow positive operations.

Kirk: This trend continued in the second quarter as we again achieved a significant reduction in G&A expenses.

Brad Amman: Importantly, the second quarter marked the eighth consecutive quarter in which we've been able to continue with this trend. For the second quarter of 2024, general administrative expenses decreased $1.8 million, or 30%, to $4.1 million compared to $5.9 million for the second quarter of last year. This year-over-year decrease reflects the success of our cost-cutting efforts as we move toward our goal of positive results from operations. For the six months ended June 30th, 2024, GNA expenses decreased $3.4 million to $9 million, or approximately 27%, compared to $12.4 million for the six months ended June 30th, 2023. The decrease reflects lower professional fees and reduction in personnel and related compensation.

Kirk: Importantly, the second quarter marked the eighth consecutive quarter in which we've been able to continue with this trend.

Brad Amman: For the second quarter of 2024, general and administrative expenses decreased $1.8 million or 30% to $4.1 million compared to $5.9 million for the second quarter of last year. This year-over-year decrease reflects the success of our cost-cutting efforts as we move toward our goal of positive results from operation. For the six months ended June 30 of 2024, GNA expenses decreased 3.4 million to 9 million, or approximately 27% compared to $12.4 million for the six months ended June 30, 2023. The decrease reflects lower professional fees and a reduction in personnel and related compensation.

Kirk: For the second quarter of 2020 for general and administrative expenses decreased $1 $8 million or 30% to $4 1 million compared to $5 9 million for the second quarter of last year.

Kirk: This year over year decrease reflects the success of our cost cutting efforts as we move toward our goal of positive results from operations.

Kirk: For the six months ended June 32020 for G&A expenses decreased $3 4 million to $9 million.

Kirk: Or approximately 27% compared to $12 $4 million for the six months ended June 32023.

The decrease reflects lower professional fees and a reduction in personnel and related compensation.

Kirk: Related compensation.

Brad Amman: Total operating expenses for the second quarter of 2024 decreased by a significant amount, $2 million or 31% versus the second quarter of last year. As noted, this represents our eighth consecutive quarter where we have reported year-over-year decreases in operating expenses. And it is mainly due to the cost-cutting initiatives we have taken since the middle part of 2022 throughout 2023 and as well as in 2024. For the six months ended June 30th, operating expenses decreased by $3.7 million, or 26%, compared to the same period last year. Our cost-cutting initiatives in lower GNA also contributed to a significant year-over-year reduction in operating loss, which decreased $2.9 million, or 57%, versus the second quarter of 2023.

Brad Amman: Total operating expenses for the second quarter of 2024 decreased by a significant amount, $2 million or 31% versus the second quarter of last year. As noted, this represents our eighth consecutive quarter where we have reported year-over-year decreases in operating expenses. And it is mainly due to the cost-cutting initiatives we have taken since the middle part of 2022, throughout 2023, and as well as in 2024. For the six months ended June 30th, operating expenses decreased by $3.7 million, or 26% compared to the same period last year.

Kirk: Total operating expenses for the second quarter of 2024 decrease by a significant amount $2 million or 31% versus the second quarter of last year.

Kirk: As noted this represents our eighth consecutive quarter, where we have reported year over year decreases in operating expenses.

Kirk: And it is mainly due to the cost cutting initiatives, we have taken since the middle part of 2022 throughout 2023 and as well as in 2024.

Kirk: For the six months ended June 30th operating expenses decreased by $3 $7 million or 26% compared to the same period last year.

Kirk: Our cost cutting initiatives and lower G&A also contributed to a significant year over year reduction in operating loss, which decreased $2 $9 million or 57% versus the second quarter of 2023.

Brad Amman: Our cost cutting initiatives and lower GNA also contributed to a significant year over year reduction in operating loss, which decreased $2.9 million or 57% versus the second quarter of 2023. For the six months into June 30th, 2024 operating loss decreased by 3.8 million or 40% compared to the same period last year. Net loss for the second quarter of 2024 decreased by 65% to $1.9 million compared to a loss of $5.5 million for the same period in 2023.

Brad Amman: For the six months ended June 30th, 2024, operating loss decreased by $3.8 million, or 40%, compared to the same period last year. Net loss for the second quarter of 2024 decreased by 65% to $1.9 million compared to a loss of $5.5 million for the same period in 2023. For the six months into June 30 at 2024, net loss decreased by 21% to $5.7 million compared to a net loss of $7.2 million for the same period last year. Turning now to our statement of cash flows, cash burned from operations for the six months into June 30, 2024 was $5.6 million.

Kirk: For the six months ended June 32020 for operating loss decreased by $3 8 million or 40% compared to the same period last year.

Kirk: Net loss for the second quarter of 2024 decreased by 65% to $1 $9 million compared to a loss of $5 five.

Kirk: For the same period in 2023.

Brad Amman: For the six months into June 30, 2024, net loss decreased by 21% to $5.7 million, compared to a net loss of $7.2 million for the same period last year. Turning now to our statement of cash flows, cash burned from operations for the six months ended June 30, 2024, was $5.6 million, a decrease of approximately 13%, or $800,000, compared to 6.4 million during the comparable prior year period. This decrease is due primarily to, The one and a half million dollar decrease in net loss in the absence in 2024 of an unfavorable net change and fair value of warrant liability of about $2.3 million. Offset by an increase in accounts receivable, a decrease in contract liability, accounts payable, accrued expenses, and other liabilities, and a decrease of approximately $800,000 in the fair value of warrants issued for services.

Kirk: For the six months ended June 32024, net loss decreased by 21% to $5 $7 million compared to a net loss of seven 2 million for the same period last year.

Brad Amman: For the six-month period ended June 30th, net cash used in investing activities of $200,000 consisted of capital expenses, for software related to development of our ordering software platform, which is expected to be placed in service this year. This compares to net cash used in investing activities of half a million dollars in the comparable 2023 period, arising from capital expenditures for the same ordering software, as well as an asset purchase of intellectual property.

Kirk: Turning now to our statement of cash flows cash burn from operations for the six months ended June 32024 was $5 6 million, a decrease of approximately 13% or $800000 compared to $6 4 million during the comparable prior year period.

Brad Amman: A decrease of approximately 13% or $800,000 compared to $6.4 million during the comparable prior year period. This decrease is due primarily to the $1.5 million decrease in net loss in the absence in 2024 of an unfavorable net change and fair value of warrant liability of about $2.3 million. Offset by an increase in accounts receivable, a decrease in contract liability, accounts payable, accrued expenses and other liabilities, and a decrease of approximately $800,000 in the fair value of warrant issued for services. For the six-month period into June 30, net cash used in investing activities of $200,000 consisted of capital expenses for software related to the development of our ordering software platform, which is expected to be placed in service this year.

Kirk: This decrease is due primarily to.

Kirk: The one and a half million dollar decrease in net loss and the absence in 2024 of an unfavorable net change in fair value of warrant liability of about $2 $3 million.

Kirk: Offset by an increase in accounts we <unk>.

Kirk: Although a decrease in contract liability accounts payable accrued expenses and other liabilities and a decrease of approximately $800000 in the fair value of warrants issued for services.

Kirk: For the six month period ended June 30, net cash used in investing activities of $200000 consisted of capital expenses.

For offer for software related to development of our ordering software platform, which is expected to be placed in service this year.

Brad Amman: This compares to net cash used in investing activities of $1.5 million in the comparable 2023 period, arising from capital expenditures for the same ordering software as well as an asset purchase of intellectual property. For the six months into June 30 at 2024, net cash provided from finance activities of $11.4 million is related to our February warrant inducement transaction and our June strategic PIPE transaction. This compares to net cash provided from financing activities in the comparable 2023 period of $7.4 million, reflecting our January of 2023 private placement, as previously announced, to augment our liquidity position in stockholders' equity in June of 2024.

Speaker Change: This compares to net cash used in investing activities of half a million dollars in the comparable 2023 period arising from capital expenditures for the same ordering software as well as an asset purchase of intellectual property.

Brad Amman: For the six months into June 30th, 2024 net cash provided from finance activities of $11.4 million is related to our February warrant inducement transaction and our June strategic pipe transaction. This compares to net cash provided from financing activities, in the comparable 2023 period of 7.4 million, reflecting our January of 2023 private placement, has previously announced to augment our liquidity position and stockholders' equity. In June of 2024, Vivos closed on a $7.5 million equity growth investment from an affiliate of new Seneca Partners, a leading middle market private equity firm.

Speaker Change: For the six months ended June 32024, net cash provided from financing activities of $11 $4 million is related to our February warrant inducement transaction and our June strategic pipe transaction.

Speaker Change: This compares to net cash provided from financing activities.

Speaker Change: In the comparable 2023 period of $7 4 million, reflecting our January of 2023 private placement.

Speaker Change: As previously announced to augment our liquidity position in stockholders equity in June of 2020 for Veeva is closed on a $7 $5 million equity growth investment from an affiliate of new Seneca partners, a leading middle market private equity firm.

Brad Amman: For VIVOS closed on a $7.5 million equity growth investment from an affiliate of New Cynic Partners, a leading middle market private equity firm. This investment is more than sufficient for us to demonstrate compliance with NASDAQ's minimum equity requirement as of the end of the quarter and materially bolsters our cash on hand to facilitate the launch of the new strategic alliance I mentioned earlier, which is expected to positively impact VIVOS's revenue growth.

Brad Amman: This investment is more than sufficient for us to demonstrate compliance with NASDAQ's minimum equity requirement, as of the end of the quarter and materially bolsters our cash on hand to facilitate the launch of the new strategic alliance I mentioned earlier, which is expected to positively impact Vivos' revenue growth. Kirk will speak more on this shortly. As of June 30th, 2024, we had approximately $6.9 million of cash and cash equivalents compared to $1.6 million as of December 31st, 2023. Our stockholders' equity at June 30th was approximately $6.3 million.

Speaker Change: This investment is more than sufficient for us to demonstrate compliance with nasdaq's minimum equity requirement.

Speaker Change: As of the ended the quarter and materially bolsters, our cash on hand to facilitate the launch of the new strategic Alliance I mentioned earlier, which is expected to positively impact <unk> revenue growth.

Brad Amman: Kirk will speak more on this shortly. As of June 30, 2024, we had approximately $6.9 million of cash and cash equivalents compared to $1.6 million as of December 31, 2023. Our stockholders' equity at June 30 was at approximately $6.3 million. In conclusion, we reported solid results for the second quarter, which included both sequential and year-over-year revenue growth. We also continued to take actions to improve our cost structure and reduce cash burn while strengthening our cash position, which was evident in our results. Based on our progress to date, Vivos continues to anticipate attaining positive cash flow from operations in the foreseeable future.

Kirk: Kirk will speak more on this shortly.

Kirk: As of June 32024, we had approximately $6 $9 million of cash and cash equivalents compared to $1 6 million as of December 31, 2023 or.

Kirk: Our stockholders equity at June 30 was approximately $6 $3 million.

Brad Amman: In conclusion, we reported solid results for the second quarter, which included both sequential and year-over-year revenue growth. We also continued to take actions to improve our cost structure and reduce cash burn while strengthening our cash position, which was evident in our results. Based on our progress to date, Vivos continues to anticipate attaining positive cash flow from operations in the foreseeable future. I want to thank you all for joining us today on our conference call. Now I'll turn the call over to Kirk Huntsman, Chairman and CEO. Kirk, please go ahead.

Speaker Change: In conclusion, we reported solid results for the second quarter, which included both sequential and year over year revenue growth.

Speaker Change: <unk> also continued to take actions to improve our cost structure and reduce cash burn while strengthening our cash position.

Speaker Change: Which was evident in our results.

Speaker Change: Based on our progress to date give us continues to anticipate attaining positive cash flow from operations in the foreseeable future.

Brad Amman: I want to thank you all for joining us today on our conference call.

Speaker Change: I want to thank you all for joining us today.

Speaker Change: Our conference call now I will turn the call over to Kirk Huntsman, Chairman and CEO.

Kirk Huntsman: Now, I'll turn the call over to Kirk Huntsman, Chairman and CEO. Kirk, please go ahead.

Kirk Huntsman: Kirk Please go ahead.

Kirk Huntsman: Thank you, Brad. Good afternoon, everyone, and thank you for joining us on today's conference call. The second quarter of 2024 was a period of significant progress for Vivos along a number of fronts. Just to recap and highlight a few financial metrics, year-over-year, same period revenue up 19 percent, with product revenue up 28 percent. Year-over-year, same period operating losses down 57 percent. Year-over-year, same period net loss down 65 percent. Year-over-year, six months operating losses, down 40 percent. Year-over-year, six months, net loss, down 21 percent. Consecutive quarter-grose profit, up 26 percent. Consecutive quarter net loss, down 49 percent.

Kirk Huntsman: Thank you Brad.

Kirk Huntsman: Thank you, Brad. Good afternoon, everyone, and thank you for joining us on today's conference call. The second quarter of 2024 was a period of significant progress for Vivos along a number of fronts. Just to recap and highlight a few financial metrics. Year over year, same period revenue up 19% with product revenue up 28%. Year-over-year same-period operating losses, down 57%. Year-over-year same-period net loss, down 65%. Year-over-year six-months operating losses, down 40%. Year-over-year six-months net loss, down 21%.

Kirk Huntsman: Good afternoon, everyone and thank you for joining us on today's conference call.

Speaker Change: The second quarter of 2024 was a period of significant progress for vivo, so long a number of fronts.

Speaker Change: Just to recap and highlight a few financial metrics.

Speaker Change: Year over year same period revenue up 19% with product revenue up 28%.

Speaker Change: Year over year same period operating losses down 57% year over year same period net loss down 65% year over year six months of operating losses down 40% year over year six months net loss down 21% consecutive quarter gross profit up two.

Kirk Huntsman: Consecutive quarter gross profit, up 26%. Consecutive quarter net loss, down 49%. Consecutive quarter net loss per share, down 63%. Cash and cash equivalents on hand at December 2023, 1.6 million. Cash and cash equivalents on hand in June 2024, 6.9 million.

Speaker Change: 6% consecutive quarter net loss down 49% consecutive quarter net loss per share down, 63% cash and cash equivalents on hand at December 2020, 316 million cash and cash equivalents on hand in June 2020 for $6 9 million.

Kirk Huntsman: Consecutive quarter net loss per share, down 63 percent. Cash and cash equivalence on hand at December 2023, 1.6 million. Cash and cash equivalence on hand in June 2024, 6.9 million. So, as you can see, from that brief overview, the second quarter of 2024 saw the culmination of many long hours of work. Our team has been putting in to get our company in a position to succeed long-term. As Brad just mentioned, this quarter marked our eighth consecutive quarter where we've delivered lower operating expenses on a year-over-year basis. And, as we said before, we aren't done yet as we continue to explore ways of cutting costs without harming revenue.

Kirk Huntsman: So you can see from that brief overview, the second quarter of 2024 saw the culmination of many long hours of work our team has been putting in to get our company in a position to succeed long term. As Brad just mentioned, this quarter marked our eighth consecutive quarter where we've delivered lower operating expenses on a year-over-year basis.

Speaker Change: So as you can see from that brief overview. The second quarter of 2024 saw the culmination of many long hours of work our team has been putting in to get our company in a position to succeed long term.

Speaker Change: As Brad just mentioned this quarter marked our eighth consecutive quarter.

Brad Edmunds: Where we've delivered lower operating expenses on a year over year basis.

Brad Edmunds: And as we've said before we arent done yet as we continue to explore ways of cutting costs without harming revenue.

Kirk Huntsman: We believe this methodical effort, patiently executed over time, has put Vivos in a much better position to now execute on our new strategic marketing and distribution model. As we have previously indicated, our new strategic alliance model is designed to deliver higher total revenue per clinical case, along with higher gross profit. In July, we launched the first phase of our first strategic alliance with a multi-center sleep clinic operation right here in Colorado. Although it is still very early, we can confirm that our previously reported experience in terms of patient acceptance and other conversion metrics seems to have carried over as expected into this new initiative.

Kirk Huntsman: We believe this methodical effort, patiently executed over time, has put Vivos in a much better position to now execute on our new strategic marketing and distribution model. As we have previously indicated, our new strategic alliance model is designed to deliver higher total revenue per clinical case, along with higher gross profit. In July, we launched the first phase of our first strategic alliance with a multi-center sleep clinic operation right here in Colorado.

Speaker Change: We believe this methodical effort patiently executed over time has put devos in a much better position to now execute on our new strategic marketing and distribution model.

Operator: At this time, all participants are in a listen only mode.

Operator: A question and answer session will follow management remarks. This conference is being recorded and a replay today's call will be available in the next 30 days.

Speaker Change: As we have previously indicated our new strategic Alliance model is designed to deliver higher total revenue per clinical case, along with higher gross profit.

Speaker Change: In July we launched the first phase of our first strategic alliance with a multicenter sleep clinic operation right here in Colorado.

John Lee: I will now hand a call over to John Lee, Vivos Executive Vice President of Marketing for instructions and the reading of the safe harbor statement. Please go ahead. Thank you operator.

Kirk Huntsman: Although it is still very early, we can confirm that our previously reported experience in terms of patient acceptance and other conversion metrics seem to have carried over as expected into this new initiative. One thing that we have been seeing that we haven't seen previously is that about half of the OSA patients that we're seeing at this medical sleep clinic are so excited about the Vivos treatment options that they've been referring friends and family members in for evaluation and treatment as well.

Speaker Change: Although it is still very early we can confirm that our previously reported experience in terms of patient acceptance and other conversion metrics seem to have carried over as expected into this new initiative.

John Lee: Hello, everyone and welcome to our conference call. A copy of our earnings press release is available on the investor relations section of our website at www at divos.com. With us on call today are Kurt Kuntzman, Vivos Chairman and Chief Executive Officer and Brad Amman, Chief Financial Officer. Today, we'll review the highlights and financial results for the second quarter 2024 as well as more recent development and Vivos's plan for the rest of 2024 following these formal remarks. We will be happy to take questions.

Kirk Huntsman: One thing that we have been seeing that we haven't seen previously is that about half of the OSA patients that we're seeing at this medical sleep clinic are so excited about the Vivos treatment options that they've been referring friends and family members in for evaluation and treatment as well. When nearly 50% of your patients refer people in like that, we believe it bodes well for a strong future organic growth. All of that, of course, is very good news, and it is very good news that has us very optimistic about things going forward.

Speaker Change: One thing that we have been seen that we haven't seen previously is that about half of the OSA patients that we're seeing at this medical sleep clinic are so excited about the vivo as treatment options that <unk> been referring friends and family members in for evaluation and treatment as well.

Kirk Huntsman: When nearly 50% of your patients refer people in like that, we believe it bodes well for strong future organic growth. All of that, of course, is very good news, and it is very good news that has us very optimistic about things going forward. This last initiative that began just last month is what we've been talking about and working toward for many months. As previously stated, we believe this strategic pivot towards medical-based, full-service breathing and sleep centers represent an inflection point for us that will materially alter our prospects for growth and profitability.

Speaker Change: We're nearly 50% of your patients refer people in like that we believe it bodes well for strong future organic growth.

Speaker Change: All of that of course is very good news and it is.

Speaker Change: It is very good news that has us very optimistic about things going forward.

John Lee: I would also like to remind everyone that today's call will contain certain forward looking statements from our management made within the meaning of section 27 A of the Securities Act of 1933 as amended and section 21 E of the Securities and Exchange Act of 1934 as amended. Concerning future events, words such as aim, may, could, should, projects, expects, intends, plans, believes, anticipates, hopes, estimates, goal and variation of such words and similar expressions are intended to identify forward looking statements.

Kirk Huntsman: This last initiative that began just last month is what we've been talking about and working toward for many months. As previously stated, we believe this strategic pivot towards medical-based, full service, breathing and sleep centers represents an inflection point for us that will materially alter our prospects for growth and profitability. Looking at the next few months, we fully expect to see an acceleration of that improvement as we move into the last part of 2024 and into 2025. To give you a sense of the leverage we see in this new model, our current calculations are that for every 100 OSA patients per month that we put into Vivo's treatment of some kind, we should realize top-line revenues of nearly $8 million annually, with high profitability.

Speaker Change: This last initiative that began just last month as what we've been talking about and working toward for many months. As previously stated we believe this strategic pivot towards medical based full service breathing and sleep centers represented an inflection point for us that will materially alter our prospects for growth.

Speaker Change: And profitability.

Kirk Huntsman: Looking at the next few months, we fully expect to see an acceleration of that improvement as we move into the last part of 2024 and into 2025, to give you a sense of the leverage we see in this new model. Our current calculations are that for every 100 OSA patients per month that we put into Vivos treatment of some kind, we should realize top line revenues of nearly $8 million annually with high profitability. For further perspective on this.

Speaker Change: Looking at the next few months, we fully expect to see an acceleration of that improvement as we move into the last part of 2024 and into 2025.

Speaker Change: To give you a sense of the leverage we see in this new model.

Speaker Change: Our current calculations are that for every 100 OSA patients.

John Lee: These statements involve significant known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant risks, uncertainties and contingencies, many of which are beyond company's control. Actual results, including without limitation, the results of Vivos's growth strategies, operational plans, including sales, marketing, distribution, product acquisition and integration, research and development, regulatory initiatives, cost savings plan, and plans to generate revenue, as well as future potential results of operations or operating metrics such as the potential of the process.

Speaker Change: Month that we put into vivo treatment of some kind, we should realize topline revenues of nearly $8 million annually with high profitability.

Kirk Huntsman: For further perspective on this, our first strategic alliance partner currently sees referrals of several hundred potential OSA patients per month, most of whom we believe could be excellent candidates for Vivo's treatment. In addition, we are currently in negotiations with six other sleep testing groups and medical doctor-based sleep centers from around the United States, who together see upwards of 5,000 OSA patients per month. These groups typically operate on a high-volume, low-margin business model and are very intrigued by the higher-margin products and services Vivo's can bring to the table. Our latest FDA clearance to treat severe OSA patients using our care or medical devices is proving to be a real asset in helping us open these doors.

Speaker Change: For further perspective on this.

Kirk Huntsman: Our first strategic alliance partner currently sees referrals of several hundred potential OSA patients per month, most of whom we believe could be excellent candidates for Vivos treatment. In addition, we are currently in negotiations with six other sleep testing groups and medical doctor-based sleep centers from around the United States, who together see upwards of 5,000 OSA patients per month. These groups, which typically operate on a high volume, low margin business model, are very intrigued by the higher margin products and services Vivos can bring to the table.

Speaker Change: Our first strategic alliance partner currently sees referrals of several hundred potential OSA patients per month most.

Speaker Change: Most of whom we believe could be excellent candidates for vehicles treatment.

Speaker Change: In addition, we are currently in negotiations.

With six other sleep testing groups and medical Doctor base sleep centers from around the United States.

Speaker Change: Together see upwards of 5000 OSA patients per month.

Speaker Change: These groups typically operate on a high volume low margin business model.

John Lee: The potential for Vivos's Vivos to achieve future positive cash flow or profitability and other matters to be addressed by Vivos management in this conference call may differ materially and adversely from those expressed or implied by such forward looking statements. Factors that could cause actual results to differ materially include but are not limited to the risk factors described and other disclosures contained in Vivos's filing with the Securities and Exchange Commission including the risk factors and other disclosures in our form 10K for the year ended December 31, 2023. And other filings with the SEC including our second quarter 10Q filed with the SEC today.

Speaker Change: We are very intrigued by the higher margin products and services <unk> can bring to the table.

Kirk Huntsman: Our latest FDA clearance to treat severe OSA patients using our CARE oral medical devices is proving to be a real asset in helping us open these doors. We have been pleased by the generally warm and welcoming reception we've received from sleep doctors who seem desperate and even relieved to have viable alternatives to CPAP. Vivos thus represents a compelling and safe clinical option, as well as a powerful revenue and profit growth opportunity on a scale they've never seen before.

Speaker Change: Our latest FDA clearance to treat severe OSA patients using our care oral medical devices is proving to be a real asset in helping us open these doors.

Kirk Huntsman: We have been pleased by the generally warm and welcoming reception we receive from sleep doctors who seem desperate and even relieved to have viable alternatives to CPAP. Vivo's thus represents a compelling and safe clinical option as well as a powerful revenue and profit growth opportunity on a scale they've never seen before. We thus believe we are just barely scratching the surface of what is possible as we continue to roll forward. There are reportedly over 2,500 AASM, that's the American Academy of Sleep Medicine accredited sleep testing labs and testing centers across the United States, with well over 100,000 new OSA patients being diagnosed each month.

Speaker Change: We have been pleased by the generally warm and welcoming reception, we received from sleep doctors, who seem desperate and even relieved to have viable alternatives to CPAP.

Speaker Change: Vivo is less represents a compelling and safe clinical option as well as a powerful revenue and profit growth opportunity on a scale they've never seen before.

Kirk Huntsman: We thus believe we're just barely scratching the surface of what is possible as we continue to roll forward. There are reportedly over 2,500 AASM, that's the American Academy of Sleep Medicine, accredited sleep testing labs and testing centers across the United States, with well over 100,000 new OSA patients being diagnosed each month. An estimated 80 to 90% of all OSA patients remain undiagnosed and untreated.

Speaker Change: We thus believe were just barely scratching the surface of what is possible as we continue to roll forward.

Speaker Change: There are reportedly over 2500 ASM, that's the American Academy of Sleep Medicine accredited sleep testing labs and testing centers across the United States.

John Lee: All of which are or will be accessible on the Investor Relations Section of Vivos's website as well as the SEC's website except to extent required by law, Vivos assumes no obligation to update statements as circumstances change. Finally, please feel aware that the US Food and Drug Administration has given certain specific Vivos appliances to treat mild to severe OSA. With the FDA clearance for severe last November, treatment of patients with severe OSA with these specific appliances is no longer needed to be performed off-label at the clinical discussion of the treating doctor and is now an integral part of the Vivo's treatment protocol. Treatment of OSA of any severity or any other condition with any other Vivo's FDA cleared devices remains at the clinical discussion of the treating doctor.

Speaker Change: With well over 100000, new OSA patients being diagnosed each month.

Kirk Huntsman: An estimated 80 to 90 percent of all OSA patients remain undiagnosed and untreated. So we see a huge opportunity here with this new model, and we are fortunate to have garnered the support of long-term investors who share our vision. We recently secured a $7.5 million private equity investment and entered into a strategic relationship with new Seneca Partners, a leading North American private equity sponsor. Seneca's investment, which comes on the heels of nine months of due diligence by Seneca, in which they have assisted crafting our new model, has provided a substantial boost to our cash on hand and stockholders' equity.

Speaker Change: An estimated 80% to 90% of all OSA patients remain undiagnosed and untreated.

Kirk Huntsman: So we see a huge opportunity here with this new model, and we are fortunate to have garnered the support of long-term investors who share our vision. We recently secured a $7.5 million private equity investment, and entered into a strategic relationship with New Seneca Partners, a leading North American private equity sponsor. Seneca's investment, which comes on the heels of nine months of due diligence by Seneca, in which they have assisted crafting our new model, has provided a substantial boost to our cash on hand and stockholders' equity. With this increased liquidity, we have moved ahead with the launch of our new strategic alliance and potentially other similar alliances. All of this is expected to positively impact Vivos' revenue growth.

Speaker Change: So we see a huge opportunity here with this new model.

Speaker Change: <unk> two have garnered the support of long term investors who share our vision.

Speaker Change: We recently secured a seven $5 million private equity investment.

Speaker Change: And entered into a strategic relationship with new Seneca partners, a leading north American private equity sponsor.

Speaker Change: <unk> investment, which comes on the heels of nine months of due diligence by Seneca in which they have assisted crafting our new model.

Speaker Change: Has provided a substantial boost to our cash on hand, and stockholders' equity with this increased liquidity. We have moved ahead with the launch of our new strategic alliance and potentially other similar alliances.

Kirk Huntsman: With this increased liquidity, we have moved ahead with the launch of our new strategic alliance and potentially other similar alliances. All of this is expected to positively impact Vivos' revenue growth.

Brad Amman: Now at this time, it's my pleasure to introduce Brad Amman, CFO of Vivos. Brad, please go ahead. Thank you, John. In good afternoon, everyone.

All of this is expectedly is expected to positively impact versus revenue growth.

Kirk Huntsman: In closing, I would simply say that Vivos has weathered the storm and is now emerging even stronger with an exciting new business model that has the potential to finally put our technology into use for thousands and perhaps tens of thousands of people who may never have seen or heard of it otherwise. So, on behalf of all of us here at Vivos, I would like to express my sincere appreciation to all of those who have stood by us while we figured this out. It has been a long journey, but we firmly believe we are on the right track and will soon begin to see the full potential of our technology being realized and the full financial potential this company as well.

Kirk Huntsman: In closing, I would simply say that Vivos has weathered the storm and is now emerging even stronger with an exciting new business model that has the potential to finally put our technology into use for thousands and perhaps tens of thousands of people who may never have seen or heard of it otherwise. So on behalf of all of us here at Vivos, I would like to express my sincere appreciation to all of those who have stood by us while we figured this out.

Speaker Change: In closing I would simply say that vivo has weathered this storm and is now emerging even stronger with an exciting new business model that has the potential to finally put our technology into the into use for.

Brad Amman: Today, I will review the highlights of our financial results for the second quarter of 2024. For further information on our results for the three and six month periods into June 30, 2024, please see our earnings release, which was distributed earlier today and our quarterly report on Form 10Q, which is available on the SEC filings portion of the Investor Relay Relations section of our website is John mentioned at www.vivos.com. Today, we are pleased to report second quarter of 2024 total revenue of $4.1 million compared to $3.4 million for both the second quarter of 2023 and the first quarter of 2024, a 19% increase both sequentially and year over year.

Speaker Change: Thousands and perhaps tens of thousands of people, who may never have seen or heard of it otherwise.

Speaker Change: So on behalf of all of us here at <unk>.

Speaker Change: Would like to express my sincere appreciation to all of those who have stood by us while we figured this out.

Kirk Huntsman: It has been a long journey, but we firmly believe we are on the right track and will soon begin to see the full potential of our technology being realized and the full financial potential of this company as well. That concludes our prepared remarks. Now we'll be happy to take questions. Operator, Yes sir, thank you. We will now begin the question and answer session. To ask a question please press star 1 on your touchtone phone. If you're using a speaker phone, Pick up the handset before pressing the button.

Speaker Change: It has been a long journey, but we firmly believe we are on the right track and we will soon begin to see the full potential of our technology being realized and the full financial potential of this company as well.

Kirk Huntsman: That concludes our prepared remarks.

Speaker Change: That concludes our prepared remarks, now we'll be happy to take questions.

Kirk Huntsman: Now we'll be happy to take questions.

Operator: Operator? Yes, sir. Thank you.

Operator: If you would like to withdraw your question, please press start. RN1 if you wish to ask a, We now have our first question, from the line of, Kim from Water Power Research. Your line is now open. Great, hi. Thanks for taking my questions and congrats on the quarter's results. Kirk, it seems that the strategic alliance with the sleep clinic is pretty important in the evolution of Vivos Therapeutics. Could you maybe expand on that a little bit? And when you say that you're seeing what you had previously, Speaker 2- Related Experiences, Are you referring to your marketing pilot study and the high rate of patients that choose Vivos' oral appliances? Yeah, great question.

Speaker Change: Operator.

Speaker Change: Yes, Sir Thank you we will now begin the question and answer session to ask a question. Please press star one on your Touchtone phone and if you're using a speaker phone. Please pick up the handset before pressing the keys.

Operator: We will now begin the question and answer session. To ask a question, please press star one on your touch-tone phone. And if you're using a speaker phone, please pick up the handset before pressing the keys. To withdraw your question, please press star two. Or in one, if you wish to ask a question.

Brad Amman: This year over year growth was due to an increase of approximately $400,000 in product revenue from higher sales and fewer discounts of Vivo's appliances and guides coupled with an increase of 200,000 in service revenue, reflecting an increase in Vivo's integrated provider or VIP enrollment revenue, which you will recall we recognize over time. As well as an increase of 100,000 in sponsorship, seminar and other service revenue. This was partially offset by a decrease of 100,000 in my functional therapy revenues.

Speaker Change: We draw your question. Please press star two.

Speaker Change: Our N. One if you wish to ask a question.

Operator: And we now have our first question.

Speaker Change: And we now have our first question comes from the line of Tom Kim from water Power Research. Your line is now open. Please go ahead.

Tom Kim: It comes from the line of Tom Kim from Water Power Research. Your line is now open. Please go ahead.

Brad Amman: Billing intelligent service and home sleep testing service revenue remained relatively unchanged year over year. For the six months ended June 30, 2024, total revenue was $7.5 million compared to $7.3 million. For the comparable period in 2023. During the second quarter of 2024, we enrolled 32 VIPs and recognized VIP enrollment revenue of $1.2 million, a revenue increase of 28% compared to the second quarter of 2023, when we enrolled 43 VIPs for a total of 900,000 in revenue.

Tom Kim: Great. Hi.

Tom Kim: Great Hi.

Kirk Huntsman: Thank you for taking my questions, and congrats on the court as a result. First, for Kirk, it seems that the strategic alliance with the sleek clinic is pretty important in the evolution of view of therapeutics. Could you maybe expand on that a little bit? And when you say that you're seeing what you had previously reported experience in terms of patients' acceptance, are you referring to your marketing pilot study and the high rate of patients that choose Veeville's oral appliances? Yeah, great question. And thank you for that. So, as to the importance of this strategic pivot, I think I can't.

Tom Kim: Thanks for taking my question and congrats on the quarters results.

Kirk Huntsman: First for Kirk.

Speaker Change: It seems that this strategic alliance with the fleet clinic.

Speaker Change: Pretty important and the evolution.

Speaker Change: <unk> Therapeutics could you could you maybe expand on that a little bit and when you say that youre seeing.

Speaker Change: But you had previously.

Reported experience in terms of like patient acceptance.

Speaker Change: Are you referring to your marketing pilot study and the high rate of patients that choose <unk>.

Speaker Change: Reverses or appliances.

Brad Amman: A approximately 600,000 in revenue was attributable to accelerated revenue recognition on several contracts for VIPs who did not complete their required training during the first 90 days of their enrollment. Please refer to our 10Q for further details, particularly on our revenue recognition policy for enrollments. For the six months ended June 30th, 2024, we enrolled 82 VIPs and recognized VIP enrollment revenue of approximately 2.1 million, a revenue decrease of 6% compared to the same period last year when we enrolled 81 VIPs for a total of $2.2 million.

Kirk Huntsman: So and thank you for that. So as to the importance of this strategic pivot, I think, I can't I can't overstate how important this is for the company. The truth of the matter is, In being sort of locked into a dental-only channel of distribution, we found that there were just simply too many dentists that just got distracted by dental things. And it wasn't a reliable, certainly not a scalable source of growth and opportunity for us.

Speaker Change: Yeah, Great question, so and thank you for that.

Speaker Change: So as to the importance of this strategic pivot.

<unk>.

Speaker Change: I think.

Speaker Change: I can't I can't overstate, how important this is for the company and the truth of the matter is.

Kirk Huntsman: I can't overstate how important this is for the company. The truth of the matter is, in being sort of locked into a dental-only channel of distribution, we found that there were just simply too many dentists that just got distracted by dental things. And it wasn't a reliable, certainly not a scalable source of growth and opportunity for us. So, we realized that that was not going to happen. There were some doctors, some dentists out there that were extremely successful with it and extremely profitable doing it, but there weren't enough of them. So, when we looked around and we said, where's the model here for success?

Speaker Change: In being sort of locked into a dental only channel.

Speaker Change: Distribution, we found that there were just simply too many Dennis just got distracted by dental things and it wasn't a reliable is certainly not a scalable.

Source of.

Speaker Change: Growth and opportunity for us so we realized that that was not going to happen. There were some doctors some dennis out there that were extremely extremely.

Brad Amman: Well, the number of VIP enrollments increased slightly. Revenue was impacted by updates to key inputs in our revenue recognition methodology, primarily estimated customer lives in the addition of new entry levels into the VIP program at lower price points. We sold 2033 oral appliance arches during the second quarter of 2024 for a total of 2 million, a 28% increase in revenue compared to 2083 oral appliances during the second quarter of 2023 for 1.5 million.

Kirk Huntsman: So we realized that that was not going to happen. There were some doctors, some dentists out there that were extremely, extremely successful with it and extremely profitable doing it, but there weren't enough of them. So when we looked around and we said, where's the model here for success, and the model is clearly.., with dentists and physicians working together. And by that, I mean, physicians who have patients who they either suspect have obstructive sleep apnea or who they know have obstructive sleep apnea, and they want alternative treatment options besides CPAP.

Speaker Change: Successful with at an extremely profitable doing it but there weren't enough of them. So so when we looked around and we said how whereas the model here for success in the model is clearly.

Kirk Huntsman: And the model is clearly... with dentists and physicians working together. And by that, I mean physicians who have patients who they either suspect have obstructive sleep apnea or who they know have obstructive sleep apnea, and they want alternative treatment options besides CPAP. In today's world, 90 to 95% of all patients who are diagnosed with OSA are prescribed to CPAP. And most of those patients, I think it's safe to say the vast majority of them would rather have anything else than a CPAP to wear to bed every night. And so to have an alternative that doctors can prescribe, and now that we have the severe sleep apnea, you know, certificate or clearance from the FDA, that opens up the door for medical doctors to feel very comfortable in saying, look, there are a couple of first-line treatment options now available and approved by the FDA.

Speaker Change: With dentists and physicians are working together.

Speaker Change: And by that I mean, physicians, who have patients who they either suspect have obstructive sleep apnea or who they know have obstructive sleep apnea.

Speaker Change: And they want alternative treatment options. Besides CPAP in today's world, 90% to 95% of all patients who are diagnosed with OSA are prescribed a CPAP.

Brad Amman: The increase in revenue is directly attributable to a 71% decrease in discounts offered during the second quarter of 2024 compared to the same period last year. For the six months ended June 30th, 2024, we sold 4,029 oral appliance arches for a total of $2.9 million, a 5% increase in revenue compared to the same period in 2023, when we sold 4,452 oral appliance arches for $2.8 million. The increase is directly attributable to a 45% decrease in discounts offered during the sixth month period in 2024 compared to the comparable period in 2023.

Kirk Huntsman: In today's world, 90 to 95% of all patients who are diagnosed with OSA are prescribed a CPAP. And most of those patients... I think it's safe to say the vast majority of them would rather have anything else than a CPAP to wear to bed every night. And so to have an alternative that doctors can prescribe, and now that we have the severe sleep apnea, you know, certificate or clearance from the FDA, that opens up the door for medical doctors to feel very comfortable in saying, look, there's a couple of first line treatment options now available and approved by FDA. One is CPAP. The other is this treatment from Vivos, and you can be in and out of treatment in 12 months and blah, blah, blah.

Speaker Change: And most of those patients I think it's safe to say the vast majority of them would rather have anything else than a CPAP to wear to bed every night.

Speaker Change: And so to have an alternative that doctors can prescribe and now that we have the severe sleep apnea.

Speaker Change: <unk>.

Speaker Change: Certificate or a clearance from the FDA that opens up the door for medical doctors to feel very comfortable in saying look there's a couple of first line treatment option is now available and approved by FDA. One is a CPAP. The other is this treatment from vivo.

Brad Amman: As Kirk will discuss in more detail, in late July, we began to see patients from our strategic marketing and distribution alliance with an operator of several sleep testing and treatment centers in Colorado. As a result, the fourth quarter of this year will be the first full quarter of operations with this new strategic revenue initiative, which is based on collaborations to better align our interests with referring medical professionals. We expect this will be materially broadened the number of OSA patients who have access to vivo's products and make our revenue less reliant on VIP enrollments going forward.

Kirk Huntsman: One is CPAP. The other is this treatment from Vivos. And you can be in and out of treatment in 12 months and blah, blah, blah. So what we wanted to do is we wanted to test our thesis on this. And so we dispatched our people over the last sort of year, about a year's time, and lo and behold, we discovered that we're pretty good at putting our treatment in front of patients along with all their options on a fully informed basis. And patients, when they hear the story, they really want what we have to offer.

Speaker Change: And you can be in an hour treatment in 12 months and blah blah blah. So what we wanted to do is we wanted to test our thesis on this and so we dispatched our people over the last.

Kirk Huntsman: So what we wanted to do is we wanted to test our theories on this. And so we dispatched our people over the last, sort of year, about a year's time, and lo and behold, we discovered that we're pretty good at putting our treatment in front of patients along with all their options on a fully informed basis, and patients, when they hear the story, really want what we have to offer.

Speaker Change: Sort of a year about a year's time and and Lo and Behold, we discovered that we're pretty good at putting our treatment in front of patients along with all their options in a fully informed basis and patients when they hear the story they really want what we have to offer and so we were seeing patients.

Kirk Huntsman: And so we were seeing patients selecting our treatment at very high rates: 70, 80, 90 percent in some cases. And so we said, you know, if that's what it takes, let's put ourselves in front of the most patients. And let's find ways to change our model so that we can do that. So our pivot to medical, the medical community, is a pivot towards putting ourselves in the best place to get traction and adoption for our treatment. And what we found is when we've been up there at CSI the last few weeks, the things that we experienced in our study, in our pilot study, are exactly the same things that we experienced up there.

Speaker Change: Selecting our treatment at very high rates, 70%, 80%, 90% in some cases and so we said you know.

Brad Amman: Gross profit was $2.7 million for the second quarter of 2024 compared to gross profit of $2.1 million for the comparable period in 2023. The increase was primarily attributable to the increase in revenue. Gross margin for the second quarter of 2024 was 65% compared to 62% for the second quarter of 2023. For the six months ended June 30 of 2024, gross profit was $4.6 million compared to gross profit of $4.4 million in the same period in 2023.

Kirk Huntsman: And so we said, you know, if that's what it takes, let's put ourselves in front of the most patients, and let's find ways to change our model so that we can do that. So our pivot to medical, the medical community, is a pivot towards putting ourselves in the best place to get traction and adoption for our treatment. And what we found is, when we've been up there at CSI the last few weeks, the things that we experienced in our study, in our pilot study, are exactly the same things that we experienced up there.

Speaker Change: If that's what it takes let's put ourselves in front of the most patients and let's find ways to change our model. So that we can do that so our pivot to medical the medical community is a pivot towards putting ourselves in the best place to get them to get traction.

Brad Amman: Attributable to the increase in revenue again. . Gross profit for the six month period ended June 30th, 2024 remain constant at 61% compared to the same period in 2023. Sales and marketing expenses decreased by about 300,000 or 46% to 300,000 for the second quarter of 2024 compared to 600,000 for the second quarter of 2023. This decrease was primarily driven by lower sales commissions as well as sales related in digital marketing expenses.

Speaker Change: And adoption for our treatment and what we found is when we've been up there.

Speaker Change: CSI the last few few weeks.

Speaker Change: The things that we experienced in our.

Speaker Change: In our <unk>.

Speaker Change: Study in our in our pilot study are exactly the same things that we experience up there.

Kirk Huntsman: Patients are thrilled to have another option. They're thrilled to know that there's hope that they can resolve their OSA symptoms without having to wear some type of a device for life. And so the uptake for our treatment has been extremely gratifying. We have not, in the month of July, we have just to be really clear. We have not had as many at bats as we would have liked to have had with being in front of as many patients as we would like to see. But that's all a function of just sort of getting our first, you know, a few weeks under our belt and sort of getting everybody geared up and all that.

Kirk Huntsman: Patients are thrilled to have another option. They're thrilled to know that there's hope that they can resolve their OSA symptoms without having to wear some type of a device for life. And so the uptake for our treatment has been extremely gratifying. We have not in the month of July, we have just to be really clear, we have not had as many at bats as we would have liked to have had with being in front of as many patients as we would like to see.

Speaker Change: Patients are thrilled to have another option. There are thrilled to know that there is hope that they can resolve their OSA symptoms without having to wear some type of a device for life and so the uptake for our treatment has been extremely gratifying. We are not in the month of July we have just to be really clear.

Speaker Change: We have not had as many at bats, as we would've liked to have had with being in front of as many patients as we would like to see but that's all a function of just sort of getting our first.

Kirk Huntsman: But that's all a function of just sort of getting our first, you know, a few weeks under our belt and sort of getting everybody geared up and all that. So, as we move forward now into August, September, October, and the last part of the year, I think you're going to see this accelerate, and as we mentioned earlier, for every 100 patients It puts about eight million, almost $8 million into the coffers here.

Brad Amman: For the six months ended June 30th, 2024, sales and marketing expense decreased to a million compared to slightly over $1.2 million for the same period in 2023. This decrease was primarily driven by the same factors I mentioned earlier. As we've said previously, we are committed to increasing efficiencies in significantly lowering our cash burn rate as we seek to prudently use our capital resources and to achieve our main goal of cash flow positive operations.

Speaker Change: A few weeks under our belt and sort of getting everybody geared up and all of that so as we move forward now into August September October and the last part of the year I think youre going to see this accelerate.

Kirk Huntsman: So as we move forward now into August, September, October, the last part of the year, I think you're going to see this accelerate. And, as we mentioned earlier, for every 100 patients, it puts about $8 million, almost $8 million into the coffers here. So it's a very accretive, very profitable way of looking at our business and also delivering on a much larger scale. So there are thousands and tens of thousands and hundreds of thousands of patients who are out there either, either who have been given a CPAP and don't want it or who would like to have the options going in.

Speaker Change: And as we mentioned earlier for every 100 patients.

Speaker Change: It puts about 8 million almost $8 million into the coffers here. So it's a very accretive very profitable way of looking at our business and also delivering on a much larger scale.

Kirk Huntsman: So it's a very accretive, very profitable way of looking at our business and also delivering on a much larger scale. There are thousands and tens of thousands and hundreds of thousands of patients who are out there either who have been given a CPAP and don't want it, or who would like to have the options going in.

Brad Amman: This trend continued in the second quarter as we again achieved a significant reduction in GNA expenses. Importantly, the second quarter marked the eighth consecutive quarter in which we've been able to continue with this trend. For the second quarter of 2024, general administrative expenses decreased $1.8 million or 30% to $4.1 million compared to $5.9 million for the second quarter of last year. This year over year decrease reflects the success of our cost-cutting efforts as we move toward our goal of positive results from operations.

There are thousands and tens of thousands and hundreds of thousands of patients who are out there either either who have been given a CPAP and don't want it or who would like to have the options going in.

Kirk Huntsman: And we see this as just the very, very early stages of a very big inflection point for this company. So I hope that, Hope that answers your question. Did I get all of that? I think I did, but yeah, yeah, yeah, you did.

Tom Kim: And we see this as just the very, very early stages of a very big inflection point for this company. So I hope that answers your question. Did I get all of that? I think I did. Yeah, you did. I mean, a 70% or 80% conversion rate would mean an amazing up. Opportunity for you guys. That's extraordinary. Yeah.

Speaker Change: And we see this as just the very very early stages of a very big inflection point for this company. So I hope that I hope that answers. Your question did I get all of that I think I did but yes, yes.

Kirk Huntsman: I mean, a 70, 80% conversion rate would mean an amazing, Yeah, what do you what do you see happening with the VIP doctors or judges that you've enrolled? going forward. Well, you know, fortunately, for all of us, the market is huge, right? There's not, we're not going to be, we're not going to, we can, we can treat all the patients that we see from the medical community and, and barely scratch the surface.

Speaker Change: I mean.

Speaker Change: 70, 80% conversion rate would mean, an amazing opportunity for you guys that's extraordinary.

Kirk Huntsman: What do you, what do you see happening with the VIP doctors? Are there just that you've been rolled going forward? Well, you know, fortunately for all of us, the market is huge, right? There's not, we're not going to be, we're not going to, we could, we could treat all the patients that we see for the medical community, and barely scratch the surface. And so there's plenty of work for them to continue to do. We're going to continue to support. We're going to continue to train. We're going to continue to teach, and we have our Vivos Institute here in Denver that is booked out fully for this next year.

Speaker Change: Yes, what do you what do you see happening with the VIP doctors.

Brad Amman: For the six months ended June 30th, 2024, GNA expenses decreased $3.4 million to $9 million or approximately 27% compared to $12.4 million for the six months ended June 30th, 2023. The decrease reflects lower professional fees and reduction in personnel and related compensation. Total operating expenses for the second quarter of 2024 decreased by a significant amount, $2 million or 31% versus the second quarter of last year. As noted, this represents our eighth consecutive quarter where we have reported year over year decreases in operating expenses.

Speaker Change: Business that you've enrolled going forward.

Speaker Change: Well Fortunately for all of US the market is huge right. There's not we're not going to be we're not going to we can we could treat all the patients that we see for the medical community and and barely scratched the surface.

Speaker Change: And so there is plenty of work for them to continue to do we're going to continue to support we're going to continue to train.

Kirk Huntsman: And so there's plenty of work for them to continue to do. We're going to continue to support, we're going to continue to train, we're going to continue to teach. And we have our Vivos Institute here in Denver that is booked out fully for this next year. And we're really excited about all the different courses that we're offering now. And, and so the continuing education will be here, the training and support will be here, we're just not going to go aggressively after dentists, they'll have to, it'll be more of an organic growth scenario for them.

Speaker Change: To continue to teach and we have our vivo Institute here in Denver that is booked out fully for this next year and we're really excited about all the different courses that we're offering now and so the continuing education will be here the training and support will be here, we're just not going to go aggressively after.

Kirk Huntsman: And we're really excited about all the different courses that we're offering now. And, and so the continued education will be here. The training and support will be here. We're just not going to go aggressively after Dennis. They'll have to; it'll be more of an organic. Growth scenario for them. And we've, we've lowered some of the prices for entry, so that training is more affordable, and all that, but our real focus here is going to be in this other channel through the medical community. But, but the Vivos doctors will continue to be. They'll continue to be supported.

Brad Amman: And it is mainly due to the cost-cutting initiatives we have taken since the middle part of 2022 throughout 2023 and as well as in 2024. For the six months ended June 30th, operating expenses decreased by $3.7 million or 26% compared to the same period last year. Our cost-cutting initiatives in lower GNA also contributed to a significant year over year reduction in operating loss, which decreased $2.9 million or 57% versus the second quarter of 2023.

Speaker Change: Sure Dennis they'll have to it'll be more of an organic.

Kirk Huntsman: And we've, we've lowered some of the prices for entry so that training is more affordable and all that. But our real focus here is going to be in this other channel through the medical community. But, but the Vivos doctors will continue to be, they'll continue to be supported, they'll continue to be, you know, catered to, and all the things that we've done in the past will continue for them. Unknown Speaker Okay, that makes sense.

Speaker Change: Growth scenario for them and we've we've lowered some of the prices for entry. So that training is more affordable and all of that but our real focus here is going to be in this other channel through the medical community, but the vivo as doctors will continue to be.

Speaker Change: There continue to be supported they'll continue to be.

Kirk Huntsman: They'll continue to be, you know, catered to, and all the things that we've done in the past will continue for them.

Speaker Change: Catered to and all of the things that we've done in the past will continue for them.

Tom Kim: Okay, that makes sense.

Okay that makes sense.

Brad Amman: For the six months ended June 30th, 2024, operating loss decreased by $3.8 million or 40% compared to the same period last year. Net loss for the second quarter of 2024 decreased by 65% to $1.9 million compared to a loss of $5.5 million for the same period in 2023. For the six months into June 30 at 2024, net loss decreased by 21% to $5.7 million compared to a net loss of $7.2 million for the same period last year.

Brad Amman: And just one quick question for Brad. Congrats on the cost-cutting efforts. It looks like it's really starting to reduce the hash burn. Maybe you could provide a little more detail about what happened over the last several quarters to achieve this. And is there more room for additional cost to come off?

Speaker Change: Just one quick question for Brad.

Brad Amman: And just one quick question for Brad, congrats on the cost cutting efforts. It looks like, really starting to reduce the hash burn. Maybe you could.

Brad Edmunds: And congrats on the cost cutting efforts it looks like it.

Brad Edmunds: Starting to reduce the cash burn.

Brad Edmunds: Maybe you could.

Brad Amman: Provide a little more detail about what's happened over the last several quarters to achieve this, and is there more room for additional costs to come off? Yeah, great question, though. Thank you for that. You know, in Q3 of 2021, our SG&A costs were around $8.7 million. In Q2 of this year, SG&A was around $4.6 million.

Speaker Change: Provide a little more detail about what happened over the last several quarters to achieve this and is there more room for additional cost to come off.

Brad Amman: Yeah, great question, though. Thank you for that. You know, in Q3 of 2021, our SG&A costs were around $8.7 million. In Q2 of this year, SGNA was around $4.6 million. On a quarter-over-quarter basis for comparable quarters, we've seen a reduction of. On average, $2 million per quarter for eight consecutive quarters in operational cash flows has been reduced, you know, from a high of over $6 million back in Q1 of 2022 to $3 million this quarter. This was certainly achieved through reductions in our workforce from a high of 180 employees to now we have just over 100 employees.

Brad Edmunds: Yes, Great question do thank you for that.

In Q3 of 2021, our SG&A costs were around $8 7 million in Q2 of this year.

Brad Amman: Turning now to our statement of cash flows, cash burned from operations for the six months into June 30 at 2024 was $5.6 million. A decrease of approximately 13% or $800,000 compared to $6.4 million during the comparable prior year period. This decrease is due primarily to the $1.5 million decrease in net loss in the absence in 2024 of an unfavorable net change and fair value of warrant liability of about $2.3 million. Offset by an increase in accounts receivable, a decrease in contract liability, accounts payable, accrued expenses and other liabilities, and a decrease of approximately $800,000 in the fair value of warrant issued for services.

Brad Edmunds: SG&A was around six or $4 6 million.

Brad Amman: On a quarter over quarter basis for comparable quarters, we've seen a reduction of, on average $2 million per quarter for a consecutive quarters and operational cash flow has been reduced from a high of over $6 million back in Q1 of 2022 to $3 million this quarter. This was certainly achieved through reductions in our workforce from a high of 180 employees to now we have just over 100 employees. We cut website development, expenditures, conferences, digital print, marketing, travel, meals, entertainment, and other costs.

Brad Edmunds: On a quarter over quarter basis for comparable quarters, we have seen a reduction of on average $2 million per quarter for a consecutive quarters, an operational cash flow has been reduced from a high of over $6 million back in Q1 of 2000 $22 million to $3 million this quarter.

Brad Edmunds: This was certainly achieved through reductions in our workforce from a high of 180 employees.

Brad Edmunds: Now we have just over 100 employees.

Brad Amman: We cut website development expenditures, conferences, digital print marketing, travel meals, entertainment, and other costs. Nonessential vendors were either eliminated, or restructured, or renegotiated here recently. And, you know, we have. New proposed expenditures, you know, we need to go through a ROI analysis, return on investment analysis to make sure that those additional expenditures are new. Any new expenditures have a return on. So we're going to continue to review our expenditures, see what we can cut, what's non-essential, and what is essential.

Brad Edmunds: We cut website development expenditures conferences digital print marketing travel meals and entertainment and other costs.

Brad Amman: Non-essential vendors were either eliminated or restructured or renegotiated here recently. And you know, we have new proposed expenditures, you know, we need to go through a, R.O.I. analysis, return on investment analysis to make sure that those additional expenditures or any new expenditures have a return on them.

Brad Edmunds: Nonessential vendors were either eliminated or restructured or renegotiated.

Here recently and we have.

Brad Amman: For the six month period into June 30, net cash used in investing activities of $200,000 consisted of capital expenses for software related to development of our ordering software platform, which is expected to be placed in service this year. This compares to net cash used in investing activities of $1.5 million in the comparable 2023 period arising from capital expenditures for the same ordering software as well as an asset purchase of intellectual property.

Brad Edmunds: New proposed expenditures.

Brad Edmunds: Need to go through a.

Brad Edmunds: ROI analysis return on investment analysis to make sure that those.

Brad Edmunds: Additional expenditures are new any new expenditures.

Brad Edmunds: Have a return on them.

Brad Amman: So, you know, we're going to continue to review our expenditures, see what we can cut, what's non-essential and what is essential. So we'll continue to go down that path and trim where we need to trim, but the important thing is that we work both the top line and our expense side to get to a point where we're positive cash flow from operation. Well, it looks like it could have all.

So working and I continue to.

Brad Edmunds: We view our expenditures see what we can cut what's non essential and what is essential. So we will continue to go down that path.

Brad Amman: So we'll continue to go down that path and trim where we need to trim, but the important thing is that we work both the top line and our expense side to get to the point where we're positive cash flow from operations.

Brad Edmunds: And trim, where we need to to DRAM, but the important thing is that we work both the top line and our expense side.

Brad Amman: For the six months into June 30 at 2024, net cash provided from finance activities of $11.4 million is related to our February warrant inducement transaction and our June strategic pipe transaction. This compares to net cash provided from financing activities in the comparable 2023 period of $7.4 million reflecting our January of 2023 private placement has previously announced to augment our liquidity position in stockholders equity in June of 2024. For VIVOS closed on a $7.5 million equity growth investment from an affiliate of new cynic partners, a leading middle market private equity firm.

Brad Edmunds: To get to a point way where were positive cash flow from operations.

Tom Kim: Well, it looks like, yeah, absolutely, and it looks like you'll pay off in the near future. Hopefully, great progress, guys. Thanks for taking my question. Thank you, though. Thank you.

Brad Amman: Yeah, absolutely. And it looks like you'll pay off in the near future, hopefully. Great progress, guys. Thanks. Thank you, though.

Speaker Change: Well it looks like.

Speaker Change: Kurt.

Kurt: Yeah, absolutely and then it looks like.

Kurt: The pay off of the.

Speaker Change: Near future hopefully great.

Speaker Change: Great progress guys. Thanks for taking my questions.

Speaker Change: Thank you though.

Lukas <unk>: Thank you and the next question comes from the line of Lukas <unk> from ascend incorporated your line is now open. Please go ahead.

Lucas Ward: And the next question comes from the line of Lucas Ward from Ascent Inc.

Operator: Unknown Speaker And the next, from the line of Lucas Ward, and Incorporated, your line is now open. Thank you. Good afternoon, gentlemen, and congrats on your business project. I am so I'm curious about, It seems like a significant portion of the revenue jump was due to lower discounts. Brad mentioned 70% lower discounts year-on-year. How does that come about? Was that just a unilateral policy?

Lucas Ward: Operated, your line snow open, please go ahead. Thank you. Good afternoon, gentlemen, and congrats on your business process. Thank you. So I'm curious about; it seems like a significant portion of the revenue jump was due to lower discounts. Brad mentioned 70% lower discounts year on year. How does that come about? Was that just a unilateral policy? You just decided not to give them, or did something in the business model change to achieve that?

Lukas <unk>: Thank you good afternoon, gentlemen, and congrats on your business process.

Speaker Change: Thank you.

Brad Amman: This investment is more than sufficient for us to demonstrate compliance with NASDAQ's minimum equity requirement as of the end of the quarter and materially bolsters are cash on hand to facilitate the launch of the new strategic alliance I mentioned earlier, which is expected to positively impact VIVOS's revenue growth. Kirk will speak more on this shortly. As of June 30 at 2024, we had approximately $6.9 million of cash and cash equivalents compared to $1.6 million as of December 31, 2023. Our stockholders equity at June 30 was at approximately $6.3 million.

Lukas <unk>: Yes.

Lukas <unk>: Hi.

Speaker Change: So I'm curious about.

Speaker Change: It seems like a significant portion of the revenue jump was due to lower discounts.

Speaker Change: Brad mentioned, 70% lower discounts year on year.

Speaker Change: How does that come about was that just a unilateral policy you just decided not to give them or did something in the business model change to achieve that.

Kirk Huntsman: You just decided not to give them or did something in the business model change to achieve that? Let me take that one. Well, a little bit of both. I mean, it was a conscious effort, and something that we, we just felt like, especially with some of our new regulatory, you know, new regulatory clearances that, frankly, are unique and, and, you know, special, we just felt like it wasn't really necessary for us to be discounting our products as much.

Kirk Huntsman: Let me take that one. Well, a little bit of both. I mean, it was a conscious effort and something that we just felt like, especially with some of our new regulatory, you know, new regulatory clearances that, frankly, are unique and special, we just felt like it wasn't really necessary for us to be discounting our products as much. So I think there's a lot of things behind that. A lot of it has to do with some of the discounts that we were giving on the initial enrollments, et cetera, et cetera. So I just think we're taking a little bit more disciplined approach than we have to just sort of stand by our prices and standing by the value proposition that our treatment delivers.

Speaker Change: Let me take that one well.

Speaker Change: Both I mean, it was a conscious effort.

Speaker Change: Something that we.

Speaker Change: We just felt like especially with some of our new regulatory.

Speaker Change: You know new regulatory clearances that frankly are unique.

Brad Amman: In conclusion, we reported solid results for the second quarter, which included both sequential and year-over-year revenue growth. We also continued to take actions to improve our cost structure and reduce cash burn while strengthening our cash position, which was evident in our results. Based on our progress to date, Vivos continues to anticipate attaining positive cash flow from operations in the foreseeable future.

And special we just felt like it wasn't really necessary for us to be discounting our products as much. So I think theres a lot of a lot of things behind that a lot of it has to do with some of the discounts.

Kirk Huntsman: So I think there's there's a lot of a lot of things behind that a lot of it has to do with some of the discounts that we were giving on the initial enrollments, etc, etc. So I just think we were taking a little bit more disciplined approach than we have to just sort of standing by our prices and standing by our, the value proposition that our treatment delivers. And so I think there's, there's a lot of work done by our people in accounting, Brad and his team, and also working with our clinical folks and our operations people to bring that about.

Speaker Change: We were given on the initial enrollments et cetera et cetera. So I just think we.

Speaker Change: We were taken a little bit more disciplined approach then we have to just sort of standing by our prices in standing by our.

Brad Edmunds: The value proposition that our treatment delivers and so I think there is a lot of work done by our people in accounting, Brad and his team in and also working with our clinical folks and our operations people to bring that about but I think it was a conscious effort.

Brad Amman: I want to thank you all for joining us today on our conference call.

Kirk Huntsman: And so I think there's a lot of work done by our people in accounting, Brad and his team, and also working with our clinical folks and our operations people to bring that about. But I think it was a conscious effort.

Kirk Huntsman: Now, I'll turn the call over to Kirk Huntsman, Chairman, and CEO. Kirk, please go ahead. Thank you, Brad. Good afternoon, everyone, and thank you for joining us on today's conference call. The second quarter of 2024 was a period of significant progress for Vivos along a number of fronts. Just to recap and highlight a few financial metrics, year-over-year, same period revenue, up 19 percent, with product revenue up 28 percent. Year-over-year, same period operating losses, down 57 percent.

Lucas Ward: Okay.

Brad Edmunds: Okay.

Brad Amman: And then, sort of similarly, you had a big sequential decline in sales commissions. So you're saving 300,000 or something sequentially. Like, is that also. Yeah, we structured all that. Yeah. We restructured our sales force and restructural. The number of sales people that we had, but we also restructured the compensation model. And I think it we did that with the specific the express intent of achieving some savings. And that's what we've; that's what we were able to do.

Kirk Huntsman: But I think it was a conscious effort. And then sort of similarly, you had a big, Sequential decline in sales commissions, so you're saving. 300,000 or something sequentially. Like, is that also, Unknown Speaker Yeah, we restructured all that. Yeah, we restructured our sales force and restructure not only the number of salespeople that we had, but we also restructured the compensation model. And, and I think it we did that with the specific, the express intent of, Achieving some savings and that's what we've that's what we were able to do, So yeah, yeah, that was that was deliberate. Yeah. With respect to overall operating expenses, which are.

Speaker Change: And then sort of similarly, you had a big sequential decline in sales commissions, so you're receiving.

Speaker Change: 300000 or something sequentially.

Speaker Change: Is that also.

Speaker Change: Ah.

Speaker Change: Yeah, we last structured all of that.

Speaker Change: Yeah, we restructured our sales.

Kirk Huntsman: Year-over-year, same period net loss, down 65 percent. Year-over-year, six months operating losses, down 40 percent. Year-over-year, six months, net loss, down 21 percent. Consecutive quarter-grose profit, up 26 percent. Consecutive quarter net loss, down 49 percent. Consecutive quarter net loss per share, down 63 percent. Cash and cash equivalence on hand at December 2023, 1.6 million. Cash and cash equivalence on hand in June 2024, 6.9 million. So, as you can see, from that brief overview, the second quarter of 2024 saw the culmination of many long hours of work.

Speaker Change: Force and.

Speaker Change: Restructure not only the number of salespeople that we had but we also restructured the compensation model and.

Speaker Change: And I think we.

Speaker Change: We did that with the specific the express intent of.

Speaker Change: <unk>.

Speaker Change: Achieving some savings and that's what we've that's what we were able to do.

Brad Amman: So yeah, that was that was deliberate.

Speaker Change: Mhm.

Yes, yes that was that was deliberate.

Speaker Change: Okay.

Brad Amman: Okay, with respect to overall operating expenses, which are now at 4.5 million, yeah, what do you see as a steady state for operating expenses? Because they really went down a lot, and they just keep going down. Yeah, I don't think we see a steady state right now, and I'll tell you why, and I realize this makes it harder for you guys to model something, but we're simply, we're pivoting into a new world here, and so we've continued to reduce staffing in the here, into the third quarter, and so you could say that we've continued along that same track, but at the same time, we're also staffing up in other arenas for the growth that we're experiencing.

Speaker Change: With respect to overall operating expenses, which are.

Kirk Huntsman: Now at 4. Unknown Speaker 5 million. Yeah. What do you see as a steady state? for operating expenses because they really went down a lot and they just keep going down.

Speaker Change: Now at four point.

Speaker Change: $5 million, what do you see as a steady state for operating expenses because they they really went down a lot and they just keep going down.

Kirk Huntsman: Our team has been putting in to get our company in a position to succeed long-term. As Brad just mentioned, this quarter marked our eighth consecutive quarter, where we've delivered lower operating expenses on a year-over-year basis. And as we said before, we aren't done yet as we continue to explore ways of cutting costs without harming revenue. We believe this methodical effort patiently executed over time has put Vivos in a much better position to now execute on our new strategic marketing and distribution model.

Kirk Huntsman: I don't think we see a steady state right now, and I'll tell you why. And I realize this makes it harder for you guys to model something, but we're simply, we're pivoting into a new world here. And so we've continued to reduce staffing in the here into the third quarter. And so you could say that we've continued along that same track, but at the same time, we're also staffing up in other arenas for the growth that we're experiencing.

Yeah.

Speaker Change: I think we see a steady state right now and I'll tell you why.

Speaker Change: And I realize that it makes it harder for you guys to model something but we're simply we're pivoting into a new world here and so we've like we've continued to reduce staffing.

Speaker Change: In here into the third quarter and.

Speaker Change: And so you could say that we've continued along that same track, but at the same time. We're also staffing up in other other arenas for the growth that we're experiencing so we have to go through a little bit of a transition time, while we we continue to cut back on some.

Kirk Huntsman: As we have previously indicated, our new strategic alliance model is designed to deliver higher total revenue per clinical case, along with higher gross profit. In July, we launched the first phase of our first strategic alliance with a multi-center sleep clinic operation right here in Colorado. Although it is still very early, we can confirm that our previously reported experience in terms of patient acceptance and other conversion metrics seem to have carried over as expected into this new initiative.

Kirk Huntsman: So we have to go through a little bit of a transition time while we continue to cut back on some types of expenditures and some types of personnel. And then we're actually also replacing them with other types of personnel that have to be trained and processed and sort of brought up to speed so that when the big bolus of patients begins to hit, it's literally gonna be starting here in the next few weeks.

Kirk Huntsman: So we have to go through a little bit of a transition time while we continued to cut back on some types of expenditures and some types of personnel, and then we're actually also replacing them with other types of personnel that have to be trained and processed and sort of brought up to speed so that when the big bolus of patience begins to hit, which will, you know, it's literally going to be starting here in the next few weeks, when all of that starts to unfold, we have to have the staffing and the doctors and the personnel in place to do that.

Speaker Change: Types of expenditures and some types of personnel and then we're actually also replacing them with other types of personnel that have to be trained and processed and sort of brought up to speed. So that when the when the the big bolus of patients begins to hit which will.

Kirk Huntsman: One thing that we have been seeing that we haven't seen previously is that about half of the OSA patients that we're seeing at this medical sleep clinic are so excited about the Vivos treatment options that they've been referring friends and family members in for evaluation and treatment as well. When nearly 50% of your patients refer people in like that, we believe it bodes well for a strong future organic growth. All of that of course is very good news, and it is very good news that has us very optimistic about things going forward.

Speaker Change: Literally going to be starting here in the next few weeks when all of that starts to unfold. We got we have to have the staffing and the doctors and the <unk>.

Kirk Huntsman: When all of that starts to unfold, we have to have the staffing and the doctors and the personnel in place to do that. A steady state for us, I think we're going to be, as we look at some of these acquisitions and some of the revenue potential sitting in these acquisitions, just those acquisitions alone, we're gonna need to add personnel just to be able to service the capacity, have the capacity to process those patients through.

Speaker Change: Personnel in place to do that so so there is so.

Kirk Huntsman: So, so there's, so I'd steady state for us, I think we're going to be, as we look at some of these acquisitions, and some of the revenue potential sitting in these acquisitions, just those acquisitions alone, we're going to need to add personnel just to be able to service the capacity to have the capacity to process those patients through. So, you know, it's just, I think just stay tuned as we announce some of these, you know, new affiliations and how, you know, we'll try to provide you guys with some idea for what type of, you know, how much of an impact, how many patients we're expecting to flow through the system. And once I think the key right now is to understand the more high level dynamics of what happens when a patient comes through, what's the revenue and EBITDA opportunity associated with each of those patients. And then I think as we start to fold, we start to fold more of those deals in with more and more flow, it'll even out, and I think we'll be able to talk about a steady state model that could be just sort of, you know, stamped out over and over again as we grow.

Speaker Change: Yes.

Speaker Change: At steady state for US I think we're going to be as we look at some of these acquisitions and some of the revenue potential sitting in these acquisitions.

Speaker Change: Just those acquisitions alone, we're going to need to add personnel just to be able to service the capacity to have the capacity to process those patients through.

Kirk Huntsman: This last initiative that began just last month is what we've been talking about and working toward for many months. As previously stated, we believe this strategic pivot towards medical-based, full service, breathing and sleep centers represent an inflection point for us that will materially alter our prospects for growth and profitability. Looking at the next few months, we fully expect to see an acceleration of that improvement as we move into the last part of 2024 and into 2025.

Speaker Change: So.

Kirk Huntsman: So, You know, it's just I think, just stay tuned as we announce some of these, you know, new affiliations and how, you know, we'll we'll try to provide you guys with some idea for what type of, you know, how much of an impact how many patients we're expecting to flow through the system. And once I think the key right now is to understand the, the more high level dynamics of what happens when a patient comes through. What's the revenue and EBITDA opportunity associated with each of those patients?

Speaker Change: It's just I think just stay tuned as we announced some of these new affiliations and how.

Speaker Change: We will try to provide you guys with some idea for what type of how much of an impact how many patients were expecting that flow through the system and once I think the key right now is to understand.

Speaker Change: The the more high level dynamics of what happens when a patient comes through.

Kirk Huntsman: To give you a sense of the leverage we see in this new model, our current calculations are that for every 100 OSA patients per month that we put into Vivo's treatment of some kind, we should realize top-line revenues of nearly $8 million annually with high profitability. For further perspective on this, our first strategic alliance partner currently sees referrals of several hundred potential OSA patients per month, most of whom we believe could be excellent candidates for Vivo's treatment.

Speaker Change: Whats the revenue and EBITDA opportunity associated with each of those patients and then I think as we start to fold.

Kirk Huntsman: And then I think as we start to fold, we start to fold more of those of those deals in with more and more flow, it'll even out and I think we'll be able to talk about a steady state model that could be just sort of, you know, stamped out over and over again as we as we grow. But as we go through this little bit of a transition time over the next quarter or so Lucas, I would say, give us a minute to kind of get our get our arms around what that's going to look like.

Speaker Change: We start to fold more of those of those deals in with more and more flow it'll it'll even out and I think we'll be able to talk about a steady state model that could be just sort of stamped out over and over again as we as we grow but.

Kirk Huntsman: But as we go through this little bit of a transition time over the next quarter, so Lucas, I would say, give us a minute to kind of get our arms around what that's going to look like. I think we have a great plan. We've got really experienced people operating at the practice level. Keep in mind that most of our senior team here has vast experience in the practice management, practice operating world. We ran hundreds of dental practices for many years, and it's not that much different. There's obviously some nuances between medical and dental, but for the most part, dealing with providers, hiring staff, operating a clinic, all those kinds of things transfer.

Speaker Change: As we go through this little bit of a transition time over the next quarter or so Lucas I would say.

Lucas: Give us a minute to kind of get our arms.

Kirk Huntsman: In addition, we are currently in negotiations with six other sleep testing groups and medical doctor-based sleep centers from around the United States who together see upwards of 5,000 OSA patients per month. These groups typically operate on a high-volume low-margin business model and are very intrigued by the higher-margin products and services Vivo's can bring to the table. Our latest FDA clearance to treat severe OSA patients using our care or medical devices is proving to be a real asset in helping us open these doors.

Lucas: Arms around.

Lucas: That's going to look like I think we have a great plan, we've got really experienced people operating at the practice level keep in mind that most of our senior team here has vast experience in the <unk>.

Kirk Huntsman: I think we have a great plan. We've got really experienced people operating at the practice level. Keep in mind that most of our senior team here has vast experience in the practice management practice operating world. We ran hundreds of dental practices for many years, and it's not that much different. There's obviously some nuances between medical and dental, but for the most part, dealing with providers, hiring staff, operating a clinic, all those kinds of things transfer.

Lucas: Practice management practice operating World, we ran hundreds of dental practices for many years and it's not that much different there is obviously, some nuances between medical and dental, but but for the most part dealing with providers hiring staff operating clinic, all those kinds of things transfer so.

Kirk Huntsman: So we feel really, really right at home here doing this, and we're probably, you know, it's probably one of the strengths of our team.

Kirk Huntsman: So we feel really, really right at home here doing this. And we're probably, you know, it's probably one of the strengths of our team. So we'll be able to answer that question much more definitively, I think, next quarter. All right, Kirk, that's all I have. Thank you very much. Thank you. Thank you, Lucas. Thank you, and I show no further questions in the queue. At this time, I would like to turn the call over to Mr. Kirk Huntsman, Chairman and CEO, for closing remarks.

Lucas: So we feel really really right at home here doing this and we're probably.

Kirk Huntsman: We have been pleased by the generally warm and welcoming reception we receive from sleep doctors who seem desperate and even relieved to have viable alternatives to CPAP. Vivo's thus represents a compelling and safe clinical option as well as a powerful revenue and profit growth opportunity on a scale they've never seen before. We thus believe we are just barely scratching the surface of what is possible as we continue to roll forward. There are reportedly over 2,500 AASM, that's the American Academy of Sleep Medicine accredited sleep testing labs and testing centers across the United States, with well over 100,000 new OSA patients being diagnosed each month.

Speaker Change: It's probably one of the strengths of our team. So we will be able to answer that question much more definitively I think next quarter.

Lucas Ward: So we'll be able to answer that question much more definitively, I think, next quarter. Okay.

Speaker Change: Okay.

Lucas Ward: All right, Kirk, that's all I have. Thank you very much. Thank you. Thank you, Lucas. Thank you.

Speaker Change: Alright, Thats all I have thank you very much.

Speaker Change: Thank you thank you Lucas.

Speaker Change: Thank you and I'm showing no further questions in the queue. At this time I would like to turn the call over to Mr. Kirk Huntsman, Chairman and CEO for closing remarks. Please go ahead Sir.

Operator: And I show no further questions in the queue at this time.

Operator: I would like to turn the call over to Mr. Kirk Huntsman, Chairman and CEO, for closing remarks. Please go ahead, sir. Thank you, operator. Well, for those of you who've been with us, and again, like I said earlier, those of you who've hung in there with Vivos while we've tried to through this out, we've always realized we had something special with respect to our technology. And it was just a matter of trying to figure out how to get it out there and get it into the hands of the right people. So I would just like to thank everybody who's hung in there with us, who's joining us today on this call.

Kirk Huntsman: Thank you operator.

Kirk Huntsman: Thank you, operator. Well, for those of you who've been with us, and again, like I said earlier, those of you who've hung in there with Vivos while we've tried to figure this out, we've always realized we had something special with respect to our technology. And it was just a matter of trying to figure out how to get it out there and get it into the hands of the right people.

Speaker Change: Well for those of you who've been with us and.

Kirk Huntsman: Again like I said earlier those of you who've hung in there with leave US while we've tried to figure. This out we've always realized we had something special with respect to our our technology and it was just a matter of trying to figure out how to get it out there and get it into the hands of the right people.

Kirk Huntsman: An estimated 80 to 90 percent of all OSA patients remain undiagnosed and untreated. So we see a huge opportunity here with this new model and we are fortunate to have garnered the support of long-term investors who share our vision. We recently secured a $7.5 million private equity investment and entered into a strategic relationship with new Seneca partners, a leading North American private equity sponsor. Seneca's investment, which comes on the heels of nine months of due diligence by Seneca, in which they have assisted crafting our new model, has provided a substantial boost to our cash on hand and stockholders equity.

Speaker Change: So I would just like to thank everybody.

Kirk Huntsman: So I would just like to thank everybody who's hung in there with us, who's joining us today on this call. I'd like to extend thank you to the people that the folks over at Seneca and and their efforts to work with Vivos and support us here, as well as our board and and all those who've been longtime supporters of the company. We look forward to sharing our continued progress with everyone as we continue to execute on our plans during the remainder of this year and on into next year. So thank you very much, everyone, and please have a great evening. Thank you. This concludes our conference for today. Thank you all for participating. You may now, on on, Voice difficult, huh?

Speaker Change: Who has hung in there with us who's joining us today on this call.

Kirk Huntsman: I'd like to extend a thank you to the people that the folks over at Seneca and their efforts to work with Vivos and support us here, as well as our board and all those who've been longtime supporters of the company. We look forward to sharing our continued progress with everyone as we continue to execute on our plans during the remainder of this year and on into next year.

Speaker Change: Like to extend.

Operator: ......

Speaker Change: Thank you to the people that the folks over at Seneca.

Speaker Change: And their efforts to <unk>.

Work with vivo and support us here as well as our board and all of those who've been long time supporters of the company. We look forward to sharing our continued progress with everyone. As we continue to execute on our plans during the remainder of this year and on into next year. So thank you very much everyone and please have a great evening. Thank you.

Kirk Huntsman: So thank you very much, everyone, and please have a great evening. Thank you.

Kirk Huntsman: With this increased liquidity, we have moved ahead with the launch of our new strategic alliance and potentially other similar alliance. All of this is expected to positively impact Vivos' revenue growth. In closing, I would simply say that Vivos has weathered the storm and is now emerging even stronger with an exciting new business model that has the potential to finally put our technology into use for thousands and perhaps tens of thousands of people who may never have seen or heard of it otherwise.

Thank you. This concludes our conference for today. Thank you all for participating you may now disconnect.

Operator: Disconcludes are conference for today. Thank you all for participating.

Kirk Huntsman: So on behalf of all of us here at Vivos, I would like to express my sincere appreciation to all of those who have stood by us while we figured this out. It has been a long journey, but we firmly believe we are on the right track and will soon begin to see the full potential of our technology being realized and the full financial potential this company as well.

Operator: That concludes our prepared remarks. Now we'll be happy to take questions. Operator? Yes, sir. Thank you. We will now begin the question and answer session. To ask a question, please press star one on your touchstone phone. And if you're using a speaker phone, please pick up the handset before pressing the keys. To withdraw your question, please press star two. Or in one, if you wish to ask a question. And we now have our first question.

Tom Kim: It comes from the line of Tom Kim from Water Power Research. Your line is now open. Please go ahead. Great. Hi. Thank you for taking my questions and congrats on the court as a result. First, for Kirk, it seems that the strategic alliance with the sleek clinic is pretty important in the evolution of view of therapeutics. Could you maybe expand on that a little bit? And when you say that you're seeing what you had previously reported experience in terms of patients' acceptance, are you referring to your marketing pilot study and the high rate of patients that choose Veeville's oral appliances?

Tom Kim: Yeah, great question. And thank you for that. So, as to the importance of this strategic pivot, I think I can't. I can't overstate how important this is for the company. The truth of the matter is, in being sort of locked into a dental-only channel of distribution, we found that there were just simply too many dentists that just got distracted by dental things. And it wasn't a reliable, certainly not a scalable source of growth and opportunity for us.

Tom Kim: So, we realized that that was not going to happen. There were some doctors, some dentists out there that were extremely successful with it and extremely profitable doing it, but there weren't enough of them. So, when we looked around and we said, where's the model here for success? And the model is clearly.., with dentists and physicians working together. And by that, I mean physicians who have patients, who they either suspect have obstructive sleep apnea or who they know have obstructive sleep apnea, and they want alternative treatment options beside CPAP.

Tom Kim: In today's world, 90 to 95% of all patients who are diagnosed with OSA are prescribed to CPAP. And most of those patients, I think it's safe to say the vast majority of them would rather have anything else than a CPAP to where to bed every night. And so to have an alternative that doctors can prescribe, and now that we have the severe sleep apnea, you know, certificate or clearance from the FDA, that opens up the door for medical doctors to feel very comfortable in saying, look, there's a couple of first-line treatment options now available and approved by FDA.

Tom Kim: One is CPAP. The other is this treatment from Vivos. And you can be in and out of treatment in 12 months and blah, blah, blah. So what we wanted to do is we wanted to test our thesis on this. And so we dispatched our people over the last sort of year, about a year's time, and lo and behold, we discovered that we're pretty good at putting our treatment in front of patients along with all their options in a fully informed basis.

Tom Kim: And patients, when they hear the story, they really want what we have to offer. And so we were seeing patients selecting our treatment at very high rates, 70, 80, 90 percent in some cases. And so we said, you know, if that's what it takes, let's put ourselves in front of the most patients. And let's find ways to change our model so that we can do that. So our pivot to medical, the medical community, is a pivot towards putting ourselves in the best place to get traction and adoption for our treatment.

Tom Kim: And what we found is when we've been up there at CSI the last few weeks, the things that we experienced in our study, in our pilot study are exactly the same things that we experienced up there. Patients are thrilled to have another option. They're thrilled to know that there's hope that they can resolve their OSA symptoms without having to wear some type of a device for life. And so the uptake for our treatment has been extremely gratifying.

Tom Kim: We have not, in the month of July, we have just to be really clear. We have not had as many at bats as we would have liked to have had with being in front of as many patients as we would like to see. But that's all a function of just sort of getting our first, you know, a few weeks under our belt and sort of getting everybody geared up and all that.

Tom Kim: So as we move forward now into August, September, October, the last part of the year, I think you're going to see this accelerate. And as we mentioned earlier, for every 100 patients, it puts about $8 million, almost $8 million into the coffers here. So it's a very accretive, very profitable way of looking at our business and also delivering on a much larger scale. So there are thousands and tens of thousands and hundreds of thousands of patients who are out there either, either who have been given a CPAP and don't want it or who would like to have the options going in.

Kirk Huntsman: And we see this as just the very, very early stages of a very big inflection point for this company. So I hope that answers your question. Did I get all of that? I think I did. Yeah, you did. I mean, a 70, 80% conversion rate would mean an amazing up, opportunity for you guys. That's extraordinary. Yeah. What do you, what do you see happening with the VIP doctors are, are there just that you've been rolled going forward?

Kirk Huntsman: Well, you know, fortunately for, for all of us, the market is huge, right? There's not, we're not going to be, we're not going to, we could, we could treat all the patients that we see for the medical community and, and barely scratch the surface. And so there's plenty of work for them to continue to do. We're going to continue to support. We're going to continue to train. We're going to continue to teach and we have our Vivos Institute here in Denver that is, is booked out fully for this next year.

Kirk Huntsman: And we're really excited about all the different courses that we're offering now. And, and so the continued education will be here. The training and support will be here. We're just not going to go aggressively after Dennis. They'll have to, it'll be more of an organic. Growth scenario for them. And we've, we've lowered some of the prices for entry, so that training is more affordable and all that, but our real focus here is going to be in this other channel through the medical community.

Kirk Huntsman: But, but the Vivos doctors will continue to be. They'll continue to be supported. They'll continue to be, you know, catered to and all the things that we've done in the past will continue for them. Okay, that makes sense.

Unknown Executive: And just one quick question for Brad. Congrats on the cost cutting efforts. It looks like it's really starting to reduce the hash burn.

Brad Amman: Maybe you could provide a little more detail about what happened over the last several quarters to achieve this. And is there more room for additional cost to come off? Yeah, great question, though. Thank you for that. You know, in Q3 of 2021, our SGNA costs were around $8.7 million. In Q2 of this year, SGNA was around $4.6 million. On a quarter over quarter basis for comparable quarters, we've seen a reduction of.

Brad Amman: On average, $2 million per quarter for eight consecutive quarters in operational cash flows been reduced, you know, from a high of over $6 million back in Q1 of 2022 to $3 million this quarter. This was certainly achieved through reductions in our workforce from a high of 180 employees to now we have just over 100 employees. We cut website development expenditures, conferences, digital print marketing, travel meals, entertainment, and other costs. Nonessential vendors were either eliminated or restructured or renegotiated here recently.

Brad Amman: And, you know, we have. New proposed expenditures, you know, we need to go through a ROI analysis, return on investment analysis to make sure that those additional expenditures are new, any new expenditures have a return on. So we're going to continue to review our expenditures, see what we can cut, what's non-essential and what is essential.

Unknown Executive: So we'll continue to go down that path and trim where we need to trim, but the important thing is that we work both the top line and our expense side to get to the point where we're positive cash flow from operations. Well, it looks like, yeah, absolutely, and it looks like you'll pay off in the near future, hopefully, great progress guys, thanks for taking my question. Thank you, though.

Unknown Executive: Thank you.

Lucas Ward: And the next question comes from the line of Lucas Ward from Ascent Inc. Operated, your line snow open, please go ahead. Thank you. Good afternoon, gentlemen and congrats on your business process. Thank you. So I'm curious about, it seems like a significant portion of the revenue jump was due to lower discounts. Brad mentioned 70% lower discounts year on year. How does that come about? Was that just a unilateral policy? You just decided not to give them or did something in the business model change to achieve that?

Lucas Ward: Let me take that one. Well, a little bit of both. I mean, it was a conscious effort and something that we just felt like, especially with some of our new regulatory, you know, new regulatory clearances that frankly are unique and special, we just felt like it wasn't really necessary for us to be discounting our products as much. So I think there's a lot of things behind that. A lot of it has to do with some of the discounts that we were giving on the initial enrollments, et cetera, et cetera.

Lucas Ward: So I just think we're taking a little bit more disciplined approach than we have to just sort of stand by our prices and standing by the value proposition that our treatment delivers. And so I think there's a lot of work done by our people in accounting, Brad and his team, and also working with our clinical folks and our operations people to bring that about. But I think it was a conscious effort.

Kirk Huntsman: Okay. And then sort of similarly, you had a big sequential decline in sales commissions. So you're saving 300,000 or something sequentially. Like, is that also. Yeah, we structured all that. Yeah. We restructured our sales force and restructural. The number of sales people that we had, but we also restructured the compensation model. And I think it we did that with the specific the express intent of achieving some savings. And that's what we've that's what we were able to do.

Kirk Huntsman: So yeah, that was that was deliberate. Okay, with respect to overall operating expenses, which are now at 4.5 million, yeah, what do you see as a steady state for operating expenses? Because they really went down a lot and they just keep going down. Yeah, I don't think we see a steady state right now, and I'll tell you why, and I realize this makes it harder for you guys to model something, but we're simply, we're pivoting into a new world here, and so we've continued to reduce staffing in the here, into the third quarter, and so you could say that we've continued along that same track, but at the same time, we're also staffing up in other arenas for the growth that we're experiencing.

Kirk Huntsman: So we have to go through a little bit of a transition time while we we continued to cut back on some types of expenditures and some types of personnel, and then we're actually also replacing them with other types of personnel that have to be trained and processed and sort of brought up to speed so that when the big bolus of patience begins to hit, which will, you know, it's literally going to be starting here in the next few weeks, when all of that starts to unfold, we have to have the staffing and the doctors and the personnel in place to do that. So, so there's, so I'd steady state for us, I think we're going to be as we look at some of these acquisitions, and some of the revenue potential sitting in these acquisitions, just those acquisitions alone, we're going to need to add personnel just to be able to service the capacity to have the capacity to process those patients through.

Kirk Huntsman: So, you know, it's just, I think just stay tuned as we announce some of these, you know, new affiliations and how, you know, we'll try to provide you guys with some idea for what type of, you know, how much of an impact, how many patients we're expecting to flow through the system, and once I think the key right now is to understand the more high level dynamics of what happens when a patient comes through, what's the revenue and EBITDA opportunity associated with each of those patients, and then I think as we start to fold, we start to fold more of those deals in with more and more flow, it'll even out, and I think we'll be able to talk about a steady state model that could be just sort of, you know, stamped out over and over again as we grow. But as we go through this little bit of a transition time over the next quarter, so Lucas, I would say, give us a minute to kind of get our arms around what that's going to look like.

Kirk Huntsman: I think we have a great plan. We've got really experienced people operating at the practice level. Keep in mind that most of our senior team here has vast experience in the practice management, practice operating world. We ran hundreds of dental practices for many years, and it's not that much different. There's obviously some nuances between medical and dental, but for the most part, dealing with providers, hiring staff, operating a clinic, all those kinds of things transfer. So we feel really, really right at home here doing this, and we're probably, you know, it's probably one of the strengths of our team.

Operator: So we'll be able to answer that question much more definitively, I think next quarter. Okay. All right, Kirk, that's all I have. Thank you very much. Thank you. Thank you, Lucas. Thank you. And I show no further questions in the queue at this time.

Kirk Huntsman: I would like to turn the call over to Mr. Kirk Huntsman, Chairman and CEO for Closing remarks. Please go ahead, sir. Thank you, operator. Well, for those of you who've been with us and again, like I said earlier, those of you who've hung in there with Vivos while we've tried to through this out, we've always realized we had something special with respect to our technology. And it was just a matter of trying to figure out how to get it out there and get it into the hands of the right people.

Kirk Huntsman: So I would just like to thank everybody who's hung in there with us, who's joining us today on this call. I'd like to extend a thank you to the people that the folks over at Seneca and their efforts to work with Vivos and support us here as well as our board and all those who've been longtime supporters of the company. We look forward to sharing our continued progress with everyone as we continue to execute on our plans during the remainder of this year and on into next year. So thank you very much, everyone, and please have a great evening. Thank you.

Operator: Disconcludes are conference for today. Thank you all for participating.