Q2 2025 Vivos Therapeutics Inc Earnings Call

Managements remarks.

Operator: A question-and-answer session will follow management's remarks. This conference call is being recorded, and a replay of today's call will be available on the investor relations section of Vivos' website and will remain posted there for the next 30 days. I will now hand the call over to Mr. Brad Amman, Chief Financial Officer, for introductions and the reading of the safe harbor statement. Please go ahead.

This conference call is being recorded and a replay of today's call will be available on the Investor Relations section of Eagle's website and will remain posted there for the next 30 days.

I will now hand, the call over to Mr. Brad Amine Chief financial officer for introductions and the reading of the Safe Harbor statement. Please go ahead.

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 Dot <unk> Dot com.

Brad Amman: 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.vivos.com. With me on the call today is Kirk Huntsman, Vivos Chairman and Chief Executive Officer. Today, we'll review the financial results for Q2 2025 as well as more recent developments and Vivos' plans for the rest of 2025 and beyond. Following these formal remarks, we will be happy to take questions. I would like to remind everyone that today's call will contain 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 Exchange Act of 1934 as amended concerning future events.

With me on the call today is Kirk Huntsman, <unk>, Chairman and Chief Executive Officer Today, We will review the financial results for the second quarter 2025, as well as more recent developments and V versus planned for the rest of the 2025 and beyond.

Following these formal remarks, we will be happy to take questions.

I would like to remind everyone that today's call will contain 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 934 as amended concerning future events word such as <unk>.

AME may could should projects expects intends plans believes anticipates hopes estimates goal and variations of such words and similar expressions are intended to identify statement.

Brad Amman: Words such as aim, may, could, should, projects, expects, intends, plans, believes, anticipates, hopes, estimates, goal, and variations of such words and similar expressions are intended to identify forward-looking statements. These statements involve significant known and unknown risks that 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.

Statements.

These statements involve significant known and unknown risks that are based upon a number of assumptions and estimates estimates, which are inherently subject to significant risks uncertainties and contingencies.

Many of which are beyond the company's control.

Actual results, including without limitation.

Brad Amman: Actual results, including without limitation, the results of Vivos' growth strategies, operational plans, including sales, marketing, distribution, medical sleep provider acquisition and integration, research and development, regulatory initiatives, cost savings plans, 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 flows 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.

The results of <unk> growth strategies operational plans, including sales marketing distribution medical sleep provider acquisition and integration.

Research and development regulatory initiatives cost savings plans and plans to generate revenue.

As well as future potential results of operations or operating metrics, such as the potential for <unk> to achieve future positive cash flows or profitability.

And other matters to be addressed by vivo 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 risk factors described in other disclosures contained in <unk> filings with the Securities and Exchange Commission, including the risk factors and other disclosures in our Form 10-K for the year ended December 31 2024.

Brad Amman: Factors that could cause actual results to differ materially include, but are not limited to, risk factors described in other disclosures contained in Vivos' filings with the Securities and Exchange Commission, including the risk factors and other disclosures in our Form 10-K for the year ended 31 December 2024, and our other filings with the SEC, including our Q2 10-Q, which was filed today with the SEC, all of which are or will be accessible on the investor relations section of Vivos' website as well as the SEC website. Except to the extent required by law, Vivos assumes no obligation to update statements as circumstances change. Finally, please be aware that the US Food and Drug Administration has given certain specific Vivos appliances 510(k) clearance to treat mild to severe OSA.

And our other filings with the SEC, including our second quarter 10-Q.

Which was filed today with the SEC all of which are or will be accessible on the investor Relations section of <unk> website as well as the SEC website.

Except to the extent required by law <unk> assumes no obligation to update statements as circumstances change.

Finally, please be aware that the U S food and drug administration has given certain specific vivo appliances, five 10-K clearance to treat mild to severe OSA.

With the FDA clearance of certain Veeva products for severe OSA in November of 2023 treatment of patients 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 Veeva treatment protocol.

Brad Amman: With the FDA clearance of certain Vivos products for severe OSA in November of 2023, treatment of patients 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 remains at the clinical discretion of the treating doctor. For further information on our results for the 3 and 6-month periods ended 30 June 2025, please see our earnings release, which was distributed earlier today. Our quarterly report on Form 10-Q, which is available on the SEC filings portion of the investor relations section of our website.

Treatment of OSA of any severity or any other condition with any other veeva is FDA cleared devices remains at the clinical discretion discretion of the treating doctor.

For further information on our results for the three and six month periods ended June 32025, 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.

In the second quarter of 2025, vivo <unk> achieved a major milestone in our pivot.

Brad Amman: In Q2 2025, Vivos achieved a major milestone in our pivot of our sales, marketing, and distribution model to focus on sleep center provider-based alliances and acquisitions. With our 10 June 2025 acquisition of The Sleep Center of Nevada. Kirk will discuss the exciting progress we have made to date on SCN and its importance to Vivos. While this was occurring, we continued to wean ourselves off of our legacy VIP enrollment revenue. The combination caused us to experience some expected increases in costs, much of which related to SCN, and declines in VIP enrollment revenue where VIPs pay Vivos to get trained. For Q2 2025, we saw a slight decrease in revenue, down about 6% to $3.8 million, compared to $4.1 million in Q2 2024.

Of our sales marketing and distribution model.

Focus on sleep center provider based alliances and acquisitions with our June 10th 2025 acquisition of the sleep Center of Nevada.

Kirk will discuss the exciting progress we have made to date on SDN and its importance to vivo.

While this was occurring we continued to wean ourselves off of our legacy VIP enrollment revenue the combination caused us to experience some expected increases in costs much of which related to SDN and declines in VIP enrollment revenue.

We're vips pay beat us to get trained.

For the second quarter of 2025, we saw a slight decrease in revenue down about 6% to $3 8 million compared to $4 1 million in second quarter of 2020 for the.

The decline in revenue reflects additional expenses.

Brad Amman: The decline in revenue reflects additional expenses related to the transition and integration of our SCN into our operations. On the product side, appliance discounts impacted product sales by $600,000. However, we saw a silver lining as our guide sales picked up, offsetting the decrease by half a million dollars. In services, while VIP enrollment revenue declined by $1 million in Q2, we made significant gains elsewhere. Importantly, we saw an immediate $500,000 uplift in sleep testing service revenue attributable to SCN. That's just for the period from 10 June, which was the SCN closing through the end of the quarter. We are very encouraged by this. We saw a $400,000 boost in sponsorship, seminar, and other service revenue as well.

Related to the transition and integration.

Of our CN into our operations on the product side appliance discounts impacted.

Product sales by $600000. However, we saw a silver lining as our guide sales picked up offsetting the decreased by half a million dollars.

In services, while VIP enrollment revenue declined by $1 million in the second quarter.

<unk> made significant gains elsewhere importantly, we saw an immediate $500000 uplift in sleep testing service revenue attributable to SDN and.

And Thats just for the period from June 10th it.

Which was the SEC SCN closing through the end of the quarter.

We are very encouraged by this we saw a 400000.

Dollar boost in sponsorship seminar and other service revenue as well.

Looking at the first half of 2025, our revenue decreased by 600000 to $6 8 million compared.

Brad Amman: Looking at H1 2025, our revenue decreased by $600,000 to $6.8 million compared to the same period in 2024. This 9% decline was primarily due to an expected $1.7 million drop in VIP enrollment revenue as we pivoted away from our legacy VIP-focused model. However, the expected decline in enrollment revenue was partially offset by increases in sleep testing revenue of a half a million dollars from SCN, as noted, and increases in sponsorship and seminar revenue of a half a million dollars. Our oral appliance sales also tell an interesting story. In Q2, we sold 4,116 arches for $1.9 million, a 5% revenue decrease from Q2 2024.

Compared to the same period in 2024.

This 9% decline was primarily due to an expected $1 7 million drop in VIP enrollment revenue as we pivoted away from our legacy VIP focused model.

However, the expected decline in enrollment revenue was partially offset by increases in sleep testing revenue of about $5 million from SDN as noted and increases in sponsorship and seminar revenue of $5 million.

Our oral appliance sales also tell an interesting story.

In second quarter, we sold 4116 arches for $1 9, Million% to 5% revenue decrease from second quarter of 'twenty four.

This shift reflects our higher volume of guide sales, which generate lower revenue compared to a more advanced cared appliances.

Brad Amman: This shift reflects our higher volume of guide sales, which generate lower revenue compared to our more advanced CARE appliances. Cost of sales and operating expenses increased significantly, primarily due to our acquisition and integration of The Sleep Center of Nevada. The closing of the transaction and integration of SCN led to higher quarter-over-quarter professional fees, per-personnel costs, and infrastructure fee expenses. The primary cause of this increase was approximately $1.8 million in costs associated with acquiring and integrating SCN, including professional fees of about $900,000, salaries and wages of approximately a half a million dollars, and infrastructure costs of approximately $300,000. Our operating loss widened to $4.9 million in Q2 and $8.8 million for H1 of 2025, reflecting these higher expenses and lower revenues during our strategic transition.

Cost of sales and operating expenses increased significantly primarily due to our acquisition and integration of sleep center of Nevada.

The closing of the transaction and integration of SCN led to higher quarter over quarter professional fees.

Personnel cost and infrastructure expenses.

The primary cause of this increase was approximately $1 $8 million and costs associated with acquiring and integrating SDN, including professional fees of about $900000 salaries and wages of approximately $5 million and infrastructure costs of approximately 300.

Dollars.

Our operating loss widened to $4 $9 million in second quarter, and $8 8 million for the first half of 2025, reflecting these higher expenses and lower revenues during our strategic transition.

On the cash flow front, we use more cash in operations and investing activities compared to last year, largely due to our acquisition efforts and increased net loss.

Brad Amman: On the cash flow front, we used more cash in operations and investing activities compared to last year, largely due to our acquisition efforts and increased net loss. However, as we secured significant debt and equity financing, providing us with eleven and a half million dollars in net cash from financing activities. Of note, the equity financing came from an affiliate of our existing significant investor, Seneca Partners. As of 30 June 2025, our balance sheet showed total liabilities of twenty-one and a half million dollars, with cash and cash equivalents of $4.4 million and stockholders' equity of $4.6 million.

However, as we secured significant debt and equity financing, providing us with $11 $5 million in net cash from financing activities.

Of note the equity financing came from an affiliate of our existing significant investors Seneca partners.

As of June 32025, our balance sheet showed total liabilities of $21 $5 million with cash and cash equivalents of $4 4 million and stockholders equity of $4 6 million.

In summary, while we are seeing some short term impacts on our financials. These numbers reflect our ongoing transition and investment and the future of our company, particularly through the SCN.

Brad Amman: In summary, while we are seeing some short-term impacts on our financials, these numbers reflect our ongoing transition and investment in the future of our company, particularly through the SCN acquisition, which we are extremely encouraged by, both on its own and as a catalyst to our exploration of similar acquisitions and similar sleep provider collaborations. We believe these strategic moves are setting the stage for stronger performance in the upcoming quarters. For more detailed information, I refer you to our earnings release and to our full Form 10-Q filed earlier today. With that, I'll hand the call over to our Chairman and CEO, Kirk Huntsman.

Acquisition, which we are extremely encouraged by both on its own.

And as a catalyst to our exploration of similar acquisitions and similar.

Sleep provider collaborations we believe these strategic moves are setting the stage for stronger performance in the upcoming quarters.

For more detailed information I refer you to our earnings release and to our full Form 10-Q filed earlier today.

And with that I'll hand, the call over to our chairman and CEO.

Yes.

Thank you Brad.

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

Kirk Huntsman: Thank you, Brad. Good afternoon, everyone, and thank you for joining us on today's conference call. The Q2 2025 was a period of significant change for Vivos and the culmination of nearly 2 years of laying the groundwork for our new model. As previously announced, during the Q2 and subsequently, we completed the acquisition of The Sleep Center of Nevada, which we refer to as SCN, and have been rapidly ramping up our operations there. Generally speaking, what we found there since closing the transaction in early June has been extremely encouraging and above our forecasts. First, the level of cooperation and buy-in from the existing SCN medical team and support personnel in Nevada has exceeded our expectations. In fact, two of the lead sleep MDs at SCN and their families were among our very first patients.

The second quarter of 2025 was a period of significant change for Veeva and the culmination of nearly two years of laying the groundwork for our new model.

As previously announced during the second quarter and subsequently we completed.

The acquisition of the sleep center in Nevada, which we refer to as SCN.

And have been rapidly ramping up our operations there.

Generally speaking what we found there since closing the transaction in early June has been extremely encouraging and above our forecast.

First the level of cooperation and buy in from the existing SCN medical team and support personnel in Nevada has.

<unk> has exceeded our expectations.

In fact.

Two of the lead sleep Mds at CN and their families were among our very first patients.

Having the full and unwavering endorsement of the medical team at CN, who have been waiting for a viable alternative option for CPAP for their patients is critical to the ultimate success of our model.

Kirk Huntsman: Having the full and unwavering endorsement of the medical team at SCN, who have been waiting for a viable alternative option for CPAP for their patients, is critical to the ultimate success of our model. Second, there appears to be far more OSA patients interested and willing to accept Vivos treatment as alternatives to CPAP than we had forecast. So much so that we are already working to expand our physical facilities and also to recruit, hire, and train additional providers and staff in order to handle the patient demand. In that respect, to date, we have created and successfully deployed what we are calling Sleep Optimization or SO teams. Each SO team consists of approximately 16 medical, dental, and support staff who are all specially trained and equipped by Vivos.

Second there appears to be far more OSA patients interested and willing to accept vivo treatment as alternatives to CPAP than we had forecast. So much. So that we are already working to expand our physical facilities.

And also to recruit hire and train additional providers and staff in order to handle the patient demand.

In that respect to date, we have created and successfully deployed what we're calling sleep optimization or esso teams.

So team consists of approximately 16 medical dental and support staff, who are all specially trained and equipped by vivo.

At present, we have deployed one five new sleep optimization teams that will help drive the growth of each center.

Kirk Huntsman: At present, we have deployed 1.5 new Sleep Optimization teams that will help drive the growth of each center. By forming discrete SO teams, we believe we can optimize productivity and collaboration among providers and staff. The primary focus of each SO team is to ensure that each and every patient is fully informed and educated about all treatment options and what might be best for their condition and situation, and then to assist them in getting into their treatment of choice, which most of the time involves Vivos products and services. In light of this progress and the growth that it portends, we worked hard to secure significant financing to fund the acquisition and to support the current and future growth of the company.

By forming discrete teams, we believe we can optimize productivity and collaboration among providers and staff.

The primary focus of each team is to ensure that each and every patient is fully informed and educated about all treatment options and what might be best for their condition and situation and.

And then to assist them in getting into their treatment of choice, which most of the time involved to be both products and services.

In light of this progress and the growth that it portends.

We worked hard to secure significant financing to fund the acquisition and to support the current and future growth of the company.

As our growth trajectory continues to rise and as other similar acquisition in affiliation opportunities materialize.

Kirk Huntsman: As our growth trajectory continues to rise and as other similar acquisition and affiliation opportunities materialize, we fully expect to raise additional growth capital to fund that growth. Now, let me return to our core message and provide you with further details on our progress at SCN and why we believe it portends well for our business model. As we've mentioned, the integration of SCN is well underway, with 2 locations already integrated ahead of schedule and under budget. We began seeing patients late in Q2. As I just mentioned, initial patient demand has outpaced our capacity to service them, and we believe we are currently servicing significantly less than 40% of the potential new patients being tested each month at SCN.

We fully expect to raise additional growth capital to fund that growth.

Now, let me return to our core message and provide you with further details on our progress at SDN and why we believe it portends well for our business model.

As we've mentioned the integration of SDN is well underway with two locations already integrated ahead of schedule and under budget.

We began seeing patients late in the second quarter.

As I just mentioned initial patient demand has outpaced our capacity to service them.

And we believe we are currently servicing significantly less than 40% of the potential new patients being tested each month that SDN.

We also believe that there are even more legacy SCN patients out there who are either dissatisfied with their CPAP units.

Kirk Huntsman: We also believe that there are even more legacy SCN patients out there who are either dissatisfied with their CPAP units or who have discontinued their CPAP treatment altogether and are looking for alternatives. Keep in mind that well over 200,000 OSA patients have been tested and seen by SCN providers since 2019. As I just mentioned, we have currently deployed 1.5 Sleep Optimization, or SO, teams across 2 locations in Las Vegas. To meet the demand, we are in the process of expanding 1 SCN location to accommodate 2 full-time SO teams there. In addition, we are relocating and expanding a second SCN location where we expect to have 1.5 SO teams deployed during the Q4 of this year, bringing our total to 3.5 SO teams in that market by year-end.

Or who have discontinued their CPAP treatment altogether and are looking for alternatives.

Keep in mind that well over 200000, OSA patients have been tested and seen by SDN providers since 2019.

As I just mentioned, we have currently deployed one and a half sleep optimization or so teams across two locations in Las Vegas.

To meet the demand we are in the process.

Of expanding Wan SDN location to accommodate the two full time teams there.

In addition, we are relocating and expanding a second SCN location, where we expect to have one five.

Teams deployed during the fourth quarter of this year, bringing our total to $3 five so teams in that in that market by year end.

Another full so team is expected to be deployed in the first quarter of 2026, bringing our total to four and a half so teams across two locations and we are and we currently believe that there is the potential to deploy up to eight total so teams at SDN based on the current demand.

Kirk Huntsman: Another full SO team is expected to be deployed in the first quarter of 2026, bringing our total to 4.5 SO teams across 2 locations. We currently believe that there is the potential to deploy up to 8 total SO teams at SCN based on the current demand. Now to quantify this, based on our limited operating experience to date, we believe each fully operational SO team can process approximately 250 patients per month, potentially generating over $500,000 in monthly net collections with contribution margins above 50%. Obviously, there will be some ramp-up times associated with each team being able to operate at optimal levels. The existing SO teams are experiencing multi-week backlogs, and there is a sense of urgency to onboard new SO teams as quickly as possible.

Now to quantify this.

Based on our limited operating experience to date.

We believe each fully operational so team can process approximately 250 patients per month.

Potentially generating over 500000 monthly net collections.

With contribution margins above 50%.

Obviously, there will be some ramp up times associated with each team being able to operate at optimal levels.

With the existing so teams are experiencing multi week backlogs.

And there is a sense of urgency to onboard new teams as quickly as possible.

As mentioned in our 10-Q filed today, we have several growth initiatives planned for the remainder of 2025 2026 and beyond.

Kirk Huntsman: As mentioned in our 10-Q file today, we have several growth initiatives planned for the remainder of 2025, 2026, and beyond, which have the potential to further increase our current growth and also in new markets. Such initiatives include, but are not limited to, the expansion of diagnostic and treatment services, the establishment and rollout of a pediatric OSA program, and the collaboration with certain specialty medical groups who treat patients with comorbid OSA, but who lack the ability to test, evaluate, and treat such patients within their existing practice environments. There is a usual and customary credentialing process that also affects our ability to scale that all new providers must go through with third-party payers. We are actively working with payers and our consultants to expedite that process, which we expect will take anywhere from 2 to 6 months, depending on the payer.

Which have the potential to further increase our growth.

Our current growth and also in new markets.

Such initiatives include but are not limited to the.

The expansion of diagnostic and treatment services.

The establishment and rollout of a pediatric OSA program.

And the collaboration with certain specialty medical groups.

Who treat patients with co morbid OSA, who lack the ability to test evaluate and treat such patients within their existing practice environments.

If there is a usual and customary credentialing process that also affects our ability to scale that all new providers must go through with third party payers. We are actively working with Payors and our consultants to expedite that process, which we expect will take anywhere from two to six months depending on the payer.

<unk>.

In addition to our acquisition model like SDN in Las Vegas.

Kirk Huntsman: In addition to our acquisition model like SCN in Las Vegas, Vivos has developed and refined a new collaboration management model for sleep centers not interested in being acquired. Now, unlike our 2024 strategic collaboration with Rebis Health here in Colorado, under our new and refined model, Vivos retains full operational control over the patient experience and the provision of treatment through its managed clinical practices while collaborating with the local sleep clinics to ensure patients receive the full array of OSA treatment options. Under this new collaboration management model, in July, Vivos executed an agreement with MI Sleep LLC, a Michigan sleep specialist entity engaged in sleep testing and OSA treatment in the Greater Detroit area. We expect to have this fully operational with one full SO team deployed in the Q4 of this year and expect further SO teams to be deployed in 2026.

<unk> has developed and refined a new collaboration management model for sleep centers not interested in being acquired.

Now unlike our 2024 strategic collaboration with <unk> health here in Colorado under our new and refined model.

<unk> retains full operational control over the patient experience and the provision of treatment through its managed clinical practices, while collaborating with the local sleep clinics to ensure patients receive the full array of OSA treatment options.

Under this new collaboration management model in July vivo has executed an agreement with my sleep LLC, a Michigan sleep specialists entity engaged in sleep testing and OSA treatment in the greater Detroit area.

We expect to have this fully operational with one full so team deployed in the fourth quarter of this year and expect further so teams to be deployed in 2026.

We expect this new model will be very attractive to sleep center operators and owners, who may not want to be acquired by us, but our look but who are looking to grow their business and referral networks by offering a highly differentiated treatment package to OSA patients.

Kirk Huntsman: We expect this new model will be very attractive to sleep center operators and owners who may not want to be acquired by us, but who are looking to grow their business and referral networks by offering a highly differentiated treatment package to OSA patients. Our M&A team continues to field calls and inquiries from both acquisition and affiliation prospects around the country. We are currently in negotiations with several potential candidates in various key markets, with one potential acquisition currently under an exclusive letter of intent. Given our experience with SCN, we believe these opportunities should be similarly accretive. In summary, we believe this initial success at SCN is a strong indication of the potential and upside of our new model.

Our M&A team continues to field calls and inquiries from both acquisition and affiliation prospects around the country.

We are currently in negotiations with several potential candidates in various key markets with one potential acquisition currently under an exclusive letter of intent.

Given our experience with SDN, we believe these opportunities should be similarly accretive.

In summary, we believe this initial success at SDN is a strong indication of the potential and upside of our new model.

As we roll forward, we expect to continue to modify and refine the model to make it even more efficient and with potential for even better gross margins.

Kirk Huntsman: As we roll forward, we expect to continue to modify and refine the model to make it even more efficient and with potential for even better gross margins. Furthermore, we expect that this model, including both acquisitions and affiliations, is highly replicable and scalable across multiple markets. It looks to be highly accretive to top-line revenue growth, as well as bottom-line profitability. We believe that this methodical effort, patiently executed over time, has put Vivos in a much better position to realize the full potential of our technological advantages and industry-leading products and services. That concludes our prepared remarks. Now, we'll be happy to take questions. Operator, could you please poll for questions?

Furthermore, we expect that this model, including both acquisitions and affiliations.

Highly record replicable and scalable across multiple markets it looks to be highly accretive to top line revenue growth as well as bottom line profitability.

We believe that this methodical effort patiently executed overtime has put <unk> in a much better position to realize the full potential of our technological advantages and industry, leading products and services.

And that concludes our prepared remarks now we'll be happy to take questions. Operator could you. Please poll for questions.

Thank you very much.

Ladies and gentlemen, we will now begin the question and answer session.

Operator: Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by 1 on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by 2. If you are using a speakerphone, please make sure to lift your handset before pressing any keys. Your first question comes from the line of Scott Henry from AGP. Please go ahead.

Should you have a question. Please press star followed by the number one on your Touchtone phone you will hear you prompt that your hand has been raised.

Should you wish to decline from the polling process. Please press star followed by the number two if you are using a speaker phone. Please make sure to lift your handset before pressing any he's.

Your first question comes from the line of Scott Henry from AGP. Please go ahead.

Thank you.

Good afternoon.

Scott Henry: Thank you and good afternoon. Certainly really interesting pivot with these SO teams and the medical relationship. I guess, Kirk, for starters, or Brad, who, you know, Q2 was a nice sequential increase from Q1. You know, numbers we haven't seen for a little bit. How should we think about the revenue in Q3 and Q4 relative to Q2?

<unk>.

Really interesting.

Pivot.

These S O T teams.

And the medical relationship.

I guess Kirk for starters or Brad.

Hi.

Q2 was a nice sequential increase from Q1.

Our numbers, we haven't seen for a little bit how should we think about the revenue in Q3 and Q4 relative to Q2.

I think the revenue will begin to track our ability to.

Kirk Huntsman: I think the revenue will begin to track our ability to deploy these SO teams. I think you'll see a continuation of the expiration really of our old model and the replacement of the revenue with higher margin and more sustainable revenue from our new model. As we deploy new teams and as we expand our footprint across not only Las Vegas, but other markets that we're looking at right now, I think you're gonna see that begin to track. What we tried to do here is provide investors with a way to sort of think about this with these SO teams. That's, I think as those teams get in place and start to produce, you'll start to see our revenue growth and everything track accordingly.

Deploy these teams I think youll see a continuation of the.

The exploration really of our old model and the replacement of the revenue with higher margin and more sustainable revenue from our new model. So as we deploy.

Teams and as we expand our footprint occur.

Across not only Las Vegas, but other markets that we're looking at right now I think youre going to see that begin to track what we've tried to do here is provide.

Investors with a.

A way to sort of think about this.

With these so teams. So that's I think as those teams get in place and start to produce youll start to see our revenue growth and everything track Accordingly.

Okay, So the $3 8 million.

Scott Henry: Okay.

Brad Amman: Scott-

Hello.

Brad Amman: The $3.8 million. Hello?

Oh, sorry, I was just going to.

Brad Amman: Oh, sorry. I was just going to, you know, your first part of your question was around Q1 revenue and the growth between Q1 and Q2 sequentially. You're exactly right. We increased revenue around $800,000 from Q1 to Q2 to $3.8 million, that was a 27% growth. What you'll see, I think, going forward is more growth on the product side of the house rather than the service side of the house, primarily because of the additional referrals from SCN into Vivos products.

Your first part of your question was around first quarter revenue and the growth between first and second quarter sequentially and Youre exactly right. We increased revenue of around 800000 from.

Q1 to Q2 to $3 8 million and that was a 27% growth.

The.

What youll see I think going forward is more growth on the product side of the house rather than the service side of the house, primarily because of the additional referrals from SCN into Veeva products.

Okay. That's helpful. Brad and you did have some strength in the sleep testing services in the sponsorship line will those continue or.

Scott Henry: Okay, that's helpful, Brad. You did have some strength in the sleep testing services in the sponsorship line. Will those continue or, you know, will those trend back down? Just trying to get a sense of how this model comes together.

Trend back down.

I need to get a sense of how this model comes together.

So so just remember that at SCN.

Kirk Huntsman: Just remember that at SCN, all that they do there today and historically is test and consult with patients. The testing revenue increase is a direct reflection of the business operations that we acquired. I think we're just beginning to see that revenue line appear and the growth in that revenue line will continue as we bring on more testing centers, doing more tests and providing patients with more consults. Where we come into the picture is after the tests are done and those patients are referred over for treatment, that's where the treatment that we provide through our, what we call our SAMC centers, which is our Sleep and Airway Medicine Centers. The patients start with the medical providers.

All that they do there today.

Historically as a test.

And consult with patients.

The revenue increase is a direct reflection of the business operations that we that we acquired.

And I think we're just beginning to see the.

See that revenue line appear and the growth in that revenue line will continue as we bring on more testing centers doing more tests and providing patients with more concepts, where we where we come into the picture is after the tests are done and those patients are referred over for treatment.

Where the treatment that we provide through our what we call our Sam C centers, which is our our sleep and airway medicine centers Thats. So the patients start with the.

Medical providers, they are tested and consulted with the results of those tests, then if they're positive for OSA theyre referred over to our centers to be evaluated and educated about their treatment options.

Kirk Huntsman: They are tested and consulted with the results of those tests. If they're positive for OSA, they're referred over to our centers to be evaluated and educated about their treatment options.

Okay, great. Thank you for that color and then on the Opex side Opex was about $7 million in <unk> 25.

Scott Henry: Okay, great. Thank you for that color. On the OpEx side, OpEx was about $7 million in Q2 2025. Would we expect that to be the new elevated rate under this new model with the acquisition of SCN, or is there some one-time events within those numbers?

Would we expect that to be the new elevated rate under this new model with the acquisition of SDN or is there. Some one time events within those numbers.

Yes.

There were some onetime events in this quarter certainly because of the acquisition of CN, we have some professional costs.

Brad Amman: Yeah, we've, you know, there were some one-time events, you know, in this quarter, certainly because of the acquisition of SCN. You know, we have some professional costs and more one-time fees, you know, accounting and legal fees that were more related to, you know, the transaction, which will not recur. We do have salaries, about a $500,000 increase in salaries, and infrastructure costs were about another $300,000. That $800,000 will continue. We do have, you know, around $700,000 to $800,000 worth of costs that are non-recurring, that are really specific more toward the acquisition of SCN and some of the due diligence that we had to do around that, and which are all more one-time costs.

And more one one time fees accounting and legal fees.

That were more related to.

The transaction, which will not reoccur, we do have salaries about a $500000 increase in salaries and infrastructure costs were about another 300000, those those that 800000 will continue but we do have it.

Around 700 800000.

Dollars' worth of costs that are nonrecurring that are really specific more toward the acquisition of SDN and some of the due diligence that we had to do around that.

And which are all more onetime cost. Okay. So there is about 700 801 time and then was SCN.

Scott Henry: Okay. There's about 700 to 800 in one time. Was SCN in the numbers for the full Q2, or do you know, or is it just part of it?

In the numbers for the full second quarter or DNA or is it just now.

We just.

Kirk Huntsman: No, no. We just started consolidating those at the date of close, which was 9 June. We only had 20 days of activity in the quarter from SCN, which generated about $500,000 of revenue from their legacy sleep center business.

It started consolidating those at the date of close which was June 9th. So we only had 20 days of activity in the quarter from <unk>, which generated about $500000 of revenue.

From there from their legacy sleep Sleep Center business.

Okay great.

I'll jump back into the queue. Thank you for taking the questions.

Scott Henry: Okay, great. I'll jump back into the queue. Thank you for taking the questions.

Thank you Scott.

Kirk Huntsman: Sure.

Operator: Thank you, Scott. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star followed by the number 1 on your touchtone phone. If you are using a speaker phone, please make sure to lift your handset before pressing any keys. The next question comes from the line of Robert Sassoon from Water Tower Research. Please go ahead.

Okay.

Ladies and gentlemen, as a reminder, if you would like to ask a question. Please press star followed by the number one on your Touchtone phone.

If you are using a speaker phone please make sure to lift your handset before pressing any keys.

The next question comes from the line of Robert session from Water Tower Research. Please go ahead.

Hi.

Thank you for taking my questions.

Robert Sassoon: Hi. Thank you for taking my questions. I wonder what you talked about the SO teams. How do you go about recruiting those professionals? Is there a sort of a timeline in your mind as to how long you can put together each team?

You talked about and so teams how do you go about recruiting.

<unk>.

Sort of a timeline in your minds as to how long you can put together each team.

Yes, it's a good question so.

Kirk Huntsman: Yeah, it's a good question. It takes several weeks for us to put the word out and, you know, sift through the resumes that come in and evaluate the providers who apply for things. There's a full court press type effort to get one of these SO teams put together. Once we have a team together, we like to train them together as a team. If we can get two of them at a time, which is I think where we're at right now, we're trying to add two more out there. To the extent we can train up all these people at the same time, that gives us some economies of scale.

It takes several weeks for us too.

Put the word out and.

Sift through the resumes that come in and.

Evaluate the providers who apply for things so it's a.

There's a there's a full court press type effort to get.

One of these so teams put together, but once once we have the team together, we like to train them together as a team. If we can get two of them at a time, which is I think where we're at right now we're trying to add two more out there.

And so to the extent, we can train them. All these people at the same time that gives us a.

That gives us some economies of scale, but what we found is is that the demand for the job demand for and the available labor pool for the positions that were advertising for and that we're looking for seem to seem to be very robust we are not having any difficulty.

Kirk Huntsman: What we found is that the job demand for, and the available labor pool for the positions that we're advertising for and that we're looking for seem to be very robust. We're not having any difficulty recruiting for these type positions, and then we can train up the teams in fairly short order.

Recruiting for these type positions and and then we can train up the teams in fairly short order.

Okay Alright.

You mentioned that Youre always looking for opportunities for acquisitions, but are you.

Robert Sassoon: Okay, great. You mentioned that you're always looking for opportunities for acquisition, but are you prioritizing bedding down the SCN acquisition, or are you gonna be opportunistic and take and look at and acquire or partner with other sleep centers?

Prioritizing betting down the SC and the acquisition of <unk>.

It could be opportunistic and take a look at the.

Oh partner with other sleep centers.

Well I think if we were to just sort of curtail the.

Kirk Huntsman: Well, I think if we were to just sort of curtail the, you know, evaluation of other acquisition possibilities or prospects, I mean, we could spend the next 10 years optimizing SCN. There's that much potential. Honestly, we're gonna continue to do that. But I believe our operations team has demonstrated the ability to walk and chew gum at the same time. I think what we're going to do is we've already begun hiring some strong leadership, not only nationally, I think, those of you who follow us note that we hired a couple of strong, senior management level people, one in human relations and the other in operations.

Evaluation of of other.

Acquisition possibilities are prospects.

I mean, we could spend the next 10 years optimizing.

SCN theres that much potential there and honestly, we're going to continue to do that but I believe our operations team has demonstrated the ability to walk and chew gum at the same time and so I think what we're going to do is we've already begun hiring some strong leadership.

Not only nationally I think those of you who follow US note that we hired a couple of strong <unk>.

Senior management level people, one in human relations and the other in operations and we're going to continue to.

Kirk Huntsman: We're gonna continue to build the bench strength of our operations team so that we can go into a market, make the acquisition or affiliation, establish the SO team or teams that are necessary to get things started. From there, we'll just keep moving along. We'll leave behind a capable and strong SO team or a number of teams with strong regional leadership and management. We just actually hired our first regional manager out there at SCN. These people, as they demonstrate their capabilities to lead and to just sort of make things happen, then we'll continue on and continue forward. We have no shortage of opportunities to affiliate and/or acquire additional SCN type groups throughout the country.

To build the bench strength of our operations teams. So that we can go into a market make the acquisition or affiliation.

Establish DSO team or teams that are necessary to to get things started and then from there. We will just keep moving along and we'll leave behind a capable and strong so team worked or a number of teams with strong regional leadership and management, we just.

Actually hired our first regional manager out there at CN.

And these these people as they demonstrate their capabilities to lead into it and it just sort of make.

Make things happen then we'll continue on and continue forward we have.

No shortage of opportunities to affiliate and acquire and or acquire.

Additional SCN type groups throughout the country and we're getting.

As the word has spread we're getting calls every every week it seems like.

Kirk Huntsman: As the word has spread, we're getting calls every week, it seems like, inquiring about whether we can come out and evaluate and explore opportunities really throughout the country.

Inquiring about whether we can come out.

And evaluate and explore opportunities really throughout the country.

Yeah.

Just following up on the <unk> question have you have you actually.

Robert Sassoon: Yeah. Just following up on the SO team question. Have you actually worked with the SO teams before? Has there been any, you know, any issues?

So to use before.

Okay.

Yes, so you would consider.

Kirk Huntsman: Yeah.

Yes, great question so.

Robert Sassoon: that you would consider?

Kirk Huntsman: Yeah, that's a great question. The senior management team here at Vivos was effectively the same senior management team that rolled out one of the very first dental service and support organizations. They're called DSOs. This is the corporate roll-up of dental practices, which we began back in 1995. We have over the years operated and managed. Now, they weren't called SO teams back in that day, but dental teams, consisting of anywhere from 10 to 20 staff members and, you know, all of them, you know, with a common mission and purpose and coordinating, you know, various professionals. Sometimes there would be hygienists, general dentists, specialists, all networking under the same dental office.

The senior management team here at Veeva.

Was effectively the same senior management team that rolled out one of the very first.

Dental service and support organizations are called Dsos. This is the corporate rollout of dental practices, which we began back at $19 95, and we have.

Over the over the years.

We have operated and managed.

Now they werent called Esso teams back in that day, but dental teams consisting of anywhere from.

10 to 20 staff members.

And all of them with a common mission and purpose and coordinating various professionals.

Sometimes there would be hygienist general dentist specialists all all in net working under the same dental office. So this is this is something that this particular management team is extremely well suited to we've been here before we know how to do this we know how to do this well I think the fact that this off.

Kirk Huntsman: This is something that this particular management team is extremely well suited to. We've been here before. We know how to do this. We know how to do this well. I think the fact that this operations team has brought this all about in a very short, relatively short period of time, on time, under budget, and performing at the level it is right out of the gate, I think speaks volumes about our ability to execute this as we go. This is an experienced group of people doing something that we've done successfully in the past, and we continue to. We see our ability to leverage this and to take this out as something right in our wheelhouse.

Operations team has brought this all about in a very short relatively short period of time.

On time under budget and performing at the level. It is right out of the gate I think speaks volumes about our ability to execute this as we go so.

This is an experienced group of people doing something we've done successfully in the past and we continue to.

We see our ability to.

To leverage this and take this out.

Is something right in our wheelhouse.

Alright, great.

Just another question on the balance sheet.

Robert Sassoon: Right. Yeah. Just another question on the balance sheet. You've taken on a bit of debt now, fairly expensive debt, I think. Are there any plans to refinance that and or, you know, what maybe you can give us a run-through on the financial strategy that's going forward.

Taking on a bit of a debt now for.

For the expensive debt I think.

Are there any plans to refinance that and.

Or maybe you can.

Give us a run through on the financial strategy going forward.

Well, we always are seeking to.

Kirk Huntsman: Well, we always are seeking to reduce the cost of capital, and we realized that the financing that we secured for SCN was very much in the expensive, you know, on the expensive end of the scale. We also realized that we have a model now that we didn't have before, that has a certain predictability to it and consistency, and the things that lenders or more conventional financing entities would look for. We're always looking to reduce our cost of capital.

Reduce the cost of capital.

And we realized that the.

The financing that we secured for SDN was.

Much in the expensive.

On the expense of end of the scale. We also realize that we have a model now that we didn't have before that has a certain predictability to it and consistency.

And the things that lenders or more conventional financing financing.

Entities wood.

I would look for and so we are we're always looking to reduce our cost of capital. So.

I can just say that we.

Kirk Huntsman: I can just say that we believe we have some very good and deep relationships out there that we intend to pursue and to tap as those type of financings become available and as our model matures and grows and predictability and confidence of it continues to evolve. Yeah, we will continue to look for that sort of thing. If our acquisition model, you know, continues to evolve and performance matches what we've seen already in the first little bit over time, then it opens up the door for us to do, you know, bank lending with credit facilities and all kinds of things that lower the cost of our acquisition funds even further.

We believe we have some very good.

And deep relationships out there that we intend to pursue and to tap as as those those type of financing has become available and as our model matures and grows and the predictability and confidence of it.

<unk> continues to evolve so yes.

Yes, we will continue to look for that sort of thing and if our acquisition model.

<unk> continues to evolve and performance matches, what we've seen already in the first little bit over time, then it opens up the door for us to do.

Bank lending with credit facilities, and all kinds of things that lower the cost of our acquisition funds, even even further so.

Yes.

Kirk Huntsman: Yeah, we're very familiar with that type of thing and capable of doing that as we go.

We're very familiar with that type of thing and capable of doing that as we go.

Just a final question for me is.

Robert Sassoon: Yeah. As a final question from me, is there a sort of a level of revenues you need? At what point do you think you could be cash breakeven at what point of revenue at?

Is that a sort of a level of <unk>.

Revenues you need.

At what point do you think is going to be cash breakeven at.

For the.

Revenue.

Well we are.

We are deploying these highly accretive and highly profitable.

Kirk Huntsman: Well, we're deploying these highly accretive and highly profitable SO teams as rapidly as we can. We have no shortage of patients. We have some constraints around the physical plant and facilities that we're operating out of right now. We're really putting a full court press effort to make sure that we expand the facilities, equip those facilities and put these teams in place as rapidly as possible, which we expect to happen early in Q4. Now, as those things unfold, we're going to be in a much better position to just to continue the growth and to see it, you know, become more predictable. I don't know. I Did I answer your question? I kinda got off on a tangent.

<unk> as rapidly as we can we have no shortage of patients.

We have some constraints around the physical plant and facilities that were operating out of right now.

We're really.

Putting a full court press effort to make sure that we expand the facilities.

Equip those facilities.

And put these teams in place as rapidly as possible, which we expect to happen early in the fourth quarter now.

As those things unfold, we're going to be in a much better position to.

Just to continue the growth and to see it.

See it.

More predictable and.

I don't know.

Did I answer your question I kind of got off.

Yes.

Yes, I mean, just wanted to it's probably you'll have a better idea.

Robert Sassoon: Yeah. I mean, I mean, yeah. That's, yeah, I mean, it's probably, you'll have a better idea as the quarter, the next few quarters go on. You know, I guess it's really dependent on how quickly you recruit.

The next few quarters go go go on.

So I guess, it's really dependent on how quickly you recruit.

Yes, so we're.

Let's just say this we are actively putting these teams in place we think that we will be have sufficient.

Kirk Huntsman: Yeah. Let's just say this, we are actively putting these teams in place. We think that we will be have sufficient revenue generation and profit flowing in that we should be cash flow positive sometime in Q4. We're really pushing hard for that, and that's our hope right now.

Revenue generation and profit.

Flowing in that we should be cash flow positive sometime in the fourth quarter, we're really pushing hard for that and that's our that's our hope right now.

Okay. Thanks for the OLED and ill jump back in the queue.

Robert Sassoon: Okay. Thanks for that, all that, and, I'll, jump back in the queue.

Alright, Thank you Robert.

Kirk Huntsman: All right. Thank you, Robert.

There are no further questions at this time I would like to turn the call back to Mr. Kirk Huntsman, Chairman and CEO for closing comments Sir. Please go ahead.

Operator: There are no further questions at this time. I'd like to turn the call back to Mr. Kirk Huntsman, Chairman and CEO, for closing comments. Sir, please go ahead.

I just want to thank everybody. This this is obviously a very pivotal time for vivo we have been.

Kirk Huntsman: I just wanna thank everybody. This is obviously a very pivotal time for Vivos. We have been talking about this pivot and preparing to execute on this pivot for quite some time. Now that we've begun to really execute on our new model, we're just extremely encouraged by what we've seen so far. We just, A shout-out to our operations team who's done just a tremendous job of putting things together and making things happen. Like I said, I feel like we're all very pleased with what we're seeing so far. We think that this is something that we see no reason why we can't extend this out into the future on future acquisitions or affiliations.

Talking about this pivot and preparing to execute on this pivot for quite some time.

Now that we've begun to really execute on our new model. We're just extremely encouraged by what we've seen so far and we just a shout out to our operations team who has done just that.

A tremendous job of putting things together and making things happen.

Like I said I feel very I feel like we're all very.

I'm pleased with what we're seeing so far we think that this is <unk>.

Something that we see no reason why we can extend this out into the future.

On future acquisitions or affiliations.

We're just going to continue to methodically execute on our game plan and I think the results will speak for themselves.

Kirk Huntsman: We're just going to continue to methodically execute on our game plan, and I think the results will speak for themselves. We look forward to sharing our continued progress with everyone as we continue to execute in the remainder of 2025 and then into next year. I want to thank everyone, everybody for being here, and I think further information will be available in our 10-Q, and more details and specifics as well as in our upcoming 8-K/A filing, which we'll have out in the next little while. Anyway, thank you everybody, and we look forward to future reports. Thank you very much.

We look forward to sharing our continued progress with everyone. As we continue to execute in the remainder of 2025 and then into next year.

So I want to thank everyone everybody for being here.

And I think further information will be available.

Our 10-Q, and more details and specifics as well as in our upcoming 8-K filing which will have out in the next little while.

So.

Thank you everybody and we.

We look forward to future reports.

You very much.

Ladies and gentlemen. This concludes today's conference call. Thank you very much for your participation you may now disconnect.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.