Vivos Therapeutics, Inc.

. . . Thank you. Thank you. Thank you. Thank you. Thank you. Bye.

Good day, everyone. And welcome to the Bevos full-year 2025 earnings conference call. At this time, all participants are in a lesson-only mode. 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 Bevos' website, and will remain posted there for the next 30 days. I will now hand the call over to Brad Elman, Chief Financial Officer, for introductions and a reading of the Safe Harbor Statement. Please go ahead.

Thank you, operator. Hello, everyone, and welcome to our 2025 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 will review the financial results for the full year 2025, as well as more recent developments and Vivos' plans for 2026 and beyond. Following these formal remarks, we will be happy to take questions. I would also 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 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 variations 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, contingencies, many of which are beyond the company's control. 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. 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 filings with the Securities and Exchange Commission, including the risk factors and other disclosures in our Form 10-K for the year ended December 31st, 2025, which was filed with the SEC today, our interim quarterly reports and other filings with the SEC, all of which are or will be accessible on the investor relations section of the Vivos 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. Finally, please be aware that the U.S. Food and Drug Administration has given certain specific vivos appliances 510 clearance to treat mild to severe OSA, with the FDA clearance of certain vivos products for severe OSA in November 2023 and moderate to severe OSA in children ages 6 to 17 years of age in September of 2024, 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 Avivos FDA cleared devices remains at the clinical discretion of the treating doctor. For further information on our results for the years ended December 31st, 2025 and 2024, please see our earnings release, which was distributed earlier today, and our annual report filed on Form 10-K, which is available on the SEC filings portion of the investor relations section of our website. With that, I'll turn to a discussion of our 2025 year-end results. In the fourth quarter of 2025, Vivos completed its second full quarter of activity following our June 10, 2025 acquisition of the Sleep Center of Nevada, demonstrating that our pivot of our sales, marketing, and distribution model has taken hold. Overall, revenue was positively impacted by the sales strategy shift and focus towards sleep center affiliations. The full year 2025 revenue increase of $2.4 million, or 16%, was due primarily to an increase of approximately $4.8 million in sleep testing services and an increase of approximately $2.2 million of revenue generated from the treatment to patients launched at two of SCN's seven sleep center locations. The increase in revenue during the year was partially offset by the decline in product revenue to our legacy VIP dentists of approximately $1.4 million in appliance and tooth positioner sales. Additionally, we had a decrease in service revenue of approximately $2 million in our VIP enrollment revenue and a decrease of $700,000 in sponsorship, conference, and training-related revenue. As we pivoted our business model to a medical provider-focused business strategy and reduced our dependence on enrolling and training VIP dentists to sell our products, we fully expected revenue from these legacy programs to decline. For the year ended December 31, 2025, we sold 25,441 oral appliances and tooth positioners for a total of approximately $6.5 million, an 18% decrease in revenue from the year ended 2024, when we sold 16,182 oral appliance and tooth positioners for a total of $7.9 million. The revenue decrease is directly attributable to a increase in discounts offered during the same period, with $1.6 million in discounts offered during the year ended December 31st, 2025, when compared to approximately $200,000 of discounts offered during the year ended 2024. Coupled with an increase in tooth positioner sales, a lower price point product when compared to Vivos' more advanced appliances. We will discuss this more in a bit, but now that we've gotten through the initial integration phase of SCN, including the achievement of critical insurance coverage for our more advanced OSA appliances, we are expecting more revenue from higher price point products in 2026 and beyond. Cost of sales increased by approximately $900,000, or 15%, to $6.9 million for the full year ended 2025, compared to $6 million for the year ended 2024. This was primarily due to approximately $1.1 million in higher costs in diagnostic services related to new sleep center affiliations and an increase of a half a million dollars related to additional staff associated with the sleep center affiliations in both Nevada and our Detroit affiliated center. Gross profit was $10.5 million for the full year ended December 31st, 2025, compared with $9 million for the full year ended December 31st, 2024, an increase of 17%. The 17% increase in gross profit during the full year 2025 compared to 2024 was attributable to an increase in revenue of approximately $2.4 million offset by an increase in cost of sales of $900,000. Gross margin remained constant at 60% for the years ended December 31st, 2025 and 2024. Operating expenses for the full year ended December 31st, 2025 were $30.4 million compared to $20.2 million for the full year ended 2024. This increase resulted primarily from an increase in general and administrative expenses related to our new model. General and administrative expenses increased $9.8 million to $27.7 million for the year ended 12-31-2025 compared to approximately $17.9 million for 2024. This increase was primarily due to $6.7 million in costs associated with running SCN operations, and related vivos treatment centers. In addition, we incurred approximately $1.6 million related to professional fees, most of which were one-time expenses, and $800,000 associated with salaries and wages and vivos personnel, as well as infrastructure costs of approximately $600,000 when compared to the year ended December 31, 2024. Sales and marketing expenses decreased by $300,000 to $1.4 million for 2025 compared to $1.7 million for 2024. This decrease was primarily driven by a $200,000 decrease in commissions as well as a $100,000 decrease in convention and trade show expenses. This is again attributable to our focus on bringing SCN online