Vivos Therapeutics, Inc.

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Good day, everyone, and welcome to the Bebo's Therapeutics First Quarter 2026 Conference Call. At this time, all participants are in a listen-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 Bebo's website and will remain posted there for the next 30 days. I will now hand the call over to Brad Ammon, Chief Financial Officer, for introductions and a reading of the Safe Harvard Statement. Please go ahead.

Thank you, Operator. Hello, everyone, and welcome to our conference call. A copy of our earnings 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 the first quarter of 2026, as well as more recent developments and Vivos' plans for the rest of 2026 and beyond. Following these formal remarks, we'll be happy to take questions. 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 in Section 21E of the Securities and Exchange Act of 1934 is 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 words regarding future events 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. Actual results, including without limitation, the results of Bevos' 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 in operating metrics, such as the potential for VVOS to achieve future positive cash flows or profitability, and other matters to be addressed by VVOS 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 in other disclosures contained in Beavis's filings with the Securities Exchange Commission, including the risk factors and other disclosures in our Form 10-K for the year ended December 31st, 2025, and our other filings with the FCC, including our first quarter 2020, our first quarter 10-Q filed with the FCC today, 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 of 23, 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. Vivos treatment of OSA of any severity or any other condition with any other of vivos' FDA-cleared devices remains at the clinical discretion of the treating doctor. For further information on our results for the three-month period ended March 31, 2026, 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. I'll turn to the review of our first quarter results. In the first quarter of 2026, VLOS completed its third full quarter of activity following our June 10, 2025 acquisition of the Sleep Center of Nevada, or SCN, demonstrating that the pivot in our sales, marketing, and distribution model has taken hold, notably with a very significant increase in revenues. Revenue increased approximately $2.1 million, or 70%, to $5.1 million for the first quarter of 2026, compared to $3 million for the first quarter of 2025, and 34% over fourth quarter of 2025. This was due to an increase of approximately $2 million in sleep testing services and an increase of $900,000 of revenue generated from vivos treatment of osa patients launched at two scn locations the increase in revenue during q1 was offset by the decline in product revenue attributable to a decrease of approximately nine hundred thousand dollars in appliance sales to our legacy vivos integrated provider or vip dentist customers offset by an increase of $500,000 in tooth positioner sales to VIPs. Additionally, we had a decrease in service revenue of $200,000 in our VIP enrollment revenue due to our strategic pivot to acquire and partner with sleep centers. An important note is that our 70% increase in year-over-year revenue occurred notwithstanding the decrease in our VIP enrollment revenue. There were no new VIP enrollments in Q1. All of this shows that we have weaned ourselves off of reliance on VIP enrollments as we have pivoted to our new revenue model. During the first quarter of 2026, we sold 5,304 oral appliance arches and tooth positioners for a total of approximately $1.4 million, a 21% decrease in revenue, from the same period in 2025 when we sold 3,735 oral appliance arches and tooth positioners for a total of $1.8 million. The revenue decrease is directly attributable to $500,000 in discounts offered in the first quarter versus $200,000 of discounts offered during the same period in 2025, coupled with a product mix that included more lower-priced products. Cost of sales increased by approximately $600,000, or 38%, to $2.1 million for the first quarter, 2026, compared to $1.5 million for the first quarter, 2025. This was primarily due to $700,000 in higher costs related to additional staff associated with SCN and our Detroit Sleep Center affiliation. We are hopeful that our investments in integrating SCN into our business will continue to pay off going forward. For the first quarter of 2026, gross profit increased by $1.5 million or 103% to $3.1 million. This increase was attributable to an increase in revenue of $2.1 million offset by an increase in cost of sales of $600,000. Gross margin increased 10 percentage points to 60% for the first quarter of 2026 when compared to 50% for the same period in 2025. This reflects the higher margin nature of our new business model. General and administrative expenses increased $4.1 million to $9 million for the first quarter of 2026 compared to $4.9 million for the prior year period. This increase was primarily due to $1.5 million in costs associated with running SCN's operations, which we did not have in first quarter of 2025. In addition, we incurred $1.5 million in salaries and wages for Vivos Treatment Center personnel in Nevada and $900,000 in non-reoccurring professional fees that we did not have in the first quarter of 2025. Depreciation and amortization expense was approximately $500,000 for the first quarter of 2026 compared to $200,000 for the prior year quarter. Depreciation and amortization increased due to an increase in depreciable assets related to the SEN asset acquisition and other affiliations. Net cash used in operating activities amounted to approximately $6 million and $3.8 million for the three months ended March 31st, 2026 and 2025 respectively. As of March 31st, 2026, we had total liabilities of approximately $26.3 million as compared with $26.7 million as of December 31st, As of March 31, 2026, we had approximately $2.1 million in cash and cash equivalents. We have implemented cost savings measures that have reduced cash used in operations. And while our revenue increased in the first month's post-SCN acquisition, our revenue did not grow enough to outpace our expenses due to dentist shortages and not being in network with payers as we continue to integrate SCN into our operations and refine and improve our product offerings and distribution strategies. As such, we raised equity capital throughout 2025 and during first quarter 2026, including our ATM program. We will be required to obtain additional financings to satisfy our near and longer-term cash needs and bolster our stockholders' equity for NASDAQ compliance purposes. We believe our Q1 results show the work we've put in towards increasing revenue and reducing costs, and moreover, that the prospect for future revenue growth is there. In addition to bolster our stockholders' equity, we are actively evaluating plans to restructure our senior debt to reduce our debt service obligations and reclassify some of the debt on our balance sheet as equity. Our main goal, of course, is to achieve cash flow positive operations in the foreseeable future. So in summary, we're seeing significant increases in revenue reflecting the acquisition of SCN in both diagnostic service as well as related revenue from providing OSA patients with treatment options, which is extremely encouraging. We are also seeing increased costs from hiring SCN personnel on the diagnostic side and additional hiring on the treatment side as these costs were nonexistent in the prior year quarter. We believe the strategic move to acquire SCN and other potential affiliate alliances and acquisitions set the stage for stronger performance in coming quarters. For more detailed information, I refer you to our earnings release and our full Form 10-Q file today. And with that, I'll hand the call back over to our chairman and CEO, Kirk Huntsman, to discuss the progress we have made to date on SEM and DDoS.