UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
(Mark
One)
For the Fiscal Year Ended December 31, 2025
For the Transition Period from to
Commission
File Number: 001-39796
Vivos
Therapeutics, Inc.
(Exact
Name of Registrant as Specified in its Charter)
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (866) 908-4867
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbol(s) Name of exchange on which registered
Common stock, par value $0.0001 per share VVOS Nasdaq Capital Market
Securities
registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES ☐ NO ☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). YES ☒ NO ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”,
“smaller reporting company”, or “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒
As
of June 30, 2025, the last business day of the second fiscal quarter, the aggregate market value of the registrant’s voting stock
held by non-affiliates, was approximately $22.9 million based on the last reported sales price of $3.16 as quoted on the Nasdaq Capital
Market on such date.
The
registrant has 13,486,006shares
of its common stock, $0.0001par
value per share, outstanding as of April 15, 2026.
TABLE
OF CONTENTS
Page
Cautionary Note Regarding Forward-Looking Statements -ii-
Summary of Material Risks Associated with our Business -iv-
Part I
Item 1. Business -1-
Item 1A. Risk Factors -37-
Item 1B. Unresolved Staff Comments -60-
Item 1C. Cybersecurity -60-
Item 2. Properties -61-
Item 3. Legal Proceedings -62-
Item 4. Mine Safety Disclosures -62-
Part II
Item 6. Reserved -64-
Item 7A. Quantitative and Qualitative Disclosures About Market Risk -75-
Item 8. Financial Statements and Supplementary Data -76-
Item 9A. Controls and Procedures -113-
Item 9B. Other Information -114-
Part III
Item 10. Directors, Executive Officers and Corporate Governance -114-
Item 11. Executive Compensation -122-
Item 14. Principal Accountant Fees and Services -138-
Part IV
Item 15. Exhibits and Financial Statement Schedules -138-
Signatures -143-
-i-
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
Annual Report on Form 10-K contains “forward-looking statements” (as defined in Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) that reflect our current expectations and views of future
events. The forward-looking statements are contained principally in the sections entitled “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations.” Readers are cautioned that known and unknown risks,
uncertainties and other factors, including those over which we may have no control and others listed in the “Risk Factors”
section of this Annual Report on Form 10-K, may cause our actual results, performance or achievements to be materially different from
those expressed or implied by the forward-looking statements.
You
can identify some of these forward-looking statements by words or phrases such as “may,” “will,” “expect,”
“anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,”
“is/are likely to,” “potential,” “continue,” “goal” or other similar expressions. We have based these forward-looking
statements largely on our current expectations and projections about future events that we believe may affect our financial condition,
results of operations, business strategy and financial needs. These forward-looking statements include statements relating to:
● our ability to successfully integrate SCN business into our operations;
-ii-
● our immediate and future financing plans; and
These
forward-looking statements involve numerous risks and uncertainties. Although we believe that our expectations expressed in these forward-looking
statements are reasonable, our expectations may later be found to be incorrect. Our actual results of operations or the results of other
matters that we anticipate herein could be materially different from our expectations. Important risks and factors that could cause our
actual results to be materially different from our expectations are generally set forth in “Risk Factors,” “Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and other sections in this Annual
Report on Form 10-K. You should thoroughly read this Annual Report on Form 10-K and the documents that we refer to with the understanding
that our actual future results may be materially different from and worse than what we expect. We qualify all of our forward-looking
statements by these cautionary statements.
The
forward-looking statements made in this Annual Report on Form 10-K relate only to events or information as of the date on which the statements
are made in this Annual Report on Form 10-K. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to
reflect the occurrence of unanticipated events. You should read this Annual Report on Form 10-K and the documents that we refer to in
this Annual Report on Form 10-K and have filed as exhibits to this Annual Report on Form 10-K, completely and with the understanding
that our actual future results may be materially different from what we expect.
The following is a non-exhaustive guide to where the primary risks qualifying each category of forward-looking statement
can be found in this Report: (i) statements regarding our new medical-provider focused model and SCN integration are qualified primarily
by the risks described under “Risk Factors--Risks Related to Our Acquisition of the Sleep Center of Nevada (SCN)” and “Risk Factors--Risks Related
to Our Business and Industry”; (ii) statements regarding FDA clearances, regulatory approvals, and clinical outcomes are qualified
primarily by the risks described under “Risk Factors--Risks Related to Our Products and Regulation”; (iii) statements regarding capital
raising, liquidity, our ability to continue as going concern and our ability to maintain compliance with Nasdaq’s listing and other
public company requirements are qualified primarily by the risk factors addressing our history of operating losses, need for
additional capital, and potential dilution under “Risk Factors--Risks Related to Our Business and Industry” and “Risk Factors--Risks Related to Our Securities Generally”; (iv) statements regarding insurance
reimbursement and Medicare coverage are qualified by risks related to changes in reimbursement structures under “Risk Factors--Risks Related to
Our Acquisition of the Sleep Center of Nevada (SCN)”; and (v) statements regarding intellectual property, competitive position,
and market opportunity are qualified by risks described under “Risk Factors--Risks Related to Our Business and Industry.”
-iii-
SUMMARY
OF MATERIAL RISKS ASSOCIATED WITH OUR BUSINESS
An
investment in our company is subject to significant risks. The following is a summary of certain risks, uncertainties and other
factors related to our company. These do not represent all of the risks we face. You should carefully consider all of the risk
factors presented in “Item 1A. Risk Factors” (some of which are not summarized below) and all other information
contained in this Report, including the financial statements which are a part of this Report, in order to a more complete picture of
the risk factors we face.
Risks
Related to Our Business and Industry
-iv-
Risks
Related to Our Acquisition of the Sleep Center of Nevada (“SCN”)
Risks
Related to Our Products and Regulation
-v-
Risks
Related to Our Securities Generally
● We are responsible for the indemnification of our officers and directors.
-vi-
PART
I
Item
1. Business.
Overview and Mission
We
are a revenue stage medical technology and healthcare services company that features a comprehensive suite of proprietary
oral appliances and therapeutic treatments. Our products non-surgically treat certain maxillofacial and developmental
abnormalities of the mouth and jaws that are closely associated with breathing and sleep disorders such as mild to severe
obstructive sleep apnea (known as OSA) and snoring in adults. We call the use of our appliances coupled with specific therapeutic treatment protocols The Vivos Method.
The
Vivos Method is estimated to be indicated and potentially effective (within the scope of the FDA cleared uses) in approximately 80% of
cases of OSA where patients are compliant with clinical treatments. Our patented C.A.R.E. oral appliances have been utilized in approximately
60,000 patients treated worldwide by more than 2,000 trained dentists. We estimate our other lines of oral appliances have treated an
additional 15,000 or more patients worldwide.
Since 2024, we have been evolving
our business model towards one that focuses on deriving revenue from appliance sales but also the provision of healthcare services in
compliance with the laws relating to the corporate practice of medicine through (i) the acquisition and management of sleep medical practices
who diagnose and treat OSA and (ii) the establishment of Vivos supported and managed Dental and Medical Service Organizations (“DSOs”
and “MSOs”). We have begun to brand our OSA treatment business as Sleep and Airway Medicine Centers (or SAMC).
Our
mission is to rid the world of OSA by being a leading technology platform and go-to services resource for the latest and most effective
diagnostic tools, treatment modalities, products, and clinical education available to healthcare providers of all specialties who treat
patients suffering from breathing and sleep disorders and their comorbidities. We recognize that breathing and sleep disorders, including
OSA, are often complex conditions with multiple contributing factors that require more than a single solution. To that end, we have broadened
our product and services lines that comprise The Vivos Method to go beyond the proprietary technologies featured in our C.A.R.E. oral
appliances and now offer sleep health providers far greater optionality in selecting a diagnostic or treatment solution that is best
for their patients. This approach recognizes that there is no “one size fits all” solution for patients, and that both providers
and patients are best served by offering a variety of solutions at various price points that can meet the needs of a larger segment of
the population.
We
believe this evolution of our mission (which was originally focused almost exclusively on the dental community) will appeal to a much
broader array of healthcare professionals, including chiropractors, nutritionists, primary care physicians, cardiologists, physical therapists,
dentists and others, all of whom have a strong vested interest in the overall health and wellbeing of their patients, and each of whom
has something meaningful to contribute when properly educated and trained. As word spreads among a broader array of professionals and
their patients, we expect more people to come to know and understand the compelling advantages of The Vivos Method. We believe this will
allow us to scale our business and grow our company, offering our OSA solutions to a large and growing number of patients.
Historically, we
have offered independent dentists three separate clinical pathways
or programs to become Vivos product providers: (i) Guided Growth and Development, (ii) Lifeline and (iii) Complete Airway Repositioning
and Expansion (“C.A.R.E.”). Each program features specific proprietary and non-proprietary oral appliances, coupled
with specific therapeutic protocols and adjunctive treatments, and each clinical pathway is intended to address the specific needs of
a diverse patient population with different patient journeys.
Our
Guided Growth and Development program features the Vivos Guide and PEx appliances along with CO2 laser treatments and other
adjunctive therapies designed for treating palatal growth and expansion in pediatric patients as they grow. The mid-range priced Lifeline
program features a selection of mandibular advancement devices (“MADs”) such as the Versa and Vida Sleep which are
U.S. Food and Drug Administration (“FDA”) 510(k) cleared for mild-to-moderate OSA in adults, along with the patented
Vida appliance, which is FDA 510(k) cleared for the alleviation of Temporomandibular Joint Dysfunction (“TMD”) symptoms,
bruxism, migraine headaches, and nasal dilation.
As of April
2026, as part of the continuing evolution in our business model, we are no longer offering the Guided Growth and Development course
to unaffiliated independent dentists who are not employed by or contracted with a Vivos-supported DSO group. Lifeline and C.A.R.E.
training programs will continue to be offered to unaffiliated independent dentists and all three programs will be offered to any or
all existing dentists who became part of our historic Vivos Integrated Provider program (“VIP”) prior to April 2026, and also to all new or existing dentists who become employed by
or contracted with any Vivos-supported DSO.
Our
flagship C.A.R.E. program features our patented DNA, mRNA and mmRNA appliances, which are FDA 510(k) cleared for mild-to-severe OSA and
snoring in adults. The Vivos Method may also include adjunctive myofunctional, chiropractic/physical therapy, and laser treatments that,
when properly used with the C.A.R.E. appliances, constitute a powerful non-invasive and cost-effective means of reducing or eliminating
OSA symptoms. In a small subset of a study, The Vivos Method was shown to reduce OSA symptoms in a statistically significant portion
of patients. According to a retrospective analysis by a leading sleep doctor of real world data derived from users of our mRNA
and DNA devices “all patients treated with mRNA
showed an increase in transpalatal width while 97% of patients treated with DNA showed an increase. Apnea Hypopnea Index (AHI) scores improved or stayed the same in
91% of DNA patients in 88% of mRNA patients. AHI improved by at least one classification for 63% of DNA patients as compared to 61% of
mRNA patients.”
The primary competitive advantage of The Vivos Method over other OSA therapies is that The Vivos Method’s
typical course of treatment is limited in most cases to 9 to 12 months, and it is possible not to need lifetime intervention, unlike
continuous positive airway pressure (“CPAP”) (the so-called “gold standard” for OSA
treatment) and neuro-stimulation implants. Additionally, out of approximately 75,000 patients treated to date worldwide with our entire current
suite of products, there have been very few reported instances of relapse.
Although
not our current focus due to a strategic pivot in our business model, we have also historically offered a suite of
diagnostic and support products and services primarily to dentists as well as medical providers and distributors who service
patients with OSA or related conditions. Such products and services include (i) VivoScore home sleep screenings and tests (powered
by SleepImage® technology), (ii) Treatment Navigator (a concierge service to assist providers in educating and
supporting patients as they navigate insurance coverage, diagnostic indications and treatment options), (iii) Billing Intelligence
Services (which optimizes medical and dental reimbursement), (v) advanced training and continuing education courses at our Vivos
Institute in Denver, Colorado, and (iv) MyoSync (formerly MyoCorrect), a service through which Vivos-trained providers can provide
orofacial myofunctional therapy (“OMT”) to patients via a telemedicine and mobile application-based platform.
Some of these services including home sleep screenings, treatment navigator services and MyoSync, are being provided to patients
directly under our medical-provider focused sales, marketing and distribution model described below. With this shift in focus, we
shifted our Medical Integration Division to pursue strategic alliances and acquisitions of sleep centers to provide better options
using Vivos products for patients who have been diagnosed with OSA.
In
this Annual Report on Form 10-K, we sometimes refer to medical doctors, dentists and other medical professionals (including our independent Vivos-trained dentists) who treat OSA as “providers”.
Also,
in this Report, and unless the context requires otherwise and except as provided for in the footnotes to our audited financial statements
included herein, the term “common stock” refers to shares of our common stock, par value $0.0001 per share.
Legacy
Business Model
Our
historical business model was to teach, train, and support primarily dentists but also medical doctors and distributors in the use
of our products and services. Dentists who use our products and services, referred to as Vivos Integrated Providers, enrolled in a
variety of live or online training and educational programs offered through our Vivos Institute, an 18,000 sq. ft. facility located
near the Denver International Airport. Even currently, VIP dentists are able to select and purchase the specific program or clinical pathway they would like
to focus on, such as “Introduction to Sleep and Airway Medicine”, “Advanced Sleep and Airway
Medicine/C.A.R.E.”, “Frenectomy and Tongue Tie”, “Myofunctional Therapy”, and many more. Such
VIPs also have the option of purchasing practice support services and clinical support services. This approach differs from
our historical business model, referred to as our “legacy model”, where dentists were charged an upfront fee and all
training and support packages were included in that fee.
New
Medical-Provider Focused Sales, Marketing and Distribution Model
Over
the course of 2024 and 2025, we worked to pivot our business strategy and began to steadily decrease our prior dependence on
enrolling and training VIP dentists to sell our products. This new business strategy is focused on (i) contractual alliances with
and outright acquisitions of sleep specialty medical providers, sleep testing centers and other similar entities (such as we
accomplished in 2025 through the acquisition of SCN, as described below), and (ii) through the use of a MSO/DSO support model where
we provide administrative and comprehensive non-clinical services to professional entities that employ Vivos-trained and other
specialty providers (such as we accomplished in the Detroit-area during 2025, as described below).
In June 2024, we entered into our first contractual alliance with Rebis Health, a sleep center operator in
Colorado. Revenues from this arrangement did not develop as we had expected due to circumstances beyond our control and as of the
date of this Report we have ended the contractual alliance with Rebis. Nevertheless, we have gained important experience and
insights from our relationship with Rebis which we are using to improve our new business model.
In
June 2025, our new business model was set in motion when we acquired all assets, including operating assets such as sleep testing,
diagnostics, and treatment centers, of R.D. Prabhu-Lata K. Shete MDs, LTD., a Nevada professional corporation d/b/a The Sleep Center
of Nevada (“SCN”). This acquisition was accompanied by the establishment of our initial MSO and marked a
milestone in the pivot in our sales, marketing distribution model. Applying this new model, SCN will provide diagnosed sleep
disorder patients with the opportunity to be candidates for our advanced, proprietary and FDA-cleared C.A.R.E oral medical devices,
other oral appliances, and additional adjunctive therapies, as well as CPAP. Under customary agreements designed to comply with
applicable corporate practice of medicine law, our operation of SCN allows us to manage and capture both diagnostic and consulting
revenues through MSO service and support fees, representing new high margin revenue streams for us, as well as potential additional revenue
from new product and service offerings from SCN. This model ensures the dentists and medical doctors retain the autonomy and
independence to make the most appropriate treatment decisions for their patients. For further information on the integration of
SCN’s practice into our business, please see the section below titled “SCN Integration Update.”
We
are also exploring and seeking to implement additional acquisitions of, or collaborations with, medical sleep and similar healthcare
practices to expand our business model in an effort to grow our revenues. We refer to this new model herein alternatively as our new
medical-provider focused sales, marketing and distribution model or our strategic alliance and/or acquisition model.
SCN
Integration Update
Our
operational planning for the integration of SCN began in April 2025, when we signed the definitive agreement to purchase the assets of
SCN. We believe these two months of advance planning has benefited the process of integrating SCN into our business, as our operations
team has been able to execute our plan on schedule and under budget with respect to two of SCN’s seven locations in the greater
Las Vegas area. Also, because of this effort, we recognized a small amount of SCN revenue during our fiscal second quarter (for the period
beginning with the June 10, 2025, as the closing date of the SCN Acquisition, through June 30, 2025). During 2025, we recognized SCN
diagnostic revenue of $4.8 million and treatment revenue of $2.0 million. Our goal is to continue to increase this diagnostic and treatment
revenue in upcoming quarters.
As
we had anticipated during the initial stage of SCN integration, patient demand is exceeding our capacity to process and treat patients
under our model which includes offering SCN patients Vivos treatment options. Our goal is to ramp up our systems and operations by strategically
deploying additional personnel and resources to meet this demand. We currently expect that some of SCN’s locations, including the
two already integrated, to be primary treatment hubs with larger patient capacities, with the remaining being referral centers (which
could be relocated facilities) requiring less time and effort to integrate.
Our
operational plan is driven by our deployment of our Sleep Optimization (“SO”) teams, each consisting of one nurse
practitioner (or physician’s assistant) and two specially trained dentists, employed by a medical or dental professional
corporation, six dental assistants, six administrative support personnel, and one treatment navigator. These SO teams can be
dedicated to high demand locations or spread across multiple locations as circumstances dictate. We currently have approximately 1.5
SO teams deployed across two SCN locations and expect to have additional (partial or whole) SO teams deployed during 2026. We anticipate an initial ramp of up to 60 days for SO teams to become fully functional, and up to six months or longer
before net revenue collections match revenue generating activity (such as OSA diagnostic services or OSA treatment case starts).
Based
on the current volume of OSA patient demand, we believe the current addressable market served by SCN could support several
additional SO teams, especially if certain planned growth initiatives and patient referrals meet expectations. 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.
Based on our experience to date, we believe our limiting constraints for
near-term revenue growth at SCN are (1) physical space to see an optimal number of patients; (2) provider and staff recruiting, training,
and onboarding; and (3) customary issues with third party provider credentialing. At the end of 2025, our operations at the two SCN locations
we have onboarded were fully booked for appointments through April 2026, and we were processing what we believe were less than 40% of
patients attempting to get appointments for treatment. Our two greatest barriers to servicing more OSA patients at that time were a lack
of Vivos-trained dentists and delays in obtaining full access to most major insurance carriers. As of the date of this Report, we believe we had made
progress in both areas, although further work remains, and we do not believe we will be able to fully meet current demand until additional
SO teams are fully deployed, further insurance participation access is granted, and additional facility space is made ready.
Our initial average case revenue and acceptance rate for Vivos treatment
at SCN to date, based upon a limited period of operations at two of SCN’s seven locations, suggest that each SO team could potentially
generate collections in excess of $500,000 per month, net of adjustments, with contribution margins above 50%. In addition to current
Vivos diagnostic and treatment options, we expect to be able to offer SCN patients additional diagnostic and treatment services that could
generate additional revenue. We continue to gather additional data that will allow us to refine our model and optimize operations, and
results of operations, in future periods. See “Risk Factors” for a discussion of the risks associated with our new business
model.
Importantly,
we expect to apply the lessons learned from our SCN integration activities to future sleep center or medical practice acquisitions
or management collaborations we are currently exploring and hope to consummate in the future as described below. We expect to fund
costs associated with our SCN integration activities with net proceeds from our June 2025 debt and equity financings, our January
2026 warrant inducement and March 2026 private placements, potential future financings and our At The Market
(“ATM”) offering program, and ultimately revenue from operations.
Revised
OSA Provider Management Model
In
addition to growth through acquisitions of medical sleep providers like SCN, we are continuing to evolve our revised MSO/DSO
management model for situations where the sleep center or medical practice owners are not interested in being purchased by us but
are interested in making the full range of our OSA treatment options available to their patients. Our plan is to accomplish this
type of collaboration through the creation and pro-rata funding of a new management services entity that is jointly owned by the
sleep center owners and our company, but where our company retains an 80/20 supermajority controlling interest. The revised
management model incorporates, among other things, our experience with Rebis as described above. Under the revised model, through
the co-owned management company, we will have more operational control to help ensure that our business model is being properly
implemented.
We
believe this revised management model can provide financial upside for our company with limited capital expenditures, and with what we
believe are manageable risks. At the same time, this revised management model creates the potential for economic upside for sleep center
or medical practice collaborators who are currently not interested in an outright sale to our company. Moreover, we believe the overall
quality of care and service to the OSA patients of our medical provider collaborators can improve by having more treatment options available.
The revised management model, as in the previous model, is designed to be compliant with current state and federal healthcare, anti-kickback,
and corporate practice of medicine and dentistry regulations.
We
are also exploring and seeking to implement additional acquisitions of, or collaborations with, medical sleep and similar healthcare
practices to expand our business model in an effort to grow our revenues. We refer to this new model herein alternatively as our new
sales, marketing and distribution model or our strategic alliance and/or acquisition model.
On
July 14, 2025, we entered into a management agreement, AIM – Detroit, under this revised approach with MISleep Solution LLC to
provide our full suite of Vivos treatments and services to OSA patients at a joint location in Auburn Hills, Michigan, near Detroit.
Consistent with our new model, our company owns a supermajority equity stake in the management services company, with the sleep doctors
having minority ownership interests.
Based
on our internal analysis and experience, we expect the economics of our Detroit SO team to be similar to the economics described above
for our SO teams at SCN, except that net profit distributions from the management services entity will be paid out on a pro-rata basis
(with our company receiving the supermajority share). As of this time, we have minimal operating history in the Detroit, Michigan market
or with this new model. However, we believe that the overall benefit to our company of this model derives from the limited risks (as
opposed to outright acquisitions) and generally low equipment and facility capital expenditures relative to the potential revenue opportunity.
This model also obviates the need for us to finance the purchase and other costs associated with our acquisition model.
Additionally,
as of mid-December 2025, we constructed and opened a new physical facility for sleep testing and treatment in Auburn Hills, Michigan.
The Auburn Hills center is currently open and operational. We have hired one SO team in Auburn Hills and are currently in the process
of onboarding and training that SO team.
We
believe the advantages of our medical-provider focused strategic marketing and distribution model are compelling:
In
summary, under our new model, we expect to present Vivos treatments to more patients, refer a higher percentage of cases into Vivos treatment,
and potentially generate more revenue and profit per case.
Potential
Provider Acquisition or Management Pipeline
We
are currently in active discussions with a number of potential acquisition targets to follow our SCN acquisition and Detroit-area management
agreement. Every prospect must meet a rigorous set of criteria and standards in order to be considered by our mergers and acquisitions
team for acquisition or management. One such acquisition target is currently under an exclusive letter of intent with us. Our pipeline
of additional potential acquisition and management opportunities with sleep centers and medical sleep specialists continues to expand.
This is happening largely through word of mouth and very little expenditure in terms of marketing efforts to the more than 2,600 American
Academy of Sleep Medicine accredited sleep testing centers nationwide. We believe this pipeline of potential acquisition and management
activity, together with the experience gained from previous endeavors, will be a key driver of future accretive growth for us.
Our
Products and Services
Currently,
The Vivos Method is comprised of the following products and services:
The
November 2023 clearance of our C.A.R.E. appliances for the indication described above represents the first time the FDA has ever
granted an oral appliance a clearance to treat severe OSA. In our experience working closely with sleep specialists and other
medical professionals since that time, we believe this unprecedented decision by the FDA is generating broader acceptance throughout
the medical community for our treatment options, leading to the potential for higher patient referrals and case starts as well as
closer collaboration with medical professionals. For example, in April 2024 we received the required regulatory approvals to enable
Medicare reimbursement for our C.A.R.E. oral medical devices. We expect such approval could potentially lead to greater reimbursement
levels from Medicare and medical health insurance payors that follow Medicare guidelines.
● Vivos oral appliances and therapies outside of C.A.R.E. system include:
These
products, services and resources are used to promote a collaborative multidisciplinary treatment model comprising dentists, general practice
physicians, sleep specialist physicians, myofunctional therapists, nutritionists, chiropractors, physical therapists, and healthcare
professionals. As part of cost optimization, and consistent with our business model pivot, during 2024 we eliminated our legacy subscription-based
program to train dentists called the Vivos Integrated Practice (VIP) program. Essentially, we unbundled the subscription-based VIP training
into several component parts. Currently, dentists can take courses individually in a customized fashion, learning at their own pace,
and only learning the materials they need in order to serve their patients.
During
2023, we expanded our product portfolio by acquiring certain devices (now known as Vivos Vida, Vivos Versa
and Vivos Vida Sleep) from Advanced Facialdontics, LLC. During 2024, we continued our screening and home sleep test (or
HST) program (which we call our VivoScore Program) featuring SleepImage® technology, a 510(k)
cleared ring-based recorder and diagnostic platform for home sleep apnea testing. We market and distribute our SleepImage HST in the
U.S. and Canada pursuant to a licensing agreement with MyCardio LLC. Based on our direct experience with our Vivos-trained providers,
approximately 53,000 VivoScore HSTs were performed during 2024. Due to the volume of home sleep test screening business that we have
generated with MyCardio LLC, we now receive pricing and terms for SleepImage® products and services that are well below
their published retail prices. We believe the growth of our VivoScore program confirms our belief that the SleepImage®
HST offers significant technological and commercial advantages over alternative home sleep apnea products and technologies in the market
and allows healthcare providers to more efficiently screen, diagnose and initiate treatment for OSA in their patients.
As
noted above, since our landmark FDA clearances in 2023 and 2024, we have not yet seen a corresponding increase in numbers of patients
using our appliances. Based on feedback from our Vivos-trained providers, we believe this to be a function of staffing turnover in their
practices and labor shortages that continue to plague the dental workplace in the aftermath of the COVID-19 pandemic. Throughout 2024,
we continued to address this by conducting additional regional dental team training sessions on integrating Vivos products and treatment
protocols. In addition, we drastically reduced the number of individuals we call Practice Advisors who had previously been used as “boots
on the ground” to help facilitate case starts and provide Vivos-trained providers with support, and we replaced them with a new
service called Treatment Navigator which we piloted and began to rollout in the late summer and fall of 2022.
Treatment
Navigators work effectively as extensions of the dental office, working directly with prospective patients to provide them information
on our C.A.R.E. appliances and other Vivos treatment options, aiding in education, screening, insurance verification of benefits and
preauthorization, coordination among various professional practitioners, recordkeeping, problem solving, as well as, delivering a home
sleep test and following up with scheduling an appointment with an affiliated sleep clinic or dentist (including dentists who are VIPs)
in their area. Dental offices who wish to avail themselves of this service pay Vivos enrollment fees and per case fees for the service,
thus adding an important new revenue line to our business. Based on our evaluation of the Treatment Navigator program, we have restructured
the Treatment Navigator program into a monthly subscription-based model. We also utilize Treatment Navigators in our SCN operations.
Background
on OSA
OSA
is a serious and chronic disease that negatively impacts a patient’s sleep, health, and quality of life. According to a 2019 article
published in Chest Physician, it is estimated that OSA afflicts 54 million adults in the U.S. alone. In June 2024, Eli Lilly recently
reported that over 80 million adults in the U.S. are estimated to suffer from OSA. Recent medical literature estimates the prevalence
of OSA in the U.S. pediatric population at 20.4% or about 10 million children. According to a 2016 report by Frost & Sullivan, OSA
has an annual societal cost of over $149.6 billion. According to the study “Global Prevalence of Obstructive Sleep Apnea (OSA)”
conducted by an international panel of leading researchers, nearly 1 billion people worldwide have sleep apnea, and as many as 80% remain
undiagnosed. Research has shown that when left untreated, OSA can increase the risk of comorbidities, such as high blood pressure, heart
failure, stroke, diabetes, dementia, chronic pain and other debilitating, life-threatening diseases.
Unfortunately
for OSA patients, the medical profession has not been able to provide them with solutions that are both effective and desirable. CPAP
is the “gold standard” treatment for over 90% of OSA patients, but no one wants to wear those devices to bed every night
for life, rendering long-term compliance rates low. Traditional oral appliances can be effective over limited time frames but often create
other problems with TMJ dysfunction, open bites, infections, and more. As with CPAP, they too must be worn
every night for life to be effective. More radical and invasive options such as neuro-stimulation devices, or maxillomandibular advancement
surgery are likewise viewed more as treatments of last resort. When The Vivos Method is presented as a viable treatment option against
the alternatives discussed above, we believe it will be the preferred choice of most patients by a factor of about 2 to 1.
We
believe our proprietary products comprising the Vivos C.A.R.E. oral appliances represent the first non-surgical, minimally invasive treatment
option for patients diagnosed with mild to severe OSA that offers cost-effective treatment featuring (i) limited treatment times; with
(ii) lasting or durable effects; and (iii) the prospect of seeing a complete reversal of symptoms. Combining treatment technologies that
impact the upper airway by altering the size, shape, patency and position of corresponding hard and soft tissues, Vivos C.A.R.E. represents
a completely new treatment modality in the treatment of dentofacial abnormalities that often lead to OSA and many other health conditions.
Our
Target Customers
Because
of the close connection and relationship between the oral cavity and airway form and function, properly trained dentists, sleep specialists
and other medical providers can play a pivotal and even leading role in the treatment of dentofacial abnormalities which are known to
impact breathing and sleep, which in turn can lead to serious health conditions. Our medical-provider focused alliance marketing and
distribution model provides sleep centers with whom we collaborate better alternatives to CPAP and surgery for patients diagnosed with
mild to severe OSA.
During
2024 and 2025, we expanded our mission and product line positioning to extend the reach and scope of The Vivos Method beyond the dental
profession and to allow for greater collaboration and mutual referrals from other healthcare practitioners, including primary care physicians,
medical specialists, chiropractors, nutritionists, physical therapists, and others who see and treat patients with breathing and sleep
disorders. We believe this extension of our approach will broaden the knowledge among various professions as to what our technology and
products can do for their patients, ultimately leading more patients into treatment with Vivos products and services. We also incorporate
courses and curricula at our TVI into our Vivos Method training that provides information, tools, techniques, and systems that enable
other healthcare professionals to engage directly with dentists and actively contribute to the best possible clinical outcome for patients.
As
we have established a national network of Vivos-trained dentists, we are pivoting our focus to the source of where we believe the vast
majority of OSA patients are first diagnosed and treated: the medical profession, including sleep centers and medical doctors and dentists
who offer OSA treatment, as well durable medical equipment (DME) companies who manufacture and distribute OSA therapies.
Our
Market Opportunity
The global
sleep apnea devices market size is generally estimated at between $6.9 and $10.3 billion in 2025, and is projected to rise to between
$11.6 billion and $18.30 billion by 2032, with a CAGR of 8.6% during the forecast period. According to an American Sleep Association study
published in 2020, an estimated 50 million to 70 million people in the U.S. are suffering from some form of sleep disorders. In 2023,
Eli Lilly analyses expanded that estimate to over 80 million. Moreover, according to Canadian Respiratory Journal in 2014, around
5.4 million adults in Canada were diagnosed with sleep apnea or were at higher risk of developing OSA. According to a study conducted
by ResMed in 2018, around 175 million people in Europe were suffering from sleep apnea. We therefore believe that effective diagnostic
and treatment strategies are needed to minimize the negative health impacts of OSA and to maximize cost-effectiveness.
Based
on our direct experience with our Vivos-trained providers performing nearly 60,000 VivoScore home sleep testes administered during
2025, we strongly believe the published estimates from available public information, which range from 12% to 20% of the population, seriously
underestimate the extent of the condition and scope of the problem in the United States and Canada. Our VivoScore testing routinely results
in approximately 50% of patients testing positive OSA, a number consistent with a recent study published in the Journal of the American
Heart Association on a sample consisting of approximately 2,000 middle-aged to older adults from the Multi-Ethnic Study of Atherosclerosis
(MESA), where 44% had moderate to severe OSA and 75% had mild, moderate or severe OSA from the study “Sleep Irregularity and Subclinical
Markers of Cardiovascular Disease: The Multi-Ethnic Study of Atherosclerosis”. We therefore believe our prior estimate that approximately
15% of the adult population in the United States and Canada suffers from OSA to be extremely conservative. Based on the estimated total
adult population of 284 million in the United States and Canada, we believe the total addressable United States and Canadian market could
be as high as 80 million adults. To be conservative and based on available data and our internal market analysis, we estimate that over
80% of individuals diagnosed with OSA in the North American addressable market may be candidates for The Vivos Method, leaving us with
a total addressable consumer market of approximately 64 million adults.
There
are an estimated 3.5 million sleep tests conducted in the United States each year. An estimated 75% to 90% of those patients test
positive for some sort of sleep disorder, of which obstructive sleep apnea is the most predominant. Our Vivos supported dentists and
providers in Las Vegas generate approximately $5,000 on average per clinical case with an estimated 50% of patients accepting some
form of Vivos product or service. Using our treatment data to extrapolate with an assumption that 75% of 3.5 million patients are
positive for OSA, we believe there are 2.6 million new OSA patients that remain to be diagnosed. Approximately half of all OSA
patients are classed as moderate to severe, as such we believe a conservative number of 1.3 million new patients to be diagnosed and
treated from OSA each year. As we pivot to our medical-provider focused alliance marketing and distribution model, we see our
average sales price to patients to increasing to approximately $5,000. This would give us an estimated total addressable annual U.S.
market (TAM) of $6.5 billion just from new adult patients with OSA. The estimated 10 million American children with OSA could add
another estimated $4 billion to the TAM.
Our
Treatment Alternative for OSA - The Vivos Method
The
Vivos Method is a non-invasive, non-surgical, non-pharmaceutical, multi-disciplinary treatment modality for the treatment of dentofacial
abnormalities and/or mild, moderate and severe OSA and snoring in adults. Proprietary and virtually painless, The Vivos Method has been
shown to typically expand the upper airway and offers patients what we believe to be an effective treatment alternative based on published
peer-reviewed retrospective clinical data. Based on feedback from independent VIPs and their patients, we believe initial therapeutic
benefits from using the treatment guidance’s and devices are often achieved relatively quickly (in days or weeks) and final clinical
results are typically achieved in 9 to 12 months), all at a relatively low cost to consumers ranging between $7,000 and $10,000 for adults
(costs vary by provider) when compared to other options such as lifetime CPAP or surgery.
The
Vivos Method alters the size, shape and position of the tissues that surround and define the functional space known as the upper
airway. Our treatment also improves nasal breathing, reduces mouth breathing, reduces AHI scores, and
generally facilitates better breathing and sleep. These statements are based on retrospective raw data with validated before and
after sleep studies, rhinomanometry testing before and after treatment, Cone Beam Computerized Tomography (CBCT) scans from treating
clinicians and patient testimony. As The Vivos Method treatment process progresses, the airway typically expands, with many patients
reporting a significant reduction of their OSA and snoring symptoms. The primary products used in The Vivos Method are our C.A.R.E.
devices - the DNA appliance®, the mRNA appliance®, and the mmRNA appliance®- each of
which is a specifically designed, customized oral appliance that is worn primarily in the evening hours and overnight. The typical
treatment times range from 9 to 12 months. Our appliances may require periodic adjustments,
some of which can be performed by the patient and others that are typically rendered at the dental office where treatment was
initiated.
Our
Growth Strategy
Our
goal is to be the global leader in providing a clinically effective non-surgical, non-invasive, non-pharmaceutical, and low-cost
alternative for patients with dentofacial abnormalities and/or mild to severe OSA and snoring in adults. As we continue our pivot to
a medical-provider focused alliance marketing and distribution model and generate revenue from MSO/DSO support services, we expect our products to be available to greater pool of
OSA patients. We believe the following strategies will play a critical role in achieving this goal and in establishing more
predictable and growing revenue leading, ultimately, to cash flow positive and profitable operations:
● Invest in research and development to drive innovation and expand indications.
● Pursue strategically adjacent markets and international opportunities.
Our
Revenue Model
Our
revenue is currently derived from the following primary sources:
Our
Competitive Strengths
We
believe that our medical-provider focused strategic business model has numerous advantages over our legacy dentist-focused model that,
taken together, set us apart from the competition and position us for success in the marketplace:
Sales
and Marketing
Prior
to 2024, we directed our prospecting and marketing efforts to the dental community. Starting in 2024 and accelerating in 2025, we
repositioned personnel and resources to support our medical-provider focused strategic marketing distribution and acquisition model.
As part of this model, we acquired the assets of SCN to offer OSA patients a full spectrum of evidence-based treatments such as our
own advanced, proprietary and FDA-cleared C.A.R.E. oral medical devices, oral appliances and additional adjunctive therapies and
methods including CPAP machines. We believe this new strategic marketing and distribution model provides several advantages. First,
it provides Vivos-trained providers direct access to far more OSA patients who are likely candidates for Vivos treatment. As we roll
out this new model going forward, potentially thousands of patients each month could be exposed to Vivos treatment options. Second,
we expect to close more cases using Vivos-trained personnel. Third, top line revenue and profit per case are expected to rise. This
significantly alters the economics when compared to our prior model, increasing top-line revenues per case start by approximately
4-6 times. In summary, under our new model, we expect to present OSA Vivos treatment options to more patients, refer a higher
percentage of cases into Vivos treatment, and generate more revenue and profit per case. Accordingly, we have ceased our VIP
enrollments, and as a result, our in-house direct sales personnel and have asked our Practice Advisors to assume direct sales and
marketing activities. Although we have seen some initial benefits from these changes, we do not yet have data to support any
conclusions as to the effects of these changes overall on our revenue and potential for profit. However, we believe the potential
for revenue growth from our new direct marketing distribution and acquisition model may eventually replace revenue from our legacy
model of VIP enrollments and we expect higher revenue and margins.
Internationally,
our efforts are primarily focused on the MENA region of the Middle East, where we have a very active international distributor,
Noum, Inc. In November 2024, we conducted our first regional training in Dubai. Since then, patient interest in the region is
exceeding forecasts, and we expect to continue to support our training and distribution efforts going forward. At this time, we do
not have plans to continue further international expansion beyond the MENA region and will continue to focus and deploy resources
primarily in the United States.
Insurance
Reimbursement
Insurance
reimbursement is generally available across the full spectrum of Vivos appliances. However, medical coverage and benefits are subject
to medical necessity, provider credentialing, and payer guidelines. We have experienced challenges with these insurance processes
in connection with establishing our SCN-related operations, causing delays in revenue generation and cash flow, and we expect to face
these challenges with other sleep practices we may acquire or affiliate with.
Although medical insurance is never a guarantee of
payment, the average reimbursement seen for out of network patients is approximately 50% (ranging from 5% to 70%). In-network benefits and coverage can vary widely, and are typically at a lower price when compared to out-of-network
reimbursements. Benefits payable
are subject to deductibles and policy limitations that may vary. A verification of benefits (VOB) is generally required for all
medical policies to check for validity of billable coding for oral appliance therapy (OAT) and need for pre-authorization that may
be required for reimbursement. VIPs typically remain out-of-network with commercial health insurance, but this depends on the