UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the Quarterly Period Ended March 31, 2026
	or

☐	Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

	For the Transition Period from to

Commission File Number: 001-39796

Vivos Therapeutics, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware		81-3224056
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7921 Southpark Plaza, Suite 210, Littleton, CO		80120
(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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

The registrant has 13,894,600 shares of its common stock, $0.0001 par value per share, outstanding as of May 20, 2026.

TABLE OF CONTENTS

		Page

	Cautionary Note Regarding Forward-Looking Statements	-ii-

PART I.	FINANCIAL INFORMATION	1

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025	1
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025	2
	Condensed Consolidated Statements of Stockholder’s Equity as of March 31, 2026 and 2025	3
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025	4
	Notes to the Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	44

PART II.	OTHER INFORMATION	45

Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 3.	Defaults Upon Senior Securities	46
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits, Financial Statement Schedules	46

	Signatures	47

-i-

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Report”) 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 section entitled “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 this Report and our other public filings, 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 continue to refine and execute our evolving business plan, including establishing and growing our new medical-provider focused sales, marketing and distribution model where we acquire or create contractual alliances with operators of sleep testing and treatment centers as a means of driving sales of our appliances, including our June 2025 acquisition of The Sleep Center of Nevada (“SCN”);

	●	our ability to implement, generate material revenues from, and grow our medical-provider focused sales, marketing distribution model, which is new and unproven and may not produce the benefits we anticipate, and to fully wind down our legacy dentist-focused model;

	●	our ability to successfully integrate SCN business into our operations, including managing staffing, accounting, insurance reimbursement and other challenges;

	●	our ability to service the substantial indebtedness we incurred in connection with financing the SCN acquisition;

	●	compliance with laws, rules and regulations relating to the corporate practice of medicine;

	●	the acceptance and adoption by sleep specialists, medical doctors and other healthcare professionals of our proprietary oral appliances as a treatment for dentofacial abnormalities and/or mild to severe obstructive sleep apnea (“OSA”) and snoring in adults and moderate to severe OSA in children ages 6-17 as per our U.S. Food and Drug Administration (“FDA”) clearances, including the anticipated benefits of insurance coverage for products;

	●	our expectations concerning the effectiveness and duration of treatment using our appliances and protocols (which we refer to as The Vivos Method) and the potential for side effects including, but not limited to, patient relapse after completion of treatment;

	●	the potential financial benefits to doctors, sleep testing centers, sleep specialists, and other healthcare professionals from treating patients with The Vivos Method;

	●	our revenues, profit margin and cash flows based on sales or leasing of our appliances and other treatments and services, including our SleepImage^®home sleep testing rings;

	●	our ability to formulate, implement and modify as necessary effective sales, marketing and strategic initiatives to drive revenue growth (including, for example, our medical provider-focused strategic alliance and/or acquisition model, our SleepImage^® home sleep apnea test and our other arrangements with sleep clinics and/or durable medical equipment companies (“DMEs”);

-ii-

	●	the viability of our current intellectual property and our ability to create and protect new intellectual property in the future;

	●	acceptance of our products and services by the medical and dental communities, as well as the marketplace of the products and services that we market;

	●	government regulations and our ability to obtain applicable regulatory approvals and comply with both state and federal government regulations including under healthcare laws and the rules and regulations of the FDA and non-U.S. equivalent regulatory bodies;

	●	our ability to hire and retain key employees and other service providers (including dentists, medical doctors or other healthcare providers);

	●	the emergence of alternative competing technologies, devices, drugs or other therapies which directly or indirectly impact the marketability of our products and services;

	●	adverse changes in general market conditions for medical devices and the products and services we offer;

	●	our ability to generate cash flow and profitability and continue as a going concern;

	●	our ability to satisfy the criteria for maintaining the listing of our common stock on Nasdaq, which we have faced challenges with;

	●	our immediate and future financing plans; and

	●	our ability to adapt to changes in market conditions (including volatile and difficult to access capital markets) which could impair our operations and financial performance.

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 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and other sections in this Report as well as the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and our other public filings. You should thoroughly read this Report 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 Report relate only to events or information as of the date on which the statements are made in this Report. 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 Report and the documents that we refer to in this Report and have filed as exhibits to this Report, completely and with the understanding that our actual future results may be materially different from what we expect.

-iii-

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

VIVOS THERAPEUTICS INC.

Unaudited Condensed Consolidated Balance Sheets

(In Thousands, Except Per Share Amounts)

	March 31, 2026			December 31, 2025
Current assets
Cash and cash equivalents	$	2,110		$	2,029
Accounts receivable, net of allowance of $1,159 and $882, respectively		1,769			1,581
Prepaid expenses and other current assets		940			774

Total current assets		4,819			4,384

Long-term assets
Goodwill		8,572			8,572
Property and equipment, net		3,526			3,757
Operating lease right-of-use asset		4,033			4,166
Intangible assets, net		3,839			4,045
Deposits and other		254			228

Total assets	$	25,043		$	25,152

LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT)
Current liabilities
Accounts payable	$	1,996		$	1,679
Accrued expenses		6,113			5,988
Current portion of contract liabilities		495			479
Current portion of operating lease liability		744			672
Current portion of financing lease liability		56			55
Current portion of debt		7,299			8,353
Other current liabilities		1,234			850

Total current liabilities		17,937			18,076

Long-term liabilities
Employee retention credit liability		2,904			2,904
Operating lease liability, net of current portion		3,653			3,840
Financing lease liability, net of current portion		98			113
Debt, net of current portion		418			469
Other liabilities		1,300			1,300

Total liabilities		26,310			26,702

Commitments and contingencies (Note 13)		-			-

Stockholders’ equity/(deficit)
Preferred Stock, $0.0001 par value per share. Authorized 50,000,000 shares; no shares issued and outstanding		-			-
Common Stock, $0.0001 par value per share. Authorized 200,000,000 shares; issued and outstanding 13,486,006 shares as of March 31, 2026 and 9,286,609 shares as December 31, 2025		1			1
Additional paid-in capital		131,900			123,866
Accumulated deficit		(133,039	)		(125,357	)
Total stockholders’ equity/(deficit)		(1,138	)		(1,490	)

Non-controlling interest		129			60
Total equity/(deficit)		(1,267	)		(1,550	)

Total liabilities and equity/(deficit)	$	25,043		$	25,152

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

VIVOS THERAPEUTICS INC.

Unaudited Condensed Consolidated Statements of Operations

(In Thousands, Except Per Share Amounts)

	2026			2025
	Three Months Ended March 31,
	2026			2025
Revenue
Product revenue	$	1,440		$	1,813
Service revenue		3,701			1,203
Total revenue		5,141			3,016

Cost of sales (exclusive of depreciation and amortization shown separately below)		2,082			1,507

Gross profit		3,059			1,509

Operating expenses
General and administrative		8,971			4,892
Sales and marketing		249			358
Depreciation and amortization		454			177

Total operating expenses		9,674			5,427

Operating loss		(6,615	)		(3,918	)

Non-operating income (expense)
Other expense		(1,167	)		(4	)
Other income		31			58
Loss before income taxes		(7,751	)		(3,864	)

Net loss	$	(7,751	)	$	(3,864	)
Net loss attributable to non-controlling interest		(69	)		-
Net loss attributable to stockholders	$	(7,682	)	$	(3,864	)

Net loss per share (basic and diluted)	$	(0.52	)	$	(0.45	)
Weighted average number of shares of Common Stock outstanding (basic and diluted)		14,634,115			8,595,288

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

VIVOS THERAPEUTICS INC.

Unaudited Condensed Consolidated Statements of Stockholders’ Equity

(In Thousands, Except Common Stock Amount

	Shares		Amount		Capital		Deficit			(Deficit)			interest			Equity
	Three Months Ended March 31,
	Common Stock				Additional Paid-in		Accumulated			Total Stockholders’ Equity/			Non- controlling			Total
	Shares		Amount		Capital		Deficit			(Deficit)			interest			Equity

Balances, December 31, 2024		5,889,520	$	-	$	112,141	$	(104,187	)	$	7,954		$	-		$	7,954
Stock-based compensation expense		-		-		317		-			317			-			317
Net loss		-		-		-		(3,864	)		(3,864	)		-			(3,864	)

Balances, March 31, 2025		5,889,520	$	-	$	112,458	$	(108,051	)	$	4,407		$	-		$	4,407

Balances, December 31, 2025		9,286,609		1		123,866		(125,357	)		(1,490	)		(60	)		(1,550	)
Issuance of common stock under At-The-Market program, net of issuance costs		57,547		-		302		-			302			-			302
Issuance of common stock to consultants for services		340,422		-		514		-			514			-			514
Issuance of warrants in private placement, net of issuance costs		-		-		567		-			567			-			567
Issuance of pre-funded warrants in private placement, net of issuance costs		-		-		68		-			68			-			68
Issuance of common stock upon exercise of warrants, net of issuance costs		1,982,356		-		4,192		-			4,191			-			4,191
Conversion of debt to common stock		1,819,072				2,240		-			2,240			-			2,240
Stock-based compensation expense		-		-		151		-			151			-			151
Net loss		-		-		-		(7,682	)		(7,682	)		(69	)		(7,751	)

Balances, March 31, 2026		13,486,006	$	1	$	131,900	$	(133,039	)	$	(1,138	)	$	(129	)	$	(1,267	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

VIVOS THERAPEUTICS INC.

Unaudited Condensed Consolidated Statements of Cash Flows

(In Thousands)

	2026			2025
	Three Months Ended March 31,
	2026			2025

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(7,751	)	$	(3,864	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		151			317
Depreciation and amortization		454			177
Fair value of common stock issued to consultants for services		514			-
Paid-in-kind interest expense on promissory note		140			-
Changes in operating assets and liabilities:
Accounts receivable,		(188	)		(288	)
Operating lease liabilities, net		18			(33	)
Prepaid expenses and other current assets		(166	)		236
Deposits		(26	)		1
Accounts payable		318			109
Accrued expenses		125			(450	)
Other liabilities		385			398
Contract liability		16			(399	)

Net cash used in operating activities		(6,010	)		(3,796	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of property and equipment		(18	)		(122	)

Net cash used in investing activities		(18	)		(122	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		342			-
Proceeds from issuance of debt		1,400			-
Proceeds from issuance of warrants		567			-
Proceeds from issuance of pre-funded warrants		68			-
Proceeds from exercise of warrants		4,639			-
Payments for issuance costs		(487	)		-
Reduction of debt liability		(406	)		-
Reduction of finance lease liability		(14	)		-

Net cash provided by financing activities		6,109			-

Net increase (decrease) in cash and cash equivalents		81			(3,918	)
Cash and cash equivalents at beginning of year		2,029			6,260

Cash and cash equivalents at end of year	$	2,110		$	2,342

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	340		$	-

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Conversion of promissory note	$	1,540		$	-
Conversion of debt to common stock	$	700		$	-

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

VIVOS THERAPEUTICS INC.

Notes to Unaudited Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2026 and 2025

NOTE 1 - ORGANIZATION, DESCRIPTION AND SIGNIFICANT ACCOUNTING POLICIES

Organization

BioModeling Solutions, Inc. (“BioModeling”) was organized on March 20, 2007 as an Oregon limited liability company, and subsequently incorporated in 2013. On August 16, 2016, BioModeling entered into a share exchange agreement (the “SEA”) with First Vivos, Inc. (“First Vivos”), and Vivos Therapeutics, Inc. (“Vivos”), a Wyoming corporation established on July 7, 2016 to facilitate the SEA transaction. Vivos was formerly named Corrective BioTechnologies, Inc. until its name changed on September 6, 2016 to Vivos Biotechnologies and on March 2, 2018 to Vivos Therapeutics, Inc. and had no substantial pre-combination business activities. First Vivos was incorporated in Texas on November 10, 2015. Pursuant to the SEA, all of the outstanding shares of common stock and warrants of BioModeling and all of the shares of common stock of First Vivos were exchanged for newly issued shares of common stock and warrants of Vivos, the legal acquirer.

The transaction was accounted for as a reverse acquisition and recapitalization, with BioModeling as the acquirer for financial reporting and accounting purposes. Upon the consummation of the merger, the historical financial statements of BioModeling became the Company’s historical financial statements and recorded at their historical carrying amounts.

On August 12, 2020, Vivos reincorporated from Wyoming to become a domestic Delaware corporation under Delaware General Corporate Law. Accordingly, as used herein, the term “the Company,” “we,” “us.” “our” and similar terminology refer to Vivos Therapeutics, Inc., a Delaware corporation and its consolidated subsidiaries. As used herein, the term “Common Stock” refers to the common stock, $0.0001 par value per share, of Vivos Therapeutics, Inc., a Delaware corporation.

On June 10, 2025, we acquired all of the operating assets (the “Acquisition”) of R.D. Prabhu-Lata K. Shete MDs, LTD., a Nevada professional corporation d/b/a The Sleep Center of Nevada (“SCN”) in consideration for a (i) cash payment equal to $6.0 million, (ii) 607,287 shares of restricted Common Stock, equal to $1.3 million based on the volume-weighted average price (“VWAP”) of the Common Stock for the 30 days immediately preceding the Acquisition and (iii) the assumption of certain specific trade accounts payable and liabilities related to specific SCN contracts assigned to the Company in connection with the Acquisition. See Note 3 for further information.

On July 14, 2025, we entered into a management agreement with MISleep Solution LLC to provide full suite of Vivos treatments and services to OSA patients at a joint location in Auburn Hills, Michigan. As a result, we formed AIM Detroit, LLC, a Colorado limited liability company (“AIM Detroit”) to serve as a management services organization to medical and dental clinical sleep practices located in the Detroit Tri-County metropolitan area, to wit: Wayne County, Oakland County and Macomb County. The Company holds an 80% ownership interest in AIM Detroit. See Note 18 for further information.

Description of Business

We are a medical technology and services company that features a comprehensive suite of proprietary oral appliances and therapeutic treatments. We 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 (“OSA”) and snoring in adults.

Our flagship C.A.R.E. program, which is part of The Vivos Method, features our patented DNA, mRNA and mmRNA appliances, which are also 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 data has actually shown that The Vivos Method can reverse OSA symptoms in a large portion (up to 80%) of 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 12 to 15 months, and it is possible not to need lifetime intervention, unlike CPAP and neuro-stimulation implants. Additionally, out of approximately 60,000 patients treated to date worldwide with our entire current suite of products, there have been very few instances of relapse.

Although not our current focus due to the pivot in the business model, we have historically offered a suite of diagnostic and support products and services to dental and 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 a provider in educating and supporting the doctors as they navigate insurance coverage, diagnostic indications and treatment options), (iii) Billing Intelligence Services (which optimizes medical and dental reimbursement), (iv) advanced training and continuing education courses at our Vivos Institute in Denver, Colorado, and (v) MyoSync (formerly MyoCorrect), a service through which Vivos-trained providers can provide orofacial myofunctional therapy (“OMT”) to patients via a telemedicine platform. Some of these services including home sleep screenings, treatment navigator services and MyoSync are being provided to patients directly under the new sales, marketing and distribution model described below. With this pivot, we shifted our Medical Integration Division (“MID”) to pursue strategic alliances and acquisitions of sleep centers to provide better options using Vivos products for patients who have been diagnosed with OSA.

Legacy Business Model

Our business model has historically been to teach, train, and support dentists, medical doctors, and distributors in the use of our products and services. Dentists who use our products and services typically enroll 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. Dentists are able to select the specific program or clinical pathway that they want to focus on, such as Guided Growth and Development or Lifeline or both. They could also enroll in our Vivos Integrated Provider (“VIP”) program for the complete set training, educational, and support services available in all three clinical pathway programs. Dentists enrolled in the VIP program are referred to as “VIPs.” We historically charged up front enrollment fees to educate and train new VIPs. We also charged for the ancillary support services listed above and view each product and service as a revenue center. We refer to the VIP-focused business model herein as our “legacy” or “historic” business model.

New Sales, Marketing and Distribution Model

Over the course of 2024 and during 2025, we worked to pivot our business strategy and began to steadily decrease our prior dependence on dentists to sell our products and our dependence on VIP enrollment revenue. This new business strategy is focused on contractual alliances with and outright acquisitions of sleep specialty providers, sleep centers and others and is based on a profit-sharing model between us and the provider which aligns our revenue generation more directly to sales of our novel appliances.

In June 2024, we entered into our first contractual alliance with Rebis Health, a sleep center operator in Colorado. Revenues from this arrangement have not developed as we had expected for many reasons beyond our control, but we learned important lessons which have led to changes to this model.

In June 2025, we acquired all assets, including operating assets such as sleep testing, diagnostics, and treatment centers of SCN. The Acquisition marked a milestone in the pivot to our sales, marketing distribution model for our innovative OSA appliances. Under the new model, SCN will provide sleep disorder patients with the opportunity to be candidates for our advanced, proprietary and FDA-cleared CARE oral medical devices, oral appliances and additional adjunctive therapies and methods. 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, representing new higher margin revenue streams for us, as well as potential Vivos appliance and related product and service revenue from SCN.

On July 14, 2025, we entered into a management agreement under this revised approach with MISleep Solution LLC to provide full suite of Vivos treatments and services to OSA patients at a joint location in Auburn Hills, Michigan. Consistent with our new model, we own a supermajority equity stake in the management services company, with the sleep doctors having minority ownership interests. AIM Detroit entered into Practice Administration Agreements and Management and Succession Agreements with affiliated Practices (defined as the professional medical and dental practice entities, including Sleep Dentistry of Detroit, P.C. and Sleep Medicine of Detroit, P.C., each owned and controlled by their respective licensed professionals) under which AIM Detroit provides business, administrative, and other non-clinical management services, while all clinical and professional services remain exclusively under the authority and control of the Practices and their licensed professionals.

We are 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.

Basis of Presentation and Consolidation

The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with current United States generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly the Company’s financial position, results of operations, and cash flows. The condensed consolidated balance sheet at December 31, 2025 has been derived from audited financial statements at that date. The interim results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to instructions, rules, and regulations prescribed by the United States Securities and Exchange Commission (“SEC”).

The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited condensed consolidated financial statements are read in conjunction with the December 31, 2025 audited consolidated financial statements contained in the Company’s 2025 Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on April 15, 2026.

We evaluate our interests in legal entities to determine whether such entities should be consolidated under the voting interest entity model or the variable interest entity (“VIE”) model. When we determine that it is the primary beneficiary of a VIE, we consolidate the entity and includes its assets, liabilities, revenues, and expenses in the consolidated financial statements. Ownership interests not held by Vivos are reflected as noncontrolling interests within equity. All significant intercompany balances and transactions have been eliminated in consolidation. See Note 18 for additional information regarding Vivos’ involvement with AIM Detroit.

Purchase Price Allocation

We account for business combinations in accordance with ASC Topic 805, Business Combinations, which requires the assets acquired and liabilities assumed in business combinations based on their estimated fair values at the date of acquisition, which involves a number of assumptions, estimates, and judgments, which are inherently uncertain and subject to refinement. We determine the estimated fair values with the assistance of valuations performed by third party specialists, discounted cash flow analysis, and estimates made by management derived from comparable market data and cash flow projections used to value the acquired business. Our ability to realize the future cash flows used in our fair value estimates may be affected by changes in our financial condition, financial performance, or business strategies. Our assumptions and estimates are also used to allocate goodwill to our reporting units that are expected to benefit from the business combination. During the measurement period, which may be up to one year from the acquisition date, we may recognize adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. We continue to collect information and reevaluate these estimates and assumptions quarterly and record any adjustment to our preliminary estimates to goodwill provided that we are within the measurement period. Upon the earlier of the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, any subsequent adjustments are included in our consolidated results of operations. Refer to Note 3.

Emerging Growth Company Status

Effective December 31, 2025, the Company is no longer an “emerging growth company” (an “EGC”), as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As a result, the Company has lost some of the benefits of being an EGC, although the Company remains a “smaller reporting company” and therefore can avoid the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) (assuming the Company remains a smaller reporting company at December 31, 2026.

Revenue Recognition

Following the guidance of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) and the applicable provisions of ASC Topic 842, Leases (“ASC 842”), we determine revenue recognition through the following five-step model, which entails:

	1)	identification of the promised goods or services in the contract;
	2)	determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract;
	3)	measurement of the transaction price, including the constraint on variable consideration;
	4)	allocation of the transaction price to the performance obligations; and
	5)	recognition of revenue when, or as the Company satisfies each performance obligation.

Service Revenue

VIP Enrollment Revenue

As part of our legacy business model based on VIP enrollment revenue and related appliance sales, we reviewed our VIP enrollment contracts from a revenue recognition perspective using the 5-step method outlined above. While we have pivoted our marketing and distribution model over the last year, we still recognize legacy VIP enrollment revenue and will continue to do so through 2026. Unearned revenue reported on the balance sheet as contract liability represents the portion of fees paid by VIP customers for services that have not yet been performed as of the reporting date and are recorded as the service is rendered. We recognize this revenue as performance obligations are met.

Sleep Testing Service Revenue

The SCN Acquisition provides our Company with diagnostic service revenue. Of the patients who test positive for OSA, we expect these patients to become candidates for OSA treatment.

Treatment Center Revenue

As we shift to our new strategic acquisition and alliance business model, we derive a greater portion of our revenues from treatment of patients who are referred by sleep and airway medicine centers in select markets with established patient bases who are diagnosed with OSA or other sleep related breathing disorders. As our treatment is customized for each patient based on his or her individualized diagnosis and presenting conditions, we recognize the revenue for treatment in service revenue, regardless of the components. Although we will continue to sell our products and services to trained and qualified VIP dentists, we eventually expect the revenue from our new strategic alliance and acquisitions business model to constitute the vast majority of service revenue for us.

Other Service Revenue

BIS is an additional service provided on a monthly subscription basis, which includes our AireO2 medical billing and practice management software. Revenue for these services is recognized monthly during the month the services are rendered.

We also offer our VIPs the ability to provide MyoSync to the VIP’s patients as part of treatment with The Vivos Method. The program includes packages of treatment sessions that are sold to the VIPs and resold to their patients. Revenue for MyoSync services is recognized over the 12-month performance period as therapy sessions occur.

Allocation of Revenue to Performance Obligations

We identify all goods and services that are delivered separately under a sales arrangement and allocate revenue to each performance obligation based on relative fair values. These fair values approximate the prices for the relevant performance obligation that would be charged if those services were sold separately and are recognized over the relevant service period of each performance obligation. After allocation to the performance obligations, any remainder is allocated to the right to sell under the residual method and is recognized over the estimated customer life. In general, revenues are separated between durable medical equipment (product revenue) and education and training services (service revenue). In our new business model where we sell a treatment plan directly to the patient, revenue for the treatment plan (which may include both Vivos treatment services and appliances) is recorded to treatment center revenue.

Treatment of Discounts and Promotions

Under our legacy VIP model, from time to time, we offered various discounts to VIPs relating to their participation in the VIP program. These include the following:

	1)	Discount for cash paid in full
	2)	Conference or trade show incentives, such as subscription enrollment into the SleepImage^® home sleep test program, or a free trial period for the SleepImage^® lease program
	3)	Negotiated concessions on annual enrollment fee
	4)	Credits/rebates to be used towards future product orders such as lab rebates

The amount of the discount is determined up front prior to the sale. Accordingly, measurement is determined before the sale occurs and revenue is recognized based on the terms agreed upon between us and the customer over the performance period. In rare circumstances, a discount has been given after the sale during a conference which is offering a discount to full price. In this situation, revenue is measured and the change in transaction price is allocated over the remaining performance obligation.

Product Revenue

In addition to revenue from services, we also generate revenue from sales of our line of oral devices and preformed pediatric tooth positioners (known as appliances or systems) to our customers, the VIP dentists or OSA patients directly in the case of our strategic alliance model. These include the DNA appliance^®, mRNA appliance^®, the mmRNA appliance, the Versa, the Vida, the Vida Sleep, EMA Now, PEx and others. We expanded our product offerings in the first quarter of 2023 via the acquisition of certain U.S. and international patents, product rights, and other miscellaneous intellectual property from Advanced Facialdontics, LLC, a New York limited liability company (“AFD”). Our appliances are similar to a retainer that is worn in the mouth after braces are removed. Each appliance is unique and is fitted to the patient.

VIP Model

Under our legacy VIP model, revenue from appliance sales is recognized when the control of a product is transferred to the VIP in an amount that reflects the consideration it expects to be entitled to in exchange for those products. The VIP in turn charges the VIP’s patient and or patient’s insurance a fee for the appliance and for his or her professional services in measuring, fitting, and installing the appliance and educating the patient as to its use. We contract with VIPs for the sale of the appliance, and we are not involved in the sale of the products and services from the VIP to the VIP’s patient. In the case of sales to sleep centers through our distribution alliances, revenue from appliance sales is recognized when the control of a product is transferred to the patient.

We utilize our network of certified VIPs throughout the United States and in some non-U.S. jurisdictions (notably Canada and Australia) to sell the appliances to their customers as well as in two dental centers that we operate. We utilize third party contract manufacturers or labs to produce our patient-customized, patented appliances and our preformed pediatric tooth positioners. The manufacturer designated by us produces the appliance in strict adherence to our patents, design files, treatments, processes and procedures and under the direction and specific instructions from us, ships the appliance to the healthcare provider who ordered the appliance from us. All of our contract manufacturers are required to follow our master design files in the production of appliances, or the lab will be in violation of the FDA’s rules and regulations. We have performed an analysis and concluded we are the principal in the transaction since we have control of the product, and we are reporting revenue gross. Under our legacy model, we billed the VIP the contracted price for the appliance which is recorded as product revenue. Product revenue is recognized once the appliance ships to the VIP under our direction.

Historically, in support of the VIPs using our appliances for their patients, we utilize a team of trained technicians to measure, order and fit each appliance. Revenue is recognized differently for Company owned centers and distribution alliances with third party sleep centers than it does for revenue from VIPs. Upon scheduling the patient (which is our customer in this case), the center takes a deposit and reviews the patient’s insurance coverage. We recognize revenue in the centers after the appliance is received from the manufacturer and once the appliance is fitted and provided to the patient.

We also historically offered certain dentists (known as Clinical Advisors) discounts to standard VIP pricing. This was done to help encourage Clinical Advisors, who help the VIPs with technical aspects of our products, to purchase our products for their own practices. In addition, from time to time, we offered credits to incentivize VIPs to adopt our products and increase case volume within their practices. These incentives are recorded as a liability at issuance and are deducted from the related product sale at the time the credit is used.

New Sales, Marketing and Distribution Model

Under our new sales, marketing and distribution strategy, we train and provide other administrative and non-clinical management support services to licensed healthcare providers trained in a variety of treatment modalities, including The Vivos Method, to treat OSA patients directly using their own independent judgment, which allows us to introduce and offer our oral appliances and therapeutic treatments to the patient rather than to the VIP dentist.

Under our new business model, diagnosis at sleep centers, such as SCN, also allows us to facilitate Vivos product sales when patients are diagnosed with OSA or other sleep disorders, and both the patients and their doctors decide on the form of treatment for that particular patient. This corresponds to the delivery of the product and services which are selected by the patients and the recognition of revenue from such diagnostic and treatment. In contractual alliances, through varying arrangements, we capture revenue from diagnostic and appliance sales as we execute our contractual management support services to the licensed providers rendering such services to patients.

Use of Estimates

The preparation of financial statements and related disclosures in conformity with GAAP requires us to make judgments, assumptions, and estimates that affect the amounts reported in its consolidated financial statements and accompanying notes. We base our estimates and assumptions on existing facts, historical experience, and various other factors that we believe are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. Our significant accounting estimates include, but are not necessarily limited to, assessing collectability on accounts receivable, determining customer life and breakage related to recognizing revenue for VIP contracts, impairment of goodwill and long-lived assets; valuation assumptions for assets acquired in asset acquisitions and business combinations; valuation assumptions for stock options, warrants, warrant liabilities and equity instruments issued for goods or services; deferred income taxes and the related valuation allowances; and the evaluation and measurement of contingencies. We believe we have made appropriate accounting estimates based on the facts and circumstances available as of the reporting date. To the extent there are material differences between our estimates and the actual results, our future consolidated results of operations will be affected.

Accounts Receivable, Net

Accounts receivable represent amounts due from customers in the ordinary course of business and are recorded at the invoiced amount and do not bear interest. Accounts receivable are stated at the net amount expected to be collected, using an expected credit loss methodology to determine the allowance for expected credit losses. We evaluate the collectability of its accounts receivable and determine the appropriate allowance for expected credit losses based on a combination of factors, including the aging of the receivables, historical collection trends, and charge-offs. When we are aware of a customer’s inability to meet its financial obligation, we may individually evaluate the related receivable to determine the allowance for expected credit losses. We use specific criteria to determine uncollectible receivables to be charged off, including bankruptcy filings, the referral of customer accounts to outside parties for collection, and the length that accounts remain past due.

Equity Offering Costs

Commissions, legal fees and other costs that are directly associated with equity offerings are capitalized as deferred offering costs, pending a determination of the success of the offering. Deferred offering costs related to successful offerings are charged to additional paid-in capital in the period it is determined that the offering was successful. Deferred offering costs related to unsuccessful equity offerings are recorded as an expense in the period when it is determined that an offering is unsuccessful.

Loss and Gain Contingencies

We are subject to the possibility of various loss contingencies arising in the ordinary course of business. An estimated loss contingency is accrued when it is probable that an asset has been impaired, or a liability has been incurred, and the amount of loss can be reasonably estimated. If some amount within a range of loss appears to be a better estimate than any other amount within the range, we accrue that amount. Alternatively, when no amount within a range of loss appears to be a better estimate than any other amount, we accrue the lowest amount in the range. If we determine that a loss is reasonably possible and the range of the loss is estimable, then we disclose the range of the possible loss. If we cannot estimate the range of loss, we will disclose the reason why it cannot estimate the range of loss. We regularly evaluate current information available to us to determine whether an accrual is required, an accrual should be adjusted and if a range of possible loss should be disclosed. Legal fees related to contingencies are charged to general and administrative expense as incurred. Contingencies that may result in gains are not recognized until realization is assured, which typically requires collection in cash.

Share-Based Compensation

We measure the cost of employee and director services received in exchange for all equity awards granted, including stock options, based on the fair market value of the award as of the grant date. We compute the fair value of stock options using the Black-Scholes-Merton (“BSM”) option pricing model. We estimate the expected term using the simplified method which is the average of the vesting term and the contractual term of the respective options. We determine the expected price volatility based on the trading history of our Common Stock. Industry peers consist of several public companies in the bio-tech industry similar to us in size, stage of life cycle and financial leverage. We intends to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of our own stock price becomes available, or unless circumstances change such that the identified companies are no longer similar to us, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation. We recognize the cost of the equity awards over the period that services are provided to earn the award, usually the vesting period. For awards granted which contain a graded vesting schedule, and the only condition for vesting is a service condition, compensation cost is recognized as an expense on a straight-line basis over the requisite service period as if the award were, in substance, a single award. We recognize the impact of forfeitures and cancellations in the period that the forfeiture or cancellation occurs, rather than estimating the number of awards that are not expected to vest in accounting for stock-based compensation.

Leases

Operating leases are included in operating lease right-of-use (“ROU”) assets, accrued expenses, and operating lease liability - current and non-current portion in our balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, we use our incremental borrowing rate based on the information available at the lease commencement date as the rate implicit in the lease is not readily determinable. The determination of our incremental borrowing rate requires management judgment based on information available at lease commencement. The operating lease ROU assets also include adjustments for prepayments, accrued lease payments and exclude lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. Operating lease cost is recognized on a straight-line basis over the expected lease term. Lease agreements entered into after the adoption of ASC 842 that include lease and non-lease components are accounted for as a single lease component. Lease agreements with a noncancelable term of less than 12 months are not recorded on our balance sheets.

Income Taxes

We account for income taxes in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes, under which deferred income taxes are recognized based on the estimated future tax effects of differences between the financial statement and tax bases of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, we consider tax regulations of the jurisdictions in which we operate, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results, or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. A valuation allowance is recorded when it is more likely than not that a deferred tax asset will not be realized. The recorded valuation allowance is based on significant estimates and judgments and if the facts and circumstances change, the valuation allowance could materially change. In accounting for uncertainty in income taxes, we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. We recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.

Basic and Diluted Net Loss Per Share

Basic net loss per common share is computed by dividing the net loss applicable to common stockholders by the weighted average number of common shares outstanding for each period presented. Diluted net loss per common share is computed by giving effect to all potential shares of Common Stock, including stock options, convertible debt, and warrants, to the extent the same are dilutive.

Warrant Accounting

We account for our warrants and financial instruments as either equity or liabilities based upon the characteristics and provisions of each instrument, in accordance with ASC 815, Derivatives and Hedging and ASC 480, Distinguishing Liabilities from Equity. Warrants classified as equity are recorded at fair value as of the date of issuance on our consolidated balance sheets and no further adjustments to their valuation are made. Warrants classified as liabilities and other financial instruments that require separate accounting as liabilities are recorded on our consolidated balance sheets at their fair value on the date of issuance and will be revalued on each subsequent balance sheet date until such instruments are exercised or expire, with any changes in the fair value between reporting periods recorded as other income or expense. Management estimates the fair value of these liabilities using the Black-Scholes model and assumptions that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions, expected volatility, expected life, yield, and risk-free interest rate.

Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by a company’s chief operating decision maker (“CODM”), or a decision-making group, in deciding how to allocate resources and in assessing financial performance. As of March 31, 2026, the Company’s CODM was the Company’s Chief Executive Officer, and we concluded that we have one reportable segment. Refer to Note 17, “Segment Information”, for additional disclosures regarding segment information.

Accounting Pronouncements

Presented below is a discussion of new accounting standards including deadlines for adoption.

Recent Accounting Pronouncements Yet to be Adopted

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”). The standard’s purpose is “to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development).” Public companies will be required to disclose in the notes to financial statements specified information about certain costs and expenses at each interim and annual reporting period. Specifically, they will be required to:

Disclose the amounts of (a) purchases of inventory; (b) employee compensation; (c) depreciation; (d) intangible asset amortization; and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption.

	2.	Include certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements.

	3.	Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively.

	4.	Disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

The amendments in the ASU are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the effect of this new guidance on our consolidated financial statements and disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which updates the accounting for internal-use software by removing project stage references and introduces a new capitalization threshold based on management authorization and project completion probability. The guidance requires evaluation of significant development uncertainty, including novel functionality and unresolved performance requirements. ASU 2025-06 also requires website-specific development costs to be evaluated under the same framework as other internal-use software and clarifies that capitalized internal-use software costs are subject to the property, plant and equipment disclosure requirements under ASC 360-10. The amendments in the ASU are effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Early adoption permitted. The Company is currently evaluating the impact of ASU 2025-06 on our financial statement disclosures.

We have reviewed and considered all other recent accounting pronouncements that have not yet been adopted and believe there are none that could potentially have a material impact on our business practices, financial condition, results of operations, or disclosures.

NOTE 2 - LIQUIDITY AND ABILITY TO CONTINUE AS A GOING CONCERN

The financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. We have incurred losses since inception, including $7.7 and $3.9 million for the three months ended March 31, 2026 and 2025, respectively, resulting in an accumulated deficit of approximately $133 million as of March 31, 2026.

Net cash used in operating activities amounted to approximately $6.0 and $3.8 million for three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had total liabilities of approximately $26.3 million.

As of March 31, 2026, we had approximately $2.1 million in cash and cash equivalents, which will not be sufficient to fund operations and strategic objectives over the next twelve months from the date of the issuance of these financial statements. Without additional financing, these factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

We have implemented cost savings measures that lead to reduced impact to cash used in operations. However, sales did not grow in the financial year ended December 31, 2025 and the first three months of 2026 as anticipated as we continued to refine our product offerings and strategies. As such, notwithstanding that we have raised equity capital throughout the fiscal year ended December 31, 2025 and through the first quarter of 2026, we will be required to obtain additional financing to satisfy the cash needs for our business and bolster our stockholders’ equity for Nasdaq compliance purposes, as management continues to work towards increasing revenue to achieve cash flow positive operations in the foreseeable future.

The 2025 acquisition of SCN has increased patient volume and increased top line revenue and also lowered customer acquisition costs. However, revenues have not be sufficient to cover expenses fully, and until a state of increased revenues and cash flow positivity is reached, management will continue to review all options to obtain additional financing to fund operations. This financing is expected to come primarily from the issuance of equity securities in order to sustain operations until we can achieve positive cash flows and profitability, if ever. However, there can be no assurances that adequate additional funding will be available on favorable terms, or at all. If such funds are not available in the future, or that SCN will not result in the patient volume and financial results within the expected timeline and we may be required to delay, significantly modify or terminate some or all of our operations, all of which could have a material adverse effect on us and our stockholders.

We do not have any off-balance sheet arrangements, as defined by applicable regulations of the SEC, that are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

NOTE 3 – BUSINESS COMBINATION

On June 10, 2025, we acquired the net operating assets of SCN pursuant to an Asset Purchase Agreement (the “SCN Purchase Agreement”). We agreed to purchase the net operating assets and liabilities related to SCN’s sleep testing, diagnostics, and treatment centers (the “Acquisition”). With seven operating locations, SCN is a leader in delivering and promoting sleep wellness and health through its proprietary, non-invasive treatments for obstructive sleep apnea (“OSA”) and is the largest operator of medical sleep centers in the state of Nevada. The Acquisition represents our first major acquisition of a sleep testing center and associated medical sleep practice. We funded the consideration for the Acquisition at closing by issuing a senior, non-convertible, secured term note (the “Note”) to Streeterville Capital, LLC (the “Lender”) in the principal amount of $8.3 million. We also entered into a securities purchase agreement with V-CO Investors 2 LLC, a Wyoming limited liability company and an affiliate of a significant investor in our company (“V-CO 2”), for a private placement of our equity instruments in consideration for total gross proceeds of $3.65 million to support ourselves in connection with the Acquisition and for general working capital purposes.

Total consideration for SCN aggregated $8.7 million consisting of $6.0 million in cash consideration, 607,287 shares of unregistered Common Stock with a fair value of $1.3 million, and contingent “earn out” consideration with an estimated fair value of $1.4 million payable upon the achievement of a financial milestone as specified in the Purchase Agreement. The Company has elected, as an accounting policy, to determine the fair value of equity securities issued in business combinations using the average market price of the Common Stock on the Acquisition closing date. Management believes this method appropriately reflects the fair value of the consideration transferred and this policy election will be applied consistently to all future business combinations. The fair value of the earn-out was determined using a Monte Carlo simulation of potential outcomes. The earn-out is payable in the form of restricted Common Stock equal to $1.5 million based on the volume-weighted average price of the Common Stock for the 30 days immediately preceding the date on which such financial milestone is achieved, as determined in accordance with U.S. generally accepted accounting principles. If the financial milestone is not achieved, the contingent consideration will not be paid. The fair value estimates of the net tangible and identifiable intangible assets acquired and liabilities assumed were based on the valuation of their fair values on the Acquisition closing date. Goodwill recorded from this transaction is attributable to SCN’s technical expertise and strategic operations, which are highly complementary to the Company’s existing business. Identifiable intangible assets of $1.9 million consist primarily of $0.4 million of tradenames to be amortized over 4 years and $1.5 million of referral relationships to be amortized over 8 years. The goodwill created by the transaction is deductible for income tax purposes, subject to certain limitations. The accounting for business combinations requires estimates and judgments regarding expectations for future cash flows of the acquired business, and the allocations of those cash flows to identifiable tangible and intangible assets, in determining the assets acquired and liabilities assumed. The fair values assigned to tangible and intangible assets acquired and liabilities assumed are based on management’s best estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques.

The following table summarizes the estimated fair values of the consideration, the tangible and identifiable intangible assets acquired, and liabilities assumed (in thousands):

Total purchase consideration:
Cash consideration	$	6,000
Fair value of Common Stock consideration		1,304
Fair value of contingent equity consideration		1,350
Total fair value of consideration transferred	$	8,654

Identifiable assets acquired and liabilities assumed:
Cash	$	865
Accounts receivable		934
Prepaid expenses and other assets		51
Property and equipment		955
Operating and finance lease right-of-use assets		2,573
Intangible assets		1,900
Operating lease liabilities		(2,242	)
Liabilities assumed		(2,111	)
Total identifiable assets acquired and liabilities assumed	$	2,925
Goodwill		5,729
Net assets acquired and liabilities assumed	$	8,654

Transaction costs incurred of less than $0.1 million were related to the Acquisition.

The following table reflects our unaudited pro forma operating results for the three months March 31, 2026 and 2025, respectively, which give effect to the Acquisition of the SCN as if it had occurred effective January 1, 2025. The pro forma results are not necessarily indicative of the operating results that would have occurred had the Acquisition been effective as of the date indicated, nor are they intended to be indicative of results that may occur in the future. The pro forma information does not include the effects of any synergies related to the SCN Acquisition or transactions between the entities prior to the Acquisition. Pro forma earnings during the periods presented were adjusted to include the following adjustments:

	●	Amortization of definite-lived intangible assets recognized at fair value that exceed one year as if acquired January 1, 2025;

	●	Interest expense (including amortization of debt issuance costs) on the Note entered into with the Lender in connection with the Acquisition as if the Note was obtained on January 1, 2025. The interest rate assumed for purposes of preparing this pro forma financial information was 9.0% which is the stated fixed rate throughout the term of the Note; and

	●	Given our history of net losses and full valuation allowances, our management estimated an annual effective income tax rate of 0.0%. Accordingly, no income tax adjustments have been recorded resulting from any pro forma adjustments.

SCHEDULE OF PRO FORMA INFORMATION

	2026			2025
	Three Months Ended March 31,
	2026			2025
(unaudited)
Net Revenue	$	5,141		$	5,343
Net Loss	$	(7,751	)	$	(4,469	)

Revenue and net loss attributable to SCN was $2.0 million for the three months ended March 31, 2026.

SEC Form 10-Q filed by Vivos Therapeutics Inc.