Operating Expenses Decreased 32% Year Over Year and 19% Sequentially as Cost Cutting Measures Take Hold
New Strategic Relationships, Including U.S. Nationwide Distribution Agreement with Lincare, Expected to Add Potentially Significant New Revenue Opportunities
Management to Host Conference Call Today at 5:00 pm ET
LITTLETON, Colo., Nov. 14, 2023 (GLOBE NEWSWIRE) -- Vivos Therapeutics, Inc. (“Vivos” or the “Company’’) (NASDAQ: VVOS), a medical technology company focused on developing innovative treatments for patients suffering from dentofacial abnormalities and/or mild-to-moderate obstructive sleep apnea (OSA) and snoring in adults, today reported financial results and operating highlights for the third quarter and nine months ended September 30, 2023.
Third Quarter 2023 Financial and Operating Summary
●
Revenue was $3.3 million for the third quarter of 2023 and $10.6 million for the nine months ended September 30, 2023, compared to $4.2 million and $12.1 million for the three and nine months ended September 30, 2022, respectively, mainly due to lower product revenue and Vivos Integrated Provider (“VIP”) enrollments offset by increased revenue from home sleep testing services and seminars conducted at the Vivos Institute in Denver. Importantly, Vivos believes that governmental investigations of third parties with non-FDA approved products in the sleep apnea treatment space has adversely impacted new Vivos case starts and VIP enrollments during 2023.
●
Gross profit was $1.9 million for the third quarter of 2023 and $6.3 million for the nine months ended September 30, 2023, compared to $2.5 million and $7.6 million for the comparable periods in 2022, respectively, attributable primarily to the decrease in revenue;
●
Gross margin was 57% for the third quarter of 2023, compared to 59% during the prior year period. For the nine months ended September 30, 2023 gross margin was 60%, compared 63% for the same period in 2022;
●
Operating expenses for the third quarter of 2023 decreased by a significant amount ($2.5 million, or 32%) versus the third quarter of 2022, reflecting Vivos’ previously announced cost-cutting initiatives including personnel and related expenses. For the nine months ended September 30, 2023 operating expenses decreased by $7.3 million or 27%, compared to the same period in 2022;
●
Vivos’ cost-cutting initiatives also led to significant year-over-year reductions of net loss of $3.3 million, or a 61% reduction, and $8.4 million, or a 47% reduction, for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022. Vivos is aiming to utilize its cost reductions to set the stage for cash flow positive operations next year should revenue increase as planned;
●
Cash and cash equivalents were $1.0 million at September 30, 2023 , but subsequent to quarter end, in November 2023, Vivos completed a private placement for net proceeds of approximately $3.5 million, to augment its liquidity position;
●
As of September 30, 2023, patients treated with The Vivos Method totaled approximately 40,000, compared to over 31,000 as of the third quarter of 2022. Vivos has also trained more than 1,850 dentists in the use of The Vivos Method and Vivos’ related value-added services, compared to over 1,650 as of the third quarter 2022;
●
Subsequent to quarter end, in October 2023, Vivos announced two key strategic agreements with Ormco, a division of publicly-traded Envista Holdings Corporation, and On Demand Orthodontist (ODO), offering Vivos’ national network of providers access to Spark™ Clear Aligners. The agreements will expand Vivos’ current product line and are expected to create near term additional revenue opportunities;
●
Also in October, Vivos announced an exclusive distribution agreement with NOUM DMCC (“Noum”), a Dubai-based company focused on diagnostic testing and treatment product distribution for healthcare providers and hospital networks treating obstructive sleep apnea patients throughout the Middle East-North Africa (MENA) region. Subject to regulatory approvals, Vivos could see revenue from this collaboration in 2024;
●
Later in October, Vivos announced that its flagship daytime-nighttime appliance (DNA) will be tested in a clinical trial at Stanford Medicine. The protocol has been finalized and participant enrollment will begin in early 2024. Study participants with moderate to severe OSA will be randomly assigned to either treatment with Vivos’ DNA appliance or CPAP (continuous positive airway pressure) machine, the current industry standard for OSA treatment. Sleep studies will be performed prior to and following a course of treatment using in-lab polysomnography to assess changes in the patients’ apnea-hypopnea index (AHI);
●
On October 27, 2023, Vivos effected a 1-for-25 reverse stock split of its issued and outstanding common stock. The reverse stock split was approved at Vivos’ 2023 Annual Meeting of Stockholders on September 22, 2023; and
●
In November 2023, Vivos amended its national distribution agreement with Lincare, a leading supplier of in-home respiratory therapy products and services for approximately 1.8 million patients, giving Lincare a six-month exclusivity period to distribute certain designated Vivos devices. The agreement follows the successful conclusion of a distribution pilot with Lincare, and marks an important milestone in Vivos’ strategy to engage with leading durable medical equipment (DME) companies in the United States.
Kirk Huntsman, Vivos’ Chairman and Chief Executive Officer, stated, “During the third quarter and throughout the past year, we have expanded our strategic relationships in order to improve our distribution channels, patient referral sources and opportunities to increase our revenues. Simultaneously, we have worked to substantially reduce our cash burn, bolster our liquidity position and enhance our capital structure. We have made great progress on all these fronts, demonstrated in our quarterly results by achieving a 32% year-over-year reduction in operating expenses. With our progress to date, we continue to plan for becoming cash flow positive from operations by the end of 2024.”
Mr. Huntsman continued, “In addition to our improved cost structure and reduced operating expenses, we have established key, strategic relationships to expand our product line and open up new distribution channels and patient referral networks for us. These include our distribution agreements with Ormco, On Demand Orthodontist, and Noum in the Middle East/North Africa (MENA) region. More recently, we signed a national distribution agreement with Lincare, which unfortunately was delayed in its launch due to third-party related technical issues that were beyond our control but have now been resolved. This relationship with a major DME is a perfect example of the type of relationship with the potential to drive failed CPAP patients into Vivos treatment. Over time, we believe these relationships will generate a substantial number of patient referrals for our extensive network of Vivos-trained dentists, bring significant new growth and revenue opportunities to Vivos as well as augment and accelerate our existing VIP and DSO enrollment efforts.”
“Along with these favorable developments, we have also taken steps to improve our liquidity and capital structure. We recently closed a private placement for gross proceeds of $4 million, providing us additional financing to pursue our growth plans. In addition to this, in October, we effected a 1-for-25 reverse stock split. We believe these actions will help us to regain compliance with Nasdaq listing requirements, make the prevailing price of our common stock more attractive to a larger group of institutional investors, and provide us with the capital resources necessary to implement our long-term growth strategies and help bolster our stockholders’ equity.”
“In summary, while the current economic environment is challenging, Vivos has taken steps to meet those challenges. We have made considerable progress in decreasing costs from our business, increasing our liquidity, improving our capital structure, expanding our product line and creating new referral sources and revenue opportunities for our company. However, decreasing costs through personnel reductions can often lead to near-term revenue shortfalls, which is in part what we saw in the third quarter. Looking ahead, our mission remains the same – our goal is to rid the world of the debilitating condition of sleep apnea. We continue to believe that our expanding portfolio of proprietary products are the best market solution for treating sleep apnea and related breathing conditions for which we have several FDA approvals. We will continue to look at and execute on opportunities to expand our product offerings and business collaborations with the goal of driving increased revenues. We intend to make further progress with our strategic revenue initiatives during the rest of this year as well as in 2024. By doing so, we believe Vivos will resume its revenue growth and achieve cash flow positive operations and profitability in the foreseeable future,” Mr. Huntsman concluded.
Vivos encourages investors and other interested parties to join its conference call today at 5:00 p.m. Eastern time (details below), where management will discuss further details on topics including: (i) Vivos’ expanded product line and revenue potential, (ii) the potential significant impact of Vivos’ recent strategic collaborations on Vivos’ near-term revenue growth, (iii) an update on Vivos’ DME sales and marketing efforts; (iv) additional programs for dentists to enroll with Vivos, and (v) Vivos’ current cash position and actions taken to reduce expenses.
In addition, further information on Vivos’ financial results is included on the attached unaudited condensed consolidated balance sheets and statements of operations, and additional explanations of Vivos’ financial performance are provided in the Vivos’ Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2023, which will be filed with the Securities and Exchange Commission (“SEC”). The full 10-Q report will be available on the SEC Filings section of the Investor Relations section of Vivos’ website at https://vivos.com/investor-relations.
Conference Call
To access Vivos’ investor conference call, please dial (844) 826-3033, or for international callers, (412) 317-5185. A replay will be available shortly after the call and can be accessed by dialing (844) 512-2921, or for international callers, (412) 317-6671. The passcode for the live call and the replay is 10184114. The replay will be available until November 28, 2023.
A live webcast of the conference call can be accessed on Vivos’ website at https://vivos.com/investor-relations. An online archive of the webcast will be available on the Company’s website for 30 days following the call.
About Vivos Therapeutics, Inc.
Vivos Therapeutics, Inc. (NASDAQ: VVOS) is a medical technology company focused on developing and commercializing innovative diagnostic and treatment methods for patients suffering from breathing and sleep issues arising from certain dentofacial abnormalities such as mild-to-moderate obstructive sleep apnea (OSA) and snoring in adults. The Vivos Method represents the first clinically effective nonsurgical, noninvasive, nonpharmaceutical and cost-effective solution for treating mild to moderate OSA. It has proven effective (within the scope of the FDA cleared uses) in approximately 40,000 patients treated worldwide by more than 1,850 trained dentists.
The Vivos Method includes the Vivos Complete Airway Repositioning and/or Expansion (CARE) appliance therapy and associated protocols that alter the size, shape and position of the soft tissues that comprise a patient’s upper airway and/or palate. The Vivos Method opens airway space and may significantly reduce symptoms and conditions associated with mild-to-moderate OSA, such as lowering Apnea Hypopnea Index scores. Vivos also markets and distributes SleepImage diagnostic technology under its VivoScore program for home sleep testing in adults and children. The Vivos Integrated Practice (VIP) program offers dentists training and other value-added services in connection with using The Vivos Method.
This press release, the conference call referred to herein, and statements of the Company’s management made in connection therewith contain “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) concerning future events. Words such as “may”, “should”, “expects”, “projects,” “intends”, “plans”, “believes”, “anticipates”, “hopes”, “goal”, “estimates” and variations of such words and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks and are based upon several assumptions and estimates, which are inherently subject to significant uncertainties and contingencies, many of which are beyond Vivos’ control. Actual results (including, without limitation, the results of the Company’s revenue generation and cost cutting initiatives as described herein) may differ materially and adversely from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the risk factors described in Vivos’ filings with the Securities Exchange Commission (“SEC”). Vivos’ filings can be obtained free of charge on the SEC's website at www.sec.gov. Except to the extent required by law, Vivos expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Vivos' expectations with respect thereto or any change in events, conditions, or circumstances on which any statement is based.
Vivos Investor Relations and Media Contact: Julie Gannon Investor Relations Officer 720-442-8113 jgannon@vivoslife.com
-Tables Follow-
VIVOS THERAPEUTICS INC. Unaudited Condensed Consolidated Balance Sheets (In Thousands, Except Per Share Amounts)
September 30, 2023
December 31, 2022
Current assets
Cash and cash equivalents
$
988
$
3,519
Accounts receivable, net of allowance of $268 and $712, respectively
228
457
Prepaid expenses and other current assets
769
1,448
Total current assets
1,985
5,424
Long-term assets
Goodwill
2,843
2,843
Property and equipment, net
3,283
3,082
Operating lease right-of-use asset
1,466
1,695
Intangible assets, net
433
302
Deposits and other
307
374
Total assets
$
10,317
$
13,720
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable
$
1,528
$
1,411
Accrued expenses
1,922
1,912
Warrant liability
600
-
Current portion of contract liabilities
2,373
2,926
Current portion of operating lease liability
460
419
Other current liabilities
284
145
Total current liabilities
7,167
6,813
Long-term liabilities
Contract liabilities, net of current portion
240
112
Employee retention credit liability
1,220
-
Operating lease liability, net of current portion
1,644
1,994
Total liabilities
10,271
8,919
Commitments and contingencies
Stockholders’ equity
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 1,197,258 shares as of September 30, 2023 and 920,592 shares as December 31, 2022
3
2
Additional paid-in capital
88,835
84,267
Accumulated deficit
(88,792
)
(79,468
)
Total stockholders’ equity
46
4,801
Total liabilities and stockholders’ equity
$
10,317
$
13,720
VIVOS THERAPEUTICS INC. Unaudited Condensed Consolidated Statements of Operations (In Thousands, Except Per Share Amounts)
Three Months Ended September 30,
Nine Months Ended September 30,
2023
2022
2023
2022
Revenue
Product revenue
$
1,466
$
2,014
$
4,783
$
6,357
Service revenue
1,835
2,232
5,770
5,717
Total revenue
3,301
4,246
10,553
12,074
Cost of sales (exclusive of depreciation and amortization shown separately below)
1,403
1,750
4,220
4,439
Gross profit
1,898
2,496
6,333
7,635
57
%
59
%
60
%
63
%
Operating expenses
General and administrative
4,596
6,622
17,012
22,118
Sales and marketing
641
1,106
1,861
3,985
Depreciation and amortization
150
175
472
500
Total operating expenses
5,387
7,903
19,345
26,603
Operating loss
(3,489
)
(5,407
)
(13,012
)
(18,968
)
Non-operating income (expense)
Other expense
(53
)
(36
)
(198
)
(152
)
PPP loan forgiveness
-
-
-
1,265
Excess warrant fair value
-
-
(6,453
)
-
Change in fair value of warrant liability, net of issuance costs of $645
1,600
-
10,362
-
Loss on inventory write-down
(151
)
-
(151
)
Other income
-
9
128
99
Net loss
$
(2,093
)
$
(5,434
)
$
(9,324
)
$
(17,756
)
Net loss per share (basic and diluted)
$
(1.75
)
$
(6.40
)
$
(8.09
)
$
(20.90
)
Weighted average number of shares of Common Stock outstanding (basic and diluted)
