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Item 1. Business

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are a medical technology company focused on the development and commercialization of innovative treatment alternatives for patients

with sleep disordered breathing (SDB), including mild-to-moderate obstructive sleep apnea (OSA).

We believe our products and technology

represent a significant improvement in the treatment of mild-to-moderate OSA versus other treatments such as continuous positive

airway pressure (or CPAP) or palliative oral appliance therapies.

We call our alternative and advanced treatment the Vivos

Vivos System is an advanced therapeutic protocol, which combines the use of customized oral appliance specifications developed

by Vivos and prescribed by specially trained dentists in cooperation with their medical colleagues.

We believe the Vivos System

technology represents the first non-surgical, non-invasive and cost-effective treatment for people with mild-to-moderate OSA.

Combining technologies and protocols that alter the size, shape and position of the tissues of a patient’s upper airway,

the Vivos System opens airway space and can significantly reduce symptoms and conditions associated with mild-to-moderate OSA.

Published studies have shown that using our customized appliances and clinical protocols led to significantly lower Apnea Hypopnea

Index scores and improve other conditions associated with OSA.

Our patented oral appliances have proven effective (within the

scope of the U.S.

Food and Drug Administration (or FDA) cleared uses) in over 15,000 patients treated worldwide by more than 1,200

trained dentists.

Vivos System consists of combination of our patented oral appliance (the mRNA appliance ®

) with multi-disciplinary

and proprietary clinical treatment protocols that has 510(k) clearance from the FDA as a Class II medical device for the treatment

of snoring, mild-to-moderate OSA and SDB.

We also market a specially designed and patented FDA Class I customized oral appliance

( DNA appliance ®

) and a number of preformed pediatric oral appliances, which we call the Vivos

For the treatment of mild-to-moderate OSA, the Vivos System and other Vivos products are typically delivered to

patients by dentists specially trained to use the Vivos System to address certain craniofacial and morphological conditions commonly

associated with SDB and mild-to-moderate OSA.

Vivos DNA appliance

Vivos mRNA appliance

Apnea and the Role of Dentists in Treatment

House of Delegates of the American Dental Association in 2017 adopted a policy statement describing the important role dentists

can play in helping identify patients at greater risk of sleep related breathing disorders.

By focusing our business model around

dentists, we fulfill this role by training dentists and providing the support to use the Vivos System with their patients that

suffer from mild-to-moderate OSA.

Our program to train dentists and offer them other value-added services as described below is

called the Vivos Integrated Practice (VIP) program.

We are a revenue stage medical

technology company focused on the development and commercialization of a suite of innovative diagnostic and treatment modalities for

patients with dentofacial abnormalities and/or patients with mild to moderate obstructive sleep apnea (OSA) and snoring in adults.

believe our proprietary oral appliances and associated protocols represent a significant improvement in the treatment of mild to moderate

OSA versus other treatments such as continuous positive airway pressure (or CPAP) or palliative oral appliance therapies.

OSA treatment protocol The Vivos Method .

Vivos Method is an advanced therapeutic protocol, which often combines the use of customized oral appliance specifications and

proprietary clinical protocols developed by our company and prescribed by specially trained dentists in cooperation with their medical

The Vivos Method features our proprietary clinical protocols combined with the following oral appliances:

Repositioning Nighttime Appliance (or mRNA appliance ® ) has 510(k) clearance from the FDA as a Class II

medical device for the treatment of snoring and mild to moderate OSA in adults.

Mandibular Repositioning Nighttime Appliance (or mmRNA appliance), for which we were granted FDA Class II market clearance

in August 2021 for treating mild to moderate OSA, jaw reposition and snoring in adults.

Nighttime Appliance (or DNA appliance ® ) is an FDA-registered product and is currently used by Vivos-trained

clinicians accordingly.

We instruct all dentists prescribing the DNA appliance about the device’s approved indications of use

and of the fact that the DNA appliance is a Class I FDA registered oral appliance for expansion.

Guides are pre-formed, flexible, BPA-free, base polymer intraoral guide and rescue appliances.

The Guides are an FDA-registered

product for orthodontic tooth positioning.

believe The Vivos Method appliance technology and associated protocols represents the first non-surgical, non-invasive and

cost-effective treatment for people with dentofacial abnormalities and/or patients diagnosed with mild to moderate obstructive sleep

apnea (OSA) and snoring in adults.

Combining technologies and protocols that alter the size, shape and position of the tissues of a

patient’s upper airway, The Vivos Method opens oral and airway space and may significantly reduce symptoms and conditions

associated with mild to moderate OSA.

studies have shown that using our customized appliances and clinical protocols led to significantly lower Apnea Hypopnea Index scores

and improved other conditions associated with OSA, and The Vivos Method is estimated to be effective (within the scope of the U.S.

and Drug Administration (or FDA) cleared uses) in approximately 80% of cases of OSA where patients are compliant with clinical protocols.

Our patented oral appliances have been utilized in approximately 25,000 patients treated worldwide by more than 1,450 trained dentists.

House of Delegates of the American Dental Association in 2017 adopted a policy statement describing the important role dentists can play

in helping identify patients at greater risk of sleep related breathing disorders.

By focusing our business model around dentists, we

fulfil this role by training dentists and providing the support to use The Vivos Method with their patients that suffer from dentofacial

abnormalities and/or mild to moderate OSA and snoring.

Our program to train dentists and offer them other value-added services

is called the Vivos Integrated Practice (VIP) program.

The VIP program provides dentists with a strong economic incentive

to provide this treatment and prescribe the Vivos System, together with practice support services.

apnea is a serious and chronic disease that negatively impacts a patient’s sleep, health and quality of life.

to a 2019 article published in Chest Physician, it is estimated that OSA afflicts 54 million adults in the U.S.

and 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.

Vivos System is estimated to be effective in approximately 80% of cases of obstructive sleep apnea.

Approximately 1 billion people

globally suffer from OSA, and as many as 80% remain undiagnosed.

Research has shown that when left untreated, OSA increases the

risk of comorbidities, such as high blood pressure, heart failure, stroke, diabetes, dementia and other debilitating, life-threatening

sleep apnea can range from mild to severe, based on a measurement system called the apnea-hypopnea index (AHI).

The AHI is an

index of the number of partial or complete airway blockages lasting 10 seconds or longer that a patient experiences in an hour.

Studies have shown that the patented and proprietary technologies and protocols incorporated into the Vivos System technology

alter the size, shape and position of the tissues that comprise the human airway.

In 17 published, peer-reviewed studies (on which

our founder and Chief Medical Officer was an author) that examined the impact of our technologies and protocols on the AHI scores

of patients with varying degrees of OSA, patient AHI scores were reduced from a low of 38% to a high of 98.6%, with the mean AHI

reduction shown in such studies being 67.4%.

The results from published case reports and articles, together with patient-reported

outcomes, have shown that our Vivos System therapy provides a significant reduction in the severity of patients’

measured by industry standard indices such as the AHI among others), improvement in sleep-related quality of life, reduction in

snoring, as well as a high patient compliance rates and a strong safety profile.

treatment by a dentist of SBD and mild-to-moderate OSA with the Vivos System follows a required diagnosis of these conditions

(typically through the use of either a polysomnogram (or PSG) or home sleep apnea test (or HSAT) by a medical doctor which is

often provided by the sleep test provider.

, Powered by SleepImage

February 2021, we launched VivoScore TM Powered by SleepImage ®

, an FDA cleared diagnostic technology

for home sleep apnea testing featuring what we believe to be significant commercial advantages over existing HSAT products and

technologies in the market.

We believe VivoScore may enable healthcare providers to more efficiently screen, diagnose and initiate

treatment for OSA in their patients which could result in more patients being treated with our Vivos System.

While we anticipate

increased revenue from VivoScore due to an expected increase in total patients tested and a corresponding increase in patient

enrollment in Vivos System treatment, in arriving at this conclusion, we are relying on the results of a pilot test we conducted

and other feedback from VIPs, which may or may not prove reliable on a broader scale.

is a comprehensive home sleep apnea test that utilizes proprietary cardiopulmonary coupling technology developed by MyCardio LLC

d/b/a SleepImage (“SleepImage”).

VivoScore consists of a single-sensor ring recorder worn on the finger that works

with a mobile phone application which facilitates a seamless data capture and upload and proprietary cloud-based algorithms to

evaluate sleep quality and clinically diagnose sleep apnea.

VivoScore test results have been shown to be comparable with overnight

in-lab PSG tests.

VivoScore creates comprehensive proprietary sleep quality measures, such as the Sleep Quality Index (or SQI),

that go beyond a mere clinical diagnosis for sleep apnea to more effectively manage treatment benefit and improve patient outcomes.

With no consumables required, per test costs are significantly reduced, which is expected to allow for broad distribution and

multi-night sleep evaluations using VivoScore that are often required by insurance carriers.

SleepImage System, which is the underlining technology for VivoScore, is FDA cleared for the purpose of evaluating sleep quality

and to diagnose and manage sleep disordered breathing in both children and adults and may eliminate access and cost hurdles that

may exist with other competing HSAT technology.

Current estimates show that 80% of sleep apnea sufferers remain undiagnosed and

untreated, creating a pressing need for an easy-to-use, clinical grade, low-cost HSAT for patients of all ages.

are bringing VivoScore to market under a Licensing, Distribution, and Marketing agreement with SleepImage.

This agreement is exclusive

to our company with respect to white labeling of the VivoScore brand to the sleep dentistry market in the United States and Canada.

Our agreement with SleepImage has an initial term of two (2) years and is subject to automatic one (1) year extensions, subject

to the right of the parties to terminate the agreement prior to an extension.

Either party also has the right to terminate the

agreement (subject to applicable notice and cure periods) for customary matters such as breach of the Agreement or bankruptcy

SleepImage also has the right to terminate the agreement under certain other circumstances, including a change of

control of our company.

to provide this treatment and prescribe The Vivos Method, together with practice support services.

apnea 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, and 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

In February 2021, we launched

our screening and home sleep test (“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.

We believe our SleepImage HST offers significant

commercial advantages over existing home sleep apnea products and technologies in the market and may enable healthcare providers to more

efficiently screen, diagnose and initiate treatment for OSA in their patients, which could result in more patients being treated through

The Vivos Method.

Initially, we anticipated increased revenue from our HST based on an expected increase in total patients tested for

OSA and a corresponding increase in patient enrolment in Vivos Method treatment.

Throughout 2021, we successfully conducted 15 training

sessions conducted by our personnel on the VivoScore Program and screening and home sleep testing using the SleepImage ®

HST, which were attended by approximately 800 dentists and their staff.

January 2022, we announced significant increases across several key metrics for our SleepImage HST, including in particular, for the

three-months ended December 31, 2021, versus the three-months ended December 31, 2020:

(i) an 18 times increase in the total number of

HSTs given across our VIP network, (ii) a 5.7 times increase in the number of VIPs administering HSTs via the VivoScore Program

and (iii) a 3 times increase in the average number of HSTs being administered per VIP.

We believe this performance gain in home sleep

testing allowed us to renegotiate our commercial agreement with MyCardio LLC to lower costs and convert the entire diagnostic

program from a loss leader aimed primarily at stimulating new case starts with sleep apnea treatment using The Vivos Method to a potential

recurring revenue center.

Under the revised agreement, we will lease out the SleepImage ring recorders to VIPs at a fixed price

that includes a full month’s worth of diagnostic sleep test reports.

This potential new revenue center is as yet unproven, but

we believe we will see positive results during 2022.

mission is to rid the world of OSA .

We believe we are well-positioned with what we consider to be a disruptive technology

in our Vivos System aimed at treating mild-to-moderate OSA, with a clear first-mover strategy in penetrating the dental market

as a means of treating OSA, compelling economics at each level of the delivery chain, and a talented team of experienced professionals

who are passionate about what we do and driven to deliver results.

We believe we are well-positioned with what we consider to be a disruptive technology in The

Vivos Method aimed at treating dentofacial abnormalities and/or mild to moderate OSA and snoring, with a clear first-mover

strategy in penetrating the dental market as a means of treating dental conditions and OSA, compelling economics at each level

of the delivery chain, and a talented team of experienced professionals who are passionate about what we do and driven to deliver results.

Market Opportunity

from publicly available information vary as to the extent of obstructive sleep apnea in the United States, but we believe the

market is significant.

According to a 2010 publicly available analysis from researchers at the Harvard Medical School Division

of Sleep Medicine, mild obstructive sleep apnea is defined by an AHI between 5 and 15 and has a prevalence of 8-11% of the adult

population in the United States.

According to an August 2019 article published in the Lancet, a n

estimated 936 million adults globally aged 30-69 years (men and women) have mild to severe obstructive sleep apnea, which includes 425

million adults aged 30-69 years who have moderate to severe obstructive sleep apnea.

The number of affected individuals with OSA was highest

in China, followed by the U.S., Brazil, and India.

The article indicated that 1 billion people (inclusive of children) are affected with

OSA, with prevalence exceeding 50% in some countries.

We therefore believe that effective diagnostic and treatment strategies are needed

to minimize the negative health impacts of OSA and to maximize cost-effectiveness.

from publicly available information vary as to the extent of obstructive sleep apnea in the United States, but we believe the market

is significant.

According to a 2010 publicly available analysis from researchers at the Harvard Medical School Division of Sleep Medicine,

mild obstructive sleep apnea is defined by an apnea-hypopnea index (or AHI) of between 5 and 15 and has a prevalence of 8-11% of the

adult population in the United States.

A 2004 study published in the Journal of the American Medical Association stated the prevalence

of mild obstructive sleep apnea is one in five adults.

Based on our analysis of the available public information, we estimate

that approximately 15% of the adult population in the United States and Canada suffers from mild-to-moderate OSA.

estimated total adult population of 284 million in the United States and Canada, we believe the total addressable United States

and Canadian market is approximately 43 million adults.

Our estimates set forth below relating to the intended uses of the Vivos

System are also based in part upon data found in the study Oral Appliance Treatment for Obstructive Sleep Apnea:

published publicly by the National Institutes of Health in 2014.

Targeted treatment projections identified by this method

of sleep titration were found to result in effective treatment in 87% of patients predicted to be successfully treated of OSA

in an initial study.

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 System, leaving us

with a total addressable consumer market of over 43.2 million adults.

currently charge clinicians an average sales price of approximately $1,600 per adult case for the Vivos System.

Based on our analysis of the available public information, we estimate that approximately

15% of the adult population in the United States and Canada suffers from OSA.

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 is approximately 43

million adults.

Our estimates set forth below relating to the intended uses of The Vivos Method are also based in part upon data found

in the study Oral Appliance Treatment for Obstructive Sleep Apnea:

An Update, published publicly by the National Institutes of

Health in 2014.

Targeted treatment projections identified by this method of sleep titration were found to result in effective treatment

in 87% of patients predicted to be successfully treated of OSA in an initial study.

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 over 43.2 million adults.

currently charge clinicians an average sales price of approximately $1,600 per adult case for The Vivos Method.

There are approximately

160,000 qualified general dentists in the United States and Canada who could potentially offer the Vivos System to their patients.

Based on the addressable US and Canadian consumer market described above and average sales price, we believe the addressable consumer

market for adults in the United States and Canada is approximately $69 billion.

addition, another published study, titled “

Global Prevalence of Obstructive Sleep Apnea (OSA) ,”

an international panel of leading researchers in 2007, reported that nearly 1 billion people worldwide have sleep apnea.

we believe there is a substantial market opportunity for us outside the United States and Canada.

Treatment Alternative for OSA –

the Vivos System

Vivos System is a non-invasive, non-surgical, non-pharmaceutical, multi-disciplinary treatment modality for the treatment of mild

to moderate OSA.

The proprietary and virtually painless Vivos System enhances and increases the upper airway and offers patients

what we believe to be an effective treatment alternative based on clinical retrospective data showing

that some patients diagnosed with mild-to-moderate OSA, snoring and SDB symptoms are improving .

Based on VIP and patient feedback we have received, we believe initial therapeutic benefits from using the device are often achieved

relatively quickly (in days or weeks) and final clinical results are typically achieved in 12 to 24 months), all at a relatively

low cost to consumers ranging between $7,000 and $10,000 for adults and $3,500 to $6,000 for children (costs vary by provider)

when compared to other options such as surgery.

believe that the Vivos System alters the size, shape and position of the tissues that surround and comprise the functional space

known as the upper airway.

This belief is based on retrospective raw data with validated before and after sleep studies and Cone

Beam Computerized Tomography (CBCT) scans from treating clinicians and patient testimony.

As the Vivos System treatment process

progresses, the airway expands, with many patients reporting a significant reduction of their mild-to-moderate OSA symptoms.

primary product used in the Vivos System is the mRNA appliance ®

, a specifically designed, custom oral appliance

that is worn primarily in the evening hours and overnight and is available for adults.

The total treatment time can range from

12 to 24 months with 18 months being the approximate mean treatment time.

Our appliances 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.

who undergo treatment in the Vivos System will typically receive a customized mRNA appliance fitted to both the upper and lower arches.

Alternatively, the VIP may prescribe an upper arch DNA appliance with the possibility of adding a lower arch DNA appliance later-on in

Each case is priced accordingly, and patient fees are set by the treating dentist.

It is not common for a given patient to

be prescribed both an mRNA appliance and a DNA appliance.

Irrespective of the Vivos device prescribed, each patient is given specific

protocols and instructions for wear and maintenance, including the expected duration of daily wear (typically 14-16 hours per day including

In addition to the oral appliance treatment, the patient may be referred for treatment by an orofacial myofunctional

therapist, a chiropractor, an ear, nose and throat physician (“ENT”), and/or other healthcare providers for adjunctive therapy,

as necessary.

Each of these providers contributes to the overall treatment outcomes within the scope of their individual licensures.

The Vivos System is a multi-specialty system that is collaborative with several related healthcare specialties such as those just listed.

the course of treatment with the Vivos System, patients have reported a variety of outcomes, including:

200,000 general dentists and dental specialists in the United States and another 30,000 in Canada who could potentially offer the Vivos

Method to their patients.

Based on the addressable U.S.

and Canadian consumer market described above and average sales price, we believe

the addressable consumer market for adults in the United States and Canada is approximately $69 billion.

According to a March 2021 Sleep

Apnea Devices Market Size & Share Report, “Sleep Apnea Devices Market Size, Share & Trends Analysis Report By Product

Type (Diagnostic Devices, Therapeutic Devices, Sleep Apnea Masks), By Region (North America, Europe, APAC, Latin America, MEA), And Segment

Forecasts, 2021 – 2028” , the global sleep apnea devices market size was valued at $3.7 billion in 2020 and is

expected to expand at a compound annual growth rate (CAGR) of 6.2% from 2021 to 2028.

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.

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

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 to

moderate OSA and snoring.

Proprietary and virtually painless, The Vivos Method may enhance and increase the upper airway and offers patients

what we believe to be an effective treatment alternative based on clinical retrospective data showing that some patients diagnosed with

mild to moderate OSA and snoring symptoms.

are improving.

Based on feedback from independent VIP and their patient we have received, we

believe initial therapeutic benefits from using the protocols and devices are often achieved relatively quickly (in days or weeks) and

final clinical results are typically achieved in 12 to 24 months), all at a relatively low cost to consumers ranging between $7,000 and

$10,000 for adults and $3,500 to $6,000 for children (costs vary by provider) when compared to other options such as surgery.

We believe that The Vivos Method

alters the size, shape and position of the tissues that surround and comprise the functional space known as the upper airway.

is based on retrospective raw data with validated before and after sleep studies and Cone Beam Computerized Tomography (CBCT) scans from

treating clinicians and patient testimony.

As The Vivos Method treatment process progresses, the airway expands, with many patients reporting

a significant reduction of their mild to moderate OSA and snoring symptoms.

Our primary products used in The Vivos Method is our

mRNA appliance ® , and our mmRNA appliance ® which are specifically designed, custom oral appliance that

are worn primarily in the evening hours and overnight and are available for adults.

The treatment time may range from 12 to 24 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.

Through the course of treatment with The Vivos Method, patients have reported a variety

of outcomes, including:

in AHI level and/or other indicators of mild to moderate OSA;

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and maintenance of proper facial symmetry and alignment;

and orthodontic correction,

of TMJ pain, clicking, and locking, and

aesthetic improvement, including a broader smile and reduced ‘gummy smile’

Vivos System has been specifically designed to promote the proper growth and development of the hard and soft tissues surrounding

and comprising the oral cavity, nasal cavity, upper and lower jaws, and other tissues which together form and shape the airway.

As these areas develop more fully using the Vivos System, a patient’s airway typically widens and expands (a process we

call Pneumopedics ®

), enabling them to breathe properly through their nose.

With a more open and less-obstructed

airway and easier nocturnal breathing, the symptoms of SDB often diminish over time and patients often report no longer suffering

from the adverse impacts of SDB or mild-to-moderate OSA.

Use of the Vivos System is variable and case dependent but is typically

recommended to be worn daily for 12 to 16 hours starting in the early evening and continuing overnight.

During use, patients can

typically talk (with minor difficulty), drink and swallow, but the device must be removed to eat.

An example of the impact of

Vivos System treatment on an upper airway is shown in the figures below depicting scans of the airway before and after treatment.

Male | 14 Months

14 Months Treatment.

Before minimum airway area:

31.4mm 2 –

After minimum airway area:

Before total airway volume:

13.22c –

After total airway volume 26.5cc.

(Imaging performed with no oral appliance in the

the cause of OSA is abnormal anatomical features of soft tissues and/or structures of the maxillomandibular skeleton that cause

a disproportionate anatomy of the airway.

Correcting the maxillo-mandibular skeletal and oral soft tissue structures can reduce

obstruction of the upper airway, as shown above.

Vivos System works to treat OSA as follows:

studies (including in the Austin Journal of Sleep Disorders by our Founder and Chief

Medical Officer, Dr.

Dave Singh, published October 16, 2014) have shown that the patented

and proprietary technologies and protocols incorporated into the Vivos System alter the

size, shape and position of the tissues that comprise the human airway, leading to lower

AHI scores in patients with mild-to-moderate OSA.

multi-disciplinary clinical approach often involves sleep specialist physicians, dentists,

myofunctional therapists, chiropractors, and other healthcare providers.

Each of these

providers contributes to the overall treatment outcomes within the scope of their individual

Our recently launched Medical Integration Division (MID) assists VIP practices

establish clinical collaboration ties to local primary care physicians, sleep specialists,

ENTs, pediatricians, pulmonologists and other healthcare professionals who routinely

see or treat patients with sleep and breathing disorders.

● Retrospective

evaluations of patients post treatment, as reported observationally by Vivos-trained

clinicians, have not shown (where patient compliance with prescribed protocols has occurred)

significant amounts of regression, resorption ( a common

type of dental injury or irritation that causes a loss of a part or parts of a tooth)

or relapse in the majority of cases (although we have only very limited case report

data to support this view).

and orthodontic improvement and/or correction;

of TMJ pain, clicking, and locking;

aesthetic improvement, including a broader smile and reduced ‘gummy smile’.

Growth Strategy

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 sleep disordered breathing, including mild-to-moderate OSA.

We believe the following strategies

will play a critical role in achieve this goal and our future growth:

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 moderate OSA and snoring in adults.

We believe the following

strategies will play a critical role in achieve this goal and our future growth:

our North American (U.S.

and Canada) sales and marketing organization to drive adoption of our Vivos System.

to rapidly and efficiently grow our sales and marketing organization in order to target and expand our network of Vivos Integrated

medical and dental community awareness of Vivos System.

and Canada) sales and marketing organization to drive adoption of The Vivos Method.

to continue the growth our sales and marketing organization and related strategic programs in order to target and expand our network

of Vivos Integrated Practices.

medical and dental community awareness of The Vivos Method.

We intend to continue to promote awareness of the value proposition

of the Vivos System through training and educating dentists, physicians, and other healthcare providers.

To accomplish this,

we conduct regular online, national, regional and local training and educational programs for both the dental and medical

We intend to continue to publish additional clinical data in various industry and scientific journals and online

and to present at various industry conferences.

of The Vivos Method through training and educating dentists, physicians, and other healthcare providers, including at our Vivos Institute

in Denver, Colorado.

to establish indirect marketing channels .

We have entered and plan to expand strategic alliances within the medical

and dental communities to increase awareness of our products.

patient awareness of the Vivos System.

We also plan to continue building patient awareness through our direct-to-patient

marketing initiatives which we anticipate will include celebrity endorsements, paid search, radio, television, social media,

We have entered, and plan to expand, strategic alliances within the medical and

dental communities to increase awareness of our products.

For example, in August 2021, we announced a new cooperative relationship

with Empower Sleep, a San Bernardino, California-based company empowering patients with affordable, accessible and personalized telemedicine

sleep care, to provide critical diagnostic and medical consultation services to people across North America who suffer from OSA.

We plan to leverage Empower Sleep’s core technologies to provide a user-friendly platform with personalized insights for our

products for patients who are being screened for OSA by North American dentists and other healthcare providers.

consumer awareness of The Vivos Method.

We also plan to continue building consumer awareness through our direct-to-patient

marketing initiatives which we anticipate will include celebrity endorsements, paid search, radio, television, social media, influencers,

company sponsored events, corporate wellness programs, and online video.

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and we intend to invest in our business to further improve our products and validate our value proposition.

We intend to invest

in existing and next generation technologies to further improve our products and clinical outcomes, optimize patient acceptance

and broaden the patient population that benefits from the Vivos therapy.

We are in the early stage of initiating a prospective

randomized clinical trial evaluating our mRNA appliance ®

evaluating the efficacy of the mRNA appliance ®

to treat mild-to-moderate OSA, SDB and snoring.

The proposed study is described further below:

Stanford University, Department of Sleep Medicine

To evaluate efficacy of the mRNA appliance ®

to treat mild-to-moderate OSA, SDB and snoring

Prospective randomized clinical trial.

Approximately 30 months

Randomization

Case-control sample of 140 subjects, randomized on a 1:1 basis for continuous positive airway pressure (CPAP)

or biomimetic device

Age over 21 years old to age 63;

good compliance;

good oral hygiene/dental health;

sufficiently dentate in both

Upper airway volume, Minimum cross-sectional area

investigator:

Clete Kushida MD PhD

enrollment time:

proposed commencement of May 1, 2021

date of completion:

this study has received IRB approval from the Stanford University.

strategically adjacent markets and international opportunities.

We have trained dentists from many different countries

all over the world.

Obstructive sleep apnea is a disease that is prevalent worldwide, and we believe there is a significant

opportunity for our products outside the United States.

We have begun an initial assessment of the development and commercialization

of the Vivos System for markets outside of North America, and we plan to conduct further strategic evaluation of such markets

as we expand our market penetration throughout the United States and Canada.

We also intend to explore strategic collaboration

opportunities in Europe and the rest of the world in order to maximize the commercial potential and the availability of the

Vivos System to patients.

We believe there is a significant opportunity for our products

outside the United States.

We have begun an initial assessment of the development and commercialization of The Vivos Method for markets

outside of North America, and we plan to conduct further strategic evaluation of such markets as we expand our market penetration

throughout the United States and Canada.

Revenue Model

revenue is derived from three primary sources, namely (1) VIP enrollment and training fees (comprised of one-time, up-front fees,

as well as optional renewal fees after 12 months);

(2) recurring Vivos System and Vivos Guides sales;

(3) recurring monthly subscription

fees from our Billing Intelligence Services (BIS);

and (4) MID one-time development and recurring management fees.

office training and enrollment fees.

We derive revenue from one-time enrollment and training fees charged to new VIPs,

which are dental practices specially trained by us in the use of the Vivos System.

We have three VIP program pricing options which

we refer to as Tier 1, Tier 2 and Tier 3.

Our Tier 1 fees are currently set at $50,000 for the main practice provider plus $10,000

for each associate doctor (although such fees for the main practice provider can be discounted to $40,000, while the associate

fees are not typically discounted and are the same across all tiers).

Tier 2 pricing reflects a one-time enrollment fee of $25,000

coupled with a 30% price premium on appliances, and Tier 3 pricing reflects a $12,500 one-time enrollment fee coupled with a 50%

price premium on appliances.

The one-time enrollment fee provides VIPs with extensive clinical and business integration training,

including training on matters such as billing and marketing.

For additional subscription fees described further below, VIPs can

sign up for our Billing Intelligence Services (BIS) under which the VIPs outsource their medical credentialing, pre-authorizations,

billing, and payer collections functions to us.

On average, our revenue from VIP enrollment fees currently is approximately $28,000

Vivos System and Guide sales.

Trained VIPs pay us an average adult case fee of approximately $1,600 per case, and $400

for a pediatric Guide case.

We maintain average gross margins in excess of 70% on both adult and pediatric cases.

offices typically charge adult patients fees ranging from $7,000 to $10,000, and $3,500 to $6,000 for pediatric cases.

that fully burdened costs to the VIP practice range from between $1,500 (pediatric Guides) and $3,000 (adult mRNA appliance ®

Intelligence Services (BIS).

This complete billing solution includes a comprehensive integrated revenue cycle management

software system that allows dentists to focus on running their practice and delivering the best care for their patients.

billing service generates recurring subscription fees from participating VIPs (Silver Package:

$795 setup fee and $795 per month,

Gold Package:

$1,800 setup fee and $895 per month, or Platinum Package:

$2,800 set up fee and $995 per month) This important adjunctive

service is priced competitively and allows VIP offices to outsource a key back-office function without adding one or more full

time employees.

Integration Division (MID).

In addition, in 2020, we launched our MID to assist VIP practices to establish clinical collaboration

ties to local primary care physicians, sleep specialists, ENTs, pediatricians, pulmonologists and other healthcare professionals

who routinely see or treat patients with sleep and breathing disorders.

The primary objective of our MID is to promote the Vivos

System to the medical profession and thus facilitate the potential for more SDB and OSA patients gaining access to the Vivos System,

which we believe can improve quality of life and can reduce overall health risks experienced these patients.

The MID seeks to

fulfill that objective by meeting with VIP dentists and physicians in their local areas to establish physician practices using

the trademarked name “Pneusomnia Craniofacial Sleep Medicine Center”

(Pneusomnia Center).

These independent medical

practices will be set up as LLCs or subchapter S corporations owned by a small group of independent physicians, co-located in

the dental practice of the VIP dentist, and managed by our company under a management and development agreement.

We believe our

early market response from MID activities has been promising, and in March 2021 we announced the opening of the first Pneusomnia

Center in Del Mar, California as well as plans to open additional Pneusomnia Centers in several other cities in the U.S.

it remains too early to predict the eventual impact on our overall revenue.

If successful, the MID is expected to enhance the

overall practice level economics for independent VIP offices and generate additional lines of recurring revenue for us.

Finally, we derive a relatively small amount of revenue from the management of two (2) clinics in Colorado (which

we call the Vivos Centers) where dentists and other healthcare professionals treat patients using the Vivos System.

As a company,

we are not in the business of treating patients per se , as this occurs only through dentists and other professionals, operating

within the scope of their respective licenses, who, among other services, prescribe and treat patients using the Vivos System

and/or Vivos Guides.

We thus have no direct control over patient intake or clinical care at our Vivos Centers.

Our role is limited

to training and educating dentists and their staff, and to fulfilling orders placed for the Vivos System and/or Vivos Guides.

operating Vivos Centers through licensed dentists and other healthcare professionals was the main aspect of our business model

prior to July 2018, the Vivos Centers are not currently our core business, but rather a means by which we derive hands-on assessments

and field intelligence from the use and practice of the Vivos System in actual clinical settings.

As such, we may dispose of one

or more of the Vivos Centers in the future, as was the case in October 2019 when we sold one Vivos Center located in Orem, Utah.

In our current business model, our core revenue drivers are enrollment and renewal fees from VIP clinical education and office

training, sales of the Vivos System and other appliances, and subscription fees from BIS services as described above.

believe the Vivos System offers the following patient advantages:

or possibly eliminate the need for surgery or lifetime CPAP or mandibular advancement

● Non-invasive,

non-surgical and non-pharmaceutical treatment of OSA

● Comfortable

and easy to wear and to comply with treatment protocols

known material side effects (minor spacing between teeth, bite changes, etc.

minor and easily addressed)

treatment is 12 to 24 months for most cases

(typically $7,000-$10,000 for an adult case and $3,500 to $6,000 for a child case)

covered by most major medical insurance plans up to 70% (average is about 50%)

effective (for its FDA cleared uses)

● Restoration

and maintenance of craniofacial symmetry

facial aesthetics (stronger jawline, reduce or eliminate “gummy”

term benefits (no waiting for months to see improvements)

patented 3D axial springs™

and screw mechanism for patient adjustment

the course of treatment with our Vivos System, patients have reported the following adverse effects that include, but are not

necessarily limited to:

salivation or drooling (especially during the first few days or weeks of use)

in dental occlusion (typically corrected at the end of treatment with clear aligners)

in interproximal spacing between teeth (typically corrected with clear aligners or veneers)

mouth or tooth soreness or pain that often results from the use of any intraoral device

or bite changes

Treatment Process

potential patients learn they may be a possible candidate for OSA therapy through physician referral, education and advertising

campaigns, and/or dentist examinations.

Some useful predictive information can be obtained from self-reported questionnaires given

to the patient in advance of a formal evaluation, and this procedure may simplify the clinical assessment of patients.

widely used of such questionnaires are the Berlin Questionnaire and the Multivariable Apnea Prediction Index.

a VIP dentist determines that a patient may have OSA, they will refer the patient to complete either a VivoScore or other home

sleep apnea test (which could be our VivoScore test) or a full polysomnography, which provides detailed information on sleep state,

respiratory behavior and gas exchange abnormalities, in addition to a range of other variables including body position, heart

rate and rhythm, and muscle tone and activity.

The sleep test will be reviewed, and a diagnosis of the test will be given by a

medical doctor;

usually by a doctor that specializes in sleep, a pulmonologist or a cardiologist.

a patient is diagnosed with sleep apnea from the reading of the home sleep apnea test or polysomnography test and is a candidate

for oral appliance therapy, additional data will be recorded including a CBCT imaging scan.

After obtaining a prescription from

a physician, the VIP dentist will design a treatment plan and present the case to the patient.

Upon treatment acceptance, the

financial arrangements will be organized including insurance pre-authorization and/or any deposits and payment plan agreements.

The VIP dentist will design the appliance(s) based upon treatment protocol and order the appliance through our cloud-based portal

that we call Vivos Aire.

of the Vivos System appliances usually takes between two to four weeks for delivery.

Upon receipt of appliance(s) by the VIP dentist,

the patient will visit the dentist for an appliance seating and delivery appointment.

Routine follow-up lasts for the 12 to 24

months of treatment.

determination of treatment completion, the patient will take a post-treatment home sleep apnea test, such as VivoScore, or a polysomnography

Post treatment CBCT imaging will be taken to compete the patient’s treatment and records profile.

industry is subject to significant competition and rapid change from the introduction of new products and technologies and other

activities of industry participants.

We compete as a first-line therapy in the OSA treatment market for patients with mild to

moderate OSA.

There are several treatment options for patients with OSA depending on the level of severity of the disease, ranging

from lifestyle changes to surgery.

The goals of therapy are to resolve signs and symptoms of OSA, improve sleep quality, normalize

and reduce the AHI, and generally increase SpO 2 (blood oxygen saturation) levels.

CPAP therapy is typically considered

the first-line standard of care of therapy for adults with OSA;

however, decreased patient adherence lessens the benefits of CPAP

Common reasons cited for lack of adherence is trouble getting used to wearing the CPAP device, difficulty tolerating

forced air, dry and stuffy nose, feeling claustrophobic, skin irritation, pressure sores, leaky mask, dry mouth, bothersome noise,

chronic bacterial and respiratory infections, and lack of intimacy.

According to published research, many patients with mild-to-moderate

OSA, who prefer not to use CPAP, use mandibular advancement devices (or MAD) oral appliances as an alternative therapy;

treatment with MADs comes with its own set of adverse side effects, including dry mouth, dental caries, TMJ pain and sounds, soft

tissue and tongue irritation, excessive salivating, occlusal changes, damage to teeth or restorations, and tooth mobility, among

other effects.

is a therapy often prescribed by medical doctors for patients with OSA.

CPAP is delivered through a face or nasal mask that connects

through a hose to a bedside air compressor.

The CPAP machine forces air into the nasal passages at pressures high enough to overcome

obstructions in the airway and facilitate normal breathing.

The effectiveness of CPAP has been limited by low patient compliance

due to claustrophobic sensations, discomfort with the constant air pressure, irritation from an ill-fitting mask, embarrassment

in front of a bed partner, machine noise, skin irritation, dry mouth, sinus infections, nausea, acid reflux, and depression about

having a sleep disorder.

CPAP therapy is a palliative solution to OSA.

It can relieve symptoms but does not address the underlying

When CPAP therapy is discontinued, patients typically revert back to having OSA.

palliative solution to OSA is a mandibular advance device.

MADs are oral appliances used to treat mild-to-moderate OSA.

used with the intent of moving the lower jaw and tongue base forward and/or preventing the tongue from moving back into the throat

or the oropharynx.

This specific action has the effect of opening the airway, thereby minimizing or preventing snoring and/or

airflow compromise leading to OSA.

Forward jaw posturing, maintained over several hours repeated daily, however, is not normal,

and can lead to a number of adverse side effects, including but not limited to, dental caries, dry mouth, tooth discomfort, temporomandibular

joint dysfunction (TMD or TMJD), craniofacial pain, muscular discomfort, malocclusion (bite changes), tooth movement, and more.

MADs and other products on the market that non-surgically address SDB and OSA are palliative therapies that temporarily treat

the symptoms only, which may worsen over time.

We believe these therapies are not designed or intended to address or resolve the

tissue obstruction(s) which, in the opinion of some researchers, constitutes the potential root cause(s) of the disorder in up

to 98% of patients with OSA.

CPAP and MADs require lifetime nightly use to be effective.

Conversely, a number of published studies

show that by addressing the potential root cause of OSA in many patients, we believe the Vivos System may offer patients the very

real hope of a more effective solution to their OSA that can be accomplished in about 12 to 24 months.

follow graphic depicts what we believe to be the competitive landscape for the Vivos System:

believe that the leading SDB and OSA treatment modalities fall into the following categories:

Positive Airway Pressure (CPAP):

This device is generally regarded as the first-line

standard of care treatment of OSA by the medical community.

However, according to published

research, an estimated 29 to 83 percent of patients are nonadherent to CPAP therapy,

with non-adherence defined as a mean of less than 4 hours of use per night.

reportedly have 85% of the market share of those who are diagnosed with OSA according

to Frost & Sullivan.

Advancement Devices (MADs):

These oral appliances open the airway by moving the

mandible (the lower jaw) forward and holding it there.

This jaw position tends to open

the airway and allows patients to breathe more freely during sleep.

According to a published

presentation, “Oral Appliances in Today’s Treatment of OSA and Snoring”,

there are over 100 different brands and several configurations of MADs available through

dentists, and an unknown number of over-the-counter devices (which purportedly treat

snoring only).

Weight loss, position therapy, myofunctional therapy, certain orthodontic treatments,

surgical implants such as Inspire, and maxillofacial surgery are other options to address

consider our primary competition, both within and outside of the United States, to be both CPAP and other oral appliance products

(all of which represent variations on the same mandibular advancement device platform) typically delivered by licensed dentists,

such as SomnoMed, DynaFlex, TAP, EMA, and Herbst (which are FDA cleared) as well as ALF, Homeoblock and FAGGA (which are not FDA

According to the American Sleep Apnea Association, over 100 different oral appliances are FDA cleared for the treatment

of snoring and OSA.

We believe other emerging businesses are in the early stages of developing mandibular advancement or other

oral appliance devices which incorporate novel technologies.

a lesser extent, we also compete with surgical therapies such as Uvulopalatopharyngoplasty (UPPP), maxillomandibular advancement

(MMA), robotic tongue reduction surgery, and Inspire Medical implants.

While we compete with CPAP in general as an alternative

treatment for mild-to-moderate OSA, we believe the Vivos System is a superior alternative given its relative safety, comfort,

ease of use and the potential to resolve underlying conditions.

In addition, the Vivos System is suitable for patients who cannot

tolerate CPAP or for whom CPAP has not been effective.

In certain cases, clinicians may temporarily treat patients using a combination

of the Vivos System and CPAP.

highlighted in the chart above, a patient who is diagnosed with OSA faces two primary treatment pathways—non-surgical and

The Vivos System, CPAP, and mandibular advancement oral appliances are examples of non-surgical treatment options.

Medical Systems implants, UPPP surgery, and Maxillomandibular Advancement surgery are examples of surgical treatment options.

Each treatment option offers patients potential benefits and risks at a different price point.

believe the Vivos System offers patients several important advantages.

Treatment in the Vivos System is typically limited to a

defined period of time (12-24 months), whereas both CPAP and oral appliance therapy require lifetime nightly use to be effective.

Treatment in the Vivos System also addresses the underlying anatomical cause of the OSA, whereas both CPAP and oral appliances

are palliative and effective only for temporary relief of symptoms while the devices are being used.

Neither treatment purports

to correct the underlying tissue and structural anomalies that give rise to the OSA condition in the first place.

Long-term compliance

in both alternative non-surgical protocols can be challenging.

Yet once treatment in the Vivos System is complete, no further

intervention is necessary, in most cases.

Medical Systems’

primary treatment for OSA involves surgical implant devices that seek to temporarily remove airway obstruction

by moving the tongue forward via an electrical stimulation.

These devices relieve OSA symptoms and lower AHI scores, but pose

the added cost and risks of surgery, and must be used nightly over the patient’s lifetime in order to be effective.

Vivos System avoids the cost and risk of surgery, and is less costly for both patients and insurance carriers than surgical options.

The Vivos System is thus far less dependent on insurance reimbursement for patients to be able to afford treatment.

believe that the primary competitive factors in the OSA treatment market are:

product and brand recognition;

efficacy, safety, reliability and differentiation;

party medical / dental insurance reimbursement availability;

practice development and clinical training teams;

time duration, product ease of use, patient compliance, and patient comfort;

costs to patients;

and volume of clinical data;

of patients, dentists, physicians and sleep centers;

force experience and access;

● technological

innovation, product enhancements and speed of innovation;

and revenue strategies.

of the other OSA treatments against which we compete have a greater penetration into the OSA treatment market.

Mandibular advancement

oral appliances and a variety of surgical treatments are better known to ENT physicians, sleep centers, dentists, and the other

physicians on whom we may rely for referrals, but we believe dentist and physician awareness of our Vivos System therapy is increasing.

revenue is currently derived from the following primary sources:

VIP office training and enrollment fees .

These fees are comprised of one-time, up-front fees, as well as optional renewal fees after 12 months.

Recurring Vivos appliance sales .

Once we train the VIP on how dentists can help treat OSA, the goal is to have them initiate “new case starts” with patients, which leads to sales of our appliances and guides.

Recurring VIP subscription fees.

These are recurring fees that a portion of our VIPs pay us to receive additional value-added services and training.

SleepImage HST revenue .

As described above, we recently

modified our agreement with MyCardio LLC relating to our SleepImage HST for sleep apnea, which creates the potential

for revenue from our leasing of SleepImage HST ring recorders to our VIPs as part of the VivoScore Program.

The Vivos Institute.

Opened in August 2021, our 15,000

square foot Vivos Institute provides advanced post-graduate education and certification to dentists, dental teams, and other healthcare

professionals in a live and hands-on setting in the emerging science of what we call Vivos Care (Complete Airway Repositioning

and Expansion) and product-specific training for the use of our products and services.

Revenue from such courses is

not material at the present time, but our expectation is that increased training awareness of OSA and the promotion of our products

and services will be enhanced by the Vivos Institute.

The Airway Intelligence Service (AIS).

This service provides a complete resource for VIPs to help simplify the diagnostic and appliance design matrix and expedite the treatment planning process.

AIS is provided as part of the price of each appliance and is not a separate revenue stream.

Billing Intelligence Services (BIS).

This complete third-party billing solution includes a comprehensive integrated revenue cycle management software system that allows dentists to focus on running their practice and delivering the best care for their patients.

This medical billing service generates recurring subscription fees from participating VIPs and independent dentists in the United States.

AireO 2 Patient Management Software.

This management software enables healthcare professionals to diagnose, treat and monitor patients with OSA and its related conditions more effectively.

Developed in collaboration with Lyon Dental, AireO 2 contains features that enhance a VIP’s billing services and practice management systems.

AireO 2 is a complement to our BIS software system.

In April 2021, we entered into an asset purchase agreement with Lyon Management and Consulting, LLC and its affiliates to acquire certain medical billing and practice management software, licenses and contracts, including the software underlying AireO2.

The asset acquisition allows us to expand and enhance our current medical billing practice through our BIS division.

The terms of the purchase include $0.2 million of cash and the issuance of a warrant to purchase 25,000 shares of our common stock at a price of $8.90 per share for three years.

The vesting of the warrant is as follows:

5,000 shares vested immediately upon issuance of the warrant, 10,000 shares vest and become exercisable on April 14, 2022 and 10,000 shares vest and become exercisable on April 14, 2023.

Medical Integration Division (MID).

In late 2020, we

launched our MID to assist VIP practices to establish clinical collaboration ties to local primary care physicians, sleep

specialists, ear, nose a throat doctors (ENTs), cardiologists, pediatricians, pulmonologists and other healthcare providers who

routinely see or treat patients with sleep and breathing disorders.

The primary objective of our MID is to promote The Vivos Method

to medical providers and thus facilitate the potential for more mild to moderate OSA patients gaining access to The Vivos Method

while offering continuum of care.

The MID seeks to fulfill that objective by meeting with VIP dentists and medical providers in

their local areas to establish physician practices using the trademarked name “Pneusomnia Sleep Reimagined Center” (which

we refer to as Pneusomnia Centers that are part of the Vivos MID).

These independent medical practices will be managed by our

company under a management and development agreement which pays us six (6%) percent of all net revenue from sleep-related services.

We also collect a development fee for each clinic prior to opening establishing all operational protocols.

We have built into our

core MID business model a great degree of flexibility, such that elements of each Pneusomnia Center as described above may change

and be adapted to local state laws and regulations, and entity formation laws as any such alterations do not violate any state or

federal statutes or regulations.

We believe our early market response from MID activities has been promising, and in March 2021 we

announced the opening of the first Pneusomnia Center in Del Mar, California, and in May 2021, the second in Modesto, California,

with plans to open additional Pneusomnia Centers in several other cities in the U.S.

However, it remains too early to predict the

eventual impact on our overall revenue.

If successful, the MID is expected to enhance the overall practice level economics for

independent VIP offices and generate additional lines of recurring revenue for us.

MyoCorrect (Orofacial Myofunctional Therapy) Program.

In March 2021, we introduced orofacial myofunctional therapy (or OMT) as a service that is part of The Vivos Method, under the name MyoCorrect.

Through MyoCorrect, dentists enrolled in the VIP program will have access to trained therapists who provide OMT via telemedicine technology.

This OMT therapy can be a component of obstructive sleep apnea treatment in conjunction with The Vivos Method which includes our Class II oral appliances and protocols.

OMT, which is given by a certified OMT therapist, involves exercises and other techniques aimed at strengthening the tongue and orofacial muscles by teaching individuals how to engage the muscles to the appropriate position.

Competitive Strengths

believe that the Vivos System has numerous advantages that, taken together, set us apart from the competition and position us

for success in the marketplace:

believe that The Vivos Method has numerous advantages that, taken together, set us apart from the competition and position us for success

in the marketplace:

barriers to entry:

We believe that third parties seeking to compete directly with us have significant barriers

to entry for the following reasons:

competitors must offer a treatment modality with similar features, capabilities, research

support, FDA regulatory clearances, and successful clinical outcomes in the market;

then establish a comprehensive educational

training program featuring other clinical professionals with actual experience and success using that particular treatment

modality to properly educate dentists on all clinical aspects of use with patients;

then develop and promulgate the systems

and best practices required to successfully integrate the treatment of mild-to-moderate OSA using this novel treatment

We believe that third parties seeking to compete directly with us have significant barriers to entry for

the following reasons:

competitors must offer a treatment modality with similar features, capabilities, research support, FDA regulatory

clearances, and successful clinical outcomes in the market;

then establish a comprehensive educational training program featuring

other clinical professionals with actual experience and success using that particular treatment modality to properly educate dentists

on all clinical aspects of use with patients;

then develop and promulgate the systems and best practices required to successfully

integrate the treatment of dentofacial abnormalities and/or mild to moderate OSA and snoring using this novel treatment

modality in a dental practice;

then establish and provide, by recruitment and otherwise, ongoing clinical mentoring and

support to dentists engaged in treating their patients for mild-to-moderate OSA and related conditions (clinical mentors

are limited and may be hard to find);

and finally, assisting the dentists with case selection, case acceptance, patient

financing, and medical insurance reimbursement.

believe we have strategically and effectively addressed each and every one of the aforementioned barriers to entry, and

thus have created a novel and compelling single-source value proposition for dentists seeking to deliver OSA treatment

to their patients.

System insurance reimbursement:

Most major commercial insurance payers reimburse for our adult treatment in the United

The average level of reimbursement is approximately 50% (with coverage ranging from 5% to 70%), although medical insurance

is never a guarantee of payment, and patient deductibles and policy restrictions will vary.

then establish and provide, by recruitment and otherwise, ongoing clinical mentoring and support to

independent dentists engaged in treating their patients for dentofacial abnormalities and/or mild to moderate OSA and

snoring and related conditions (clinical mentors are limited and may be hard to find);

and finally, assisting the dentists with

case selection, case acceptance, patient financing, and medical insurance reimbursement.

We believe we have strategically and effectively

addressed each and every one of the aforementioned barriers to entry, and thus have created a novel and compelling single-source

value proposition for dentists seeking to deliver OSA treatment to their patients.

Method insurance reimbursement:

Most major commercial insurance (and also Medicare for the mmRNA appliance, which we achieved

during 2021), reimburse for our adult treatment in the United States.

The average level of commercial payer reimbursement is approximately

50% (with coverage ranging from 5% to 70%), although medical insurance is never a guarantee of payment, and patient deductibles and

policy restrictions will vary.

Medicare reimbursement for the mmRNA appliance will vary by the Centers for Medicare and Medicaid

Services (CMS) jurisdiction in the U.S.

of published research and strong patient outcomes:

Together with our network of trained dentists, we have developed

a body of clinical and patient data over approximately ten years and an estimated delivery of approximately 15,000 appliances

that demonstrates the safety, effectiveness, therapy adherence (patient compliance), and benefits of the Vivos System for

its FDA cleared and registered uses.

The documented and reported benefits of treatment with the Vivos System have been consistent

across reports from dentists, and have been highlighted in approximately 55 published studies, case reports, and articles,

most of which have been peer reviewed.

We believe this favorable data provides us with a significant competitive advantage

and will continue to support increased adoption.

Together with our network of trained dentists, we have developed a body

of clinical and patient data over approximately ten years and an estimated 25,000 patients treated with our proprietary clinical

protocols that demonstrates the safety, effectiveness, therapy adherence (patient compliance), and benefits of The Vivos Method for

its registered and 510(k) cleared uses.

The documented and reported benefits of treatment with The Vivos Method have been

consistent across reports from independent dentists and have been highlighted in approximately 55 published studies, case

reports, and articles, many of which have been peer reviewed.

We believe this favorable data provides us with a significant

competitive advantage and will continue to support increased adoption.

mover advantage:

Our business model is the first to focus on dentists screening patients for mild-to-moderate OSA

and SDB, referring patients to physicians for diagnosis, with the dentists then serving as the primary source of treatment

using the Vivos System for such patients.

In addition, we provide VIPs not only with our novel treatment technology and protocols,

but also programs to support and incentivize broad case acceptance.

We are the first company to offer individuals diagnosed

with mild-to-moderate OSA access to the Vivos System via our VIP dentists across the United States and Canada, whereby patients

can receive much-needed treatment that offers many of them a potentially better option than CPAP and/or MADs.

We believe our

focus provides us with a significant first mover advantage and momentum over future competitors, as we have an estimated 1,200

dentists trained in the proper use of the Vivos System.

Our business model is the first to focus on dentists screening patients for mild to moderate OSA, referring

patients to physicians for diagnosis, with the dentists then serving as the primary source of treatment using The Vivos Method for

such patients.

Differentiated

The dental profession’s historical and current contribution to the treatment of OSA has almost exclusively

been via the fitting of MADs.

To our knowledge, only the Vivos System offers a truly differentiated, non-invasive treatment

option that actually works on a common root cause of the condition.

MAD-type oral appliances are typically less expensive,

but do not reshape the upper airway like the Vivos System, and therefore require nightly use over a lifetime, and have a number

To our knowledge, we believe only The Vivos Method offers a truly differentiated, non-invasive treatment

option that actually works on a common root cause of OSA.

We also believe that older oral appliances are typically less expensive,

but do not reshape the upper airway like our appliances, and therefore require nightly use over a lifetime, and have a number

of other disadvantages.

property portfolio and research and development capabilities:

We have a comprehensive patent portfolio to protect

our intellectual property and technology, with five design patents that expire between 2023 through 2029 and two utility patents

expiring in 2029 and 2030.

We also own two Canadian patents and one European patent that has been validated in Belgium, Switzerland,

Germany, Denmark, Spain, France, United Kingdom, Hungary, Italy and the Netherlands, all of which expire in 2029.

trademark portfolio consists of ten registered marks and five pending trademark applications.

Extensive online and in-person

training, multiple touch point support systems, specific fabrication materials, customized appliance designs, and multi-disciplinary

treatment protocols are all considered proprietary trade secrets and competitive advantages with no known counterparts.

property portfolio and research and development capabilities We have a comprehensive patent portfolio to protect our intellectual

property and technology, five design patents that expire between 2023 through 2029 and two utility patents expiring

in 2029 and 2030.

We own two Canadian patents and one European patent that has been validated in Belgium, Switzerland, Germany,

Denmark, Spain, France, United Kingdom, Hungary, Italy and the Netherlands, all of which expire in 2029.

We also have three pending

utility patents.

trademark portfolio consists of 10 registered marks and one pending trademark applications.

Extensive online and in-person training, multiple touch point support systems, specific fabrication materials, customized appliance

designs, and multi-disciplinary treatment protocols are all considered proprietary trade secrets and competitive advantages with

no known counterparts.

Training and Support Systems:

We believe our extensive online and in-person clinical and business systems training

program offered through our Institute for Craniofacial Sleep Medicine (ICSM) is unmatched anywhere in dentistry and is a clear

competitive strength that would be difficult to replicate.

Our integrated network of clinical advisors, market advisors, and

practice advisors is comprised of experienced and dedicated individuals with proven abilities to mentor, consult, and drive

new case starts within the specific environment of a dental practice.

The collective experience, training, and performance

of such a broad network of individuals would be difficult to replicate and represents a core competitive strength.

economics at all levels of the product and service delivery chain:

Integrated Practice Program (VIP).

We offer our VIP program with a tiered fee structure.

These up-front enrollment

fees provide each VIP dentist with a full 12 months of unlimited access to all clinical, systems, and staff training offered

through our Institute for Craniofacial Sleep Medicine, along with full access to a dedicated team of professionals who

are available to assist with whatever questions or concerns new or existing VIPs may have.

After the first year, dentists

may renew their access to the Institute for a reasonable monthly subscription fee.

addition to the Vivos training enrollment fees, all VIP practices are strongly advised to have Cone Beam Computerized

Tomography (CBCT) equipment that meets certain criteria available at their practices.

These machines have many uses in

dentistry such as with implants, orthodontics, and routine diagnostics, and are critical in the diagnosis and treatment

planning with the Vivos System.

return on such an investment is seen by the relatively high gross margins available to VIP providers.

See “Recurring

Vivos System and Guide Sales”

According to the largest dental industry supplier, Henry Schein, within the

typical general dental practice, there are well over 400 patients with OSA.

new VIP dentist typically achieves 2 to 4 new cases per month within 12 months after receiving training, with a mid-term

target of 4 to 6 cases per month and a long-term target of 10 cases per month.

At this average level of production and

profit margin, VIP providers can expect to see a full payback of their investment well within 18 months after they complete

their training.

Vivos System and Guides Sales.

Trained VIPs pay us an average adult case fee of approximately $1,600 per case, and $400 for

a pediatric Guide case.

We maintain average gross margins in excess of 70% on both adult and pediatric cases.

In turn, VIP offices

typically charge adult patients fees ranging from $7,000 to $10,000, and $3,500 to $6,000 for pediatric cases.

We estimate that

fully burdened costs to the VIP practice range from between $1,500 (pediatric Guides) and $3,000 (adult mRNA appliance ®

Thus, VIP providers also have compelling unit case economics with relatively high gross margins.

VIP Subscription Fees.

Ongoing renewal access to our Institute for Craniofacial Sleep Medicine (ICSM) and online training

courses after first 12 months as a VIP are estimated at $595 per month and are expected to start in the first quarter of 2021.

Due to our extensive use of online broadcasting and training delivery, we believe incremental training costs to scale and

accommodate additional VIP providers will not be significant.

Nevertheless, we do have costs associated with paying professional

lecturers, acquiring and recording fresh new content, and constant upgrades to our curricula and course offerings.

we do have a physical training facility currently under lease near Denver, Colorado with certain fixed and variable costs.

Institute for Craniofacial Sleep Medicine.

Our Institute for Craniofacial Sleep Medicine (ICSM) provides advanced post-graduate

education and certification in the emerging science of Pneumopedics®

and product-specific training for the use of Vivos products

and services.

Certain adjunctive courses, such as orofacial myofunctional training and certification are offered through the

ICSM at an additional cost and profit to our company.

Revenue from such courses is not material at the present time.

Airway Intelligence Service (AIS) provides a complete resource for VIPs to help simplify the diagnostic and appliance

design matrix and expedite the treatment planning process.

AIS is provided as part of the price of each appliance and is not

a separate revenue stream.

We believe that this value-added service included with every new case start is a major differentiator

between our higher cost products and other lower cost oral appliances (MADs) on the market.

Billing Intelligence Service (BIS).

This complete billing solution includes a comprehensive integrated revenue cycle management

software system that allows dentists to focus on running their practice and delivering the best care for their patients.

medical billing service generates recurring subscription fees from participating VIPs (Silver Package:

$795 setup fee and

$795 per month, Gold Package:

$1,800 setup fee and $895 per month, or Platinum Package:

$2,800 set up fee and $995 per month)

This important adjunctive service is priced competitively and allows VIP offices to outsource a key back-office function without

adding one or more full time employees.

Integration Division (MID).

Our recently launched MID is tasked with assisting VIP offices to create close ties and

collaborative relationships with local physicians and other healthcare providers.

Our first Pneusomnia Center is located

in Del Mar, California and is owned and operated by a diverse group of local physicians led by Dr.

Mimi Guarneri, cardiologist,

founder and president of The Academy of Integrative Health and Medicine and an award-winning physician and researcher.

The intent of our MID is to expose more medical healthcare providers to our technology and products, and ultimately to

drive additional case volume to the VIP offices.

The MID works closely with participating VIP offices and local physicians

or other interested healthcare providers to showcase the Vivos System.

MID is charged with fostering closer collaboration between our VIP dentists and local physicians in order to improve overall

patient care and extend the opportunities for greater numbers of patients to receive what we believe is a treatment that

can improve quality of life and can reduce overall health risks experienced by SBD and OSA patients.

The MID executes

that mandate by meeting with VIP dentists and physicians in their local areas to establish medical practices utilizing

the trademarked name “Pneusomnia”.

These independent medical practices will be set up as LLCs or subchapter

S corporations owned by a small group of independent physicians, co-located in the dental practice of the VIP dentist,

and managed by our company under a management and development agreement.

The physicians will capitalize the company physician

owned medical practice through an initial investment (which totals $100,000) and appoint a wholly-owned subsidiary of

our company as Manager under a long-term Management Services Agreement which pays us six (6%) percent of all net revenue

from sleep-related services.

The treating dentist will sub-lease a portion of the space in his or her dental practice

to the physician practice.

He or she will also contract through a professional services agreement with the physician practice

as a contract provider to treat patients at a fair market value rate to provide professional services.

The difference

between the fees paid by patients and the contract rate paid by the physician practice to the treating dentist will give

the physician practice a margin of profit that will allow the physician practice to pay expenses and potentially generate

a cash flow for the physician owners.

Owner doctors will receive profit distributions from their limited liability companies

or subchapter S corporations based solely on their ownership percentage and will not be compensated for patient referrals

We have built into our core MID business model a great degree of flexibility, such that elements of each Pneusomnia

Center as described above may change and be adapted to local state laws and regulations, and entity formation laws as

any such alterations do not violate any state or federal statutes or regulations.

As of the date of this Annual Report,

we have opened one Pneusomnia Center clinic in Del Mar, California and have plans to open additional clinics in several

We believe our extensive online and in-person clinical and business systems training program

offered through The Vivos Institute is unmatched anywhere in dentistry and is a clear competitive strength that would be difficult

to replicate.

approach to market development :

We have established a systematic and scalable approach to actively and consistently

engage with our primary target audience of U.S.

We have established a systematic and scalable approach to actively and consistently engage

with our primary target audience of U.S.

and Canadian dentists.

In addition, our recently launched MID is actively

targeting physicians and other relevant healthcare providers in order to build awareness and collaborative patient options

at our VIP practices.

Since the end of January 2020 our Continuing Education Department has offered over 200 education courses

through continuing education Zoom seminars, with total registration of more than 44,000 medical and dental professionals with

over 32,000 continuing education certificates distributed.

Our sales force is focused on building long-lasting relationships

with dentists as we support their practices through all aspects of the Vivos System treatment protocol.

We highlight our compelling

clinical data and value proposition to increase awareness and adoption by the medical community.

We are confident that our

approach to engagement across multiple channels will continue to drive increased awareness of and demand for our Vivos System.

Patient access to the Vivos System at a VIP practice is rapidly becoming readily available, and active

VIP providers can now be found in almost all major US cities and in many cities in Canada.

The Vivos System and other company

products are in the marketplace, with growing acceptance among dentists and other healthcare providers.

In addition, our MID is actively targeting physicians and other relevant

healthcare providers in order to build awareness and collaborative patient options for independent VIP practices.

Patient access to The Vivos Method at a VIP practice is becoming more readily available, and active VIP providers

can now be found in almost all major U.S.

cities and in many cities in Canada.

and Marketing

have established a methodical approach to market development which centers on active engagement directly with members of the medical

community, including general dentists and medical doctors who treat SDB and OSA, to educate them on the Vivos System and its benefits.

The goals of our sales and marketing efforts are (i) secure new VIP dentists provide them with the tools to treat patients with

our products and (ii) more broadly educate the medical community regarding our products with a view towards expanding our number

of VIPs as well as medical professionals who could refer SBD and OSA patients to our VIPs for treatment.

sell the VIP Program to dentists through a direct sales force that primarily targets general dentists in the United States and

Our VIP program was developed to train dentists to identify and treat conditions associated with SDB and mild-to-moderate

Our sales program to target medical doctors is our recently launched MID program, which was developed to assist VIP

practices to establish clinical collaboration ties to local primary care physicians, sleep specialists, ENTs, pediatricians, pulmonologists

and other healthcare professionals who routinely see or treat patients with sleep and breathing disorders.

sell our VIP program to dentists in the United States and Canada.

In countries outside of North America we typically offer a modified

training and support program at a lower cost.

We currently have approximately 10 direct sales representatives in the United States

Our direct sales force engages in sales efforts and promotional activities focused on referring physicians, as well

as directly to the over 147,000 professionally active general dentists in the United States and the 13,000 general dentists in

current VIP sales organization is comprised of:

Enrollment Specialist, who is the primary salesperson responsible for enrolling new VIPs;

Enrollment Support Staff members, who are responsible for organizing potential VIP appointments

for Enrollment Specialist;

Business Development Associates, who are responsible for cultivating new business leads

which are referred to the Enrollment Support Staff);

Outreach and Engagement Associate, who is responsible for engaging with potential VIPs

in our sales process with surveys and offers of online courses with the purpose of leads

community, including general dentists and medical doctors who treat dentofacial abnormalities and/or mild to moderate OSA and

snoring, to educate them on The Vivos Method and its benefits.

The goals of our sales and marketing efforts are (i) to secure new

VIP dentists and provide them with the tools to treat patients with our products and (ii) more broadly educate the medical community

regarding our products with a view towards expanding our number of VIPs as well as medical professionals who could refer patients to

our VIPs for treatment.

sell the VIP Program to dentists through a direct sales force that primarily targets general dentists in the United States and Canada.

Our sales effort is developed through social media initiatives, and our new website with over 150 videos, and the production of over

350 new content creation projects.

Our VIP program was developed to train independent dentists to identify and treat dental

conditions that may be associated with mild to moderate sleep apnea.

Our sales program to target medical doctors is our MID

program, which was developed to assist VIP practices to establish clinical collaboration ties to local primary care physicians, sleep

specialists, ENTs, pediatricians, pulmonologists and other healthcare professionals who routinely see or treat patients with sleep and

breathing disorders.

countries outside of North America we typically offer a modified training and support program at a lower cost.

We currently have approximately

25 direct sales representatives in the United States and Canada.

Our direct sales force engages in sales efforts and promotional activities

focused on referring physicians, as well as directly to the over 200,000 professionally active general dentists in the United States

and 20,000 general dentists in Canada.

current VIP sales organization is comprised of three teams consisting of:

Enrollment Specialist , who is the primary salesperson responsible for enrolling new

Enrollment Support Staff members, who are responsible for organizing potential VIP

appointments for the Enrollment Specialist;

Business Development Associates , who are responsible for cultivating new business

leads which are referred to the Enrollment Support Staff;

Outreach and Engagement Associate , who is responsible for engaging with potential

VIPs in our sales process with surveys and offers of online courses with the purpose of leads

to be referred to the Enrollment Support Staff members;

Practice Advisory Onboarding Specialist, who is responsible for onboarding new VIPs to

our training programs.

MID sales organization is comprised of a Senior Vice President that leads the MID sales efforts and one Senior Director of Business

We plan on growing our MID sales organization by recruiting candidates that have extensive healthcare backgrounds,

strong business development experience setting up physician owned medical facilities/practices and significant healthcare regulatory

utilize indirect and direct marketing channels to inform and educate dentists, medical doctors and healthcare professionals about

the Vivos System.

Our indirect marketing channels include strategic partners, industry key opinion leaders, trade shows and our

own clinical advisor network.

Our direct marketing channel includes outreach to prospective VIPs using digital advertising platforms

including Facebook and Google ad placements.

The objective of our indirect and direct marketing efforts are to bring dentists,

medical doctors and healthcare professionals to our educational and training websites to learn about SDB, OSA and treatment alternatives.

believe our dentist and medical doctor marketing efforts have been effective in facilitating contact via our Vivos introduction

and online training webinars, particularly during the COVID-19 epidemic.

Practice Advisory Onboarding Specialist , who is responsible for onboarding new VIPs

to our training programs.

MID sales organization is comprised of a Senior Vice President that leads the MID sales efforts and one Senior Director of Business Development.

We plan on growing our MID sales organization by recruiting candidates that have extensive healthcare backgrounds, strong business development

experience setting up physician owned medical facilities/practices and significant healthcare regulatory knowledge.

utilize indirect and direct marketing channels to inform and educate dentists, medical doctors and healthcare professionals about The

Vivos Method.

Our indirect marketing channels include strategic partners, industry key opinion leaders, trade shows and our own clinical

advisor network.

In 2021, we made strides by establishing the following strategic partnerships aimed and broadening awareness

of and selling efforts for The Vivos Method:

In October 2021, we announced a new collaboration with Candid Care

Co., a digital platform for oral healthcare, which that will seek to provide patients with a comprehensive, whole-mouth solution

to diagnose and treat OSA in adult patients and provide orthodontic treatment from the same provider network.

At the core of this

collaboration, Vivos and Candid will market each company’s products and areas of expertise to deliver a comprehensive sleep

and oral health solution to patients in the United States and Canada.

The focus of the collaboration will be Candid’s CandidPro

clear aligner for straightening teeth and the Vivos Method for treating OSA.

The two companies will also share educational resources,

training, and key opinion leaders to bridge the gap between airway health and orthodontic therapy.

Our ongoing collaboration with Candid is still in the early and

formative stages, primarily due to a major strategy change by Candid where they completely shut down their direct-to-consumer initiatives

in order to focus entirely on their CandidPro model emphasizing active dentist participation and patient interaction.

Now that Candid

has made that transition, we fully expect to see an increase in alignment and close collaboration between our two companies.

The emphasis will be on sharing provider lists, dentist prospects, DSO affiliations, and jointly developing future clinical products.

We currently have bi-weekly conference calls between respective company senior management and expect that to continue.

In August 2021, we announced a cooperative relationship with Empower Sleep, a San Bernardino, California-based company empowering patients with affordable, accessible and personalized telemedicine sleep care, to provide critical diagnostic and medical consultation services to people across North America who suffer from OSA.

Together, Vivos and Empower Sleep plan to leverage each company’s core technologies to provide a user-friendly platform with personalized insights for patients who are being screened for OSA by North American dentists and other healthcare providers.

Empower Sleep spent most of 2021 organizing and obtaining medical licensure

throughout the U.S.

Currently, Empower Sleep is fully licensed to practice medicine in approximately 40 states and expect to be in all

50 states by the end of the second quarter of 2022.

Sahil Chopra is the primary sleep specialist and owner of Empower Sleep.

speaks at Vivos events and has largely organized his company in a manner that best serves our VIPs and their patients.

While much progress

has been made to fully operationalize the Vivos/Empower Sleep dentist and patient interactions, we believe some work remains to smooth

out the inefficiencies and normal start-up risks.

We believe our two companies work very well together and share a mutual purpose and

direct marketing channels include outreach to prospective VIPs using digital advertising platforms including Facebook and Google ad placements.

The objective of our indirect and direct marketing efforts are to bring dentists, medical doctors and healthcare professionals to our

educational and training websites to learn about OSA and its treatment alternatives.

further believe our dentist and medical doctor marketing efforts have been effective in facilitating contact via our Vivos introduction

and online training webinars, despite significant headwinds throughout our core customer base, mostly driven by COVID-19 Delta and

Omicron variant resurgences in the middle and latter part of the year.

Economics for Trained VIP Clinicians

that enroll in our VIP program have favorable economics.

The actual incidence of dental patients with OSA will vary, but our conservative

estimate would suggest the average dental practice sees 400-500 adult patients with a high risk of suffering from obstructive

Using these demographic figures, the economic potential per dentist may be calculated, based on a retail adult case

fee of approximately $9,000, fully burdened VIP provider costs of approximately $3,000, and net profit of approximately $6,000,

to be over $3,300,000 in annual gross revenue potential annually with over $2,400,000 in potential net profit.

that enroll in our VIP program have the potential for compelling economics.

The actual incidence of dental patients with OSA will vary,

but our conservative estimate would suggest that the average dental practice sees 400-500 adult patients a year with a high risk of suffering

from obstructive sleep apnea.

Using these demographic figures, the economic potential per dentist may be calculated, based on a retail

adult case fee of approximately $9,000, fully burdened VIP provider costs of approximately $3,000, and net profit of approximately $6,000,

to be over $3.3 million in annual gross revenue potential annually with over $2.4 million in potential net profit.

We believe, based

on our experience that dentists have seen accretive economic additions to their practices with the Vivos System, and thus the

VIP program can likely add to the doctor’s take-home income.

Our sales and clinical advisory dentists conduct training primarily

in a highly personalized, deep immersion workshop format at our Institute for Craniofacial Sleep Medicine.

The key topics covered

in training include case selection, clinical diagnosis, treatment planning, appliance design, adjunctive therapies, instructions

on ordering Vivos products, guidance on pricing, case acceptance, instruction on insurance reimbursement protocols and interacting

with our proprietary software system and the many other features of our website.

We present our training material in a manner

we believe to be superior to most other dental training and experience.

As a result, we are able to complete the initial training

workshops, both online and in person, typically within just 15 days spread out over several weeks.

Our success in training approximately

1,200 dentists confirms our belief that training represents a minimal barrier to adoption for most dentists.

is an illustrative model depicting the total additional revenue a dentist might receive by treating patients with the Vivos System.

The potential patients with OSA is determined by using a calculation that results in a conservative estimate that 30% of patients

of a dental practice patient may suffer from OSA (according to a 2019 article published in Chest Physician ).

treatment fee is estimated at $9,000 per patient.

This illustration helps to explain why a dentist might want to become a trained

VIP and use the Vivos System.

Number of Active Patients in

Typical Dental Practice

Potential Patients with OSA

Potential Additional Revenue for Dentist

facilitate the adoption of the Vivos System, we market the VIP Program, and as part of that offering, we often partner with equipment

manufacturers to bundle training and equipment into a turn-key program financed by third party lenders for those dental practices

who need to purchase additional equipment.

The VIP Program fees are also often financed by third party lenders separate from any

equipment purchases.

Loan terms and payments will vary depending on the doctor’s credit, the interest rate, the amount financed,

and the term of the loan.

on our experience, that dentists have seen accretive economic additions to their practices by utilizing The Vivos Method, and thus participation

in the VIP program can likely add to the dentist’s take-home income.

terms of continuing training, our sales and clinical advisory dentists conduct training primarily in a highly personalized, deep immersion

workshop format at our Vivos Institute.

The key topics covered in training include case selection, clinical diagnosis, treatment planning,

appliance design, adjunctive therapies, information on our productions and services, guidance on pricing, case acceptance, instruction

on insurance reimbursement protocols and interacting with our proprietary software system and the many other features of our website.

We present our training material in a manner we believe to be superior to most other dental training and experience, including preparatory

online courses, didactic lectures, hands-on training, specialized small group breakout sessions, and post training technical support

from assigned mentors.

As a result, we are able to complete the initial training workshops, both online and in person, typically

within just 15 days spread out over several weeks.

Our success in training approximately 1,450 dentists confirms our belief that

training represents a minimal barrier to adoption for most dentists.

is an illustrative model depicting the total additional revenue a dentist might receive by treating patients with The Vivos Method.

potential patients with dentofacial abnormalities and/or mild to moderate OSA is determined by using a calculation that results

in a conservative estimate that 30% of patients of a dental practice patient may suffer from OSA (according to a 2019 article published

in Chest Physician ).

The revenue treatment fee is estimated at $9,000 per patient.

This illustration helps to explain why a dentist

might want to become a trained VIP and use The Vivos Method.

Number of Active

Patients in Typical

Dental Practice

Patients with

facilitate the adoption of The Vivos Method, we market the VIP Program, and as part of that offering, we often partner with equipment

manufacturers to bundle training and equipment into a turn-key program financed by third party lenders for those dental practices who

need to purchase additional equipment.

The VIP Program fees are also often financed by third party lenders separate from any equipment

Loan terms and payments will vary depending on the doctor’s credit, the interest rate, the amount financed, and the

term of the loan.

Generally, payments on such financing range from about $600 to $2,500 per month.

Reimbursement

mRNA appliance ®

is a custom fabricated appliance to treat mild-to-moderate OSA, SDB and snoring in adults.

mRNA can be billed in and out of network to most commercial payers under the E0486 CPT code.

The E0486 is reimbursable by many

major commercial medical payers following a medical diagnosis of OSA.

Level of reimbursement is approximately 50% (ranging from

5% to 70%), although medical insurance is never a guarantee of payment, and patient deductibles and policy limitations may vary.

A verification of benefits is required for all medical policies to check for validity of CPT code E0486 and oral appliance therapy

mRNA appliance ® and mmRNA appliance ® are custom fabricated appliances to treat mild to moderate

OSA and snoring in adults.

The mRNA and mmRNA can be billed in and out of network to most commercial payers under the E0486 CPT

The E0486 is reimbursable by many major commercial medical payers following a medical diagnosis of OSA.

Level of reimbursement

is approximately 50% (ranging from 5% to 70%), although medical insurance is never a guarantee of payment, and patient deductibles and

policy limitations may vary.

A verification of benefits is required for all medical policies to check for validity of CPT code E0486

and oral appliance therapy (OAT).

Pre-authorization may be required for reimbursement.

Pre-Authorization requirements may vary based on the payer policies

and patient’s insurance coverage.

Although many patients pay for treatment out of pocket on a fee for service basis, the

availability of health insurance coverage is an important consideration for many patients who desire treatment in the Vivos System.

Pre-Authorization requirements may vary based

on the payer policies and patient’s insurance coverage.

Although many patients pay for treatment out of pocket on a fee for service

basis, the availability of health insurance coverage is an important consideration for many patients who desire treatment in The Vivos

All medical policies have different reimbursement policies which may affect availability of reimbursement.

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payer guidelines in each state.

As out of network providers, dentists can set their own fees and balance bill the patient for

the cost of care not covered by the patient’s health insurance.

The American Medical Association will provide fee ranges

for all billable CPT codes.

A dentist must set their own fees for the CPT codes billed in their office that are within their scope

The Vivos System of appliances are reimbursable by Medicare or Medicaid.

mRNA appliance ®

is not covered by Medicare or Medicaid due to not meeting approved design criteria by CMS.

made modifications to the mRNA appliance ®

in order to meet CMS criteria for the billing code E0486 to Medicare.

These slight modifications of the mRNA appliance ®

have provided the opportunity to create a new device called the

mmRNA appliance ®

(Modified Mandibular Repositioning Nighttime Appliance).

We have completed mechanical testing

on the mmRNA appliance ®

and in February 2021 we announced that we submitted a 510(k) for Class II clearance to

the FDA for the mmRNA with indications to treat mild-to-moderate OSA, SDB and Snoring in adults.

Upon 510(k) Class II approval,

we plan to submit an application to PDAC (Pricing, Coding, Analysis and Coding) for the mmRNA appliance ®

added to the CMS Medicare list of approved sleep appliances.

We expect this process to take 3 to 6 months.

We have not found the

lack of inclusion on the current CMS Medicare list of approved sleep appliances to hinder market distribution or acceptance due

to the fact that most dentists who work with the Vivos System are out of network with commercial payers and do not typically file

for reimbursement under Medicare.

have seen an increase in the ability for reimbursement for our other FDA registered oral appliances such as DNA appliances and

As out of network providers, dentists can set their own fees and balance bill the patient for the cost

of care not covered by the patient’s health insurance.

The American Medical Association will provide fee ranges for all billable

A dentist must set their own fees for the CPT codes billed in their office that are within their scope of practice.

mRNA appliance ® and our DNA appliance are not covered by Medicare or Medicaid as they do not meet the approved design

criteria by CMS.

We made modifications to the mRNA appliance ® to meet CMS criteria for the billing code E0486 to

These slight modifications of the mRNA appliance ® led to the creation of a new FDA cleared device,

the mmRNA appliance ® ( Modified Mandibular Repositioning Nighttime Appliance ).

In February 2021, we submitted a

510(k) for Class II clearance to the FDA for the mmRNA appliance with indications to treat mild to moderate OSA and snoring in

adults, which was approved by FDA in August 2021.

In December 2021, we received acceptance from a Centers for Medicare &

Medicaid Services Pricing, Data Analysis and Coding (“PDAC”) contractor for our mmRNA applicable for treating mild to

moderate OSA and snoring in adults.

This acceptance places the mmRNA device on the PDAC list of oral appliances covered by and

billable to Medicare, making the benefits of the mmRNA device available to millions of Medicare beneficiaries.

Notwithstanding this

important achievement, in general we have not found the lack of inclusion on the current CMS Medicare list of approved sleep

appliances to hinder market distribution or acceptance due to the fact that most dentists who work with The Vivos Method are out of

network with commercial payers and do not typically file for reimbursement under Medicare.

have seen an increase in the ability for reimbursement for our other FDA registered oral appliances such as the DNA appliance and the

Vivos Guides.

These oral appliances are being pre-authorized and billed under an undefined CPT code only when medical necessity is present

and documented properly.

Pre-authorization with medical director review is required with a “letter of medical necessity”

(LMN) to gain possible medical reimbursement.

A dentist billing an undefined CPT code for a Class I or Class II oral appliance

must proceed with caution.

Billing an undefined CPT code for OAT must be supported with documented medical necessity and is reviewed

by the medical director at the payor before being submitted for possible reimbursement.

Typically, the dentist writes an LMN to

explain the medical necessity, the subscriber’s request for oral appliance therapy and submit these for review to the medical

directors at the payor.

The plan medical directors will then review any craniofacial abnormalities, CT images, comorbidities,

and any medical conditions the patient has be diagnosed with by a medical doctor.

This documentation is how the dentist establishes

medical necessity.

Once pre-authorization is gained, then oral appliance therapy can be billed for a possible reimbursement from

the medical payor.

A dentist typically can gain reimbursement for OAT by the medical insurance as long as there is medical necessity

present and documented.

A dentist billing an undefined CPT code for a Class I or Class II oral appliance must proceed

with caution.

Billing an undefined CPT code for OAT must be supported with documented medical necessity and is reviewed by the medical

director at the payor before being submitted for possible reimbursement.

Typically, the dentist writes an LMN to explain the medical

necessity and the patient’s request for oral appliance therapy and submits the LMN for review to the medical directors at the payor.

The plan medical directors will then review the LMN, including any dentofacial abnormalities, CT images, comorbidities, and any medical

conditions the patient has be diagnosed with by a medical doctor.

This documentation is how the dentist establishes medical necessity.

Once pre-authorization is gained, then OAT can be billed for a possible reimbursement from the medical payor.

A dentist typically can

gain reimbursement for OAT by the medical insurance if the undefined code is valid and billable under their policy and there is

medical necessity present, supported, and documented.

are several studies in the medical literature on upper airway remodeling in pathologic conditions such as asthma, chronic obstructive

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Advances in 3D digital technology, as well as an increased understanding of the human genome and epigenetics,

has allowed us to make further advances in understanding of craniofacial phenomena.

has allowed us to make further advances in the understanding of dentofacial phenomena.

For example, while it was believed that sutures

undergo closure in early adulthood, according to published research, it is now thought that populations of stem cells may persist

to permit continued growth and development.

undergo closure in early adulthood, according to published research, it is now thought that populations of stem cells may persist to

permit continued growth and development.

Using this premise, the midfacial bone volume can be increased surgically or non-surgically.

Since the roof of the mouth is the floor of the nose, the volume of the nasal airway can also be increased surgically or non-surgically.

Therefore, using our patented, non-surgical protocols we targeted upper airways to address sleep disordered breathing.

Using various

assessment techniques, we found surface area, volumetric and functional changes of the upper airway.

These treatment-induced changes

might be described as physiologic remodeling of the upper airway (a process we have labeled and trademarked as Pneumopedics ®

achieved through craniofacial epigenetics.

Therefore, using our patented, non-surgical protocols we targeted oral conditions and upper airways to address dentofacial

abnormalities and/or mild to moderate OSA and snoring.

Using various assessment techniques, we found surface area, volumetric and

functional changes of the upper airway.

2009, our technology has been the subject of approximately 55 peer-reviewed articles in the medical, dental and orthodontic literature.

Of the 55, 27 of these articles are journal papers, with Dr.

Dave Singh, our Chief Medical Officer, as first author on 22 of

these papers.

Of the 27, 17 of these articles describe the studies that examine the impact of our technology and protocols on

the AHI scores of patients with varying degrees of OSA as described in “Overview”

In addition, over 25 conference

papers have been published as abstracts, with Dr.

Singh as first author on 20 of these conference papers, and 19 independent dentists

and 5 different sleep physicians are co-authors on these publications as well.

The results published in these case reports and

articles, together with patient-reported outcomes, have shown that our Vivos System therapy provides a significant reduction in

the severity of patients’

mild-to-moderate OSA (as measured by industry standard indices such as the AHI, among others),

improvement in sleep-related quality of life, reduction in snoring, as well as a high patient compliance rates and a strong safety

establish and protect our proprietary rights, we rely on a combination of patents, trademarks, copyrights, trade secrets, including

know-how, license agreements, confidentiality procedures, non-disclosure agreements with third parties, employee disclosure and

invention assignment agreements, and other contractual rights.

Our intellectual property is important to achieving and maintaining

our position in the market.

We currently own five design patents that expire between 2023 through 2029 and two utility patents

expiring in 2029 and 2030.

We also own two Canadian patents and one European patent that has been validated in Belgium, Switzerland,

Germany, Denmark, Spain, France, United Kingdom, Hungary, Italy and the Netherlands, all of which expire in 2029.

portfolio consists of ten registered marks and five pending trademark applications.

Of the 55 articles, 27 of these are journal papers, with Dr.

Dave Singh, our founder and former Chief Medical Officer, as first author

on 22 of these papers.

Of the 27 journal papers, 17 of these articles describe the studies that examine the impact of our technology

and protocols on the AHI scores of patients with varying degrees of OSA as described in “Overview” above.

In addition, over

25 conference papers have been published as abstracts, with Dr.

Singh as first author on 20 of these conference papers.

Additionally,

there were 19 independent dentists and five different sleep physicians are co-authors on these publications as well.

published in these case reports and articles, together with patient-reported outcomes, have illustrated that The Vivos Method

therapy can provide a significant change in the severity of patients’ with dentofacial abnormalities and/or mild

to moderate OSA and snoring (as measured by industry standard indices such as the AHI, among others), improvement in oral conditions,

sleep-related quality of life, reduction in snoring, high patient compliance rates and a strong safety profile.

establish and protect our proprietary rights, we rely on a combination of patents, trademarks, copyrights and trade secrets, including

know-how, license agreements, confidentiality procedures, non-disclosure agreements with third parties, employee disclosure and invention

assignment agreements, and other contractual rights.

Our intellectual property is important in achieving and maintaining our position

in the market.

We currently own five design patents that expire between 2023 through 2029 and two utility patents expiring in 2029 and

We also own two Canadian patents and a European patent that has been validated in Belgium, Switzerland, Germany, Denmark, Spain,

France, United Kingdom, Hungary, Italy and the Netherlands, all of which expire in 2029.

trademark portfolio consists of ten

registered marks and one pending trademark application.

Extensive online and in-person training, multiple touch point support systems,

specific fabrication materials, customized appliance designs, and multi-disciplinary treatment protocols are all considered proprietary

trade secrets and competitive advantages with no known counterparts.

Regulatory Status

Vivos System features our Mandibular Repositioning Nighttime Appliance (or mRNA appliance ®

), which incorporates

the same patented technology built into our Daytime Nighttime Appliance (DNA appliance ®

We also separately market

our own pre-formed guide and rescue appliances which are not a part of the Vivos System (which we refer to collectively as Vivos

Guides or Guides).

The Vivos Method offers treatment

protocol that uses nonsurgical, noninvasive, and cost-effective oral appliance technology prescribed by trained dentists and medical

professionals to treat dentofacial abnormalities and/or mild to moderate OSA and snoring.

The Vivos Method includes a customized treatment

plan that may begin with a simple and easy at-home sleep apnea screening using proprietary HST technology from SleepImage.

offer two Class II devices cleared by the FDA ( mRNA and mmRNA ) and one Class I device registered with the FDA (DNA).

our own pre-formed Vivos Guides.

The regulatory status of our products is as follows:

mRNA appliance ®

has 510(k) clearance from the FDA as a Class II medical device for the treatment of snoring,

mild-to-moderate OSA and SDB.

DNA appliance ®

is an FDA-registered product, and is currently used by Vivos-trained clinicians accordingly.

The DNA appliance ®

also currently has a pending 510(k) application to include additional indications of

use for the treatment of mild-to-moderate OSA, snoring, and SDB in adults.

We have validated this 510(k) request with

retrospective clinical data.

This DNA appliance ®

510(k) review and approval process is expected to take

another three to six months, meaning we would expect to hear from the FDA in 2021.

However, it is possible that we may

not receive this FDA additional clearance.

Nevertheless, the DNA appliance ®

is exempt from 510(k) clearance

as a Class I device.

instruct all dentists prescribing the DNA appliance about the device’s approved indications of use and of the fact

that the DNA appliance is a Class I FDA registered oral appliance.

Dentists, as licensed clinicians within the scope of

their practice, are free to diagnose, treat and prescribe the appropriate oral appliance therapy as they see fit, including

uses which might be “off label”, based on their professional judgement.

Given the fact that our dentists regularly

prescribe the DNA appliance to treat conditions closely associated with OSA, we do not believe a failure to receive FDA

Class II clearance would materially impact our results or financial condition.

Any potential consequences of off-label

use of the DNA appliance are the responsibility of the treating dentist;

however, we may face consequences related to

such off-label use.

Risk Factors—

The misuse or off-label use of the Vivos System may harm our reputation

in the marketplace, result in injuries that lead to product liability suits or result in costly investigations, fines

or sanctions by regulatory bodies if we are deemed to have engaged in the promotion of these uses, any of which could

be costly to our business.”

Guides are an FDA-registered product for orthodontic tooth positioning.

are conducting two separate Western Institutional Review Board (WIRB) approved pediatric

clinical trials with seven private dental sites around the country.

The purpose of the first

study is to evaluate the safety and efficacy of the DNA appliance ®

to reduce SDB, including snoring, mild to moderate OSA, and Upper Airway Resistance Syndrome (or UARS), and to establish

nasal breathing in children.

The purpose of the second study is to evaluate the safety

and efficacy of the Guides (which we call the Vivos Grow and Vivos Way appliances) to reduce SDB, including snoring, mild to moderate

OSA, and Upper Airway Resistance Syndrome (or UARS).

Upon completion of these WIRB pediatric

clinical trials (expected to be completed in the next 12 to 18 months), we plan to submit two separate 510(k) applications to

the FDA requesting pediatric clearances and indications of use for the DNA appliance ®

well as the Guides.

mRNA appliance ®

is cleared by the FDA as Class II sleep appliance to treat mild-to-moderate OSA, sleep disordered

breathing and snoring in adults.

Patients undergoing treatment are seeing improvement in the said cleared indications of use,

but clinicians have also reported that they are seeing other comorbidities and medical conditions improve due to treatment.

mRNA appliance ®

(central to the Vivos System) and other Vivos appliances are made available to trained clinicians

who exercise their independent clinical judgment with respect to their use and suitability as a part of an overall treatment protocol

created for each individual patient.

submitted a 510(k) Class II application to the U.S.

Food and Drug Administration in February 2021 for our mmRNA oral appliance

with indications to treat mild-to-moderate OSA, sleep-disordered breathing and snoring in adults.

The mmRNA oral appliance (modified

mandibular Repositioning Nighttime Appliance) is a new version of the company’s existing mRNA appliance ®

which is an FDA-cleared Class II oral appliance.

Assuming the mmRNA’s 510(k) Class II approval, we expect to submit an application

to a PDAC (Pricing, Data Analysis and Coding) contractor for the mmRNA to be added to the Centers for Medicare and Medicaid Services’

list of approved sleep apnea appliances.

September of 2017 our subsidiary, BMS, was the subject of a routine FDA audit.

It was the very first time the FDA had ever audited

That audit resulted in certain findings that BMS was required to remediate, such as the inadequate documentation of certain

FDA-required procedures, not keeping certain records and materials in paper format and in triplicate and using certain descriptive

words and phrases on its website and in marketing materials that were unapproved in advance by FDA.

We immediately hired a highly

qualified FDA consultant and legal counsel with FDA expertise to assist BMS in preparing both a written response and a plan for

maintaining compliance with FDA regulations and guidelines.

In good faith, and based on documents provided by BMS, we believed

BMS had filed its response to the original audit in a timely manner with FDA.

However, in January 2018 BMS received a request

for a response to an FDA Warning Letter that had been posted online at the FDA website for its alleged failure to reply in a timely

manner to FDA and address the findings of the September audit.

Prior to that request, BMS had never before seen or received any

further notice of deficiency and no such Warning Letter.

We discovered that this Warning Letter was the direct result of FDA never

having received the BMS initial response, which we believed we had filed on September 27, 2017.

Due to the local BMS office in

Portland, Oregon being closed down on September 30, 2017 pursuant to a share exchange pursuant to which BMS became a subsidiary

of our company (which transaction was accounted for as a merger as disclosed in the consolidated financial statements), all of

which was fully disclosed to FDA, neither we nor BMS ever received any further notices from FDA as to them not having received

the initial BMS response.

upon becoming aware of the miscommunication and deficiency, we and BMS notified the FDA of the error and provided the FDA with

full documentation of our substantial efforts to fully comply with FDA rules and regulations.

The FDA completed a second audit

in April 2018, which examined the responses to the BMS findings and Warning Letter.

We believe that this matter has been satisfactorily

resolved, although no definitive statement to that effect has been made by FDA, nor has the Warning Letter been taken down.

FDA also audited our company (then known as Vivos BioTechnologies, Inc.) and issued one minor observation, to which we have responded

and addressed.

addition to the proactive steps previously mentioned, we engaged a consultant in October of 2017 who we hired as our Senior Vice

President of Compliance in January 2018, revamped 100% of all website and marketing materials and literature, accelerated our

efforts to address all of the findings of deficiencies from the September 2017 audit, and began filing additional documentation

and requests to expand the current labeling restrictions and allow us to have greater latitude in using certain descriptive phrases

such as Sleep Disordered Breathing in public communications.

have validated a 510(k) request for the DNA appliance ®

with retrospective clinical data.

This DNA appliance ®

510(k) is under review and the approval process is expected to take three to six months, meaning we would expect to hear

from the FDA in 2021.

However, it is possible that we may not receive this FDA additional clearance.

Nevertheless, the DNA appliance ®

is exempt from 510(k) clearance, as a Class I device.

see “Corporate History –

Rescission Offering in 2018”

below for more information relating to such FDA matter.

mmRNA (Pat.Pend.) appliance has a 510(k) clearance from the FDA as a Class II medical device

for the treatment of jaw repositioning, snoring and mild to moderate OSA in adults.

mRNA appliance ® has 510(k) clearance from the FDA as a Class II medical device

for the treatment of snoring and mild to moderate OSA in adults.

DNA appliance ® is an FDA-registered product for expansion and

is currently used by Vivos-trained clinicians.

We instruct all dentists prescribing the DNA

appliance about the device’s approved indications of use and of the fact that the DNA

appliance is a Class I FDA registered oral appliance.

Dentists, as licensed clinicians within

the scope of their practice, are free to diagnose, treat and prescribe the appropriate oral

appliance therapy as they see fit, including uses which might be “off label”,

based on their professional judgement.

Given the fact that our dentists regularly prescribe

the DNA appliance to treat conditions closely associated with OSA, we do not believe a failure

to receive FDA Class II clearance would materially impact our results or financial condition.

Any potential consequences of off-label use of the DNA appliance are the responsibility of

the treating dentist;

however, we may face consequences related to such off-label use.

“ Risk Factors— The misuse or off-label use of The Vivos Method may harm our

reputation in the marketplace, result in injuries that lead to product liability suits or

result in costly investigations, fines or sanctions by regulatory bodies if we are deemed

to have engaged in the promotion of these uses, any of which could be costly to our business.”

Vivos Guides are an FDA-registered product for orthodontic tooth positioning.

2021, we announced that results from a peer-reviewed, published study by an independent dentist

found a significant reduction of tooth decay in pediatric patients after undergoing treatment

using our Vivos Guides.

are conducting two separate Western Copernicus Group Institutional Review Board (WCG IRB) approved pediatric clinical trials

with eight private dental sites around the country.

The purpose of the first study is to evaluate the safety and efficacy of an intraoral

device (the DNA) to reduce sleep-disordered breathing (SDB) in children, including:

snoring, mild to moderate obstructive sleep apnea

(OSA), and Upper Airway Resistance Syndrome (UARS).

The child subjects enrolled in this study will be using the DNA appliance to correct

orthodontic issues.

They will also present with midfacial hypoplasia suitable for palatal expansion.

During orthodontic treatment and

palatal expansion, the device will be studied to determine whether it can also reduce symptoms of sleep disordered breathing in children.

The study will recruit pediatric subjects who have already elected to utilize the study device for their orthodontic treatment.

meet the inclusion and exclusion criteria, then they will be included in the study.

The purpose of the second study is to evaluate the

safety and efficacy of an intraoral device (the Vivos Grow and/or Vivos Way appliances) to reduce sleep-disordered breathing (SDB) in

children, including:

snoring, mild to moderate obstructive sleep apnea (OSA), and Upper Airway Resistance Syndrome (UARS).

subjects enrolled in this study will be using the Vivos Grow/Vivos Way appliance to correct orthodontic issues.

They will also present

with midfacial hypoplasia suitable for palatal expansion.

During orthodontic treatment and palatal expansion, the devices will be studied

to determine whether they can also reduce symptoms of sleep disordered breathing in children.

The study will recruit pediatric subjects

who have already elected to utilize the study device for their orthodontic treatment.

If they meet the inclusion and exclusion criteria

they can be included in the study.

Upon completion of these WIRB pediatric clinical trials (expected to be completed in the next 6

to 12 months), we plan to submit two separate 510(k) applications to the FDA requesting pediatric clearances and indications of use

for the DNA appliance ® as well as the Vivos Guides.

Our mRNA appliance ®

and mmRNA appliance ® are cleared by the FDA as Class II sleep appliances to treat mild to moderate OSA and snoring

Patients undergoing treatment are seeing improvement in the said cleared indications of use, but clinicians have also reported

that they are seeing other comorbidities and medical conditions improve due to treatment.

These appliances (which are central to The

Vivos Method) and other Vivos appliances are made available to trained clinicians who exercise their independent clinical judgment with

respect to their use and suitability as a part of an overall treatment protocol created for each individual patient.

September 2017 our subsidiary, BMS, was the subject of its first routine FDA audit.

That audit resulted in findings that required BMS

to remediate certain deficiencies such as:

(i) inadequate documentation of certain FDA-required procedures (i) not keeping certain records

and materials in paper format and in triplicate, and (iii) the use of certain descriptive words and phrases on its website and in marketing

materials that were not approved in advance by FDA.

We immediately hired a highly qualified FDA consultant and legal counsel with FDA

expertise to assist BMS in preparing both a written response and a plan for regaining and maintaining compliance with FDA regulations

and guidelines.

In good faith, and based on documents provided by BMS, we believed BMS had filed its response to the original audit in

a timely manner with FDA which was due on [ ].

However, in January 2018 BMS received a request for a response to an FDA Warning Letter

(the “Warning Letter”) that had been posted online at the FDA website.

The Warning Letter stated that BMS failed to reply

in a timely manner and address the findings of the September audit.

We believed that we had filed out response to the FDA on September

The local BMS office in Portland, Oregon was closed down as of September 30, 2017 pursuant to a share exchange agreement which

made BMS a subsidiary of our company (and which transaction was accounted for as a merger as disclosed in the consolidated financial

This transaction was disclosed to the FDA, and neither we nor BMS ever received any further notices from FDA after September

upon becoming aware of the miscommunication and deficiency, we notified the FDA of the error and provided the FDA with full documentation

of our substantial efforts to fully comply with FDA rules and regulations.

The FDA completed a second audit in April 2018, which examined

our responses to the initial deficiencies and our compliance plan.

We believe that this matter has been satisfactorily resolved, although

no definitive statement to that effect has been made by FDA, nor has the Warning Letter been taken down from the FDA website.

also audited our company (then known as Vivos BioTechnologies, Inc.) and issued one minor observation, to which we have responded and

August of 2020, we underwent our 2-year FDA regulatory inspection.

This inspection resulted in our receipt of an FDA Form 483 with two

observations.

These observations were corrected and responded to according the Code of Federal Regulations.

Upon the review of the 483

responses, the FDA delivered a letter to us requesting additional information.

We responded to the letter, and thereafter learned that

the FDA was satisfied with our responses.

Manufacturing

rely on third-party suppliers and manufacturers on a per order, or per item basis.

Outsourcing manufacturing reduces our need

for capital investment and reduces operational expenses.

Additionally, outsourcing provides expertise and capacity necessary to

scale up or down based on demand for our Vivos System.

We select our manufacturing labs to ensure that our Vivos System appliances

are safe and effective, adhere to all applicable regulations, are of the highest quality, and meet our supply needs.

on third-party carriers and freight forwarders for product shipments, including shipments to and from our manufactures’

distribution facilities and customer distribution facilities.

We rely on third-party suppliers

and manufacturers on a per order, or per item basis.

Outsourcing manufacturing reduces our need for capital investment and reduces operational

Additionally, outsourcing provides expertise and capacity necessary to scale up or down based on demand for our appliances.

We select our manufacturing labs so we can ensure that our appliances are safe and effective, adhere to all applicable regulations, are

of the highest quality, and meet our supply needs.

We also rely on third-party carriers and freight forwarders for product shipments,

including shipments to and from our manufactures’ distribution facilities and customer distribution facilities.

Ongoing Clinical Research

are committed to ongoing research and development, and we intend to invest in our business to further improve our products and

clinical outcomes, increase patient acceptance and comfort and broaden the patient population that can benefit from the Vivos

Biomimetic oral appliance therapy (BOAT) for the treatment of mild-to-moderate OSA in adults.

of this study is to investigate structural and functional effects of the novel BOAT protocol using the mRNA appliance ®

in the treatment of mild-to-moderate adult OSA.

This study will test the hypothesis that treatment of the upper airway

in the Vivos System is associated with functional improvements of sleep parameters in adults with mild-to-moderate OSA.

January 2019 –

Treatment of SDB with an intraoral device in a pediatric population.

Approved by WIRB as non-significant

controlled clinical trials, we are conducting 2 separate clinical trials to evaluate the safety and efficacy of the DNA appliance ®

clinical outcomes, increase patient acceptance and comfort and broaden the patient population that can benefit from The Vivos Method.

approved February 2021 –

Biomimetic oral appliance therapy (BOAT) for the treatment of mild to moderate OSA in adults (March 2022 renamed “ Daytime

Nighttime Appliance (DNA) therapy for the treatment of Obstructive Sleep Apnea (OSA)”) .

The aim of this study

is to investigate structural and functional effects of the treatment protocol using the DNA appliance ® in

the treatment of mild to moderate OSA in adults.

This study will test the hypothesis that treatment of the upper airway associated

with functional improvements of sleep parameters in adults with mild to moderate OSA.

January 2019 – Treatment of SDB with an intraoral device in a pediatric population.

Approved by WCG IRB as non-significant

controlled clinical trials, we are conducting 2 separate clinical trials to evaluate the safety and efficacy of the DNA appliance ®

and the Vivos Guides (which we call the Vivos Grow and Vivos Way appliances) to reduce SDB in children, including snoring,

mild to moderate OSA, and UARS.

The WIRB is an independent Institutional Review Board located in Olympia, Washington that

The WCG IRB is an independent Institutional Review Board located in Olympia, Washington that

provides services for academic and non-academic institutions.

WIRB is accredited by the Association for the Accreditation

WCG IRB is accredited by the Association for the Accreditation

of Human Research Protection Programs.

(AAHRPP) Clinical outcomes:

Pediatric Sleep Questionnaire, reduction in sleep apnea

and UARS using the AHI, Epworth Sleepiness Scale for Children and Adolescents, and changes in upper airway volume.

products and our operations are subject to extensive regulation by the FDA and other federal and state authorities in the United

States, as well as comparable authorities in the EEA.

Our products are subject to regulation as medical devices under the Federal

Food, Drug, and Cosmetic Act, or FDCA, as implemented and enforced by the FDA.

The FDA regulates the development, design, non-clinical

and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping,

premarket clearance or approval, import, export, adverse event reporting, advertising, promotion, marketing and distribution,

and import and export of medical devices to ensure that medical devices distributed domestically are safe and effective for their

intended uses and otherwise meet the requirements of the FDCA.

Pediatric Sleep Questionnaire, reduction in sleep apnea and UARS

using the AHI, Epworth Sleepiness Scale for Children and Adolescents, and changes in upper airway volume.

products and our operations are subject to extensive regulation by the FDA and other federal and state authorities in the United States,

as well as comparable authorities in the European Economic Area (“EEA”).

Our products are subject to regulation as medical

devices under the Federal Food, Drug, and Cosmetic Act, or FDCA, as implemented and enforced by the FDA.

The FDA regulates the development,

design, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping,

premarket clearance or approval, import, export, adverse event reporting, advertising, promotion, marketing and distribution, and import

and export of medical devices to ensure that medical devices distributed domestically are safe and effective for their intended uses

and otherwise meet the requirements of the FDCA.

addition to U.S.

regulations, we are subject to a variety of regulations in the EEA governing clinical trials and the commercial

sales and distribution of our products.

Whether or not we have or are required to obtain FDA clearance or approval for a product,

we will be required to obtain authorization before commencing clinical trials and to obtain marketing authorization or approval

of our products under the comparable regulatory authorities of countries outside of the United States before we can commence clinical

trials or commercialize our products in those countries.

The approval process varies from country to country and the time may

be longer or shorter than that required for FDA clearance or approval.

regulations, we are subject to a variety of regulations in the EEA governing clinical trials and the commercial sales

and distribution of our products.

Whether or not we have or are required to obtain FDA clearance or approval for a product, we will be

required to obtain authorization before commencing clinical trials and to obtain marketing authorization or approval of our products

under the comparable regulatory authorities of countries outside of the United States before we can commence clinical trials or commercialize

our products in those countries.

The approval process varies from country to country and the time may be longer or shorter than that

required for FDA clearance or approval.

Premarket Clearance and Approval Requirements

an exemption applies, each medical device commercially distributed in the United States requires either FDA clearance of a 510(k)

premarket notification or pre-market approval (PMA).

Under the FDCA, medical devices are classified into one of three classes—Class

I, Class II or Class III—depending on the degree of risk associated with each medical device and the extent of manufacturer

and regulatory control needed to ensure its safety and effectiveness.

Class I includes devices with the lowest risk to the patient

and are those for which safety and effectiveness can be assured by adherence to the FDA’s General Controls for medical devices,

which include compliance with the applicable portions of the QSR, facility registration and product listing, reporting of adverse

medical events, and truthful and non-misleading labeling, advertising, and promotional materials.

Class II devices are subject

to the FDA’s General Controls, and special controls as deemed necessary by the FDA to ensure the safety and effectiveness

of the device.

These special controls can include performance standards, post-market surveillance, patient registries and FDA

guidance documents.

While most Class I devices are exempt from the 510(k) premarket notification requirement, manufacturers of

most Class II devices are required to submit to the FDA a premarket notification under Section 510(k) of the FDCA requesting permission

to commercially distribute the device.

The FDA’s permission to commercially distribute a device subject to a 510(k) premarket

notification is generally known as 510(k) clearance.

Under the 510(k) process, the manufacturer must submit to the FDA a premarket

notification demonstrating that the device is “substantially equivalent”

to either a device that was legally marketed

(for which the FDA has not required a PMA submission) prior to May 28, 1976, the date upon which the Medical Device Amendments

of 1976 were enacted, or another commercially available device that was cleared to through the 510(k) process.

The FDA has 90

days from the date of the pre-market equivalence acceptance to authorize or decline commercial distribution of the device.

similar to the PMA process, clearance may take longer than this three-month window, as the FDA can request additional data.

the FDA resolves that the product is not substantially equivalent to a predicate device, then the device acquires a Class III

designation, and a PMA must be approved before the device can be commercialized.

Guides are registered with the FDA as Class I devices for orthodontic tooth positioning.

The DNA appliance®

is registered

with the FDA as a Class I device for palatal expansion and is currently used by Vivos-trained clinicians accordingly.

appliance®

also currently has a pending 510(k) application to include additional indications of use for the treatment of mild-to-moderate

OSA, snoring, and SDB in adults.

This use would require the DNA appliance ®

to be registered as a Class II device.

We have validated this 510(k) request with retrospective clinical data.

This DNA appliance®

510(k) review and approval process

is expected to take another three to six months, meaning we would expect to hear from the FDA in 2021.

However, it is possible

that we may not receive this FDA additional clearance.

Nevertheless, the DNA appliance®

is exempt from 510(k) clearance as

a Class I device.

Given the fact that our dentists regularly prescribe the DNA appliance to treat conditions closely associated

with OSA, we do not believe a failure to receive FDA Class II clearance would materially impact our results or financial condition.

The mRNA appliance®

has 510(k) clearance from the FDA as a Class II medical device for the treatment of snoring, mild-to-moderate

deemed by the FDA to pose the greatest risks, such as life-sustaining, life-supporting or some implantable devices, or devices

that have a new intended use, or use advanced technology that is not substantially equivalent to that of a legally marketed device,

are placed in Class III, requiring approval of a PMA.

Some pre-amendment devices are unclassified, but are subject to the FDA’s

premarket notification and clearance process in order to be commercially distributed.

an exemption applies, each medical device commercially distributed in the United States requires either FDA clearance of a 510(k) premarket

notification or pre-market approval (PMA).

Under the FDCA, medical devices are classified into one of three classes—Class I, Class

II or Class III—depending on the degree of risk associated with each medical device and the extent of manufacturer and regulatory

control needed to ensure its safety and effectiveness.

Class I includes devices with the lowest risk to the patient and are those for

which safety and effectiveness can be assured by adherence to the FDA’s General Controls for medical devices, which include compliance

with the applicable portions of the QSR, facility registration and product listing, reporting of adverse medical events, and truthful

and non-misleading labeling, advertising, and promotional materials.

Class II devices are subject to the FDA’s General Controls,

and special controls as deemed necessary by the FDA to ensure the safety and effectiveness of the device.

These special controls can

include performance standards, post-market surveillance, patient registries and FDA guidance documents.

While most Class I devices are

exempt from the 510(k) premarket notification requirement, manufacturers of most Class II devices are required to submit to the FDA a

premarket notification under Section 510(k) of the FDCA requesting permission to commercially distribute the device.

permission to commercially distribute a device subject to a 510(k) premarket notification is generally known as 510(k) clearance.

the 510(k) process, the manufacturer must submit to the FDA a premarket notification demonstrating that the device is “substantially

equivalent” to either a device that was legally marketed (for which the FDA has not required a PMA submission) prior to May 28,

1976, the date upon which the Medical Device Amendments of 1976 were enacted, or another commercially available device that was cleared

to through the 510(k) process.

The FDA has 90 days from the date of the pre-market equivalence acceptance to authorize or decline commercial

distribution of the device.

However, similar to the PMA process, clearance may take longer than this three-month window, as the FDA can

request additional data.

If the FDA resolves that the product is not substantially equivalent to a predicate device, then the device

acquires a Class III designation, and a PMA must be approved before the device can be commercialized.

Vivos Guides are registered with the FDA as Class I devices for orthodontic tooth positioning.

The DNA appliance ® is registered

with the FDA as a Class I device for expansion and is currently used by Vivos-trained clinicians accordingly.

deemed by the FDA to pose the greatest risks, such as life-sustaining, life-supporting or some implantable devices, or devices that have

a new intended use, or use advanced technology that is not substantially equivalent to that of a legally marketed device, are placed

in Class III, requiring approval of a PMA.

Some pre-amendment devices are unclassified but are subject to the FDA’s premarket

notification and clearance process in order to be commercially distributed.

We do not have any Class III devices.

III devices require PMA approval before they can be marketed although some pre-amendment Class III devices for which the FDA has

not yet required a PMA are cleared through the 510(k) process.

The PMA process is more demanding than the 510(k) premarket notification

In a PMA application, the manufacturer must demonstrate that the device is safe and effective, and the PMA application

must be supported by extensive data, including data from preclinical studies and human clinical trials.

The PMA must also contain

a full description of the device and its components, a full description of the methods, facilities and controls used for manufacturing,

and proposed labeling.

Following receipt of a PMA application, the FDA determines whether the application is sufficiently complete

to permit a substantive review.

If the FDA accepts the application for review, it has 180 days under the FDCA to complete its

review of a PMA application, although in practice, the FDA’s review often takes significantly longer, and can take up to

several years.

An advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide

recommendations to the FDA as to the approvability of the device.

The FDA may or may not accept the panel’s recommendation.

In addition, the FDA will generally conduct a preapproval inspection of the applicant or its third-party manufacturers.

FDA will approve the new device for commercial distribution if it determines that the data and information in the PMA application

constitute valid scientific evidence and that there is reasonable assurance that the device is safe and effective for its intended

The FDA may approve a PMA application with post-approval conditions intended to ensure the safety and effectiveness of

the device, including, among other things, restrictions on labeling, promotion, sale and distribution, and collection of long-term

follow-up data from patients in the clinical study that supported a PMA approval or requirements to conduct additional clinical

studies post-approval.

The FDA may condition a PMA approval on some form of post-market surveillance when deemed necessary to

protect the public health or to provide additional safety and efficacy data for the device in a larger population or for a longer

period of use.

In such cases, the manufacturer might be required to follow certain patient groups for a number of years and to

make periodic reports to the FDA on the clinical status of those patients.

Failure to comply with the conditions of approval can

result in material adverse enforcement action, including withdrawal of the approval.

changes to an approved device, such as changes in manufacturing facilities, methods, or quality control procedures, or changes

in the design performance specifications, which affect the safety or effectiveness of the device, require submission of a new

PMA application or a PMA supplement.

PMA supplements often require submission of the same type of information as a PMA application,

except that the supplement is limited to information needed to support any changes from the device covered by the original PMA

application and may not require as extensive clinical data or the convening of an advisory panel.

Certain other changes to an

approved device require the submission of a new PMA application, such as when the design change causes a different intended use,

mode of operation, and technical basis of operation, or when the design change is so significant that a new generation of the

device will be developed, and the data that were submitted with the original PMA application are not applicable for the change

in demonstrating a reasonable assurance of safety and effectiveness.

III devices require PMA approval before they can be marketed although some pre-amendment Class III devices for which the FDA has not

yet required a PMA are cleared through the 510(k) process.

The PMA process is more demanding than the 510(k) premarket notification process.

In a PMA application, the manufacturer must demonstrate that the device is safe and effective, and the PMA application must be supported

by extensive data, including data from preclinical studies and human clinical trials.

The PMA must also contain a full description of

the device and its components, a full description of the methods, facilities and controls used for manufacturing, and proposed labeling.

Following receipt of a PMA application, the FDA determines whether the application is sufficiently complete to permit a substantive review.

If the FDA accepts the application for review, it has 180 days under the FDCA to complete its review of a PMA application, although in

practice, the FDA’s review often takes significantly longer, and can take up to several years.

An advisory panel of experts from

outside the FDA may be convened to review and evaluate the application and provide recommendations to the FDA as to the approvability

of the device.

The FDA may or may not accept the panel’s recommendation.

In addition, the FDA will generally conduct a preapproval

inspection of the applicant or its third-party manufacturers.

FDA will approve the new device for commercial distribution if it determines that the data and information in the PMA application constitute

valid scientific evidence and that there is reasonable assurance that the device is safe and effective for its intended use(s).

may approve a PMA application with post-approval conditions intended to ensure the safety and effectiveness of the device, including,

among other things, restrictions on labeling, promotion, sale and distribution, and collection of long-term follow-up data from patients

in the clinical study that supported a PMA approval or requirements to conduct additional clinical studies post-approval.

condition a PMA approval on some form of post-market surveillance when deemed necessary to protect the public health or to provide additional

safety and efficacy data for the device in a larger population or for a longer period of use.

In such cases, the manufacturer might be

required to follow certain patient groups for a number of years and to make periodic reports to the FDA on the clinical status of those

Failure to comply with the conditions of approval can result in material adverse enforcement action, including withdrawal of

the approval.

changes to an approved device, such as changes in manufacturing facilities, methods, or quality control procedures, or changes in the

design performance specifications, which affect the safety or effectiveness of the device, require submission of a new PMA application

or a PMA supplement.

PMA supplements often require submission of the same type of information as a PMA application, except that the supplement

is limited to information needed to support any changes from the device covered by the original PMA application and may not require as

extensive clinical data or the convening of an advisory panel.

Certain other changes to an approved device require the submission of

a new PMA application, such as when the design change causes a different intended use, mode of operation, and technical basis of operation,

or when the design change is so significant that a new generation of the device will be developed, and the data that were submitted with

the original PMA application are not applicable for the change in demonstrating a reasonable assurance of safety and effectiveness.

trials are almost always required to support a PMA application and are sometimes required to support a 510(k) submission.

clinical investigations of investigational devices to determine safety and effectiveness must be conducted in accordance with

the FDA’s investigational device exemption, or IDE, regulations which govern investigational device labeling, prohibit promotion

of the investigational device, and specify an array of recordkeeping, reporting and monitoring responsibilities of study sponsors

and study investigators.

If the device presents a “significant risk”

to human health, as defined by the FDA, the FDA

requires the device sponsor to submit an IDE application to the FDA, which must become effective prior to commencing human clinical

A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of a patient

and either is implanted, used in supporting or sustaining human life, substantially important in diagnosing, curing, mitigating

or treating disease or otherwise preventing impairment of human health, or otherwise presents a potential for serious risk to

An IDE application must be supported by appropriate data, such as animal and laboratory test results, showing that

it is safe to test the device in humans and that the testing protocol is scientifically sound.

The IDE will automatically become

effective 30 days after receipt by the FDA unless the FDA notifies us that the investigation may not begin.

If the FDA determines

that there are deficiencies or other concerns with an IDE for which it requires modification, the FDA may require a response on

such deficiencies or permit a clinical trial to proceed under a conditional approval.

addition, the study must be approved by, and conducted under the oversight of, an Institutional Review Board, or IRB, for each

clinical site.

The IRB is responsible for the initial and continuing review of the IDE, and may pose additional requirements for

the conduct of the study.

If an IDE application is approved by the FDA and one or more IRBs, human clinical trials may begin at

a specific number of investigational sites with a specific number of patients, as approved by the FDA.

If the device presents

a non-significant risk to the patient, a sponsor may begin the clinical trial after obtaining approval for the trial by one or

more IRBs without separate approval from the FDA, but must still follow abbreviated IDE requirements, such as monitoring the investigation,

ensuring that the investigators obtain informed consent, and labeling and record-keeping requirements.

Acceptance of an IDE application

for review does not guarantee that the FDA will allow the IDE to become effective and, if it does become effective, the FDA may

or may not determine that the data derived from the trials support the safety and effectiveness of the device or warrant the continuation

of clinical trials.

An IDE supplement must be submitted to, and approved by, the FDA before a sponsor or investigator may make

a change to the investigational plan that may affect its scientific soundness, study plan or the rights, safety or welfare of

human subjects.

investigations of investigational devices to determine safety and effectiveness must be conducted in accordance with the FDA’s

investigational device exemption, or IDE, regulations which govern investigational device labeling, prohibit promotion of the investigational

device, and specify an array of recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators.

the device presents a “significant risk” to human health, as defined by the FDA, the FDA requires the device sponsor to submit

an IDE application to the FDA, which must become effective prior to commencing human clinical trials.

A significant risk device is one

that presents a potential for serious risk to the health, safety, or welfare of a patient and either is implanted, used in supporting

or sustaining human life, substantially important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment

of human health, or otherwise presents a potential for serious risk to a subject.

An IDE application must be supported by appropriate

data, such as animal and laboratory test results, showing that it is safe to test the device in humans and that the testing protocol

is scientifically sound.

The IDE will automatically become effective 30 days after receipt by the FDA unless the FDA notifies us that

the investigation may not begin.

If the FDA determines that there are deficiencies or other concerns with an IDE for which it requires

modification, the FDA may require a response on such deficiencies or permit a clinical trial to proceed under a conditional approval.

addition, the study must be approved by, and conducted under the oversight of, an Institutional Review Board, or IRB, for each clinical

The IRB is responsible for the initial and continuing review of the IDE, and may pose additional requirements for the conduct of

If an IDE application is approved by the FDA and one or more IRBs, human clinical trials may begin at a specific number of

investigational sites with a specific number of patients, as approved by the FDA.

If the device presents a non-significant risk to the

patient, a sponsor may begin the clinical trial after obtaining approval for the trial by one or more IRBs without separate approval

from the FDA, but must still follow abbreviated IDE requirements, such as monitoring the investigation, ensuring that the investigators

obtain informed consent, and labeling and record-keeping requirements.

Acceptance of an IDE application for review does not guarantee

that the FDA will allow the IDE to become effective and, if it does become effective, the FDA may or may not determine that the data

derived from the trials support the safety and effectiveness of the device or warrant the continuation of clinical trials.

An IDE supplement

must be submitted to, and approved by, the FDA before a sponsor or investigator may make a change to the investigational plan that may

affect its scientific soundness, study plan or the rights, safety or welfare of human subjects.

a study, the sponsor is required to comply with the applicable FDA requirements, including, for example, trial monitoring, selecting

clinical investigators and providing them with the investigational plan, ensuring IRB review, adverse event reporting, record

keeping and prohibitions on the promotion of investigational devices or on making safety or effectiveness claims for them.

clinical investigators in the clinical study are also subject to FDA regulations and must obtain patient informed consent, rigorously

follow the investigational plan and study protocol, control the disposition of the investigational device, and comply with all

reporting and recordkeeping requirements.

Additionally, after a trial begins, we, the FDA or the IRB could suspend or terminate

a clinical trial at any time for various reasons, including a belief that the risks to study subjects outweigh the anticipated

clinical investigators and providing them with the investigational plan, ensuring IRB review, adverse event reporting, record keeping

and prohibitions on the promotion of investigational devices or on making safety or effectiveness claims for them.

The clinical investigators

in the clinical study are also subject to FDA regulations and must obtain patient informed consent, rigorously follow the investigational

plan and study protocol, control the disposition of the investigational device, and comply with all reporting and recordkeeping requirements.

Additionally, after a trial begins, we, the FDA or the IRB could suspend or terminate a clinical trial at any time for various reasons,

including a belief that the risks to study subjects outweigh the anticipated benefits.

a device is cleared or approved for marketing, numerous and pervasive regulatory requirements continue to apply.

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registration and device listing with the FDA;

requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control,

documentation and other quality assurance procedures during all aspects of the design and manufacturing process;

and marketing regulations, which require that promotion is truthful, not misleading, fairly balanced and provide adequate

directions for use and that all claims are substantiated, and also prohibit the promotion of products for unapproved or off-label

uses and impose other restrictions on labeling;

FDA guidance on off-label dissemination of information and responding to unsolicited

requests for information;

federal Physician Sunshine Act and various state and foreign laws on reporting remunerative relationships with health care

federal Anti-Kickback Statute (and similar state laws) prohibiting, among other things, soliciting, receiving, offering or

providing remuneration intended to induce the purchase or recommendation of an item or service reimbursable under a federal

healthcare program, such as Medicare or Medicaid.

A person or entity does not have to have actual knowledge of this statute

or specific intent to violate it to have committed a violation;

federal False Claims Act (and similar state laws) prohibiting, among other things, knowingly presenting, or causing to be

presented, claims for payment or approval to the federal government that are false or fraudulent, knowingly making a false

statement material to an obligation to pay or transmit money or property to the federal government or knowingly concealing,

or knowingly and improperly avoiding or decreasing, an obligation to pay or transmit money to the federal government.

government may assert that claim includes items or services resulting from a violation of the federal Anti-Kickback Statute

constitutes a false or fraudulent claim for purposes of the false claims statute;

or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or

that would constitute a major change in intended use of one of our cleared devices, or approval of a supplement for certain

modifications to PMA devices;

device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or

contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be

likely to cause or contribute to a death or serious injury, if the malfunction were to recur;

removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product

recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that

may present a risk to health;

with the new federal law and regulations requiring Unique Device Identifiers (UDI) on devices and also requiring the submission

of certain information about each device to the FDA’s Global Unique Device Identification Database (GUDID);

FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is

in violation of governing laws and regulations;

surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or

to provide additional safety and effectiveness data for the device.

requirements, which require manufacturers, including third-party manufacturers, to follow

stringent design, testing, control, documentation, and other quality assurance procedures

during all aspects of the design and manufacturing process;

and marketing regulations, which require that promotion is truthful, not misleading, fairly

balanced and provide adequate directions for use and that all claims are substantiated, and

also prohibit the promotion of products for unapproved or off-label uses and impose other

restrictions on labeling;

FDA guidance on off-label dissemination of information and responding

to unsolicited requests for information;

federal Physician Sunshine Act and various state and foreign laws on reporting remunerative

relationships with health care customers;

federal Anti-Kickback Statute (and similar state laws) prohibiting, among other things, soliciting,

receiving, offering or providing remuneration intended to induce the purchase or recommendation

of an item or service reimbursable under a federal healthcare program, such as Medicare or

A person or entity does not have to have actual knowledge of this statute or specific

intent to violate it to have committed a violation;

federal False Claims Act (and similar state laws) prohibiting, among other things, knowingly

presenting, or causing to be presented, claims for payment or approval to the federal government

that are false or fraudulent, knowingly making a false statement material to an obligation

to pay or transmit money or property to the federal government or knowingly concealing, or

knowingly and improperly avoiding or decreasing, an obligation to pay or transmit money to

the federal government.

The government may assert that claim includes items or services resulting

from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim

for purposes of the false claims statute;

or approval of product modifications to 510(k)-cleared devices that could significantly affect

safety or effectiveness or that would constitute a major change in intended use of one of

our cleared devices, or approval of a supplement for certain modifications to PMA devices;

device reporting regulations, which require that a manufacturer report to the FDA if a device

it markets may have caused or contributed to a death or serious injury, or has malfunctioned

and the device or a similar device that it markets would be likely to cause or contribute

to a death or serious injury, if the malfunction were to recur;

● correction,

removal and recall reporting regulations, which require that manufacturers report to the

FDA field corrections and product recalls or removals if undertaken to reduce a risk to health

posed by the device or to remedy a violation of the FDCA that may present a risk to health;

with the new federal law and regulations requiring Unique Device Identifiers (UDI) on devices

and also requiring the submission of certain information about each device to the FDA’s

Global Unique Device Identification Database (GUDID);

FDA’s recall authority, whereby the agency can order device manufacturers to recall

from the market a product that is in violation of governing laws and regulations;

● post-market

surveillance activities and regulations, which apply when deemed by the FDA to be necessary

to protect the public health or to provide additional safety and effectiveness data for the

may be subject to similar foreign laws that may include applicable post-marketing requirements such as safety surveillance.

manufacturing processes are required to comply with the applicable portions of the QSR, which cover the methods and the facilities

and controls for the design, manufacture, testing, production, processes, controls, quality assurance, labeling, packaging, distribution,

installation and servicing of finished devices intended for human use.

The QSR also requires, among other things, maintenance

of a device master file, device history file, and complaint files.

As a manufacturer, our facilities, records and manufacturing

processes are subject to periodic scheduled or unscheduled inspections by the FDA.

Our failure to maintain compliance with the

QSR or other applicable regulatory requirements could result in the shut-down of, or restrictions on, our manufacturing operations

Our manufacturing

processes are required to comply with the applicable portions of the quality system regulation (“QSR”), which cover the methods

and the facilities and controls for the design, manufacture, testing, production, processes, controls, quality assurance, labeling, packaging,

distribution, installation, and servicing of finished devices intended for human use.

The QSR also requires, among other things,

maintenance of a device master file, device history file, and complaint files.

As a manufacturer, our facilities, records, and

manufacturing processes are subject to periodic scheduled or unscheduled inspections by the FDA.

Our failure to maintain compliance with

the QSR or other applicable regulatory requirements could result in the shut-down of, or restrictions on, our manufacturing operations

and the recall or seizure of our products.

The discovery of previously unknown problems with any of our products, including unanticipated

adverse events or adverse events of increasing severity or frequency, whether resulting from the use of the device within the

scope of its clearance or off-label by a physician in the practice of medicine, could result in restrictions on the device, including

the removal of the product from the market or voluntary or mandatory device recalls or a public warning letter that could harm

both our reputation and sales.

Any potential consequences of off-label use of the DNA appliance are the responsibility of the

treating dentist;

adverse events or adverse events of increasing severity or frequency, whether resulting from the use of the device within the scope of

its clearance or off-label by a physician in the practice of medicine, could result in restrictions on the device, including the removal

of the product from the market or voluntary or mandatory device recalls or a public warning letter that could harm both our reputation

Any potential consequences of off-label use of the DNA appliance are the responsibility of the treating independent

however, we may face consequences related to such off-label use.

Risk Factors—

or off-label use of the Vivos System may harm our reputation in the marketplace, result in injuries that lead to product liability

suits or result in costly investigations, fines or sanctions by regulatory bodies if we are deemed to have engaged in the promotion

of these uses, any of which could be costly to our business.”

See “ Risk Factors— The misuse or off-label use

of The Vivos Method may harm our reputation in the marketplace, result in injuries that lead to product liability suits or result in

costly investigations, fines or sanctions by regulatory bodies if we are deemed to have engaged in the promotion of these uses, any of

which could be costly to our business.”

FDA has broad regulatory compliance and enforcement powers.

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restrictions or partial suspension or total shutdown of production;

or delaying requests for 510(k) marketing clearance or PMA approvals of new products or modified products;

or delaying requests for 510(k) marketing clearance or PMA approvals of new products or modified

● withdrawing

510(k) clearances or PMAs that have already been granted;

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of Medical Devices in the EEA

is currently no premarket government review of medical devices in the EEA (which is comprised of the 28 Member States of the EU

plus Norway, Liechtenstein and Iceland).

However, all medical devices placed on the market in the EEA must meet the relevant essential

requirements laid down in Annex I of Directive 93 /42/EEC concerning medical devices, or the Medical Devices Directive.

There is also a directive specifically addressing Active Implantable Medical Devices (Directive 90/385/EEC).

The most fundamental

essential requirement is that a medical device must be designed and manufactured in such a way that it will not compromise the

clinical condition or safety of patients, or the safety and health of users and others.

In addition, the device must achieve the

performances intended by the manufacturer and be designed, manufactured and packaged in a suitable manner.

The European Commission

has adopted various standards applicable to medical devices.

These include standards governing common requirements, such as sterilization

and safety of medical electrical equipment, and product standards for certain types of medical devices.

There are also harmonized

standards relating to design and manufacture.

While not mandatory, compliance with these standards is viewed as the easiest way

to satisfy the essential requirements as a practical matter.

Compliance with a standard developed to implement an essential requirement

also creates a rebuttable presumption that the device satisfies that essential requirement.

is currently no premarket government review of medical devices in the EEA (which is comprised of the 28 Member States of the EU plus

Norway, Liechtenstein and Iceland).

However, all medical devices placed on the market in the EEA must meet the relevant essential requirements

laid down in Annex I of Directive 93/42/EEC concerning medical devices, or the Medical Devices Directive.

There is also a directive specifically

addressing Active Implantable Medical Devices (Directive 90/385/EEC).

The most fundamental essential requirement is that a medical device

must be designed and manufactured in such a way that it will not compromise the clinical condition or safety of patients, or the safety

and health of users and others.

In addition, the device must achieve the performances intended by the manufacturer and be designed, manufactured

and packaged in a suitable manner.

The European Commission has adopted various standards applicable to medical devices.

These include

standards governing common requirements, such as sterilization and safety of medical electrical equipment, and product standards for

certain types of medical devices.

There are also harmonized standards relating to design and manufacture.

While not mandatory, compliance

with these standards is viewed as the easiest way to satisfy the essential requirements as a practical matter.

Compliance with a standard

developed to implement an essential requirement also creates a rebuttable presumption that the device satisfies that essential requirement.

demonstrate compliance with the essential requirements laid down in Annex I to the Medical Devices Directive, medical device manufacturers

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in respect of similar products already marketed.

Except for low-risk medical devices (Class I non-sterile, non-measuring devices),

where the manufacturer can self-declare the conformity of its products with the essential requirements (except for any parts which

relate to sterility or metrology), a conformity assessment procedure requires the intervention of a Notified Body.

Except for low-risk medical devices (Class I non-sterile, non-measuring devices), where

the manufacturer can self-declare the conformity of its products with the essential requirements (except for any parts which relate to

sterility or metrology), a conformity assessment procedure requires the intervention of a “Notified Body”.

Notified Bodies

are often separate entities and are authorized or licensed to perform such assessments by government authorities.

body would typically audit and examine a product’s technical dossiers and the manufacturers’

quality system.

that the relevant product conforms to the relevant essential requirements, the notified body issues a certificate of conformity,

which the manufacturer uses as a basis for its own declaration of conformity.

The manufacturer may then apply the CE Mark to the

device, which allows the device to be placed on the market throughout the EEA.

Once the product has been placed on the market

in the EEA, the manufacturer must comply with requirements for reporting incidents and field safety corrective actions associated

with the medical device.

The Notified Body would

typically audit and examine a product’s technical dossiers and the manufacturers’ quality system.

If satisfied that the relevant

product conforms to the relevant essential requirements, the Notified Body issues a certificate of conformity, which the manufacturer

uses as a basis for its own declaration of conformity.

The manufacturer may then apply the CE Mark to the device, which allows the device

to be placed on the market throughout the EEA.

Once the product has been placed on the market in the EEA, the manufacturer must comply

with requirements for reporting incidents and field safety corrective actions associated with the medical device.

order to demonstrate safety and efficacy for their medical devices, manufacturers must conduct clinical investigations in accordance

with the requirements of Annex X to the Medical Devices Directive, Annex 7 of the Active Implantable Medical Devices Directive,

and applicable European and International Organization for Standardization standards, as implemented or adopted in the EEA member

Clinical trials for medical devices usually require the approval of an ethics review board and approval by or notification

to the national regulatory authorities.

Both regulators and ethics committees also require the submission of serious adverse event

reports during a study and may request a copy of the final study report.

April 5, 2017, the European Parliament passed the Medical Devices Regulation (Regulation 2017/745), which repeals and replaces

the EU Medical Devices Directive and the Active Implantable Medical Devices Directive.

Unlike directives, which must be implemented

into the national laws of the EEA member States, the regulations would be directly applicable, i.e., without the need for adoption

of EEA member State laws implementing them, in all EEA member States and are intended to eliminate current differences in the

regulation of medical devices among EEA member States.

The Medical Devices Regulation, among other things, is intended to establish

a uniform, transparent, predictable and sustainable regulatory framework across the EEA for medical devices and ensure a high

level of safety and health while supporting innovation.

The Medical Devices Regulation will however only become applicable three

years after publication (in 2020).

Once applicable, the new regulations will among other things:

with the requirements of Annex X to the Medical Devices Directive, Annex 7 of the Active Implantable Medical Devices Directive, and applicable

European and International Organization for Standardization standards, as implemented or adopted in the EEA member states.

Clinical trials

for medical devices usually require the approval of an ethics review board and approval by or notification to the national regulatory

Both regulators and ethics committees also require the submission of serious adverse event reports during a study and may

request a copy of the final study report.

April 5, 2017, the European Parliament passed the Medical Devices Regulation (Regulation 2017/745), which repeals and replaces the EU

Medical Devices Directive and the Active Implantable Medical Devices Directive.

Unlike directives, which must be implemented into the

national laws of the EEA member States, the regulations would be directly applicable, i.e., without the need for adoption of EEA member

State laws implementing them, in all EEA member States and are intended to eliminate current differences in the regulation of medical

devices among EEA member States.

The Medical Devices Regulation, among other things, is intended to establish a uniform, transparent,

predictable and sustainable regulatory framework across the EEA for medical devices and ensure a high level of safety and health while

supporting innovation.

The Medical Devices Regulation will however only become applicable three years after publication (in 2020).

applicable, the new regulations will among other things:

the rules on placing devices on the market and reinforce surveillance once they are available;

explicit provisions on manufacturers’

responsibilities for the follow-up of the quality, performance and safety of devices

placed on the market;

the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification

up a central database to provide patients, healthcare professionals and the public with comprehensive information on products

available in the EU;

rules for the assessment of certain high-risk devices, such as implants, which may have to undergo an additional check

by experts before they are placed on the market.

are subject to regulations and product registration requirements in many foreign countries in which we may sell our products,

including in the areas of:

explicit provisions on manufacturers’ responsibilities for the follow-up of the quality,

performance and safety of devices placed on the market;

the traceability of medical devices throughout the supply chain to the end-user or patient

through a unique identification number;

up a central database to provide patients, healthcare professionals and the public with comprehensive

information on products available in the EU;

● strengthened

rules for the assessment of certain high-risk devices, such as implants, which may have to

undergo an additional check by experts before they are placed on the market.

are subject to regulations and product registration requirements in many foreign countries in which we may sell our products, including

in the areas of:

development, manufacturing and testing;

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keeping procedures;

● advertising

and promotion;

and field corrective actions;

surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to

death or serious injury;

● post-market

surveillance, including reporting of deaths or serious injuries and malfunctions that, if

they were to recur, could lead to death or serious injury;

and export restrictions;

regulations, duties and tax requirements;

● registration

for reimbursement;

of testing performed in country by distributors for licensees;

time required to obtain clearance required by foreign countries may be longer or shorter than that required for FDA clearance,

and requirements for licensing a product in a foreign country may differ significantly from FDA requirements.

time required to obtain clearance required by foreign countries may be longer or shorter

than that required for FDA clearance, and requirements for licensing a product in a foreign

country may differ significantly from FDA requirements.

EU Medical Devices Regulation became effective in May 2020.

The revised regulation includes further controls and requirements

on the following activities:

The revised regulation includes further controls and requirements on the

following activities:

level of request for premarket clinical evidence for high-risk devices;

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of notified bodies, by independent auditors;

requirements regarding vigilance and product traceability (specifically related to labeling requirements);

requirements regarding vigilance and product traceability (specifically related to labeling

requirements);

regulation for non-traditional roles such as importer and distributor.

State and Foreign Fraud and Abuse and Physician Payment Transparency Laws

addition to FDA restrictions on marketing and promotion of drugs and devices, other federal and state laws restrict our business

These laws include, without limitation, foreign, federal, and state anti-kickback and false claims laws, as well as

transparency laws regarding payments or other items of value provided to healthcare providers.

federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving

any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind to

induce or in return for purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any good,

facility, item or service reimbursable, in whole or in part, under Medicare, Medicaid or other federal healthcare programs.

term “remuneration”

has been broadly interpreted to include anything of value, including stock, stock options, and

the compensation derived through ownership interests.

that the federal Anti-Kickback Statute is broad and may prohibit many innocuous or beneficial arrangements within the healthcare

industry, the United State Department of Health and Human Services (“DHHS”) issued regulations in July 1991, which

DHHS has referred to as “safe harbors.”

These safe harbor regulations set forth certain provisions which, if met in

form and substance, will assure medical device manufacturers, healthcare providers and other parties that they will not be prosecuted

under the federal Anti-Kickback Statute.

Additional safe harbor provisions providing similar protections have been published intermittently

Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities

from prosecution, the exceptions and safe harbors are drawn narrowly.

Our arrangements with physicians, hospitals and other persons

or entities who are in a position to refer may not fully meet the stringent criteria specified in the various safe harbors.

that involve remuneration that may be alleged to be intended to induce prescribing, purchases or recommendations may be subject

to scrutiny if they do not fall within an exception or safe harbor.

Failure to meet all of the requirements of a particular applicable

statutory exception or regulatory safe harbor does not make the conduct per se illegal under the federal Anti-Kickback

Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all

its facts and circumstances.

Several courts have interpreted the statute’s intent requirement to mean that if any one purpose

of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the federal Anti-Kickback

Statute has been violated.

In addition, a person or entity does not need to have actual knowledge of the statute or specific intent

to violate it in order to have committed a violation.

Moreover, a claim including items or services resulting from a violation

of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act

(described below).

of the federal Anti-Kickback Statute may result in civil monetary penalties up to $100,000 for each violation, plus up to three

times the remuneration involved.

addition to FDA restrictions on marketing and promotion of drugs and devices, other federal and state laws restrict our business practices.

These laws include, without limitation, foreign, federal, and state anti-kickback and false claims laws, as well as transparency laws

regarding payments or other items of value provided to healthcare providers.

federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving any remuneration

(including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind to induce or in return for

purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any good, facility, item or service reimbursable,

in whole or in part, under Medicare, Medicaid or other federal healthcare programs.

The term “remuneration” has been broadly

interpreted to include anything of value, including stock, stock options, and the compensation derived through ownership interests.

that the federal Anti-Kickback Statute is broad and may prohibit many innocuous or beneficial arrangements within the healthcare industry,

the United State Department of Health and Human Services (“DHHS”) issued regulations in July 1991, which DHHS has referred

to as “safe harbors.” These safe harbor regulations set forth certain provisions which, if met in form and substance, will

assure medical device manufacturers, healthcare providers and other parties that they will not be prosecuted under the federal Anti-Kickback

Additional safe harbor provisions providing similar protections have been published intermittently since 1991.

Although there

are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and

safe harbors are drawn narrowly.

Our arrangements with physicians, hospitals and other persons or entities who are in a position to refer

may not fully meet the stringent criteria specified in the various safe harbors.

Practices that involve remuneration that may be alleged

to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not fall within an exception

or safe harbor.

Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does

not make the conduct per se illegal under the federal Anti-Kickback Statute.

Instead, the legality of the arrangement will be

evaluated on a case-by-case basis based on a cumulative review of all its facts and circumstances.

Several courts have interpreted the

statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of

federal healthcare covered business, the federal Anti-Kickback Statute has been violated.

In addition, a person or entity does not need

to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

Moreover, a claim including

items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes

of the federal civil False Claims Act (described below).

of the federal Anti-Kickback Statute may result in civil monetary penalties up to $100,000 for each violation, plus up to three times

the remuneration involved.

Civil penalties for such conduct can further be assessed under the federal False Claims Act.

Violations can also result in criminal penalties, including criminal fines of up to $100,000 and imprisonment of up to 10 years.

Similarly, violations can result in exclusion from participation in government healthcare programs, including Medicare and Medicaid.

Liability under the federal Anti-Kickback Statute may also arise because of the intentions or actions of the parties with whom

we do business.

While we are not aware of any such intentions or actions, we have only limited knowledge regarding the intentions

or actions underlying those arrangements.

Conduct and business arrangements that do not fully satisfy one of these safe harbor

provisions may result in increased scrutiny by government enforcement authorities.

The majority of states also have anti-kickback

laws which establish similar prohibitions and, in some cases, may apply more broadly to items or services covered by any third-party

payor, including commercial insurers and self-pay patients.

federal civil False Claims Act prohibits, among other things, any person or entity from knowingly presenting, or causing to be

presented, a false or fraudulent claim for payment or approval to the federal government or knowingly making, using or causing

to be made or used a false record or statement material to a false or fraudulent claim to the federal government.

A claim includes

“any request or demand”

for money or property presented to the U.S.

The federal civil False Claims Act

also applies to false submissions that cause the government to be paid less than the amount to which it is entitled, such as a

Intent to deceive is not required to establish liability under the civil federal civil False Claims Act.

addition, private parties may initiate “qui tam”

whistleblower lawsuits against any person or entity under the federal

civil False Claims Act in the name of the government and share in the proceeds of the lawsuit.

Penalties for federal civil False

Claim Act violations include fines for each false claim, plus up to three times the amount of damages sustained by the federal

government and, most critically, may provide the basis for exclusion from government healthcare programs, including Medicare and

On May 20, 2009, the Fraud Enforcement Recovery Act of 2009, or FERA, was enacted, which modifies and clarifies certain

provisions of the federal civil False Claims Act.

In part, the FERA amends the federal civil False Claims Act such that penalties

may now apply to any person, including an organization that does not contract directly with the government, who knowingly makes,

uses or causes to be made or used, a false record or statement material to a false or fraudulent claim paid in part by the federal

The government may further prosecute conduct constituting a false claim under the federal criminal False Claims Act.

The criminal False Claims Act prohibits the making or presenting of a claim to the government knowing such claim to be false,

fictitious or fraudulent and, unlike the federal civil False Claims Act, requires proof of intent to submit a false claim.

an entity is determined to have violated the federal civil False Claims Act, the government may impose civil fines and penalties

ranging from $11,181 to $22,363 for each false claim, plus treble damages, and exclude the entity from participation in Medicare,

Medicaid and other federal healthcare programs.

Civil Monetary Penalty Act of 1981 imposes penalties against any person or entity that, among other things, is determined to have

presented or caused to be presented a claim to a federal healthcare program that the person knows or should know is for an item

or service that was not provided as claimed or is false or fraudulent, or offering or transferring remuneration to a federal healthcare

beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items

or services reimbursable by the government from a particular provider or supplier.

Violations can

also result in criminal penalties, including criminal fines of up to $100,000 and imprisonment of up to 10 years.

Similarly, violations

can result in exclusion from participation in government healthcare programs, including Medicare and Medicaid.

Liability under the federal

Anti-Kickback Statute may also arise because of the intentions or actions of the parties with whom we do business.

While we are not aware

of any such intentions or actions, we have only limited knowledge regarding the intentions or actions underlying those arrangements.

Conduct and business arrangements that do not fully satisfy one of these safe harbor provisions may result in increased scrutiny by government

enforcement authorities.

The majority of states also have anti-kickback laws which establish similar prohibitions and, in some cases,

may apply more broadly to items or services covered by any third-party payor, including commercial insurers and self-pay patients.

federal civil False Claims Act prohibits, among other things, any person or entity from knowingly presenting, or causing to be presented,

a false or fraudulent claim for payment or approval to the federal government or knowingly making, using or causing to be made or used

a false record or statement material to a false or fraudulent claim to the federal government.

A claim includes “any request or

demand” for money or property presented to the U.S.

The federal civil False Claims Act also applies to false submissions

that cause the government to be paid less than the amount to which it is entitled, such as a rebate.

Intent to deceive is not required

to establish liability under the civil federal civil False Claims Act.

addition, private parties may initiate “qui tam” whistleblower lawsuits against any person or entity under the federal civil

False Claims Act in the name of the government and share in the proceeds of the lawsuit.

Penalties for federal civil False Claim Act

violations include fines for each false claim, plus up to three times the amount of damages sustained by the federal government and,

most critically, may provide the basis for exclusion from government healthcare programs, including Medicare and Medicaid.

2009, the Fraud Enforcement Recovery Act of 2009, or FERA, was enacted, which modifies and clarifies certain provisions of the federal

civil False Claims Act.

In part, the FERA amends the federal civil False Claims Act such that penalties may now apply to any person,

including an organization that does not contract directly with the government, who knowingly makes, uses or causes to be made or used,

a false record or statement material to a false or fraudulent claim paid in part by the federal government.

The government may further

prosecute conduct constituting a false claim under the federal criminal False Claims Act.

The criminal False Claims Act prohibits the

making or presenting of a claim to the government knowing such claim to be false, fictitious or fraudulent and, unlike the federal civil

False Claims Act, requires proof of intent to submit a false claim.

When an entity is determined to have violated the federal civil False

Claims Act, the government may impose civil fines and penalties ranging from $11,181 to $22,363 for each false claim, plus treble damages,

and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs.

Civil Monetary Penalty Act of 1981 imposes penalties against any person or entity that, among other things, is determined to have presented

or caused to be presented a claim to a federal healthcare program that the person knows or should know is for an item or service that

was not provided as claimed or is false or fraudulent, or offering or transferring remuneration to a federal healthcare beneficiary that

a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable

by the government from a particular provider or supplier.

also created additional federal criminal statutes that prohibit among other actions, knowingly and willfully executing, or attempting

to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully

embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense,

and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or

fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.

Similar to the

federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to

violate it in order to have committed a violation.

to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling

or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly

and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement

in connection with the delivery of or payment for healthcare benefits, items or services.

Similar to the federal Anti-Kickback Statute,

a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed

foreign countries have similar laws relating to healthcare fraud and abuse.

Foreign laws and regulations may vary greatly from

country to country.

For example, the advertising and promotion of our products is subject to EU Directives concerning misleading

and comparative advertising and unfair commercial practices, as well as other EEA Member State legislation governing the advertising

and promotion of medical devices.

These laws may limit or restrict the advertising and promotion of our products to the general

public and may impose limitations on our promotional activities with healthcare professionals.

Foreign laws and regulations may vary greatly from country

For example, the advertising and promotion of our products is subject to EU Directives concerning misleading and comparative

advertising and unfair commercial practices, as well as other EEA Member State legislation governing the advertising and promotion of

medical devices.

These laws may limit or restrict the advertising and promotion of our products to the general public and may impose

limitations on our promotional activities with healthcare professionals.

Also, many U.S.

states have similar

fraud and abuse statutes or regulations that may be broader in scope and may apply regardless of payor, in addition to items and

services reimbursed under Medicaid and other state programs.

states have similar fraud and abuse statutes

or regulations that may be broader in scope and may apply regardless of payor, in addition to items and services reimbursed under Medicaid

and other state programs.

Additionally,

there has been a recent trend of increased foreign, federal, and state regulation of payments and transfers of value provided

to healthcare professionals or entities.

The federal Physician Payments Sunshine Act imposes annual reporting requirements on

certain drug, biologics, medical supplies and device manufacturers for which payment is available under Medicare, Medicaid or

Children’s Health Insurance Program (“CHIP”), for payments and other transfers of value provided by them, directly

or indirectly, to physicians (including physician family members), certain other healthcare providers, and teaching hospitals,

as well as ownership and investment interests held by physicians and their immediate family members.

A manufacturer’s failure

to submit timely, accurately and completely the required information for all payments, transfers of value or ownership or investment

interests may result in civil monetary penalties ranging from $1,000 to $10,000 for each payment or other transfer of value that

Is not reported (up to a maximum per annual report of $150,000) and from $10,000 to $100,000 for each knowing failure to report

(up to a maximum per annual report of $1,150,000).

Manufacturers must submit reports by the 90 th day of each calendar

there has been a recent trend of increased foreign, federal, and state regulation of payments and transfers of value provided to healthcare

professionals or entities.

The federal Physician Payments Sunshine Act imposes annual reporting requirements on certain drug, biologics,

medical supplies and device manufacturers for which payment is available under Medicare, Medicaid or Children’s Health Insurance

Program (“CHIP”), for payments and other transfers of value provided by them, directly or indirectly, to physicians (including

physician family members), certain other healthcare providers, and teaching hospitals, as well as ownership and investment interests

held by physicians and their immediate family members.

A manufacturer’s failure to submit timely, accurately and completely the

required information for all payments, transfers of value or ownership or investment interests may result in civil monetary penalties

ranging from $1,000 to $10,000 for each payment or other transfer of value that Is not reported (up to a maximum per annual report of

$150,000) and from $10,000 to $100,000 for each knowing failure to report (up to a maximum per annual report of $1,150,000).

Manufacturers

must submit reports by the 90 th day of each calendar year.

Certain foreign countries and U.S.

states also mandate implementation of commercial compliance programs, impose restrictions

on device manufacturer marketing practices and require tracking and reporting of gifts, compensation and other remuneration to

healthcare professionals and entities.

Additionally, there are criminal penalties if an entity intentionally makes false statement

in such reports.

With some exceptions, the information that manufacturers report is made publicly available.

states also mandate implementation

of commercial compliance programs, impose restrictions on device manufacturer marketing practices and require tracking and reporting

of gifts, compensation and other remuneration to healthcare professionals and entities.

Additionally, there are criminal penalties if

an entity intentionally makes false statement in such reports.

With some exceptions, the information that manufacturers report is made

publicly available.

Privacy and Security Laws

are also subject to various federal, state and foreign laws that protect the confidentiality of certain patient health information,

including patient medical records, and restrict the use and disclosure of patient health information by healthcare providers,

such as HIPAA, as amended by HITECH, in the United States.

established uniform standards governing the conduct of certain electronic healthcare transactions and requires certain entities,

called covered entities, to comply with standards that include the privacy and security of protected health information, or PHI.

HIPAA also requires business associates, such as independent contractors or agents of covered entities that have access to PHI

in connection with providing a service to or on behalf of a covered entity, of covered entities to enter into business associate

agreements with the covered entity and to safeguard the covered entity’s PHI against improper use and disclosure.

HIPAA privacy regulations cover the use and disclosure of protected health information by covered entities as well as business

associates, which are defined to include subcontractors that create, receive, maintain, or transmit protected health information

on behalf of a business associate.

They also set forth certain rights that an individual has with respect to his or her protected

health information maintained by a covered entity, including the right to access or amend certain records containing protected

health information, or to request restrictions on the use or disclosure of protected health information.

The security regulations

establish requirements for safeguarding the confidentiality, integrity, and availability of protected health information that

is electronically transmitted or electronically stored.

HITECH, among other things, established certain health information security

breach notification requirements.

A covered entity must notify any individual whose protected health information is breached according

to the specifications set forth in the breach notification rule.

The HIPAA privacy and security regulations establish a uniform

federal “floor”

and do not supersede state laws that are more stringent or provide individuals with greater rights

with respect to the privacy or security of, and access to, their records containing protected health information or insofar as

such state laws apply to personal information that is broader in scope than protected health information as defined under HIPAA.

are also subject to various federal, state and foreign laws that protect the confidentiality of certain patient health information, including

patient medical records, and restrict the use and disclosure of patient health information by healthcare providers, such as HIPAA, as

amended by HITECH, in the United States.

established uniform standards governing the conduct of certain electronic healthcare transactions and requires certain entities, called

covered entities, to comply with standards that include the privacy and security of protected health information, or PHI.

requires business associates, such as independent contractors or agents of covered entities that have access to PHI in connection with

providing a service to or on behalf of a covered entity, of covered entities to enter into business associate agreements with the covered

entity and to safeguard the covered entity’s PHI against improper use and disclosure.

HIPAA privacy regulations cover the use and disclosure of protected health information by covered entities as well as business associates,

which are defined to include subcontractors that create, receive, maintain, or transmit protected health information on behalf of a business

They also set forth certain rights that an individual has with respect to his or her protected health information maintained

by a covered entity, including the right to access or amend certain records containing protected health information, or to request restrictions

on the use or disclosure of protected health information.

The security regulations establish requirements for safeguarding the confidentiality,

integrity, and availability of protected health information that is electronically transmitted or electronically stored.

HITECH, among

other things, established certain health information security breach notification requirements.

A covered entity must notify any individual

whose protected health information is breached according to the specifications set forth in the breach notification rule.

The HIPAA privacy

and security regulations establish a uniform federal “floor” and do not supersede state laws that are more stringent or provide

individuals with greater rights with respect to the privacy or security of, and access to, their records containing protected health

information or insofar as such state laws apply to personal information that is broader in scope than protected health information as

defined under HIPAA.

requires the notification of patients, and other compliance actions, in the event of a breach of unsecured protected health information,

If notification to patients of a breach is required, such notification must be provided without unreasonable delay and

in no event later than 60 calendar days after discovery of the breach.

In addition, if the PHI of 500 or more individuals is improperly

used or disclosed, we would be required to report the improper use or disclosure to DHHS, Office of Civil Rights, which would

post the violation on its website, and to the media.

Failure to comply with the HIPAA privacy and security standards can result

in civil monetary penalties up to $59,522 per violation, not to exceed $1,785,651 per calendar year for non-compliance of an identical

provision, and, in certain circumstances, criminal penalties with fines up to $250,000 per violation and/or imprisonment.

If notification to patients of a breach is required, such notification must be provided without unreasonable delay and in no

event later than 60 calendar days after discovery of the breach.

In addition, if the PHI of 500 or more individuals is improperly used

or disclosed, we would be required to report the improper use or disclosure to DHHS, Office of Civil Rights, which would post the violation

on its website, and to the media.

Failure to comply with the HIPAA privacy and security standards can result in civil monetary penalties

up to $59,522 per violation, not to exceed $1,785,651 per calendar year for non-compliance of an identical provision, and, in certain

circumstances, criminal penalties with fines up to $250,000 per violation and/or imprisonment.

authorizes state attorneys general to file suit on behalf of their residents for violations.

Courts are able to award damages,

costs and attorneys’

fees related to violations of HIPAA in such cases.

While HIPAA does not create a private right of action

allowing individuals to file suit against us in civil court for violations of HIPAA, its standards have been used as the basis

for duty of care cases in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI.

HIPAA mandates that the Secretary of DHHS conduct periodic compliance audits of HIPAA covered entities, such as us, and their

business associates for compliance with the HIPAA privacy and security standards.

It also tasks DHHS with establishing a methodology

whereby harmed individuals who were the victims of breaches of unsecured PHI may receive a percentage of the civil monetary penalty

paid by the violator.

Courts are able to award damages, costs

and attorneys’ fees related to violations of HIPAA in such cases.

While HIPAA does not create a private right of action allowing

individuals to file suit against us in civil court for violations of HIPAA, its standards have been used as the basis for duty of care

cases in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI.

In addition, HIPAA mandates that

the Secretary of DHHS conduct periodic compliance audits of HIPAA covered entities, such as us, and their business associates for compliance

with the HIPAA privacy and security standards.

It also tasks DHHS with establishing a methodology whereby harmed individuals who were

the victims of breaches of unsecured PHI may receive a percentage of the civil monetary penalty paid by the violator.

the European Union, we may be subject to laws relating to our collection, control, processing and other use of personal data (i.e.,

1 unchanged sentence

We process personal data in relation to our operations.

We process data of

both our employees and our customers, including health and medical information.

The data privacy regime in the EU includes the

EU Data Protection Directive (95/46/EC) regarding the processing of personal data and the free movement of such data, the E-Privacy

Directive 2002/58/EC and national laws implementing each of them.

Each EU Member State has transposed the requirements laid down

by the Data Protection Directive and E-Privacy Directive into its own national data privacy regime and therefore the laws may

differ by jurisdiction, sometimes significantly.

We need to ensure compliance with the rules in each jurisdiction where we are

established or are otherwise subject to local privacy laws.

We process data of both

our employees and our customers, including health and medical information.

The data privacy regime in the EU includes the EU Data Protection

Directive (95/46/EC) regarding the processing of personal data and the free movement of such data, the E-Privacy Directive 2002/58/EC

and national laws implementing each of them.

Each EU Member State has transposed the requirements laid down by the Data Protection Directive

and E-Privacy Directive into its own national data privacy regime and therefore the laws may differ by jurisdiction, sometimes significantly.

We need to ensure compliance with the rules in each jurisdiction where we are established or are otherwise subject to local privacy laws.

requirements include that personal data may only be collected for specified, explicit and legitimate purposes based on legal grounds

1 unchanged sentence

Personal data must also be adequate,

relevant, not excessive in relation to the purposes for which it is collected, be secure, not be transferred outside of the EEA

unless certain steps are taken to ensure an adequate level of protection and must not be kept for longer than necessary for the

purposes of collection.

To the extent that we process, control or otherwise use sensitive data relating to living individuals

(for example, patients’

health or medical information), more stringent rules apply, limiting the circumstances and the manner

in which we are legally permitted to process that data and transfer that data outside of the EEA.

In particular, in order to process

such data, explicit consent to the processing (including any transfer) is usually required from the data subject (being the person

to whom the personal data relates).

new EU-wide General Data Protection Regulation, or GDPR, became applicable on May 25, 2018, replacing the current data protection

laws issued by each EU member state based on the Directive 95/46/EC.

Unlike the Directive (which needed to be transposed at national

level), the GDPR text is directly applicable in each EU member state, resulting in a more uniform application of data privacy

laws across the EU.

The GDPR imposes onerous accountability obligations requiring data controllers and processors to maintain

a record of their data processing and policies.

It requires data controllers to be transparent and disclose to data subjects (in

a concise, intelligible and easily accessible form) how their personal information is to be used, imposes limitations on retention

of information, increases requirements pertaining to pseudonymized (i.e., key-coded) data, introduces mandatory data breach notification

requirements and sets higher standards for data controllers to demonstrate that they have obtained valid consent for certain data

processing activities.

Fines for non-compliance with the GDPR are significant—the greater of EUR 20 million or 4% of global

The GDPR provides that EU member states may introduce further conditions, including limitations, to the processing of

genetic, biometric or health data, which could limit our ability to collect, use and share personal data, or could cause our compliance

costs to increase, ultimately having an adverse impact on our business.

are subject to the supervision of local data protection authorities in those jurisdictions where we are established or otherwise

subject to applicable law.

depend on a number of third parties in relation to our provision of our services, a number of which process personal data on our

With each such provider we enter into contractual arrangements to ensure that they only process personal data according

to our instructions, and that they have sufficient technical and organizational security measures in place.

Where we transfer

personal data outside the EEA, we do so in compliance with the relevant data export requirements.

We take our data protection

obligations seriously, as any improper disclosure, particularly with regard to our customers’

sensitive personal data, could

negatively impact our business and/or our reputation.

United States and some foreign jurisdictions are considering or have enacted a number of legislative and regulatory proposals

to change the healthcare system in ways that could affect our ability to sell our products profitably.

Among policy makers and

payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated

goals of containing healthcare costs, improving quality or expanding access.

Current and future legislative proposals to further

reform healthcare or reduce healthcare costs may limit coverage of or lower reimbursement for the procedures associated with the

use of our products.

The cost containment measures that payors and providers are instituting and the effect of any healthcare

reform initiative implemented in the future could impact our revenue from the sale of our products.

implementation of the Affordable Care Act in the United States, for example, has changed healthcare financing and delivery by

both governmental and private insurers substantially, and affected medical device manufacturers significantly.

The Affordable

Care Act imposed, among other things, a 2.3% federal excise tax, with limited exceptions, on any entity that manufactures or imports

Class I, II and III medical devices offered for sale in the United States that began on January 1, 2013.

Through a series of legislative

amendments, the tax was suspended for 2016 through 2019.

Absent further legislative action, the device excise tax will be reinstated

on medical device sales starting January 1, 2020.

The Affordable Care Act also provided incentives to programs that increase the

federal government’s comparative effectiveness research and implemented payment system reforms including a national pilot

program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency

of certain healthcare services through bundled payment models.

Additionally, the Affordable Care Act has expanded eligibility

criteria for Medicaid programs and created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities

in, and conduct comparative clinical effectiveness research, along with funding for such research.

We do not yet know the full

impact that the Affordable Care Act will have on our business.

There have been judicial and Congressional challenges to certain

aspects of the Affordable Care Act, and we expect additional challenges and amendments in the future.

Moreover, the Trump Administration

Congress may take further action regarding the Affordable Care Act, including, but not limited to, repeal or replacement.

Most recently, the Tax Cuts and Jobs Acts was enacted, which, among other things, removes penalties for not complying with the

individual mandate to carry health insurance, beginning in 2019.

addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.

For example, the

Budget Control Act of 2011, among other things, included reductions to Medicare payments to providers of 2% per fiscal year, which

went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through

2027 unless additional Congressional action is taken.

Additionally, the American Taxpayer Relief Act of 2012, among other things,

reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government

to recover overpayments to providers from three to five years.

expect additional state and federal healthcare reform measures to be adopted in the future, any of which could limit the amounts

that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our

products or additional pricing pressure.

relevant, not excessive in relation to the purposes for which it is collected, be secure, not be transferred outside of the EEA unless

certain steps are taken to ensure an adequate level of protection and must not be kept for longer than necessary for the purposes of

To the extent that we process, control or otherwise use sensitive data relating to living individuals (for example, patients’

health or medical information), more stringent rules apply, limiting the circumstances and the manner in which we are legally permitted

to process that data and transfer that data outside of the EEA.

In particular, in order to process such data, explicit consent to the

processing (including any transfer) is usually required from the data subject (being the person to whom the personal data relates).

new EU-wide General Data Protection Regulation, or GDPR, became applicable on May 25, 2018, replacing the current data protection laws

issued by each EU member state based on the Directive 95/46/EC.

Unlike the Directive (which needed to be transposed at national level),

the GDPR text is directly applicable in each EU member state, resulting in a more uniform application of data privacy laws across the

The GDPR imposes onerous accountability obligations requiring data controllers and processors to maintain a record of their data

processing and policies.

It requires data controllers to be transparent and disclose to data subjects (in a concise, intelligible and

easily accessible form) how their personal information is to be used, imposes limitations on retention of information, increases requirements

pertaining to pseudonymized (i.e., key-coded) data, introduces mandatory data breach notification requirements and sets higher standards

for data controllers to demonstrate that they have obtained valid consent for certain data processing activities.

Fines for non-compliance

with the GDPR are significant—the greater of EUR 20 million or 4% of global turnover.

The GDPR provides that EU member states may

introduce further conditions, including limitations, to the processing of genetic, biometric or health data, which could limit our ability

to collect, use and share personal data, or could cause our compliance costs to increase, ultimately having an adverse impact on our

are subject to the supervision of local data protection authorities in those jurisdictions where we are established or otherwise subject

to applicable law.

depend on a number of third parties in relation to our provision of our services, a number of which process personal data on our behalf.

With each such provider we enter into contractual arrangements to ensure that they only process personal data according to our instructions,

and that they have sufficient technical and organizational security measures in place.

Where we transfer personal data outside the EEA,

we do so in compliance with the relevant data export requirements.

We take our data protection obligations seriously, as any improper

disclosure, particularly with regard to our customers’ sensitive personal data, could negatively impact our business and/or our

political and regulatory influences are continuously causing fundamental changes in the healthcare industry in the United States.

2010, the U.S.

Congress enacted and President Obama signed into law, significant reforms to the U.S.

healthcare system.

These reforms,

contained primarily in the Patient Protection and Affordable Care Act of 2010 (the “PPACA”) and its companion act, the Health

Care Education and Reconciliation Act of 2010 (collectively, the “Health Reform Laws”), significantly altered the U.S.

system by authorizing, among many other things:

(i) increased access to health insurance benefits for the uninsured and underinsured

(ii) new facilitators and providers of health insurance, as well as new health insurance purchasing access points (i.e.,

(iii) incentives for certain employer groups to purchase health insurance for their employees;

(iv) opportunities for subsidies

to certain qualifying individuals to help defray the cost of premiums and other out-of-pocket costs associated with the purchase of health

insurance, and over the longer term;

and (v) mechanisms to foster alternative payment and reimbursement methodologies focused on outcomes,

quality and care coordination.

In addition, certain states in which we operate are periodically considering various healthcare reform

their passage in 2010, the Health Reform Laws have triggered many changes to the U.S.

healthcare system, some of which took effect (e.g.,

the subsequently eliminated individual mandate penalty) while others have continued to be delayed and subsequently repealed (e.g., the

medical device tax).

The Health Reform Laws also have faced several challenges and remain subject to ongoing efforts to repeal or modify

For example, President Trump issued an Executive Order 13765 (Minimizing the Economic Burden of the Patient Protection and

Affordable Care Act Pending Repeal) on January 20, 2017 granting authority to certain executive departments and agencies to minimize

the economic burden of the PPACA.

However, President Biden revoked this Executive Order on January 28, 2021 (as part of President Biden’s

Executive Order on Strengthening Medicaid and the Affordable Care Act) and directed heads of departments to “consider whether to

suspend, revise, or rescind — and, as applicable, publish for notice and comment proposed rules suspending, revising, or rescinding”

actions taken by the Trump Administration which may hinder the operation of the Health Reform Laws.

Nevertheless,

the core tenets of the Health Reform Laws remain in effect with several exceptions.

The individual mandate penalty was eliminated beginning

in 2019 through the Tax Cuts and Jobs Act of 2017.

In addition, on December 20, 2019, the Further Consolidated Appropriations Act, 2020

was signed into law which repealed several provisions that were included in the Health Reform Laws to pay for the increased federal spending

associated with the Health Reform Laws.

Specifically, Congress:

(i) repealed the Medical Device Excise Tax, which imposed a 2.3% excise

tax on manufacturers, producers and importers of certain medical devices;

(ii) repealed the health insurance tax, which applies to most

fully insured plans, beginning in 2021;

and (iii) repealed the so-called Cadillac Tax, which imposed an excise tax of 40% on premiums

for employer-sponsored individuals and families that exceeded a certain minimum threshold.

Prior to these changes Congress had passed

a short-term spending bill as part of the Continuing Appropriations Act of 2018 that delayed the implementation of these provisions and

eliminated the Independent Payment Advisory Board, which was a 15- member panel of healthcare experts created by the Health Reform Laws

and tasked with making annual cost-cutting recommendations for Medicare if Medicare spending exceeded a specified growth rate.

Health Reform Laws have also been the subject of litigation.

In particular, in 2019, a collection of 20 state governors

and state attorneys general (subsequently two states have dropped out) filed a lawsuit against the federal government in the Northern

District of Texas seeking to enjoin the entire Health Reform Laws following the elimination of the individual mandate penalty.

Court ruled that without the penalty the individual mandate was unconstitutional and further held that all other provisions of the Health

Reform Laws should be overturned as well.

Court of Appeals for the 5th Circuit affirmed the trial court’s decision;

instead of deciding whether the rest of the PPACA must be struck down, the 5th Circuit sent the case back to the trial court for additional

In March of 2020 the United States Supreme Court agreed to review the case and heard oral arguments on November 10, 2020.

June 17, 2021, the Supreme Court held that the plaintiffs lacked standing and reversed the Fifth Circuit’s judgment in respect

to standing, vacated the Fifth Circuit’s judgment, and remanded the case with instructions to dismiss the case.

Subsequently the

Fifth Circuit vacated the judgement of the District Court in its entirety and remanded the case to the District Court with instructions

The District Court finally dismissed the case on July 27, 2021.

Trump Administration made a number of changes that have affected the individual and small group exchange markets, including modifications

to the open enrollment periods, funding cuts to patient support resources, including the patient navigator program, and failing to issue

cost-sharing reduction payments to insurers participating in the exchanges.

In June 2018, the Trump Administration published a final

rule that allows small businesses and self-employed individuals to band together to create associations that are considered “employers”

under the Employee Retirement Income Security Act (“ERISA”) such that these associations are eligible to access large

group health plans, which are typically less expensive and are not subject to as many of the consumer protections imposed by the PPACA

on small group and individual health plans.

In addition, the Trump Administration published a final rule which makes short term, limited

duration plans more accessible, providing individuals with another product offering that is generally less expensive but has fewer protections

than under the PPACA plans.

This final rule combined with the association health plan final rule, may increase instability in the healthcare

exchanges by siphoning off potentially healthier people from the risk pool.

However, in 2021 President Biden issued an Executive Order

on Strengthening Medicaid and the Affordable Care Act, directing heads of departments to review and potentially revoke or revise these

Trump-era actions.

In light of the ongoing efforts to alter the Health Reform Laws, we are unable at this time to predict the full impact

that potential changes will have on our business, including provisions in the Health Reform Laws related to Medicare payments, mechanisms

to foster alternative payment and reimbursement methodologies focused on outcomes, quality and care coordination, Medicare enrollment

and claims submission requirements and revisions to other federal healthcare laws such as the federal Anti-Kickback Statute, the Stark

Law and the federal False Claims Act.

anticipate, however, that federal and state governments will continue to review and assess alternative healthcare delivery systems and

payment methodologies, and that public debate regarding these issues will continue in the future.

Changes in the law or new interpretations

of existing laws can have a substantial effect on permissible activities, the relative costs associated with doing business in the healthcare

industry, and the amount of reimbursement available from government and other payors.

Any repeal or modification of the Health Reform

Laws may materially adversely impact our business, financial condition, results of operations, cash flow, capital resources and liquidity.

In addition, the potential proposals for alternative legislation to replace the Health Reform Laws may have an adverse impact on our

and Corruption Laws

operations are subject to the FCPA.

We are required to comply with the FCPA, which generally prohibits covered entities and

their intermediaries from engaging in bribery or making other prohibited payments to foreign officials for the purpose of obtaining

or retaining business or other benefits.

In addition, the FCPA imposes accounting standards and requirements on publicly traded

are subject to the Foreign Corrupt Practices Act (“FCPA”).

We are required to comply with the FCPA, which generally prohibits

covered entities and their intermediaries from engaging in bribery or making other prohibited payments to foreign officials for the purpose

of obtaining or retaining business or other benefits.

In addition, the FCPA imposes accounting standards and requirements on publicly

corporations and their foreign affiliates, which are intended to prevent the diversion of corporate funds to the payment

of bribes and other improper payments, and to prevent the establishment of “off books”

slush funds from which such

improper payments can be made.

We also are subject to similar anticorruption legislation implemented in Europe under the Organization

for Economic Co-operation and Development’s Convention on Combating Bribery of Foreign Public Officials in International

Business Transactions.

of bribes and other improper payments, and to prevent the establishment of “off books” slush funds from which such improper

payments can be made.

We also are subject to similar anticorruption legislation implemented in Europe under the Organization for Economic

Co-operation and Development’s Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

Capital Resources

1 unchanged sentence

None of our employees are represented by a union.

We consider our relations with our employees to be good but we do have a Whistleblower Hotline setup for employees to confidentially

report concerns.

Of our current employees, approximately nine are involved in senior management, 16 in sales and marketing, one

in research, development and regulatory and 71 in finance and operations.

consider our relations with our employees to be good but we do have a Whistleblower Hotline setup for employees to confidentially report

Of our current employees, approximately, nine are part of finance and accounting, 11 are involved in senior management, 19

in sales and marketing, one in research, development and regulatory and 118 in operations.

value the importance of retention, growth and development of our employees and we believe we offer competitive compensation (including

salary, incentive bonus, and equity) and benefits packages.

We traditionally will benchmark compensation with external sources

to verify positions are paid in-line with the market.

Our corporate culture is built on passion –

we believe in the company’s

vision of ridding the world of sleep apnea and hire employees who want to share that same passion.

We hold annual company-wide

trainings and host regularly scheduled management meetings where management communicates notable corporate developments to be

disseminated to employees, as well as a periodic corporate all hands meetings.

We are always looking for additional ways to diversify

our workforce.

We will continue to promote a work environment that is based on the fundamental principles of human dignity, equality

and mutual respect.

In addition, we are committed to providing a safe and healthy work environment for all of our employees.

response to the COVID-19 pandemic, we have required personal protective equipment for patient-facing employees in addition to

requiring daily health questionnaires and temperature checks.

Many employees work remotely and we have limited travel as a result

of the pandemic.

We will continue to support our workforce during these unprecedented circumstances to ensure their safety and

We traditionally will benchmark compensation with external sources to verify

positions are paid in-line with the market.

Our corporate culture is built on passion – we believe in the company’s vision

of ridding the world of sleep apnea and hire employees who want to share that same passion.

We hold annual company-wide trainings and

host regularly scheduled management meetings where management communicates notable corporate developments to be disseminated to employees,

as well as a periodic corporate all hands meetings.

We are always looking for additional ways to diversify our workforce.

We will continue

to promote a work environment that is based on the fundamental principles of human dignity, equality and mutual respect.

we are committed to providing a safe and healthy work environment for all of our employees.

In response to the COVID-19 pandemic, we

have required personal protective equipment for patient-facing employees in addition to requiring daily health questionnaires and temperature

Many employees work remotely and we have limited travel as a result of the pandemic.

We will continue to support our workforce

during these unprecedented circumstances to ensure their safety and well-being.

were originally organized on July 7, 2016 in Wyoming as Corrective BioTechnologies, Inc.

On September 6, 2016, we changed our

name from Corrective BioTechnologies, Inc.

On September 6, 2016, we changed our name from

Corrective BioTechnologies, Inc.

to Vivos BioTechnologies, Inc.

On March 2, 2018, we changed our name from Vivos BioTechnologies,

On March 2, 2018, we changed our name from Vivos BioTechnologies, Inc.

to Vivos Therapeutics, Inc.

During our formation in 2016, we issued an aggregate of 933,334 shares of common stock to a group

of our founders, including Summit Capital USA (now Upeva, Inc., 666,667 shares), Regal Capital Venture Partners LLC (166,667 shares)

and Thomas P.

During our formation in 2016, we issued an aggregate of 933,334 shares of common stock to a group of our

founders, including Summit Capital USA (now Upeva, Inc., 666,667 shares), Regal Capital Venture Partners LLC (166,667 shares) and Thomas

Madden (100,000 shares) at a purchase price of $0.0003 per share (for an aggregate of $280 of proceeds).

1 unchanged sentence

and First Vivos, Inc.

August and September 2016, we completed, by way of share exchange, an agreement to acquire the business and operations of (1)

BMS (now a wholly-owned subsidiary), which was engaged in the manufacture and sale of our patented DNA appliance ®

and FDA cleared mRNA appliance ®

(collectively with special proprietary treatment protocols comprises the Vivos

System), and (2) First Vivos, Inc., a Texas corporation (or First Vivos), which proposed to develop and operate a retail chain

of Vivos Centers with specially trained dentists that offer the Vivos System and corroborating physicians.

In connection with

the share exchange with BMS, we issued 3,333,334 shares of common stock to the shareholders of BMS (including, but not limited

Dave Singh, our founder and Chief Medical Officer, who received 3,219,705 shares) in exchange for 12,423,500 shares

of BMS, which constitutes 100% ownership interest in BMS.

In connection with the share exchange with First Vivos, we issued 3,333,334

shares of common stock to the shareholders of First Vivos (including, but not limited to, R.

Kirk Huntsman, our co-founder, Chairman

of the Board and Chief Executive Officer, who received 1,833,334 shares) in exchange for 5,000 shares of First Vivos, which constitutes

100% ownership interest in First Vivos.

transaction was accounted for as a reverse acquisition and recapitalization, with BMS as the acquirer for financial reporting

and accounting purposes.

Upon the consummation of the acquisition, the historical financial statements of BMS became our historical

financial statements and continued to be recorded at their historical carrying amounts.

Offering in 2018

January 26, 2018, we offered fifteen (15) investors who invested from January 4, 2018 to February 9, 2018 a right to rescind their

purchase of shares of common stock during such period and to receive a refund of the full purchase price paid for such shares

due to inadvertent non-disclosure of our receipt of a Warning Letter from the FDA on January 12, 2018 requesting that we take

prompt action to correct the violations discussed in the Warning Letter, and noting that our failure to do so may result in regulatory

action being initiated by the FDA.

See “FDA Regulatory Status”

above for further information on FDA matter.

such investors elected to rescind their purchase of such shares.

of Common Stock and Convertible Promissory Note in Connection with Acquisition of Orem Vivos Center and Empowered Dental Lab

July 1, 2018, we issued 93,334 shares of common stock with a value of $7.50 per share (an aggregate value of $700,000) and a 6%

convertible promissory note in the principal amount of $525,000 to a third party to acquire his dentistry clinic in Orem, Utah

(total consideration of $1,225,000).

On November 6, 2018, we entered into an asset purchase agreement with Empowered Dental Lab,

LLC, a Utah limited liability company, under which we agreed to purchase certain inventory and assets from Empowered Dental Lab

in exchange for consideration of 6,667 shares of common stock and a 6% convertible promissory note for $25,000, for total consideration

August and September 2016, we completed, by way of a share exchange, an agreement to acquire the business and operations of (1) BMS (now

a wholly-owned subsidiary), which was engaged in the manufacture and sale of our patented DNA appliance ® and FDA cleared

mRNA appliance ® (collectively with special proprietary treatment protocols comprises The Vivos Method), and (2) First

Vivos, Inc., a Texas corporation (“First Vivos”), which proposed to develop and operate a retail chain of Vivos Centers

with specially trained dentists that offer The Vivos Method and corroborating physicians.

In connection with the share exchange with

BMS, we issued 3,333,334 shares of common stock to the shareholders of BMS (including, but not limited to, Dr.

Dave Singh, our founder

and former Chief Medical Officer and director, who received 3,219,705 shares) in exchange for 12,423,500 shares of BMS, which constitutes

100% ownership interest in BMS.

In connection with the share exchange with First Vivos, we issued 3,333,334 shares of common stock to

the shareholders of First Vivos (including, but not limited to, R.

Kirk Huntsman, our co-founder, Chairman of the Board and Chief Executive

Officer, who received 1,833,334 shares) in exchange for 5,000 shares of First Vivos, which constitutes 100% ownership interest in First

transaction was accounted for as a reverse acquisition and recapitalization, with BMS as the acquirer for financial reporting and accounting

Upon the consummation of the acquisition, the historical financial statements of BMS became our historical financial statements

and continued to be recorded at their historical carrying amounts.

of Stock and Option Award Plan

April 18, 2019, our stockholders approved the adoption of a stock and option award plan (the “2019 Plan”), under which

April 18, 2019, our stockholders approved the adoption of a stock and option award plan (the “2019 Plan”), under which 333,334

shares were reserved for future issuance for options, restricted stock awards and other equity awards.

On June 18, 2020,

our stockholders approved an amendment and restatement of the 2019 Plan to increase the number shares or our common stock available

for issuance thereunder by 833,333 share of common stock such that, after amendment and restatement of the 2019 Plan, 1,166,667

shares of common stock will be available for issuance under the 2019 Plan.

The 2019 Plan permits grants of equity awards to employees,

directors, consultants and other independent contractors.

On June 18, 2020, our stockholders

approved an amendment and restatement of the 2019 Plan to increase the number shares or our common stock available for issuance thereunder

by 833,333 share of common stock such that, after amendment and restatement of the 2019 Plan, 1,166,667 shares of common stock will be

available for issuance under the 2019 Plan.

The 2019 Plan permits grants of equity awards to employees, directors, consultants and other

independent contractors.

of Transfer of Corporate Domicile and Reverse Stock Split

April 18, 2019, our stockholders voted to authorize our board of directors to recapitalize our common stock by way of reverse

stock split at a ratio of up to one for three.

In addition, on such date, our shareholders also authorized our board of directors

to transfer our corporate domicile from Wyoming to another U.S.

Our board of directors elected not to implement the reverse

stock split transfer of corporate domicile at that time.

August 12, 2020, we transferred our corporate domicile and became a Delaware corporation pursuant to Section 17-16-1720 of the

Wyoming Business Corporation Act and Section 265 of the Delaware General Corporation Law.

As a result of the transfer of corporate

domicile, each share of capital stock of Vivos Wyoming became a share of capital stock of Vivos Delaware on a one-to-one basis,

and such shares shall carry the same terms in all material respects as the shares of Vivos Wyoming .

The transfer of corporate

domicile has heretofore been approved by the board of directors and majority shareholders of Vivos Wyoming.

April 18, 2019, our stockholders voted to authorize our board of directors to recapitalize our common stock by way of reverse stock split

at a ratio of up to one for three.

In addition, on such date, our shareholders also authorized our board of directors to transfer our

corporate domicile from Wyoming to another U.S.

Our board of directors elected not to implement the reverse stock split transfer

of corporate domicile at that time.

August 12, 2020, we transferred our corporate domicile and became a Delaware corporation pursuant to Section 17-16-1720 of the Wyoming

Business Corporation Act and Section 265 of the Delaware General Corporation Law.

As a result of the transfer of corporate domicile,

each share of capital stock of Vivos Wyoming became a share of capital stock of Vivos Delaware on a one-to-one basis, and such shares

shall carry the same terms in all material respects as the shares of Vivos Wyoming.

The transfer of corporate domicile has heretofore

been approved by the board of directors and majority shareholders of Vivos Wyoming.

July 30, 2020, prior to the transfer of our corporate domicile from Wyoming to Delaware, Vivos Wyoming we implemented a one-for-three

reverse stock split of our outstanding common stock pursuant to which holders of Vivos Wyoming’s outstanding common stock

received one share of common stock for every three shares of common stock held.

Unless the context expressly dictates otherwise,

all references to share and per share amounts referred to in this Annual Report reflect the reverse stock split.

reverse stock split of our outstanding common stock pursuant to which holders of Vivos Wyoming’s outstanding common stock received

one share of common stock for every three shares of common stock held.

Unless the context expressly dictates otherwise, all references

to share and per share amounts referred to in this Annual Report reflect the reverse stock split.

manage our business within one reportable segment.

Segment information is consistent with how management reviews our business,

makes investing and resource allocation decisions, and assesses our operating performance.

believe that the patient volumes of our VIPs will be sensitive to seasonal fluctuations in urgent care and primary care activity.

Typically, winter months see a higher occurrence of influenza, bronchitis, pneumonia and similar illnesses;

however, the timing

and severity of these outbreaks vary dramatically.

Additionally, as consumers shift toward high deductible insurance plans, they

are responsible for a greater percentage of their bill, particularly in the early months of the year before other healthcare spending

has occurred, which may lead to lower than expected patient volume or an increase in bad debt expense during that period.

quarterly operating results may fluctuate significantly in the future depending on these and other factors.

principal offices are located at 9137 Ridgeline Boulevard, Suite 135, Highlands Ranch, Colorado 80129, and our telephone number

is (866) 908-4867.

Our website is www.vivoslife.com .

Our website and the information on or that can be accessed through

such website are not part of this Annual Report on Form 10-K.

We were originally organized on July 7, 2016 as a Wyoming corporation

under the name as Corrective BioTechnologies, Inc.

On September 6, 2016, we changed our name from Corrective BioTechnologies,

to Vivos BioTechnologies, Inc., and on March 2, 2018, we changed our name from Vivos BioTechnologies, Inc.

to Vivos Therapeutics,

Effective August 12, 2020, we transferred our corporate domicile from Wyoming to Delaware.

maintain a website at www.vivoslife.com .

You may access our annual reports on Form 10-K, quarterly reports on Form 10-Q,

current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange

Act with the SEC free of charge at our website as soon as reasonably practicable after such material is electronically filed with,

or furnished to, the SEC.

The reference to our website address does not constitute incorporation by reference of the information

contained on our website, and you should not consider the contents of our website in making an investment decision with respect

to our common stock.

Segment information is consistent with how management reviews our business, makes

investing and resource allocation decisions, and assesses our operating performance.

principal offices are located at 9137 Ridgeline Boulevard, Suite 135, Highlands Ranch, Colorado 80129, and our telephone number is (866)

Our website is www.vivos.com and the information that can be accessed through our website is not part of this Annual

Report on Form 10-K.

maintain a website at www.vivos.com .

You may access our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports

on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act with the SEC free

of charge at our website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC.

The reference to our website address does not constitute incorporation by reference of the information contained on our website, and

you should not consider the contents of our website in making an investment decision with respect to our common stock.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business