What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-04-15 compared with 2025-03-31 · 1152 added, 662 removed, 663 unchanged (73% of the section changed)

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Consolidated statements of operations for the years ended December 31, 2025 and 2024

Consolidated statements of stockholders’ equity for the years ended December 31, 2024 and 2023

Consolidated statements of stockholders’ equity/(deficit) for the years ended December 31, 2025 and 2024

Consolidated statements of cash flows for the years ended December 31, 2025 and 2024

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of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of

The Shareholders and the Board of Directors of

Vivos Therapeutics, Inc.

and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated

balance sheets of Vivos Therapeutics, Inc.

and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements

of operations, stockholders’ equity and cash flows for the years then ended, and the related notes (collectively referred to as

the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects,

the consolidated financial position of the Company as of December 31, 2024 and 2023, and the consolidated results of its operations and

its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Uncertainty

The accompanying consolidated financial

statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the consolidated financial

statements, the Company has suffered recurring losses from operations that raise substantial doubt about its ability to continue as a

going concern.

Management’s plans in regard to these matters are also described in Note 2.

The consolidated financial statements

do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements

based on our audits.

on the Financial Statements

We have audited the accompanying consolidated balance sheets of Vivos Therapeutics, Inc.

and Subsidiaries (the

Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, stockholders’ equity/(deficit),

and cash flows for the years then ended, and the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of

the Company as of December 31, 2025 and 2024, and the consolidated results of its operations and its cash flows for the years then

ended, in conformity with accounting principles generally accepted in the United States of America.

Concern Uncertainty

The accompanying consolidated financial statements have been prepared

assuming that the Company will continue as a going concern.

As discussed in Note 2 to the consolidated financial statements, the Company

has suffered recurring losses from operations that raise substantial doubt about its ability to continue as a going concern.

plans in regard to these matters are also described in Note 2.

The consolidated financial statements do not include any adjustments that

might result from the outcome of this uncertainty.

These consolidated financial statements are the responsibility of the

Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based

on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)

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rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with

the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the

consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have,

nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain

an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of

the Company’s internal control over financial reporting.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements

are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform,

an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal

control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal

control over financial reporting.

Accordingly, we express no such opinion.

Moss Adams, LLP

Our audits included performing procedures to assess the risks of material

misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is

a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated

to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter

in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Business Combination – Valuation of Acquired

Intangible Assets and Consideration Transferred

Critical Audit Matter Description

As described in Note 3 to the consolidated financial

statements, the Company acquired the net operating assets of The Sleep Center of Nevada for total consideration aggregating approximately

$8.7 million, which included contingent consideration with an estimated fair value of $1.4 million, payable upon the achievement of a

financial milestone as specified in the transaction agreements.

The acquisition was accounted for as a business combination and included

acquired referral relationships.

The Company used a multi-period excess earnings method to measure the estimated fair values of both the

contingent consideration and acquired referral relationships.

We identified the valuation of contingent

consideration and acquired referral relationships as a critical audit matter.

The principal considerations for our determination

that auditing these estimated fair values is a critical audit matter were the especially

challenging, complex and subjective auditor judgements required to perform audit procedures and evaluate the results of those

procedures, including the involvement of valuation professionals with specialized skills and knowledge in evaluating the

Company’s use of complex valuation models based on estimates of future cash flows.

How We Addressed the Matter in Our Audits

Addressing the matter involved performing procedures

and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

Our audit procedures

related to the valuation of intangible assets and consideration transferred included the following, among others:

● Obtained an understanding and evaluated the methodologies used by management to develop its fair value estimates.

● With the assistance of valuation professionals with specialized skills and knowledge, evaluated and tested the reasonableness of the

valuation methodologies, revenue growth rate, gross margin rate, referral attrition rate, and volatility used to estimate the fair value

of both contingent consideration and referral relationships.

● Verified the mathematical accuracy and internal consistency of the valuation models used and conducted sensitivity analyses to evaluate

the effect of changes in key assumptions on the estimated fair values of the identifiable intangible assets.

● Tested the completeness and accuracy of underlying data used in the valuation models.

● Corroborated management’s assumptions and valuation conclusions with external market evidence where available.

Baker Tilly US, LLP

have served as the Company’s auditor since 2023.

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Deposits and other

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT)

Current liabilities

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Current portion of operating lease liability

Current portion of financing lease liability

Current portion of debt

Other current liabilities

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Operating lease liability, net of current portion

Financing lease liability, net of current portion

Debt, net of current portion

Other liabilities

Total liabilities

Commitments and contingencies (Note 14)

Stockholders’ equity

Stockholders’ equity/(deficit)

Preferred Stock, $ 0.0001 par value per share.

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Accumulated deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

Total stockholders’ equity/(deficit)

Non-controlling interest

Total equity/(deficit)

Total liabilities and equity/(deficit)

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

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Other expense

Excess warrant fair value

Change in fair value of warrant liability, net of issuance costs of $ 645

Loss before income taxes

Net loss attributable to non-controlling interest

Net loss attributable to stockholders

Net loss per share (basic and diluted)

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THERAPEUTICS, INC.

Statements of Stockholders’ Equity

Statements of Stockholders’ Equity/(Deficit)

Ended December 31, 2025 and 2024

Total Stockholders’

Non-controlling

Balances, December 31, 2023

Issuance of common stock and warrants in private placement, net of issuance costs

Issuance of common stock and warrants to consultants for services

Issuance of common stock for purchase of assets

Issuance of commons stock upon exercise of warrants,

net of issuance costs

Shares added for fractional shares pursuant to reverse stock split

Reclassification of liabilities-classified warrants to equity

Issuance of commons stock upon exercise of warrants, net of issuance costs

Issuance of common stock to consultants for services

Issuance of warrants to consultants for services

Stock-based compensation expense

Balances, December 31, 2024

$ ( 104,187 )

Issuance of common stock under At-The-Market program, net of issuance costs

Issuance of common stock and warrants in private placement, net of issuance costs

Issuance of commons stock upon exercise of warrants,

net of issuance costs

Issuance of common stock to consultants for services

Issuance of warrants to consultants for services

Common stock consideration for acquisition

Issuance of common stock upon exercise of warrants, net of issuance costs

Conversion of debt to equity

Stock-based compensation expense

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Fair value of warrants issued for services

Change in fair value of warrant liability, net of issuance costs of $ 645

Excess warrant fair value

Changes in operating assets and liabilities:

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Accrued expenses

Employee retention credit liability

Other liabilities

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Acquisitions of property and equipment

Payment for asset purchase

Cash paid for acquisition of SCN

Net cash used in investing activities

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Proceeds from issuance of common stock

Proceeds from issuance of debt

Proceeds from issuance of warrants

Proceeds from issuance of pre-funded warrants

Proceeds from exercise of warrants

Proceeds from exercise of pre-funded warrants

Payments for issuance costs

Reduction of finance lease liability

Net cash provided by financing activities

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SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Fair value of warrants issued in asset purchase

Conversion of promissory note, net of issuance costs

Common stock issued as consideration for acquisition

Contingent consideration as consideration for acquisition of SCN, net of valuation adjustment

Fair value of warrants issued in private placement

Acquisitions of property and equipment by issuing debt

Conversion of debt to equity

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

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(“Vivos”), a Wyoming corporation established on July 7, 2016

to facilitate this share exchange combination transaction.

to facilitate the SEA transaction.

Vivos was formerly named Corrective BioTechnologies, Inc.

until its name changed

on September 6, 2016 to Vivos Biotechnologies and on March 2, 2018 to Vivos Therapeutics, Inc.

and had no substantial pre-combination

business activities.

until its name changed on September 6, 2016

to Vivos Biotechnologies and on March 2, 2018 to Vivos Therapeutics, Inc.

and had no substantial pre-combination business activities.

First Vivos was incorporated in Texas on November 10, 2015.

Pursuant to the SEA, all of the outstanding shares of

common stock and warrants of BioModeling and all of the shares of common stock of First Vivos were exchanged for newly issued shares

of common stock and warrants of Vivos, the legal acquirer.

Pursuant to the SEA, all of the outstanding shares of common stock and warrants

of BioModeling and all of the shares of common stock of First Vivos were exchanged for newly issued shares of common stock and warrants

of Vivos, the legal acquirer.

transaction was accounted for as a reverse acquisition and recapitalization, with BioModeling as the acquirer for financial reporting

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refers to the common stock, $ 0.0001 par value per share, of Vivos Therapeutics, Inc., a Delaware corporation.

October 25, 2023, we effected a reverse stock split of its outstanding shares of common stock at a ratio of 1-for-25 (the “Reverse

Stock Split”).

The Reverse Stock Split, which was approved by our Board of Directors under authority granted by the our stockholders

at our 2023 Annual Meeting of Stockholders held on September 22, 2023, was consummated pursuant to a Certificate of Amendment filed with

the Secretary of State of Delaware on October 25, 2023 (the “Certificate of Amendment”).

Unless the context otherwise requires,

all references in the accompanying financial statements, these footnotes to the financial statements in general to shares of the Company’s

common stock, including prices per share of the common stock, reflect the Reverse Stock Split.

Fractional shares were not issued, and

the final number of shares were rounded up to the next whole share.

June 10, 2025, we acquired all of the operating assets (the “Acquisition”) of R.D.

Prabhu-Lata K.

Shete MDs, LTD., a Nevada

professional corporation d/b/a The Sleep Center of Nevada (“SCN”) in consideration for a (i) cash payment equal to $ 6.0 million,

(ii) 607,287 shares of restricted common stock in the Company, par value $ 0.0001 per share (the “Common Stock”), equal to

$ 1.3 million based on the volume-weighted average price (“VWAP”) of the Common Stock for the 30 days immediately preceding

the Acquisition and (iii) the assumption of certain specific trade accounts payable and liabilities related to specific SCN contracts

assigned to the Company in connection with the Acquisition.

See Note 3 for further information.

July 14, 2025, we entered into a management agreement with MISleep Solution LLC to provide full suite of Vivos treatments and services

to OSA patients at a joint location in Auburn Hills, Michigan.

As a result, we formed AIM Detroit, LLC, a Colorado limited liability

company (“AIM Detroit”) to serve as a management services organization to medical and dental clinical sleep practices located

in the Detroit Tri-County metropolitan area, to wit:

Wayne County, Oakland County and Macomb County.

The Company holds an 80 % ownership

interest in AIM Detroit.

See Note 19 for further information.

are a medical technology and services company that features a comprehensive suite of proprietary oral appliances and therapeutic treatments.

Our products non-surgically treat certain maxillofacial and developmental abnormalities of the mouth and jaws that are closely associated

with breathing and sleep disorders such as, mild to severe obstructive sleep apnea (“OSA”) and snoring in adults.

three separate clinical pathways or programs to providers—Guided Growth and Development, Lifeline, and Complete Airway Repositioning

and Expansion (“C.A.R.E.”).

Each program features certain oral appliances coupled with specific therapeutic treatments, and

each clinical pathway is intended to address the specific needs of a diverse patient population with different patient journeys.

example, the Guided Growth and Development program features the Vivos Guide and PE x appliances along with CO 2 laser

treatments and other adjunctive therapies designed for treating palatal growth and expansion in pediatric patients as they grow.

mid-range priced Lifeline program features a selection of mandibular advancement devices (“MADs”) such as the Versa and Vida

Sleep which are FDA 510(k) cleared for mild-to-moderate OSA in adults, along with the patented Vida appliance, which is FDA 510(k) cleared

as unspecified classification for the alleviation of Temporomandibular Joint Dysfunction (“TMD”) symptoms, bruxism, migraine

headaches, and nasal dilation.

We non-surgically treat certain maxillofacial and developmental abnormalities of the mouth and jaws that are closely associated with

breathing and sleep disorders such as, mild to severe obstructive sleep apnea (“OSA”) and snoring in adults.

flagship C.A.R.E.

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worldwide with our entire current suite of products, there have been very few instances of relapse.

offer a suite of diagnostic and support products and services to dental and medical providers and distributors who service patients

with OSA or related conditions.

Such products and services include (i) VivoScore home sleep screenings and tests (powered by

SleepImage ® technology), (ii) AireO2 (an electronic health record program designed specifically for use by dentists

treating sleep patients), (iii) Treatment Navigator (a concierge service to assist a provider in educating and supporting the

doctors as they navigate insurance coverage, diagnostic indications and treatment options), (iv) Billing Intelligence Services

(which optimizes medical and dental reimbursement), (v) advanced training and continuing education courses at our Vivos Institute in

Denver, Colorado, (vi) MyoCorrect, a service through which Vivos-trained providers can provide orofacial myofunctional therapy

(“OMT”) to patients via a telemedicine platform, and (vii) our Medical Integration Division (“MID”), which

historically has managed independent medical practices under management and development agreements which paid us from six ( 6 %)

to eight ( 8 %)

percent of all net revenue from sleep-related services as well as development fees.

With the shift in focus to the alliance-based

marketing and distribution model described below, the MID will be pursuing strategic alliances with sleep centers to provide better options using

Vivos products for patients who have been diagnosed with OSA.

not our current focus due to the pivot in the business model, we have historically offered a suite of diagnostic and support products

and services to dental and medical providers and distributors who service patients with OSA or related conditions.

Such products and

services include (i) VivoScore home sleep screenings and tests (powered by SleepImage ® technology), (ii) Treatment Navigator

(a concierge service to assist a provider in educating and supporting the doctors as they navigate insurance coverage, diagnostic indications

and treatment options), (iii) Billing Intelligence Services (which optimizes medical and dental reimbursement), (iv) advanced training

and continuing education courses at our Vivos Institute in Denver, Colorado, and (v) MyoSync (formerly MyoCorrect), a service through which Vivos-trained

providers can provide orofacial myofunctional therapy (“OMT”) to patients via a telemedicine platform.

Some of these services

including home sleep screenings, treatment navigator services and MyoSync are being provided to patients directly under the new sales,

marketing and distribution model described below.

With this pivot, we shifted our Medical Integration Division (“MID”) to

pursue strategic alliances and acquisitions of sleep centers to provide better options using Vivos products for patients who have been

diagnosed with OSA.

Business Model

business model has historically been to teach, train, and support dentists, medical doctors, and distributors in the use of our products

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the specific program or clinical pathway that they want to focus on, such as Guided Growth and Development or Lifeline or both.

may also enroll in the VIP program for the complete set training, educational, and support services available in all three clinical pathway

Dentists enrolled in the VIP Program are referred to as “VIPs.” We charge up front enrollment fees to educate and

train new providers.

We also charge for the ancillary support services listed above and view each product and service as a revenue/profit

Over the course of 2024, we worked to pivot our business strategy and began

to steadily decrease our prior dependence on dentists to sell our products and our dependence on VIP enrollment revenue.

This new business

strategy is focused on contractual alliances with (and, in the future, potential outright acquisitions by us of) OSA healthcare providers,

including dentists, sleep centers and others and is based on a profit-sharing model between us and the provider which aligns our revenue

generation more directly to sales of our novel appliances.

could also enroll in our Vivos Integrated Provider (“VIP”) program for the complete set training, educational, and support

services available in all three clinical pathway programs.

Dentists enrolled in the VIP program are referred to as “VIPs.”

We historically charged up front enrollment fees to educate and train new VIPs.

We also charged for the ancillary support services listed

above and view each product and service as a revenue center.

We refer to the VIP-focused business model herein as our “legacy”

or “historic” business model.

Sales, Marketing and Distribution Model

the course of 2024 and during 2025, we worked to pivot our business strategy and began to steadily decrease our prior dependence on dentists

to sell our products and our dependence on VIP enrollment revenue.

This new business strategy is focused on contractual alliances with

and outright acquisitions of sleep specialty providers, sleep centers and others and is based on a profit-sharing model between us and

the provider which aligns our revenue generation more directly to sales of our novel appliances.

June 2024, we entered into our first contractual alliance with Rebis Health, a sleep center operator in Colorado.

Revenues from this

arrangement have not developed as we had expected for many reasons beyond our control, but we learned important lessons which have led

to changes to this model.

June 2025, we acquired all assets, including operating assets such as sleep testing, diagnostics, and treatment centers of SCN.

The Acquisition

marked a milestone in the pivot to our sales, marketing distribution model for our innovative OSA appliances.

Under the new model, SCN

will provide sleep disorder patients with the opportunity to be candidates for our advanced, proprietary and FDA-cleared CARE oral medical

devices, oral appliances and additional adjunctive therapies and methods.

Under customary agreements designed to comply with applicable

corporate practice of medicine law, our operation of SCN allows us to manage and capture both diagnostic and consulting revenues, representing

new higher margin revenue streams for us, as well as potential Vivos appliance and related product and service revenue from SCN.

July 14, 2025, we entered into a management agreement under this revised approach with MISleep Solution LLC to provide full suite of

Vivos treatments and services to OSA patients at a joint location in Auburn Hills, Michigan.

Consistent with our new model, we own a

supermajority equity stake in the management services company, with the sleep doctors having minority ownership interests.

entered into Practice Administration Agreements and Management and Succession Agreements with affiliated Practices (defined as the professional

medical and dental practice entities, including Sleep Dentistry of Detroit, P.C.

and Sleep Medicine of Detroit, P.C., each owned and

controlled by their respective licensed professionals) under which AIM Detroit provides business, administrative, and other non-clinical

management services, while all clinical and professional services remain exclusively under the authority and control of the Practices

and their licensed professionals.

are exploring and seeking to implement additional acquisitions of, or collaborations with, medical sleep and similar healthcare practices

to expand our business model in an effort to grow our revenues.

refer to this new model herein alternatively as our new sales, marketing and distribution model or our strategic alliance and/or acquisition

of Presentation and Consolidation

accompanying consolidated financial statements, which include the accounts of the Company and its wholly owned subsidiaries (BioModeling,

First Vivos, Vivos Therapeutics (Canada) Inc., Vivos Management and Development, LLC, Vivos Del Mar Management, LLC, Vivos Modesto Management,

LLC, Vivos Therapeutics DSO LLC, a Colorado limited liability company, and Vivos Airway Alliances, LLC, a Colorado limited liability

company), are prepared in conformity with generally accepted accounting principles in the United States of America (“U.S.

All significant intercompany balances and transactions have been eliminated in consolidation.

First Vivos, Vivos Therapeutics (Canada) Inc., Vivos Management and Development, LLC, Vivos Therapeutics DSO LLC, a Colorado limited

liability company, Vivos Airway Alliance, LLC, a Colorado limited liability company, Vivos Providers Network, LLC, a Colorado limited

liability company, Airway Integrated Management Company, LLC and Airway Intelligence Center, LLC.

Additionally, Sleep Center of Nevada,

Rachakonda & Associates, PLLC, Nevada Sleep and Airway, Patterson & Associates, PLLC, AIM – Detroit, LLC, Sleep Medicine

of Detroit, P.C., and Sleep Dentistry of Detroit, P.C.), are not wholly owned but are controlled by Vivos and are prepared in conformity

with generally accepted accounting principles in the United States of America (“U.S.

evaluate our interests in legal entities to determine whether such entities should be consolidated under the voting interest entity model

or the variable interest entity (“VIE”) model.

When we determine that it is the primary beneficiary of a VIE, we consolidate

the entity and includes its assets, liabilities, revenues, and expenses in the consolidated financial statements.

Ownership interests

not held by Vivos are reflected as noncontrolling interests within equity.

All significant intercompany balances and transactions have

been eliminated in consolidation.

See Note 19 for additional information regarding Vivos’ involvement with AIM Detroit.

Price Allocation

account for business combinations in accordance with ASC Topic 805, Business Combinations, which requires the assets acquired and liabilities

assumed in business combinations based on their estimated fair values at the date of acquisition, which involves a number of assumptions,

estimates, and judgments, which are inherently uncertain and subject to refinement.

We determine the estimated fair values with the assistance

of valuations performed by third party specialists, discounted cash flow analysis, and estimates made by management derived from comparable

market data and cash flow projections used to value the acquired business.

Our ability to realize the future cash flows used in our fair

value estimates may be affected by changes in our financial condition, financial performance, or business strategies.

Our assumptions

and estimates are also used to allocate goodwill to our reporting units that are expected to benefit from the business combination.

the measurement period, which may be up to one year from the acquisition date, we may recognize adjustments to the assets acquired and

liabilities assumed with the corresponding offset to goodwill.

We continue to collect information and reevaluate these estimates and

assumptions quarterly and record any adjustment to our preliminary estimates to goodwill provided that we are within the measurement

Upon the earlier of the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities

assumed, any subsequent adjustments are included in our consolidated results of operations.

Refer to Note 3.

Growth Company Status

Company is an “emerging growth company” (an “EGC”), as defined in Section 2(a) of the Securities Act, as modified

by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and as a result, we may take advantage of certain exemptions

from various reporting requirements that are applicable to other public companies that are not EGCs.

These include, but are not limited

to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley

Act”), reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding a nonbinding

advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Section 102(b)(1) of the JOBS Act exempts EGCs from being required to comply with new or revised financial accounting standards until

private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class

of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply

with the new or revised financial accounting standards.

The JOBS Act provides that a company can elect to opt out of the extended transition

period and comply with the requirements that apply to non-EGC but any such election to opt out is irrevocable.

We currently expect to

retain our status as an EGC until the year ending December 31, 2025, but this status could end sooner under certain circumstances.

generate revenue from the sale of products and services.

A significant majority of the our revenues are generated from enrolling dentists

as either (i) Guided Growth and Development VIPs;

(ii) Lifeline VIPs;

(iii) combined Guided Growth and Development and Lifeline VIPs;

or Premier Vivos Integrated Providers (“Premier VIPs”).

Prior to the second quarter of 2023, the majority of VIP enrollments

were Premier VIPs.

The other, lower priced enrollments were piloted in fiscal quarters prior to second quarter of 2023, and on a limited

They were officially adopted during the second quarter of 2023.

For each VIP program, revenue is recognized when control of the

products or services is transferred to customers (i.e., VIP dentists ordering such products or services for their patients) in a manner

that reflects the consideration we expect to be entitled to in exchange for those products and services.

January 1, 2026, the Company is no longer an “emerging growth company” (an “EGC”), as defined in Section 2(a)

of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and must comply with

the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).

the guidance of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) and the applicable provisions of

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Enrollment Revenue

review our VIP enrollment contracts from a revenue recognition perspective using the 5-step method outlined above.

All program enrollees,

irrespective of their level of enrollment, are commonly referred to as VIPs, unless it is necessary to specify their particular program.

Once it is determined that a contract exists (i.e., a VIP enrollment agreement is executed and payment is received), service revenue

related to VIP enrollments is recognized when the underlying services are performed.

The price of the Premier VIP enrollment that the

VIP pays upon execution of the contract is significant, running at approximately $ 23,200 , with different entry levels for the various

programs described above.

Unearned revenue reported on the balance sheet as contract liability represents the portion of fees paid by

VIP customers for services that have not yet been performed as of the reporting date and are recorded as the service is rendered.

recognize this revenue as performance obligations are met.

Accordingly, the contract liability for unearned revenue is a significant

liability for us.

Provisions for discounts are provided in the same period that the related revenue from the products and/or services

enter into programs that may provide for multiple performance obligations.

Commencing in 2018, we began enrolling medical and dental

professionals in a one-year program (now known as the Premier VIP Program) which includes training in a highly personalized, deep immersion

workshop format which provides the Premier VIP dentist access to a team who is dedicated to creating a successful integrated practice.

enrollment fees include multiple performance obligations which vary on a contract-by-contract basis.

The performance obligations included

with enrollments may include sleep apnea rings, a six or twelve month BIS subscription, a marketing package, lab credits and the right

to sell our appliances.

We allocate the transaction price of a VIP enrollment contract to each performance obligation under such contract

using the relative standalone selling price method.

The relative standalone price method is based on the proportion of the standalone

selling price of each performance obligation to the sum of the total standalone selling prices of all the performance obligations in

the contract.

right to sell is similar to a license of intellectual property because without it the VIP cannot purchase appliances from us.

to sell performance obligation includes the Vivos training and enrollment materials which prepare dentists for treating their patients

using The Vivos Method.

the right to sell is never sold outside of VIP contracts, and VIP contracts are sold for varying prices, we believe that it is appropriate

to estimate the standalone selling price of this performance obligation using the residual method.

As such, the observable prices of

other performance obligations under a VIP contract will be deducted from the contract price, with the residual being allocated to the

right to sell performance obligation.

use significant judgements in revenue recognition including an estimation of customer life over which it recognizes the right to sell.

We have determined that Premier VIPs who do not complete sessions 1 and 2 of training rarely complete training at all and fail to participate

in the Premier VIP program long term.

Since the beginning of the Premier VIP program, just under one-third of new VIP members fall into

this category, and the revenue allocated to the right to sell for those VIPs is accelerated at the time in which it becomes remote that

a VIP will continue in the program.

Revenue is recognized in accordance with each individual performance obligation unless it becomes

remote the VIP will continue, at which time the remainder of revenue is accelerated and recognized in the following month.

who complete training typically remain active for a much longer period, and revenue from the right to sell for those VIPs is recognized

over the estimated period of which those VIPs will remain active.

Because of various factors occurring year to year, we have estimated

customer life for each year a contract is initiated.

Estimated customer lives have been calculated separately for each year and were

estimated between 14 months and 27 months for the years 2020 through 2024, depending upon the length of time customers stayed active

The right to sell is recognized on a sum of the years’ digits method over the estimated customer life for each year

as this approximates the rate of decline in VIPs purchasing behaviors we have observed.

Given that our alliance-based marketing and distribution model is very new and has yet to generate significant revenues,

we are in the process of developing and implementing our revenue recognition plan for revenues derived from this model.

part of our legacy business model based on VIP enrollment revenue and related appliance sales, we reviewed our VIP enrollment contracts

from a revenue recognition perspective using the 5-step method outlined above.

While we have pivoted our marketing and distribution model

over the last year, we still recognize legacy VIP enrollment revenue and will continue to do so through 2026.

Unearned revenue reported

on the balance sheet as contract liability represents the portion of fees paid by VIP customers for services that have not yet been performed

as of the reporting date and are recorded as the service is rendered.

We recognize this revenue as performance obligations are met.

Testing Service Revenue

SCN Acquisition provides our Company with diagnostic service revenue.

Of the patients who test positive for OSA, we expect these patients

to become candidates for OSA treatment.

Center Revenue

we shift to our new strategic acquisition and alliance business model, we derive a greater portion of our revenues from treatment of

patients who are referred by sleep and airway medicine centers in select markets with established patient bases who are diagnosed with

OSA or other sleep related breathing disorders.

As our treatment is customized for each patient based on his or her individualized diagnosis

and presenting conditions, we recognize the revenue for treatment in service revenue, regardless of the components.

Although we will

continue to sell our products and services to trained and qualified VIP dentists, we eventually expect the revenue from our new strategic

alliance and acquisitions business model to constitute the vast majority of service revenue for us.

Service Revenue

addition to VIP enrollment service revenue, in 2020 we launched BIS, an additional service on a monthly subscription basis, which includes

our AireO2 medical billing and practice management software.

Revenue for these services is recognized monthly during the month the services

are rendered.

also offer our VIPs the ability to provide MyoCorrect to the VIP’s patients as part of treatment with The Vivos Method.

is an additional service provided on a monthly subscription basis, which includes our AireO2 medical billing and practice management

Revenue for these services is recognized monthly during the month the services are rendered.

also offer our VIPs the ability to provide MyoSync to the VIP’s patients as part of treatment with The Vivos Method.

includes packages of treatment sessions that are sold to the VIPs and resold to their patients.

Revenue for MyoCorrect services is recognized

Revenue for MyoSync services is recognized

over the 12-month performance period as therapy sessions occur.

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services (service revenue).

In our new business model where we sell a treatment plan directly to the patient, revenue for the treatment

plan (which may include both Vivos treatment services and appliances) is recorded to treatment center revenue.

of Discounts and Promotions

time to time, we offer various discounts to its customers.

These include the following:

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

include the following:

for cash paid in full

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and the change in transaction price is allocated over the remaining performance obligation.

amount of consideration can vary by customer due to promotions and discounts authorized to incentivize a sale.

Prior to the sale, the

customer and us agree upon the amount of consideration that the customer will pay in exchange for the we provide.

The net consideration

that the customer has agreed to pay is the expected value that is recognized as revenue over the service period.

At the end of each reporting

period, we update the transaction price to represent the circumstances present at the end of the reporting period and any changes in

circumstances during the reporting period.

addition to revenue from services, we also generate revenue from the sale of our line of oral devices and preformed guides (known as

appliances or systems) to our customers, the VIP dentists or OSA patients directly in the case of our strategic alliance model.

These include the DNA appliance ® , mRNA

appliance ® , the mmRNA appliance, the Versa, the Vida, the Vida Sleep and others.

We expanded our product offerings in

the first quarter of 2023 via the acquisition of certain U.S.

and international patents, product rights, and other miscellaneous

intellectual property from Advanced Facialdontics, LLC, a New York limited liability company (“AFD”).

appliance sales is recognized when the control of a product is transferred to the VIP in an amount that reflects the consideration

it expects to be entitled to in exchange for those products.

The VIP in turn charges the VIP’s patient and or patient’s

insurance a fee for the appliance and for his or her professional services in measuring, fitting, and installing the appliance and

educating the patient as to its use.

We contract with VIPs for the sale of the appliance, and we are not involved in the sale of the

products and services from the VIP to the VIP’s patient.

appliances are similar to a retainer that is worn in the mouth after braces are removed.

Each appliance is unique and is fitted to the

We utilize our network of certified VIPs throughout the United States and in some non-U.S.

jurisdictions (notably Canada and

Australia) to sell the appliances to their customers as well as in two dental centers that we operate.

We utilize third party contract

manufacturers or labs to produce our patient-customized, patented appliances and our preformed guides.

The manufacturer designated by

us produces the appliance in strict adherence to our patents, design files, treatments, processes and procedures and under the direction

and specific instructions from us, ships the appliance to the VIP who ordered the appliance from us.

All of our contract manufacturers

are required to follow our master design files in the production of appliances, or the lab will be in violation of the FDA’s rules

and regulations.

We have performed an analysis and concluded we are the principal in the transaction since we have control of the product

and we reporting revenue gross.

We bill the VIP the contracted price for the appliance which is recorded as product revenue.

revenue is recognized once the appliance ships to the VIP under our direction.

support of the VIPs using our appliances for their patients, we utilize a team of trained technicians to measure, order and fit each

addition to revenue from services, we also generate revenue from sales of our line of oral devices and preformed pediatric tooth positioners

(known as appliances or systems) to our customers, the VIP dentists or OSA patients directly in the case of our strategic alliance model.

These include the DNA appliance ® , mRNA appliance ® , the mmRNA appliance, the Versa, the Vida, the Vida Sleep,

EMA Now, PEx and others.

We expanded our product offerings in the first quarter of 2023 via the acquisition of certain U.S.

and international

patents, product rights, and other miscellaneous intellectual property from Advanced Facialdontics, LLC, a New York limited liability

company (“AFD”).

Our appliances are similar to a retainer that is worn in the mouth after braces are removed.

Each appliance

is unique and is fitted to the patient.

our legacy VIP model, revenue from appliance sales is recognized when the control of a product is transferred to the VIP in an amount

that reflects the consideration it expects to be entitled to in exchange for those products.

The VIP in turn charges the VIP’s

patient and or patient’s insurance a fee for the appliance and for his or her professional services in measuring, fitting, and

installing the appliance and educating the patient as to its use.

We contract with VIPs for the sale of the appliance, and we are not

involved in the sale of the products and services from the VIP to the VIP’s patient.

In the case of sales to sleep centers through

our distribution alliances, revenue from appliance sales is recognized when the control of a product is transferred to the patient.

utilize our network of certified VIPs throughout the United States and in some non-U.S.

jurisdictions (notably Canada and Australia)

to sell the appliances to their customers as well as in two dental centers that we operate.

We utilize third party contract manufacturers

or labs to produce our patient-customized, patented appliances and our preformed pediatric tooth positioners.

The manufacturer designated

by us produces the appliance in strict adherence to our patents, design files, treatments, processes and procedures and under the direction

and specific instructions from us, ships the appliance to the healthcare provider who ordered the appliance from us.

All of our contract

manufacturers are required to follow our master design files in the production of appliances, or the lab will be in violation of the

FDA’s rules and regulations.

We have performed an analysis and concluded we are the principal in the transaction since we have

control of the product, and we are reporting revenue gross.

Under our legacy model, we billed the VIP the contracted price for the appliance

which is recorded as product revenue.

Product revenue is recognized once the appliance ships to the VIP under our direction.

Historically,

in support of the VIPs using our appliances for their patients, we utilized a team of trained technicians to measure, order and fit each

Revenue is recognized differently for Company owned centers and distribution alliances with third party sleep centers than

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once the appliance is fitted and provided to the patient.

offer certain dentists (known as Clinical Advisors) discounts to standard VIP pricing.

This is done to help encourage Clinical Advisors,

who help the VIPs with technical aspects of our products, to purchase our products for their own practices.

In addition, from time to

time, we offer credits to incentivize VIPs to adopt the our products and increase case volume within their practices.

These incentives

are recorded as a liability at issuance and are deducted from the related product sale at the time the credit is used.

also historically offered certain dentists (known as Clinical Advisors) discounts to standard VIP pricing.

This was done to help encourage

Clinical Advisors, who help the VIPs with technical aspects of our products, to purchase our products for their own practices.

from time to time, we offered credits to incentivize VIPs to adopt our products and increase case volume within their practices.

incentives are recorded as a liability at issuance and are deducted from the related product sale at the time the credit is used.

Sales, Marketing and Distribution Model

Under our new sales, marketing and distribution strategy, we train and provide

other administrative and non-clinical management support services to licensed healthcare providers trained in a variety of treatment modalities,

including The Vivos Method, to treat OSA patients directly using their own independent judgment, which allows us to introduce and offer

our oral appliances and therapeutic treatments to the patient rather than to the VIP dentist.

Under our new business model,

diagnosis at sleep centers, such as SCN, also allows us to facilitate Vivos product sales when patients are diagnosed with OSA or other

sleep disorders, and both the patients and their doctors decide on the form of treatment for that particular patient.

This corresponds

to the delivery of the product and services which are selected by the patients and the recognition of revenue from such diagnostic and

In contractual alliances, through varying arrangements, we capture revenue from diagnostic and appliance sales as we execute

our contractual management support services to the licensed providers rendering such services to patients.

preparation of financial statements and related disclosures in conformity with U.S.

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valuation assumptions for assets

acquired in asset acquisitions;

valuation assumptions for stock options, warrants, warrant liabilities and equity instruments issued

for goods or services;

acquired in asset acquisitions and business combinations;

valuation assumptions for stock options, warrants, warrant liabilities and

equity instruments issued for goods or services;

deferred income taxes and the related valuation allowances;

and the evaluation and measurement of contingencies.

We believe we have made appropriate accounting estimates based on the facts and circumstances available as of the reporting date.

the extent there are material differences between our estimates and the actual results, our future consolidated results of operations

and the evaluation and measurement

of contingencies.

We believe we have made appropriate accounting estimates based on the facts and circumstances available as of the reporting

To the extent there are material differences between our estimates and the actual results, our future consolidated results of operations

will be affected.

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We do not begin depreciating assets until assets are placed in service.

and Intangible Assets, Net

is the excess of acquisition cost of an acquired entity over the fair value of the identifiable net assets acquired.

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There were no quantitative or qualitative indicators

of impairment that occurred for the year ended December 31, 2024.

Accordingly no impairment was required.

assets consist of assets acquired from First Vivos and costs paid to (i) MyoCorrect, from whom we acquired certain assets related to

its OMT service in March 2021, (ii) Lyon Management and Consulting, LLC and its affiliates (“Lyon Dental”), from whom we

acquired certain medical billing and practice management software, licenses and contracts in April 2021 (including the software underlying

AireO2) for work related to our acquired patents, intellectual property and customer contracts and (iii) AFD, from whom we acquired certain

and international patents, trademarks, product rights, and other miscellaneous intellectual property in March 2023.

The identifiable

intangible assets acquired from First Vivos and Lyon Dental for customer contracts are amortized using the straight-line method over

the estimated life of the assets, which approximates 5 years (See Note 5).

The costs paid to MyoCorrect, Lyon Dental and AFD for patents

and intellectual property are amortized over the life of the underlying patents, which approximates 15 years.

of impairment that occurred for the year ended December 31, 2025, accordingly no impairment was required.

assets consist of assets acquired from First Vivos, costs paid to (i) MyoSync, (ii) Lyon Management and Consulting, LLC and its affiliates

(“Lyon Dental”), (iii) AFD, and (iv) SCN, from whom we acquired tradenames and referral relationships.

The identifiable intangible

assets acquired are amortized using the straight-line method over the estimated life of the assets, which ranges between 5 five

and 15 years (See Note 6).

of Long-lived Assets

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becomes available from the IRS.

As a result, as of the years ended December 31, 2024 and 2023, approximately $ 1.2 million is reflected

under long-term liabilities.

With the acquisition of SCN, we acquired $ 1.7 million of employee retention credit liability.

as of the years ended December 31, 2025 and 2024, approximately $ 2.9 million and $ 1.2 million is reflected under long-term liabilities.

and Gain Contingencies

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term and the contractual term of the respective options.

We determine the expected price volatility based on the historical volatilities

of shares of our peer group as we do not have sufficient trading history for our Common Stock.

Industry peers consist of several public

companies in the bio-tech industry similar to us in size, stage of life cycle and financial leverage.

We intends to continue to consistently

apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility

of our own stock price becomes available, or unless circumstances change such that the identified companies are no longer similar to

us, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation.

the cost of the equity awards over the period that services are provided to earn the award, usually the vesting period.

For awards granted

which contain a graded vesting schedule, and the only condition for vesting is a service condition, compensation cost is recognized as

an expense on a straight-line basis over the requisite service period as if the award were, in substance, a single award.

the impact of forfeitures and cancellations in the period that the forfeiture or cancellation occurs, rather than estimating the number

of awards that are not expected to vest in accounting for stock-based compensation.

We determine the expected price volatility based on the trading history of our

Common Stock.

Industry peers consist of several public companies in the bio-tech industry similar to us in size, stage of life cycle

and financial leverage.

We intends to continue to consistently apply this process using the same or similar public companies until a

sufficient amount of historical information regarding the volatility of our own stock price becomes available, or unless circumstances

change such that the identified companies are no longer similar to us, in which case, more suitable companies whose share prices are

publicly available would be utilized in the calculation.

We recognize the cost of the equity awards over the period that services are

provided to earn the award, usually the vesting period.

For awards granted which contain a graded vesting schedule, and the only condition

for vesting is a service condition, compensation cost is recognized as an expense on a straight-line basis over the requisite service

period as if the award were, in substance, a single award.

We recognize the impact of forfeitures and cancellations in the period that

the forfeiture or cancellation occurs, rather than estimating the number of awards that are not expected to vest in accounting for stock-based

compensation.

and Development

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and enhancements to existing products.

Research and development costs incurred were approximately $ 0.1 million during each of the years

Research and development costs incurred were less than $ 0.1 million during each of the years

ended December 31, 2025 and 2024.

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Pronouncements

below is a discussion of new accounting standards including deadlines for adoption assuming that we retain our designation as an EGC.

Adopted Accounting Pronouncements

November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

(“ASU 2023-07”).

The standard requires disclosure of significant segment expenses that are regularly provided to the CODM

and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items

to reconcile to segment profit or loss, and the title and position of the entity’s CODM.

Effective December 31, 2024, we adopted

the provisions of this ASU which resulted in the inclusion of additional disclosures within Note 15, “Segment Information”.

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

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The Company adopted

the standard on January 1, 2025, using a prospective approach.

The amendments require enhanced disaggregation of the effective tax rate

reconciliation and expanded disclosures of income taxes paid.

Refer to Note 12.

Accounting Pronouncements Yet to be Adopted

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financial statements and disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill

and Other-Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”),

which updates the accounting for internal-use software by removing project stage references and introduces a new capitalization threshold

based on management authorization and project completion probability.

The guidance requires evaluation of significant development uncertainty,

including novel functionality and unresolved performance requirements.

ASU 2025-06 also requires website-specific development costs to

be evaluated under the same framework as other internal-use software and clarifies that capitalized internal-use software costs are subject

to the property, plant and equipment disclosure requirements under ASC 360-10.

The amendments in the ASU are effective for fiscal years

beginning after December 15, 2027, and interim periods within those fiscal years.

Early adoption permitted.

The Company is currently evaluating

the impact of ASU 2025-06 on our financial statement disclosures.

have reviewed and considered all other recent accounting pronouncements that have not yet been adopted and believe there are none that

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2025 as anticipated, as our product offerings and strategies continue to be refined.

As such, we have raised equity capital in late 2023

and throughout 2024 and will be required to obtain additional financing to satisfy our cash needs and bolster our stockholders’

equity for Nasdaq compliance purposes, as management continues to work towards increasing revenue to achieve cash flow positive operations

in the foreseeable future.

a state of cash flow positivity is reached, management is reviewing all options to obtain additional financing to fund operations.

financing is expected to come primarily from the issuance of equity securities in order to sustain operations until we can achieve profitability

and positive cash flows, if ever.

We expect the Strategic Alliance Agreement (“SAA”) with Rebis to increase patient volume,

drive top line revenue and lower customer acquisition costs and overhead.

However, there can be no assurances that adequate additional

funding will be available on favorable terms, or at all.

If such funds are not available in the future, or that the SAA agreement will

result in the patient volume and financial results within the expected timeline and we may be required to delay, significantly modify

or terminate some or all of our operations, all of which could have a material adverse effect on us and our stockholders.

As such, we have raised equity capital throughout

2024 and 2025 and will be required to obtain additional financing to satisfy our cash needs and bolster our stockholders’ equity

for Nasdaq compliance purposes, as management continues to work towards increasing revenue to achieve cash flow positive operations in

the foreseeable future.

expect the acquisition of SCN to increase patient volume, drive top line revenue and lower customer acquisition costs and overhead.

until a state of cash flow positivity is reached, management is reviewing all options to obtain additional financing to fund operations.

This financing is expected to come primarily from the issuance of equity securities in order to sustain operations until we can achieve

profitability and positive cash flows, if ever.

However, there can be no assurances that adequate additional funding will be available

on favorable terms, or at all.

If such funds are not available in the future, or that SCN will not result in the patient volume and financial

results within the expected timeline and we may be required to delay, significantly modify or terminate some or all of our operations,

all of which could have a material adverse effect on us and our stockholders.

do not have any off-balance sheet arrangements, as defined by applicable regulations of the SEC, that are reasonably likely to have a

current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

3 – BUSINESS COMBINATION

June 10, 2025 (“Closing Date”), we acquired the net operating assets of SCN pursuant to an Asset Purchase Agreement (the

“SCN Purchase Agreement”).

We agreed to purchase the net operating assets and liabilities related to SCN’s sleep testing,

diagnostics, and treatment centers (the “Acquisition”).

With seven operating locations, SCN is a leader in delivering and

promoting sleep wellness and health through its proprietary, non-invasive treatments for obstructive sleep apnea (“OSA”)

and is the largest operator of medical sleep centers in the state of Nevada.

The Acquisition represents our first major acquisition of

a sleep testing center and associated medical sleep practice.

We funded the consideration for the Acquisition at closing by issuing a

senior, non-convertible, secured term note (the “Note”) to Streeterville Capital, LLC (the “Lender”) in the principal

amount of $ 8.3 million.

We also entered into a securities purchase agreement with V-Co Investors 2 LLC, a Wyoming limited liability company

and an affiliate of a significant investor in our company (“V-Co 2”), for a private placement of our equity instruments in

consideration for total gross proceeds of $ 3.65 million to support ourselves in connection with the Acquisition and for general working

capital purposes.

consideration for SCN aggregated $ 8.7 million consisting of $ 6.0 million in cash consideration, 607,287 shares of unregistered common

stock with a fair value of $ 1.3 million, and contingent “earn out” consideration with an estimated fair value of $ 1.4 million

payable upon the achievement of a financial milestone as specified in the Purchase Agreement.

The Company has elected, as an accounting

policy, to determine the fair value of equity securities issued in business combinations using the average market price of the Company’s

common stock on the Acquisition closing date.

Management believes this method appropriately reflects the fair value of the consideration

transferred and this policy election will be applied consistently to all future business combinations.

The fair value of the earn-out

was determined using a Monte Carlo simulation of potential outcomes.

The earn-out is payable in the form of restricted common stock equal

to $ 1.5 million based on the volume-weighted average price of the Common Stock for the 30 days immediately preceding the date on which

such financial milestone is achieved, as determined in accordance with U.S.

generally accepted accounting principles.

If the financial

milestone is not achieved, the contingent consideration will not be paid.

The fair value estimates of the net tangible and identifiable

intangible assets acquired and liabilities assumed were based on the valuation of their fair values on the Closing Date.

Goodwill recorded

from this transaction is attributable to SCN’s technical expertise and strategic operations, which are highly complementary to

the Company’s existing business.

Identifiable intangible assets of $ 1.9 million consist primarily of $ 0.4 million of tradenames

to be amortized over 4 years and $ 1.5 million of referral relationships to be amortized over 8 years.

The goodwill created by the transaction

is deductible for income tax purposes, subject to certain limitations.

The accounting for business combinations requires estimates and

judgments regarding expectations for future cash flows of the acquired business, and the allocations of those cash flows to identifiable

tangible and intangible assets, in determining the assets acquired and liabilities assumed.

The fair values assigned to tangible and

intangible assets acquired and liabilities assumed are based on management’s best estimates and assumptions, as well as other information

compiled by management, including valuations that utilize customary valuation procedures and techniques.

following table summarizes the estimated fair values of the consideration, the tangible and identifiable intangible assets acquired,

and liabilities assumed (in thousands):

OF ESTIMATED FAIR VALUE OF TANGIBLE AND IDENTIFIABLE INTANGIBLE ASSETS ACQUIRED AND LIABILITIES ASSUMED

Total purchase consideration:

Cash consideration

Fair value of common stock consideration

Fair value of contingent equity consideration

Total fair value of consideration transferred

Identifiable assets acquired and liabilities assumed:

Accounts receivable

Prepaid expenses and other assets

Property and equipment

Operating and finance lease right-of-use assets

Intangible assets

Operating lease liabilities

Liabilities assumed

Total identifiable assets acquired and liabilities assumed

Net assets acquired and liabilities assumed

Transaction costs incurred of less than $ 0.1 million were related

to the Acquisition.

following table reflects our unaudited pro forma operating results for the year ended December 31, 2025 and 2024, respectively, which

give effect to the Acquisition of the SCN as if it had occurred effective January 1, 2024.

The pro forma results are not necessarily

indicative of the operating results that would have occurred had the Acquisition been effective as of the date indicated, nor are they

intended to be indicative of results that may occur in the future.

The pro forma information does not include the effects of any synergies

related to the SCN Acquisition or transactions between the entities prior to the Acquisition.

Pro forma earnings during the periods presented

were adjusted to include the following adjustments:

of definite-lived intangible assets recognized at fair value that exceed one year as if acquired January 1, 2024;

expense (including amortization of debt issuance costs) on the Note entered into with the Lender in connection with the Acquisition

as if the Note was obtained on January 1, 2024.

The interest rate assumed for purposes of preparing this pro forma financial information

was 9.0 % which is the stated fixed rate throughout the term of the Note;

our history of net losses and full valuation allowances, our management estimated an annual effective income tax rate of 0.0 %.

no income tax adjustments have been recorded resulting from any pro forma adjustments.

OF PRO FORMA INFORMATION

and net income attributable to SCN was $ 4.8 million and $ 0.4 million for the period of acquisition to the period ended December 31, 2025.

4 - REVENUE, CONTRACT ASSETS AND CONTRACT LIABILITIES

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Product revenue

Tooth Positioners

Total product revenue

Service revenue

Billing intelligence services

Sleep testing services

Billing intelligence services

Myofunctional therapy services

Treatment centers

Sponsorship/seminar/other

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Total revenue

revenue from the sale of appliances and guides is typically fixed at the inception of the contract and is recognized at the point

in time when shipment of the related products occurs.

revenue from the sale of VIP enrollments, billing services and therapy is typically fixed at the inception of the contract and is

revenue from the sale of appliances and tooth positioners is typically fixed at the inception of the contract and is recognized at

the point in time when shipment of the related products occurs.

revenue from the sale of VIP enrollments, billing service and therapy is typically fixed at the inception of the contract and is

recognized ratably over time as the services are performed and the performance obligations completed.

testing, treatment center, and other revenue is recognized at a point in time.

in Contract Liabilities

key components of changes in contract liabilities for years ended December 31, 2025 and 2024 are as follows (in thousands):

SCHEDULE OF CONTRACT LIABILITY

OF CHANGES IN CONTRACT LIABILITIES

Beginning balance, January 1

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improvements relate to the Vivos Institute (a 15,000 square foot facility where we provide advanced post-graduate education and certification

to dentists, dental teams, and other healthcare professionals in a live and hands-on setting) and the two Company-owned dental centers

Total depreciation and amortization expense was $ 0.6 million for the years ended December 31, 2024 and 2023.

to dentists, dental teams, and other healthcare professionals in a live and hands-on setting), two Company-owned dental centers in Colorado,

seven diagnostic centers, two treatment centers in Nevada and one treatment center in Detroit.

Total depreciation expense for property

and equipment was $ 0.7 million and $ 0.5 million for the years ended December 31, 2025 and 2024, respectively.

6 - GOODWILL AND INTANGIBLE ASSETS

of $ 2.8 million as of December 31, 2024 and 2023, consist of the following acquisitions (in thousands):

of $ 8.6 and $ 2.8 million as of December 31, 2025 and 2024, respectively, consist of the following acquisitions (in thousands):

SCHEDULE OF GOODWILL

Sleep Center of Nevada

Empowered Dental

Total goodwill

assets consist of assets acquired from First Vivos and costs paid to (i) MyoSync, from whom we acquired certain assets related to

its OMT service in March 2021, (ii) Lyon Dental, from whom we acquired certain medical billing and practice management software, licenses

and contracts in April 2021 (including the software underlying AireO2) for work related our acquired patents, intellectual property and

customer contracts and (iii) AFD, from whom we acquired certain U.S.

and international patents, trademarks, product rights, and other

miscellaneous intellectual property in March 2023, and (iv) SCN, from whom we acquired tradenames and referral relationships.

Internal-use software of $ 2.4 million represents capitalized software development costs for cloud-based ordering platform placed in service

identifiable intangible assets acquired from First Vivos and Lyon Dental for customer contracts are amortized using the straight-line

method over the estimated life of the assets, which approximates 5 five years.

The costs paid to MyoSync, Lyon Dental and AFD for patents

and intellectual property are amortized over the life of the underlying patents, which approximates 15 years.

The identifiable intangible

assets acquired from SCN for tradenames are to be amortized over 4 four years, and the referral relationships are to be amortized over

8 eight years (see Note 3).

of December 31, 2025 and 2024, identifiable intangible assets were as follows (in thousands):

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Patents and developed technology

Internal-use software

Total intangible assets

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Net intangible assets

expense of identifiable intangible assets was less than $ 0.1 million for the years ended December 31, 2024 and 2023.

The estimated future

amortization of identifiable intangible assets is as follows (in thousands):

expense of identifiable intangible assets was $ 0.6 and $ 0.1 million for the years ended December 31, 2025 and 2024, respectively.

estimated future amortization of identifiable intangible assets is as follows (in thousands):

SCHEDULE OF ESTIMATED FUTURE AMORTIZATION OF IDENTIFIABLE ASSETS

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Accrued payroll

Accrued legal and other

Accrued interest expense

Accrued royalties

Accrued sales tax

Accrued legal and other

Total accrued liabilities

8 – DEBT, EQUIPMENT FINANCING AND OTHER LIABILITIES

had the following outstanding Notes Payable balance as of December 31, 2025, excluding equipment financing:

OF OUTSTANDING NOTE PAYABLE BALANCE

Principal amount

Unamortized debt issuance costs and original issue discount

Total notes payable

June 9, 2025, we entered into a note purchase agreement the Lender secured by the assets of Airway Integrated Management Company, LLC,

a Colorado limited liability company and a wholly-owned subsidiary of the Company (“AIM”), pursuant to which we agreed to

issue and sell to the Lender the Note in an aggregate initial principal amount of $ 8.3 million, which is payable on or before the date

that is 18 months from the issuance date.

The initial principal amount includes an original issue discount of $ 0.7 million and $ 50 thousand

that we agreed to pay to the Lender to cover the Lender’s legal fees, accounting costs, due diligence, monitoring and other transaction

The net proceeds from the Note were $ 7.5 million.

on the Note accrues at a rate of 9 % per annum and is payable on the maturity date.

The Company may prepay all or a portion of the Note

monitoring fee of 10 % of the outstanding balance was charged on the 120-day anniversary of the issuance of the Note (October 7, 2025)

to cover Lender’s accounting, legal and other costs incurred in monitoring.

The foregoing fee was added to the outstanding balance

on the applicable date without any further action by either party.

on the sixth month anniversary of the issuance, the Lender shall have the right to redeem up to $ 0.6 million of the Note plus any interest

accrued thereunder each month by providing written notice delivered to us;

provided, however, that if the Lender does not exercise any

monthly redemption amount in its corresponding month then such monthly redemption amount shall be available for the Lender to redeem

in any further month in addition to such future month’s monthly redemption amount.

Upon receipt of any monthly redemption notice,

we shall pay the applicable monthly redemption amount in cash to the Lender within three (3) trading days of the Company’s receipt

of such monthly redemption notice.

As of December 31, 2025, the Lender redeemed less than $ 0.1 million.

Note includes customary event of default provisions, subject to certain cure periods, and provides for a default interest rate equal

to the lesser of twenty-two percent (22%) or the maximum rate permitted under applicable law.

Upon the occurrence of an event of default,

interest would accrue on the outstanding balance of the Note beginning on the date the applicable event of default occurred.

December 5, 2025, we entered into a Note Purchase Agreement with Avondale Capital, LLC, a Utah limited liability company (“ Avondal e”),

pursuant to which we issued and sold to Avondale a Promissory Note in the original principal amount of $ 2.1 million.

The principal amount

of the Avondale Note includes an original issue discount of $ 0.6 million.

We also agreed to pay $ 6 thousand to Avondale to cover its

legal fees, accounting costs, due diligence, monitoring, and other transaction costs, each of which was added to the principal amount

of the Avondale Note, resulting in a purchase price of for the Avondale Note and gross proceeds to us of approximately $ 1.5 million.

The Avondale Note is not convertible into shares of Common Stock or otherwise.

Avondale is an affiliate of Streeterville.

Avondale Note does not bear interest and no interest will accrue on the Avondale Note unless an event of default occurs as further described

We have made weekly payments of approximately $ 70 thousand beginning on December 12, 2025.

The Company may prepay the outstanding

amount due under the Avondale Note at any time without penalty.

The Company intends used the net proceeds from the Avondale Note Financing

for working capital and other general corporate purposes.

No placement agent was used in connection with the Avondale Note Financing.

As of December 31, 2025, we have paid approximately $ 0.2 million to Avondale.

Avondale Note is unsecured.

In connection with the Avondale Note Financing, the Company has caused Company’s wholly-owned subsidiary,

AIM to enter into the Guaranty Agreement, dated December 5, 2025, in favor of Avondale to provide a guarantee of the Company’s

obligations to Avondale under the Avondale Note and the other transaction documents.

December 31, 2025 and December 31, 2024, we had the following outstanding notes payable for equipment financing as follows (in thousands):

SCHEDULE OF OUTSTANDING NOTES

PAYABLE FOR EQUIPMENT FINANCING

Principal amount

maturity of notes payable for equipment financing is as follows (in thousands):

AMORTIZATION OF NOTES PAYABLE

As of December 31,

expense recognized on the condensed consolidated statement of operations was $ 1.4 million for the period ended December 31, 2025.

of December 31, 2025 and December 31, 2024, other liabilities consist of the following (in thousands):

OF OTHER LIABILITIES

Contingent consideration on acquisition of SCN

fair value of the contingent consideration was determined using a Monte Carlo simulation of potential outcomes.

The contingent consideration

is payable in the form of restricted common stock equal to $ 1.5 million based on the volume-weighted average price of the Common Stock

for the 30 days immediately preceding the date on which such financial milestone is achieved.

If the financial milestone is not achieved,

the contingent consideration will not be paid.

The fair value of the contingent consideration was based on the valuation of their fair

values on the Closing Date.

contingent consideration liability is recognized as a liability due to the variability of the potential share settlement and will be

remeasured at fair value each reporting period until the contingency is resolved, with changes in fair value recognized in operating

During the year ended December 31, 2025, we did recognize a gain in change in fair value of contingent consideration of

approximately $ 0.1

Significant assumptions included a discount rate of 9 %

as well as projected revenue derived from internal forecasts with a three-month volatility rate of 20 %.

9 – PREFERRED STOCK

7 unchanged sentences

Stock Transactions During the Periods Presented

January 9, 2023, we closed a private placement (the “January 2023 Private Placement”) pursuant to which we agreed to issue

and sell 80,000 shares of Common Stock, Pre-Funded Warrants to purchase up to an aggregate of 186,667 shares of Common Stock and Common

Stock Purchase Warrants to purchase up to an aggregate of 266,667 shares of Common Stock for net proceeds of approximately $ 7.4 million.

Issuance costs associated with the January 2023 Private Placement were approximately $ 0.6 million.

February 28, 2023, we acquired certain U.S.

and international patents, patent applications, trademarks, product rights, and other miscellaneous

intellectual property from AFD.

Pursuant to the asset acquisition, we agreed to issue 10,000 shares of Common Stock in addition to cash

consideration of $ 50,000 .

As a result of this transaction, we recorded intangible assets of approximately $ 0.2 million.

As part of the

associated Asset Purchase Agreement, we agreed to a future earnout payment consideration based on a sliding-scale percentage on the volume

of future sales, as well as a cash payment of $ 0.2 million upon the achievement of specified milestones.

Per our accounting policy, the

contingent consideration obligation will be recorded as the contingency is resolved and the consideration is paid or becomes payable.

addition, we entered into an employment agreement with Dr.

Scott Simonetti, DDS, the founder and Chief Executive Officer of AFD, as part-time

Senior Director of Research and Development for an annual salary of approximately $ 0.1 million and a five-year warrant to purchase up

to 16,000 shares of Common Stock with an exercise price of $ 15.25 per share;

provided, however, that the shares of Common Stock underlying

such warrant are subject to vesting only upon the achievement of specified milestones related to new FDA authorizations for the intangible

assets acquired.

disclosed above, on October 25, 2023 (the “Effective Date”), we effected a Reverse Stock Split of its outstanding shares

of common stock at a ratio of 1-for-25 .

As of the Effective Date, every twenty-five shares of our issued and outstanding Common Stock

was combined into one share of Common Stock.

As a result, our issued and outstanding Common Stock on the Effective Date was proportionally

reduced from approximately 29,928,786 shares to approximately 1,197,258 shares.

The ownership percentage of each of our stockholders

remained unchanged, other than as a result of fractional shares.

No fractional shares of Common Stock were issued in connection with

the Reverse Stock Split, and stockholders that would hold a fractional share of Common Stock as a result of the Reverse Stock Split had

such fractional shares of Common Stock rounded up to the nearest whole share of Common Stock.

The number of shares of Common Stock available

for issuance under our equity incentive plans and the Common Stock issuable pursuant to outstanding equity awards and common stock purchase

warrants immediately prior to the Reverse Stock Split were proportionately adjusted by the ratio of the Reverse Stock Split.

prices of such outstanding options and warrants were also adjusted in accordance with their respective terms.

The number of authorized

shares of common stock was not affected by the Reverse Stock Split.

November 2, 2023, we closed a private placement (the “November 2023 Private Placement”) with an institutional investor pursuant

to which we sold an aggregate of $ 4.0 million of securities in a private placement consisting of (i) 130,000 shares of Common Stock,

(ii) a pre-funded warrant to purchase 850,393 shares of Common Stock at an exercise price of $ 0.0001 per share, (iii) a five-year Series

A Common Stock Purchase Warrant to purchase up to 980,393 shares of Common Stock with an exercise price of $ 3.83 per share and (iii)

an 18-month Series B Common Stock Purchase Warrant (the “Series B Warrant”) to purchase up to 980,393 shares of Common Stock

with an exercise price of $ 3.83 per share.

Issuance costs associated with the November 2023 Private Placement were approximately $ 0.5

December 2023, 437,393 of the 850,393 pre-funded warrants granted on November 2, 2023 were exercised.

In January 2024, the remaining

413,000 pre-funded warrants were exercised.

February 14, 2024, we entered into a warrant inducement letter agreement (the “Inducement Agreement”) with the same institutional

investor in the November 2023 Private Placement pursuant to which the investor agreed to exercise for cash the entirety of the Series

B Warrant at an exercise price of $ 4.02 per share (with such exercise price being established for purposes of compliance with the listing

rules of the Nasdaq Stock Market), resulting in gross proceeds to us of approximately $ 4.0 million.

Pursuant to the Inducement Agreement,

in consideration for the immediate exercise of the Series B Warrant in full, we agreed to issue to the investor, in a new private placement

transaction (the “Inducement Transaction”):

(i) a 5-year, Series B-1 Common Stock Purchase Warrant to purchase 735,296 shares

of our common stock at an exercise price of $ 5.05 per share, and (ii) an 18-month, Series B-2 common stock purchase warrant to purchase

735,296 shares of our common stock at an exercise price of $ 5.05 per share (collectively, the “Inducement Warrants” and such

aggregate 1,470,592 shares of our common stock underlying the Inducement Warrants, the “Inducement Warrant Shares”).

Inducement Warrants are identical to each other, other than their dates of expiration, and are substantially identical to the Series

Issuance costs associated with the February inducement were approximately $ 0.3 million.

June 10, 2024 we, entered into a securities purchase agreement (the “SPA”) with V-CO Investors LLC, a Wyoming limited liability

company (“V-CO”).

V-CO is an affiliate of New Seneca Partners Inc., a Michigan corporation (“Seneca”), an independent

private equity firm.

Pursuant to the SPA, we sold to V-CO in a private placement offering (the “Private Placement”):

169,498 shares (the “Shares”) of our Common Stock, (ii) a pre-funded warrant to purchase 3,050,768 shares of Common Stock

(the “Pre-Funded Warrant”, with the shares of Common Stock underlying the Pre-Funded Warrant being referred to as the “PFW

Shares”), and (iii) a Common Stock Purchase Warrant to purchase up to 3,220,266 shares of Common Stock (the “Common Stock

Purchase Warrant, and together with the Pre-Funded Warrant, the “Warrants”, and with the shares of Common Stock underlying

the Common Stock Purchase Warrant being referred to as the “Warrant Shares”).

paid a purchase price of $ 2.329 for each Share and Pre-Funded Warrant Share and associated Common Stock Purchase Warrant, with such price

being established for purposes of compliance with the listing rules of the Nasdaq Stock Market LLC.

The Private Placement closed on September

We received gross proceeds of $ 7,500,000 from the Private Placement.

We intend to use the net proceeds from the Private Placement

for general working capital and general corporate purposes.

2024 Warrant Exercise Transaction

February 14, 2024, we entered into a warrant inducement letter agreement (the “ February 2024 Inducement Agreement ”)

with an institutional investor pursuant to which the investor agreed to exercise for cash the entirety of the November 2023 Series B

Warrant at an exercise price of $ 4.02 per share (with such exercise price being established for purposes of compliance with the listing

rules of the Nasdaq Stock Market), resulting in gross proceeds to the Company of approximately $ 4.0 million.

The February 2024 Inducement

Transaction closed on February 20, 2024.

to the February 2024 Inducement Agreement, in consideration for the immediate exercise of the November 2023 Series B Warrant in full,

the Company agreed to issue to the investor, in a new private placement transaction (the “ February 2024 Inducement Transaction” ):

(i) a 5 -year, Series B-1 Common Stock Purchase Warrant to purchase 735,296 shares of our Common Stock at an exercise price of $ 5.05 per

share (the “ February 2024 B-1 Warrant” ), and (ii) an 18 -month, Series B-2 Common Stock Purchase Warrant to purchase

735,296 shares of our Common Stock at an exercise price of $ 5.05 per share (the “ February 2024 B-2 Warrant ”, and collectively,

the “ February 2024 Inducement Warrants ” and such aggregate 1,470,592 shares of Common Stock underlying the Inducement

Warrants, the “ February 2024 Inducement Warrant Shares ”).

The February 2024 Inducement Warrants are identical to each

other, other than their dates of expiration, and are substantially identical to the November 2023 Series B Warrant.

February 2024 Inducement Warrants contain (i) customary stock-based anti-dilution protection, (ii) a cashless exercise provision in the

event the February 2024 Inducement Warrant Shares are not registered for resale at the time of exercise, (iii) beneficial ownership limitations

that may be waived at the option of such holder upon 61 days’ notice to the Company, (iv) a put right granting the investor the

right to require the Company or its successor to redeem the February 2024 Inducement Warrants in cash for their Black-Scholes value in

the event of a Fundamental Transaction (as defined in the February 2024 Inducement Warrants) and (v) other customary provisions for warrants

of this type.

of the date of this Report, the February 2024 B-2 Warrant expired and the February 2024 B-1 Warrant was exercised, in full, in connection

with the January 2026 Inducement Transaction described below.

2024 Private Placement and Management Services Agreement with Seneca

June 10, 2024, we entered into a securities purchase agreement (the “ June 2024 SPA ”) with V-CO Investors LLC, a Wyoming

limited liability company (“ V-CO ”).

V-CO is an affiliate of Seneca, a leading independent private equity firm.

to the June 2024 SPA, we sold to V-CO in a private placement offering:

(i) 169,498 shares of our Common Stock, (ii) a pre-funded warrant

(which we refer to herein as the Pre-Funded Warrant) to purchase 3,050,768 shares of Common Stock (which we refer to herein as the Pre-Funded

Warrant Shares), and (iii) a Common Stock Purchase Warrant (which we refer to as the June 2024 Warrant) to purchase up to 3,220,266 shares

of Common Stock (which we refer to herein as the June 2024 Warrant Shares).

V-CO paid a purchase price of $ 2.329 for each share and Pre-Funded

Warrant Share and associated June 2024 Warrant, with such price being established for purposes of compliance with the listing rules of

the Nasdaq Stock Market LLC.

The private placement closed on June 10, 2024.

We received gross proceeds of $ 7,500,000 from the private

No placement agent was used in connection with the private placement.

Common Stock Purchase Warrant has a five year term, an exercise price of $ 2.204 per share and became exercisable immediately as of the

date of issuance.

The Pre-Funded Warrant has a term ending on the complete exercise of the Pre-Funded Warrant, an exercise price of $ 0.0001

per share and became exercisable immediately as of the date of issuance.

The Warrants also contain customary stock-based (but not price-based)

anti-dilution protection as well as beneficial ownership limitations that may be waived at the option of each holder upon 61 days’

notice to the Company.

SPA provides that for a period of three (3) years from the closing of the offering, Seneca shall be entitled to (i) receive notice of

any regular or special meeting of our board of directors (the “Board”) at the time such notice is provided to the members

of the Board, (ii) receive copies of any materials delivered to our directors in connection with such meetings and (iii) allow one Seneca

representative (who shall be an officer or employee of Seneca) to attend and participate (but not vote) in all such meetings of the Board.

The SPA also includes standard representations, warranties, indemnifications, and covenants of the Company and V-CO.

terms of the SPA require us to file a registration statement on Form S-3 or other appropriate form (the “Resale Registration Statement”)

registering the Shares, the PFW Shares and the Warrant Shares (collectively, the “Registerable Securities”) for resale.

Resale Registration Statement was filed with the SEC on July 30, 2024, and was declared effective by the SEC on August 7, 2024.

to the SPA, we must also use its commercially reasonable efforts to keep the Resale Registration Statement continuously effective (including

by filing a post-effective amendment to the Resale Registration Statement or a new registration statement if the Resale Registration

Statement expires) for a period of three (3) years after the date of effectiveness of the Resale Registration Statement or for such shorter

period as such securities no longer constitute Registrable Securities, subject to certain limitations specified in the SPA.

September 18, 2024, we entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional

investors in connection with a registered direct offering (the “Offering”), priced at-the-market under Nasdaq Stock Market

rules, to purchase 1,363,812 shares (the “Shares”) of our common stock, par value $ 0.0001 per share (“Common Stock”)

at a purchase price of $ 3.15 per Share.

No common stock purchase warrants were offered or issued to investors in the Offering.

closed on September 20, 2024.

Wainwright & Co., LLC, pursuant to an engagement agreement with us, dated May 2, 2024 and amended on August 2, 2024 (as amended,

the “Engagement Agreement”), acted as the exclusive placement agent (the “Placement Agent”) for the Offering.

Pursuant to the Engagement Agreement, we have paid the Placement Agent (i) a cash fee equal to 7.0% of the aggregate gross proceeds of

the Offering, and (ii) a management fee of 1.0% of the aggregate gross proceeds of the Offering.

We have also agreed to reimburse the

Placement Agent for certain expenses and legal fees.

In addition, we issued to the Placement Agent, or its designees warrants (the “Placement

Agent Warrants”) to purchase up to 95,467 shares of Common Stock (or 7% of the number of Shares sold in the Offering) at an exercise

price of $ 3.9375 per share of Common Stock, exercisable beginning upon issuance until five years from the commencement of sales in the

gross proceeds to us from the Offering were approximately $ 4.3 million, before deducting the Placement Agent’s fees and other offering

expenses payable by us.

We intend to use the net proceeds from the offering for working capital and general corporate purposes.

Shares were issued pursuant to an effective shelf registration statement on Form S-3 that was filed with the SEC (File No.

June 2024 Warrant has a five-year term, an exercise price of $ 2.204 per share and became exercisable immediately as of the date of issuance.

The Pre-Funded Warrant has a term ending on the complete exercise of the Pre-Funded Warrant, an exercise price of $ 0.0001 per share and

became exercisable immediately as of the date of issuance.

The June 2024 Warrant and the Pre-Funded Warrants also contain customary stock-based

(but not price-based) anti-dilution protection as well as beneficial ownership limitations that may be waived at the option of the holder

upon 61 days’ notice to us.

June 2024 SPA provides that for a period of three (3) years from the closing of the private placement, Seneca shall be entitled to (i)

receive notice of any regular or special meeting of our board of directors at the time such notice is provided to the members of our

Board of Directors, (ii) receive copies of any materials delivered to our directors in connection with such meetings and (iii) allow

one Seneca representative (who shall be an officer or employee of Seneca) to attend and participate (but not vote) in all such meetings

of our Board of Directors.

The June 2024 SPA also includes standard representations, warranties, indemnifications, and covenants of our

company and V-CO.

terms of the June 2024 SPA require us to file a registration statement on Form S-3 or other appropriate form registering the shares,

the Pre-Funded Warrant Shares and the June 2024 Warrant Shares for resale no later than July 25, 2024 and to use commercially reasonable

best efforts to cause such registration statement to be effective by September 8, 2024.

We must also use its commercially reasonable

efforts to keep such registration statement continuously effective (including by filing a post-effective amendment or a new registration

statement if such registration statement expires) for a period of three (3) years after the date of effectiveness of such registration

statement, subject to certain limitations specified in the SPA.

We have filed with the SEC such registration statement registering the

shares and warrants as described herein on Form S-3 (File No.

333-281090) on July 30, 2024 which was subsequently declared effective

on August 7, 2024.

2024 Registered Direct Offering

September 18, 2024, we entered into a securities purchase agreement (the “ September 2024 SPA ”) with certain institutional

investors in connection with a registered direct offering (the “ September 2024 Offering ”), priced at-the-market under

Nasdaq Stock Market rules, to purchase 1,363,812 shares of Common Stock at a purchase price of $ 3.15 per share.

No common stock purchase

warrants were offered or issued to investors in the September 2024 Offering.

Wainwright & Co., LLC (“ HCW ”), pursuant an engagement agreement with us, dated May 2, 2024 and amended on August

2, 2024 (as amended, the “ HCW Engagement Agreement ”), acted as the exclusive placement agent (the “ Placement

Agent ”) for the September 2024 Offering.

Pursuant to the HCW Engagement Agreement, we have (i) paid the Placement Agent a cash

fee equal to 7.0% of the aggregate gross proceeds of the September 2024 Offering, (ii) paid the Placement Agent a management fee of 1.0%

of the aggregate gross proceeds of the September 2024 Offering, and (iii) reimbursed the Placement Agent for certain expenses and legal

addition, we issued to the Placement Agent or its designees (who are among the selling stockholders named herein) warrants (the “ September

2024 PA Warrants ”) to purchase up to 95,467 shares of Common Stock (or 7 % of the number of shares sold in the September 2024

Offering) at an exercise price of $ 3.9375 per share of Common Stock, exercisable beginning upon issuance until five years from the commencement

of sales in the September 2024 Offering.

shares of the September 2024 Offering were issued pursuant to a shelf registration statement on Form S-3 that was filed with the SEC

333-262554) on February 7, 2022 and declared effective on February 14, 2022.

A prospectus supplement relating to the Offering has been filed with

Purchase Agreement contains customary representations, warranties and agreements of the Company and the investors and customary indemnification

A prospectus supplement relating to the September

2024 Offering has been filed with the SEC on September 20, 2024.

September 2024 SPA contains customary representations, warranties and agreements of the Company and the investors and customary indemnification

rights and obligations of the parties.

Pursuant to the terms of the Purchase Agreement, we agreed to certain restrictions on the issuance

and sale of our shares of Common Stock and securities convertible into shares of Common Stock for a period of 30 days following the closing

of the Offering.

We also agreed not to effect or agree to effect any Variable Rate Transaction (as defined in the Purchase Agreement)

until one year following the closing of the Offering, subject to certain exceptions.

December 22, 2024, we entered into a securities purchase agreement (the “December 2024 SPA”) with certain institutional investors

(who are the selling stockholders named herein) in connection with a registered direct offering, priced at-the-market under Nasdaq Stock

Market rules, to purchase 709,220 shares of Common Stock and, in a concurrent private placement (collectively, with the registered direct

offering, the “December 2024 Offering”), warrants (the “December 2024 Warrants”) to purchase up to 709,220 shares

of Common Stock (the shares of Common Stock issuable upon exercise of the December 2024 Warrants, the “December 2024 Warrant Shares”).

The combined purchase price per share for the December 2024 Warrants is $ 4.935 .

The December 2024 Warrants are immediately exercisable

upon issuance, will expire two years following the issuance date and have an exercise price of $ 4.81 per share.

agreed to file a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), with the SEC,

covering the resale of the December 2024 Warrants Shares within 30 calendar days following the date of the December 2024 SPA and to use

commercially reasonable efforts to cause the registration statement to be declared effective by the SEC within 90 days following the

closing of the December 2024 Offering.

Pursuant to the terms of the September 2024 SPA, we agreed to certain restrictions on the issuance

and sale of its shares of Common Stock and securities convertible into shares of Common Stock for a period of 30 days following the closing

of the September 2024 Offering.

We have also agreed not to effect or agree to effect any Variable Rate Transaction (as defined in the

September 2024 SPA) until one year following the closing of the September 2024 Offering, subject to certain exceptions.

2024 Registered Direct Offering and Private Placement of the December 2024 Warrants

December 22, 2024, we entered into a securities purchase agreement (the “ December 2024 SPA ”) with certain institutional

investors (who are the selling stockholders named herein) in connection with a registered direct offering, priced at-the-market under

Nasdaq Stock Market rules, to purchase 709,220 shares of Common Stock and, in a concurrent private placement (collectively, with the

registered direct offering, the “December 2024 Offering”), warrants (the “ December 2024 Warrants ”) to

purchase up to 709,220 shares of Common Stock (the shares of Common Stock issuable upon exercise of the December 2024 Warrants, the “ December

2024 Warrant Shares ”).

The combined purchase price per share and each of the December 2024 Warrants is $ 4.935 .

2024 Warrants are immediately exercisable upon issuance, will expire two years following the issuance date and have an exercise price

of $ 4.81 per share.

shares from the December 2024 Offering were issued pursuant to an effective resale registration statement on Form S-1 that was filed

with the SEC (File No.

333-284399) on January 22, 2025 and declared effective on January 30, 2025.

to the HCW Engagement Agreement dated May 2, 2024, as amended on August 2, 2024 and December 22, 2024 with us, HCW acted as the Placement

7 unchanged sentences

of the shares of Common Stock underlying the December 2024 Purchase Warrants that have been exercised.

have also issued to the Placement Agent or its designees (who are among the selling stockholders named herein) warrants (the “December

2024 PA Warrants”) to purchase up to 95,467 shares of Common Stock (or 7% of the number of shares sold in the December 2024 Offering)

at an exercise price of $ 6.1688 per share of Common Stock, exercisable beginning upon issuance until two years following the issuance

We registered the Common Stock underlying the December 2024 PA Warrants for public resale pursuant to the registration statement

filed on January 31, 2025.

gross proceeds from the December 2024 Offering were approximately $ 3.5 million, before deducting the Placement Agent’s fees and

other offering expenses payable by us of approximately $ 0.5 million.

As of December 31, 2024 and 2023 all warrants outstanding have been classified as equity and recorded at fair values

of the date of issuance on the Company’s consolidated balance sheets and there have been no further adjustments to their issuance

date valuation, The guidance in this ASC 815, Derivatives and Hedging and ASC 480, Distinguishing Liabilities from Equity, has

been considered in making this assessment.

9 – STOCK OPTIONS AND WARRANTS

also issued to the Placement Agent or its designees (who are among the selling stockholders named herein) warrants (the “ December

2024 PA Warrants ”) to purchase up to 95,467 shares of Common Stock (or 7 % of the number of shares sold in the December 2024

Offering) at an exercise price of $ 6.1688 per share of Common Stock, exercisable beginning upon issuance until two years following the

issuance date.

December 2024 SPA contains customary representations, warranties and agreements of our company and the investors and customary indemnification

rights and obligations of the parties.

Pursuant to the terms of the December 2024 SPA, we agreed not to effect or agree to effect any

Variable Rate Transaction (as defined in the Purchase Agreement) until one year following the closing of the December 2024 Offering,

subject to certain exceptions.

2025 Private Placement

June 9, 2025, we entered into a Securities Purchase Agreement (the “ June 2025 PIPE SPA”) with V-Co 2.

affiliate of Seneca.

Pursuant to the June 2025 PIPE SPA, the Company sold to V-Co 2 in a private placement offering (the “ June

2025 PIPE Offering ”):

(i) 828,000 shares (the “ June 2025 PIPE Shares ”) of Common Stock, (ii) a pre-funded

warrant to purchase 725,258 shares of Common Stock (the “ June 2025 Pre-Funded Warrant ”, with the shares of Common

Stock underlying the Pre-Funded Warrant being referred to as the “ June 2025 PFW Shares ”), and (iii) a Common Stock

Purchase Warrant to purchase up to 2,329,886 shares of Common Stock (the June 2025 Common Stock Purchase Warrant, and together with the

Pre-Funded Warrant, the “ June 2025 Warrants ”, and with the shares of Common Stock underlying the Common Stock Purchase

Warrant being referred to as the “ June 2025 Warrant Shares ”).

2 paid a purchase price of $ 2.42 for each June 2025 PIPE Share and June 2025 Pre-Funded Warrant Share and associated June 2025 Common

Stock Purchase Warrant, with such price being established for purposes of compliance with the listing rules of Nasdaq.

The June 2025

PIPE Offering closed on June 9, 2025.

June 2025 Common Stock Purchase Warrant has a term ending on or before June 9, 2029 , an exercise price of $ 2.23 per share and became

exercisable immediately as of the date of issuance.

The June 2025 Pre-Funded Warrant has a term ending on the complete exercise of the

June 2025 Pre-Funded Warrant, an exercise price of $ 0.0001 per share and became exercisable immediately as of the date of issuance.

June 2025 Warrants also contain customary stock-based (but not price-based) anti-dilution protection as well as beneficial ownership

limitations preventing Seneca or its affiliates from exercising the June 2025 Warrants if such exercise would result in Seneca or its

affiliates from owning in excess of 19.99 % of the then outstanding Common Stock.

agreed to file a registration statement under the Securities Act covering the resale of the June 2025 Warrants with 45 calendar days

following the closing of the June 2025 SPA and to use commercially reasonable effort to cause the registration statement to be declared

effective by the SEC within 90 days of the closing of the June 2025 SPA.

Subsequently, pursuant to an amendment to the June 2025 PIPE

SPA, dated July 24, 2025, we and V-Co 2 agreed to extend the respective date for which we must file the registration statement and cause

such registration statement to be declared effective by 30 days.

“At-the-Market”

Equity Offering

previously reported on a Current Report on From 8-K filed on February 14, 2025 (the “ February 8-K ”), on February 14,

2025, pursuant to a prospectus supplement to the Company’s previously filed shelf registration statement on Form S-3 (File No.

333-262554) (the “ Prior Shelf Registration ”), the Company entered into an At The Market Offering Agreement (the “ ATM

Sales Agreement ”) with HCW, pursuant to which the Company may offer and sell shares of Common Stock from time to time through

The Company did not sell any shares of Common Stock under the Prior Shelf Registration pursuant to the ATM Sales Agreement.

September 12, 2025, the Company filed a prospectus supplement (the “ ATM Pro Supp”) with the SEC pursuant to which

the Company may continue, under the ATM Sales Agreement, to sell, from time to time, up to an aggregate sales price of $ 5,830,572 of

its Common Stock (the “ ATM Shares ”), through HCW as sales agent.

HCW will be entitled to compensation at a fixed commission

rate of 3.0 % of the gross proceeds of each sale of Shares.

In connection with the sale of our ATM Shares on our behalf, HCW will be deemed

to be an “underwriter” within the meaning of the Securities Act and the compensation of HCW will be deemed to be underwriting

commissions or discounts.

We have also agreed to provide indemnification and contribution to HCW with respect to certain liabilities,

including liabilities under the Securities Act.

offer and sale of the ATM Shares have been made pursuant to a shelf registration statement on Form S-3 (File No.

333-284834), as amended

(the “ New Shelf Registration ”), initially filed by the Company with the SEC on February 11, 2025 and declared effective

by the SEC on September 10, 2025, as supplemented by the ATM Pro Supp filed with the SEC pursuant to Rule 424(b) under the Securities

the twelve ended December 31, 2025, the Company sold an aggregate of 1,770,021 ATM Shares at an average price of $ 3.05 per share through

the ATM Sales Agreement, resulting in proceeds of $ 5.2 million net of commissions.

Under the ATM Offering, $ 2,782,265 million shares

of Common Stock remain available for future sales as of December 31, 2025;

however, the Company is not obligated to make any sales under

this program.

of December 31, 2025 and 2024 all warrants outstanding have been classified as equity and recorded at fair values of the date of issuance

on the Company’s consolidated balance sheets and there have been no further adjustments to their issuance date valuation, The guidance

in this ASC 815, Derivatives and Hedging and ASC 480, Distinguishing Liabilities from Equity, has been considered in making this

11 – STOCK AWARDS AND WARRANTS

2017, our shareholders approved the adoption of a stock and option award plan (the “2017 Plan”), under which shares were

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are to be retired.

We anticipate that the 1,600,000 shares will allow the 2024 Omnibus Plan to operate for several years, although this

could change based on other factors, including but not limited to merger and acquisition activity.

The purpose of the 2024 Omnibus Plan

is to promote the success and enhance the value of the Company by linking the personal interest of the participants to those of our stockholders

by providing the participants with an incentive for outstanding performance.

Any non-employee director, officer, employee or consultant

of the Company or its subsidiaries or affiliates will be eligible to participate in the 2024 Omnibus Plan.

As of December 31, 2024, we

had five non-employee directors, two officers, 110 employees and three consultants, although we expect that, based on our current usage,

awards will be generally limited to approximately five non-employee directors, two officers ten employees, and three consultants.

2024 Omnibus Plan provides for the grant of options to purchase shares of our Common Stock, including stock options intended to qualify

as incentive stock options (“ISOs”) under Section 422 of the Code and nonqualified stock options that are not intended to

so qualify (“NQSOs”), stock appreciation rights (“SARs”), restricted stock awards, and other equity-based or

equity-related awards including restricted stock units and performance units (each, an “Award”).

As of December 31, 2024,

awards (in the form of options) for an aggregate of 1,020,487 shares of Common Stock have been issued under our 2024 Omnibus Plan.

At the 2025 Annual Meeting, the Company’s stockholders approved and adopted an amendment to the 2024 Omnibus

Plan to increase the number of shares of our Common Stock authorized to be issued pursuant to the 2024 Omnibus Plan from 1,600,000 shares

to 4,100,000 shares in the aggregate.

We anticipate that the 4,100,000 shares will allow the 2024 Omnibus Plan to operate for several

years, although this could change based on other factors, including but not limited to merger and acquisition activity.

purpose of the 2024 Omnibus Plan is to promote the success and enhance the value of the Company by linking the personal interest of the

participants to those of our stockholders by providing the participants with an incentive for outstanding performance.

Any non-employee

director, officer, employee or consultant of the Company or its subsidiaries or affiliates will be eligible to participate in the 2024

Omnibus Plan.

As of December 31, 2025, we had five non-employee directors, two officers, 268 employees and three consultants, although

we expect that, based on our current usage, awards will be generally limited to approximately five non-employee directors, two officers

twelve employees, and three consultants.

The 2024 Omnibus Plan provides for the grant of options to purchase shares of our Common Stock,

including stock options intended to qualify as incentive stock options (“ISOs”) under Section 422 of the Code and nonqualified

stock options that are not intended to so qualify (“NQSOs”), stock appreciation rights (“SARs”), restricted stock

awards, and other equity-based or equity-related awards including restricted stock units and performance units (each, an “Award”).

As of December 31, 2025, awards (in the form of options and restricted stock units (“RSU”) for an aggregate of 1,110,487

shares of Common Stock have been issued under our 2024 Omnibus Plan.

RSUs totaling 90,000 shares were granted to employees and contractors

at an average price of $ 5.57 per share during the year ended December 31, 2025.

following table summarizes all stock options as of December 31, 2025 and 2024 (shares in thousands):

SCHEDULE OF STOCK OPTIONS

OF STOCK OPTIONS

Outstanding, at December 31,

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of December 31, 2025, and 2024 the aggregate intrinsic value of exercisable stock options was $ 0 .

the year ended December 31, 2024 and 2023, the valuation assumptions for stock options granted under the 2017 Plan, the 2019 Plan and

2024 Omnibus Plan were estimated on the date of grant using the BSM option-pricing model with the following weighted-average inputs and

the year ended December 31, 2025 no options were granted.

For the year ended December 31, 2024, the valuation assumptions for stock options

granted under the 2017 Plan, the 2019 Plan and 2024 Omnibus Plan were estimated on the date of grant using the BSM option-pricing model

with the following weighted-average inputs and assumptions:

SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS USED IN THE FAIR VALUE

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on the inputs and assumptions set forth above, the weighted-average grant date fair value per share for stock options granted for the

years ended December 31, 2024 and 2023 was $ 2.82 and $ 9.89 , respectively.

year ended December 31, 2024 was $ 2.82 .

the years ended December 31, 2025 and 2024, we recognized approximately $ 0.7 and $ 0.8 million, respectively, of share-based compensation

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remaining term of 7.6 and 8.5 years, respectively.

following table summarizes all RSU granted as of December 31, 2025 and 2024 (shares in thousands):

SCHEDULE OF RSU GRANTED

Outstanding, at December 31,

Exercisable, at December 31,

the weighted average exercise price.

the weighted average remaining contractual term until the RSUs expire.

of December 31, 2025, and 2024 the aggregate intrinsic value of stock options outstanding was $ 0 .

of December 31, 2025, and 2024 the aggregate intrinsic value of exercisable stock options was $ 0 .

are priced on the date of grant and vest over 2 years at the end of the first and second years respectively.

is a summary of our warrants outstanding for the years ended December 31, 2025 and 2024 (shares in thousands):

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of December 31, 2025, the aggregate intrinsic value of warrants outstanding was $ 0 million.

of December 31, 2024, the aggregate intrinsic value of warrants exercisable was $ 0 million.

the years ended December 31, 2025 and 2024, the valuation assumptions for warrants issued were estimated on the measurement date using

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average grant price.

valuation of warrants is based on the expected term.

valuation of warrants is based on the contractual term.

12 - INCOME TAXES

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SCHEDULE OF LOSS BEFORE INCOME TAX

International

Loss before income taxes

the years ended December 31, 2025 and 2024, we did not recognize any current or deferred income tax expense due to a valuation allowance

against all of its net deferred income tax assets.

reconciliation between the income tax benefit computed by applying the statutory U.S.

federal income tax rate of 21% to the pre-tax loss,

and the income tax benefit recognized in the consolidated financial statements is as follows for the years ended December 31, 2024 and

2023 (in thousands):

against all of our net deferred income tax assets.

Accordingly, we did not make any cash payments for income taxes for the years ended

December 31, 2025 and 2024.

A reconciliation between the income tax benefit computed by applying the statutory U.S.

federal income tax

rate of 21 % to the pre-tax domestic loss before income taxes, and the income tax benefit (expense) recognized in the consolidated financial

statements is as follows for the years ended December 31, 2025 and 2024 (in thousands):

SCHEDULE OF INCOME TAX EXPENSE (BENEFIT) DIFFERED FROM LOSS BEFORE INCOME TAXES

Income tax benefit computed at federal statutory rate

Apportioned state income tax benefit

Other permanent differences

Prior year adjustment to state net operating loss carryforwards

Federal statutory tax rate

Domestic state income taxes, net of Federal income tax effect (1)

Reductions in domestic state net operating loss carryforwards:

Changes in apportionment and other

Increase in valuation allowance

Non-qualified stock option cancellations

Nontaxable gain on change in fair value of warrants, net of issuance costs

Change in valuation allowance

Total income tax benefit

of December 31, 2024 and 2023, the principal components of deferred tax assets and liabilities were as follows (in thousands):

Non-deductible items

Increase in U.S.

Federal valuation allowance

Federal tax rate

the year ended December 31, 2024, approximately 73% of the Federal net operating loss was apportioned to 12 domestic state income

tax returns whereby the weighted average state income tax rate was approximately 5.2%.

Colorado and California comprise the majority

of the tax effects in this category.

of December 31, 2025 and 2024, the principal components of deferred income tax assets and liabilities were as follows (in thousands):

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

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Net operating loss carryforwards:

Stock based compensation

Domestic rates

Lease liability

Property, equipment and intangibles

Total deferred tax assets before valuation allowance

Valuation allowance

Total deferred income tax assets after valuation allowance

Deferred tax liabilities - ROU assets and other

Intangible assets

Accrued liabilities

Stock based compensation

Property and equipment

Total deferred tax assets after valuation allowances

Valuation allowances

Total deferred tax assets after valuation allowances

Deferred tax liabilities:

Goodwill and other

Total deferred tax liabilities

Net deferred tax assets and liabilities

assesses the available positive and negative evidence to estimate if it is more likely than not that sufficient future taxable income

will be generated to realize the existing deferred tax assets.

A significant piece of objective negative evidence evaluated was the cumulative

net loss incurred since inception.

Such objective evidence limits the ability to consider other subjective evidence such as our projections

for future growth.

On the basis of this evaluation, a valuation allowance of $ 20.4 million was recognized as of December 31, 2024.

the years ended December 31, 2024 and 2023, the valuation allowance increased by $ 1.1 million and $ 3.7 million, respectively.

assess the available positive and negative evidence to determine if it is more likely than not that sufficient future taxable income

will be generated to realize the existing deferred income tax assets.

A significant piece of objective negative evidence is the cumulative

net losses incurred since our inception.

Such objective evidence limits the ability to consider other subjective evidence such as our

projections for future growth.

On the basis of this evaluation, valuation allowances of $ 26.1 million and $ 20.4 million were recognized

as of December 31, 2025 and 2024, respectively.

For the years ended December 31, 2025 and 2024, the valuation allowances increased by

$ 4.6 million and $ 1.1 million, respectively.

of December 31, 2025, we have federal net operating loss (“NOL”) carryforwards of $ 104.6 million.

We also have various state

NOL carry forwards.

The determination of the state NOL carryforwards is dependent upon the apportionment percentages and state laws that

can change from year to year and impact the amount of such carryforwards.

If federal NOL carryforwards are not utilized, approximately

$ 3.3 million will expire in 2036 and 2037.

As of December 31, 2024, the remaining federal NOL carryforward of $ 80.5 million has no expiration

We also estimate that various

state NOL carryforwards are available for an aggregate of approximately $66.5 million as of December 31, 2025.

The determination of the

state NOL carryforwards is dependent upon the apportionment percentages and state laws that can change from year to year and impact the

amount of such carryforwards.

If federal NOL carryforwards are not utilized, a total of $ 3.3 million will expire in 2036 and 2037.

of December 31, 2025, the remaining federal NOL carryforwards of $ 101.3 million have no expiration date.

and state laws impose substantial restrictions on the utilization of NOL carryforwards if we experience significant ownership changes

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groups) over any three-year period.

We are not currently utilizing its federal and state NOL carryforwards and have not completed a formal

We are not currently utilizing our Federal and state NOL carryforwards and have not completed a formal

study to determine if any past ownership changes may have triggered limitations under IRC Section 382.

Our ability to use our remaining

The ability to use our remaining

NOL carryforwards may be further limited if we experience an IRC Section 382 ownership change in connection with future changes in our

stock ownership.

do not believe there are any significant uncertain tax positions as of and for the years ended December 31, 2024 and 2023.

no interest and penalties related to uncertain tax positions have been recognized for the years ended December 31, 2024 and 2023.

file income tax returns in the United States federal and various state jurisdictions.

We are no longer subject to income tax examinations

for federal income taxes before 2021 or for states before 2020.

Net operating loss carryforwards are subject to examination in the year

they are utilized regardless of whether the tax year in which they are generated has been closed by statute.

don’t have any significant uncertain tax positions as of and for the years ended December 31, 2025 and 2024.

Accordingly, no interest

and penalties related to uncertain tax positions have been recognized in the accompanying consolidated financial statements.

file income tax returns in the U.S.

Federal and various state jurisdictions.

We are no longer subject to income tax examinations for

Federal income taxes before 2022 or for domestic states before 2021.

NOL carryforwards are subject to examination in the year they are

utilized regardless of whether the tax year in which they are generated has been closed by statute.

The amount subject to disallowance

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Accordingly, we may be subject to examination for prior NOL’s generated as such NOL’s are

As of December 31, 2024, we have filed all appropriate foreign operation tax returns.

July 2025, the One Big Beautiful Bill Act (the “OBBB”) was signed into law.

Among other things, OBBB permits immediate expensing

of domestic research and experimental (“R&E”) costs, modifies the international tax framework, and restores 100% bonus

depreciation for certain qualified property.

The most significant impact of OBBB for us was that we no longer intend to capitalize R&E

costs for 2025 and we plan to continue amortizing R&E costs that were capitalized in prior years.

We recognized the effects of OBBB

in 2025 which did not have any impact on our annual U.S.

Federal effective tax rate.

have entered into various operating lease agreements for certain offices, medical facilities and training facilities.

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to include options to extend the lease until it is reasonably certain that we will exercise that option.

As of December 31, 2024, we

are party to three leases in Colorado and one in Utah, these leases have an expiration date between 2025 and 2029.

of December 31, 2025, we are party to three leases in Colorado, nine leases in Nevada, one in Michigan and one in Utah, these leases

have an expiration date between 2026 and 2034 .

addition to base rent in these leases, we also pay our proportionate share of the operating expenses, as defined in the leases.

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taxes, and insurance.

entered into a financing lease agreement during 2024.

As of December 31, 2025, the ROU asset and related liability was approximately

$ 168 thousand.

The discount rate used was 5 % and the remaining term as of December 31, 2025 is 35 months.

of December 31, 2025 and 2024, the components of lease expense are as follows (in thousands):

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Operating lease cost

Financing lease cost

Total operating lease cost

expense is recognized on a straight-line basis over the lease term.

Lease expense, including real estate taxes and related costs for

the years ended December 31, 2024 and 2023 aggregated approximately $ 0.5 million, respectively.

This is included under general and administrative

expense is recognized on a straight-line basis over the lease term and is included under general and administrative expense.

of December 31, 2025 and 2024, the remaining lease terms and discount rate used are as follows (in thousands):

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Cash paid for operating lease liabilities

of December 31, 2024 and 2023, the maturities of our future minimum lease payments were as follows (in thousands):

Cash paid for financing lease liabilities

Total cash paid for lease liabilities

of December 31, 2025, the maturities of our future minimum lease payments were as follows (in thousands):

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS

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14 – COMMITMENTS AND CONTINGENCIES

were no new material commitments or contingencies entered into during the year ended December 31, 2024 and 2023.

March 13, 2026, we entered into a confidential joint settlement and release agreement (the “Settlement Agreement”) with Ortho-Tain

for the full release, waiver and dismissal-resolution of all claims asserted by the parties against each other in the lawsuit we filed

in federal district court in Colorado, Case No.

20 cv 1637 and the lawsuit Orth-Tain, Inc.

filed in the United States District Court

for the Northern District of Illinois on July 22, 2020.

June of 2020, we filed a lawsuit in federal district court in Colorado, Case No.

Our’ Complaint alleged that we had

suffered economic injuries, including lost profits/sales and an injury to its business reputation, as a result of allegedly false, misleading,

and defamatory statements made by Ortho-Tain, Inc.’s CEO and legal counsel.

In July of 2020, Ortho-Tain, Inc.

filed a lawsuit in

federal district court in Illinois, Case No.

Ortho-Tain’s Complaint alleged that it had suffered economic injuries,

including lost profits/sales and an injury to its business reputation, as a result of allegedly unlawful marketing conduct by agents

Settlement Agreement resolves any claim for relief that was, or could have been alleged, in the foregoing litigation matters.

to the Settlement Agreement, we will pay Ortho-Tain a confidential sum and, among other considerations, not make use of the phrase “Guide”

or “Guides” in the formal product name of any of our oral appliance products and cease direct solicitation and training of

independent dental professionals in the use of any Vivos pre-formed tooth positioner products that are competitive with Ortho-Tain.

of December 31, 2025, management recorded an accrual of $ 250 thousand for the settlement expense under accrued expenses.

were no new other material commitments or contingencies entered into as of the year ended December 31, 2025 and 2024.

15 – RELATED PARTY TRANSACTIONS

Company has certain office space leases whereby the entity leasing the office space as the lessor is controlled or owned by an employee

of the Company.

The details of these leases are as follows:

#1 – 2025 El Dorado modification.

In November 2024, SCN entered into an amended office lease agreement for $ 22,186 per month

with an annual 3% increase to the monthly rent effective each succeeding November .

The remaining lease term is for approximately nine

years as of December 31, 2025.

During 2025, the Company paid approximately $ 156 thousand in fixed rent amounts.

#2 – 2025 Apache modification.

In January 2024, SCN entered into an office lease agreement when the previous agreement expired.

The monthly amount for the lease is $ 11,452 and has a remaining lease term of three years as of December 31, 2025.

During 2025, the Company

paid approximately $ 80 thousand in fixed rent amounts.

#3 – 2025 Red Rock modification.

As of December 31, 2025, the Company has an office lease with five years remaining on its

The monthly lease amount is $ 12,320 and increases each April by 3% .

During 2025, the Company paid approximately $ 89 thousand

in fixed rent amounts.

of December 31, 2025, the unamortized balance of leasehold improvements related to these leases is approximately $ 633 thousand and the

weighted average remaining useful life of the improvements is approximately 7.5 years.

16 - NET LOSS PER SHARE OF COMMON STOCK

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Common stock warrants

Common stock options

NOTE 14 - FINANCIAL INSTRUMENTS AND SIGNIFICANT

CONCENTRATIONS

Common stock options and RSU’s

17 - FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS

Value Measurements

value is defined as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction

between market participants on the measurement date.

When determining fair value, we consider the principal or most advantageous market

in which it transacts and considers assumptions that market participants would use when pricing the asset or liability.

following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization

within the hierarchy upon the lowest level of input that is available and significant to the measurement of fair value:

1 - Quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date

2 - Other than quoted prices included in Level 1 that are observable for the asset and liability, either directly or indirectly through

market collaboration, for substantially the full term of the asset or liability

3 - Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available,

thereby allowing for situations in which there is little, if any market activity for the asset or liability at measurement date

of December 31, 2025 and 2024, the fair value of our cash and cash equivalents, accounts receivable, accounts payable, and other accrued

liabilities approximated their carrying values due to the short-term nature of these instruments.

Fair Value Measurements

Fair value is defined as the

price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants

on the measurement date.

When determining fair value, we consider the principal or most advantageous market in which it transacts and

considers assumptions that market participants would use when pricing the asset or liability.

We apply the following fair value hierarchy,

which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the

lowest level of input that is available and significant to the measurement of fair value:

Level 1 - Quoted prices in active

markets for identical assets or liabilities accessible to the reporting entity at the measurement date

Level 2 - Other than quoted prices

included in Level 1 that are observable for the asset and liability, either directly or indirectly through market collaboration, for

substantially the full term of the asset or liability

Level 3 - Unobservable inputs

for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations

in which there is little, if any market activity for the asset or liability at measurement date

As of December 31, 2024 and 2023,

the fair value of our cash and cash equivalents, accounts receivable, accounts payable, and other accrued liabilities approximated their

carrying values due to the short-term nature of these instruments.

Recurring Fair Value Measurements

For the years ended December

31, 2024 and 2023, we did not have any assets and liabilities classified as Level 1, Level 2 or Level 3.

We concluded that the warrants

issued in connection with the private placement met the definition of a liability under ASC 480, Distinguishing Liabilities from Equity

and classified the liability as Level 3 during 2023, this liability was reclassified to additional paid-in-capital on November 2,

The following table represents

a reconciliation of our liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the

year ended December 31, 2023:

OF FAIR VALUE LIABILITIES ON RECURRING BASIS

Warrant Liability

(In thousands)

Beginning balance, January 1, 2023

Issuance of warrants

Exercise of warrants

Change in fair value upon re-measurement

Reclassification of warrant liabilities to additional paid-in-capital

Ending balance, December 31, 2023

We re-measured the liability

to estimate fair value at November 2, 2023 as a result of the amendment described above, using the Black-Scholes option pricing model

with the following assumptions:

OF FAIR VALUE PRICING MODEL

January 9, 2023

March 31, 2023

June 30, 2023

September 30, 2023

November 2, 2023

Measurement date closing price of Common Stock (1)

Contractual term (years) (2)

Risk-free interest rate

Dividend yield

Based on the trading value of common stock of

Vivos Therapeutics, Inc.

as of January 9, 2023 and each presented period ending date.

The valuation of warrants is based on the expected

Our policy is to recognize asset

or liability transfers among Level 1, Level 2 and Level 3 as of the actual date of the events or change in circumstances that caused

the transfer.

As of the years ended December 31, 2024, and 2023 we had no transfers of its assets or liabilities between levels of the

fair value hierarchy.

Significant Concentrations

We maintain our cash and cash

equivalents primarily in depository and money market accounts within three large financial institutions in the United States.

Cash balances

deposited at these major financial banking institutions exceed the insured limits.

We have not experienced any losses on its bank deposits

and believe these deposits do not expose us to any significant credit risk.

If we were unable to access cash and cash equivalents as

needed, the financial position and ability to operate the business could be adversely affected.

As of December 31, 2024, we had cash

and cash equivalents with three financial institutions in the United States with an aggregate balance of $ 6.3 million.

Generally, credit risk with respect

to accounts receivable is diversified due to the number of entities comprising our customer base and their dispersion across different

geographies and industries.

We perform ongoing credit evaluations on certain customers and generally do not require collateral on accounts

the years ended December 31, 2025 and 2024, we did not have any assets and liabilities classified as Level 1 or Level 2.

are classified as level 3.

Our policy is to recognize asset or liability transfers among Level 1, Level 2 and Level 3 as of the actual

date of the events or change in circumstances that caused the transfer.

As of the years ended December 31, 2025, and 2024 we had no transfers

of its assets or liabilities between levels of the fair value hierarchy.

Concentrations

maintain our cash and cash equivalents primarily in depository and money market accounts within three large financial institutions in

the United States.

Cash balances deposited at these major financial banking institutions exceed the insured limits.

We have not experienced

any losses on its bank deposits and believe these deposits do not expose us to any significant credit risk.

If we were unable to access

cash and cash equivalents as needed, the financial position and ability to operate the business could be adversely affected.

As of December

31, 2025, we had cash and cash equivalents with three financial institutions in the United States with an aggregate balance of $ 2.0 million.

credit risk with respect to accounts receivable is diversified due to the number of entities comprising our customer base and their dispersion

across different geographies and industries.

We perform ongoing credit evaluations on certain customers and generally do not require

collateral on accounts receivable.

No single customer represented more than 10% of our sales or accounts receivable as of December 31,

We maintain reserves

for potential bad debts.

Supplier Concentration

As previously disclosed, we rely

on third-party suppliers and contract manufacturers for the raw materials and components used in our appliances and to manufacture and

assemble our products.

As of December 31, 2024, we had five suppliers that accounted for approximately 57 % of our total purchases during

We maintain reserves for potential bad debts.

Concentration

previously disclosed, we rely on third-party suppliers and contract manufacturers for the raw materials and components used in our appliances

and to manufacture and assemble our products.

As of December 31, 2025, we had five suppliers that accounted for approximately 35 % of

our total purchases during the year.

We expect to maintain existing relationships with these vendors.

NOTE 15 – SEGMENT INFORMATION

We operate our business as one

operating segment.

An operating segment is defined as a component of an enterprise for which separate discrete financial information

is available and evaluated regularly by CODM in deciding how to allocate resources and in assessing performance.

Our CODM is the Company’s

Chief Executive Officer, and Chair of the Board of Directors.

Reportable segment information is consistent with how management reviews

the business, makes investing and resource allocation decisions and assesses operating performance.

Our segment revenues are derived

from the sales of our products, and services, the Vivos Method, to sleep centers and VIP providers in the U.S., Canada, Australia and

in select countries in Europe and Asia.

Our CODM uses consolidated revenue,

gross profit, gross margin and operating loss as the measure of profit or loss.

Our CODM assesses performance for the segment and allocates

resources and monitors budget versus actual results using consolidated revenue, gross profit, gross margin and operating loss.

The monitoring

of budget versus actual results are used in establishing management’s compensation.

The measure of segment assets is reported on

the balance sheet as total consolidated assets.

18 – SEGMENT INFORMATION

operate our business as one operating segment.

An operating segment is defined as a component of an enterprise for which separate discrete

financial information is available and evaluated regularly by CODM in deciding how to allocate resources and in assessing performance.

Our CODM is the Company’s Chief Executive Officer, and Chair of the Board of Directors.

Reportable segment information is consistent

with how management reviews the business, makes investing and resource allocation decisions and assesses operating performance.

revenues are derived from the sales of our products, and services, the Vivos Method, to sleep centers and VIP providers in the U.S.,

Canada, Australia and in select countries in Europe and Asia.

CODM uses consolidated revenue, gross profit, gross margin and operating loss as the measure of profit or loss.

Our CODM assesses performance

for the segment and allocates resources and monitors budget versus actual results using consolidated revenue, gross profit, gross margin

and operating loss.

The monitoring of budget versus actual results are used in establishing management’s compensation.

of segment assets is reported on the balance sheet as total consolidated assets.

OF SEGMENT REPORTING

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Sales and marketing

Operating loss (exclusive of depreciation and amortization shown

separately below)

Operating loss (exclusive of depreciation and amortization shown separately below)

Depreciation and amortization

Other expense

Excess warrant fair value

Change in fair value of warrant liability, net of issuance costs of $ 645

Segment net loss

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Consolidated net loss

The significant expense categories and amounts align with the segment-level

information that is regularly provided to our chief operating decision maker.

Revenue and long-lived tangible assets are all located

NOTE 16 – SUBSEQUENT EVENTS

Changes in and Disagreements with Accountants

on Accounting and Financial Disclosure.

significant expense categories and amounts align with the segment-level information that is regularly provided to our chief operating

decision maker.

and long-lived tangible assets are all located in the U.S.

19 – VARIABLE INTEREST ENTITIES

Interest Entities

evaluate our involvement with variable interest entities (“VIEs”) to determine whether it is required to consolidate such

entities and to provide related disclosures.

Variable Interest Entity

Detroit, LLC (“AIM Detroit”) is a limited liability company formed to provide management and administrative services to affiliated

clinical practices.

We hold an 80% ownership interest in AIM Detroit.

have determined that AIM Detroit is a variable interest entity because, by design, AIM Detroit’s equity at risk is not sufficient

to permit it to finance its activities without additional subordinated financial support.

Such support includes, among other things,

as-needed member funding during the start-up period and credit support arrangements related to equipment financing.

are the primary beneficiary of AIM Detroit because we has substantive decision-making authority over the activities that most significantly

affect AIM Detroit’s economic performance and have the obligation to absorb losses or the right to receive benefits that could

potentially be significant.

Accordingly, AIM Detroit is consolidated in the Vivos’ consolidated financial statements.

and Liabilities of Consolidated Variable Interest Entity

following table presents the carrying amounts of assets and liabilities of AIM Detroit that are included in the consolidated balance

sheet as of December 31, 2025.

The assets of AIM Detroit can be used only to settle obligations of AIM Detroit, and the creditors of

AIM Detroit do not have recourse to the general credit of the Company.

OF VARIABLE INTEREST ENTITY

Current assets

Cash and cash equivalents

Accounts receivable, net of allowance

Total current assets

Long-term assets

Property and equipment, net

Operating lease right-of-use asset

Deposits and other

LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT)

Current liabilities

Accounts payable

Accrued expenses

Current portion of operating lease liability

Current portion of debt

Other current liabilities

Total current liabilities

Long-term liabilities

Operating lease liability, net of current portion

Debt, net of current portion

Total liabilities

Noncontrolling

remaining 20% ownership interest in AIM Detroit is reflected as a noncontrolling interest in the consolidated balance sheets.

or loss of AIM Detroit is attributed between the Vivos and the noncontrolling interest in accordance with the AIM Detroit operating agreement.

Losses attributable to the noncontrolling interest are allocated even if such allocation results in a deficit noncontrolling interest

maximum exposure to loss related to its involvement with AIM Detroit is limited to its investment in AIM Detroit and its variable interests.

We have not provided financial or other support to AIM Detroit that it was not previously contractually required to provide.

financing arrangements of AIM Detroit include guarantees provided by a related party in their individual capacity;

however, the Company

is not a guarantor under such arrangements and has no obligation to fund losses beyond its stated exposure.

20 – SUBSEQUENT EVENTS

Johnson to the Board

as of February 4, 2026, the Board pursuant to the recommendation of the Nominating and Corporate Governance Committee of the Board, appointed

Johnson as an independent director of the Board.

Johnson will also serve on the Compensation Committee of the Board.

agreed to compensate Mr.

Johnson with an annual non-employee director cash fee of $ 48,000 plus $ 5,000 per membership on a committee of

the Board, consistent with its policy for all non-employee directors of the Company.

Johnson is also eligible to receive stock option

compensation under the Company’s 2024 Equity Incentive Plan, as amended.

Johnson has no family relationships with any of the Company’s directors or executive officers, and he is not a party to, and does

not have any direct or indirect material interest in, any transaction requiring disclosure under Item 404(a) of Regulation S-K.

are no arrangements or understandings between Mr.

Johnson and any other persons pursuant to which he was selected as a director.

2026 Warrant Inducement Transaction

January 15, 2026, we entered into a warrant inducement letter agreement (the “ January 2026 Inducement Agreement ”)

with an institutional investor (the “ Holder ”), pursuant to which the Holder agreed to exercise for cash the entirety

of its January 2023 Warrants, November 2023 Series A Warrants and February 2024 Inducement Warrants at a reduced exercise price of $ 2.34

per share (with such exercise price being established for purposes of compliance with the listing rules of the Nasdaq Stock Market),

resulting in gross proceeds to the Company of approximately $ 4.6 million.

The January 2023 Warrant, the November 2023 Warrant and the

February 2024 Inducement Warrant are referred to collectively as the “January 2026 Exercised Warrants .

of the shares of Common Stock underlying the January 2026 Exercised Warrants have been registered pursuant to a Post-Effective Amendment

to Form S-1 on a Registration Statement on Form S-3 (File No.

333-278564), which became effective with the SEC on January 7, 2026.

to the January 2026 Inducement Agreement, in consideration for the immediate exercise of the January 2026 Exercised Warrants in full

for cash, the Company agreed to issue to the Holder, in a private placement transaction:

(i) a five-year, Series A Common Stock Purchase

Warrant to purchase up to 1,982,356 shares of Common Stock at an exercise price of $ 2.09 per share, and (ii) a 24-month, Series B Common

Stock Purchase Warrant to purchase up to 1,982,356 shares of Common Stock at an exercise price of $ 2.09 per share (collectively, the

“ January 2026 Inducement Warrants ” and such aggregate 3,964,712 shares of Common Stock underlying the Inducement Warrants,

the “ January 2026 Inducement Shares ”).

The January 2026 Inducement Warrants are identical to each other, other than

their dates of expiration and the absence of a “Black-Scholes put right” in the Series B Inducement Warrant.

The transactions

contemplated by the January 2026 Inducement Agreement closed on January 20, 2026.

have filed with the SEC such registration statement registering shares of Common Stock underlying the January 2026 Inducement Warrant

on Form S-3 (File No.

333-293492) on February 17, 2026.

Under the January 2026 Inducement Agreement, we have agreed to use our commercially

reasonable efforts to have such registration statement declared and be continuously effective.

Settlement Agreement

March 13, 2026, we entered into a confidential joint settlement and release agreement (the “Settlement Agreement”) with Ortho-Tain

for the full release, waiver and dismissal-resolution of all claims asserted by the parties against each other in the lawsuit we filed

in federal district court in Colorado, Case No.

20 cv 1637 and the lawsuit Orth-Tain, Inc.

filed in the United States District Court

for the Northern District of Illinois on July 22, 2020.

The settlement has been paid in full as of the date of this Report.

2026 V-Co Investors 3 LLC Note

January 15, 2026, we entered into an unsecured convertible promissory note in favor of V-Co Investors 3 LLC ( “V-Co 3” )

in the maximum principal amount of up to $ 5,500,000

(the “V-Co 3 Note” and the maximum principal amount, inclusive of the original issuance discount described below,

the “Maximum Principal” ).

V-Co 3 is an affiliate of Seneca.

The purpose of the V-Co 3 Note is to provide advanced funding and support

to the Company in connection with a proposed equity financing of the Company in the aggregate amount of up to $ 5,500,000 (the “ Subsequent Financing ”).

January 15, 2026, V-Co funded an initial $ 900,000 to the Company under the V-Co 3 Note.

At any time until the close of business

day on February 16, 2026, or the “ Outside Date ”, V-Co shall advance funds and confirm such amount in advance to the

Company, up to the Maximum Principal.

The Maximum Principal shall include a ten percent ( 10 %) original issuance discount of the aggregate Maximum Principal as a financing

fee to V-Co 3.

The V-Co 3 Note does not bear any interest, except in the case of an event

of default, which is defined as (i) the Company fails to pay the principal or any accrued interest under the

V-Co 3 Note on demand, (ii) the Company fails to observe or perform any other material covenant, obligation, condition or agreement in

any material respect contained in the V-Co 3 Note, (iii) the Company’s voluntary bankruptcy or (iv) an involuntary bankruptcy is

commenced against the Company.

Upon the occurrence of any event of default, interest shall accrue on the V-Co 3 Note at a rate equal to

fifteen percent (15%) per annum and shall be computed on the basis of a 365-day year.

the event of a Subsequent Financing prior to the Outside Date, all principal under the V-Co 3 Note shall automatically convert dollar-to-dollar,

without any further action required on the part of V-Co or the Company, into such equity instruments of the Company as are issued in

the Subsequent Financing.

The Subsequent Financing may, but is not required to be, led by V-Co.

Following the Outside Date, the Company

may repay all or any portion of the outstanding principal amount and any accrued interest of the V-Co 3 Note in whole or in part without

March 31, 2026, we entered into an equity financing with V-Co 3 and accordingly, $ 1,400,000 of the V-Co 3 automatically converted into

such equity financing.

For more information, please refer to “March 2026 PIPE Offering ” below.

2026 PIPE Offering

March 31, 2026, the Company entered into a Securities Purchase Agreement (the “ March 2026 PIPE SPA ”) with V-Co 3.

Pursuant to the March 2026

PIPE SPA, the Company sold to V-Co 3 in a private placement offering (the “ March 2026 PIPE Offering ”):

(i) 1,353,625

shares (the “ March 2026 PIPE Shares ”) of Common Stock, (ii) a pre-funded warrant to purchase 429,957 shares of Common

Stock (the “ March 2026 Pre-Funded Warrant ”, with the shares of Common Stock underlying the Pre-Funded Warrant being

referred to as the “ March 2026 PFW Shares ”), (iii) a Series A Common Stock Purchase Warrant (the “ March 2026

Series A Warrant ”) to purchase up to 1,783,582 shares of Common Stock and (iv) a Series B Common Stock Purchase Warrant to

purchase up to 1,783,582 shares of Common Stock (the “ March 2026 Series B Warrant ”, and together with the Series A

Warrant, the “ March 2026 Common Stock Purchase Warrants” , and together with the Pre-Funded Warrant, the “ March

2026 Warrants ”, and with the shares of Common Stock underlying the Common Stock Purchase Warrants being referred to as the

“ March 2026 Warrant Shares ”).

3 paid a purchase price of $ 1.34 for each March 2026 PIPE Share and March 2026 Pre-Funded Warrant Share and associated March 2026 Common

Stock Purchase Warrants, with such price being established for purposes of compliance with the listing rules of the Nasdaq Stock Market

The March 2026 PIPE Offering closed on March 31, 2026.

The Company received $ 850,000 in cash proceeds upon the closing of the March

2026 PIPE Offering.

Additionally, $ 1,400,000 previously funded by V-Co 3 under the V-Co 3 Note automatically converted into the PIPE

The gross proceeds funded under the V-Co 3 Note exclude an original issue discount of $ 140,000 paid by the Company in connection

with previous funding under the V-Co 3 Note.

The Company expected to use the net proceeds from the March 2026 PIPE Offering for general

working capital purposes.

No placement agent was used in connection with the March 2026 PIPE Offering.

Both March 2026 Common Stock

Purchase Warrants have an exercise price of $ 1.09 per share and became exercisable immediately as of the date of issuance.

2026 Common Stock Purchase Warrants are identical to each other, other than their dates of expiration (the March 2026 Series A Warrant

has a term of two years and the March 2026 Series B Warrant has a term of five years).

The March 2026 Pre-Funded Warrant has a term ending

on the complete exercise of the March 2026 Pre-Funded Warrant, an exercise price of $ 0.0001 per share and became exercisable immediately

as of the date of issuance.

The March 2026 Warrants also contain customary stock-based (but not price-based) anti-dilution protection

as well as beneficial ownership limitations preventing Seneca or its affiliates from exercising March 2026 Warrants if such exercise

would result in Seneca or its affiliates from owning in excess of 19.99 % of the then outstanding Common Stock.

terms of the March 2026 PIPE SPA require the Company to file a registration statement on Form S-3 or other appropriate form registering

the March 2026 PIPE Shares, the March 2026 PFW Shares and the March 2026 Warrant Shares (collectively, the “ March 2026 Registerable

Securities ”) for resale no later than 45 days of the closing of the March 2026 PIPE Offering and to use commercially reasonable

best efforts to cause such resale registration statement to be effective within 90 days of the closing of the March 2026 PIPE Offering.

The Company must also use its commercially reasonable efforts to keep such resale registration statement continuously effective (including

by filing a post-effective amendment to such resale registration statement or a new registration statement if such resale registration

statement expires) for a period of three (3) years after the date of effectiveness of such resale registration statement or for such

shorter period as such securities no longer constitute March 2026 Registrable Securities, subject to certain limitations specified in

the March 2026 PIPE SPA.

The March 2026 PIPE SPA further

provides that the Company shall pay V-Co 3 in the amount equal to $ 50,000 for the fees and expenses of V-Co 3’s counsel incurred

in connection with the March 2026 PIPE Offering.

The March 2026 PIPE SPA also includes standard representations, warranties, indemnifications,

and covenants of the Company and V-Co 3.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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 8. Financial Statements and Supplementary Data