Vivos Therapeutics, Inc. 10-K

Item 8. Financial Statements and Supplementary Data. TABLE OF CONTENTS Page Reports of Independent Registered Public Accounting Firm (PCAOBID No. 23 ) -77- Financial Statements: Consolidated balance sheets as of December 31, 2025 and 2024 -78- Consolidated statements of operations for the years ended December 31, 2025 and 2024 -79- Consolidated statements of stockholders’ equity/(deficit) for the years ended December 31, 2025 and 2024 -80- Consolidated statements of cash flows for the years ended December 31, 2025 and 2024 -81- Notes to consolidated financial statements -82- - 76 - Report of Independent Registered Public Accounting Firm 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, 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. 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. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable 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 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. 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. /s/ Baker Tilly US, LLP Denver, Colorado April 15 , 2026 We have served as the Company’s auditor since 2023. - 77 - VIVOS THERAPEUTICS, INC. Consolidated Balance Sheets December 31, 2025 and 2024 (In Thousands, Except Per Share Amounts) 2025 2024 Current assets Cash and cash equivalents $ 2,029 $ 6,260 Accounts receivable, net of allowance of $ 882 and $ 390 , respectively 1,581 430 Prepaid expenses and other current assets 774 783 Total current assets 4,384 7,473 Long-term assets Goodwill 8,572 2,843 Property and equipment, net 3,757 3,311 Operating lease right-of-use asset 4,166 1,032 Intangible assets, net 4,045 409 Deposits and other 228 216 Total assets $ 25,152 $ 15,284 LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT) Current liabilities Accounts payable $ 1,679 $ 1,098 Accrued expenses 5,988 2,234 Current portion of contract liabilities 479 896 Current portion of operating lease liability 672 477 Current portion of financing lease liability 55 - Current portion of debt 8,353 - Other current liabilities 850 273 Total current liabilities 18,076 4,978 Long-term liabilities Contract liabilities, net of current portion - 97 Employee retention credit liability 2,904 1,220 Operating lease liability, net of current portion 3,840 1,035 Financing lease liability, net of current portion 113 - Debt, net of current portion 469 - Other liabilities 1,300 - Total liabilities 26,702 7,330 Commitments and contingencies (Note 14) - - Stockholders’ equity/(deficit) Preferred Stock, $ 0.0001 par value per share. Authorized 50,000,000 shares; no shares issued and outstanding - - Common Stock, $ 0.0001 par value per share. Authorized 200,000,000 shares; issued and outstanding 9,286,609 shares as of December 31, 2025 and 5,889,520 shares as December 31, 2024 1 - Additional paid-in capital 123,866 112,141 Accumulated deficit ( 125,357 ) ( 104,187 ) Total stockholders’ equity/(deficit) ( 1,490 ) 7,954 Non-controlling interest 60 - Total equity/(deficit) ( 1,550 ) 7,954 Total liabilities and equity/(deficit) $ 25,152 $ 15,284 The accompanying notes are an integral part of these consolidated financial statements. - 78 - VIVOS THERAPEUTICS, INC. Consolidated Statements of Operations Years Ended December 31, 2025 and 2024 (In Thousands, Except Per Share Amounts) 2025 2024 Revenue Product revenue $ 6,487 $ 7,874 Service revenue 10,956 7,157 Total revenue 17,443 15,031 Cost of sales (exclusive of depreciation and amortization shown separately below) 6,901 6,012 Gross profit 10,542 9,019 Operating expenses General and administrative 27,727 17,878 Sales and marketing 1,400 1,731 Depreciation and amortization 1,309 581 Total operating expenses 30,436 20,190 Operating loss ( 19,894 ) ( 11,171 ) Non-operating income (expense) Other expense ( 1,481 ) ( 110 ) Other income 145 145 Loss before income taxes ( 21,230 ) ( 11,136 ) Net loss $ ( 21,230 ) $ ( 11,136 ) Net loss attributable to non-controlling interest ( 60 ) - Net loss attributable to stockholders $ ( 21,170 ) $ ( 11,136 ) Net loss per share (basic and diluted) $ ( 2.07 ) $ ( 2.22 ) Weighted average number of shares of Common Stock outstanding (basic and diluted) 10,273,881 5,019,886 The accompanying notes are an integral part of these consolidated financial statements. - 79 - VIVOS THERAPEUTICS, INC. Consolidated Statements of Stockholders’ Equity/(Deficit) Years Ended December 31, 2025 and 2024 (In Thousands) Common Stock Additional Total Stockholders’ Shares Amount Paid-in Capital Accumulated Deficit Equity/ Deficit) Non-controlling interest Total Equity Balances, December 31, 2023 1,833,877 $ - $ 93,462 $ ( 93,051 ) $ 411 $ - $ 411 Issuance of common stock and warrants in private placement, net of issuance costs 3,209,923 - 14,240 - 14,240 - 14,240 Issuance of commons stock upon exercise of warrants, net of issuance costs 841,000 3,635 - 3,635 - 3,635 Issuance of common stock to consultants for services 4,720 - 11 - 11 - 11 Issuance of warrants to consultants for services - 31 - 31 - 31 Stock-based compensation expense - - 762 - 762 - 762 Net loss - - - ( 11,136 ) ( 11,136 ) - ( 11,136 ) Balances, December 31, 2024 5,889,520 $ - $ 112,141 $ ( 104,187 ) $ 7,954 $ - $ 7,954 Balances 5,889,520 $ - $ 112,141 $ ( 104,187 ) $ 7,954 $ - $ 7,954 Issuance of common stock under At-The-Market program, net of issuance costs 1,770,021 1 5,226 - 5,227 - 5,227 Issuance of common stock and warrants in private placement, net of issuance costs 828,000 - 3,642 - 3,642 - 3,642 Common stock consideration for acquisition 607,287 - 1,305 - 1,305 - 1,305 Issuance of common stock upon exercise of warrants, net of issuance costs 180,000 - 866 - 866 - 866 Conversion of debt to equity 11,781 - 25 - 25 - 25 Stock-based compensation expense - - 661 - 661 - 661 Net loss - - - ( 21,170 ) ( 21,170 ) ( 60 ) ( 21,230 ) Balances, December 31, 2025 9,286,609 $ 1 $ 123,866 $ ( 125,357 ) $ ( 1,490 ) $ ( 60 ) $ ( 1,550 ) Balance 9,286,609 $ 1 $ 123,866 $ ( 125,357 ) $ ( 1,490 ) $ ( 60 ) $ ( 1,550 ) The accompanying notes are an integral part of these consolidated financial statements. - 80 - VIVOS THERAPEUTICS, INC. Consolidated Statements of Cash Flows Years Ended December 31, 2025 and 2024 (In Thousands) 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 21,230 ) $ ( 11,136 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation expense 661 762 Depreciation and amortization 1,309 581 Fair value of common stock issued for services - 11 Fair value of warrants issued for services - 31 Changes in operating assets and liabilities: Accounts receivable, ( 217 ) ( 228 ) Operating lease liabilities, net 55 ( 129 ) Prepaid expenses and other current assets 19 ( 167 ) Deposits 29 105 Accounts payable 524 ( 1,048 ) Accrued expenses 3,618 ( 39 ) Other liabilities 483 - Contract liability ( 514 ) ( 1,434 ) Net cash used in operating activities ( 15,263 ) ( 12,691 ) CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions of property and equipment ( 2,341 ) ( 568 ) Cash paid for acquisition of SCN ( 5,185 ) - Net cash used in investing activities ( 7,526 ) ( 568 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 5,576 7,796 Proceeds from issuance of debt 10,673 - Proceeds from issuance of warrants 1,699 7,500 Proceeds from issuance of pre-funded warrants 609 3,941 Proceeds from exercise of warrants 866 - Payments for issuance costs ( 837 ) ( 1,361 ) Reduction of finance lease liability ( 28 ) - Net cash provided by financing activities 18,558 17,876 Net increase (decrease) in cash and cash equivalents ( 4,231 ) 4,617 Cash and cash equivalents at beginning of year 6,260 1,643 Cash and cash equivalents at end of year $ 2,029 $ 6,260 2025 2024 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest $ - $ 9 SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Conversion of promissory note, net of issuance costs $ 1,100 $ - Common stock issued as consideration for acquisition $ 1,305 $ - Contingent consideration as consideration for acquisition of SCN, net of valuation adjustment $ 1,350 $ - Fair value of warrants issued in private placement $ - $ 262 Acquisitions of property and equipment by issuing debt $ 922 $ - Conversion of debt to equity $ 25 $ - The accompanying notes are an integral part of these consolidated financial statements. - 81 - VIVOS THERAPEUTICS, INC. Notes to the Consolidated Financial Statements NOTE 1 - ORGANIZATION, DESCRIPTION AND SIGNIFICANT ACCOUNTING POLICIES Organization BioModeling Solutions, Inc. (“BioModeling”) was organized on March 20, 2007 as an Oregon limited liability company, and subsequently incorporated in 2013. On August 16, 2016, BioModeling entered into a share exchange agreement (the “SEA”) with First Vivos, Inc. (“First Vivos”), and Vivos Therapeutics, Inc. (“Vivos”), a Wyoming corporation established on July 7, 2016 to facilitate the SEA transaction. Vivos was formerly named Corrective BioTechnologies, Inc. until its name changed on September 6, 2016 to Vivos Biotechnologies and on March 2, 2018 to Vivos Therapeutics, Inc. and had no substantial pre-combination business activities. First Vivos was incorporated in Texas on November 10, 2015. Pursuant to the SEA, all of the outstanding shares of common stock and warrants of BioModeling and all of the shares of common stock of First Vivos were exchanged for newly issued shares of common stock and warrants of Vivos, the legal acquirer. The transaction was accounted for as a reverse acquisition and recapitalization, with BioModeling as the acquirer for financial reporting and accounting purposes. Upon the consummation of the merger, the historical financial statements of BioModeling became the Company’s historical financial statements and recorded at their historical carrying amounts. On August 12, 2020, Vivos reincorporated from Wyoming to become a domestic Delaware corporation under Delaware General Corporate Law. Accordingly, as used herein, the term “the Company,” “we,” “us.” “our” and similar terminology refer to Vivos Therapeutics, Inc., a Delaware corporation and its consolidated subsidiaries. As used herein, the term “Common Stock” refers to the common stock, $ 0.0001 par value per share, of Vivos Therapeutics, Inc., a Delaware corporation. On June 10, 2025, we acquired all of the operating assets (the “Acquisition”) of R.D. Prabhu-Lata K. Shete MDs, LTD., a Nevada professional corporation d/b/a The Sleep Center of Nevada (“SCN”) in consideration for a (i) cash payment equal to $ 6.0 million, (ii) 607,287 shares of restricted common stock 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. On July 14, 2025, we entered into a management agreement with MISleep Solution LLC to provide full suite of Vivos treatments and services to OSA patients at a joint location in Auburn Hills, Michigan. As a result, we formed AIM Detroit, LLC, a Colorado limited liability company (“AIM Detroit”) to serve as a management services organization to medical and dental clinical sleep practices located in the Detroit Tri-County metropolitan area, to wit: Wayne County, Oakland County and Macomb County. The Company holds an 80 % ownership interest in AIM Detroit. See Note 19 for further information. Description of Business We are a medical technology and services company that features a comprehensive suite of proprietary oral appliances and therapeutic treatments. We non-surgically treat certain maxillofacial and developmental abnormalities of the mouth and jaws that are closely associated with breathing and sleep disorders such as, mild to severe obstructive sleep apnea (“OSA”) and snoring in adults. Our flagship C.A.R.E. program, which is part of The Vivos Method, features our patented DNA, mRNA and mmRNA appliances, which are also FDA 510(k) cleared for mild-to-severe OSA and snoring in adults. The Vivos Method may also include adjunctive myofunctional, chiropractic/physical therapy, and laser treatments that, when properly used with the C.A.R.E. appliances, constitute a powerful non-invasive and cost-effective means of reducing or eliminating OSA symptoms. In a small subset of a study, the data has actually shown that The Vivos Method can reverse OSA symptoms in a large portion (up to 80 %) of patients. The primary competitive advantage of The Vivos Method over other OSA therapies is that The Vivos Method’s typical course of treatment is limited in most cases to 12 to 15 months, and it is possible not to need lifetime intervention, unlike CPAP and neuro-stimulation implants. Additionally, out of approximately 60,000 patients treated to date worldwide with our entire current suite of products, there have been very few instances of relapse. Although not our current focus due to the pivot in the business model, we have historically offered a suite of diagnostic and support products and services to dental and medical providers and distributors who service patients with OSA or related conditions. Such products and services include (i) VivoScore home sleep screenings and tests (powered by SleepImage ® technology), (ii) Treatment Navigator (a concierge service to assist a provider in educating and supporting the doctors as they navigate insurance coverage, diagnostic indications and treatment options), (iii) Billing Intelligence Services (which optimizes medical and dental reimbursement), (iv) advanced training and continuing education courses at our Vivos Institute in Denver, Colorado, and (v) MyoSync (formerly MyoCorrect), a service through which Vivos-trained providers can provide orofacial myofunctional therapy (“OMT”) to patients via a telemedicine platform. Some of these services including home sleep screenings, treatment navigator services and MyoSync are being provided to patients directly under the new sales, marketing and distribution model described below. With this pivot, we shifted our Medical Integration Division (“MID”) to pursue strategic alliances and acquisitions of sleep centers to provide better options using Vivos products for patients who have been diagnosed with OSA. Legacy Business Model Our business model has historically been to teach, train, and support dentists, medical doctors, and distributors in the use of our products and services. Dentists who use our products and services typically enroll in a variety of live or online training and educational programs offered through our Vivos Institute; a 18,000 sq. ft. facility located near the Denver International Airport. Dentists are able to select the specific program or clinical pathway that they want to focus on, such as Guided Growth and Development or Lifeline or both. They could also enroll in our Vivos Integrated Provider (“VIP”) program for the complete set training, educational, and support services available in all three clinical pathway programs. Dentists enrolled in the VIP program are referred to as “VIPs.” We historically charged up front enrollment fees to educate and train new VIPs. We also charged for the ancillary support services listed above and view each product and service as a revenue center. We refer to the VIP-focused business model herein as our “legacy” or “historic” business model. - 82 - New Sales, Marketing and Distribution Model Over the course of 2024 and during 2025, we worked to pivot our business strategy and began to steadily decrease our prior dependence on dentists to sell our products and our dependence on VIP enrollment revenue. This new business strategy is focused on contractual alliances with and outright acquisitions of sleep specialty providers, sleep centers and others and is based on a profit-sharing model between us and the provider which aligns our revenue generation more directly to sales of our novel appliances. In June 2024, we entered into our first contractual alliance with Rebis Health, a sleep center operator in Colorado. Revenues from this arrangement have not developed as we had expected for many reasons beyond our control, but we learned important lessons which have led to changes to this model. In June 2025, we acquired all assets, including operating assets such as sleep testing, diagnostics, and treatment centers of SCN. The Acquisition marked a milestone in the pivot to our sales, marketing distribution model for our innovative OSA appliances. Under the new model, SCN will provide sleep disorder patients with the opportunity to be candidates for our advanced, proprietary and FDA-cleared CARE oral medical devices, oral appliances and additional adjunctive therapies and methods. Under customary agreements designed to comply with applicable corporate practice of medicine law, our operation of SCN allows us to manage and capture both diagnostic and consulting revenues, representing new higher margin revenue streams for us, as well as potential Vivos appliance and related product and service revenue from SCN. On July 14, 2025, we entered into a management agreement under this revised approach with MISleep Solution LLC to provide full suite of Vivos treatments and services to OSA patients at a joint location in Auburn Hills, Michigan. Consistent with our new model, we own a supermajority equity stake in the management services company, with the sleep doctors having minority ownership interests. AIM Detroit entered into Practice Administration Agreements and Management and Succession Agreements with affiliated Practices (defined as the professional medical and dental practice entities, including Sleep Dentistry of Detroit, P.C. and Sleep Medicine of Detroit, P.C., each owned and controlled by their respective licensed professionals) under which AIM Detroit provides business, administrative, and other non-clinical management services, while all clinical and professional services remain exclusively under the authority and control of the Practices and their licensed professionals. We are exploring and seeking to implement additional acquisitions of, or collaborations with, medical sleep and similar healthcare practices to expand our business model in an effort to grow our revenues. We refer to this new model herein alternatively as our new sales, marketing and distribution model or our strategic alliance and/or acquisition model. Basis of Presentation and Consolidation The 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 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. GAAP”). We evaluate our interests in legal entities to determine whether such entities should be consolidated under the voting interest entity model or the variable interest entity (“VIE”) model. When we determine that it is the primary beneficiary of a VIE, we consolidate the entity and includes its assets, liabilities, revenues, and expenses in the consolidated financial statements. Ownership interests not held by Vivos are reflected as noncontrolling interests within equity. All significant intercompany balances and transactions have been eliminated in consolidation. See Note 19 for additional information regarding Vivos’ involvement with AIM Detroit. - 83 - Purchase Price Allocation We account for business combinations in accordance with ASC Topic 805, Business Combinations, which requires the assets acquired and liabilities assumed in business combinations based on their estimated fair values at the date of acquisition, which involves a number of assumptions, estimates, and judgments, which are inherently uncertain and subject to refinement. We determine the estimated fair values with the assistance of valuations performed by third party specialists, discounted cash flow analysis, and estimates made by management derived from comparable market data and cash flow projections used to value the acquired business. Our ability to realize the future cash flows used in our fair value estimates may be affected by changes in our financial condition, financial performance, or business strategies. Our assumptions and estimates are also used to allocate goodwill to our reporting units that are expected to benefit from the business combination. During the measurement period, which may be up to one year from the acquisition date, we may recognize adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. We continue to collect information and reevaluate these estimates and assumptions quarterly and record any adjustment to our preliminary estimates to goodwill provided that we are within the measurement period. Upon the earlier of the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, any subsequent adjustments are included in our consolidated results of operations. Refer to Note 3. Emerging Growth Company Status Effective 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”). Revenue Recognition Following the guidance of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) and the applicable provisions of ASC Topic 842 , Leases (“ASC 842”), we determine revenue recognition through the following five-step model, which entails: 1) identification of the promised goods or services in the contract; 2) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; 3) measurement of the transaction price, including the constraint on variable consideration; 4) allocation of the transaction price to the performance obligations; and 5) recognition of revenue when, or as the Company satisfies each performance obligation. Service Revenue VIP Enrollment Revenue As part of our legacy business model based on VIP enrollment revenue and related appliance sales, we reviewed our VIP enrollment contracts from a revenue recognition perspective using the 5-step method outlined above. While we have pivoted our marketing and distribution model over the last year, we still recognize legacy VIP enrollment revenue and will continue to do so through 2026. Unearned revenue reported on the balance sheet as contract liability represents the portion of fees paid by VIP customers for services that have not yet been performed as of the reporting date and are recorded as the service is rendered. We recognize this revenue as performance obligations are met. Sleep Testing Service Revenue The SCN Acquisition provides our Company with diagnostic service revenue. Of the patients who test positive for OSA, we expect these patients to become candidates for OSA treatment. Treatment Center Revenue As we shift to our new strategic acquisition and alliance business model, we derive a greater portion of our revenues from treatment of patients who are referred by sleep and airway medicine centers in select markets with established patient bases who are diagnosed with OSA or other sleep related breathing disorders. As our treatment is customized for each patient based on his or her individualized diagnosis and presenting conditions, we recognize the revenue for treatment in service revenue, regardless of the components. Although we will continue to sell our products and services to trained and qualified VIP dentists, we eventually expect the revenue from our new strategic alliance and acquisitions business model to constitute the vast majority of service revenue for us. - 84 - Other Service Revenue BIS is an additional service provided on a monthly subscription basis, which includes our AireO2 medical billing and practice management software. Revenue for these services is recognized monthly during the month the services are rendered. We also offer our VIPs the ability to provide MyoSync to the VIP’s patients as part of treatment with The Vivos Method. The program includes packages of treatment sessions that are sold to the VIPs and resold to their patients. Revenue for MyoSync services is recognized over the 12-month performance period as therapy sessions occur. Allocation of Revenue to Performance Obligations We identify all goods and services that are delivered separately under a sales arrangement and allocate revenue to each performance obligation based on relative fair values. These fair values approximate the prices for the relevant performance obligation that would be charged if those services were sold separately and are recognized over the relevant service period of each performance obligation. After allocation to the performance obligations, any remainder is allocated to the right to sell under the residual method and is recognized over the estimated customer life. In general, revenues are separated between durable medical equipment (product revenue) and education and training services (service revenue). In our new business model where we sell a treatment plan directly to the patient, revenue for the treatment plan (which may include both Vivos treatment services and appliances) is recorded to treatment center revenue. Treatment of Discounts and Promotions Under our legacy VIP model, from time to time, we offered various discounts to VIPs relating to their participation in the VIP program. These include the following: 1) Discount for cash paid in full 2) Conference or trade show incentives, such as subscription enrollment into the SleepImage ® home sleep test program, or a free trial period for the SleepImage ® lease program 3) Negotiated concessions on annual enrollment fee 4) Credits/rebates to be used towards future product orders such as lab rebates The amount of the discount is determined up front prior to the sale. Accordingly, measurement is determined before the sale occurs and revenue is recognized based on the terms agreed upon between us and the customer over the performance period. In rare circumstances, a discount has been given after the sale during a conference which is offering a discount to full price. In this situation, revenue is measured and the change in transaction price is allocated over the remaining performance obligation. Product Revenue In addition to revenue from services, we also generate revenue from sales of our line of oral devices and preformed pediatric tooth positioners (known as appliances or systems) to our customers, the VIP dentists or OSA patients directly in the case of our strategic alliance model. These include the DNA appliance ® , mRNA appliance ® , the mmRNA appliance, the Versa, the Vida, the Vida Sleep, EMA Now, PEx and others. We expanded our product offerings in the first quarter of 2023 via the acquisition of certain U.S. and international patents, product rights, and other miscellaneous intellectual property from Advanced Facialdontics, LLC, a New York limited liability company (“AFD”). Our appliances are similar to a retainer that is worn in the mouth after braces are removed. Each appliance is unique and is fitted to the patient. - 85 - VIP Model Under our legacy VIP model, revenue from appliance sales is recognized when the control of a product is transferred to the VIP in an amount that reflects the consideration it expects to be entitled to in exchange for those products. The VIP in turn charges the VIP’s patient and or patient’s insurance a fee for the appliance and for his or her professional services in measuring, fitting, and installing the appliance and educating the patient as to its use. We contract with VIPs for the sale of the appliance, and we are not involved in the sale of the products and services from the VIP to the VIP’s patient. In the case of sales to sleep centers through our distribution alliances, revenue from appliance sales is recognized when the control of a product is transferred to the patient. We utilize our network of certified VIPs throughout the United States and in some non-U.S. jurisdictions (notably Canada and Australia) to sell the appliances to their customers as well as in two dental centers that we operate. We utilize third party contract manufacturers or labs to produce our patient-customized, patented appliances and our preformed pediatric tooth positioners. The manufacturer designated by us produces the appliance in strict adherence to our patents, design files, treatments, processes and procedures and under the direction and specific instructions from us, ships the appliance to the healthcare provider who ordered the appliance from us. All of our contract manufacturers are required to follow our master design files in the production of appliances, or the lab will be in violation of the FDA’s rules and regulations. We have performed an analysis and concluded we are the principal in the transaction since we have control of the product, and we are reporting revenue gross. Under our legacy model, we billed the VIP the contracted price for the appliance which is recorded as product revenue. Product revenue is recognized once the appliance ships to the VIP under our direction. Historically, in support of the VIPs using our appliances for their patients, we utilized a team of trained technicians to measure, order and fit each appliance. Revenue is recognized differently for Company owned centers and distribution alliances with third party sleep centers than it does for revenue from VIPs. Upon scheduling the patient (which is our customer in this case), the center takes a deposit and reviews the patient’s insurance coverage. We recognize revenue in the centers after the appliance is received from the manufacturer and once the appliance is fitted and provided to the patient. We also historically offered certain dentists (known as Clinical Advisors) discounts to standard VIP pricing. This was done to help encourage Clinical Advisors, who help the VIPs with technical aspects of our products, to purchase our products for their own practices. In addition, from time to time, we offered credits to incentivize VIPs to adopt our products and increase case volume within their practices. These incentives are recorded as a liability at issuance and are deducted from the related product sale at the time the credit is used. New Sales, Marketing and Distribution Model Under our new sales, marketing and distribution strategy, we train and provide other administrative and non-clinical management support services to licensed healthcare providers trained in a variety of treatment modalities, including The Vivos Method, to treat OSA patients directly using their own independent judgment, which allows us to introduce and offer our oral appliances and therapeutic treatments to the patient rather than to the VIP dentist. Under our new business model, diagnosis at sleep centers, such as SCN, also allows us to facilitate Vivos product sales when patients are diagnosed with OSA or other sleep disorders, and both the patients and their doctors decide on the form of treatment for that particular patient. This corresponds to the delivery of the product and services which are selected by the patients and the recognition of revenue from such diagnostic and treatment. In contractual alliances, through varying arrangements, we capture revenue from diagnostic and appliance sales as we execute our contractual management support services to the licensed providers rendering such services to patients. Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires us to make judgments, assumptions, and estimates that affect the amounts reported in its consolidated financial statements and accompanying notes. We base our estimates and assumptions on existing facts, historical experience, and various other factors that we believe are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. Our significant accounting estimates include, but are not necessarily limited to, assessing collectability on accounts receivable, determining customer life and breakage related to recognizing revenue for VIP contracts, impairment of goodwill and long-lived assets; valuation assumptions for assets acquired in asset acquisitions and business combinations; valuation assumptions for stock options, warrants, warrant liabilities and equity instruments issued for goods or services; deferred income taxes and the related valuation allowances; and the evaluation and measurement of contingencies. We believe we have made appropriate accounting estimates based on the facts and circumstances available as of the reporting date. To the extent there are material differences between our estimates and the actual results, our future consolidated results of operations will be affected. - 86 - Cash and Cash Equivalents All highly liquid investments purchased with an original maturity of three months or less that are freely available for our immediate and general business use are classified as cash and cash equivalents. Accounts Receivable, Net Accounts receivable represent amounts due from customers in the ordinary course of business and are recorded at the invoiced amount and do not bear interest. Accounts receivable are stated at the net amount expected to be collected, using an expected credit loss methodology to determine the allowance for expected credit losses. We evaluate the collectability of its accounts receivable and determine the appropriate allowance for expected credit losses based on a combination of factors, including the aging of the receivables, historical collection trends, and charge-offs. When we are aware of a customer’s inability to meet its financial obligation, we may individually evaluate the related receivable to determine the allowance for expected credit losses. We use specific criteria to determine uncollectible receivables to be charged off, including bankruptcy filings, the referral of customer accounts to outside parties for collection, and the length that accounts remain past due. Property and Equipment, Net Property and equipment are stated at historical cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which ranges from 3 to 5 years. Amortization of leasehold improvements is recognized using the straight-line method over the shorter of the life of the improvement or the term of the respective leases which range between 5 and 7 years. We do not begin depreciating assets until assets are placed in service. Goodwill and Intangible Assets, Net Goodwill is the excess of acquisition cost of an acquired entity over the fair value of the identifiable net assets acquired. Goodwill is not amortized but tested for impairment annually or whenever indicators of impairment exist. These indicators may include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors. We test for impairment annually as of December 31. There were no quantitative or qualitative indicators of impairment that occurred for the year ended December 31, 2025, accordingly no impairment was required. Intangible 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). Impairment of Long-lived Assets We review and evaluate the recoverability of long-lived assets whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable. Such circumstances could include, but are not limited to, (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used, or (3) an adverse action or assessment by a regulator. We measure the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds its fair value. The fair value is measured based on quoted market prices, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires us to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts. There were no quantitative or qualitative indicators of impairment that occurred for the year ended December 31, 2025. Accordingly, no impairment was required. Equity Offering Costs Commissions, legal fees and other costs that are directly associated with equity offerings are capitalized as deferred offering costs, pending a determination of the success of the offering. Deferred offering costs related to successful offerings are charged to additional paid-in capital in the period it is determined that the offering was successful. Deferred offering costs related to unsuccessful equity offerings are recorded as an expense in the period when it is determined that an offering is unsuccessful. - 87 - Employee Retention Tax Credit The employee retention tax credit (“ERTC”) for 2020 was established under the Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”) and amended by the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (the “Relief Act”). The ERTC provided for changes in the employee retention credit for 2020 and provided an additional credit for the first, second and third calendar quarters of 2021. Employers were eligible for the credit if they experienced either a full or partial suspension of operations during any calendar quarter because of governmental orders due to the COVID-19 pandemic or if they experienced a significant decline in gross receipts based on a comparison of quarterly revenue results for 2020 and/or 2021 and the corresponding quarters in 2019. The ERTC is a refundable credit that employers can claim on qualified wages paid to employees, including certain health insurance costs. For 2021, the ERTC was 70 % of the first ten thousand qualified wages paid per employee each quarter. Accordingly, the credit was limited to approximately $ 0.7 million. As there is no authoritative guidance under U.S. GAAP on accounting for government assistance to for-profit business entities, we accounted for the ERTC by analogy to ASC 450, Contingencies . Accordingly, under ASC 450, entities would treat the ERTCs (whether received in cash or as an offset to current or future payroll taxes) as if they were gain contingencies. When applying ASC 450-30, entities would not consider the probability of complying with the terms of the ERC program but, rather, would defer any recognition in the income statement until all uncertainties are resolved and the income is “realized” or “realizable” (i.e., upon receipt of the funds or formal notice by the IRS that we are entitled to such funds). In our case, we elected to follow a more conservative approach and instead of recognizing a receivable for amounts to be received when the amended tax forms were filed in 2022, it was decided to wait for the notice from IRS and cash was received. As for financial statement presentation, it is believed that either classifying the amounts as a reduction to payroll tax expense (expense off-set is however contrary to U.S. GAAP) or as other income to be acceptable with appropriate disclosure of the election made by us. However, the IRS issued a renewed warning regarding the ERTC on March 7, 2023 urging taxpayers to carefully review the ERTC guidelines. We continue to evaluate additional information from the IRS and elected to disclose the funds received as a separate line item under long-term liabilities on the balance sheet, until more information becomes available from the IRS. With the acquisition of SCN, we acquired $ 1.7 million of employee retention credit liability. As a result, as of the years ended December 31, 2025 and 2024, approximately $ 2.9 million and $ 1.2 million is reflected under long-term liabilities. Loss and Gain Contingencies We are subject to the possibility of various loss contingencies arising in the ordinary course of business. An estimated loss contingency is accrued when it is probable that an asset has been impaired, or a liability has been incurred, and the amount of loss can be reasonably estimated. If some amount within a range of loss appears to be a better estimate than any other amount within the range, we accrue that amount. Alternatively, when no amount within a range of loss appears to be a better estimate than any other amount, we accrue the lowest amount in the range. If we determine that a loss is reasonably possible and the range of the loss is estimable, then we disclose the range of the possible loss. If we cannot estimate the range of loss, we will disclose the reason why it cannot estimate the range of loss. We regularly evaluate current information available to us to determine whether an accrual is required, an accrual should be adjusted and if a range of possible loss should be disclosed. Legal fees related to contingencies are charged to general and administrative expense as incurred. Contingencies that may result in gains are not recognized until realization is assured, which typically requires collection in cash. Share-Based Compensation We measure the cost of employee and director services received in exchange for all equity awards granted, including stock options, based on the fair market value of the award as of the grant date. We compute the fair value of stock options using the Black-Scholes-Merton (“BSM”) option pricing model. We estimate the expected term using the simplified method which is the average of the vesting term and the contractual term of the respective options. We determine the expected price volatility based on the trading history of our Common Stock. Industry peers consist of several public companies in the bio-tech industry similar to us in size, stage of life cycle and financial leverage. We intends to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of our own stock price becomes available, or unless circumstances change such that the identified companies are no longer similar to us, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation. We recognize the cost of the equity awards over the period that services are provided to earn the award, usually the vesting period. For awards granted which contain a graded vesting schedule, and the only condition for vesting is a service condition, compensation cost is recognized as an expense on a straight-line basis over the requisite service period as if the award were, in substance, a single award. We recognize the impact of forfeitures and cancellations in the period that the forfeiture or cancellation occurs, rather than estimating the number of awards that are not expected to vest in accounting for stock-based compensation. - 88 - Research and Development Costs related to research and development are expensed as incurred and include costs associated with research and development of new products and enhancements to existing products. Research and development costs incurred were less than $ 0.1 million during each of the years ended December 31, 2025 and 2024. These are recorded on the statement of operations under sales and marketing expense. Leases Operating leases are included in operating lease right-of-use (“ROU”) assets, accrued expenses, and operating lease liability - current and non-current portion in our balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, we use our incremental borrowing rate based on the information available at the lease commencement date as the rate implicit in the lease is not readily determinable. The determination of our incremental borrowing rate requires management judgment based on information available at lease commencement. The operating lease ROU assets also include adjustments for prepayments, accrued lease payments and exclude lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. Operating lease cost is recognized on a straight-line basis over the expected lease term. Lease agreements entered into after the adoption of ASC 842 that include lease and non-lease components are accounted for as a single lease component. Lease agreements with a noncancelable term of less than 12 months are not recorded on our balance sheets. Income Taxes We account for income taxes in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes, under which deferred income taxes are recognized based on the estimated future tax effects of differences between the financial statement and tax bases of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, we consider tax regulations of the jurisdictions in which we operate, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results, or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. A valuation allowance is recorded when it is more likely than not that a deferred tax asset will not be realized. The recorded valuation allowance is based on significant estimates and judgments and if the facts and circumstances change, the valuation allowance could materially change. In accounting for uncertainty in income taxes, we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. We recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. Basic and Diluted Net Loss Per Share Basic net loss per common share is computed by dividing the net loss applicable to common stockholders by the weighted average number of common shares outstanding for each period presented. Diluted net loss per common share is computed by giving effect to all potential shares of Common Stock, including stock options, convertible debt, Preferred Stock, and warrants, to the extent the same are dilutive. - 89 - Warrant Accounting We account for our warrants and financial instruments as either equity or liabilities based upon the characteristics and provisions of each instrument, in accordance with ASC 815, Derivatives and Hedging and ASC 480, Distinguishing Liabilities from Equity . Warrants classified as equity are recorded at fair value as of the date of issuance on our consolidated balance sheets and no further adjustments to their valuation are made. Warrants classified as liabilities and other financial instruments that require separate accounting as liabilities are recorded on our consolidated balance sheets at their fair value on the date of issuance and will be revalued on each subsequent balance sheet date until such instruments are exercised or expire, with any changes in the fair value between reporting periods recorded as other income or expense. Management estimates the fair value of these liabilities using the Black-Scholes model and assumptions that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions, expected volatility, expected life, yield, and risk-free interest rate. Segment Information Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by a company’s chief operating decision maker (“CODM”), or a decision-making group, in deciding how to allocate resources and in assessing financial performance. As of December 31, 2025, the Company’s CODM was the Company’s Chief Executive Officer, and we concluded that we have one reportable segment. Refer to Note 18, “Segment Information”, for additional disclosures regarding segment information. Accounting Pronouncements Presented below is a discussion of new accounting standards including deadlines for adoption. In 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. Recent Accounting Pronouncements Yet to be Adopted In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”). The standard’s purpose is “to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development).” Public companies will be required to disclose in the notes to financial statements specified information about certain costs and expenses at each interim and annual reporting period. Specifically, they will be required to: 1. Disclose the amounts of (a) purchases of inventory; (b) employee compensation; (c) depreciation; (d) intangible asset amortization; and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption. 2. Include certain amounts that are already required to be disclosed under current generally accepted accounting principles (GAAP) in the same disclosure as the other disaggregation requirements. 3. Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. 4. Disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The amendments in the ASU are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the effect of this new guidance on our consolidated financial statements and disclosures. In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which updates the accounting for internal-use software by removing project stage references and introduces a new capitalization threshold based on management authorization and project completion probability. The guidance requires evaluation of significant development uncertainty, including novel functionality and unresolved performance requirements. ASU 2025-06 also requires website-specific development costs to be evaluated under the same framework as other internal-use software and clarifies that capitalized internal-use software costs are subject to the property, plant and equipment disclosure requirements under ASC 360-10. The amendments in the ASU are effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Early adoption permitted. The Company is currently evaluating the impact of ASU 2025-06 on our financial statement disclosures. We have reviewed and considered all other recent accounting pronouncements that have not yet been adopted and believe there are none that could potentially have a material impact on our business practices, financial condition, results of operations, or disclosures. - 90 - NOTE 2 - LIQUIDITY AND ABILITY TO CONTINUE AS A GOING CONCERN The financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. We have incurred losses since inception, including $ 21.2 and $ 11.1 million for the years ended December 31, 2025 and 2024, respectively, resulting in an accumulated deficit of approximately $ 125.4 million as of December 31, 2025. Net cash used in operating activities amounted to approximately $ 15.3 and $ 12.7 million for years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had total liabilities of approximately $ 26.7 million. As of December 31, 2025, we had approximately $ 2.0 million in cash and cash equivalents, which will not be sufficient to fund operations and strategic objectives over the next twelve months from the date of the issuance of these financial statements. Without additional financing, these factors raise substantial doubt regarding the Company’s ability to continue as a going concern. We have implemented cost savings measures that lead to reduced impact to cash used in operations. However, sales did not grow in 2024 or 2025 as anticipated, as our product offerings and strategies continue to be refined. 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. We expect the acquisition of SCN to increase patient volume, drive top line revenue and lower customer acquisition costs and overhead. However, 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. We do not have any off-balance sheet arrangements, as defined by applicable regulations of the SEC, that are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources. NOTE 3 – BUSINESS COMBINATION On June 10, 2025 (“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. Total consideration for SCN aggregated $ 8.7 million consisting of $ 6.0 million in cash consideration, 607,287 shares of unregistered common stock with a fair value of $ 1.3 million, and contingent “earn out” consideration with an estimated fair value of $ 1.4 million payable upon the achievement of a financial milestone as specified in the Purchase Agreement. The Company has elected, as an accounting policy, to determine the fair value of equity securities issued in business combinations using the average market price of the 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. - 91 - The following table summarizes the estimated fair values of the consideration, the tangible and identifiable intangible assets acquired, and liabilities assumed (in thousands): SCHEDULE OF ESTIMATED FAIR VALUE OF TANGIBLE AND IDENTIFIABLE INTANGIBLE ASSETS ACQUIRED AND LIABILITIES ASSUMED Total purchase consideration: Cash consideration $ 6,000 Fair value of common stock consideration 1,304 Fair value of contingent equity consideration 1,350 Total fair value of consideration transferred $ 8,654 Identifiable assets acquired and liabilities assumed: Cash $ 865 Accounts receivable 934 Prepaid expenses and other assets 51 Property and equipment 955 Operating and finance lease right-of-use assets 2,573 Intangible assets 1,900 Operating lease liabilities ( 2,242 ) Liabilities assumed ( 2,111 ) Total identifiable assets acquired and liabilities assumed $ 2,925 Goodwill 5,729 Net assets acquired and liabilities assumed $ 8,654 Transaction costs incurred of less than $ 0.1 million were related to the Acquisition. The following table reflects our unaudited pro forma operating results for the 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: ● Amortization of definite-lived intangible assets recognized at fair value that exceed one year as if acquired January 1, 2024; ● Interest expense (including amortization of debt issuance costs) on the Note entered into with the Lender in connection with the Acquisition as if the Note was obtained on January 1, 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; and ● Given our history of net losses and full valuation allowances, our management estimated an annual effective income tax rate of 0.0 %. Accordingly, no income tax adjustments have been recorded resulting from any pro forma adjustments. SCHEDULE OF PRO FORMA INFORMATION 2025 2024 Year Ended December 31, 2025 2024 (unaudited) Net Revenue $ 21,617 $ 22,463 Net Loss $ ( 21,227 ) $ ( 11,949 ) - 92 - Revenue 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. NOTE 4 - REVENUE, CONTRACT ASSETS AND CONTRACT LIABILITIES Net Revenue For the years ended December 31, 2025 and 2024, the components of revenue from contracts with customers and the related timing of revenue recognition is set forth in the table below (in thousands): SCHEDULE OF REVENUE FROM CONTRACT WITH CUSTOMERS 2025 2024 Product revenue Appliances $ 3,277 $ 5,601 Tooth Positioners 3,210 2,273 Total product revenue 6,487 (1) 7,874 (1) Service revenue Sleep testing services $ 6,041 (3) $ 1,282 (3) VIP 491 (2) 2,485 (2) Billing intelligence services 686 (3) 840 (3) Myofunctional therapy services 337 (2) 609 (2) Treatment centers 2,179 (2) - (2) Sponsorship/seminar/other 1,222 (3) 1,941 (3) Total service revenue 10,956 7,157 Total revenue $ 17,443 $ 15,031 (1) Product 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. (2) Service 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. (3) Sleep testing, treatment center, and other revenue is recognized at a point in time. - 93 - Changes in Contract Liabilities The key components of changes in contract liabilities for years ended December 31, 2025 and 2024 are as follows (in thousands): SCHEDULE OF CHANGES IN CONTRACT LIABILITIES 2025 2024 Beginning balance, January 1 $ 993 $ 2,427 New contracts, net of cancellations 969 2,117 Revenue recognized ( 1,483 ) ( 3,551 ) Ending balance, December 31 $ 479 $ 993 The current portion of deferred revenue is approximately $ 0.5 million, which is expected to be recognized over the next 12 months from the date of the period presented. Additionally, revenue from breakage on contract liabilities was approximately $ 0.1 and $ 1.7 million for the years ended December 31, 2025 and 2024 respectively. Changes in Accounts Receivable Our customers are billed based on fees agreed upon in each customer contract. Receivables from customers were $ 1.6 million at December 31, 2025, $ 0.4 million at December 31, 2024 and $ 0.2 million at January 1, 2024. Adjustment to the allowance are recorded in bad debt expense under general and administrative expenses in the consolidated statement of operations. An allowance of $ 0.9 and $ 0.4 million existed as of December 31, 2025 and 2024. NOTE 5 - PROPERTY AND EQUIPMENT, NET As of December 31, 2025 and 2024, property and equipment consist of the following (in thousands): SCHEDULE OF PROPERTY AND EQUIPMENT 2025 2024 Furniture and equipment $ 3,090 $ 1,349 Leasehold improvements 3,197 2,479 Construction in progress - 1,857 Molds and other 406 406 Gross property and equipment 6,693 6,091 Less accumulated depreciation ( 2,936 ) ( 2,780 ) Net Property and equipment $ 3,757 $ 3,311 Leasehold 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), 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. NOTE 6 - GOODWILL AND INTANGIBLE ASSETS Goodwill Goodwill 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 Acquisitions 2025 2024 Sleep Center of Nevada $ 5,729 $ - BioModeling 2,619 2,619 Empowered Dental 52 52 Lyon Dental 172 172 Total goodwill $ 8,572 $ 2,843 Intangible Assets Intangible 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 early 2025. - 94 - 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 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). As of December 31, 2025 and 2024, identifiable intangible assets were as follows (in thousands): SCHEDULE OF IDENTIFIABLE INTANGIBLES 2025 2024 Patents and developed technology $ 3,802 $ 2,302 Internal-use software 2,377 117 Trade name 730 330 Other 27 27 Total intangible assets 6,936 2,776 Less accumulated amortization ( 2,891 ) ( 2,367 ) Net intangible assets $ 4,045 $ 409 Amortization expense of identifiable intangible assets was $ 0.6 and $ 0.1 million for the years ended December 31, 2025 and 2024, respectively. The estimated future amortization of identifiable intangible assets is as follows (in thousands): SCHEDULE OF ESTIMATED FUTURE AMORTIZATION OF IDENTIFIABLE ASSETS As of December 31, 2026 808 2027 764 2028 761 2029 667 2030 251 Thereafter 794 Total $ 4,045 NOTE 7 - OTHER FINANCIAL INFORMATION Accrued Expenses As of December 31, 2025 and 2024, accrued expenses consist of the following (in thousands): SCHEDULE OF ACCRUED EXPENSES 2025 2024 Accrued payroll $ 1,843 $ 1,001 Accrued interest expense 1,952 - Accrued royalties 175 100 Accrued sales tax 799 481 Accrued legal and other 1,219 652 Total accrued liabilities $ 5,988 $ 2,234 - 95 - NOTE 8 – DEBT, EQUIPMENT FINANCING AND OTHER LIABILITIES Debt We had the following outstanding Notes Payable balance as of December 31, 2025, excluding equipment financing: SCHEDULE OF OUTSTANDING NOTE PAYABLE BALANCE Principal amount $ 10,109 Less: Unamortized debt issuance costs and original issue discount ( 2,014 ) Total notes payable $ 8,095 On 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 costs. The net proceeds from the Note were $ 7.5 million. Interest 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 at any time. A 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. Beginning 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. The 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. On 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. The Avondale Note does not bear interest and no interest will accrue on the Avondale Note unless an event of default occurs as further described below. 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. The 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. - 96 - Equipment Financing At 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 December 31, 2025 December 31, 2024 Principal amount $ 753 $ - Total $ 753 $ - The maturity of notes payable for equipment financing is as follows (in thousands): SCHEDULE OF AMORTIZATION OF NOTES PAYABLE As of December 31, 2026 284 2027 211 2028 162 2029 49 2030 31 Thereafter 16 Total $ 753 Interest expense recognized on the condensed consolidated statement of operations was $ 1.4 million for the period ended December 31, 2025. Other Liabilities As of December 31, 2025 and December 31, 2024, other liabilities consist of the following (in thousands): SCHEDULE OF OTHER LIABILITIES December 31, 2025 December 31, 2024 Contingent consideration on acquisition of SCN $ 1,300 $ - Total $ 1,300 $ - The 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. This 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 expenses. During the year ended December 31, 2025, we did recognize a gain in change in fair value of contingent consideration of approximately $ 0.1 million. 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 %. NOTE 9 – PREFERRED STOCK As of December 31, 2025, our Board of Directors continues to have the authority to designate up to 50,000,000 shares of Preferred Stock in various series that provide for liquidation preferences, and voting, dividend, conversion, and redemption rights as determined at the discretion of the Board of Directors. - 97 - NOTE 10 – COMMON STOCK We are authorized to issue 200,000,000 shares of Common Stock. Holders of Common Stock are entitled to one vote for each share held . Our Board of Directors may declare dividends payable to the holders of Common Stock. Common Stock Transactions During the Periods Presented February 2024 Warrant Exercise Transaction On 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. Pursuant 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. The 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. As 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. June 2024 Private Placement and Management Services Agreement with Seneca On 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. Pursuant 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 placement. No placement agent was used in connection with the private placement. The 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. - 98 - The 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. The 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. September 2024 Registered Direct Offering On 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. H.C. 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 fees. In 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. The shares of the September 2024 Offering were issued pursuant to a shelf registration statement on Form S-3 that was filed with the SEC (File No. 333-262554) on February 7, 2022 and declared effective on February 14, 2022. A prospectus supplement relating to the September 2024 Offering has been filed with the SEC on September 20, 2024. The 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 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. December 2024 Registered Direct Offering and Private Placement of the December 2024 Warrants On 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 . 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. - 99 - The 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. Pursuant 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 Agent for the December 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 December 2024 Offering, (ii) paid the Placement Agent a management fee of 1.0% of the aggregate gross proceeds of the December 2024 Offering, and (iii) reimbursed the Placement Agent for certain expenses and legal fees. In addition, upon the exercise of any December 2024 Warrants for cash, we have agreed to (i) pay the Placement Agent a cash fee equal to 7.0% of the aggregate exercise price paid in cash, (ii) pay the Placement Agent a management fee of 1.0% of the aggregate exercise price paid in cash and (iii) issue to the Placement Agent or its designees warrants to purchase shares of Common Stock representing 7% of the shares of Common Stock underlying the December 2024 Purchase Warrants that have been exercised. We 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. The 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. June 2025 Private Placement On June 9, 2025, we entered into a Securities Purchase Agreement (the “ June 2025 PIPE SPA”) with V-Co 2. V-Co 2 is an 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 ”). V-Co 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. The 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. The 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. We 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. - 100 - “At-the-Market” Equity Offering As 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 HCW. The Company did not sell any shares of Common Stock under the Prior Shelf Registration pursuant to the ATM Sales Agreement. On 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. The 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 Act. During 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. As 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 assessment. NOTE 11 – STOCK AWARDS AND WARRANTS Stock Options In 2017, our shareholders approved the adoption of a stock and option award plan (the “2017 Plan”), under which shares were reserved for future issuance for Common Stock options, restricted stock awards and other equity awards. The 2017 Plan permits grants of equity awards to employees, directors, consultants and other independent contractors. Our shareholders have approved a total reserve of 53,333 shares of Common Stock for issuance under the 2017 Plan. On September 22, 2023, our stockholders approved an amendment and restatement of the 2019 Plan to increase the number shares or our Common Stock available for issuance thereunder by 80,000 shares of Common Stock such that, after amendment and restatement of the 2019 Plan, 126,667 shares of Common Stock are available for issuance under the 2019 Plan. As of December 31, 2024, awards (in the form of options) for an aggregate of 174,380 shares of Common Stock have been issued under our 2019 Plan. A total of 287 shares remaining for issuance were retired with the approval and adoption of the 2024 Omnibus Plan (as further described below). On November 26, 2024, our shareholders approved and adopted the Vivos Therapeutics, Inc. 2024 Omnibus Equity Incentive Plan (or the “2024 Omnibus Plan”). The 2024 Omnibus Plan automatically replaced and superseded the 2019 Plan. Under the 2024 Omnibus Plan, a total of 1,600,000 shares are available for future use. No awards are to be granted under the 2019 Plan or any other prior plan on or after the effective date of the 2024 Omnibus Plan and after the 2024 Omnibus Plan became effective any unused shares left in the 2019 Plan are to be retired. 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. - 101 - 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, 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. The following table summarizes all stock options as of December 31, 2025 and 2024 (shares in thousands): SCHEDULE OF STOCK OPTIONS 2025 2024 Shares Price (1) Term (2) Shares Price (1) Term (2) Outstanding, at December 31, 1,238 $ 8.80 8.5 127 $ 62.45 3.4 Granted - - 1,125 2.62 Forfeited ( 15 ) - ( 14 ) - Outstanding, at December 31, 1,223 (3) $ 6.83 7.6 1,238 (3) $ 8.80 8.5 Exercisable, at December 31, 177 (4) 26.00 2.6 121 (4) 44.22 2.6 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term until the stock options expire. (3) As of December 31, 2025, and 2024 the aggregate intrinsic value of stock options outstanding was $ 0 . (4) As of December 31, 2025, and 2024 the aggregate intrinsic value of exercisable stock options was $ 0 . For 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 2025 2024 Grant date closing price of Common Stock n/a $ 2.62 Expected term (years) n/a 5.8 Risk-free interest rate n/a 3.8 % Volatility n/a 140 % Dividend yield n/a 0 % Based on the inputs and assumptions set forth above, the weighted-average grant date fair value per share for stock options granted for the year ended December 31, 2024 was $ 2.82 . - 102 - For the years ended December 31, 2025 and 2024, we recognized approximately $ 0.7 and $ 0.8 million, respectively, of share-based compensation expense reported under general and administrative expense in the income statement. Unrecognized expense relating to these awards as of December 31, 2025 and 2024 was approximately $ 2.8 and $ 3.5 million, respectively, which will be recognized over the weighted average remaining term of 7.6 and 8.5 years, respectively. Restricted Stock Units The following table summarizes all RSU granted as of December 31, 2025 and 2024 (shares in thousands): SCHEDULE OF RSU GRANTED 2025 Shares Price (1) Term (2) Outstanding, at December 31, - $ - - Granted 90 $ 5.57 Forfeited - - Exercised - - Outstanding, at December 31, 90 (3) $ 5.57 10 Exercisable, at December 31, - (4) 5.57 10 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term until the RSUs expire. (3) As of December 31, 2025, and 2024 the aggregate intrinsic value of stock options outstanding was $ 0 . (4) As of December 31, 2025, and 2024 the aggregate intrinsic value of exercisable stock options was $ 0 . RSU’s are priced on the date of grant and vest over 2 years at the end of the first and second years respectively. Warrants Following is a summary of our warrants outstanding for the years ended December 31, 2025 and 2024 (shares in thousands): SCHEDULE OF WARRANT OUTSTANDING 2025 2024 Shares Price (1) Term (2) Shares Price (1) Term (2) Outstanding, at December 31 9,658 $ 3.22 3.9 2,821 $ 13.15 4.6 Grants of warrants: Private placement 3,055 7,125 Consultants for services - 4 Warrant inducement - 1,471 Exercised ( 180 ) ( 1,739 ) Forfeited ( 751 ) ( 24 ) Outstanding, at December 31 11,782 (3) $ 2.44 3.4 9,658 (3) $ 3.22 3.9 Exercisable, at December 31 11,745 $ 2.36 3.3 9,605 $ 3.10 3.9 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term until the warrants expire. (3) As of December 31, 2025, the aggregate intrinsic value of warrants outstanding was $ 0 million. - 103 - For the years ended December 31, 2025 and 2024, the valuation assumptions for warrants issued were estimated on the measurement date using the BSM option-pricing model with the following weighted-average input and assumptions: SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS USED IN THE FAIR VALUE 2025 2024 Measurement date closing price of Common Stock (1) $ 1.70 $ 2.17 Contractual term (years) (2) 4.0 3.7 Risk-free interest rate 4.0 % 4.4 % Volatility 148 % 140 % Dividend yield 0 % 0 % (1) Weighted average grant price. (2) The valuation of warrants is based on the contractual term. NOTE 12 - INCOME TAXES For the years ended December 31, 2025 and 2024, the domestic and foreign components of loss before income taxes consist of the following (in thousands): SCHEDULE OF LOSS BEFORE INCOME TAX 2025 2024 Domestic $ ( 21,230 ) $ ( 11,194 ) Canada - 58 Loss before income taxes $ ( 21,230 ) $ ( 11,136 ) For 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 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 2025 2024 Amount Percent Amount Percent U.S. Federal statutory tax rate $ 4,459 21.0 % $ 2,351 21.0 % Domestic state income taxes, net of Federal income tax effect (1) 639 3.0 % 253 2.3 % Reductions in domestic state net operating loss carryforwards: Changes in apportionment and other ( 169 ) - 0.8 % ( 26 ) - 0.2 % Increase in valuation allowance ( 470 ) - 2.2 % ( 227 ) - 2.0 % Non-qualified stock option cancellations ( 327 ) - 1.5 % ( 56 ) - 0.5 % Non-deductible items ( 144 ) - 0.7 % ( 121 ) - 1.1 % Other 140 0.7 % ( 208 ) - 1.9 % Increase in U.S. Federal valuation allowance ( 4,128 ) - 19.4 % ( 1,966 ) - 17.6 % U.S. Federal tax rate $ - 0.0 % $ - 0.0 % (1) For 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. - 104 - As 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 2025 2024 Deferred tax assets: Net operating loss carryforwards: U.S. Federal $ 21,966 $ 17,598 Domestic rates 2,734 2,274 Lease liability 1,133 352 Intangible assets 530 673 Accrued liabilities 368 184 Stock based compensation 297 528 Property and equipment 111 70 Other 95 98 Total deferred tax assets after valuation allowances 27,234 21,777 Valuation allowances ( 26,120 ) ( 21,522 ) Total deferred tax assets after valuation allowances 1,114 255 Deferred tax liabilities: ROU assets ( 1,045 ) ( 240 ) Goodwill and other ( 69 ) ( 15 ) Total deferred tax liabilities ( 1,114 ) ( 255 ) Net deferred tax assets and liabilities $ - $ - We 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. As of December 31, 2025, we have federal net operating loss (“NOL”) carryforwards of $ 104.6 million. 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. As of December 31, 2025, the remaining federal NOL carryforwards of $ 101.3 million have no expiration date. Federal and state laws impose substantial restrictions on the utilization of NOL carryforwards if we experience significant ownership changes as defined in Section 382 of the Internal Revenue Code (“IRC”). Pursuant to IRC Section 382, annual use of our NOL carryforwards may be limited in the event there is a cumulative change in ownership of more than 50% among 5% or greater shareholders (or shareholder groups) over any three-year period. 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. 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. We 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. We 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 is limited to the NOL utilized. Accordingly, we may be subject to examination for prior NOL’s generated as such NOL’s are utilized. - 105 - In 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. NOTE 13 – LEASES Operating Leases We have entered into various operating lease agreements for certain offices, medical facilities and training facilities. These leases have original lease periods expiring between 2026 and 2034 . Most leases include an option to renew and the exercise of a lease renewal option typically occurs at the discretion of both parties . For purposes of calculating operating lease liabilities, lease terms are deemed not to include options to extend the lease until it is reasonably certain that we will exercise that option. As 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 . In addition to base rent in these leases, we also pay our proportionate share of the operating expenses, as defined in the leases. These payments are made monthly and adjusted annually to reflect actual charges incurred for operating expenses, such as common area maintenance, taxes, and insurance. Financing Leases SCN 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. As of December 31, 2025 and 2024, the components of lease expense are as follows (in thousands): SCHEDULE OF LEASE EXPENSE Lease cost: 2025 2024 Operating lease cost $ 1,038 $ 483 Financing lease cost 38 - Total operating lease cost $ 1,076 $ 483 Rent expense is recognized on a straight-line basis over the lease term and is included under general and administrative expense. As of December 31, 2025 and 2024, the remaining lease terms and discount rate used are as follows (in thousands): SCHEDULE OF REMAINING LEASE TERMS AND DISCOUNT RATE 2025 2024 Weighted-average remaining lease term (years) 5.4 2.8 Weighted-average discount rate 27.2 % 8.4 % Supplemental cash flow information related to leases as of December 31, 2025 and 2024 is as follows (in thousands): SCHEDULE OF RELATED TO LEASES 2025 2024 Cash flow classification of lease payments: Cash paid for operating lease liabilities $ 1,109 $ 613 Cash paid for financing lease liabilities $ 36 $ - Total cash paid for lease liabilities $ 1,145 $ 613 - 106 - As of December 31, 2025, the maturities of our future minimum lease payments were as follows (in thousands): SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS As of December 31, Operating Finance Total 2026 1,638 62 1,700 2027 1,684 62 1,746 2028 1,323 57 1,380 2029 1,088 - 1,088 2030 1,045 - 1,045 Thereafter 1,813 - 1,813 Total lease payments 8,591 181 8,772 Less: imputed interest ( 4,079 ) ( 13 ) ( 4,092 ) Total $ 4,512 $ 168 $ 4,680 NOTE 14 – COMMITMENTS AND CONTINGENCIES On 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. In June of 2020, we filed a lawsuit in federal district court in Colorado, Case No. 20 cv 1637. 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. 20 cv 0301. 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 of Vivos. The Settlement Agreement resolves any claim for relief that was, or could have been alleged, in the foregoing litigation matters. Pursuant 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. As of December 31, 2025, management recorded an accrual of $ 250 thousand for the settlement expense under accrued expenses. There were no new other material commitments or contingencies entered into as of the year ended December 31, 2025 and 2024. NOTE 15 – RELATED PARTY TRANSACTIONS The 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: Lease #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. Lease #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. Lease #3 – 2025 Red Rock modification. As of December 31, 2025, the Company has an office lease with five years remaining on its lease term. 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. As 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. - 107 - NOTE 16 - NET LOSS PER SHARE OF COMMON STOCK Basic and diluted net loss per share of Common Stock (“EPS”) is computed by dividing (i) net loss (the “Numerator”), by (ii) the weighted average number of shares of Common Stock outstanding during the period (the “Denominator”). The calculation of diluted EPS is also required to include the dilutive effect, if any, of stock options, unvested restricted stock awards, convertible debt and Preferred Stock, and other Common Stock equivalents computed using the treasury stock method, in order to compute the weighted average number of shares outstanding. As of December 31, 2025 and 2024, all Common Stock equivalents were antidilutive. Presented below are the calculations of the Numerators and the Denominators for basic and diluted EPS (dollars in thousands, except per share amounts): SCHEDULE OF COMPUTATION OF ANTI-DILUTIVE WEIGHTED-AVERAGE SHARES OUTSTANDING 2025 2024 Calculation of Numerator: Net loss $ ( 21,230 ) ( 11,136 ) Loss applicable to common stockholders $ ( 21,230 ) $ ( 11,136 ) Calculation of Denominator: Weighted average number of shares of Common Stock outstanding 10,273,881 5,019,886 Net loss per share of Common Stock (basic and diluted) $ ( 2.07 ) $ ( 2.22 ) As of December 31, 2025 and 2024, the following potential Common Stock equivalents were excluded from the computation of diluted net loss per share of Common Stock since the impact of inclusion was antidilutive (in thousands): SCHEDULE OF OUTSTANDING COMMON STOCK SECURITIES NOT INCLUDED IN THE COMPUTATION OF DILUTED NET LOSS PER SHARE 2025 2024 Common stock warrants 11,782 9,658 Common stock options and RSU’s 1,223 1,238 Total 13,005 10,896 NOTE 17 - FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS 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, 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. Recurring Fair Value Measurements For the years ended December 31, 2025 and 2024, we did not have any assets and liabilities classified as Level 1 or Level 2. Our warrants 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. Significant Concentrations Credit Risk 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, 2025, we had cash and cash equivalents with three financial institutions in the United States with an aggregate balance of $ 2.0 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 receivable. No single customer represented more than 10% of our sales or accounts receivable as of December 31, 2025. 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, 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. - 108 - NOTE 18 – 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. SCHEDULE OF SEGMENT REPORTING 2025 2024 Year Ended December 31, 2025 2024 Revenue $ 17,443 $ 15,031 Less: (1) Cost of sales 6,901 6,012 Gross profit 10,542 9,019 Less: (1) General and administrative 27,727 17,878 Sales and marketing 1,400 1,731 Operating loss (exclusive of depreciation and amortization shown separately below) ( 18,585 ) ( 10,590 ) Depreciation and amortization ( 1,309 ) ( 581 ) Other expense ( 1,481 ) ( 110 ) Other income 145 145 Segment net loss ( 21,230 ) ( 11,136 ) Reconciliation of profit or loss Adjustments and reconciling items - - Consolidated net loss $ ( 21,230 ) $ ( 11,136 ) (1) 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 in the U.S. NOTE 19 – VARIABLE INTEREST ENTITIES Variable Interest Entities We evaluate our involvement with variable interest entities (“VIEs”) to determine whether it is required to consolidate such entities and to provide related disclosures. Consolidated Variable Interest Entity AIM 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. We 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. We 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. - 109 - Assets and Liabilities of Consolidated Variable Interest Entity The 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. SCHEDULE OF VARIABLE INTEREST ENTITY 2025 Current assets Cash and cash equivalents $ 20 Accounts receivable, net of allowance 3 Total current assets 23 Long-term assets Property and equipment, net 318 Operating lease right-of-use asset 80 Deposits and other 9 Total assets $ 430 LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT) Current liabilities Accounts payable $ 126 Accrued expenses 78 Current portion of operating lease liability 19 Current portion of debt 39 Other current liabilities 2 Total current liabilities 264 Long-term liabilities Operating lease liability, net of current portion 167 Debt, net of current portion 87 Total liabilities $ 518 Noncontrolling Interest The remaining 20% ownership interest in AIM Detroit is reflected as a noncontrolling interest in the consolidated balance sheets. Net income 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 balance. Risk Exposure Vivos’ 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. Certain 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. NOTE 20 – SUBSEQUENT EVENTS Appointment of Gregg C. E. Johnson to the Board Effective as of February 4, 2026, the Board pursuant to the recommendation of the Nominating and Corporate Governance Committee of the Board, appointed Gregg C. E. Johnson as an independent director of the Board. Mr. Johnson will also serve on the Compensation Committee of the Board. We 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. Mr. Johnson is also eligible to receive stock option compensation under the Company’s 2024 Equity Incentive Plan, as amended. Mr. 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. There are no arrangements or understandings between Mr. Johnson and any other persons pursuant to which he was selected as a director. - 110 - January 2026 Warrant Inducement Transaction On 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 . ” The resale 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. Pursuant 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. We 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. Ortho-Tain Settlement Agreement On 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. Refer to Note 14. January 2026 V-Co Investors 3 LLC Note On 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 ”). On 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. In 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 penalty. On 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. - 111 - March 2026 PIPE Offering On 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 ”). V-Co 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 LLC. 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 Offering. 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. The March 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. The 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. - 112 - Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.