Vivos Therapeutics, Inc. (“Vivos” or the
“Company’’) (NASDAQ: VVOS), a medical technology company focused on
developing and commercializing innovative diagnostic and treatment
methods for patients suffering from a variety of health conditions,
many of which are associated with breathing related sleep
conditions arising from certain dentofacial abnormalities, today
reported financial results and operating highlights for the second
quarter and six months ended June 30, 2023.
Second Quarter 2023 Financial and
Operating Summary
- Revenue was $3.4 million for the
second quarter of 2023 and $7.3 million for the six months ended
June 30, 2023, compared to $4.2 million and $7.8 million for the
three and six months ended June 30, 2022, respectively, mainly due
to lower product revenue and Vivos Integrated Provider (“VIP”)
enrollments offset by increased revenue from home sleep testing
services and seminars conducted at the Vivos Institute.
Importantly, Vivos believes that governmental investigations of
third parties with non-FDA approved products in the sleep apnea
treatment space adversely impacted new Vivos case starts and VIP
enrollments during the first half of 2023.
- Gross profit was $2.1 million for
the second quarter of 2023 and $4.4 million for the six months
ended June 30, 2023, compared to $2.6 million and $5.1 million for
the comparable periods in 2022, respectively, attributable
primarily to the decrease in revenue;
- Gross margin remained the same at
62% for the second quarter of 2023 compared to the prior year
period. For the six months ended June 30, 2023 gross margin was
61%, compared 66% for the same period in 2022;
- Operating expenses for the second
quarter of 2023 decreased by a significant amount ($2.9 million, or
31%) versus the second quarter of 2022, reflecting Vivos’
previously announced cost-cutting initiatives including personnel
and related expenses. For the six months ended June 30, 2023
operating expenses decreased by $4.7 million or 25%, compared to
the same period in 2022;
- The Company’s cost-cutting
initiatives led to significant year-over-year reductions of net
loss of $1.5 million or 21% and $5.1 million or 41% for the three
and six months ended June 30, 2023, respectively, compared to the
same periods in 2022;
- Cash and cash equivalents were $3.9
million at June 30, 2023;
- As of June 30, 2023, patients
treated with The Vivos Method totaled approximately 40,000,
compared to over 28,000 as of the second quarter of 2022. Vivos has
also trained more than 1,800 dentists in the use of The Vivos
Method and Vivos’ related value-added services, compared to over
1,600 as of the second quarter 2022;
- In May 2023, Vivos announced the
results of a clinical observational study on the application of the
POD® (being rebranded as the Vida), in the treatment and prevention
of migraine headaches. The study demonstrated statistically
significant results, with ninety-two percent (92%) of study
patients reporting their migraine symptoms were completely resolved
following completion of treatment. Migraine headaches affect over
39 million people in the United States alone according to the
American Migraine Foundation; and
- Overall, Vivos’ previously stated
goal was to decrease costs and increase revenues during 2023 with
the aim of becoming cash flow positive from operations by the first
quarter of 2024 without the need for additional financing, if
possible. Vivos has successfully implemented cost savings measures
and significantly reduced cash used in operations; however, sales
have not grown during 2023 as anticipated due to external factors
and as Vivos continues to refine its product offerings and sales
strategies. As such, Vivos now anticipates that it will likely be
required to obtain additional financing to satisfy cash needs as
the Company works towards increasing revenue and achieving cash
flow positive operations in the foreseeable future.
Kirk Huntsman, Vivos’ Chairman and Chief
Executive Officer, stated “Throughout this year we significantly
reduced our cash burn, which led to a 31% second quarter over
quarter, and 25% year over year reduction in operating expenses. At
the same time, we expanded our product offerings to address a
broader spectrum of patient needs and price points to drive revenue
growth. This included our acquisition of certain key patents,
trademarks, product rights and trade secrets earlier in 2023, which
filled a gap in our product offerings to providers and patients. We
continue to believe that these developments will allow us to begin
to see revenue improvement here in the second half of 2023.”
Mr. Huntsman continued, “That said, we believe
revenues in our second quarter were adversely impacted by a widely
publicized lawsuit and ensuing governmental, including criminal,
investigations into a non-Vivos, non-FDA cleared oral appliance
purporting to treat sleep apnea. Although Vivos was uninvolved in
these matters, we believe the negative publicity, rumors and
speculation created significant confusion and concern in the
marketplace. Not long after reports of this matter began to
circulate, we saw a decline in both new VIP enrollments and
appliance sales, and these declines continued throughout the second
quarter. What we know is this: Vivos products are FDA-approved for
their indicated uses, and we believe this creates an opportunity
for us to distinguish our products from lesser competition. So
while we’ve faced some headwinds in the market on the revenue side,
we also see new opportunities emerging as we seek to achieve
revenue momentum across our entire suite of products.”
“The second quarter also saw continued progress
in our pilot tests with certain Dental Service Organizations
(“DSOs”), including the execution of new and existing pilots during
the quarter with eight regional and national DSOs representing over
1,000 locations nationwide. We also executed our first
non-exclusive distribution agreement for a 90-day pilot with a
nationally recognized durable medical equipment company (“DME”)
focused on the respiratory space, that serves hundreds of thousands
of CPAP patients nationwide who are seeking alternatives. We hope
to provide further public details about this DME collaboration
following the conclusion of the 90-day trial, but so far it appears
promising as a means of expanding our sales reach. Our team is very
excited about these relationships and we expect to enter into
additional, similar relationships during the remainder of 2023 and
beyond,” continued Mr. Huntsman.
“Through the combination of our strategic
revenue initiatives, internal operating cost reductions, and new
capital raising initiatives, we believe we have positioned Vivos to
achieve revenue growth and, ultimately, cash flow positive
operations and profitability in the foreseeable future. In summary,
while the larger economic and market environment is creating
challenges for both the medical and dental communities, Vivos has
taken steps to address those challenges and our long-term growth
drivers remain in place. With our innovative, evidence-based
technology and network of trained providers, we remain committed to
our core mission of addressing the crisis of sleep apnea and
breathing related sleep issues,” Mr. Huntsman concluded.
Vivos encourages investors and other interested
parties to join its conference call today at 6:00 p.m. Eastern time
(details below), where management will discuss further details on
topics including: (i) Vivos’ expanded product line and revenue
potential, (ii) the potential significant impact of Vivos’ recent
discussions with DME companies on Vivos’ near-term growth, (iii) an
update on Vivos’ DSO and DME sales and marketing efforts; (iv)
additional programs for dentists to enroll with Vivos, and (v)
Vivos’ current cash position and actions taken to reduce cash
burn.
In addition, further information on Vivos’
financial results is included on the attached unaudited condensed
consolidated balance sheets and statements of operations, and
additional explanations of Vivos’ financial performance are
provided in the Vivos’ Quarterly Report on Form 10-Q for the three
and six months ended June 30, 2023, which will be filed with the
Securities and Exchange Commission (“SEC”). The full 10-Q report
will be available on the SEC Filings section of the Investor
Relations section of Vivos’ website at
https://vivos.com/investor-relations.
Conference Call
To access Vivos’ investor conference call,
please dial (877) 451-6152, or for international callers, (201)
389-0879. A replay will be available shortly after the call and can
be accessed by dialing (844) 512-2921, or for international
callers, (412) 317-6671. The passcode for the live call and the
replay is 13740723. The replay will be available until August 30,
2023.
A live webcast of the conference call can be
accessed on Vivos’ website at https://vivos.com/investor-relations.
An online archive of the webcast will be available on the Company’s
website for 30 days following the call.
About Vivos Therapeutics,
Inc.
Vivos Therapeutics, Inc. (NASDAQ: VVOS) is a
medical technology company focused on developing and
commercializing innovative diagnostic and treatment methods for
patients suffering from breathing and sleep issues arising from
certain dentofacial abnormalities such as mild-to-moderate
obstructive sleep apnea (OSA) and snoring in adults. The Vivos
Method represents the first clinically effective nonsurgical,
noninvasive, nonpharmaceutical and cost-effective solution for
treating mild to moderate OSA. It has proven effective in
approximately 40,000 patients treated worldwide by more than 1,800
trained dentists.
The Vivos Method includes the Vivos Complete
Airway Repositioning and/or Expansion (CARE) appliance therapy and
associated protocols that alter the size, shape and position of the
soft tissues that comprise a patient’s upper airway and/or palate.
The Vivos Method opens airway space and may significantly reduce
symptoms and conditions associated with mild-to-moderate OSA, such
as lowering Apnea Hypopnea Index scores. Vivos also markets and
distributes SleepImage diagnostic technology under its VivoScore
program for home sleep testing in adults and children. The Vivos
Integrated Practice (VIP) program offers dentists training and
other value-added services in connection with using The Vivos
Method.
For more information, visit
www.vivos.com.
Cautionary Note Regarding
Forward-Looking Statements
This press release, the conference call referred
to herein, and statements of the Company’s management made in
connection therewith contain “forward-looking statements” (as
defined in Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended)
concerning future events, particularly with respect to the public
offering described herein. Words such as “may”, “should”,
“expects”, “projects,” “intends”, “plans”, “believes”,
“anticipates”, “hopes”, “estimates”, “goal” and variations of such
words and similar expressions are intended to identify
forward-looking statements. These statements involve significant
known and unknown risks and are based upon several assumptions and
estimates, which are inherently subject to significant
uncertainties and contingencies, many of which are beyond Vivos’
control. Actual results (including, without limitation, the results
of Vivos’ sales, marketing and cost cutting initiatives as
described herein) may differ materially from those expressed or
implied by such forward-looking statements. Factors that could
cause actual results to differ materially include, but are not
limited to: (i) the risk that Vivos may be unable to implement
revenue, sales and marketing strategies that increase revenues,
(ii) risks associated with regulatory scrutiny of and adverse
publicity in the sleep apnea treatment sector; (iii) the risk that
Vivos may be unable to secure additional financings on reasonable
terms when needed, if at all and (iv) other risk factors described
in Vivos’ filings with the Securities and Exchange Commission
(“SEC”). Vivos’ filings can be obtained free of charge on the SEC’s
website at www.sec.gov. Except to the extent required by law, Vivos
expressly disclaims any obligations or undertaking to release
publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in Vivos’ expectations with
respect thereto or any change in events, conditions, or
circumstances on which any statement is based.
Vivos Investor Relations
Contact:Julie GannonInvestor Relations
Officer720-442-8113jgannon@vivoslife.com
-Tables Follow-
VIVOS THERAPEUTICS
INC.Unaudited Condensed Consolidated Balance
Sheets(In Thousands, Except Per Share
Amounts)
|
|
June 30, 2023 |
|
|
December 31, 2022 |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
3,942 |
|
|
$ |
3,519 |
|
Accounts receivable, net of allowance of $251 and $712,
respectively |
|
|
327 |
|
|
|
457 |
|
Prepaid expenses and other current assets |
|
|
1,073 |
|
|
|
1,448 |
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
5,342 |
|
|
|
5,424 |
|
|
|
|
|
|
|
|
|
|
Long-term
assets |
|
|
|
|
|
|
|
|
Goodwill |
|
|
2,843 |
|
|
|
2,843 |
|
Property and equipment, net |
|
|
3,267 |
|
|
|
3,082 |
|
Operating lease right-of-use asset |
|
|
1,544 |
|
|
|
1,695 |
|
Intangible assets, net |
|
|
445 |
|
|
|
302 |
|
Deposits and other |
|
|
308 |
|
|
|
374 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
13,749 |
|
|
$ |
13,720 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,325 |
|
|
$ |
1,411 |
|
Accrued expenses |
|
|
1,949 |
|
|
|
1,912 |
|
Warrant liability |
|
|
2,200 |
|
|
|
- |
|
Current portion of contract liabilities |
|
|
2,359 |
|
|
|
2,926 |
|
Current portion of operating lease liability |
|
|
447 |
|
|
|
419 |
|
Other current liabilities |
|
|
160 |
|
|
|
145 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
8,440 |
|
|
|
6,813 |
|
|
|
|
|
|
|
|
|
|
Long-term
liabilities |
|
|
|
|
|
|
|
|
Contract liabilities, net of current portion |
|
|
264 |
|
|
|
112 |
|
Employee retention credit liability |
|
|
1,175 |
|
|
|
- |
|
Operating lease liability, net of current portion |
|
|
1,764 |
|
|
|
1,994 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
11,643 |
|
|
|
8,919 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
|
|
|
|
Preferred Stock, $0.0001 par value per share. Authorized 50,000,000
shares; no shares issued and outstanding |
|
|
- |
|
|
|
- |
|
Common Stock, $0.0001 par value per share. Authorized 200,000,000
shares; issued and outstanding 29,928,786 shares as of June 30,
2023 and 23,012,119 shares as December 31, 2022 |
|
|
3 |
|
|
|
2 |
|
Additional paid-in capital |
|
|
88,802 |
|
|
|
84,267 |
|
Accumulated deficit |
|
|
(86,699 |
) |
|
|
(79,468 |
) |
Total stockholders’ equity |
|
|
2,106 |
|
|
|
4,801 |
|
Total liabilities and stockholders’ equity |
|
$ |
13,749 |
|
|
$ |
13,720 |
|
|
|
|
|
|
|
|
|
|
VIVOS THERAPEUTICS
INC.Unaudited Condensed Consolidated Statements of
Operations(In Thousands, Except Per Share
Amounts)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenue |
|
$ |
1,546 |
|
|
$ |
2,293 |
|
|
$ |
3,318 |
|
|
$ |
4,342 |
|
Service revenue |
|
|
1,849 |
|
|
|
1,891 |
|
|
|
3,935 |
|
|
|
3,486 |
|
Total revenue |
|
|
3,395 |
|
|
|
4,184 |
|
|
|
7,253 |
|
|
|
7,828 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales (exclusive of depreciation and amortization shown
separately below) |
|
|
1,297 |
|
|
|
1,596 |
|
|
|
2,817 |
|
|
|
2,689 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
2,098 |
|
|
|
2,588 |
|
|
|
4,436 |
|
|
|
5,139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
|
5,877 |
|
|
|
7,691 |
|
|
|
12,414 |
|
|
|
15,497 |
|
Sales and marketing |
|
|
590 |
|
|
|
1,699 |
|
|
|
1,220 |
|
|
|
2,879 |
|
Depreciation and amortization |
|
|
148 |
|
|
|
162 |
|
|
|
323 |
|
|
|
324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
6,615 |
|
|
|
9,552 |
|
|
|
13,957 |
|
|
|
18,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(4,517 |
) |
|
|
(6,964 |
) |
|
|
(9,521 |
) |
|
|
(13,561 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income
(expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense |
|
|
(225 |
) |
|
|
(37 |
) |
|
|
(174 |
) |
|
|
(116 |
) |
PPP loan forgiveness |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,287 |
|
Excess warrant fair value |
|
|
- |
|
|
|
- |
|
|
|
(6,453 |
) |
|
|
- |
|
Change in fair value of warrant liability, net of issuance costs of
$645 |
|
|
(867 |
) |
|
|
- |
|
|
|
8,761 |
|
|
|
- |
|
Other income |
|
|
81 |
|
|
|
9 |
|
|
|
156 |
|
|
|
68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(5,528 |
) |
|
$ |
(6,992 |
) |
|
$ |
(7,231 |
) |
|
$ |
(12,322 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share (basic and
diluted) |
|
$ |
(0.18 |
) |
|
$ |
(0.33 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.58 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares of Common Stock outstanding (basic and diluted) |
|
|
29,928,786 |
|
|
|
21,233,485 |
|
|
|
28,245,084 |
|
|
|
21,233,485 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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