Good day, everyone, and welcome to the Vivos Second Quarter 2024 Earnings Conference Call. This conference is being recorded, and a replay of today’s call will be available in the Investor Relations section of Vivos’ website and will remain posted there for the next 30 days. I will now hand the call over to John Lee, Vivos’ Executive Vice President of Marketing, for the instructions and the reading of the Safe Harbor statement. Please go ahead.

Thank you, operator. Hello, everyone, and welcome to our conference call. A copy of our earnings press release is available on the Investor Relations section of our website at www.vivos.com. With us on the call today are Kirk Huntsman, Vivos’ Chairman and Chief Executive Officer; and Brad Amman, Chief Financial Officer. Today, we’ll review the highlights and financial results for the second quarter of 2024 as well as more recent developments and Vivos’ plan for the rest of 2024. Following these formal remarks, we will be happy to take questions. I would also like to remind everyone that today’s call will contain certain forward-looking statements from our management made within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, concerning future events. Words such as aim, may, could, should, projects, expects, 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 a number of assumptions and estimates, which are inherently subject to significant risks, uncertainties and contingencies, many of which are beyond the company’s control. Actual results, including without limitation, the results of Vivos’ growth strategies, operational plans, including sales, marketing, distribution, product acquisition and integration, research and development, regulatory initiatives, cost savings plans and plans to generate revenue, as well as future potential results of operations or operating metrics such as the potential for Vivos to achieve future positive cash flow or profitability and other matters to be addressed by Vivos’ management in this conference call may differ materially and adversely from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the risk factors described and other disclosures contained in Vivos’ filings with the Securities and Exchange Commission, including the risk factors and other disclosures in our Form 10-K for the year ended December 31, 2023, and other filings with the SEC, including our second quarter 10-Q filed with the SEC today, all of which are accessible on the Investor Relations section of Vivos’ website as well as the SEC’s website. Except to the extent required by law, Vivos assumes no obligation to update statements as circumstances change. Finally, please be aware that the U.S. Food and Drug Administration has given certain specific Vivos appliances 510(k) clearance to treat mild to severe OSA. With the FDA clearance for severe last November, treatment of patients with severe OSA with these specific appliances is no longer needed to be performed off-label at the clinical discretion of the treating doctor and is now an integral part of the Vivos treatment protocol. Treatment of OSA of any severity or any other condition with any other Vivos FDA-cleared devices remains at the clinical discretion of the treating doctor. Now at this time, it’s my pleasure to introduce Brad Amman, CFO of Vivos. Brad, please go ahead.

Thank you, John, and good afternoon, everyone. Today, I will review the highlights of our financial results for the second quarter of 2024. For further information on our results for the three and six months periods ended June 30, 2024, please see our earnings release, which was distributed earlier today, and our quarterly report on Form 10-Q, which is available on the SEC filings portion of the Investor Relations section of our website, as John mentioned, at www.vivos.com. Today, we are pleased to report second quarter 2024 total revenue of $4.1 million compared to $3.4 million for both the second quarter of 2023 and the first quarter of 2024, a 19% increase both sequentially and year-over-year. This year-over-year growth was due to an increase of approximately $400,000 in product revenue from higher sales and fewer discounts of Vivos appliances and guides, coupled with an increase of $200,000 in service revenue, reflecting an increase in Vivos Integrated Provider, or VIP, enrollment revenue, which you will recall we recognize over time, as well as an increase of $100,000 in sponsorship, seminar and other service revenue. This was partially offset by a decrease of $100,000 in Myofunctional Therapy revenues. Billing Intelligence Service and home sleep testing service revenue remained relatively unchanged year-over-year. For the six months ended June 30, 2024, total revenue was $7.5 million compared to $7.3 million for the comparable period in 2023. During the second quarter of 2024, we enrolled 32 VIPs and recognized VIP enrollment revenue of $1.2 million, a revenue increase of 28% compared to the second quarter of 2023 when we enrolled 43 VIPs for a total of $900,000 in revenue. Approximately $600,000 in revenue was attributable to accelerated revenue recognition on several contracts for VIPs who did not complete their required training during the first 90 days of their enrollment. Please refer to our 10-Q for further details, particularly on our revenue recognition policy for enrollments. For the six months ended June 30, 2024, we enrolled 82 VIPs and recognized VIP enrollment revenue of approximately $2.1 million, a revenue decrease of 6% compared to the same period last year when we enrolled 81 VIPs for a total of $2.2 million. While the number of VIP enrollments increased slightly, revenue was impacted by updates to key inputs in our revenue recognition methodology primarily estimated customer lives and the addition of new entry levels into the VIP program at lower price points. We sold 2,033 oral appliance arches during the second quarter of 2024 for a total of $2 million, a 28% increase in revenue compared to 2,083 oral appliances during the second quarter of 2023 for $1.5 million. The increase in revenue is directly attributable to a 71% decrease in discounts offered during the second quarter of 2024 compared to the same period last year. For the six months ended June 30, 2024, we sold 4,029 oral appliance arches for a total of $2.9 million, a 5% increase in revenue compared to the same period in 2023 when we sold 4,452 oral appliance arches for $2.8 million. The increase is directly attributable to a 45% decrease in discounts offered during the six-month period in 2024 compared to the comparable period in 2023. As Kirk will discuss in more detail, in late July, we began to see patients from our strategic marketing and distribution alliance with an operator of several sleep testing and treatment centers in Colorado. As a result, the fourth quarter of this year will be the first full quarter of operations with this new strategic revenue initiative, which is based on collaborations to better align our interest with referring medical professionals. We expect this will materially broaden the number of OSA patients who have access to Vivos’ products and make our revenue less reliant on VIP enrollments going forward. Gross profit was $2.7 million for the second quarter of 2024 compared to gross profit of $2.1 million for the comparable period in 2023. The increase was primarily attributable to the increase in revenue. Gross margin for the second quarter of 2024 was 65% compared to 62% for the second quarter of 2023. For the six months ended June 30, 2024, gross profit was $4.6 million compared to gross profit of $4.4 million in the same period in 2023, attributable to the increase in revenue again. Gross profit for the six-month period ended June 30, 2024, remained constant at 61% compared to the same period in 2023. Sales and marketing expenses decreased by about $300,000 or 46% to $300,000 for the second quarter of 2024 compared to $600,000 for the second quarter of 2023. This decrease was primarily driven by lower sales commissions as well as sales-related and digital marketing expenses. For the six months ended June 30, 2024, sales and marketing expense decreased to $1 million compared to slightly over $1.2 million for the same period in 2023. This decrease was primarily driven by the same factors I mentioned earlier. As we’ve said previously, we are committed to increasing efficiencies and significantly lowering our cash burn rate as we seek to prudently use our capital resources and to achieve our main goal of cash flow positive operations. This trend continued in the second quarter as we again achieved a significant reduction in G&A expenses. Importantly, the second quarter marked the eighth consecutive quarter in which we’ve been able to continue with this trend. For the second quarter of 2024, general and administrative expenses decreased $1.8 million or 30% to $4.1 million compared to $5.9 million for the second quarter of last year. This year-over-year decrease reflects the success of our cost-cutting efforts as we move toward our goal of positive results from operations. For the six months ended June 30, 2024, G&A expenses decreased $3.4 million to $9 million or approximately 27% compared to $12.4 million for the six months ended June 30, 2023. The decrease reflects lower professional fees and a reduction in personnel and related compensation. Total operating expenses for the second quarter of 2024 decreased by a significant amount, $2 million or 31% versus the second quarter of last year. As noted, this represents our eighth consecutive quarter where we have reported year-over-year decreases in operating expenses, and it is mainly due to the cost-cutting initiatives we have taken since the middle part of 2022, throughout 2023, and as well as in 2024. For the six months ended June 30, operating expenses decreased by $3.7 million or 26% compared to the same period last year. Our cost-cutting initiatives and lower G&A also contributed to a significant year-over-year reduction in operating loss, which decreased $2.9 million or 57% versus the second quarter of 2023. For the six months ended June 30, 2024, operating loss decreased by $3.8 million or 40% compared to the same period last year. Net loss for the second quarter of 2024 decreased by 65% to $1.9 million compared to a loss of $5.5 million for the same period in 2023. For the six months ended June 30, 2024, net loss decreased by 21% to $5.7 million compared to a net loss of $7.2 million for the same period last year. Turning now to our statement of cash flows. Cash burn from operations for the six months ended June 30, 2024, was $5.6 million, a decrease of approximately 13% or $800,000 compared to $6.4 million during the comparable prior year period. This decrease is due primarily to the $1.5 million decrease in net loss in the absence in 2024 of an unfavorable net change in fair value of warrant liability of about $2.3 million, offset by an increase in accounts receivable, a decrease in contract liability, accounts payable, accrued expenses and other liabilities and a decrease of approximately $800,000 in the fair value of warrants issued for services. For the six-month period ended June 30, net cash used in investing activities of $200,000 consisted of capital expenses for software related to the development of our ordering software platform, which is expected to be placed in service this year. This compares to net cash used in investing activities of $0.5 million in the comparable 2023 period, arising from capital expenditures for the same ordering software as well as an asset purchase of intellectual property. For the six months ended June 30, 2024, net cash provided from finance activities of $11.4 million is related to our February warrant inducement transaction and our June strategic pipe transaction. This compares to net cash provided from financing activities in the comparable 2023 period of $7.4 million, reflecting our January of 2023 private placement. As previously announced, to augment our liquidity position and stockholders’ equity, in June of 2024, Vivos closed on a $7.5 million equity growth investment from an affiliate of New Seneca Partners, a leading middle-market private equity firm. This investment is more than sufficient for us to demonstrate compliance with NASDAQ’s minimum equity requirement as of the end of the quarter and materially bolsters our cash on hand to facilitate the launch of the new strategic alliance I mentioned earlier, which is expected to positively impact Vivos’ revenue growth. Kirk will speak more on this shortly. As of June 30, 2024, we had approximately $6.9 million of cash and cash equivalents compared to $1.6 million as of December 31, 2023. Our stockholders’ equity at June 30 was approximately $6.3 million. In conclusion, we reported solid results for the second quarter, which included both sequential and year-over-year revenue growth. We also continue to take actions to improve our cost structure and reduce cash burn while strengthening our cash position, which was evident in our results. Based on our progress to date, Vivos continues to anticipate attaining positive cash flow from operations in the foreseeable future. I want to thank you all for joining us today on our conference call. Now I’ll turn the call over to Kirk Huntsman, Chairman and CEO. Kirk, please go ahead.

Thank you, Brad. Good afternoon, everyone, and thank you for joining us on today’s conference call. The second quarter of 2024 was a period of significant progress for Vivos along a number of fronts. Just to recap and highlight a few financial metrics, year-over-year same period revenue was up 19%, with product revenue up 28%. Year-over-year same period operating losses were down 57%. Year-over-year same period net loss was down 65%. Year-over-year six months operating losses were down 40%. Year-over-year six months net loss was down 21%. Consecutive quarter gross profit was up 26%. Consecutive quarter net loss was down 49%. Cash and cash equivalents on hand at December 2023 were $1.6 million. Cash and cash equivalents on hand in June 2024 are $6.9 million. So you can see from that brief overview, the second quarter of 2024 saw the culmination of many long hours of work our team has been putting in to get our company in a position to succeed long-term. As Brad just mentioned, this quarter marked our eighth consecutive quarter where we’ve delivered lower operating expenses on a year-over-year basis. And as we’ve said before, we aren’t done yet as we continue to explore ways of cutting costs without harming revenue. We believe this methodical effort patiently executed over time has put Vivos in a much better position to now execute on our new strategic marketing and distribution model. As we have previously indicated, our new strategic alliance model is designed to deliver higher total revenue per clinical case along with higher gross profit. In July, we launched the first phase of our first strategic alliance with a multicenter sleep clinic operation right here in Colorado. Although it is still very early, we can confirm that our previously reported experience in terms of patient acceptance and other conversion metrics seem to have carried over as expected into this new initiative. One thing that we have been seeing that we haven’t seen previously is that about half of the OSA patients that we’re seeing at this medical sleep clinic are so excited about the Vivos treatment options that they’ve been referring friends and family members in for evaluation and treatment as well. When nearly 50% of your patients refer people in like that, we believe it bodes well for a strong future organic growth. All of that, of course, is very good news, and it is very good news that has us very optimistic about things going forward. This last initiative that began just last month is what we’ve been talking about and working toward for many months. As previously stated, we believe this strategic pivot towards medical-based, full-service breathing and sleep centers represents an inflection point for us that will materially alter our prospects for growth and profitability. Looking at the next few months, we fully expect to see an acceleration of that improvement as we move into the last part of 2024 and into 2025. To give you a sense of the leverage we see in this new model, our current calculations are that for every 100 OSA patients per month that we put into Vivos treatment of some kind, we should realize top-line revenues of nearly $8 million annually with high profitability. For further perspective on this, our first strategic alliance partner currently sees referrals of several hundred potential OSA patients per month, most of whom we believe could be excellent candidates for Vivos treatment. In addition, we are currently in negotiations with six other sleep testing groups and medical doctor-based sleep centers from around the United States who together see upwards of 5,000 OSA patients per month. These groups typically operate on a high-volume, low-margin business model and are very intrigued by the higher-margin products and services Vivos can bring to the table. Our latest FDA clearance to treat severe OSA patients using our CARE oral medical devices is proving to be a real asset in helping us open these doors. We have been pleased by the generally warm and welcoming reception we receive from sleep doctors who seem desperate and even relieved to have viable alternatives to CPAP. Vivos thus represents a compelling and safe clinical option as well as a powerful revenue and profit growth opportunity on a scale they’ve never seen before. We thus believe we are just barely scratching the surface of what is possible as we continue to roll forward. There are reportedly over 2,500 AASM accredited sleep testing labs and testing centers across the United States, with well over 100,000 new OSA patients being diagnosed each month. An estimated 80% to 90% of all OSA patients remain undiagnosed and untreated. So we see a huge opportunity here with this new model, and we are fortunate to have garnered the support of long-term investors who share our vision. We recently secured a $7.5 million private equity investment and entered into a strategic relationship with New Seneca Partners, a leading North American private equity sponsor. Seneca’s investment, which comes on the heels of nine months of due diligence by Seneca, in which they have assisted in crafting our new model, has provided a substantial boost to our cash on hand and stockholders’ equity. With this increased liquidity, we have moved ahead with the launch of our new strategic alliance and potentially other similar alliances. All of this is expected to positively impact Vivos’ revenue growth. In closing, I would simply say that Vivos has weathered the storm and is now emerging even stronger with an exciting new business model that has the potential to finally put our technology into use for thousands and perhaps tens of thousands of people who may never have seen or heard of it otherwise. So on behalf of all of us here at Vivos, I would like to express my sincere appreciation to all of those who have stood by us while we figured this out. It has been a long journey, but we firmly believe we are on the right track and we’ll soon begin to see the full potential of our technology being realized and the full financial potential of this company as well. That concludes our prepared remarks. Now we’ll be happy to take questions.

And we now have our first question from Do Kim at Water Tower Research. Your line is open, please go ahead.

Great. Hi, thanks for taking my question and congrats on the quarter’s results. First, for Kirk, it seems that the strategic alliance with the sleep clinic is pretty important in the evolution of Vivos Therapeutics. Could you maybe expand on that a little bit? And when you say that you’re seeing you had previously reported experience in terms of like patient acceptance, are you referring to your marketing pilot study and the high rate of patients that choose Vivos’ oral appliances?

Yes, that's a great question, and I appreciate it. The significance of this strategic shift cannot be overstated. We realized that being focused solely on a dental distribution channel limited our growth, as many dentists became sidetracked by dental issues. This approach was neither reliable nor scalable for our growth. While some dentists achieved significant success and profitability, they were too few. We needed to identify a successful model, which we found in the collaboration between dentists and physicians. Physicians with patients displaying signs or diagnosed cases of obstructive sleep apnea often seek alternative treatments to CPAP, as around 90% to 95% of these patients receive CPAP prescriptions, though the majority would prefer other solutions. Now that we have FDA clearance for severe sleep apnea treatment, medical doctors can confidently offer our option alongside CPAP as a first-line treatment. Over the past year, we tested our hypothesis and found we excel at presenting our treatment alongside all available options to patients. The response has been overwhelmingly positive, with patients opting for our treatment at rates between 70% to 90% in some instances. This encouraged us to position ourselves more directly in front of patients and adjust our model for better outreach. Our pivot towards the medical community aims to enhance traction and adoption of our treatment. During our recent experiences at CSI, we observed that our pilot study results were mirrored, with patients eager to explore alternatives. The demand for our treatment has been highly encouraging. Although we had fewer patient interactions in July than hoped, this was due to initial adjustments. Looking ahead to August, September, and October, we expect to see significant acceleration in our efforts. It's worth noting that every 100 patients contribute nearly $8 million to our revenue, marking a highly profitable direction for our business on a larger scale. There are countless individuals who either reject CPAP or are seeking alternatives, and we view this as just the nascent phase of a significant turning point for our company. I hope that addresses your question comprehensively.

Yes, you did. I mean a 70%, 80% conversion rate would mean an amazing opportunity for you guys. That’s extraordinary. What do you see happening with the VIP doctors or dentists that you’ve enrolled going forward?

Fortunately, the market is vast. We could treat all the patients we see from the medical community and still barely make a dent. There's a lot of work ahead for them. We will keep providing support, training, and education. Our Vivos Institute in Denver is fully booked for the upcoming year, and we are excited about the various courses we are offering. Continuing education, training, and support will be available. However, we won't aggressively pursue dentists; their growth will be more organic. We have reduced entry prices to make training more affordable. Our primary focus will be in the medical community, but we will still support and cater to Vivos doctors, and everything we have done in the past will continue for them.

Okay. That makes sense. And just one quick question for Brad. Congrats on the cost-cutting efforts. It looks like it’s really starting to reduce the cash burn. Maybe you could provide a little more detail about what happened over the last several quarters to achieve this. And is there more room for additional costs to come off?

Yes, thank you for the great question. In the third quarter of 2021, our SG&A costs were approximately $8.7 million. In the second quarter of this year, SG&A was around $6 million or $4.6 million. When comparing quarters, we have observed an average reduction of about $2 million per quarter for eight consecutive quarters, and our operational cash flow has decreased from a high of over $6 million in the first quarter of 2022 to $3 million this quarter. This was primarily due to reductions in our workforce from a peak of 180 employees down to just over 100. We have also cut expenditures on website development, conferences, digital and print marketing, travel, meals, entertainment, and other costs. Non-essential vendors have been eliminated, restructured, or renegotiated recently. We plan to conduct a return on investment analysis for any new proposed expenditures to ensure they are justified. We will continue reviewing our expenses to identify what can be trimmed, focusing on eliminating non-essential costs while maintaining essential functions. Our goal is to improve both our revenue and expense management to achieve positive cash flow from operations. Did that help?

Yes, absolutely. And it looks like it will pay off in the near future, hopefully. Great progress, guys. Thanks for taking my questions.

Thank you, Do.

Thank you. And the next question comes from the line of Lucas Ward from Ascendiant Incorporated. Your line is now open. Please go ahead.

Thank you. Good afternoon, gentlemen and congrats on your business progress.

Thank you.

So I’m curious about, it seems like a significant portion of the revenue jump was due to lower discounts. Brad mentioned 70% lower discounts year-on-year. How does that come about? Was that just a unilateral policy, you just decided not to give them? Or did something in the business model change to achieve that?

Let me take that one. Well, a little bit of both. I mean it was a conscious effort and something that we just felt like especially with some of our new regulatory clearances that frankly are unique and special, we just felt like it wasn’t really necessary for us to be discounting our products as much. So I think there’s a lot of things behind that. A lot of it has to do with some of the discounts that we were giving on the initial enrollments, etcetera. So I just think we’re taking a little bit more disciplined approach than we have to just sort of standing by our prices and standing by our, the value proposition that our treatment delivers. And so I think there’s a lot of work done by our people in accounting, Brad and his team, and also working with our clinical folks and our operations people to bring that about. But I think it was a conscious effort.

Okay. And then sort of similarly, you had a big sequential decline in sales commissions. So you’re saving $300,000 or something sequentially. Like is that also a unilateral...

We restructured our sales force, which included not only the number of salespeople but also the compensation model. We did this with the specific intent of achieving some savings, and that’s exactly what we were able to accomplish. It was a deliberate effort.

Okay. With respect to overall operating expenses, which are now at $4.5 million, yes. What do you see as a steady state for operating expenses because they really went down a lot and they just keep going down?

We currently do not have a steady state, and I understand that this might complicate your modeling. We are undergoing significant changes. While we have continued to reduce staffing into the third quarter, we are also increasing our staff in areas where we are experiencing growth. This transition period involves cutting back on certain expenditures and personnel while simultaneously bringing in and training other personnel so they are prepared for the influx of patients expected in the coming weeks. As new acquisitions unfold, we will need to add more personnel to handle the increased patient capacity. I encourage you to stay tuned for announcements regarding new affiliations and updates on patient flow expectations. It's important to grasp the broader dynamics of patient processing and the associated revenue and EBITDA opportunities. Over time, as we integrate more deals and patient flow stabilizes, we will be able to present a steady state model that reflects our growth. In the next few quarters, please bear with us as we work out what this will entail. Our team has substantial experience in managing practices, having operated numerous dental practices over the years, and this experience will serve us well as we navigate these changes. We should be able to provide clearer answers next quarter.

All right. That’s all I have. Thank you very much.

Thank you, Lucas.

Thank you. I show no further questions in the queue. At this time, I would like to turn the call over to Mr. Kirk Huntsman, Chairman and CEO, for closing remarks. Please go ahead, sir.

Thank you, operator. Well, for those of you who’ve been with us and again, like I said earlier, those of you who’ve hung in there with Vivos while we’ve tried to figure this out, we’ve always realized we had something special with respect to our technology. And it was just a matter of trying to figure out how to get it out there and get it into the hands of the right people. So I would just like to thank everybody who’s hung in there with us, who is joining us today on this call. I’d like to extend a thank you to the people at Seneca, and their efforts to work with Vivos and support us here, as well as our Board and all those who have been longtime supporters of the company. We look forward to sharing our continued progress with everyone as we continue to execute on our plans during the remainder of this year and on into next year. So thank you very much, everyone, and please have a great evening. Thank you.

Thank you. This concludes our conference for today. Thank you all for participating. You may now disconnect.