10-K/A: Vivos Therapeutics Amends 2023 Annual Report Due to Typographical Error, Reaffirms Financials

Vivos Therapeutics has filed an amendment to its 2023 annual report to correct a minor typographical error, while reaffirming the accuracy of its financial statements.

Summary

• Vivos Therapeutics filed an amendment to its 2023 annual report (Form 10-K/A) to correct a typographical error in an internal cross-reference within the report of its independent auditor.
• The amendment does not change any of the financial data or other information in the original filing, except for the correction of the cross-reference and updated certifications from the company's executives.
• The company's financial statements for 2023 show a net loss of $13.6 million, compared to a net loss of $23.8 million in 2022.
• Total revenue for 2023 was $13.8 million, down from $16.0 million in 2022, with product revenue decreasing from $8.4 million to $6.3 million and service revenue remaining relatively stable at $7.5 million.
• The company's cash and cash equivalents decreased from $3.5 million in 2022 to $1.6 million in 2023.
• The company has an accumulated deficit of $93.1 million as of December 31, 2023, and has incurred losses since inception.
• The company's auditors have expressed substantial doubt about its ability to continue as a going concern due to recurring losses and insufficient cash to fund operations over the next twelve months.

Sentiment

Score: 3

Explanation: The document highlights significant financial challenges, including declining revenue, decreasing cash reserves, and a going concern warning from auditors. While there are some positives, such as reduced losses and successful capital raises, the overall sentiment is negative due to the company's precarious financial position.

Positives

• The company's net loss decreased significantly in 2023 compared to 2022.
• The company successfully raised capital through private placements in 2023.
• The company has a substantial amount of federal net operating loss carryforwards that could be used to offset future taxable income.

Negatives

• The company's total revenue decreased in 2023 compared to 2022.
• The company's cash and cash equivalents decreased significantly in 2023.
• The company has a large accumulated deficit and has incurred losses since inception.
• The company's auditors have expressed substantial doubt about its ability to continue as a going concern.

Risks

• The company's recurring losses and insufficient cash raise substantial doubt about its ability to continue as a going concern.
• The company may need to raise additional capital to fund operations, and there is no guarantee that such funding will be available on favorable terms or at all.
• The company's business could be negatively impacted by economic conditions, inflation, and supply chain issues.
• The company relies on a limited number of suppliers, which could create supply chain risks.
• The company's ability to use its net operating loss carryforwards may be limited if it experiences significant ownership changes.

Future Outlook

The company is reviewing all options to obtain additional financing to fund operations, primarily through the issuance of equity securities, until it can achieve profitability and positive cash flows. There is no assurance that adequate additional funding will be available.

Management Comments

• Management is reviewing all options to obtain additional financing to fund operations.
• Management expects financing to come primarily from the issuance of equity securities.
• Management believes that the company's risk is negligible with respect to cash and cash equivalents on deposit with financial institutions.

Industry Context

The company operates in the medical technology and services sector, focusing on oral appliances and therapeutic treatments for sleep disorders. The document highlights the challenges faced by the company, including the impact of COVID-19 on dental practices and the need for additional funding. The company's business model involves training and supporting dentists in the use of its products and services.

Comparison to Industry Standards

• The company's financial performance, particularly its recurring losses and cash burn, is concerning when compared to industry benchmarks for medical technology companies.
• Many companies in the medical device sector focus on achieving profitability and positive cash flow, which Vivos has not yet achieved.
• The company's reliance on equity financing to sustain operations is not uncommon for early-stage companies, but the lack of a clear path to profitability is a significant risk.
• The company's revenue decline in 2023 is a negative trend compared to the growth seen in many other medical technology companies.
• The company's auditor's going concern opinion is a significant red flag, indicating a higher level of risk than is typical for established companies in the sector.

Related Party Transactions

• Options for the purchase of 16,000 and 79,000 shares of common stock were granted to the company's directors, officers, employees, and consultants for the years ended December 31, 2023 and 2022, respectively.

Stakeholder Impact

• Shareholders face significant risk due to the company's financial instability and the going concern warning.
• Employees may be concerned about the company's ability to continue operations and their job security.
• Customers (VIP dentists) may be concerned about the company's long-term viability and its ability to provide ongoing support and services.
• Suppliers may be concerned about the company's ability to pay its obligations.

Next Steps

• The company intends to seek additional financing, primarily through the issuance of equity securities.
• The company is required to file a registration statement for the resale of shares issued in the February 2024 inducement transaction.
• The company will need to use commercially reasonable best efforts to cause the resale registration statement to be effective within 60 calendar days following the filing.

Key Dates

Keywords

Vivos Therapeutics, financial results, annual report, Form 10-K, going concern, net loss, revenue, private placement, reverse stock split, warrants, auditor opinion, operating loss, cash flow, debt, equity, stock options, intangible assets, lease liabilities, COVID-19, inflation