Good day everyone, and welcome to the Vivos Therapeutics Second Quarter 2021 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow management’s remarks. This conference call is being recorded and a replay of today’s call will be available on the Investor Relations section of Vivo's website and will remain posted there for the next 30 days. I will now hand the call over to Mr. Edward Loew, Vivos' Investor Relations Officer for introductions and the reading of the safe harbor statement. Please go ahead sir.

Thank you, operator. Hello, everyone, and welcome to Vivos Therapeutics Second Quarter 2021 Earnings Conference Call. A copy of the company's earnings press release is available on the Investor Relations section of our website at www.vivoslife.com. With us on today's call 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 2021 as well as more recent developments. Following these formal remarks, we will be prepared to answer your 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 may, should, projects, expects, intends, plans, believes, anticipates, hopes, estimates and variations of such words and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks and are based upon a number of assumptions and estimates, which are inherently subject to significant uncertainties and contingencies, many of which are beyond the company's control. Actual results, including the results of Vivos' growth strategies, operational plans, future potential results of operations, or operating metrics, and other matters to be addressed by Vivos management in this conference call, 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, the risk factors described in other disclosures contained in Vivos' filings with the Securities and Exchange Commission, including our second quarter 2021 10-Q, which is being filed today as well as in our most recent Form 10-K, which can also be accessed on the Vivos Investor Relations website. Except to the extent required by law, Vivos assumes no obligation to update statements as circumstances change. Now at this time, it is my pleasure to introduce, Kirk Huntsman, Chairman and CEO of Vivos. Kirk please go ahead.

Thanks Ed, and thank you everyone for joining us today on our second quarter 2021 earnings conference call. I'm excited to review our strong quarterly results and provide you with an update on our progress. Afterwards our Chief Financial Officer, Brad Amman will review the highlights of our second quarter financial results. Following that, we'll be happy to take your questions. Our second quarter revenue results were quite strong, well-ahead of our internal forecast and analyst estimates. This is due to the continued recognition and adoption of our Vivos System as a treatment for mild-to-moderate sleep apnea by members of the medical and dental communities as well as the benefits of our accelerated growth actions including a focus on strategic sales and marketing initiatives. We are also beginning to see revenue from beyond our core VIP enrollment revenue and appliances such as the value-added services we offer our VIPs and their patients as well as management revenue from our Medical Integration Division. As we are still relatively new to being a publicly traded company, I'd like to briefly recap our mission and strategy. Vivos is a growing medical technology company. Since the beginning our mission has been to rid the world of obstructive sleep apnea or OSA. To realize our goal Vivos focused on developing and commercializing innovative treatments for adult patients suffering from sleep-disordered breathing including OSA. For those of you not familiar with OSA, it is a chronic illness that impacts nearly one billion people globally and over 54 million in the United States. Over 80% of OSA sufferers are unaware they even have a condition, mostly because getting a proper clinical diagnosis is often confusing and costly especially for children. Because of these challenges a majority of these sufferers remain undiagnosed and untreated. Those that are properly…

Thank you, Kirk, and good afternoon, everyone. Today, I'll review our second quarter 2021 financial results. We reported total revenue of approximately $4.5 million for the second quarter of 2021, an increase of 37.5% compared to approximately $3.3 million for the second quarter of 2020. This increase was related to revenue from appliance sales, VIP enrollments, billing intelligence service subscriptions and initial management fees from our Medical Integration division or MID program. Revenue growth in 2021, when compared to 2020 is partially attributable to the negative impact of COVID-19 on our revenue during the second quarter of 2020. During the second quarter, we enrolled 73 VIPs and recognized revenue of approximately $2.4 million compared to 101 VIPs and recognized revenue of approximately of $2.5 million during the same period last year. During the three months ended June 30 2021, we sold 3,082 total oral appliance arches for a total of approximately $1.6 million, an increase from the three months ended June 30th, 2020 where we sold 1,266 total appliance arches for a total of approximately $600,000. The increase in appliance revenue is due to volume increases. For the six months ended June 30th, 2021, revenue increased 23% to more than $7.9 million compared to approximately $6.5 million for the six months ended June 30th, 2020. The increase was attributable to the same factors I mentioned earlier. During the first six months of 2021, we enrolled 126 VIPs for revenue of approximately $4.1 million compared to 133 VIPs and revenue of approximately $4 million for 2020. Additionally, our billing intelligence service revenues increased from approximately $300,000 for the first six months of 2020 compared to $400,000 for the first six months of 2021. During the first six months ended June 30th, 2021, we sold 5,652 oral appliance arch revenue of approximately…

Thank you. [Operator Instructions] We'll take our first question from Alex Nowak with Craig-Hallum Capital. Please go ahead.

Great. Good afternoon everyone. Appreciate the update there. A lot of good color on the marketing spend. I just want to dig in there a little bit more. So the investments that you're making can you kind of mention how you're allocating it? Is it building out more teams on the sales side, more feet on the street? Is it more around the branding exercise? Is it more around patient and customer reach out there? Just any detail would be helpful.

Yeah. Great question. So we're approaching this in phases, Alex. So we've got -- the first order of business for us we believe was to establish a network -- a national network throughout the US and Canada for doctors to be able to treat the patients. This means that we had to focus our marketing efforts almost entirely on the professional community, the dental community. And then we began augmenting that last year by introducing the Vivos System to the medical community. So we -- our initial thrust here has been with the professional community. We are beginning to move our emphasis and our spend -- our marketing spend over into a broader more consumer-oriented type of spend. You'll see -- in the months ahead, you'll start to see -- actually in the next few weeks, you'll start to see a greater emphasis on social media. You'll see things that are -- there'll be more consumer-oriented type offerings in terms of media spend. And so we're actually beginning to transition to where we're not we continuing to spend money to attract additional providers, but we're also beginning to generate some brand awareness amongst consumers. So you're seeing us go through a little bit of an evolution here as we sort of find that we've filled out the network to the point where when we do make a market spend on social media, there are doctors available to treat patients who needs to come in. So that's really the way that we're spending our money. That's how we see the go-forward strategy.

Yes. No, that's great. And Kirk, you obviously have a lot of experience on the DSO side. So I thought the commentary you had on the call and in the press release is really interesting there. So with the pilot program assuming that's successful, would it basically be like a large amount of VIPs coming on to the platform, if you did sign up one of these DSOs, or how would that look? And what are you thinking about timing in there?

Well, that's another great question. So, a little background is probably in order here. So, the DSO universe is -- basically there are several major players in the DSO world. These are operators that have hundreds and hundreds of dental offices scattered across multiple states. And then there's a whole new generation of DSO operators that are smaller. They may have anywhere from three to 50 different offices. So the universe is expanding. The DSO space is expanding. One of the unique aspects of this is that there's never been a DSO to our knowledge that has successfully implemented a sleep -- a dental sleep program, and there's many reasons for that. One of the reasons -- one of the major reasons for that is simply that it takes a lot of different kinds of training, capital equipment expenditures, staff training, a whole changeover, a workflow process, and then the medical billing part becomes an obstacle for them as well. So every attempt thus far that I'm aware of in the DSO space has proven to be a very, very pragmatic and that's across the board. What we are going to them with is a radically different program that's made possible by our VivoScore devices. So what we're doing is we're going to the DSOs with a different type of new proposition. We're not asking them to spend hundreds of thousands of dollars per practice on training and capital expenditures. We're not asking them to upset their whole workflow process throughout their general dentistry or specialty practice. What we're doing is we're leading with the tip of our spear, which is VivoScore product in a program that takes and ask them to go and introduce this into their hygiene programs, where their patients are cycling through hygiene and the hygienists…

Alex you also asked about -- yes. You also asked about the sales teams. As you recall in Q1, we added our second sales team and now we have three fully operational sales teams on the VIP enrollment.

Perfect. All right. I appreciate that. Just last question. Just any update on new studies we should be watching for? The Stanford study, when that should begin enrolling?

The Stanford study appears to be mired in some sort of just administrative black hole there at Stanford. We talk to them every week. They've had some turnover on their administrative staff and we're just waiting. We're ready to go. Everything has been agreed to. We're waiting to go to get that started. We're hopeful that that's going to happen at any time. And then, yes, there are other studies that are wrapping up and we'll have some announcements. I don't know when, but we'll have some announcements around that as soon as we get them ready to publish.

Okay. Great. Thanks for the update. Appreciate it.

Thank you. We'll take our next question from Scott Henry with ROTH Capital.

Thank you and good afternoon. Just a couple of questions. First on the VivoScore, some great percentage gains in the quarter. Can you tell me what the absolute number of VivoScore put out in the market was during the quarter? And should we think about that as the top of the funnel? And is that a leading indicator that we should track -- to get a sense of traction? Thank you.

Yes. Great question, Scott. I would say that, the impact of VivoScore deployment in Q2 was fairly minimal. We did start to receive shipments. Although some of those shipments were delayed there appears to be something of a global shortage of various components for manufacturer. And so we were affected by that somewhat in terms of delays of receipt of the equipment. So, we had a deployment throughout Q2. So I would not put a tremendous amount of emphasis on that in Q2. However, we have fully deployed. The latter -- the last couple of weeks of the quarter, we were able to get some out the door. We were able to get some positioned and they started generating a little bit. But we're -- really Q3 is where we're starting to see the more full deployment. Brad, do you want to comment on that at all, or is that...

Yes, the orders that we've placed include about 4,000 of the VivoScore diagnostic rings.

Right.

And so that's really what's out there. And we're using those both for sales as well as for our sales and marketing team to use as demo devices as well with the dentist.

What we found, one of the most effective ways for us to attract the attention of these doctors is -- yes. Yes. We give them a demo ring. They take the test. They see that they have sleep apnea themselves. And suddenly we have their full attention.

Okay. Shifting gears. Brad, since I've got you you're adding sales teams. You had a strong 2Q. Should we expect sequential revenue growth in Q3 and Q4 in the second half of the year?

Well, the rings -- we believe that the rings that we're deploying will help the dentist as a tool and serve as a tool for them with their own patients. The outcome of that is still yet, to be determined but we are seeing a lot of tests come back from those dentists. And next step is for them to -- once they come back and they're tested either negative or positive for OSA, they look at the ones that tested positive and start the Vivos System process them. So we can't really speculate on, how many of those will result in increased revenue quarter-over-quarter at this point yet, but that's the objective.

We are seeing -- just to your point there Scott, we are seeing a rather dramatic increase in the number of tests. And as Brad mentioned, the test theoretically should lead. And based upon the pilot testing that we've done, they should lead to an uptick in sales of devices but we are not -- we're not yet far enough along to be able to give you any sort of an idea for, how many of those positive tests will convert into clinical treatment cases. So we're working on that. We should have better visibility on that in Q3 and Q4.

Okay. That's helpful. And Kirk, you mentioned the MyoCorrect, as being a new revenue driver. Can you talk about the magnitude of revenues that can -- I mean is that a $5 million product at peak, or could it even be more than that in, perhaps a couple of years out? Just trying to get a sense of how to think about that product?

The MyoCorrect therapy the -- this is technically called orofacial myofunctional therapy. That therapy we have seen in some of our -- through some of our dental offices and reports from practitioners, we've seen benefits in terms of the duration of treatment being shortened, case acceptance and compliance being higher and also with the quality of the outcomes for these cases being better. So there's lots of clinical benefits to the orofacial myofunctional therapy. What we are doing now in the institute, the Vivos Institute, is we have made the oral myofunctional therapy a centerpiece of the training to go along adjunctively with our standard Vivos System treatment therapy or treatment curriculum. So what's happening is the new generation of graduates, let's say, from the institute are all going to be schooled in the idea that with every Vivo's case they should include the oral facial myofunctional therapy. That has the potential to add about $800 -- between $600 and $800 of additional gross revenue margin to our already existing margins. So for every case that gets the oral myofunctional therapy, there's literally a box that the dentist checks. So if he's submitting a case that he's ready for -- to order appliances, there's a box that he checks that says "I want oral facial therapy -- oral facial my functional therapy. With this case, that box when he checks it, it automatically it adds substantially to our revenue for each case. So as we go forward, we're going to -- we expect to see a growing number of cases with higher margins for the company because of the presence of orofacial myofunctional therapy. And so we get lots of benefits. We get better clinical outcomes shorter treatment times, better case acceptance and compliance. We also get greater margins per case. All of those things work to the benefit of the company the patients and the providers.

Great. Thank you for that comment and Thank you for taking the question.

You bet.

That does conclude today's question-and-answer session. I'd like to turn the conference back over to Mr. Huntsman, Chairman and CEO, for closing remarks.

Thank you, operator. I would like to thank everyone for participation and for joining us on today's call and for your continued interest in Vivos Therapeutics. We look forward to our progress with you in the future. Thank you very much and have a great day. Operator?

Thank you. That does conclude today's conference. Thank you for your participation.