Vivos Therapeutics, Inc. (VVOS) Q3 2023 Earnings Name Transcript

Vivos Therapeutics, Inc. (NASDAQ:VVOS) Q3 2023 Earnings Convention Name November 14, 2023 5:00 PM ET

Firm Members

Julie Gannon – Investor Relations Officer

Kirk Huntsman – Chairman and Chief Govt Officer

Brad Amman – Chief Monetary Officer

Convention Name Members

Lucas Ward – Ascendiant Capital Markets

Operator

Good day, everybody, and welcome to the Vivos Therapeutics Third Quarter 2023 Earnings Convention Name. Right now, individuals are in a listen-only mode. An issue-and-answer session will observe administration’s remarks. This convention name is being recorded, and a replay of as we speak’s name will likely be out there on the Investor Relations part of Vivos web site and can stay posted there for the subsequent 30-days.

I’ll now hand the decision over to Julie Gannon, Vivos’ Investor Relations Officer for introductions and studying of the protected harbor assertion. Please go forward.

Julie Gannon

Thanks, operator. Howdy, everybody, and welcome to our convention name. A replica of our earnings press launch is on the market on the Investor Relations part of our web site at www.vivos.com.

With us on as we speak’s name are Kirk Huntsman, Vivos’ Chairman and Chief Govt Officer; and Brad Amman, Chief Monetary Officer. Right now, we’ll assessment the highlights and monetary outcomes for the third quarter of 2023, in addition to more moderen developments and Vivos plans for the rest of the 12 months. Following these formal remarks, we will likely be comfortable to take questions.

I might additionally wish to remind everybody that as we speak’s name will comprise sure forward-looking statements from our administration made throughout the which means of Part 27A of the Securities Act of 1933 as amended and Part 21E of the Securities and Change Act of 1934 as amended, regarding future occasions. Phrases corresponding to intention, could, may, ought to, initiatives, expects, intends, plans, believes, anticipates, hopes, estimates, objective and variations of such phrases and comparable expressions are supposed to establish forward-looking statements.

These statements contain important recognized and unknown dangers and are primarily based upon numerous assumptions and estimates, that are inherently topic to important threat, uncertainties and contingencies and lots of of that are past Vivos’ management. Precise outcomes, together with with out limitation, the outcomes of Vivos’ development methods, operational plans, together with gross sales, advertising, product acquisition and integration, analysis and growth, regulatory initiatives, price saving plans and plans to generate income in addition to future potential outcomes of operations or working metrics, corresponding to potential for Vivos to attain future constructive money flows and different issues to be addressed by Vivos’ administration on this convention name could differ materially and adversely from these expressed or implied by such forward-looking statements.

Elements that would trigger precise outcomes to vary materially embrace, however are usually not restricted to, the danger elements described and different disclosures contained in Vivos’ filings with the Securities and Change Fee, together with the danger elements and different disclosures in our Kind 10-Okay for the 12 months ended December thirty first, 2022, and our different filings with the SEC, together with our 10-Q filed with the SEC as we speak, all of that are accessible on the Investor Relations part of the Vivos’ web site, in addition to the SEC’s web site. Besides to the extent required by legislation, Vivos assumes no obligation to replace statements as circumstances change.

Lastly, please remember that the U.S. Meals and Drug Administration have already given Vivos’ equipment’s 510(okay) clearance to deal with delicate to average OSA. Any reference herein relating to Vivos therapy or the Vivos technique ought to be considered in that context. Remedy of sufferers with extreme OSA is carried out off-label on the sole medical discretion of the treating physician and are usually not a part of the Vivos’ therapy protocol.

Now right now, it’s my pleasure to introduce Kirk Huntsman, Chairman and CEO of Vivos. Kirk, please go forward.

Kirk Huntsman

Thanks, Julie. I wish to thanks all for becoming a member of us on as we speak’s convention name. In only a second, I am going to flip the decision over to our Chief Monetary Officer, Brad Amman, who will stroll you thru the highlights of our third quarter 2023 monetary and working outcomes. As soon as Brad is completed, I am going to come again and converse with you in regards to the highlights of what we achieved at Vivos throughout the third quarter and extra not too long ago after the quarter finish.

This consists of some key strategic relationships that we shaped with numerous new industrial companions, together with our not too long ago introduced distribution settlement with Lincare, who’s a acknowledged sturdy medical gear firm or DME. We’re particularly enthusiastic about this relationship as a result of Lincare serves near 2 million sufferers nationwide, lots of whom are unhappy with utilizing CPAP machines and are looking for various strategies of therapy, one thing we will actually advise them with.

Along with Lincare, I am going to speak — I am going to additionally speak a bit about another agreements we have signed with companions corresponding to with Ormco, a division of publicly-traded Envista Holdings Company, On Demand Orthodontist, which represents an thrilling new service, we will now supply our Vivos suppliers and Noum within the Center East area, who has developed and maintained numerous strategic relationships and accounts for diagnostic testing with sleep physicians, sleep facilities, hospitals and different healthcare suppliers throughout the MENA area.

Collectively, these relationships have expanded our product line and distribution channels and created new income alternatives for our firm. We imagine these new strategic relationships will generate a considerable variety of affected person referrals for our current and in depth community of Vivos’ skilled dentists, which ought to carry important new development and income alternatives to Vivos. We additionally imagine these initiatives will assist to enhance and speed up our VIP enrollment efforts.

Together with these constructive developments, I am going to speak about a few of our progress in lowering employees and trimming prices, the place we achieved a 32% year-over-year discount in working bills. Sadly, these cost-cutting measures got here with some near-term trade-offs, as high line income declined on each a quarter-over-quarter and year-over-year foundation. We have labored arduous all through this course of to keep away from staffing and different reductions that may affect income, however we now imagine the brand new Vivos Integrator — we now imagine new Vivos Built-in Suppliers or VIP enrollments and equipment gross sales have been negatively impacted due to these measures.

Thankfully, for the reason that quarter closed, we have now seen sturdy constructive traits in equipment gross sales, as different income development measures have kicked in. So the important thing takeaway right here is that we imagine our accountable cost-cutting measures over the previous 12 months helps set a monetary basis that can help our income development initiatives, as we search to enhance our working outcomes going ahead.

I additionally wish to spotlight the steps we have been taking to enhance our liquidity, in addition to our capital construction. This consists of the current closing of a $4 million personal placement, our reverse inventory break up and the actions we have taken all through the previous 12 months to extend operational efficiencies, cut back bills, which place Vivos to capitalize on the expansion alternatives out there to us.

With all of the progress that we have made and what we anticipate to perform, as we transfer ahead, we proceed to plan for turning into money stream constructive from operations by the top of 2024. After speaking a bit extra about our plans for the remainder of this 12 months and what we’re planning for 2024, we will likely be comfortable to take your questions.

Now, let me flip it over to Brad for a assessment of our financials. Brad, please go forward.

Brad Amman

Thanks, Kirk, and good afternoon, everybody. Right now, I am going to assessment the highlights of our monetary outcomes for the third quarter and the primary 9 months of 2023. For additional info on our outcomes for the three and 9 month intervals ended September 30, 2023, I am going to refer you to our earnings launch, which was distributed earlier as we speak and our quarterly report on Kind 10-Q, which is on the market on the SEC filings portion of the Investor Relations part of the Vivos web site at vivos.com/investor-relations.

Right now, we reported third quarter 2023 whole income of $3.3 million in comparison with $4.2 million for the third quarter of 2022. The quarter-over-quarter lower was resulting from decrease income generated quarter-over-quarter from equipment gross sales, income from VIP enrollments, in addition to the affect from staffing and value reductions. This was partially offset by elevated sleep testing providers and Myofunctional Remedy income.

Through the third quarter of 2023, we enrolled 29 VIPs and acknowledged VIP income of roughly $1 million in comparison with 56 VIPs for a complete of $1.6 million in income throughout the identical interval final 12 months. Income development was impacted by new entry ranges into our VIP program, starting from $2,500 to $50,000 and including an $8,000 pediatric program, which was obtained constructive — positively by our suppliers.

Common enrollments throughout the interval elevated from roughly 28,000 throughout the three months ended September 30, 2022, to 34,000 throughout the three months ended September 30, 2023, and VIP enrollment Proper to Purchase income was acknowledged over an extended time frame, 23 months in 2023 versus 18 months in 2022.

We offered 1,809 oral equipment arches throughout the third quarter of 2023 for a complete of roughly $1.5 million in comparison with 3,057 throughout the third quarter of 2022 for $2 million. Throughout each the third quarters of 2023 and 2022, we acknowledged roughly $200,000 in billing intelligence service income in comparison with $300,000 throughout the identical interval in 2022. Myofunctional Remedy Companies remained flat period-over-period at $200,000.

Lastly, throughout our third quarter of 2023, we acknowledged $300,000 in income from our ring lease program in comparison with $100,000 in our comparable 2022 interval. For the 9 months ended September 30, 2023, income was $10.6 million in comparison with $12.1 million for the 9 months ended final 12 months. The lower was attributable to the identical elements I discussed earlier.

Through the first 9 months of 2023, we enrolled 110 VIPs for income of $3.2 million in comparison with 146 VIPs in income of $3.6 million for a similar interval in 2022. Through the 9 months ended September 30, 2023, we offered 6,261 oral equipment arches for income of $4.6 million in comparison with 9,343 oral equipment arches for income of roughly $5.8 million.

We attribute the lower in product gross sales, partly resulting from a damaging CPS information report that got here out in March of 2023 relating to an unrelated oral machine referred to as the AGGA that was not cleared to be used by the FDA and was getting used off label. Though, Vivos care units are cleared by the FDA, primarily based on our persevering with discussions with our dentist clients, we imagine that some practitioners paused purchases till they study extra in regards to the situation.

Moreover, for the 9 months ended September 30, 2023 and 2022, we acknowledged roughly $700,000 in Myofunctional Remedy income. For the 9 months ended September 30, 2023, we had $600,000 in billing intelligence service income in comparison with $900,000 within the prior 12 months interval.

Lastly, for the 9 months ended September 30 of this 12 months, we acknowledged roughly $900,000 in sleep testing providers in comparison with $300,000 for the 9 months ended final 12 months and $100,000 in middle product income in comparison with $500,000 for the 9 months ended final 12 months.

Gross revenue was $1.9 million for the third quarter of 2023 in comparison with gross revenue of $2.5 million for the comparable interval in 2022. Gross margin was 57% for the third quarter of 2023 in comparison with 59% throughout the prior 12 months interval.

Gross revenue for the 9 months ended September 30, 2023, was $6.3 million in comparison with $7.6 million for the 9 months ended final 12 months. Gross margin for the 9 months ended September 30, 2023, was 60% in comparison with 63% for a similar interval final 12 months resulting from decrease income.

Gross sales and advertising bills have been decrease quarter-over-quarter and year-over-year. Bills have been $600,000 for the third quarter of 2023 in comparison with $1.1 million for the third quarter of 2022.

For the 9 months ended September 30, 2023, gross sales and advertising expense was $1.9 million in comparison with $4 million for the 9 months ended final 12 months. Decrease spend displays web site growth for each vivos.com and vivosinstitute.com that occurred in 2022 and decrease gross sales commissions and sales-related bills in 2023 commensurate with decrease VIP enrollments.

Very importantly, our G&A bills decreased roughly $2 million or 31% to $4.6 million for the third quarter of 2023 in comparison with $6.6 million for the third quarter of final 12 months. 12 months-over-year lower displays a considerable affect in our beforehand introduced cost-cutting efforts are making. We imagine these necessary efforts will trigger — will proceed to cut back our money burn, as we search to ramp revenues and transfer towards money stream constructive operations.

For the 9 months ended September 30, 2023, normal and administrative bills decreased $5.1 million or 23% to $17 million in comparison with $22.1 million for the 9 months ended final 12 months. The first driver of this lower was a change in personnel and associated compensation of roughly $2.7 million.

Whole working bills for the third quarter of 2023 decreased by a big quantity, $2.5 million or 32% versus the third quarter of 2022, additionally reflecting Vivos’ cost-cutting initiatives. For the 9 months ended September 30, 2023, working bills decreased by $7.3 million or 27% in comparison with the identical interval in 2022.

Working loss was roughly $3.5 million and $5.4 million for the three and 9 months ended September 30, 2023, in comparison with $13 million and $19 million for the comparable intervals final 12 months. 12 months-over-year lower in working loss was primarily from decrease G&A resulting from expense cuts and the opposite elements I simply mentioned.

Web loss was roughly $2.1 million for the third quarter of 2023, a big year-over-year discount of $3.3 million or 61% in comparison with $5.4 million for the third quarter of 2022. The discount in internet loss was primarily as a result of cost-cutting initiatives I described earlier.

Web loss for the 9 months ended September 30 of 2023 was $9.3 million, a discount of $8.4 million or 47% in comparison with $17.8 million for a similar interval in 2022.

Turning to our assertion of money flows, money burn from operations for the 9 months ended September 30 of this 12 months was $9.2 million, a lower of roughly $7.4 million in comparison with $16.6 million throughout the comparable prior 12 months interval. That is additional proof of the constructive affect of our expense discount initiatives.

For the 9 months ended September 30, 2023, internet money utilized in investing actions consisted of capital expenditures for software program of $700,000 associated to the event of VIP ordering software program for inner use, which is predicted to be positioned in service in late 2023, in addition to the acquisition of patents and different mental property in February of this 12 months. This equally compares with money utilized in investing actions of $700,000 within the comparable 2022 interval, arising from money capital expenditures for the internally developed ordering software program.

As of September 30, 2023, we had $1 million in money and money equivalents in comparison with $3.5 million, as of December 31 of 2022. As beforehand introduced, following the top of the third quarter, earlier this November, Vivos accomplished a non-public placement for internet proceeds of roughly $3.5 million to enhance its liquidity place and stockholders’ fairness. As Kirk talked about earlier, our objective stays to turn out to be money stream constructive from operations by the top of 2024.

With that, I am going to flip the decision again over to Kirk.

Kirk Huntsman

Thanks, Brad. Let’s bounce proper into it now and reply what are in all probability essentially the most urgent questions in your thoughts relating to our firm’s efficiency within the third quarter year-to-date and our prospects for resuming actual development — actual income development in 2024. First, why did high line income decline when the expectation was that Lincare, and different income initiatives have been supposed to start to affect income began in Q3?

Properly, I might level to 4 major elements right here: first, a discount in staffing and help personnel; second, a discount in advertising expenditures; third, lingering results of the AGGA information stories and associated authorities investigations, Brad talked about earlier; and fourth, the unavoidable delay — and an unavoidable delay within the Lincare venture getting off the bottom after a profitable pilot.

So let me talk about every of those. All through 2023, we have now executed on broad cost-cutting measures which have included reductions in sure help personnel, which have been very influential in aiding VIP dentists to get instances booked and processed as Vivos case begins. We have been keenly conscious that curbing these help capabilities would are inclined to lower case begins and equipment gross sales, which is precisely what we have now skilled.

Thankfully, our new product traces have begun to kick in. And right here within the fourth quarter, we’re seeing equipment gross sales and Myofunctional Remedy begins rebounding. As our money assets declined, we have been constrained to chop again on sure advertising expenditures as effectively. Nonetheless, we did refocus and redirect our restricted advertising spend to solely these areas with the potential for the very best near-term returns.

Subsequent, as beforehand talked about by Brad, the affect of that damaging publicity and information stories relating to the AGGA machine went deeper and lasted longer than we anticipated. Chances are you’ll recall that in March of this 12 months, a CBS Information report broke a couple of non-FDA-cleared oral equipment referred to as the AGGA that made unsubstantiated claims relating to its capability to deal with obstructive sleep apnea. Authorities regulators and others arrange client criticism hotlines and moved aggressively to research and curtail any additional harm or potential hurt to most of the people.

Now regardless of the AGGA being a materially completely different machine with nearly no analysis to again it up and no required regulatory FDA clearances, the mere suggestion that an oral equipment for treating sleep apnea doubtlessly trigger affected person hurt actually impacted our gross sales and enrollment efforts. We took many steps to make sure that our Vivos VIP docs clearly understood the variations between that machine and our Vivos care units. However all the episode trigger lots of them to pause their Vivos manufacturing till additional readability and certainty may very well be supplied.

Lastly, the beforehand introduced Lincare venture was briefly delayed resulting from some software program configuration and growth delays by a third-party cost in facilitating service provider banking and cost preparations to Lincare. I’m happy to report that the scenario there has now been resolved and the deliberate growth into extra markets has resumed in earnest.

Clearly, the aforementioned delay additionally impacted our forecasted high line income for Q3. Now that delay is behind us, we do anticipate to see the Lincare venture contributing positively to This autumn and into 2024. So the takeaway right here is that Vivos is working leaner than ever earlier than, and the income headwinds beforehand mentioned look like behind us. New product traces are exhibiting nice promise and good development and the brand new initiatives, corresponding to our increase and kickoff packages are being effectively obtained.

Now let me contact on these two packages for only a second. Through the latter a part of the third quarter and into the present quarter, we started to supply what we name Enhance and Kickoff packages to present and new Vivos suppliers. The Enhance program requires current VIP suppliers to prepay a minimal of $10,000 in home equipment as a way to have our company personnel come to their places of work to assist arrange programs, prepare employees and shut instances. Roughly 40 Enhance packages have been offered to-date, with most of them to be delivered in 2024.

The Kickoff program is principally the identical, besides that it’s included within the enrollment charges for brand spanking new docs. These packages have now been delivered and executed in only a handful of places of work, producing near $400,000 in new case begins and a ton of constructive momentum and supplier enthusiasm. After profitable occasions of their particular person places of work, numerous docs have renewed and repurchased extra Enhance occasions. We imagine this extremely profitable new program will proceed to drive new case begins and rekindle supplier enthusiasm in This autumn and all through 2024.

Second, why ought to traders now imagine that the expansion technique will lastly be realized going ahead and that it’s going to really outcome within the firm attending to money stream constructive?

To reply that query, I imagine — the reply to that query, I imagine, is that we’re pivoting away from a income mannequin that’s oriented in direction of new VIP development with a dependency on dentists, who should generate their very own case begins and in direction of a mannequin that’s pushed by recruiting new affected person sources, corresponding to DME firms, medical docs, non-vivos dentists, et cetera, and producing new case begins in current VIP places of work, as with our Enhance and Kickoff packages. Our new product line, which we acquired earlier this 12 months is already exhibiting promise of upper development forward.

The settlement with Lincare is already feeding new sufferers into VIP places of work. We anticipate extra such DME distribution agreements will observe all through 2024 after the Lincare exclusivity interval expires in April. We additionally — we have now additionally confirmed our capability to generate medical referrals into Vivos supplier practices and are at present increasing and intensifying these efforts.

In November of 2023, we amended our settlement with Lincare, which supplies Lincare a six month exclusivity interval to distribute sure designated units of ours. The settlement — the settlement follows the profitable conclusion of a distribution pilot with Lincare, and we imagine there are extra DME alternatives which can be aligned with these initiatives, and we’re actively engaged in exploring such alternatives.

Along with Lincare, in October of 2023, we introduced 2 key strategic agreements with Ormco, a division of publicly-traded Envista Holdings Company and On Demand Orthodontist supply — or ODO, providing our nationwide community of suppliers entry to Spark Clear Aligners. The agreements will increase our present product line and are anticipated to create near-term extra income alternatives that ought to start to contribute right here within the fourth quarter.

Additionally in October, we introduced that we had entered into an unique distribution settlement with NOUM DMCC, a Dubai-based firm centered on diagnostic testing and therapy product distribution for healthcare suppliers and hospital networks treating obstructive sleep apnea sufferers all through the Center East, North Africa or MENA area.

Topic to regulatory approvals, Vivos may start to see income from this collaboration in 2024. As well as, we’re at present in negotiations for comparable distribution agreements in different necessary worldwide markets. If and as such negotiations come to fruition, we are going to you’ll want to announce them.

On the medical and regulatory entrance, in October, we introduced that our flagship daytime-nighttime equipment, or DNA, will likely be examined in a medical trial at Stanford Drugs. The protocol has been finalized and participant enrollment will start in early 2024. Research individuals with average to extreme OSA will likely be randomly assigned to both therapy with Vivos’ DNA equipment or CPAP, the present trade customary for OSA therapy. Sleep research will likely be carried out previous to and following a course of therapy utilizing in-lab polysomnography, or PSG, to evaluate adjustments within the sufferers’ apnea-hypopnea index or AHI.

As well as, we proceed to actively pursue new regulatory approvals for added indications of use by the FDA for Vivos oral home equipment. We hope to have the ability to announce some necessary regulatory developments within the close to future. Though, no assurances could be on condition that any such approvals will likely be granted by the FDA, nor can we predict the timing of such grants ought to they happen.

Lastly, a phrase about our capital wants going ahead. Our present forecast means that we should always be capable to flip money stream constructive in 2024. With the current infusion of $4 million, we took a big step in direction of that objective. Nonetheless, we anticipate to want extra — an extra spherical of capital in the same quantity to attain that objective. We’re at present working with numerous events to make sure that the capital we want will likely be there after we want it. That concludes our ready remarks.

Now, we will likely be comfortable to take questions. Operator?

Query-and-Reply Session

Operator

We’ll now start the question-and-answer session. [Operator Instructions] And the primary query comes from Lucas Ward from Ascendiant Capital Markets. Please go forward.

Lucas Ward

Hello, guys, thanks for the overview. My first query is on G&A bills, these have actually been coming down fairly dramatically over the past six quarters actually. I used to be questioning what your expectations are for G&A run price in This autumn and into subsequent 12 months.

Kirk Huntsman

Brad, do you wish to take that?

Brad Amman

Sure, you wager. As I stated earlier, we lower round $2.7 million of personnel-related prices. We have additionally lower numerous non-essential distributors and consultants, skilled charges have come down considerably. We anticipate that fourth quarter G&A bills will likely be similar to what we skilled within the third quarter.

Kirk Huntsman

I might add to that, that it is necessary to know that we’re always evaluating and reevaluating our G&A expenditures relative to our income. And so, we could also be making as circumstances dictate extra adjustments, both up or down relying on how our income begins to develop, whether or not it recovers or whether or not it continues to go flat for somewhat bit right here. However we totally anticipate that we’ll proceed to proper dimension our G&A in line with our income streams. And I feel we have now, as Brad indicated, I feel we have now received that almost proper, however we’re all the time taking a look at it and all the time reevaluating.

Lucas Ward

Okay, nice. And only a follow-up query on the income entrance. When it comes to the general market alternative, you talked about, I feel, final quarter that if you happen to may convert simply 1% of the so-called failed CPAP revenues, from the DMEs, as an illustration, that could be sufficient to get you to breakeven. So clearly, there is a very giant type of penetration alternative there. I am questioning like what can be the catalysts — catalyst or catalysts to actually convert these gross sales into Vivos?

Kirk Huntsman

Good query. So step one in that course of is for the DME firms or the opposite referral sources relying on wherever they’re, proper, the opposite locations, the place these sufferers are recognized to establish, who could be a candidate, so to establish and enter right into a dialogue with a CPAP failed affected person. Now a lot of the DME firms monitor their CPAP sufferers remotely. In order that they have a superb sense of who’s utilizing their CPAP and who is not. And so, the primary outreach effort, whether or not whatever the supply, the primary outreach effort is an engagement with the affected person to know what occurred there, why aren’t they utilizing their CPAP and would they be taken with an alternate remedy.

More often than not that they are getting some actually good stream by at that stage, and that is all dealt with by the DME firm. So Lincare handles that a part of it. They then hand that over to our therapy navigator, these sufferers that point out an curiosity, they hand them over to a Vivos’ therapy navigator, who takes that affected person offers additional schooling about oral equipment remedy and makes an attempt to get that affected person to arrange an appointment up.

So the method is pretty simple. The numbers of sufferers that type of match that standards set are huge. I imply, we’re speaking about within the hundreds of thousands of sufferers right here. And so, it is simply — it simply is a matter of time. I did not know, if you happen to have been beginning to say — it is a matter of time. And I feel one of many issues which can be — let me simply end with one different thought, and that’s that what we have demonstrated with our Enhance program, after we go right into a dental workplace, we requested the dentist and his staff to arrange a full schedule of sufferers. So between seven — as an example, seven to 10 sufferers every day for 2 days. They go in to do a Enhance program, and so they’ve received in all probability between 10 and 20 at [Indiscernible] with sufferers, and our outcomes are simply excellent.

I imply, we’re getting — I imply, I feel we had one which was 19 for 20 transformed into therapy. One other one was 11 for 11 and 10 for 10 and 6 of 9. And I imply, we maintain taking place right here. We’re getting conversion charges very, very excessive in our workplace — within the places of work after we’re sending our skilled groups in there to indicate these docs how you can do it. So if the [Indiscernible] are within the chair and the sufferers are there, we have demonstrated the power to shut it. We simply should get extra docs with the arrogance stage and the employees members to have the ability to shut these issues and that is what we’re engaged on now.

Lucas Ward

Okay. Nice, Kirk. If I may, only one extra query. You had this uptick within the ring lease revenues, up 300% versus final 12 months. To what extent is that an indicator of future gross sales in different areas, on condition that, that is type of a testing program?

Brad Amman

Properly, we all the time consider the sleep testing form of being the entrance finish of the method and the extra assessments {that a} supplier completes with their sufferers, theoretically, the extra case begins ought to results of that. A variety of our suppliers are testing a number of their sufferers. We’re simply engaged on mechanisms and methods to extend the conversion from the check to a case begin.

Kirk Huntsman

Sure. So let me add on to that somewhat bit. The — I feel as Brad simply talked about, the sleep testing program utilizing the sleep picture rings that we seek advice from as Vivos rating rings, that is the tip of the spear. It is the primary alternative {that a} affected person has to actually start to know that they’ve sleep apnea. And so, it is actually the entry level. Now we do about 75,000 assessments a 12 months all through our community, and most of these sufferers — about half of these sufferers check constructive. So there’s a lot of sufferers which can be testing constructive, however these sufferers are usually not being closed by the dental places of work. They are not — their instances are usually not being correctly defined, and so they’re not getting the closure on these instances.

So after we ship our company groups on the market to, once more, present these folks step-by-step how you can shut the instances, and we’re closing like 90% of those folks, then the dental staff begin to get it. They begin to perceive. And we could have skilled them 10 occasions. However once they see it taking place in their very own places of work, what we discovered thus far and its — our information set is pretty restricted right here, however what we see thus far is that after we present them the way in which of their places of work, they then are capable of decide up and proceed that top stage of closing.

And that is actually one thing that we have taken nice arduous in as a result of it is a sea change kind occasion for us to see 10 out of 11 sufferers being closed. If we had, had that each one alongside in these dental places of work, I imply, we might be having a completely completely different kind of dialog right here. However now that we found out somewhat little bit of how you can generate that form of confidence and competency within the places of work, we expect that, that portends superb issues to come back so.

Lucas Ward

Nice. Thanks very a lot.

Kirk Huntsman

Thanks, Lucas.

Operator

I present no additional questions within the queue. Right now, I might like to show the decision over to Mr. Kirk Huntsman, Chairman and CEO, for closing remarks.

Kirk Huntsman

Thanks, operator. I wish to thank, everybody once more for becoming a member of us on as we speak’s name and to your continued curiosity in Vivos Therapeutics. We look ahead to sharing our continued progress to you within the coming weeks and months. Thanks and have a fantastic night.

Operator

The convention has now concluded. Thanks for attending as we speak’s presentation. Chances are you’ll now disconnect.