Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Some of the numbers included herein have been rounded for the convenience of presentation. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. See "Cautionary Note Regarding Forward-Looking Statements."

Overview

We are a revenue stage medical technology and healthcare services company focused on the development and commercialization of innovative treatment alternatives for patients with dentofacial abnormalities and/or patients diagnosed with mild to severe obstructive sleep apnea ("OSA") and snoring in adults. We believe our technologies and conventions represent a significant improvement in the treatment of mild to severe OSA versus other treatments such as CPAP or palliative oral appliance therapies. Our alternative treatments are part of The Vivos Method.

The Vivos Method is an advanced therapeutic protocol, which often combines the use of customized oral appliance specifications and proprietary clinical treatments developed by our company and prescribed by specially trained dentists in cooperation with their medical colleagues. Published studies have shown that using our customized appliances and clinical treatments led to significantly lower Apnea Hypopnea Index scores and have improved other conditions associated with OSA. Nearly 75,000 patients have been treated to date worldwide with our entire current suite of products by more than 2,000 trained dentists.

In June 2025, we acquired all assets, including operating assets such as sleep testing, diagnostics, and treatment centers of SCN. The Acquisition marked a milestone in the pivot to our medical provider-focused sales, marketing distribution model for our innovative OSA appliances. Under the new model, SCN will provide sleep disorder patients with the opportunity to be candidates for our advanced, proprietary and FDA-cleared CARE oral medical devices, oral appliances and additional adjunctive therapies and methods. Under customary agreements designed to comply with applicable corporate practice of medicine law, our operation of SCN allows us to manage and capture both diagnostic and diagnostic consulting revenues, representing new higher margin revenue streams for us, as well as potential Vivos appliance and related product and service revenue.

See Note 1 to the accompanying financial statements for additional background information on our Company and current product and service offerings.

Material Items, Trends and Risks Impacting Our Business

We believe that the following items and trends may be useful in better understanding our results of operations.

VIP Enrollments (Service Revenue). Enrolling dental practices as VIPs has historically been the first step in our ability to generate new revenue. As part of the VIP enrollment fee, we enter into a service contract with VIPs under which they receive training on the use of the Vivos treatment modalities. VIPs have the ability to start generating revenue for us and themselves after this training.

In addition to enrollment service revenue, we offer additional services, such as our Billing Intelligence Services offering, and MyoSync (formally MyoCorrect) orofacial myofunctional therapy services, which was introduced in April 2021. Revenue for these services is recognized as our performance obligations are satisfied in accordance with ASC 606.

Because of our 2024 marketing and distribution business model pivot, which was accelerated by our June 2025 acquisition of SCN, we have become primarily focused on engaging in strategic collaborations or acquisitions to market the benefits of the Vivos treatment modalities to dentists and other medical providers, including our cooperative relationships with various medical providers to deliver diagnostic and medical consultation services to people across North America who suffer from OSA. As such, while we will continue to recognize some VIP enrollment revenue through 2026, we believe such revenue will become immaterial.

We recognize revenue on VIP enrollments once the contract is executed, payment is received, and as our performance obligations are satisfied in accordance with ASC 606.

Product Sales Revenue. Vivos treatment "case starts" are paramount to our business, as case starts lead to appliance orders and related revenue. Once a provider is fully trained, we encourage them to start cases. However, our historic experience had been that VIPs typically start slowly as they introduce The Vivos Method into their practices. The slow acceptance rate Vivos appliances with providers led us to consider other business models, most notably the medical provider-focused alliance marketing and distribution model announced in 2024 and the 2025 acquisition of SCN, to provide services and sell appliance product. In our new model, our biggest challenge to date has been hiring, equipping and training personnel at SCN locations in the Vivos Method, as well as insurance reimbursement. Navigating these challenges has led to increases in service revenue (including sleep testing) and our goal is to increase case starts and appliance sales as well. Since our SCN acquisition, we have been unable to generate sufficient revenues to pay for all of our expenses, including debt service, so our business primary goal is to increase revenues through SCN and also consider other acquisitions or alliances as a means of increasing revenue from services and appliance sales.

In addition, an important aspect of our strategy to increase product revenues relates to the products and related intellectual property we acquired in March 2023 from Advanced Facialdontics, LLC ("AFD"), including a custom single arch device with an FDA 510(k) clearance for treating TMD and/or Bruxism (teeth grinding or clenching). We have rebranded the AFD products as Vivos Versa, Vivos Vida and Vivos Vida Sleep.

Clinical Trial Work. Our efforts to engage in research to demonstrate the clinical efficacy of our products and obtain additional regulatory clearances for the use of our products is an important aspect of our overall strategy. In this regard, on May 29, 2023, we and Stanford University executed an agreement to commence a sponsored clinical research study to evaluate the efficacy of our FDA-cleared DNA appliance compared to the standard of care, CPAP for treatment of sleep apnea. Our DNA device is currently indicated for the treatment of mild to severe sleep apnea and jaw repositioning in adults (and in the case of severe OSA, along with positive airway pressure and/or myofunctional therapy, as needed) and has an FDA clearance intended to reduce nighttime snoring and to treat moderate and severe obstructive sleep apnea in children, 6 - 17 years of age who are diagnosed with snoring and/or moderate or severe obstructive sleep apnea and need orthodontic treatment. Enrollment of 150 patients with moderate to severe sleep apnea (apnea-hypopnea index score of 15 or greater) will be randomly assigned to either treatment with our FDA-cleared DNA appliance or CPAP. The protocol has been finalized, and enrollment began in 2024. Late 2024, our clinical study conducted in collaboration with Stanford University and evaluating the DNA and CPAP for the treatment of OSA, was placed on hold by Stanford University. The decision to pause the study was made due to low recruitment into the study. The study is still on hold as of 2026.

We are working with Stanford University to address the concerns that led to the hold and has continued engaged discussions with the university. While we believe these efforts will facilitate the resumption of the study, there can be no assurance that the hold will be lifted in a timely manner, or at all. Any delay or failure to resolve the issues could impact the development timeline and future prospects for the study. We remain committed to the highest standards of patient safety, scientific integrity, and regulatory compliance and will provide updates as material developments occur. This trial may not meet its designated endpoints, and therefore additional FDA clearances for the DNA device may not be obtained.

Distribution Agreements. During 2023, we entered into distribution collaborations with third parties to expand access of our products to potential patients. We hope that these strategic initiatives will lead to revenue growth opportunities for us in 2024 and beyond, and our ability to capitalize on these initiatives is expected to be a material aspect of our medical provider-focused sales and marketing program going forward.

Also, in October 2023, we announced an exclusive distribution agreement with NOUM DMCC, a Dubai-based company focused on diagnostic testing and treatment product distribution for healthcare providers and hospital networks treating obstructive sleep apnea patients throughout the Middle East-North Africa region. With regulatory approvals pending, there was no revenue from this collaboration in 2025 or year to date, 2025.

Inflation. The U.S. has been experiencing a period of inflation which has increased (and may continue to increase) our and our suppliers' costs as well as the end cost of our products to consumers. To date, we have been able to manage inflation risk without a material adverse impact on our business or results of operations. However, inflationary pressures (including increases in the price of raw material components of our appliances) made it necessary for us to adjust our standard pricing for our appliance products in 2022 and will be revisited in 2026. The full impact of such price adjustments on sales or demand for our products is not fully known at this time and may require us to adjust other aspects of our business as we seek to grow revenue and, ultimately, achieve profitability and positive cash flow from operations.

An additional inflation-related risk is the Federal Reserve's response, which up to this point has been to slightly decrease interest rates, however, the perceived decrease was lower than what was expected. Such actions have, in times past, created unintended consequences in terms of the impact on housing starts, overall manufacturing, capital markets, and banking. If such disruptions become systemic, as occurred in the recession of 2008, then the impact on our revenue, earnings and access to capital of both inflation and inflation-fighting responses would be impossible to know or calculate.

Supply Chain. From time to time, we may experience supply chain challenges due to forces beyond our control. For example, the Suez Canal blockage earlier in 2021 caused some delay in shipments of SleepImage^® rings from China. Changes in U.S. or foreign trade policy, including the imposition of new tariffs, increases in existing tariffs or changes in customs classifications, could increase our costs. Overall, however, as our appliances are made in the U.S., we have not experienced significant supply chain issues as a result of COVID-19 or otherwise, although this may change in future periods.

Middle East Hostilities. In addition, geopolitical instability in the Middle East continues to create uncertainty in global economic conditions and commercial activity. Hostilities in the region, including the attacks by Hamas on Israel in October 2023, Israel's subsequent military responses, and more recent U.S. and Israeli military actions involving Iran, have contributed to heightened regional and global tensions. These developments, combined with the ongoing effects of Russia's invasion of Ukraine that began in February 2022, have intensified supply chain constraints, increased commodity price volatility, disrupted international trade flows, creating. If an economic recession or depression commences and is sustained, it could have a material adverse effect on our business as demand for our products could decrease. Capital markets uncertainty, with public stock price decreases and volatility, could make it more difficult for us to raise capital when needed.

Potential Nasdaq Delisting. Given that our stockholders' equity at December 31, 2025 and March 31, 2026 was less than $2.5 million, we are presently not in compliance with the Nasdaq Stock Market's ("Nasdaq") minimum stockholders' equity requirement (the "Equity Requirement"). We are seeking to regain compliance by raising new funding in the form of equity and reducing costs. However, we will be faced with delisting proceedings which will distract management and cost resources to remedy.

We have a history of challenges of maintaining compliance with the Nasdaq's continuing listing requirements. We have been subject to two Nasdaq listing deficiencies, one related to Nasdaq's $1.00 minimum bid price requirement (the "Minimum Bid Requirement") and a second related to the Equity Requirement.

On September 21, 2023, we received a written notice from the Nasdaq staff confirming that since, as of that date, we failed to meet the Minimum Bid Requirement, and because as of the period ended June 30, 2023 we also failed the Equity Requirement, Nasdaq would commence delisting proceedings against us. As permitted under Nasdaq rules, we appealed the Nasdaq staff's determination and requested a hearing (the "Hearing") before a Nasdaq Hearing Panel (the "Hearing Panel"). The Hearing request stayed any delisting or suspension action by the Nasdaq staff pending the issuance of the Hearing's Panel decision. The Hearing took place on November 9, 2023.

Prior to the date of the Hearing, we effectuated a reverse stock split of our issued and outstanding shares of common stock at a ratio of 1-for-25 (the "Reverse Stock Split"). The Reverse Stock Split became effective on October 25, 2023, and our common stock began trading on a post-Reverse Stock Split basis on the Nasdaq on October 27, 2023. To satisfy the Minimum Bid Requirement, our common stock was required to trade at above $1.00 per share for at least 10 trading days, and this was achieved on November 9, 2023. We therefore have regained compliance with the Minimum Bid Requirement.

At the Hearing on November 9, 2023, we presented our plan to regain compliance with the Equity Requirement, which included raising additional equity capital. On November 30, 2023, we received a letter from the Hearings Panel that, subject to certain conditions, the Hearings Panel granted our request to continue to be listed on Nasdaq. On February 23, 2024 we presented our plan of compliance to the Hearings Committee. On May 6, 2024, we received written notice from the Nasdaq staff indicating that we had regained compliance with the Equity Requirement.

On May 16, 2024, we received a further written notice from Nasdaq indicating that, as of March 31, 2024, we failed to comply with the Equity Requirement. On June 25, 2024, we reported in a Current Report on Form 8-K that we believed we had stockholders' equity of at least $2.5 million as of the date of the filing of such report as a result of our closing of a $7.5 million equity private placement on June 10, 2024.

On June 27, 2024, we met with the Panel to discuss our past, current, and anticipated future compliance with the Equity Requirement, and requested the continued listing of its securities on Nasdaq.

On July 5, 2024, we were notified that the Panel granted our request for continued listing on Nasdaq, subject to our filing of the Form 10-Q for the quarter ended June 30, 2024, with the Securities and Exchange Commission, evidencing our compliance with the Equity Requirement. We made such filing in a timely manner.

On April 17, 2026, we received a letter ("Letter") from the Listing Qualifications Staff (the "Staff") of Nasdaq indicating that the Company's stockholders' equity as reported in its Annual Report on Form 10-K for the year ended December 31, 2025 (the "Form 10-K"), did not satisfy the continued listing requirement under the Equity Requirement. As reported in its Form 10-K, as of December 31, 2025 we had a negative stockholders' equity of approximately $1.55 million. The Staff's notice has no immediate impact on the listing of the Company's common stock on Nasdaq.

We have taken affirmative steps since December 31, 2025 to remedy the Minimum Stockholders' Equity Requirement. Specifically, as previously reported, the Company engaged in two equity financing transactions during the first quarter ended March 31, 2026 for aggregate gross proceeds of $6.8 million: a $4.6 million warrant exercise inducement transaction and $2.25 million private placement with an existing investor. While these equity financings do not in and of themselves cure the Minimum Stockholders' Equity Requirement deficiency, they demonstrate our ability to raise funding to bolster its stockholders' equity.

In accordance with the Nasdaq Listing Rules, we have 45 calendar days, or until June 1, 2026, to submit a plan to regain compliance with the Stockholders' Equity Requirement, which the Company plans to timely submit for the Staff's consideration. If the plan is accepted, the Staff may grant us an extension period of up to 180 calendar days from the date of the deficiency notice (or through October 14, 2026) to regain compliance with the Minimum Stockholders' Equity Requirement.

We anticipate that our new medical provider-focused strategic marketing and distribution alliance model will also positively impact our revenue growth and stockholders' equity in upcoming fiscal quarters. However, there is a risk that we will be unable to raise sufficient capital, reduce costs sufficiently or generate sufficient revenue or operating results to maintain compliance with the Equity Requirement. If we fail to achieve ongoing compliance and our common stock is delisted by Nasdaq, such delisting would likely have a material adverse effect on our stock price, the ability of our stockholders to buy or sell their common stock, our ability to raise capital and on our reputation, all of which could make it significantly more difficult to operate.

Key Components of Consolidated Statements of Operations

Net revenue. We recognize revenue when we satisfy our performance obligations over time as our customers receive the benefit of the promised goods and services, which generally occurs over a short period of time. Performance obligations with respect to appliance sales are typically satisfied at a point in time by shipping or delivering products to our VIPs or to the sleep clinic, through our new strategic alliance model. In the case of enrollment or service revenue, upon our satisfaction of performance obligations associated with VIP enrollments. Revenue consists of the gross sales price, net of estimated allowances, discounts, and personal rebates that are accounted for as a reduction from the gross sale price.

In the case of product purchased by clinics managed by our subsidiary for inclusion in a treatment protocol, the sales price of the Vivos device is recognized by us and becomes a component of cost of sales of the treatment center service provided to the patient. For the treatment centers, the intercompany account is used to fulfil the account payable obligation and recognize the expense of the goods and services in cost of sales.

Cost of sales. Cost of goods sold primarily consists of direct costs attributable to the purchase from third party suppliers and related products. It also includes freight costs, fulfillment, distribution, and warehousing costs related to products sold.

Sales and marketing. Sales and marketing costs primarily consist of personnel costs for employees engaged in sales and marketing activities, commissions, advertising and marketing costs, website enhancements, and conferences for our sales and marketing staff.

General and administrative expenses. General and administrative ("G&A") expenses consist primarily of personnel costs for our administrative, human resources, finance and accounting employees, and executives. General and administrative expenses also include contract labor and consulting costs, travel-related expenses, legal, auditing and other professional fees, rent and facilities costs, repairs and maintenance, and general corporate expenses.

Depreciation and amortization expense. Depreciation and amortization expense is comprised of depreciation expense related to property and equipment, amortization expense related to leasehold improvements, and amortization expense related to identifiable intangible assets.

Other income. Other income relates to the excess warrant fair value and change in fair value of warrant liability.

Results of Operations

Comparison of the three months ended March 31, 2026 and 2025

Our consolidated statements of operations for the three months ended March 31, 2026 and 2025 are presented below (dollars in thousands):

		Three Months Ended March 31,
		2026				2025				Change
Revenue
Product revenue		$	1,440			$	1,813			$	(373	)
Service revenue			3,701				1,203				2,498
Total revenue			5,141				3,016				2,125
Cost of sales (exclusive of depreciation and amortization shown separately below)			2,082				1,507				575
Gross profit			3,059				1,509				1,550
Gross profit %			60	%			50	%			9	%
Operating expenses
General and administrative			8,971				4,892				4,079
Sales and marketing			249				358				(109	)
Depreciation and amortization			454				177				277
Operating loss			(6,615	)			(3,918	)			(2,697	)
Non-operating income (expense)
Other expense			(1,167	)			(4	)			(1,163	)
Other income			31				58				(27	)
Net loss		$	(7,751	)		$	(3,864	)		$	(3,887	)
Net loss attributable to non-controlling interest			(69	)			-				(69	)
Net loss attributable to stockholders		$	(7,682	)		$	(3,864	)		$	(3,818	)

Revenue

Revenue increased approximately $2.1 million, or 70%, to approximately $5.1 million for the three months ended March 31, 2026 compared to $3.0 million for the three months ended March 31, 2025. This was due to an increase of approximately $2.0 million in sleep testing services and an increase of approximately $0.9 million of revenue generated from Vivos treatment to patients launched at two SCN locations. The increase in revenue during the three months ended March 31, 2026 was offset by the decline in product revenue attributable to a decrease of approximately $0.9 million in appliance sales to VIPs, offset by an increase of approximately $0.5 million in tooth positioner sales to VIPs. Additionally, we had a decrease in service revenue of approximately $0.2 million in our VIP enrollment revenue, a decrease of approximately $0.1 million in sponsorship, conference and training related revenue, and a decrease of approximately $0.1 million in Myofunctional therapy and BIS revenue.

During the three months ended March 31, 2026, we enrolled no VIPs and recognized VIP enrollment revenue of $37 thousand, a decrease of approximately 84% in enrollment revenue due to the pivot to the new business model, compared to the three months ended March 31, 2025, when we recognized approximately $0.2 million. Over the last year, our reliance on VIP enrollment revenue has diminished significantly as such revenues have decreased due to the pivot. Our revenue was impacted by the sales strategy shift and focus toward sleep center affiliations, coupled with no enrollments in 2025, which resulted in almost no service revenue from VIP enrollments for the three months ended March 31, 2026.

For the three months ended March 31, 2026, we sold 5,304 oral appliance arches and tooth positioners for a total of approximately $1.4 million, a 21% decrease in revenue from the three months ended March 31, 2025, when we sold 3,735 oral appliance arches and tooth positioners for a total of approximately $1.8 million. The revenue decrease is directly attributable to an increase in discounts offered during the same period, with $0.5 million in discounts offered during the three months ended March 31, 2026 compared to approximately $0.2 million offered during the three months ended March 31, 2025, coupled with an increase in tooth positioner sales at a lower price point product when compared to Vivos appliances.

Cost of Sales and Gross Profit

Cost of sales increased by approximately $0.6 million, or 38%, to approximately $2.1 million for the three months ended March 31, 2026, compared to approximately $1.5 million for the three months ended March 31, 2025. This was primarily due to approximately $0.7 million in higher costs related to additional staff associated with the sleep center affiliations and an increase of approximately $0.1 million in diagnostic services related to new sleep center affiliations.

For the three months ended March 31, 2026, gross profit increased by approximately $1.5 million or 103% to $3.1 million. This increase was attributable to an increase in revenue of approximately $2.1 million, offset by an increase in cost of sales of approximately $0.6 million. Gross margin increased to 60% for the three months ended March 31, 2026, when compared to 50% for the three months ended March 31, 2025.

General and Administrative Expenses

General and Administrative expenses increased $4.1 million to approximately $9.0 million for the three months ended March 31, 2026, compared to approximately $4.9 million for the three months ended March 31, 2025. This increase was primarily due to approximately $1.5 million in costs associated with running SCN's operations. In addition, approximately $0.9 million related to professional fees, approximately $1.5 million associated with salaries and wages for Vivos personnel and related Vivos treatment centers and infrastructure costs of approximately $0.2 million when compared to the three months ended March 31, 2025.

Sales and Marketing

Sales and marketing expense decreased by $0.1 million to $0.2 million for the three months ended March 31, 2026, compared to approximately $0.3 million for the three months ended March 31, 2025. This decrease was primarily driven by a $0.1 million decrease in media marketing and video production expenses as a result of our strategic pivot which allows us to rely less heavily on sales and marketing compared with the legacy VIP model.

Depreciation and Amortization

Depreciation and amortization expense was approximately $0.5 million for the three months ended March 31, 2026, compared to approximately $0.2 million for the three months ended March 31, 2025. Depreciation and amortization increased due to an increase in depreciable assets related to the new sleep center asset acquisition and affiliations.

Liquidity and Capital Resources

The financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. We have incurred losses since inception, including $7.7 million and $3.9 million for the three months ended March 31, 2026 and 2025, respectively, resulting in an accumulated deficit of approximately $133 million as of March 31, 2026.

Net cash used in operating activities amounted to approximately $6.0 and $3.8 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had total liabilities of approximately $26.3 million as compared with $26.7 million as of December 31, 2025.

As of March 31, 2026, we had approximately $2.1 million in cash and cash equivalents, which will not be sufficient to fund operations and strategic objectives over the next twelve months from the date of issuance of these financial statements. As of the date of this Report, we have both near and long term cash requirements to operate our business, and without additional financing, these factors raise substantial doubt regarding our ability to continue as a going concern.

We have implemented cost savings measures that have reduced cash used in operations. However, sales did not grow in the 2025 and for the three months ended March 31, 2026 as much as we had anticipated or in amounts sufficient to cover our expenses, as we continued to integrate SCN into our operations and refine and improve our product offerings and distribution strategies. As such, notwithstanding that we have raised equity capital throughout the fiscal year ended December 31, 2025 and through the first quarter of 2026, we will be required to obtain additional financing to satisfy our business cash needs and bolster our stockholders' equity for Nasdaq compliance purposes, as management continues to work towards increasing revenue to achieve cash flow positive operations in the foreseeable future.

In addition, to bolster our stockholders' equity for Nasdaq compliance purposes, we are actively evaluating ways to restructure our senior debt (incurred in 2025 in connection with the SCN acquisition) to reduce our debt service obligations and reclassify some of the debt as equity on our balance sheet.

Until we attain positive cash flow, our management is reviewing all options to obtain additional financing to fund our operations. We financed the SCN acquisition from the issuance of senior secured debt and equity securities. As reflected in our increase in revenue for the three months ended March 31, 2026, we expect the SCN acquisition will ultimately allow our company to achieve positive cash flows; however, there is a risk this may not occur. We seek to acquire other sleep centers in transactions similar to the SCN Acquisition or enter into other strategic alliances with improved terms. There can be no assurances that adequate additional funding will be available on favorable terms, or at all. If such funds are not available in the future, or if alliances or acquisitions do not result in the patient volume, appliance sales and financial results within the timeframes we expect, we may be required to delay, significantly modify or terminate some or all of our operations, all of which could have a material adverse effect on us and our stockholders.

We do not have any off-balance sheet arrangements, as defined by applicable regulations of the SEC, that are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

Cash Flows

The following table presents a summary of our cash flow for the three months ended March 31, 2026 and 2025 (in thousands):

		2026				2025
Net cash provided by (used in):
Operating activities		$	(6,010	)		$	(3,796	)
Investing activities			(18	)			(122	)
Financing activities			6,109				-

Net cash used in operating activities of approximately $6.0 million for the three months ended March 31, 2026 which represents an increase of approximately $2.4 million compared to net cash used in operating activities of approximately $3.8 million for the three months ended March 31, 2025. This increase is due primarily to an increase of approximately $3.9 million in our net loss, including $0.5 million in fair value of Common Stock issued for services, offset by an increase of approximately $0.6 million in accrued expenses, an increase of approximately $0.4 million in contract liabilities, an increase of $0.3 million for depreciation and amortization, and an increase of approximately $0.2 million in accounts payable.

For the three months ended March 31, 2026, net cash used in investing activities consisted of capital expenditures of less than $0.1 million for leasehold improvements. This compares to net cash used in investing activities for the three months ended March 31, 2025 of $0.1 million due to capital expenditures for the development of software for internal use.

Net cash provided by financing activities of $6.1 million for the three months ended March 31, 2026, is attributable to proceeds of approximately $4.6 million from the exercise of warrants, approximately $1.4 million from the issuance of debt, approximately $0.6 million from the issuance of warrants, and approximately $0.3 million from the issuance of common stock, net of approximately $0.4 million repayment of debt and $0.3 million of professional fees and other issuance costs associated with equity and debt financings. This compares to no cash provided by investing financing for the three months ended March 31, 2025.

Critical Accounting Policies Involving Management Estimates and Assumptions

Our critical accounting policies and estimates are described in "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. We have reviewed and determined that those critical accounting policies and estimates remain our critical accounting policies and estimates as of and for the three months ended March 31, 2026.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed in Note 1 to the accompanying condensed consolidated financial statements included in this Report, we believe that the impact of recently issued standards that are not yet effective could have a material impact on our financial position or results of operations upon adoption. For additional information on recently issued accounting standards and our plans for adoption of those standards, please refer to the section titled Recent Accounting Pronouncements under Note 1 to the accompanying condensed consolidated financial statements included in this Report.