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FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | 6 Months Ended
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Jun. 30, 2023
Investments, All Other Investments [Abstract] |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | NOTE 14 - FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS Fair Value Measurements Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it transacts and considers assumptions that market participants would use when pricing the asset or liability. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the measurement of fair value: Level 1-Quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date Level 2-Other than quoted prices included in Level 1 that are observable for the asset and liability, either directly or indirectly through market collaboration, for substantially the full term of the asset or liability Level 3-Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any market activity for the asset or liability at measurement date As of June 30, 2023 and 2022, the fair value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, and other accrued liabilities approximated their carrying values due to the short-term nature of these instruments. As discussed in Note 8, on January 9, 2023, the Company closed on the Private Placement for the sale by the Company of shares of the Company’s common stock and the issuance of pre-funded warrant to purchase up to an aggregate of 4,666,667 shares of common stock at an exercise price of $0.0001 per share, and the issuance of warrant to purchase up to an aggregate of 6,666,667 shares of common stock at an exercise price of $1.20 per share. The warrants are initially exercisable commencing January 9, 2023 through their expiration date of July 9, 2028. The liability associated with those warrants was initially recorded at fair value in the Company’s consolidated balance sheet upon issuance, and subsequently re-measured as of March 31, 2023, and June 30, 2023. The changes in the fair value between issuance, the March 31, 2023 measurement date and the June 30, 2023 measurement date are recorded as a component of other income (expense), in the consolidated statement of operations. Recurring Fair Value Measurements For the three months and six months ended June 30, 2023 and 2022, the Company did not have any assets and liabilities classified as Level 1 or Level 3. The Company has concluded that the warrants issued in connection with the private placement, met the definition of a liability under ASC 480, Distinguishing Liabilities from Equity and has classified the liability as Level 3. The following fair value hierarchy table present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2023: SCHEDULE OF FAIR VALUE MEASUREMENT ON RECURRING BASIS
|  | Fair Value Measurement as of June 30, 2023 |
|  | (In thousands) |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Balance |
Warrant liability |  | $ | - |  |  | $ | - |  |  | $ | 2,200 |  |  | $ | 2,200 |
Total |  | $ | - |  |  | $ | - |  |  | $ | 2,200 |  |  | $ | 2,200 |
The following table represent a reconciliation of the Company’s liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months and six months ended June 30, 2023: SCHEDULE OF FAIR VALUE LIABILITIES ON RECURRING BASIS
|  | Warrant Liability |
|  | (In thousands) |
Beginning balance, January 1 |  | $ | - |
Issuance of warrants |  |  | 14,453 |
Exercise of warrants |  |  | (2,847 | )
Change in fair value upon re-measurement |  |  | (10,273 | )
Ending balance, March 31 |  | $ | 1,333 |
Change in fair value upon re-measurement |  |  | 867 |
Ending balance, June 30 |  | $ | 2,200 |
The Company has re-measured the liability to estimate fair value at June 30, 2023, using the Black-Scholes option pricing model with the following assumptions: SCHEDULE OF FAIR VALUE PRICING MODEL
|  | January 9, 2023 |  |  | March 31, 2023 |  |  | June 30, 2023 |
Measurement date closing price of Common Stock (1) |  | $ | 1.44 |  |  | $ | 0.34 |  |  | $ | 0.51 |
Contractual term (years) (2) |  |  | 5.5 |  |  |  | 5.3 |  |  |  | 5.0 |
Risk-free interest rate |  |  | 3.6 | % |  |  | 3.5 | % |  |  | 4.1 | %
Volatility |  |  | 100 | % |  |  | 100 | % |  |  | 100 | %
Dividend yield |  |  | 0 | % |  |  | 0 | % |  |  | 0 | %
| (1) | Based on the trading value of common stock of Vivos Therapeutics, Inc. as of January 9, 2023 and each presented period ending date.
| (2) | The valuation of warrants is based on the expected term.
The Company’s policy is to recognize asset or liability transfers among Level 1, Level 2 and Level 3 as of the actual date of the events or change in circumstances that caused the transfer. During the three months and six months ended June 30, 2023 and 2022, the Company had no transfers of its assets or liabilities between levels of the fair value hierarchy. Significant Concentrations Financial instruments that potentially expose the Company to concentrations of credit risk consist principally of cash and cash equivalents on deposit with financial institutions, the balances of which frequently exceed federally insured limits. Management monitors the soundness of these financial institutions and believes the Company’s risk is negligible. The Company has not experienced any losses in such accounts. If any of the financial institutions with whom the Company does business was to be placed into receivership, the Company may be unable to access the cash they have on deposit with such institutions. If the Company were unable to access cash and cash equivalents as needed, the financial position and ability to operate the business could be adversely affected. As of June 30, 2023, the Company had cash and cash equivalents with three financial institutions in the United States with an aggregate balance of $3.9 million. Generally, credit risk with respect to accounts receivable is diversified due to the number of entities comprising the Company’s customer base and their dispersion across different geographies and industries. The Company performs ongoing credit evaluations on certain customers and generally does not require collateral on accounts receivable. The Company maintains reserves for potential bad debts.

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- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
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