UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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the quarterly period ended
OR
For the transition period from to
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Registrant’s
telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The number of shares outstanding of the registrant’s common stock as of November 14, 2025, was shares.
EXPLANATORY NOTE
ENvue Merger
On February 14, 2025, pursuant to the terms of that certain Agreement and Plan of Merger, dated as of February 14, 2025 (the “Merger Agreement”), by and among NanoVibronix, Inc. (the “Company”), NVEH Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of NVEH Merger Sub I, Inc. (“First Merger Sub”), NVEH Merger Sub II, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Second Merger Sub”), and Predecessor ENvue Medical Holdings LLC (previously: Envizion Medical Holding Corp. hereinafter: “ENvue”), the Company and Predecessor ENvue effected (i) a merger of First Merger Sub with and into Predecessor ENvue, with the First Merger Sub ceasing to exist and Predecessor ENvue becoming a wholly-owned subsidiary the Company and (ii) the merger of Predecessor ENvue with and into Second Merger Sub (the “Second Merger” and, together with the First Merger, the “ENvue Merger”), with Second Merger Sub being the surviving entity of the Second Merger (“Surviving Entity”). At the effective time of the Second Merger, the certificate of formation of the Surviving Entity was amended and restated to, among other things, to change the name of the Surviving Entity to “ENvue Medical Holdings LLC.”
The information in this Quarterly Report on Form 10-Q (the “Quarterly Report”) reflects the consummation of the ENvue Merger.
Reverse Stock Splits
On March 12, 2025, we filed a Certificate of Amendment to our Certificate of Incorporation with the Secretary of State of Delaware to effect a 1-for-11 reverse stock split of the shares of our common stock, par value $0.001 per share (the “Common Stock”), either issued and outstanding or held by us as treasury stock, effective as of 4:05 p.m. (Delaware time) on March 13, 2025 (the “March 2025 Reverse Stock Split”).
On August 8, 2025, we filed a Certificate of Amendment to our Certificate of Incorporation with the Secretary of State of Delaware to effect a 1-for-10 reverse stock split of the shares of our Common Stock, either issued and outstanding or held by us as treasury stock, effective as of 4:05 p.m. (Delaware time) on August 11, 2025 (the “August 2025 Reverse Stock Split” and together with the March 2025 Reverse Stock Split, the “Reverse Stock Splits”).
All common stock share and per share amounts in this Quarterly Report have been adjusted to give effect to the Reverse Stock Splits unless otherwise stated.
NanoVibronix, Inc.
Quarter Ended September 30, 2025
(Unaudited)
TABLE OF CONTENTS
| i |
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NanoVibronix, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(Amounts in thousands except share and per share data)
| September 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS: | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Trade receivables | ||||||||
| Prepaid expenses and other accounts receivable | ||||||||
| Inventory | ||||||||
| Total current assets | ||||||||
| Noncurrent assets: | ||||||||
| Property and equipment, net | ||||||||
| Long-term trade receivables | ||||||||
| Severance pay fund | ||||||||
| Operating lease right-of-use assets | ||||||||
| Intangible assets | ||||||||
| Goodwill | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY: | ||||||||
| Current liabilities: | ||||||||
| Trade payables | $ | $ | ||||||
| Other accounts payable and accrued expenses | ||||||||
| Loans | ||||||||
| Tranche financing liability | ||||||||
| Warranty liability | ||||||||
| Deferred revenue | ||||||||
| Operating lease liabilities, current | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities: | ||||||||
| Accrued severance pay | ||||||||
| Operating lease liabilities, non-current | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity (*): | ||||||||
| Series G Preferred stock of $ par value - Authorized: and shares at September 30, 2025 and December 31, 2024, respectively; Issued and outstanding: and shares at September 30, 2025 and December 31, 2024 | (*) | |||||||
| Series X Preferred stock of $ par value - Authorized: and shares at September 30, 2025 and December 31, 2024, respectively; Issued and outstanding: and shares at September 30, 2025 and December 31, 2024 | ||||||||
| Series H Preferred stock of $ par value - Authorized: and shares at September 30, 2025 and December 31, 2024, respectively; Issued and outstanding: and shares at September 30, 2025 and December 31, 2024 | ||||||||
| Common stock of $ par value - Authorized: shares at September 30, 2025 and December 31, 2024, respectively; Issued and outstanding: and shares at September 30, 2025 and December 31, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive income | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
| (*) |
The accompanying notes are an integral part of these condensed consolidated financial statements
| 1 |
NanoVibronix, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
(Amounts in thousands except share and per share data)
| Three Month Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | ||||||||||||||||
| Selling and marketing | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Financial income, net | ||||||||||||||||
| Income (loss) before taxes on income | ( | ) | ( | ) | ( | ) | ||||||||||
| Income tax expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income (loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Preferred Stock dividends | ||||||||||||||||
| 8% dividend on Convertible Preferred Series X | ( | ) | ( | ) | ||||||||||||
| 9% dividend on Convertible Preferred Series H | ( | ) | ( | ) | ||||||||||||
| Deemed dividend for down round on Series H | ( | ) | ( | ) | ||||||||||||
| Deemed contribution on repurchase of Preferred Series X | ||||||||||||||||
| Deemed contribution | ||||||||||||||||
| Net loss available to common stockholders | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Basic and diluted net loss available for holders of common stock (*) | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic and diluted (*) | ||||||||||||||||
| Comprehensive loss: | ||||||||||||||||
| Net income (loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Change in foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Comprehensive income (loss) available to common stockholders | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| (*) |
The accompanying notes are an integral part of these condensed consolidated financial statements
| 2 |
NanoVibronix, Inc.
Condensed
Consolidated Statement of Stockholders’ Equity (Unaudited)
(Amounts in thousands except share and per share data)
| Series G Preferred Stock | Series X Preferred Stock | Series H Preferred Stock | Common Stock | Additional Paid - in | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares (*) | Amount (*) | Capital (*) | Income | Deficit | Equity | |||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | | $ | | $ | | $ | ( | ) | $ | ( | ) | $ | | ||||||||||||||||||||||||||||||||
| Issuance of Common Stock for private placement | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Exercise of pre-funded warrants | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Conversion of Series G Preferred Stock into Common Stock | ( | ) | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of Series X Preferred Stock | - | ( | ) | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Dividend on Convertible Preferred Series X | - | - | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Dividend on Convertible Preferred Series H | - | - | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Issuance of Series H Preferred Stock | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Deemed dividend for down round on Series H | - | - | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Currency translation adjustment | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Net income | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||
| Series G Preferred Stock | Series X Preferred Stock | Series H Preferred Stock | Common Stock | Additional Paid - in | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares (*) | Amount (*) | Capital (*) | Income | Deficit | Equity | |||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | | $ | | | $ | ( | ) | $ | ( | ) | $ | | |||||||||||||||||||||||||||||||||
| ENvue Merger | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of warrants | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Exercise of pre-funded warrants | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Warrant exchange agreement | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Issuance of Series G Preferred Stock | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Conversion of Series G Preferred Stock into Common Stock | ( | ) | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of Series X Preferred Stock | - | ( | ) | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Dividend on Convertible Preferred Series X | - | - | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Issuance of Series H Preferred Stock | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Dividend on Convertible Preferred Series H | - | - | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Issuance of Common Stock for private placement | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Deemed dividend for down round on Series H | - | - | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Issuance of fractional shares due to reverse stock split | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Currency translation adjustment | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||||||
| Series G Preferred Stock | Series X Preferred Stock | Series H Preferred Stock | Common Stock | Additional Paid - in | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares (*) | Amount (*) | Capital (*) | Income | Deficit | Equity | |||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | | $ | | $ | | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Currency translation adjustment | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Exercise of pre-funded warrants | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2024 | $ | $ | $ | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| Series G Preferred Stock | Series X Preferred Stock | Series H Preferred Stock | Common Stock | Additional Paid - in | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares (*) | Amount (*) | Capital (*) | Income | Deficit | Equity | |||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | | | | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Exercise of pre-funded Warrants | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Currency translation adjustment | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| (*) |
The accompanying notes are an integral part of these condensed unaudited consolidated financial statements
| 3 |
NanoVibronix, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Amounts in thousands except share and per share data)
| Nine Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Stock-based compensation | ||||||||
| Noncash interest expense | ||||||||
| Gain/Loss on termination of investment | - | 1 | ||||||
| Change in fair value of warrant liability | ( | ) | ||||||
| Issuance cost allocated to warrant liability | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Trade receivable | ( | ) | ( | ) | ||||
| Other accounts receivable and prepaid expenses | ( | ) | ( | ) | ||||
| Inventory | ||||||||
| Trade payables | ( | ) | ||||||
| Other accounts payable and accrued expenses | ||||||||
| Deferred revenue | ( | ) | ( | ) | ||||
| Operating lease liabilities, net | ( | ) | ||||||
| Accrued severance pay, net | ( | ) | ||||||
| Net cash used in operating activities | $ | ( | ) | ( | ) | |||
| Cash flows from investing activities: | ||||||||
| Cash acquired in ENvue Merger | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | $ | ( | ) | |||||
| Cash flows from financing activities: | ||||||||
| Proceeds from the issuance of commons stock, preferred stock and warrants, net | ||||||||
| Repurchase of Series X Preferred Stock | ( | ) | ||||||
| Proceeds from tranche financing | ||||||||
| Proceeds from issuance of notes payable to a related party | ||||||||
| Payments of note payable to related party | ( | ) | ||||||
| Payments of short-term loan to related party | ( | ) | ||||||
| Proceeds from issuance of short-term loan payable | ||||||||
| Proceeds from exercise of options and warrants | ||||||||
| Net cash provided by financing activities | $ | |||||||
| Effects of currency translation on cash and cash equivalents | ( | ) | ( | ) | ||||
| Net increase in cash, cash equivalents and restricted cash | ( | ) | ||||||
| Cash, cash equivalents and restricted cash at beginning of period | ||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | ||||||
| Reconciliation of cash, cash equivalents and restricted cash: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash at end of period | ||||||||
| Total cash, cash equivalents and restricted cash | $ | $ | ||||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | $ | $ | ||||||
The accompanying notes are an integral part of these condensed unaudited consolidated financial statements
| 4 |
NANOVIBRONIX, INC.
Notes to Consolidated Financial Statements
(Unaudited)
(Amounts in thousands except share and per share data)
NOTE 1 - DESCRIPTION OF BUSINESS
NanoVibronix, Inc. (the “Company”), a Delaware corporation, commenced operations on October 20, 2003, and is a medical device company focusing on non-invasive biological response-activating devices that target wound healing and pain therapy and can be administered at home, without the assistance of medical professionals.
The Company’s principal research and development activities are conducted in Israel through its wholly-owned subsidiary, NanoVibronix Ltd., a company registered in Israel, which commenced operations in October 2003.
On February 14, 2025, pursuant to the terms of that certain Agreement and Plan of Merger, dated as of February 14, 2025 (the “Merger Agreement”), by and among NanoVibronix, Inc. (the “Company”), NVEH Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of NVEH Merger Sub I, Inc. (“First Merger Sub”), NVEH Merger Sub II, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Second Merger Sub”), and Predecessor ENvue, the Company and Predecessor ENvue effected (i) a merger of First Merger Sub with and into Predecessor ENvue, with the First Merger Sub ceasing to exist and Predecessor ENvue becoming a wholly-owned subsidiary the Company and (ii) the merger of Predecessor ENvue with and into Second Merger Sub (the “Second Merger” and, together with the First Merger, the “ENvue Merger”), with Second Merger Sub being the surviving entity of the Second Merger (“Surviving Entity”). At the effective time of the Second Merger, the certificate of formation of the Surviving Entity was amended and restated to, among other things, to change the name of the Surviving Entity to “ENvue Medical Holdings LLC.” See Note 4 – Merger.
ENvue Medical Holdings LLC (previously: Envizion Medical Holding Corp.) (hereinafter: “ENvue”) is a Delaware corporation incorporated June 5, 2024. ENvue has two wholly owned subsidiaries: ENvue Medical (USA) Inc. (previously: Envizion Medical (USA) Inc.) and ENvue Medical Ltd. (previously: Envizion Medical Israel Ltd.).
ENvue is engaged in research, development, marketing, and sale of medical equipment in the field of enteral feeding and are in the initial stage of commercializing its products.
NOTE 2 - LIQUIDITY AND PLAN OF OPERATIONS
As
of September 30, 2025, the Company has incurred recurring losses and negative cash flows from operations and has an accumulated deficit
of $
These conditions raise substantial doubt about the Company’s ability to continue as a going concern for twelve months from the date of issuance of these interim condensed consolidated financial statements. The accompanying condensed interim consolidated financial statements do not include any adjustments to reflect the possible future effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation and principles of consolidation
The unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for the interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the financial position and results of operations of the Company. These condensed consolidated financial statements and notes thereto are unaudited and should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2024, as found in the Company’s Annual Report on Form 10-K, as amended, initially filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2025.
The balance sheet for December 31, 2024, was derived from the Company’s audited financial statements for the year ended December 31, 2024. The results of operations for the periods presented are not necessarily indicative of results that could be expected for the entire fiscal year. Certain information and footnote disclosures normally included in the consolidated financial statements in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC for interim reporting.
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, including ENvue as of the date of the ENvue Merger. Intercompany accounts and transactions have been eliminated upon consolidation.
| 5 |
Use of estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Foreign currency translation
The currency of the primary economic environment in which the operations of the Company and certain subsidiaries are conducted is the U.S. dollar; thus, the dollar is the functional currency of the Company and certain subsidiaries.
The Company and certain subsidiaries’ transactions and balances denominated in dollars are presented at their original amounts. Non-dollar transactions and balances have been remeasured to dollars in accordance with ASC 830, “Foreign Currency Matters”. All transaction gains and losses from remeasurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statements of operations as financial income or expenses, as appropriate.
For certain subsidiaries whose functional currency has been determined to be a non-dollar currency, assets and liabilities are translated at period-end exchange rates and statement of operations items are translated at average exchange rates prevailing during the period. Such translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) in shareholders’ equity.
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less, at the date of purchase.
Concentration of credit risk
Financial
instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, trade receivables,
and other accounts receivable. The Company holds cash in various banking institutions. Such funds are insured by the Federal Deposit
Insurance Corporation (“FDIC”) up to $
Trade receivables
The Company’s trade receivable balance consists of amounts due from its customers. The Current Expected Credit Losses (“CECL”) impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, which considers forecasts of future economic conditions in addition to information about past events and current conditions. Based on this model, the Company considers many factors, including the age of the balance, collection history, and current economic trends. Credit losses are written off after all collection efforts have ceased. Allowances for credit losses are recorded as a direct reduction from an asset’s amortized cost basis. Credit losses and recoveries are recorded in selling, general and administrative expenses in the consolidated statements of operations. Recoveries of financial assets previously written off are recorded when received. As of September 30, 2025, the credit losses allowance was immaterial.
The Company computes net loss per share using the two-class method required for participating securities. The two-class method requires income available to common stockholders for the period to be allocated between shares of Common Stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The Company’s Series X Preferred Shares and Series H Preferred shares would be entitled to dividends that would be distributed to the holders of Common Stock, based on the conversion ratio, assuming conversion of all Convertible Series X Preferred Shares and Series H Preferred shares into shares of Common Stock. The Company does not allocate losses to these participating securities as they do not share in the Company’s losses.
The Company’s basic net loss per share is calculated by dividing net loss attributable to common and preferred stockholders by the weighted-average number of shares, which include prefunded warrants, without consideration of potentially dilutive securities. The diluted net loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities. Diluted net loss per share is the same as basic net loss per share in periods when the effects of potentially dilutive shares of Common Stock are anti-dilutive.
Inventory
Inventories are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Cost is determined using the “first-in, first-out” method.
Inventory write-offs are provided to cover risks arising from slow-moving items or technological obsolescence. The Company periodically evaluates the quantities on hand relative to current and historical selling prices and historical and projected sales volume. Based on this evaluation, provisions are made when required to write-down inventory to its net market value.
| 6 |
Goodwill
Goodwill has been recorded as a result of the acquisition. Goodwill represents the excess of the purchase price in a business combination over the fair value of identifiable tangible and intangible assets acquired. Goodwill is not amortized but rather is subject to an impairment test.
ASC No. 350, “Intangibles - Goodwill and other” (“ASC No. 350”) requires goodwill to be tested for impairment at the reporting unit level at least annually or between annual tests in certain circumstances and written down when impaired.
ASC No. 350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If it does result in a more likely than not indication of impairment, the quantitative goodwill impairment test is performed. Alternatively, ASC No. 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to perform the quantitative goodwill impairment test. The Company performs the quantitative goodwill impairment test during the fourth quarter of each fiscal year, or more frequently if impairment indicators are present and compares the fair value of the reporting unit with its carrying value.
During
the nine months ended September 30, 2025 and 2024,
Intangible Assets
The
estimated fair values of acquired intangibles are generally determined based upon future economic benefits such as earnings and cash
flows. Acquired identifiable intangible assets are recorded at fair value and are amortized over their estimated useful lives, which
is
The estimated useful lives of the Company’s intangible assets are as follows:
| Intangible Assets | Years | |
| Tradename and trademarks | ||
| Technology | ||
| Customer list |
Property and equipment, net
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets.
The estimated useful lives of the Company’s property and equipment are as follows:
| Years | ||
| Computers and peripheral equipment | ||
| Office furniture and equipment | ||
| Leasehold improvements |
Impairment of Long-Lived Assets
The long-lived assets of the Company, including finite-lived intangible assets, are reviewed for impairment in accordance with ASC No. 360, “Property, Plant and Equipment”, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets.
If
such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of
the assets exceeds the fair value of the assets. During the three and nine months ended September 30, 2025 and 2024,
Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance. The assessment considers whether the warrants are freestanding financial instruments, meet the definition of a liability under ASC 480, and meet all of the requirements for equity classification, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent reporting period end date while the warrants are outstanding. Warrants that meet all the criteria for equity classification, are required to be recorded as a component of additional paid-in capital. Warrants that do not meet all the criteria for equity classification, are required to be recorded as liabilities at their initial fair value on the date of issuance and remeasured to fair value at each balance sheet date thereafter. The liability-classified warrants are recorded under non-current liabilities. Changes in the estimated fair value of the warrants are recognized in Financial expenses or income in the unaudited interim condensed consolidated statements of operations.
The Company issued warrants in connection with the Series G Preferred financing and Series H Preferred financing, which were recorded as liabilities. The rest of the Company’s outstanding warrants are equity classified.
Accrued severance pay
The
Company’s liability for severance pay is for its Israeli employees and is calculated pursuant to Israeli Severance Pay Law based
on the most recent salary of the employees multiplied by the number of years of employment as of the balance sheet date and is in large
part covered by regular deposits with recognized pension funds, deposits with severance pay funds and purchases of insurance policies.
The value of these deposits and policies is recorded as an asset in the Company’s balance sheet. Accrued severance pay liability
on September 30, 2025, and December 31, 2024, was $
Leases
The Company accounts for its leases in accordance with ASU 2016-02, “Leases” (Topic 842). This topic requires that a lessee recognize the assets and liabilities that arise from operating leases. The Company recognizes right-of-use assets and lease liabilities on the consolidated balance sheet for all leases with a term longer than 12 months and classifies them as operating leases. For leases with a term of 12 months or less, the Company elects not to recognize lease assets and lease liabilities on those leases. Lease liabilities have been measured by the present value of the Company’s remaining lease payments over the lease term using our incremental borrowing rates or implicit rates, when readily determined.
The Company may sell its insertion systems to customers through bundled lease arrangements which typically include insertion systems and nasoenteral tubes. Revenues under these bundled lease arrangements are allocated considering the relative standalone selling prices of the lease and non-lease components included in the bundled arrangement. The primary accounting provision the Company uses to classify transactions as sales-type or operating leases is whether the lease transfers ownership of the underlying asset to the lessee by the end of the lease term. Systems included in arrangements meeting this condition are accounted for as sales-type leases and revenue is recognized at lease commencement. When leases are determined to be operating leases, revenue is recognized over the term of the lease. For the nine-month period ended September 30, 2025, there were no operating leases.
Revenue from sales-type leases is presented on a gross basis when the Company enters into a lease to realize value from a product that it would otherwise sell in its ordinary course of business—see revenue recognition policy.
Interest income for the nine-month period ended September 30, 2025 was immaterial.
At
the commencement date of sales-type leases for the nine-month period ended September 30, 2025, the Company recognized $
| 7 |
Revenue recognition
Revenues from product and services are recognized in accordance with ASC 606 “Revenue Recognition.” Five basic steps must be followed before revenue can be recognized: (1) Identifying the contract(s) with a customer that create(s) enforceable rights and obligations; (2) Identifying the performance obligations in the contract, such as promising to transfer goods or services to a customer; (3) Determining the transaction price, meaning the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer; (4) Allocating the transaction price to the performance obligations in the contract, which requires the company to allocate the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or services promised in the contract; and (5) Recognizing revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service to a customer.
The Company generates revenue from sales of products and services. Revenues from product sales is recorded at the net sales price, or “transaction price,” which includes estimates of variable consideration that result from discounts as well as allowances for returns. Revenue from product sales is recognized at a point in time when control of the product is transferred, which is generally upon shipment to the customer.
Regarding its ENvue sales, the Company regularly sells its Systems and Nasoenteral tubes on a stand-alone basis and therefore concludes these products are separate performance obligations. Revenue from product sales is recognized at a point in time when control of the product is transferred, which is generally upon shipment to the customer. Revenue from training services is recognized over time, while the Company provides the services, which are usually completed in under a week.
The Company also concluded that training services are capable of being distinct and separately identifiable and therefore should be accounted for as a separate performance obligation. When a contract includes one of these products or services, the entire transaction price is allocated to that product or service. When a contract includes a combination of products and services, the transaction price is allocated to each performance obligation on a stand-alone selling price basis. The stand-alone selling prices are generally determined based on the prices at which the Company separately sells the products and services. The Company’s contracts with its ENvue customers generally do not include rights of return.
Revenue from sales-type leases is presented on a gross basis when the Company enters into a lease to realize value from a product that it would otherwise sell in its ordinary course of business—see lease policy.
The payments are typically due between 30 and 60 days.
The Company applied the practical expedient in ASC 606 and did not evaluate payment terms of one year or less for the existence of a significant financing component. The related revenue is recognized net of any taxes collected from customers which are subsequently remitted to governmental entities (e.g., sales tax and other indirect taxes). The Company elected to not disclose information about the remaining performance obligations that have original expected durations of one year or less.
In
some of its contracts, the Company provides assurance type warranty services to its customers, in accordance with legal provisions or
industry standards to ensure the quality of the products. As such, the Company recognizes a provision for warranties in its financial
statements as applicable. As of September 30, 2025, the Company’s provision for warranty amounted to $
| 8 |
Convertible Debenture
As permitted under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 825, Financial Instruments (“ASC 825”), the Company elects to account for its Debenture (as defined below), which meets the required criteria, at fair value at inception and at each subsequent reporting date. Subsequent changes in fair value are recorded as a component of non-operating loss in the consolidated statements of operations, except for adjustments related to instrument specific credit risk, which are recorded as other comprehensive income. This election is made on an instrument-by-instrument basis as permitted under ASC 825. As a result of electing the fair value option, direct costs and fees related to the Debenture are expensed as incurred.
The Company estimates the fair value of the Debenture using a Monte Carlo simulation model, which uses as inputs the fair value of our common stock and estimates for the equity volatility and volume volatility of our common stock, the time to expiration of the Debenture, the risk-free interest rate for a period that approximates the time to expiration, and probability of default. Therefore, we estimate our expected future volatility based on the actual volatility of our common stock and historical volatility of our common stock utilizing a lookback period consistent with the time to expiration. The time to expiration is based on the contractual maturity date, giving consideration to the voluntary, mandatory and potential accelerated redemption scenarios. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of measurement for time periods approximately equal to the time to expiration. Probability of default is estimated using our financial information to calculate a default risk specific to the Company.
The
Company’s convertible debenture was repaid in May 2025. During the nine-month period ended September 30, 2025, the Company recorded
fair value adjustment of $
Variable interest entities
The Company evaluates its variable interests in variable interest entities (“VIEs”), and consolidates VIEs when the Company is the primary beneficiary. The Company determines whether it is the primary beneficiary of a VIE based on its assessment of whether the Company possesses both (i) the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the obligation to absorb losses that could be significant to the VIE or the right to receive benefits that could be significant to the VIE. The Company reevaluates the accounting for its VIEs upon the occurrence of events that could change the primary beneficiary conclusion.
Business combination
The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Goodwill generated from a business combination is primarily attributable to synergies.
When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include but are not limited to future expected cash flows from acquired technology and acquired customer relationships from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred (see also Note 4).
| 9 |
Recently issued accounting standards
In December 2023, the Financial Accounting Standard Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, which requires disaggregated information about the effective tax rate reconciliation as well as information on income taxes paid. The guidance is effective for the Company for annual periods beginning January 1, 2025. The Company is currently evaluating the impact on its financial statement disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40), Disaggregation of Income Statement Expenses, which requires disclosure of disaggregated information about certain expense captions presented in the Consolidated Statements of Operations as well as disclosure about selling expense. The guidance will be effective for the Company for annual periods beginning January 1, 2027 and interim periods beginning January 1, 2028, with early adoption permitted. It could be applied either prospectively or retrospectively. The Company is currently evaluating the impact on its financial statement disclosures.
In July 2025, the FASB issued Accounting Standards Update No. 2025-05, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”), which provides a practical expedient for estimating expected credit losses for current accounts receivable and current contract assets. ASU 2025-05 will be effective for annual periods beginning after December 15, 2025 and interim periods within those annual reporting periods and should be applied prospectively. The Company is currently evaluating the impact of ASU 2025-05 on its consolidated financial statements and related disclosures.
NOTE 4 – MERGER
Agreement and Plan of Merger
On
February 14, 2025, pursuant to the terms of that certain Agreement and Plan of Merger (as amended, restated, amended and restated, supplemented
or modified from time to time, the “Merger Agreement”), dated as of February 14, 2025, by and among us, NVEH Merger Sub I,
Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“First Merger Sub”), NVEH Merger Sub II, LLC,
a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Second Merger Sub”), and ENvue Medical
Holdings, Corp. (“Predecessor ENvue” or “ENvue”), the Company and Predecessor ENvue effected (i) a merger of
First Merger Sub with and into Predecessor ENvue, with the First Merger Sub ceasing to exist and Predecessor ENvue becoming a wholly-owned
subsidiary the Company (the “First Merger”, and effective time of such First Merger, the “First Effective Time”)
and (ii) the merger of Predecessor ENvue with and into Second Merger Sub (the “Second Merger” and, together with the First
Merger, the “Merger”), with Second Merger Sub being the surviving entity of the Second Merger (“Surviving Entity”).
At the effective time of the Second Merger, the certificate of formation of the Surviving Entity was amended and restated to, among other
things, to change the name of the Surviving Entity to “ENvue Medical Holdings LLC.” In connection with the Merger Agreement,
we issued (i) shares of common stock (the “Merger Shares”), which such number of shares represented no more than
Given that both companies operate in the medical device sector and demonstrate natural synergies and strategic alignment in their operations, the merger was undertaken to combine and enhance their respective strengths. The Company concluded the merger resulted in the Company obtaining a controlling financial interest in VIE in accordance with ASC 810, Consolidation. The Company determined that ENvue was considered to be a VIE as it did not have sufficient equity to finance its activities without additional subordinated financial support. The Company acquired all of the outstanding shares of ENvue and, therefore, is the sole equity holder and primary beneficiary. The Company has the obligation to the absorb losses and right to receive the benefits of ENvue, and the power to direct the activities that most significantly affect the economic performance of ENvue. Therefore, the Company is the primary beneficiary. Further, the Company concluded that ENvue qualified as a business and accounted for the transaction as the acquisition of a business in accordance with ASC 805. As the primary beneficiary, the Company was the acquirer in the transaction. In the second quarter of 2025, during the measurement period, the Company revised certain aspects of the purchase price allocation. As a result, goodwill and additional paid-in capital increased to reflect updated information available within the measurement period, in accordance with ASC 805, Business Combinations.
For additional details regarding the Series X Preferred Stock, refer to note 6 – stockholders’ equity.
The
acquisition date fair value of the consideration transferred amounted to $
Acquisition-related
expenses of approximately $
| 10 |
The transaction was accounted for as a business combination in accordance with ASC No. 805, “Business Combinations.” The total purchase price was preliminarily allocated using information currently available to the Company and may be subject to change as additional information is received during the respective measurement period, up to one year from the acquisition date. Preliminary allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date is as follows:
| Purchase price: | ||||
| Common Stock and Pre-Funded Warrants consideration | $ | |||
| Series X Preferred Stock consideration | ||||
| Total purchase price | $ | |||
| Allocated tangible assets: | ||||
| Net working capital | $ | ( | ) | |
| Inventory | ||||
| Property and equipment | ||||
| Right-of-use assets | ||||
| Lease liability | ( | ) | ||
| Total allocated tangible assets | $ | ( | ) | |
| Purchase price allocated to intangible assets | ||||
| Tradename and trademarks | $ | |||
| Proprietary technology | ||||
| Customer relationships | ||||
| Goodwill (unallocated intangible value) | $ | |||
The
excess purchase price has been recorded as “goodwill” in the amount of $
Supplemental Unaudited Pro Forma Information
Following are the supplemental consolidated financial results of the Company, NanoVibronix and ENvue on an unaudited pro forma basis, as if the acquisitions had been consummated as of the beginning of the fiscal year 2025 (i.e., January 1, 2025).
| Nine Months Ended | ||||
| September 30, 2025 | ||||
| Net revenue | $ | |||
| Net loss | $ | ( | ) | |
The unaudited pro forma financial information below combines the historical results of the Company with the historical results of ENvue for the nine months ended September 30, 2025, as if the Merger had occurred on January 1, 2025.
The unaudited pro forma financial information presented is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the Merger been completed at the beginning of fiscal year 2025, nor is it indicative of the future operating results of the combined company. The pro forma results includes and adjustment related to purchase accounting, primarily amortization of acquisition-related intangible assets.
NOTE 5 – INVENTORY
Inventory consists of the following components:
| September 30, 2025 | December 31, 2025 | |||||||
| Raw materials | $ | $ | 391 | |||||
| Finished goods | 1,800 | |||||||
| Total inventory | $ | $ | 2,191 |
|||||
Inventory
write-down charged to the cost of sales amounted to $
The Company identified certain inaccuracies in its 510(k) application for the PainShield MD Plus product and on August
19, 2025 submitted a request to the U.S. Food and Drug Administration (FDA) to withdraw the clearance. While the Company is unaware of
any safety issues related to the PainShield MD Plus product, it has decided to halt future sales. An appropriate inventory allowance was
recorded for the impact of halt in sales in the amount of $
NOTE 6 - STOCKHOLDERS’ EQUITY
Common Stock
The common stock confers upon the holders the right to receive notice to participate and vote in general meetings of the Company, and the right to receive dividends, if declared, and to participate in the distribution of the surplus assets and funds of the Company in the event of liquidation, dissolution or winding up of the Company.
| 11 |
Reverse stock splits
On
March 13, 2025, the Company effected a
As a result of the March 2025 Reverse Stock Split, every eleven () shares of issued and outstanding Common Stock were automatically combined into one (1) issued and outstanding share of Common Stock, without any change in the par value per share.
As a result of the August 2025 Reverse Stock Split, every ten () shares of issued and outstanding Common Stock were automatically combined into one (1) issued and outstanding share of Common Stock, without any change in the par value per share. No fractional shares were issued as a result of the Reverse Stock Splits. In connection with the August 2025 Reverse Stock Split, the Company issued an aggregate of additional shares to round up fractional shares to whole shares.
Any fractional shares that would otherwise have resulted from the Reverse Stock Splits were rounded up to the next whole number. The number of authorized shares of common stock under the Company’s Amended and Restated Certificate of Incorporation, as amended, remained unchanged at shares.
All references in this Quarterly Report to the number of shares, price per share and weighted average number of shares of common stock outstanding prior to the Reverse Stock Splits have been adjusted to reflect the Reverse Stock Splits on a retroactive basis, unless otherwise noted.
Underwritten Public Offering, Series G Convertible Preferred Stock
On
May 15, 2025, the Company announced the closing of an underwritten public offering (the “2025 Underwritten Offering”) of
shares of the Company’s Series G Convertible Preferred Stock (“Series G Preferred Stock”), with a par value
$ per share, and liability classified warrants to purchase up to
On May 15, 2025, prior to the closing of the 2025 Underwritten Offering, the Company filed the Certificate of Preferences, Rights and Limitations of the Series G Convertible Preferred Stock (the “Series G Certificate of Designations”) with the Secretary of State of the State of Delaware, which became effective upon filing. Pursuant to the terms of the Series G Certificate of Designations, the holders of the Series G Preferred Stock are entitled to receive cumulative dividends at the rate per share of % per annum of the stated value per share until the fifth anniversary of the date of issuance of the Series G Preferred Stock, which such dividends may be paid, at the Company’s option, in up to an aggregate of shares of common stock. In addition, in accordance with the Series G Certificate of Designations, accrued and unpaid dividends are payable upon the conversion of the Series G Preferred Stock prior to the fifth anniversary of issuance, upon any liquidation, dissolution, or winding up of the Company, and in connection with certain fundamental transactions. The five year % per annum dividend will be paid upon conversion of the Series G Preferred Stock irrespective of the timing of conversion such that upon conversion, the conversion price will incorporate the five-year % dividend.
The
aggregate net proceeds of the 2025 Underwritten Offering were approximately $
Conversion of Series G Convertible Preferred Stock
Between May 16, 2025, and July 1, 2025, a majority of the Series G Preferred Stockholders exercised their optional conversion right, converting shares of Series G Preferred Stock into shares of Common Stock and an additional shares of Common Stock for the make-whole dividend. As of September 30, 2025, there were outstanding shares of Series G Preferred Stock.
Series X Non-Voting Convertible Preferred Stock
On February 14, 2025, in connection with the Merger (see Note 4), the Company issued shares of Series X Non-Voting Convertible Preferred Stock (the “Series X Preferred Stock”) to the holders of Predecessor ENvue. In addition, the Company issued shares of Series X Preferred Stock to a consulting firm for services rendered in facilitating the Merger, resulting in a total of shares of Series X Preferred Stock outstanding after the Merger.
The Merger was consummated and completed on February 14, 2025.
After
giving effect to the Merger, pursuant to the terms and conditions of the Merger Agreement: (i)
Each share of Series X Preferred Stock has a stated value of $ and ranks senior to the Company’s common stock with respect to dividend rights and rights upon liquidation, dissolution or winding up. The Series X Preferred Stock is not subject to mandatory redemption and may not be redeemed at the option of the Company or the holder.
Holders
shall be entitled to receive, and the Company shall pay, dividends on shares of Series X Preferred Stock, based on the Stated Value,
at a rate of eight percent (8%) per annum, commencing on the three (3) month anniversary of the Original Issue Date (as defined in the
Series X Certificate of Designations) until the date the Company obtains the Stockholder Approval. Such dividends can be paid in the
form of cash or additional issuances of shares of Series X Preferred Stock based on the Stated Value, with such type of payment determined
in the sole discretion of the Company, and accrue and be compounded daily on the basis of a 360-day year and twelve (12) 30-day months
and shall be paid the earlier of: (i) promptly after conversion of the Series X Preferred Stock or (ii) quarterly starting on the six
(6) month anniversary of the Original Issue Date. For the three and nine-month period ended September 30, 2025, the Company recorded
$
On
May 12, 2025, the Company filed the Series X Certificate of Amendment with the Secretary of State of the State of Delaware, thereby amending
the Series X Certificate of Designations. The Series X Certificate of Amendment became effective with the Secretary of State of the State
of Delaware upon filing. The amendment decreased the Series X Preferred Stock conversion price from $
The
Company concluded that the modification of the Series X Preferred stock should be accounted for as an extinguishment. As such, the difference
between the fair value of the modified Series X Preferred Stock and their carrying amount was accounted for as a deemed contribution
in the amount of $
In
conjunction with the July Purchase Agreement (as defined below), on July 22, 2025, the Company repurchased
outstanding shares of its Series X Preferred Stock from one investor for $
| 12 |
Private Placement, Series H Convertible Preferred Stock
On
July 18, 2025, the Company entered into a Securities Purchase Agreement (the “July 2025 Purchase Agreement”) with a certain
institutional investor (the “July 2025 Investor”), pursuant to which it agreed to sell to the Investor (i) an aggregate of
shares of the Company’s newly-designated Series H Convertible Preferred Stock (“Series H Preferred Stock”), and
(ii) warrants to acquire up to an aggregate of
Pursuant
to the terms of the July 2025 Purchase Agreement, the Company also agreed to issue shares of Series H Preferred Stock and warrants
to purchase up to
The
Initial Closing and occurred on July 22, 2025, and the Second Closing occurred October 30, 2025. The aggregate net proceeds from the
July 2025 Private Placement were $
Holders
of the Series H Preferred Stock shall be entitled to receive cumulative dividends at the rate per share (as a percentage of the stated
value per share) of
As a result of the September 2025 registered
direct offering (see below), the conversion price of the Series H Preferred Stock was reduced to $
September 2025 Registered Direct Offering
On
September 16, 2025, the Company entered into a securities purchase agreement with a single institutional investor, pursuant to which
the Company issued and sold (i) shares of common stock and (ii) prefunded warrants to purchase up to shares of common
stock (the “September 2025 Pre-Funded Warrants”) pursuant to an effective shelf registration statement on Form S-3 (the “September
2025 Offering”). The offering price was $ per share of common stock and $ per September 2025 Pre-Funded Warrant, which
is the price of each share of common stock sold in the September 2025 Offering, minus the $
Share-based compensation
On December 19, 2024, stockholders approved the NanoVibronix, Inc. 2024 Long-Term Incentive Plan (the “2024 Plan”), as a successor to the Nanovibronix 2014 Long-Term Incentive Plan, which was adopted by the Board on November 6, 2023. As of December 31, 2024, under the 2024 Plan, shares of our common stock were reserved for issuance. On March 14, 2025, the Company effected the 2025 Reverse Stock Split. Consequently, the number of shares of common stock of the Company reserved for issuance pursuant to awards under the 2024 Plan was reduced to shares. As of September 30, 2025, there were shares of common stock available to be issued under the plan.
During the three- and nine-month periods ended September 30, 2025, employee options were exercised, options were granted and options expired.
The options granted during the nine months ended September 30, 2024, vested immediately and were recorded at fair values of approximately $. The contractual term for granted options is years. During the three- and nine-month periods ended September 30, 2024, stock-based compensation expense related to these options were approximately $ and $, respectively.
Shares Under Options | Weighted Average Exercise Price per Share | Weighted Average Remaining Life (Years) | ||||||||||
| Outstanding – December 31, 2024 | ||||||||||||
| Granted | - | |||||||||||
| Exercised | - | |||||||||||
| Expired | ( | ) | - | |||||||||
| Outstanding – September 30, 2025 | ||||||||||||
| 13 |
Warrants
On
August 30, 2023, the Company issued (a) Pre-Funded Warrants to purchase up to
In
connection with the August 2023 Private Placement, the Company issued placement agent warrants to H.C. Wainwright & Co., LLC, or
its designees, as compensation in connection with the Private Placement, to purchase up to an aggregate of
Warrant Exchange Agreement
On
January 7, 2025, the Company entered into a securities exchange agreement (the “Exchange Agreement”) with a certain institutional
investor pursuant to which the Company agreed to issue an aggregate of (i) shares of common stock (the “3(a)(9) Shares”),
(ii) a warrant to purchase up to
Subsequent to the Exchange, the holder of the January 2025 Pre-Funded Warrant (i) exercised the January 2025 Pre-Funded Warrant in full on a cashless basis for an aggregate of shares of common stock and (ii) exercised the January 2025 Warrant in full on a cashless basis for an aggregate of shares of common stock.
As
of September 30, 2025, a total of
| 14 |
NOTE 7 – WARRANT LIABILITY
Based on an evaluation, pursuant to ASC 815-40, the May 2025 Warrants and July 2025 Warrants (see note 6) do not meet all the equity classification criteria and therefore were determined to be classified as liabilities measured at fair value through earnings. The Company utilized the Black Scholes Model to calculate the value of the May 2025 Warrants and July 2025 Warrants issued during the three months ended September 30, 2025.
The
fair value of the May 2025 Warrants and Representative’s Warrants of $
The
fair value of the July 2025 Warrants of $
The
Company recognized changes in the fair value of the warrant liability of $
Changes in the warrant liability balance
Below is the change in the warrant liability balance for the nine months ended September 30, 2025:
| Balance as of December 31, 2024 | $ | |||
| Issuance | ||||
| Change in fair value | ( | ) | ||
| Balance as of September 30, 2025 | $ |
See note 12 for assets and liabilities which are measured at fair value on a recurring basis by level within the fair value hierarchy.
NOTE 8 – CONVERTIBLE DEBENTURE
On
February 13, 2025, the Company entered into a Securities Purchase Agreement (the “PIPE Purchase Agreement”) with an institutional
investor (the “February 2025 Investor”), pursuant to which the Company sold in a private placement senior convertible debenture
(the “Debenture”) due the earlier of (i) the date that is the 30-day anniversary of the effective date of stockholder approval
of the issuance of the shares of common stock upon the conversion of the debentures and (ii) November 13, 2025 (the date that is nine
months following the date of issuance of the Debenture) (“Maturity Date”), having an aggregate principal amount (the “Principal
Amount”) of $
On
March 26, 2025, the Company amended and restated the Debenture (the “A&R Debenture”) to increase the Principal Amount
to $
On
the Maturity Date, the Company shall pay the February 2025 Investor in cash or, at the option of the February 2025 Investor, in the
form of conversion shares, or a combination thereof, the entire outstanding Principal Amount of the A&R Debenture, together with
accrued and unpaid interest thereon, the applicable exit fee and any other amounts due thereunder. Following the receipt of
Debenture Stockholder Approval, the A&R Debenture shall be convertible, in whole or in part, into shares of common stock, at the
option of the Investor, at the initial conversion price of $
Due to certain embedded features within the A&R Debenture, the Company elected to account for the A&R Debenture and all the embedded features at fair value at inception. Subsequent changes in fair value are recorded in financial income (expense), net in the consolidated statements of operations. As a result of electing the fair value option, direct costs and fees related to the Debenture were expensed as incurred.
For
the three and nine months ended September 30, 2025, the Company recorded a loss of $
The following table presents the change in the balance of the A&R Debenture for periods identified:
| Nine Months Ended September 30, 2025 | ||||
| Balance, beginning of period | $ | |||
| Debenture issued | ||||
| Mark to market | ||||
| Payments on debenture | ( | ) | ||
| Balance, end of period | ||||
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NOTE 9 – LOANS
ENvue Consolidated Secured Note
On
January 17, 2025, ENvue issued a Consolidated Secured Note (as amended, the “Alpha Note”) in the aggregate principal amount
of $
For
the nine months ended September 30, 2025, the Company recognized $
| Nine Months Ended | ||||
| September 30, 2025 | ||||
| Balance, beginning of period | $ | |||
| Amortized discount | ||||
| Payments on note | ( | ) | ||
| Balance, end of period | $ | |||
April 2025 Promissory Note and Guaranty
On
April 11, 2025, ENvue issued a promissory note (the “April Note”) to Alpha (the “Lender”) in the principal amount
of $
Pursuant to the terms of the April Note, commencing on the date of the issuance and sale of any shares common stock or Common Stock Equivalents (as defined in the April Note) by us, the Lender may require ENvue to redeem all or a portion of the April Note with the proceeds of such issuance and sale (the “Redemption Right”). The Redemption Right may be redeemed at any time after date of such issuance and sale by the Lender providing to ENvue written notice specifying the principal amount of the Note to be redeemed (the “Redemption Amount”), and the Redemption Amount shall be due and payable by ENvue on the second business day after the date of such notice.
The April Note additionally provides for certain customary events of default which upon occurrence, the Lender may, at its option, declare the entire April Note Principal Amount together with all accrued interest and all other amounts payable under the April Note immediately due and payable, provided however, that if a bankruptcy event occurs, the April Note Principal Amount and accrued interest on the April Note shall become immediately due and payable without any notice, declaration or other act on the part of the Lender.
In connection with ENvue’s issuance of the April Note, on April 11, 2025, we entered into that certain Guaranty (the “Guaranty”) in favor of the Lender, pursuant to which we have agreed to guarantee to the Lender the payment of all obligations and liabilities of ENvue under the April Note, including, without limitation, for principal, interest and any other amounts due and payable by ENvue under the April Note (the “Guaranteed Obligations”). Upon the occurrence of an Event of Default (as defined in the April Note), the Guaranteed Obligations shall be deemed immediately due and payable at the election of Lender and we shall pay on demand the Guaranteed Obligations to Lender.
On May 19, 2025, the Company paid the April Note in full using proceeds from the 2025 Underwritten Offering, pursuant to the terms of the April Note.
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Basic net loss per common share (“Basic EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. All outstanding stock options and warrants for the three and nine months ended September 30, 2025, and 2024 have been excluded from the calculation of the diluted net loss per share because all such securities are anti-dilutive for all periods presented, except for prefunded warrants.
| Three Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Numerator: | ||||||||||||||||
| Net income (loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Dividend on Series X Convertible Preferred | ( | ) | ( | ) | ||||||||||||
| Dividend on Series H Convertible Preferred | ( | ) | ( | ) | ||||||||||||
| Deemed dividend for down round on Series H (See note 6) | ( | ) | ( | ) | ||||||||||||
| Deemed contribution on repurchase of Preferred Series X | ||||||||||||||||
| Deemed contribution (See note 6) | ||||||||||||||||
| Net loss available to common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| September 30, 2025 | September 30, 2024 | |||||||
| Stock options – employee and non-employee | $ | $ | ||||||
| Warrants | ||||||||
| Total | $ | $ | ||||||
The diluted loss per share equals basic loss per share in the three and nine months ended September 30, 2025, and 2024 because the Company had a net loss and the impact of the assumed exercise of stock options and the vesting of restricted stock would have been anti-dilutive.
NOTE 11 – SEGMENT INFORMATION
Operating segments are defined as components of an entity for which separate financial information is available and that is regularly provided to the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented by operating segment in making operating decisions, allocating resources, and evaluating financial performance.
The
Company conducted the business through
The Company’s chief executive officer is its chief operating decision maker (CODM), who allocates resources to and assesses the performance of each operating segment using information about the operating segment’s loss from operations.
Goodwill and Assets
| NanoVibronix | ENvue | Corporate | Total | |||||||||||||
| Balance sheet at September 30, 2025: | ||||||||||||||||
| Goodwill | $ | $ | $ | - | $ | |||||||||||
| Assets | $ | $ | $ | $ | ||||||||||||
| Balance sheet at December 31, 2024: | ||||||||||||||||
| Goodwill | - | |||||||||||||||
| Assets | $ | $ | $ | $ | ||||||||||||
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Segment operating results
| Nine months ended September 30, 2025: | NanoVibronix | ENvue | Corporate | Total | ||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ||||||||||||||||
| Research and development | ||||||||||||||||
| Selling and marketing | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Nine months ended September 30, 2024: | NanoVibronix | ENvue | Corporate | Total | ||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ||||||||||||||||
| Research and development | ||||||||||||||||
| Selling and marketing | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating loss | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
| Three months ended September 30, 2025: | NanoVibronix | ENvue | Corporate | Total | ||||||||||||
| Revenues | $ | | $ | $ | $ | |||||||||||
| Cost of revenues | ||||||||||||||||
| Research and development | ||||||||||||||||
| Selling and marketing | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Three months ended September 30, 2024: | NanoVibronix | ENvue | Corporate | Total | ||||||||||||
| Revenues | $ | | $ | $ | $ | |||||||||||
| Cost of revenues | ||||||||||||||||
| Research and development | ||||||||||||||||
| Selling and marketing | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating loss | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
Geographic Information and Major Customer Data
The following is a summary of revenues within geographic areas:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| United States | $ | $ | $ | $ | ||||||||||||
| Europe | ||||||||||||||||
| Australia/New Zealand | ||||||||||||||||
| Other | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
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For
the three and nine months ended September 30, 2025, the Company generated approximately $
NOTE 12 – FAIR VALUE
Financial Liabilities Measured at Fair Value on a Recurring Basis
The fair value accounting standards define fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is determined based upon assumptions that market participants would use in pricing an asset or liability. Fair value measurements are rated on a three-tier hierarchy as follows:
| ● | Level 1 inputs: Quoted prices (unadjusted) for identical assets or liabilities in active markets; |
| ● | Level 2 inputs: Inputs, other than quoted prices included in Level 1, that are observable either directly or indirectly; and |
| ● | Level 3 inputs: Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions. |
There were no transfers between Level 3 during the nine months ended September 30, 2025, and 2024.
The following table presents changes in Level 3 asset and liability measured at fair value for the nine months ended September 30, 2025:
| Warrants Liability | ||||
| Balance – December 31, 2024 | $ | |||
| Issuance – warrant liability | ||||
| Fair Value adjustments – warrant liability | ( | ) | ||
| Balance – September 30, 2025 | $ | |||
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The following table sets forth the Company’s assets and liabilities which are measured at fair value on a recurring basis by level within the fair value hierarchy:
| Fair Value Measurements as of September 30, 2025 | ||||||||||||||||
| Level I | Level II | Level III | Total | |||||||||||||
| Warrant liability | $ | |||||||||||||||
NOTE 13 - COMMITMENTS AND CONTINGENCIES
Pending and settled litigation
On
February 26, 2021, Protrade Systems, Inc. (“Protrade”) filed a Request for Arbitration (the “Request”) with the
International Court of Arbitration (the “ICA”) of the International Chamber of Commerce alleging the Company is in breach
of an Exclusive Distribution Agreement dated March 7, 2019 (the “Exclusive Distribution Agreement”) between Protrade and
the Company. Protrade alleges, in part, that the Company has breached the Exclusive Distribution Agreement by discontinuing the manufacture
of the DV0057 Painshield MD device in favor of an updated 10-100-001 Painshield MD device. Protrade claims damages estimated at $
On
March 15, 2022, the arbitrator issued a final award which determined that (i) the Company had the right to terminate the Exclusive Distribution
Agreement; (ii) the Company did not breach the duty of good faith and fair dealing with regard to the Exclusive Distribution Agreement;
and (iii) the Company did not breach any confidentiality obligations to Protrade. Nevertheless, the arbitrator determined that the Company
did not comply with the obligation to supply Protrade with a year’s supply of patches, and awarded Protrade $
On July 22, 2022, the Company filed a cross-motion seeking to vacate arbitration award on the grounds that the arbitrator exceeded her authority, that the award was procured by fraud, and that the arbitrator failed to follow procedures established by New York law. In particular, the Company averred in its motion that Protrade’s witness made false statements in arbitration, and that the arbitrator resolved a claim that was never raised by Protrade and that has no factual basis.
On October 3, 2022, the court issued a decision granting Protrade its petition to confirm the award and denying the cross-motion.
On November 9, 2022, the Company filed a motion to re-argue and renew its cross-motion to vacate the arbitration decision based on newer information that was not available during the initial hearing. On the same day, the Company also filed a notice of appeal with the Appellate Division, Second Department. On March 21, 2023, the court denied the motion to re-argue and renew.
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On July 10, 2023, the Company filed its appeal with the Appellate Division, Second Department. That appeal is now fully briefed. In February 2025, the Second Department informed counsel for the Company that the Second Department was beginning to process the appeal for calendaring with oral arguments to start by the end of May 2025.
On May 30, 2025, the oral arguments were presented to the Appellate Court. A decision is expected at undetermined date later this year.
As
of September 30, 2025, the Company accrued the amount of the arbitration award to Protrade of approximately $
NOTE 14 – RELATED PARTY TRANSACTION
Aurora Cassirer served as a member of the Company’s board of directors until her resignation effective April 1, 2025. During her tenure, Ms. Cassirer also served on the Audit Committee, the Nominating and Corporate Governance Committee, and the Compensation Committee. Her resignation was not in connection with any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices, or any other matter. Ms. Cassirer is an attorney but did not provide any legal services or legal advice to the Company during the period that she was a member of the board.
The
firm FisherBroyles LLP handled all of the Company’s Protrade litigation and appeals through December 31, 2024. For the year ended
December 31, 2024, the Company was not billed and did not pay any legal fees to FisherBroyles. On January 1, 2024, Ms. Cassirer and the
lawyers responsible for handling the Company’s Protrade litigation left FisherBroyles to join the firm Pierson Ferdinand LLP, which
since that date has currently been the sole firm handling all of the Company’s Protrade litigation and appeals. For the nine months
ended September 30, 2025, and 2024, Pierson Ferdinand was paid $
On
January 17, 2025, ENvue issued the Alpha Note in the aggregate principal amount of $
On
February 13, 2025, the Company entered into a PIPE Purchase Agreement with Alpha, pursuant to which the Company sold in a private placement
Debenture due the earlier of (i) the date that is the 30-day anniversary of the effective date of stockholder approval of the issuance
of the shares of common stock upon the conversion of the debentures and (ii) November 13, 2025 (the date that is nine months following
the date of issuance of the Debenture), having the Principal Amount of $
On February 14, 2025, pursuant to the terms of the Merger Agreement and in connection with the Merger and the appointment of Doron Besser and Zeev Rotstein (together, the “Indemnitees”) to the Board of Directors, the Company and each of the Indemnitees entered into the Company’s standard form of indemnification agreement, which such indemnification agreements provide that the Company shall indemnify the Indemnitees to the fullest extent of permitted by applicable law in effect on the date hereof or as amended to increase the scope of permitted indemnification, against expenses, losses, liabilities, judgments, fines, penalties and amounts paid in settlement (including all interest, taxes, assessments and other charges in connection therewith) incurred by Indemnitee or on Indemnitee’s behalf in connection with any proceeding in any way connected with, resulting from or relating to Indemnitee’s corporate status.
On
April 11, 2025, ENvue issued the April Note to Alpha in the principal amount of $
On
July 18, 2025, the Company entered into the July 2025 Purchase Agreement pursuant to which it agreed to sell to the July 2025 Investor
(i) an aggregate of shares of the Company’s newly-designated Series H Preferred Stock, initially convertible into up to
shares of common stock at an adjusted conversion price of $
Pursuant
to the terms of the July 2025 Purchase Agreement, the Company has also issued shares of Series H Preferred Stock with a total stated
value of $
On September 16, 2025, the Company entered into a securities purchase agreement with a single institutional investor, pursuant to which the Company agreed to issue and sell (i) shares of the Company’s common stock, and (ii) the September 2025 Pre-Funded Warrants to purchase up to shares of common stock in the September 2025 Offering —see note 6.
NOTE 15 - SUBSEQUENT EVENTS
On October 30, 2025, the Second Closing of the July 2025 Private Placement was consummated—see note 6.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the results of operations and financial condition of NanoVibronix, Inc. and its subsidiaries (collectively, the “Company”) as of September 30, 2025, should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”). This discussion and analysis should be read in conjunction with the Company’s audited financial statements and related disclosures as of December 31, 2024, and for the year then ended, which are included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on September 30, 2025. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us,” “we,” “our,” and similar terms refer to the Company and its subsidiaries.
Overview
We were organized as a Delaware corporation in October 2003. On February 14, 2025, we completed the Merger pursuant to the Merger Agreement, as further described below. Following the consummation of the Merger, NanoVibronix will conduct its operations through its two wholly-owned subsidiaries: (i) NanoVibronix Ltd., a private company incorporated under the laws of the State of Israel (“Nano OpCo”) and (ii) ENvue Medical Holdings LLC, a Delaware limited liability company (together with its respective subsidiaries, “ENvue”). Nano OpCo focuses on non-invasive biological response-activating devices that target biofilm prevention, pain therapy, and wound healing and can be administered at home, without the assistance of medical professionals. ENvue is a medical device company engaged in the research, development, production, marketing, and sale of medical devices in the field of enteral feeding and are in the initial stage of commercializing our products.
Agreement and Plan of Merger
On February 14, 2025, pursuant to the terms of that certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of February 14, 2025, by and among us, NVEH Merger Sub I, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“First Merger Sub”), NVEH Merger Sub II, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Second Merger Sub”), and ENvue Medical Holdings, Corp. (“Predecessor ENvue” or “ENvue”), the Company and Predecessor ENvue effected (i) a merger of First Merger Sub with and into Predecessor ENvue, with the First Merger Sub ceasing to exist and Predecessor ENvue becoming a wholly-owned subsidiary the Company and (ii) the merger of Predecessor ENvue with and into Second Merger Sub (the “Second Merger” and, together with the First Merger, the “ENvue Merger”), with Second Merger Sub being the surviving entity of the Second Merger (“Surviving Entity”). At the effective time of the Second Merger, the certificate of formation of the Surviving Entity was amended and restated to, among other things, to change the name of the Surviving Entity to “ENvue Medical Holdings LLC.” In connection with the Merger Agreement, we issued (i) 3,318 shares of common stock (the “Merger Shares”), which such number of shares represented no more than 4.9% of the outstanding shares of common stock as of immediately before the First Effective Time and (ii) Pre-Funded Warrants to purchase up to 12,526 shares of our common stock (the “Merger Pre-Funded Warrants”) at an exercise price of $0.001 per share, and (iii) 57,720 shares of Series X Non-Voting Convertible Preferred Stock (the “Series X Preferred Stock”).
Recent Developments
September 2025 Registered Direct Offering
On September 16, 2025, the Company entered into a securities purchase agreement with a single institutional investor, pursuant to which the Company agreed to issue and sell (i) 74,114 shares common stock and (ii) prefunded warrants to purchase up to 217,090 shares of common stock (the “September 2025 Pre-Funded Warrants”) in a registered direct offering pursuant to an effective shelf registration statement on Form S-3 (the “September 2025 Offering”). The offering price was $7.01 per share of common stock and $7.01 per September 2025 Pre-Funded Warrant, which is the price of each share of common stock sold in the September 2025 Offering, minus the $0.001 exercise price per September 2025 Pre-Funded Warrant. The net proceeds from the September 2025 Offering were approximately $1.88 million, after deducting placement agent fees and other offering expenses of $163.
August 2025 Reverse Stock Split
On August 8, 2025, we filed a Certificate of Amendment to our Certificate of Incorporation with the Secretary of State of Delaware to effect a 1-for-10 reverse stock split of the shares of our common stock, par value $0.001 per share, either issued and outstanding or held by us as treasury stock, effective as of 4:05 p.m. (Delaware time) on August 11, 2025 (the “August 2025 Reverse Stock Split”). All common stock share and per share amounts in this Quarterly Report have been adjusted to give effect to the August 2025 Reverse Stock Split and the 1-for-11 reverse stock split of our common stock effectuated in March 2025, unless otherwise stated.
Private Placement of Series H Preferred Stock
On July 18, 2025, we entered into a Securities Purchase Agreement (the “Series H Purchase Agreement”) with a certain institutional investor (the “Series H Investor”), pursuant to which it agreed to sell to the Series H Investor (i) an aggregate of 8,889 shares of our newly-designated Series H Convertible Preferred Stock, with a par value of $0.001 per share and a stated value of $1,000 per share (the “Stated Value”), initially convertible into up to 880,099 shares of our common stock, at an adjusted conversion price of $7.01 per share (the “Series H Preferred Stock”) pursuant to the Certificate of Preferences, Rights and Limitations of the Series H Convertible Preferred Stock (the “Series H Certificate of Designations”) and (ii) warrants to acquire up to an aggregate of 467,836 shares of common stock (the “Series H Warrants”) at an exercise price of $22.50 (such closing, the “Series H Initial Closing”).
Pursuant to the terms of the Series H Purchase Agreement, we have also agreed to issue 2,222 shares of Series H Preferred Stock with a total stated value of $2,222 thousand and warrants to purchase up to 116,960 shares of common stock at an exercise price of $22.50 in a second closing which such second closing was consummated on October 30, 2025 (the “Second Closing”). Additionally, pursuant to the terms of the Series H Purchase Agreement, we have agreed that during the period ending 36 months from the effective date of the registration statement (the “Resale Registration Statement”) registering the resale of the shares of common stock underlying the Series H Preferred Stock and the Series H Warrants, the Series H Investor shall have the right, but no obligation, upon notice to us from time to time, to purchase up to an aggregate of $44,000 thousand stated value (representing 44,000 shares of Series H Preferred Stock and $39,600 thousand of subscription amount) of additional Series H Preferred Stock, which shall have identical terms to the Series H Preferred Stock issued at the Series H Initial Closing, except that the initial conversion price of such additional shares of Series H Preferred Stock shall be equal to 85% of the arithmetic average of the three (3) lowest VWAPs during the ten trading days prior to the date of the Series H Investor’s exercise of such right.
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The Series H Initial Closing occurred on July 22, 2025. The aggregate gross proceeds from the Series H Initial Closing were $8 million, prior to deducting placement agent fees and other offering expenses payable by us.
Among other covenants, the Series H Purchase Agreement requires us to hold a meeting of our stockholders at the earliest practicable date to seek approval (the “Stockholder Approval”) under Nasdaq Stock Market Rule 5635(d) for the issuance of shares of common stock in excess of 19.99% of our issued and outstanding shares of common stock at prices below the “Minimum Price” (as defined in Rule 5635 of the Rules of the Nasdaq Stock Market) on the date of the Series H Purchase Agreement pursuant to the terms of the Series H Preferred Stock and the applicable Series H Warrants and shall hold a meeting every four months thereafter if Stockholder Approval to seek Stockholder Approval until the earlier of the date Stockholder Approval is obtained or the Preferred Stock is no longer outstanding. Additionally, pursuant to the terms of the Series H Purchase Agreement, we have also agreed to file the Resale Registration Statement as soon as reasonably practicable.
Nasdaq Minimum Stockholder’s Bid Price Requirement and Minimum Stockholder’s Equity Requirement
As previously disclosed, on April 10, 2024, we received a letter (the “Letter”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC indicating that, based upon the closing bid price of our Common Stock for the 30 consecutive business days between February 27, 2024 and April 9, 2024, we did not meet the minimum bid price of $1.00 per share required for continued listing on Nasdaq pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”). The Letter also indicated that we were provided with a compliance period of 180 calendar days, or until October 7, 2024, in which to regain compliance with the Bid Price Rule pursuant to Nasdaq Listing Rule 5810(c)(3)(A). We did not regain compliance with the Bid Price Rule by October 7, 2024, and on October 8, 2024, Nasdaq notified us that our securities were subject to delisting from Nasdaq unless we timely requested a hearing before the Nasdaq Hearings Panel (the “Panel”). We subsequently timely requested a hearing before the Panel, which was held on December 5, 2024 (the “Hearing”).
On November 19, 2024, we received an additional deficiency notice from the Staff indicating that we no longer satisfied the $2.5 million stockholders’ equity requirement set forth in Nasdaq Listing Rule 5550(b)(1) (the “Equity Rule”) for continued listing on Nasdaq. The Staff indicated that our non-compliance with the Equity Rule would be considered by the Panel at the Hearing and could serve as an additional basis for delisting of our securities from Nasdaq.
On December 26, 2024, we received a decision letter (the “Decision Letter”) from the Panel granting a limited extension of time for us to demonstrate compliance with the Bid Price Rule and the Equity Rule for continued listing on Nasdaq, subject to the following conditions: (i) on or before February 27, 2025, we will have obtained stockholder approval to effect a reverse stock split; (ii) on or before March 31, 2025, we shall have effected a reverse stock split and, thereafter, maintain a $1.00 closing bid price of our common stock for a minimum of ten consecutive trading days; (iii) on or before March 31, 2025, we are required to demonstrate compliance with the Equity Rule by filing public disclosure with the SEC and demonstrate long-term compliance with the Equity Rule; and (iv) on or before March 31, 2025, we are required to demonstrate compliance with all continued listing requirements for Nasdaq. On February 24, 2025, we obtained approval from our stockholders to file a certificate of amendment to our Certificate of Incorporation to effectuate the Reverse Stock Split, among others, and on March 13, 2025, the Reverse Stock Split became effective.
On April 9, 2025, we received a letter (the “April Letter”) from the Staff notifying us that we had demonstrated compliance with the Bid Price Rule and the Equity Rule as required by the Panel pursuant to the Decision Letter.
Pursuant to the April Letter, we are subject to a mandatory panel monitor for a period of one year from the date of the April Letter. If, within that one-year monitoring period, Staff finds us again out of compliance with the Equity Rule that was subject of the exception, notwithstanding Rule 5810(c)(2), we will not be permitted to provide the Staff with a plan of compliance with respect to that deficiency and Staff will not be permitted to grant additional time for us to regain compliance with respect to that deficiency, nor will the company be afforded an applicable cure or compliance period pursuant to Rule 5810(c)(3). Instead, Staff will issue a Delist Determination Letter and we will have an opportunity to request a new hearing with the Panel or a newly convened Hearings Panel if the initial Panel is unavailable.
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Critical Accounting Policies and Significant Estimates
This management’s discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. In accordance with U.S. GAAP, we base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Actual results may differ from these estimates if conditions differ from our assumptions. While our significant accounting policies are more fully described in Note 3 – Summary of Significant Accounting Policies in the “Notes to Financial Statements”, we believe the following accounting policies are critical to the process of making significant estimates in preparation of our financial statements.
Inventory
Inventories are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Cost is determined using the “first-in, first-out” method.
Inventory write-offs are provided to cover risks arising from slow-moving items or technological obsolescence. The Company periodically evaluates the quantities on hand relative to current and historical selling prices and historical and projected sales volume. Based on this evaluation, provisions are made when required to write-down inventory to its net market value.
Impairment of long-lived assets
Management reviews for impairment whenever events or changes in circumstances indicate that the carrying amount of long-lived assets may not be recoverable under the provisions of accounting for the impairment of long-lived assets. If it is determined that an impairment loss has occurred based upon expected future cash flows, the loss is recognized in the Consolidated Statements of Operations.
Goodwill impairment
Management also evaluates goodwill for impairment at least annually, or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable. Any impairment loss is recognized in the Consolidated Statements of Operations.
Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance. The assessment considers whether the warrants are freestanding financial instruments, meet the definition of a liability under ASC 480, and meet all of the requirements for equity classification, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent reporting period end date while the warrants are outstanding. Warrants that meet all the criteria for equity classification, are required to be recorded as a component of additional paid-in capital. Warrants that do not meet all the criteria for equity classification, are required to be recorded as liabilities at their initial fair value on the date of issuance and remeasured to fair value at each balance sheet date thereafter. The liability-classified warrants are recorded under non-current liabilities. Changes in the estimated fair value of the warrants are recognized in Financial expenses or income in the unaudited interim condensed consolidated statements of operations.
Revenue recognition
Revenues from product and services are recognized in accordance with ASC 606 “Revenue Recognition.” Five basic steps must be followed before revenue can be recognized; (1) Identifying the contract(s) with a customer that create(s) enforceable rights and obligations; (2) Identifying the performance obligations in the contract, such as promising to transfer goods or services to a customer; (3) Determining the transaction price, meaning the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer; (4) Allocating the transaction price to the performance obligations in the contract, which requires the company to allocate the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or services promised in the contract; and (5) Recognizing revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service to a customer.
The Company’s performance obligation is generally the sale and delivery of its products. Revenues from product sales is recorded at the net sales price, or “transaction price,” which includes estimates of variable consideration that result from discounts as well as allowances for returns. Revenue from product sales is recognized at a point in time when control of the product is transferred, which is generally upon shipment to the customer.
Regarding its ENvue sales, the Company regularly sells its Systems and Nasoenteral tubes on a stand-alone basis and therefore concludes these products are separate performance obligations. Revenue from product sales is recognized at a point in time when control of the product is transferred, which is generally upon shipment to the customer. Revenue from training services is recognized over time, while the Company provides the services, which are usually completed in under a week. Revenue from training services is recognized over time, while the Company provides the services, which are usually completed in under a week.
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The Company also concluded that training services are capable of being distinct and separately identifiable and therefore should be accounted for as a separate performance obligation. When a contract includes one of these products or services, the entire transaction price is allocated to that product or service. When a contract includes a combination of products and services, the transaction price is allocated to each performance obligation on a stand-alone selling price basis. The stand-alone selling prices are generally determined based on the prices at which the Company separately sells the products and services.
The Company’s contracts with its ENvue customers generally do not include rights of return.
The payments are typically due between 30 and 60 days.
The Company applied the practical expedient in ASC 606 and did not evaluate payment terms of one year or less for the existence of a significant financing component. The related revenue is recognized net of any taxes collected from customers which are subsequently remitted to governmental entities (e.g., sales tax and other indirect taxes). The Company elected to not disclose information about the remaining performance obligations that have original expected durations of one year or less.
In some of its contracts, the Company provides assurance type warranty services to its customers, in accordance with legal provisions or industry standards to ensure the quality of the products. As such, the Company recognizes a provision for warranties in its financial statements as applicable. As of September 30, 2025, the Company’s provision for warranty amounted to $64.
Recently issued accounting standards
In December 2023, the Financial Accounting Standard Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, which requires disaggregated information about the effective tax rate reconciliation as well as information on income taxes paid. The guidance is effective for the Company for annual periods beginning January 1, 2025. The Company is currently evaluating the impact on its financial statement disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40), Disaggregation of Income Statement Expenses, which requires disclosure of disaggregated information about certain expense captions presented in the Consolidated Statements of Operations as well as disclosure about selling expense. The guidance will be effective for the Company for annual periods beginning January 1, 2027, and interim periods beginning January 1, 2028, with early adoption permitted. It could be applied either prospectively or retrospectively. The Company is currently evaluating the impact on its financial statement disclosures.
In July 2025, the FASB issued Accounting Standards Update No. 2025-05, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”), which provides a practical expedient for estimating expected credit losses for current accounts receivable and current contract assets. ASU 2025-05 will be effective for annual periods beginning after December 15, 2025 and interim periods within those annual reporting periods and should be applied prospectively. The Company is currently evaluating the impact of ASU 2025-05 on its consolidated financial statements and related disclosures.
For a summary of recent accounting pronouncements applicable to our consolidated financial statements see Note 3, “Summary of Significant Accounting Policies” to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
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Results of Operations
Three Months Ended September 30, 2025, Compared to Three Months Ended September 30, 2024
Revenues. For the three months ended September 30, 2025, and 2024, our revenues were approximately $722 thousand and $376 thousand, respectively, an increase of approximately 92%, or $346 thousand, between the periods. The increase in revenue is primarily attributable to the addition of sales from ENvue products, partially offset by a decline in sales of Nanovibronix products to its largest customer during the quarter.
For the three months ended September 30, 2025, and 2024, the portion of our revenues derived from our largest direct medical equipment distributor, Ultra Pain Products LLC, was 0% and 24%, respectively, and customers introduced by our largest sales representative was 30% and 29, respectively.
Gross Profit. For the three months ended September 30, 2025, and 2024, gross profit was approximately $189 thousand and $133 thousand, respectively, an increase of approximately 42% or $56 thousand. The increase in the gross profit was mainly due to the addition of the ENvue sales.
Gross profit as a percentage of revenues were approximately 26% and 35% for the three months ended September 30, 2025, and 2024, respectively. The decrease in gross profit as a percentage of revenues is mainly due to the write off of $204 thousand of inventory and the amortization of technology of $123 thousand.
Research and Development Expenses. For the three months ended September 30, 2025, and 2024, research and development expenses were approximately $221 thousand and $249 thousand, respectively, a decrease of approximately 11%, or $28 thousand between the periods. This reduction was primarily due to the suspension of certain research and development activities during the period.
Research and development expenses as a percentage of total revenues were approximately 31% and 66% for the three months ended September 30, 2025, and 2024, respectively.
Our research and development expenses consist mainly of expenses related to subcontracting research and development and clinical trial activities, as well as payroll expenses to employees involved in research and development activities, and the associated facilities costs.
Selling and Marketing Expenses. For the three months ended September 30, 2025, and 2024, selling and marketing expenses were approximately $812 thousand and $181 thousand, respectively, an increase of approximately 349%, or $631 thousand between the periods. The increase was primarily due to the inclusion of ENvue’s operations following the ENvue Merger.
Selling and marketing expenses as a percentage of total revenues were approximately 112% and 48% for the three months ended September 30, 2025, and 2024, respectively.
Selling and marketing expenses consist mainly of payroll expenses to direct sales and marketing employees, stock-based compensation expenses, travel expenses, conventions, advertising and marketing expenses, rent and facilities expenses associated with and allocated to selling and marketing activities.
General and Administrative Expenses. For the three months ended September 30, 2025, and 2024, general and administrative expenses were approximately $1,403 thousand and $673 thousand, respectively, an increase of approximately 108%, or $730 thousand between the periods. The increase was primarily due to the inclusion of ENvue’s operations following the ENvue Merger.
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Our general and administrative expenses consist mainly of payroll expenses for management and administrative employees, stock-based compensation expenses, accounting, legal and facilities expenses associated with general and administrative activities and costs associated with being a publicly traded company.
General and administrative expenses as a percentage of total revenues were approximately 194% and 179% for the three months ended September 30, 2025, and 2024, respectively.
Financial income, net. For the three months ended September 30, 2025, and 2024, financial income, net was approximately $2,845 thousand compared to $8 thousand, respectively, an increase of approximately $2,837 thousand between the periods mainly due to the change in fair value of warrant liability of $3,203 thousand, partially offset by $332 thousand in issuance costs related to the warrant liability.
Interest expense. For the three months ended September 30, 2025, and 2024, our interest expenses were $53 thousand and $33 thousand, respectively.
Income tax expenses. For the three months ended September 30, 2025, our income tax expenses were approximately $35 thousand as compared to $3 thousand in the three months ended September 30, 2024.
Net Income (Loss). Our net income for the three months ended September 30, 2025, increased by approximately $1,508 thousand, or 151%, to approximately $510 thousand, compared to a net loss of approximately $998 thousand for the same period in 2024. This increase was primarily due to the factors described above.
Nine Months Ended September 30, 2025, Compared to Nine Months Ended September 30, 2024
Revenues. For the nine months ended September 30, 2025, and 2024, our revenues were approximately $2,241 thousand and $2,114 thousand respectively, an increase of approximately 6%, or $127 thousand between the periods. The increase in revenue is primarily attributable to the addition of sales from ENvue products, partially offset by a decline in sales of Nanovibronix products to its largest customer during the quarter.
Gross Profit. For the nine months ended September 30, 2025, and 2024, gross profit was approximately $523 thousand and $1,225 thousand, respectively, a decrease of approximately 57% or $702 thousand. The decrease in gross profit was primarily driven by lower sales volumes of PainShield Plus, which has historically generated higher gross margins compared to the Company’s other products. In addition, gross margin was adversely impacted by inventory write-offs related to PainShield Plus, further contributing to the overall reduction in gross profit for the period.
Gross profit as a percentage of revenues was approximately 23% and 58% for the nine months ended September 30, 2025, and 2024, respectively.
The decrease in gross profit as a percentage of revenues is mainly due to the reasons described above.
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Research and Development Expenses. For the nine months ended September 30, 2025, and 2024, research and development expenses were approximately $1,723 thousand and $557 thousand, respectively, an increase of approximately 209%, or $1,166 thousand, between the periods. The increase was mainly due to the costs of our clinical trial test program with the University of Michigan of approximately $624 thousand and the inclusion of expenses from ENvue’s operations following the ENvue Merger of approximately $464 thousand.
Our research and development expenses consist mainly of payroll expenses to employees involved in research and development activities, stock-based compensation expenses, expenses related to subcontracting, patents application and registration, clinical trial and facilities expenses associated with and allocated to research and development activities.
Research and development expenses as a percentage of total revenues were approximately 77% and 26% for the nine months ended September 30, 2025 and 2024, respectively.
Selling and Marketing Expenses. For the nine months ended September 30, 2025, and 2024, selling and marketing expenses were approximately $1,878 thousand and $545 thousand, respectively, an increase of approximately 245%, or $1,333 thousand, between the periods. The increase was primarily due to the inclusion of $1,157 thousand of expenses from ENvue’s operations following the ENvue Merger.
Selling and marketing expenses consist mainly of payroll expenses to direct sales and marketing employees, stock-based compensation expenses, travel expenses, conventions, advertising and marketing expenses, rent and facilities expenses associated with and allocated to selling and marketing activities.
Selling and marketing expenses as a percentage of total revenues were relatively steady totaling approximately 84% and 26% for the nine months ended September 30, 2025, and 2024, respectively.
General and Administrative Expenses. For the nine months ended September 30, 2025, and 2024, general and administrative expenses were approximately $4,997 thousand and $2,335 thousand, respectively, an increase of approximately 114%, or $2,662 thousand, between the periods. The increase was primarily due to professional fees incurred in connection with the ENvue Merger and the inclusion of $1,496 thousand of expenses from ENvue’s operations following the ENvue Merger.
Our general and administrative expenses consist mainly of payroll expenses for management and administrative employees, stock-based compensation expenses, accounting, legal and facilities expenses associated with general and administrative activities and costs associated with being a publicly traded company.
General and administrative expenses as a percentage of total revenues were approximately 223% and 110% for the nine months ended September 30, 2025, and 2024, respectively.
Financial income, net. For the nine months ended September 30, 2025, and 2024, financial income, net was approximately $3,104 thousand compared to an expense of $53 thousand, respectively, an increase of approximately $3,051 thousand between the periods mainly due to the change in fair value of warrant liability of $4,613 thousand, partially offset by $1,420 thousand in professional fees related to the warrant liability.
Interest expense. For the nine months ended September 30, 2025, and 2024, interest expense was $250 thousand and $101 thousand, respectively. This primarily pertains to the amortization of debt discount on the Alpha loans (see note 9 to the consolidated condensed interim financial statements).
Income tax expenses. For the nine months ended September 30, 2025, and 2024, tax expenses were $112 thousand and $14 thousand, respectively.
Net loss. Our net loss for the nine months ended September 30, 2025, increased by approximately $3,059 thousand, or 135%, totaling approximately $5,333 thousand, compared to a net loss of approximately $2,274 thousand for the same period in 2024. This decrease in net loss was primarily due to the factors described above.
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Liquidity and Capital Resources
Going Concern
As of September 30, 2025, the Company had incurred recurring losses and negative cash flows from operations and had an accumulated deficit of approximately $76.9 million. For the nine months ended September 30, 2025, the Company used approximately $6,696 thousand of cash in operating activities. During the same period, the Company received net proceeds of approximately $17.1 million from the issuance of common stock, preferred stock, and warrants, $2,000 thousand from a subscription payable, $1,300 thousand from the issuance of notes payable to a related party, $360 thousand from the issuance of a short-term loan payable, and $102 thousand from the exercise of options. These inflows were partially offset by $5,000 thousand used to repurchase certain shares of our Series X Preferred Stock, $1,300 thousand in payments of notes payable to a related party, and $1,777 thousand in payments of a short-term loan to a related party. As a result, the Company reported a cash balance of approximately $6,980 thousand as of September 30, 2025.
Because the Company does not have sufficient resources to fund its operation for the next twelve months from the date of the issuance of these unaudited interim condensed consolidated financial statements, management has substantial doubt regarding the Company’s ability to continue as a going concern. During the nine months ended September 30, 2025, we met our short-term liquidity requirements from our existing cash reserves. Our future capital requirements and the adequacy of our available funds will depend on many factors, including our ability to successfully commercialize our products, our development of future products and competing technological and market developments. We expect to continue to incur losses and negative flows from operations. We intend to use the proceeds generated from equity financings, or strategic alliances with third parties, either alone or in combination with equity financing to meet our short-term liquidity requirements as well as to advance our long-term plans. There are no assurances that we are able to raise additional capital, as required, on terms favorable to us.
We do not have any material commitments to capital expenditures as of September 30, 2025, and we are not aware of any material trends in capital resources that would impact our business.
As of September 30, 2025, we have no off-balance sheet transactions, arrangements, obligations (including contingent obligations), or other relationships with unconsolidated entities or other persons that have, or may have, a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Major Change in Assets and Total Reportable Assets
As discussed in Note 4, the major changes in assets and total reportable assets are primarily attributable to the merger. These changes reflect the revaluation and consolidation of assets from the merger, which significantly impacted the overall asset base of the Company. The changes in assets are consistent with the terms and conditions outlined in the merger agreement and are considered a direct result of the transaction.
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Summary of Cash Flow
General. As of September 30, 2025, we had cash and cash equivalents of approximately $6,980 thousand, compared to approximately $752 thousand as of December 31, 2024. We have historically met our cash needs through a combination of issuance of equity, borrowing activities and sales. Our cash requirements are generally for product development, research and development costs, marketing and sales activities, general and administrative costs, capital expenditures and general working capital.
Cash used in our operating activities was approximately $6,696 thousand for the nine months ended September 30, 2025, and approximately $1,968 thousand for the same period in 2024.
Cash provided in our investing activities was approximately $111 thousand and cash used in investing activities was $3 thousand for the nine months ended September 30, 2025, and 2024, respectively. Cash provided in the nine months ended September 30, 2025, is mainly from the cash acquired in the Merger.
Cash provided by financing activities during the nine months ended September 30, 2025 and 2024, was approximately $12.8 million and $1 thousand, respectively. This primarily resulted from net proceeds of $17.1 million from the issuance of common stock, preferred stock, and warrants, $2,000 thousand from proceeds of a tranche financing liability, $1,300 thousand from the issuance of notes payable to a related party, $360 thousand from the issuance of a short-term loan payable, and $102 thousand from the exercise of options. These inflows were partially offset by a $5,000 thousand repurchase of Series X Preferred Stock, payments of $1,300 thousand on notes payable to a related party, and $1,777 thousand on a short-term loan to a related party.
The Company’s future capital requirements and the adequacy of its available funds will depend on various factors, including the successful commercialization of its products, the development of future product offerings, and the impact of technological and competitive market developments.
Factors That May Affect Future Operations
We believe that our future operating results will continue to be subject to quarterly variations based upon a wide variety of factors, including the ordering patterns of our distributors, timing of regulatory approvals, the implementation of various phases of our clinical trials and manufacturing efficiencies due to the learning curve of utilizing new materials and equipment. Our operating results could also be impacted by increased tariffs which may add additional costs to our manufacturing process, the hostilities in Israel, and the Middle East, including the interruption or curtailment of trade within Israel or between Israel and its trading partners, or the ability to ship our products overseas or a weakening of the Euro and strengthening of the New Israeli Shekel, or NIS, both against the U.S. dollar. Lastly, other economic conditions we cannot foresee may affect customer demand, such as individual country reimbursement policies pertaining to our products.
Known Trends, Events and Uncertainties
Following a review, we have identified certain inaccuracies in our 510(k) application for the PainShield MD Plus product, and have submitted a request to FDA to withdraw the clearance. The company is unaware of any safety issue related to PainShield MD Plus, but intends to halt future sales of the product.
The Company is subject to risks and uncertainties common to companies in the biopharmaceutical industry, including but not limited to, risks associated with completing studies and clinical trials, receiving regulatory approvals for product candidates, development by competitors of new biopharmaceutical products, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. In addition, the consequences of the ongoing geopolitical conflicts, such as the ongoing conflict between Russia and Ukraine and the ongoing conflict between Israel and Hamas, including related sanctions and countermeasures, and the effects of rising global inflation, are difficult to predict, and could adversely impact geopolitical and macroeconomic conditions, the global economy, and contribute to increased market volatility, which may in turn adversely affect our business and operations. Additionally, recent changes to U.S. policy implemented by the U.S. Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, tariffs, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. Although we cannot predict the impact, if any, of these changes to our business, they could adversely affect our business. For a further discussion of factors that may affect future operating results see the section entitled “Risk Factors” of this Quarterly Report. Other than as discussed above and elsewhere in this Quarterly Report, we are not aware of any trends, events or uncertainties that are likely to have a material effect on our financial condition.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this Item 3.
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ITEM 4. CONTROLS AND PROCEDURES
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of September 30, 2025, the end of the period covered by this Quarterly Report. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to provide reasonable assurance that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed to provide reasonable assurance that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Based on their evaluation, as of the end of the period covered by this Quarterly Report, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective because of the material weaknesses in our internal control over financial reporting as described in Item 9A in our Annual Report on Form 10-K for the fiscal ended December 31, 2024, filed with the SEC on March 31, 2025.
Remediation Efforts to Address Material Weakness
With the oversight of senior management and audit committee of the Board of Directors, we have taken the steps below and we plan to take additional measures to remediate the underlying causes of the material weakness in our internal control over financial reporting as described in Item 9A in our Annual Report on Form 10-K for the fiscal ended December 31, 2024, filed with the SEC on March 31, 2025:
| ● | With assistance from a current finance and accounting third-party service provider, the Company was able to formalize our risk assessment process, policies and procedures, implementing revised control activities, controls documentation, and ongoing monitoring activities related to the internal controls over financial reporting including testing documentation to provide evidence that our system of internal controls over financial reporting meets the requirements of the COSO 2013 framework, and provide a foundation for the Company to communicate internal control deficiencies in a timely manner to those parties responsible for taking corrective action. |
| ● | Expanded consultations with third party specialists on complex accounting matters, financial reporting and regulatory filings, and create enhanced documentation to support a more precise review process, as well as enhanced monitoring of the review process, and effective enhanced monitoring of the review process, and an effective system of training of use and review of our inventory recording systems. |
In addition, under the direction of the audit committee of the Board of Directors, management will continue to review and make necessary changes to the overall design of the Company’s internal control environment, as well as to refine policies and procedures to improve the overall effectiveness of internal control over financial reporting of the Company. After all the remediation efforts, not all material weaknesses may be remediated and others may arise in future periods.
Changes in Internal Control over Financial Reporting
Other than described above in Item 4, there has been no change in our internal control over financial reporting that occurred during the last fiscal quarter to which this Quarterly Report relates that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may be involved in certain claims and litigation arising out of the ordinary course and conduct of business. Management assesses such claims and, if it considers that it is probable that an asset had been impaired or a liability had been incurred and the amount of loss can be reasonably estimated, provisions for loss are made based on management’s assessment of the most likely outcome.
The information set forth in Note 11 – Commitments and Contingencies of the Notes to Consolidated Financial Statements of this Quarterly Report is incorporated by reference herein.
There are no other material proceedings in which any of our directors, officers, affiliates, any registered or beneficial stockholder of more than 5% of our common stock, or any associate of any of the foregoing is an adverse party or has a material interest adverse to our interest.
Item 1A. Risk Factors
The following description of risk factors includes any material changes to, and supersedes the description of, the risk factors addressed below associated with our business, financial condition and results of operations previously disclosed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the SEC on March 31, 2025. Our business, financial condition, and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described below, any one or more of which could, directly or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results, and stock price.
The following discussion of risk factors contains forward-looking statements. These risk factors may be important to understanding other statements in this Form 10-Q. The following information should be read in conjunction with the condensed consolidated financial statements and related notes in Part I, Item 1, “Financial Statements” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report.
Risks Related to our Series H Preferred Stock
The Series H Certificate of Designations provides for the payment of cumulative dividends in shares of our common stock which will require us to have shares of common stock available to pay the dividends.
Each share of the Series H Preferred Stock is entitled to receive cumulative dividends at the rate per share of 9% per annum (as a percentage of the Stated Value per share), payable on each conversion date (with respect to only the shares of Series H Preferred Stock being converted), in duly authorized, validly issued, fully paid and non-assessable shares of common stock at the conversion price then on effect in accordance with the terms of the Series H Certificate of Designations. As such, we may rely on having available shares of common stock to pay such dividends, which will result in dilution to our shareholders. If we do not have such available shares, we may not be able to satisfy our obligations as related to these dividends pursuant to the terms of the Series H Certificate of Designations.
The Series H Certificate of Designations contains certain anti-dilution provisions, which may dilute the interests of our stockholders, depress the price of our common stock, and make it difficult for us to raise additional capital.
Certain events, for example, a Dilutive Issuance (as defined in the Series H Certificate of Designations) may reduce the conversion price of the Series H Preferred Stock, which in turn may lead to further dilution to the holders of our common stock. In addition, the perceived risk of dilution may cause our shareholders to be more inclined to sell their common stock, which may in turn depress the price of common shares regardless of our business performance. We may also find it more difficult to raise additional equity capital while any of the shares of Series H Preferred Stock and the Series H Warrants remain outstanding.
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Under the Series H Purchase Agreement, we are subject to certain restrictive covenants that may make it difficult to procure additional financing.
The Series H Purchase Agreement contains, among others, the following restrictive covenants: (A) from the date of the Series H Purchase Agreement until 90 days after the Stockholder Approval Date (as defined in the Series H Purchase Agreement), we shall not (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or common stock equivalents or (ii) file any registration statement or any amendment or supplement thereto, in each case other than as contemplated pursuant to the Series H Purchase Agreement and (B) until the one year anniversary of the date of the Series H Initial Closing, we shall be prohibited from entering into any variable rate transactions, subject to certain exceptions.
If we require additional funding while these restrictive covenants remain in effect, we may be unable to effect a financing transaction on terms acceptable to us, or at all, while also remaining in compliance with the terms of the Series H Purchase Agreement, or we may be forced to seek a waiver from the investor party to the Series H Purchase Agreement, which such investor is not obligated to grant to us.
Additionally, the Series H Purchase Agreement requires us to hold a meeting of our stockholders at the earliest practicable date to seek the Stockholder Approval and to hold a meeting every four months thereafter to seek the Stockholder Approval if such approval is not obtained at the initial meeting until the earlier of the date the Stockholder Approval is obtained or the Series H Preferred Stock is no longer outstanding, which may be time consuming and costly.
Risks Related to our Prior Independent Registered Public Accounting Firm
We may incur material expenses or delays in financings or SEC filings due to the dismissal of our prior independent registered public accounting firm, Zwick CPA, PLLC, and our stock price and access to the capital markets may be affected.
As a public company, we are required to file financial statements with the SEC that are audited or reviewed, as applicable, by an independent registered public accounting firm. In August 2025, following discussions with Zwick CPA, PLLC (“Zwick”) regarding potential proceedings that could be instituted against them, which may result in their suspension or bar from appearing or practicing before the SEC as an independent registered public accounting firm, we were notified by Zwick that they could no longer continue to serve as our independent registered public accounting firm for purposes of providing audited financial statements in compliance with SEC rules. Our access to the capital markets, and our ability to make timely SEC filings, has depended in the past and will continue to depend on having financial statements audited or reviewed by an independent registered public accounting firm.
As of the date of this prospectus, no formal proceedings have been brought against Zwick. We understand that any such proceedings are not expected to question the services previously provided by Zwick to the company. However, if proceedings are initiated and actions are taken against Zwick, we anticipate that the PCAOB may determine that investors cannot rely on Zwick’s audit reports or the financial statements audited by Zwick for the years ended December 31, 2024, and 2023, or on Zwick to provide customary deliverables such as consents or comfort letters in connection with financings or other transactions. While a revocation of Zwick’s registration would not, in and of itself, affect the validity of Zwick’s previously issued audit reports, the absence of their consent could require us to have our financial statements for prior years re-audited by our current independent registered public accounting firm. This could result in significant delays, additional costs, and other complications in connection with financings or other transactions. Any delay in or inability to access the public capital markets could disrupt our operations and adversely affect the price and liquidity of our securities.
In addition, any negative developments concerning potential proceedings against Zwick may adversely affect investor confidence in companies that were previously audited by Zwick. These factors could materially and adversely affect the market price of our common stock and our ability to access the capital markets.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On October 30, 2025, the Second Closing of the July 2025 Private Placement was consummated. In the Second Closing, an aggregate of 2,222 shares of Series H Preferred Stock and warrants to purchase up to 116,960 shares of common stock at an exercise price of $22.50 per share were issued for aggregate gross proceeds of $2.2 million, prior to deducting fees and offering expenses payable by the Company.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
None
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Item 6. Exhibits
EXHIBIT INDEX
| * | Filed herewith. |
| ** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| NANOVIBRONIX, INC. | ||
| Date: November 14, 2025 | By: | /s/ Doron Besser, M.D. |
| Name: | Doron Besser, M.D. | |
| Title: | Chief Executive Officer | |
| Date: November 14, 2025 | By: | /s/ Stephen Brown |
| Name: | Stephen Brown | |
| Title: | Chief Financial Officer |
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