Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. You should read the following discussion and analysis of financial condition and results of operations in conjunction with our consolidated financial statements and the related notes thereto included elsewhere in this Annual Report on Form 10-K. In addition to historical information, the following discussion and analysis includes forward-looking information that involves risks, uncertainties and assumptions. Our actual results and the timing of events could differ materially from those anticipated by these forward-looking statements as a result of many factors, including those discussed under "Item 1A. Risk Factors" and elsewhere in this Annual Report on Form 10 -K. See "Item 1. Business - Cautionary Note Regarding Forward-Looking Statement; Risk Factors Summary" included elsewhere in this Annual Report on Form 10 -K.

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"). In addition, the Company issued 3,626 shares of Series X Preferred Stock to a service provider of ENvue, replacing its equity interest in ENvue, resulting in a total of 61,346 shares of Series X Preferred Stock outstanding after the Merger.

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.

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 and obsolete items. 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

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 assets to the future undiscounted cash flows expected to be generated by the assets. If such review indicates that the carrying amount of long-lived assets is not recoverable, the carrying amount of such assets is reduced to fair value.

During the years ended December 31, 2025 and 2024, the Company recorded a long-lived asset impairment charge of $645 and $0, respectively. See Note 21

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.

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. During the measurement period, which may extend up to one year from the acquisition date, the Company may record adjustments to the provisional fair values of the assets acquired and liabilities assumed, with a corresponding offset to goodwill. Upon the earlier of the end of the measurement period or the final determination of the fair values of the assets acquired and liabilities assumed, any subsequent adjustments are recorded in earnings.

Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. See Note 4 Merger, for further information.

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 warrants meet the required 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.

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.

For customers of both NanoVibronix and ENvue, 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.

Income taxes

We account for income taxes in accordance with ASC 740, "Income Taxes". This topic prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. We provide full valuation allowance, to reduce deferred tax assets to the amount that is more likely than not to be realized.

We implemented a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% (cumulative basis) likely to be realized upon ultimate settlement.

We recognize interest and penalties related to uncertain tax positions on the income tax expense line in the accompanying consolidated statement of operations. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheet.

Recently adopted 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 adopted this guidance for the year ended December 31, 2025 on a prospective basis.

Recently issued accounting standards

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.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):Targeted Improvements to the Accounting for Internal-Use Software, to modernize the accounting for costs related to internal-use software and better align it with current software development practices. The amended guidance removes references to project stages and clarifies when entities are required to begin capitalizing eligible costs. This guidance will be effective for the Company for annual periods beginning January 1, 2028, with early adoption permitted. The guidance may be applied prospectively, retrospectively, or using a modified prospective transition method. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which clarifies current guidance for determining the accounting acquirer for a transaction effected primarily by exchanging equity interests in which the legal acquiree is a variable interest entity that meets the definition of a business. ASU 2025-03 is effective for annual reporting periods beginning after December 15, 2026, including interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

Results of Operations

Year Ended December 31, 2025, Compared to Year Ended December 31, 2024

Revenues. For the years ended December 31, 2025 and 2024, revenues were approximately $2,553 and $2,558, respectively, representing a decrease of approximately $5, or 0.2%, year over year. The decrease was primarily attributable to the removal of PainShield Ultra from the market, partially offset by revenues generated from ENvue systems, as well as continued revenues from Veterans Administration facilities and workers' compensation programs and sales through certain sales representatives and our largest direct medical equipment distributor. Revenues may fluctuate as new customers are added or when existing distributors or customers place large orders in one period and not in another.

For the year ended December 31, 2025, the percentage of revenues attributable to our products was: PainShield and monthly kits 73%- Envue system and tubes 27%. For the year ended December 31, 2024, the percentage of revenues attributable to our products was: PainShield and monthly kits - 99% and UroShield - 1%. For the years ended December 31, 2025, and 2024, the portion of our revenues that was derived from our largest direct medical equipment distributor, were 31% and 36%, respectively.

Gross Profit. For the years ended December 31, 2025, and 2024, gross profit was approximately $153 and $1,508, respectively, a decrease of approximately 90% or $1,355. Gross margin was also significantly impacted, declining primarily due to the removal of PainShield Ultra from the market, which historically generated higher margins, as well as inventory write-downs associated with PainShield Ultra. In addition, amortization expense related to intangible assets recognized in connection with the ENvue merger, which is recorded within cost of goods sold, further contributed to the decline in gross margin.

Gross profit as a percentage of revenues were approximately 6% and 59% for the years ended December 31, 2025, and 2024, respectively. The increase in gross profit as a percentage of revenues is mainly due to the reasons described above.

Research and Development Expenses. For the years ended December 31, 2025 and 2024, research and development expenses were approximately $1,762 and $909, respectively, representing an increase of approximately $853, or 94%. The increase was primarily attributable to additional costs related to new intellectual property and patent activities, increased quality assurance and regulatory audit efforts associated with the ENvue system, along with continued expenses related to product development activities.

Research and development expenses as a percentage of total revenues were approximately 69% and 36% for the years ended December 31, 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, and the associated facilities' costs, who are involved with research and development activities.

Selling and Marketing Expenses. For the years ended December 31, 2025 and 2024, selling and marketing expenses were approximately $2,493 and $720, respectively, representing an increase of approximately $1,773, or 246%. The increase was primarily attributable to amortization expense related to intangible assets recognized in connection with the purchase price allocation, as well as higher consulting fees and travel costs associated with system reactivation, new installations, commercialization activities, and rebranding efforts for the ENvue system.

Selling and marketing expenses as a percentage of total revenues were approximately 98% and 28% for the years ended December 31, 2025, and 2024, respectively.

Selling and marketing expenses consist mainly of payroll expenses to direct sales and marketing employees, 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 years ended December 31, 2025 and 2024, general and administrative expenses were approximately $7,633 and $3,461, respectively, representing an increase of approximately $4,172, or 121%. The increase was primarily attributable to higher legal fees related to securities matters, merger-related expenses, and litigation, as well as increased accounting and professional consulting fees incurred in connection with the business combination, severance costs associated with former executive management and termination costs with former board members.

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 299% and 135% for the years ended December 31, 2025, and 2024, respectively.

Goodwill and Intangible Assets Impairment Expense. For the year ended December 31, 2025, we recognized a non-cash impairment charge of approximately $11,154 related to goodwill and intangible assets associated with the ENvue reporting unit, consisting of approximately $10,509 related to goodwill and $645 related to intangible assets. The impairment resulted from our annual impairment assessment, during which the estimated fair value of the reporting unit and certain long-lived assets was determined to be below their respective carrying values.

Financial income (expense). For the years ended December 31, 2025, and 2024, financial income (expense), net was income of approximately $4,397 and expense of approximately $(104), respectively. This was primarily driven by a gain of approximately $6,204 related to the change in fair value of warrant liabilities that was partially offset by warrant liability issuance expenses of $1,418, and interest expense of $288 related to the Company's loan.

Income tax expense. For the year ended December 31, 2025, our income tax benefit was approximately $307. For the year ended December 31, 2024, our income tax expense was approximately $19. For 2025 and 2024 we recorded tax expense at our Israeli subsidiary based on the appropriate tax rate and in addition for 2025 we recorded a change in the valuation allowance

Net Loss. Our net loss increased by approximately $14,480 or 391%, to approximately $18,185 for the year ended December 31, 2025, from approximately $3,705 during the same period in 2024. The increase in net loss resulted primarily from the factors described above.

Liquidity and Capital Resources

We have incurred net losses of approximately $18,185 during the year ended December 31, 2025. We also had negative cash flow from operating activities of $9,372 for the year ended December 31, 2025. Although we had a cash balance of just over $4,254 as of December 31, 2025, we expect to continue to incur losses and negative cash flows from operating activities, and therefore, we do not have sufficient resources to fund our operation for the next twelve months from the date of this filing causing us to have substantial doubt of our ability to continue as a going concern. We will need to continue to raise additional capital to finance its losses and negative cash flows from operations beyond the next years and may continue to be dependent on additional capital raising as long as our products do not reach commercial profitability.

During the year ended December 31, 2025, we met our short-term liquidity requirements from our existing cash reserves and equity financings. Our future capital requirements and the adequacy of our available funds will depend on many factors, including our ability to successfully commercialize our products, advance development of new products, and respond to evolving technological and market conditions. We expect to continue to incur losses and negative cash flows from operations.

We intend to fund our operations through a combination of equity financings and potential strategic alliances with third parties. However, there can be no assurance that we will be able to raise additional capital, when needed, on terms favorable to us, or at all.

We do not have any material commitments to capital expenditures as of December 31, 2025, and we are not aware of any material trends in capital resources that would impact our business.

As of December 31, 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.

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 of common stock, and (ii) pre-funded warrants to purchase up to 217,090 shares of common stock in a registered direct offering for $2.04 million, pursuant to an effective shelf registration statement on Form S-3 (the "September 2025 Registered Direct Offering"). The offering price was $7.01 per share of common stock and $7.009 per pre-funded warrant, which was the price of each share of common stock sold, minus the nominal $0.001 exercise price per pre-funded warrant. The net proceeds from the September 2025 Registered Direct Offering were approximately $1.88 million, after deducting placement agent fees of $163.

July 2025 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 we 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, initially convertible into up to 880,099 shares of our common stock, at an initial conversion price of $10.10 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 "July 2025 Initial Closing").

Pursuant to the terms of the Series H Purchase Agreement, we also agreed to issued 2,222 shares of Series H Preferred Stock with a total stated value of $2,222 in a second closing and warrants to acquire up to an aggregate of 116,960 shares of common stock the Series H Warrants at an exercise price of $22.50 (such closing, the "Series H Second Closing"), subject to the satisfaction of customary closing conditions. 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 "Series H 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 stated value (representing 44,000 shares of Series H Preferred Stock and $39,600 of subscription amount) of additional Series H Preferred Stock.

The Series H Initial Closing occurred on July 22, 2025, and the Series H Second Closing of the private placement occurred October 30, 2025. The aggregate net proceeds from the Private Placement of Series H Preferred Stock was $9 million, after deducting placement agent fees and other offering expenses payable by the Company of $958.

On January 30, 2026, we entered into that certain Amendment Agreement (the "Series H Amendment Agreement") with the Required Holders (as defined in the Series H Amendment Agreement). Pursuant to the Series H Amendment Agreement, the Required Holders agreed to amend the Series H Certificate of Designations by filing a Certificate of Amendment (the "Series H Certificate of Amendment") to the Series H Certificate of Designations with the Secretary of State of the State of Delaware to remove the Floor Price (as defined in the Series H Certificate of Designations) in consideration of the holders of the Series H Preferred Stock exercising $2,500,000 of the Additional Investment Right (as such concept is described in the Series H Purchase Agreement by and between us and the holders of the Series H Preferred Stock.

May 2025 Underwritten Public Offering, Series G Convertible Preferred Stock

On May 16, 2025, we announced the closing of an underwritten public offering (the "2025 Underwritten Offering") of 40,000 shares of our Series G Convertible Preferred Stock ("Series G Preferred Stock"), with a par value $0.01 per share and a stated value equal to $25, and warrants to purchase up to 490,198 shares of common stock, par value $0.01 per share at an exercise price of $20.40 per share (the "May 2025 Warrants"). The combined public offering price of each share of Series G Preferred Stock together with an accompanying May 2025 Warrant was $25. The May 2025 Warrants have a term of five years from the initial issuance date and are exercisable immediately upon issuance. We also issued to Dawson James Securities, Inc. warrants (the "May 2025 Representative's Warrants") to purchase up to 24,510 shares of common stock the May 2025 Representative's Warrants expire five years from the date of commencement of sales in the 2025 Underwritten Offering.

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 9% 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 our option, in up to an aggregate of 220,588 shares of common stock. The Series G holder may convert at any time and receive the full amount of dividends.

The aggregate net proceeds of the 2025 Underwritten Offering were approximately $8.2 million, after deducting approximately $1.8 million of underwriting discounts, commissions and other offering costs and expenses.

April 2025 Promissory Note and Guaranty

On April 11, 2025, we issued a promissory note (the "April Note") to Alpha ("Alpha" in the principal amount of $360 (the "April Note Principal Amount"), together with all accrued interest thereon. The April Note has a maturity date of June 11, 2025 (the "April Note Maturity Date") and on the April Note Maturity Date, the aggregate unpaid April Note Principal Amount, all accrued and unpaid interest and all other amounts payable under the April Note shall be due and payable. The April Note bore interest at an annual rate equal to 8.0% and was payable "in kind" by adding such accrued interest to the April Note Principal Amount. On May 19, 2025, we paid the April Note in full using proceeds from the 2025 Underwritten Offering, pursuant to the terms of the April Note.

Summary of Cash Flow

General. As of December 31, 2025, we had cash of approximately $4,241, net compared to approximately $752 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 $9,372 for the years ended December 31, 2025, and approximately $2,516 for the same period in 2024. The increase in net cash used in operating activities of approximately $8,330 was primarily attributable to non-cash charges, including goodwill and intangible asset impairment, issuance costs allocated to warrant liabilities, depreciation and amortization, and non-cash interest expense, partially offset by a gain related to the change in fair value of warrant liabilities and a benefit from deferred taxes.

Cash provided by (used in) our investing activities was approximately $148 and ($3) for the years ended December 31, 2025, and 2024, respectively, from cash acquired in the ENvue Merger and purchases of fixed assets.

Cash provided by financing activities during the years ended December 31, 2025, and 2024, was approximately $12,786 and $1, respectively, which was primarily composed of net proceeds received from the issuance of common stock and preferred stock and warrants. Our future capital requirements and the adequacy of 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.

Factors That May Affect Future Operations

We believe that our future operating results will continue to be subject to quarterly variability based on a number of factors, including the ordering patterns of our distributors, the timing of regulatory approvals, the progress and implementation of clinical trials, and manufacturing efficiencies associated with the adoption of new materials and equipment.

Our operating results may also be impacted by geopolitical developments, including hostilities in Israel and the broader Middle East, which could disrupt trade, impact our ability to ship products, or affect our operations and those of our partners. In addition, fluctuations in foreign currency exchange rates, including a weakening of the Euro or strengthening of the New Israeli Shekel against the U.S. dollar, may adversely affect our results of operations.

More broadly, macroeconomic conditions, including changes in reimbursement policies and healthcare spending in the markets in which we operate, may impact customer demand for our products.