NanoVibronix Inc
For the period ended Jun 30, 2024. Filed Aug 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 14, 2024
FEED$1.03-69.3%Stored close · as of Sep 15, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-15.
0001493152-24-019675
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001493152-24-032138
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 57 previous paragraphs and 70 current paragraphs.
28 unchanged; 18 reworded; 17 added; 11 removed; 0 previous and 7 current paragraphs rearranged.
Tables are not compared: 1 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Gross Profit. For the three months ended June 30, 2024 and 2023, gross profit was approximately $428,000 and $216,000, respectively, an increase of approximately 98%, or $212, between the periods. The increase was mainly due to increase in revenues from customers from Veteran Administration facilities and through workman’s compensation programs who are referred to us from certain sales representatives, and UPPI in 2024. The decrease in the gross margin percentage for the three months ended June 30, 2024 was due to lowering our wholesale sales price awarded to customers from Veteran Administration facilities or through workman’s compensation programs who are referred to us from certain sales representatives, which took place in the second quarter of 2024.
Current report
Selling and marketing expenses as a percentage of total revenues were approximately 24% and 77% for the three months ended June 30, 2024 and 2023, respectively.
Current report
General and administrative expenses as a percentage of total revenues were approximately 88% and 328% for the three months ended June 30, 2024 and 2023, respectively.
Current report
*Financial expense, net.*For the three months ended June 30, 2024 and 2023, financial expenses, net was approximately $24,000 and $(19,000), respectively, an increase of approximately $43,000 between the periods mainly due to the change in fair value of the investment in Sanuwave.
Current report
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Current report
Revenues. For the six months ended June 30, 2024 and 2023, our revenues were approximately $1,738,000 and $648,000 respectively, an increase of approximately 168%, or $1,090,000 between the periods. The increase was due to increase revenues from customers from Veteran Administration facilities and through workman’s compensation programs who are referred to us from certain sales representatives, and UPPI in 2024. Our revenues may fluctuate as we add new consumers or when existing distributors or consumers make large purchases of our products during one period and no purchases during another period. Therefore, any growth or decrease in revenues by quarter may not be linear or consistent.
Current report
For the six months ended June 30, 2024, the percentage of revenues attributable to our products was: PainShield MD- 51%, PainShield Plus – 23%, Painshield MD Monthly Kits – 19% and Painshield Plus Monthly Kits – 5% and UroShield – 0%. For the six months ended June 30, 2023, the percentage of revenues attributable to our products was: PainShield - 95% and UroShield – 5%. For the six months ended June 30, 2024 and 2023, the portion of our revenues that was derived from distributors was 41% and 91%, respectively.
Current report
Gross Profit. For the six months ended June 30, 2024 and 2023, gross profit was approximately $1,092,000 and $451,000, respectively, an increase of approximately 142% or $641,000. The increase was mainly due to the increase in revenues in 2024. The decrease in the gross margin percentage for the six months ended June 30, 2024 was due to lowering our wholesale sales price awarded to customers from Veteran Administration facilities or through workman’s compensation programs who are referred to us from certain sales representatives, which took place in the second quarter of 2024.
Current report
Research and Development Expenses. For the six months ended June 30, 2024 and 2023, research and development expenses were approximately $308,000 and $90,000, respectively, a increase of approximately 242%, or $218,000, between the periods. The increase was due to the addition of product redevelopment costs of $150,000 and clinical trial costs of $84,000 incurred in 2024.
Current report
Research and development expenses as a percentage of total revenues were relatively steady totaling approximately 18% and 14% for the six months ended June 30, 2024 and 2023, respectively.
Current report
Selling and Marketing Expenses. For the six months ended June 30, 2024 and 2023, selling and marketing expenses were approximately $364,000 and $441,000, respectively, a decrease of approximately 17%, or $77,000, between the periods. The decrease was due to consulting fees and costs incurred during the six months ended June 30, 2023, related to our website development project which was completed in 2023.
Current report
Selling and marketing expenses as a percentage of total revenues were relatively steady totaling approximately 21% and 68% for the six months ended June 30, 2024 and 2023, respectively.
Current report
General and Administrative Expenses. For the six months ended June 30, 2024 and 2023, general and administrative expenses were approximately $1,662,000 and $1,984,000, respectively, a decrease of approximately 16%, or $322,000, between the periods. The decrease was mainly due to a decrease of legal fees related to securities and litigation matters, as well as accounting fees incurred during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023.
Current report
General and administrative expenses as a percentage of total revenues were approximately 96% and 306% for the six months ended June 30, 2024 and 2023, respectively.
Current report
*Financial expense, net.*For the six months ended June 30, 2024 and 2023, financial expenses, net was approximately $45,000 compared to $(25,000), respectively, an increase of approximately $70,000 between the periods mainly due to the change in fair value of the investment in Sanuwave.
Current report
General
Current report
Off-Balance Sheet Commitments and Arrangements
Removed paragraphs (11)
Previous report
Recent Developments
Previous report
Services Agreement
Previous report
On March 22, 2024, the Company entered into a standalone services agreement (the “Services Agreement”), by and between the Company and Veranex, Inc., a Delaware corporation (“Veranex”) pursuant to which, the Company engaged Veranex to provide certain research and development services (the “Services”) to assist with the development of the Company’s next generation UroShield and PainShield products. The Services Agreement has a term of approximately 50 weeks, subject to adjustments or earlier termination thereof in accordance with the terms of the Services Agreement. The Services Agreement contains certain representations, warranties, limitations of liabilities, confidentiality and indemnity obligations and other provisions customary for an agreement of its type.
Previous report
Nasdaq Listing Requirements
Previous report
On April 10, 2024,the Company received a letter from the Listing Qualifications Department of the Nasdaq Stock Market (“Nasdaq”) indicating that, based upon the closing bid price of the Company’s Common Stock for the 30 consecutive business days between February 27, 2024 and April 9, 2024, the Company did not meet the minimum bid price of $1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2). The letter also indicated that the Company will be provided with a compliance period of 180 calendar days, or until October 7, 2024 (the “Compliance Period”), in which to regain compliance pursuant to Nasdaq Listing Rule 5810(c)(3)(A).
Previous report
In order to regain compliance with Nasdaq’s minimum bid price requirement, the Company’s Common Stock must maintain a minimum closing bid price of $1.00 for at least ten consecutive business days during the Compliance Period. In the event the Company does not regain compliance by the end of the Compliance Period, the Company may be eligible for additional time to regain compliance. To qualify, the Company will be required to meet the continued listing requirement for the market value of its publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and will need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split if necessary. If the Company meets these requirements, the Company may be granted an additional 180 calendar days to regain compliance; however, if it appears to Nasdaq that the Company will be unable to cure the deficiency or if the Company is not otherwise eligible for the additional cure period, Nasdaq will provide notice that the Company’s Common Stock will be subject to delisting. There can be no assurance that the Company will be eligible for the additional 180 calendar day compliance period, if applicable, or that the Nasdaq staff would grant the Company’s request for continued listing subsequent to any delisting notification. In the event of such a notification, the Company may appeal the Nasdaq staff’s determination to delist its securities.
Previous report
The letter has no immediate impact on the listing of the Company’s Common Stock, which will continue to be listed and traded on The Nasdaq Capital Market, subject to the Company’s compliance with the other listing requirements of The Nasdaq Capital Market.
Previous report
There can be no assurance that we will be able to regain and maintain compliance. If we do not regain compliance by the end of the extension granted by Nasdaq, or we fail to satisfy another Nasdaq requirement for continued listing, Nasdaq staff could provide notice that our Common Stock will become subject to delisting. In such event, Nasdaq rules permit us to appeal the decision to reject its proposed compliance plan or any delisting determination to a Nasdaq Hearings Panel. Accordingly, there can be no guarantee that we will be able to maintain our Nasdaq listing.
Previous report
Gross Profit. For the three months ended March 31, 2024 and 2023, gross profit was approximately $664,000 and $235,000, respectively, an increase of approximately 183%, or $429,000, between the periods, The increase was mainly due to a larger percentage of higher gross margin from direct sales to customers from Veteran Health Care network facilities and workers’ compensation plans, as well as increased sales from our direct medical equipment distributor in the United States, UPPI.
Previous report
Selling and marketing expenses as a percentage of total revenues were approximately 18% and 60% for the three months ended March 31, 2024 and 2023, respectively.
Previous report
General and administrative expenses as a percentage of total revenues were approximately 103% and 288% for the three months ended March 31, 2024 and 2023, respectively.
Reworded paragraphs (18)
Previous wording
The Company’s unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. During the three months ended March 31, 2024, the Company’s cash used in operations was $583,000 leaving a cash balance of $2,700,000 as of March 31, 2024. Because the Company does not have sufficient resources to fund our operations for the next twelve months from the date of this filing, management has substantial doubt about the Company’s ability to continue as a going concern.
Current wording
The Company’s unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. During the six months ended June 30, 2024, the Company’s cash used in operations was $1,113,000 leaving a cash balance of $2,170,000 as of June 30, 2024. Because the Company does not have sufficient resources to fund its operations for the next twelve months from the date of this filing, management has substantial doubt about the Company’s ability to continue as a going concern.
Previous wording
Revenues. For the three months ended March 31, 2024 and 2023, our revenues were approximately $921,000 and $354,000, respectively, an increase of approximately 160%, or $567,000, between the periods. The increase was mainly attributable to increased sales from our Ultra Pain Products Inc. (“UPPI”) distributor as well an increase of customers from Veteran Administration facilities or through workman’s compensation programs, referred to us from three sales representatives to whom we sold our products directly for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. Our revenues may fluctuate as we add new customers or when existing distributors make large purchases of our products during one period and no purchases during another period. Our revenues by quarter may not be linear or consistent. We do not anticipate that our revenues will be impacted by inflation or changing prices in the foreseeable future.
Current wording
Revenues. For the three months ended June 30, 2024 and 2023, our revenues were approximately $817,000 and $294,000, respectively, an increase of approximately 178%, or $523,000, between the periods. The increase was mainly attributable to increased sales from our Ultra Pain Products Inc. (“UPPI”) distributor as well an increase of customers from Veteran Administration facilities or through workman’s compensation programs, referred to us from three sales representatives to whom we sold our products directly for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. Our revenues may fluctuate as we add new customers or when existing distributors make large purchases of our products during one period and no purchases during another period. Our revenues by quarter may not be linear or consistent. We do not anticipate that our revenues will be impacted by inflation or changing prices in the foreseeable future.
Previous wording
For the three months ended March 31, 2024, the percentage of revenues attributable to our products was: PainShield Plus – 10%, PainShield MD – 59%, Monthly Kits PP – 2% and Monthly Kits P – 28%. For the three months ended March 31, 2023, the percentage of revenues attributable to our products was: PainShield MD – 91%, PainShield Plus – 0% and UroShield – 9%.
Current wording
For the three months ended June 30, 2024, the percentage of revenues attributable to our products was: PainShield Plus – 38%, PainShield MD – 45%, Painshield Plus Monthly Kits – 7% and Painshield MD Monthly Kits – 10%. For the three months ended June 30, 2023, the percentage of revenues attributable to our products was: PainShield – 100% and UroShield – 0%.
Previous wording
Gross profit as a percentage of revenues was approximately 72% and 66% for the three months ended March 31, 2024 and 2023, respectively. The increase in gross profit as a percentage of revenues is mainly due to the reasons described above.
Current wording
Gross profit as a percentage of revenues was approximately 52% and 73% for the three months ended June 30, 2024 and 2023, respectively. The decrease in gross profit as a percentage of revenues is mainly due to the reasons described above.
Previous wording
Research and Development Expenses. For the three months ended March 31, 2024 and 2023, research and development expenses were approximately $121,000 and $55,000, respectively, an increase of approximately 120%, or $66,000, between the periods. The increase was mainly due to the start of the University of Michigan clinical trial in the 2024.
Current wording
Research and Development Expenses. For the three months ended June 30, 2024 and 2023, research and development expenses were approximately $187,000 and $35,000, respectively, an increase of approximately 434%, or $152,000, between the periods. The increase was mainly due to product redevelopment costs of $150,000 incurred during 2024.
Previous wording
Research and development expenses as a percentage of total revenues were approximately 13% and 16% for the three months ended March 31, 2024 and 2023, respectively. This decrease was due to higher expenses incurred in 2023 compared to revenue.
Current wording
Research and development expenses as a percentage of total revenues were approximately 44% and 12% for the three months ended June 30, 2024 and 2023, respectively. This increase was due to higher expenses incurred in 2024 compared to revenue.
Previous wording
Selling and Marketing Expenses. For the three months ended March 31, 2024, and 2023, selling and marketing expenses were approximately $165,000 and $214,000, respectively, a decrease of approximately 23%, or $49,000, between the periods. The decrease was mainly due to a significant decrease in website and online marketing budget in 2024.
Current wording
Selling and Marketing Expenses. For the three months ended June 30, 2024, and 2023, selling and marketing expenses were approximately $199,000 and $227,000, respectively, a decrease of approximately 12%, or $28,000, between the periods. The decrease was mainly due to reduced consulting fees and related expenses due to completed wed development project in 2024 and reduce use of targeted sales.
Previous wording
General and Administrative Expenses. For the three months ended March 31, 2024 and 2023, general and administrative expenses were approximately $947,000 and $1,021,000, respectively, a decrease of approximately 7%, or $74,000, between the periods. The decrease was primarily due to decrease in legal fees related to securities and litigation matters, as well as accounting fees incurred in 2024, as compared to 2023.
Current wording
General and Administrative Expenses. For the three months ended June 30, 2024 and 2023, general and administrative expenses were approximately $716,000 and $963,000, respectively, a decrease of approximately 88%, or $247,000, between the periods. The decrease was primarily due to a decrease in legal fees related to securities and litigation matters, as well as accounting fees incurred in 2024, as compared to 2023.
Previous wording
Interest expense. For the three months ended March 31, 2024, and 2023, interest expense was $34,000, for both periods. This pertains to the interest on the Company’s judgment liability for both years.
Current wording
Interest expense. For the three months ended June 30, 2024, and 2023, interest expense was $34,000 and $33,000, respectively. This pertains to the interest on the Company’s judgment liability for both years.
Previous wording
Income tax expense. For the three months ended March 31, 2024 and 2023, tax expenses were $7,000 and $2,000, respectively. The tax expense is computed by multiplying income before taxes at our Israeli subsidiary by the appropriate tax rate.
Current wording
Income tax expense. For the three months ended June 30, 2024 and 2023, tax expenses were $4,000 and $13,000, respectively. The tax expense is computed by multiplying income before taxes at our Israeli subsidiary by the appropriate tax rate.
Previous wording
Net loss. Our net loss decreased by approximately 46%, or $509,000, to approximately $588,000 for the three months ended March 31, 2024 from approximately $1,097,000 in the same period of 2023. The decrease in net loss resulted primarily from the factors described above.
Current wording
Net loss. Our net loss decreased by approximately 36%, or $386,000, to approximately $688,000 for the three months ended June 30, 2024 from approximately $1,074,000 in the same period of 2023. The decrease in net loss resulted primarily from the factors described above.
Previous wording
We have incurred losses in the amount of approximately $588,000 during the three months ended March 31, 2024, as we continue to maintain significant net operating losses from operations. We also had negative cash flow from operating activities of $579,000 for the three months ended March 31, 2024. We had a cash balance of just over $2,700,000 as of March 31, 2024 and we expect to continue to incur losses and negative cash flows from operating activities. Due to the continued expected negative cash flow from operations and the potential arbitration payment, if we are unsuccessful in our appeals, the Company does not have sufficient resources to fund operations for at least the next twelve months from the date of this filing. As such, there is substantial doubt of our ability to continue as a going concern.
Current wording
We have incurred losses in the amount of approximately $1,276,000 during the six months ended June 30, 2024, as we continue to maintain significant net operating losses from operations. We also had negative cash flow from operating activities of $1,113,000 for the six months ended June 30, 2024. We had a cash balance of just over $2,170,000 as of June 30, 2024, and we expect to continue to incur losses and negative cash flows from operating activities. Due to the continued expected negative cash flow from operations and the potential arbitration payment, if we are unsuccessful in our appeals, the Company does not have sufficient resources to fund operations for at least the next twelve months from the date of this filing. As such, there is substantial doubt of our ability to continue as a going concern.
Previous wording
During the three period ended March 31, 2024, we met our short-term liquidity requirements from our existing cash reserves and from the sale of our securities. 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, 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 will be able to raise additional capital, as required, on terms favorable to us.
Current wording
During the six-month period ended June 30, 2024, we met our short-term liquidity requirements from our existing cash reserves and from the sale of our securities. 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, 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 will be able to raise additional capital, as required, on terms favorable to us.
Previous wording
We do not have any material commitments to capital expenditures as of March 31, 2024, other than the $2 million owed to Protrade as of March 31, 2024, under the court decision, which we continue to appeal.
Current wording
As of June 30, 2024, we do not have a commitment to fund our product redevelopment project for approximately another $1.2 million over the next four quarters as well as the $2 million owed to Protrade as of June 30, 2024, under the court decision, which we continue to appeal.
Previous wording
As of March 31, 2024, we had cash of approximately $2,700,000, compared to approximately $3,283,000 as of December 31, 2023. The decrease in cash was primarily due to our net loss of $588,000 which primarily consisted of increased revenues and increased gross margins offset by our operating expenses. 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 cost, marketing and sales activities, finance and administrative cost, capital expenditures, and general working capital.
Current wording
As of June 30, 2024, we had cash of approximately $2,170,000, compared to approximately $3,283,000 as of December 31, 2023. The decrease in cash was primarily due to our net loss of $1,276,000 which primarily consisted of increased revenues and increased gross margins offset by our operating expenses. 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 cost, marketing and sales activities, finance and administrative cost, capital expenditures, and general working capital.
Previous wording
Cash used in our operating activities was approximately $579,000 for the three months ended March 31, 2024, compared to $1,200,000 for the three months ended March 31, 2023.
Current wording
Cash used in our operating activities was approximately $1,132,000 for the six months ended June 30, 2024, compared to $2,429,000 for the six months ended June 30, 2023.
Previous wording
Cash used in our investing activities was approximately $1,000 for the three months ended March 31, 2024, and 2023.
Current wording
Cash used in our investing activities was approximately $3,000 for the six months ended June 30, 2024, compared to $1,000 for the six months ended June 30, 2023.
Previous wording
Cash provided by financing activities was approximately $0 for the three months ended March 31, 2024, compared to $7,000 for the three months ended March 31, 2023.
Current wording
Cash provided by financing activities was approximately $28,000 for the six months ended June 30, 2024, compared to $7,000 for the six months ended June 30, 2023.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
Gross profit as a percentage of revenues was approximately 63% and 70% for the six months ended June 30, 2024 and 2023, respectively. The decrease in gross profit as a percentage resulted primarily from the reasons described above.
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
Interest expense. For the six months ended June 30, 2024 and 2023, interest expense was $68,000 and $67,000, respectively. This pertains to the interest on the Company’s judgment liability for the first six months of 2024.
Current report — wording carried from elsewhere
Income tax expenses. For the six months ended June 30, 2024 and 2023, tax expenses were $11,000 and $15,000, respectively. The tax expense is computed by multiplying income before taxes at our Israeli subsidiary by the appropriate tax rate.
Current report — wording carried from elsewhere
Net loss. Our net loss decreased by approximately $895,000, or 41%, to approximately $1,276,000 for the six months ended June 30, 2024 from approximately $2,171,000 in the same period of 2023. The decrease in net loss resulted primarily from the factors described above.