ENvue Medical, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)

NOTE 1 -DESCRIPTION OF BUSINESS

ENvue Medical, Inc. (formerly known as NanoVibronix, Inc.) (the “Company”) was incorporated as a Delaware corporation in October 2003. The Company 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, utilizing its proprietary low-intensity ultrasound (acoustic) technology. 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 the Company, 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”), the Company and Predecessor ENvue effected (i) a merger of First Merger Sub with and into Predecessor ENvue, with First Merger Sub ceasing to exist and Predecessor ENvue becoming a wholly-owned subsidiary of 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 (the “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, change the name of the Surviving Entity to “ENvue Medical Holdings LLC.”

ENvue Medical Holdings LLC (formerly ENvue Medical Holding, Corp.) (“ENvue”), a wholly-owned subsidiary of the Company, is a Delaware limited liability company incorporated on June 5, 2024. ENvue has two wholly-owned subsidiaries: ENvue Medical (USA) Inc. and ENvue Medical Ltd. (formerly ENvue Medical Israel Ltd.). ENvue is engaged in the research, development, marketing, and sale of medical devices in the field of enteral feeding and is in the initial stage of commercializing its products.

NOTE 2 -LIQUIDITY AND PLAN OF OPERATIONS

As of March 31, 2026, the Company has incurred recurring losses and negative cash flows from operations and has an accumulated deficit of $112,136. For the three months ended March 31, 2026, the Company used approximately $4,312 of cash in operations. The Company’s ability to continue to operate is dependent mainly on its ability to successfully market and sell its products and the receipt of additional financing until profitability is achieved.

The Company expects to incur future net losses and its transition to profitability is dependent upon, among other things, the achievement of a level of revenues adequate to support the cost structure. Until the Company achieves profitability or generates positive cash flows, it will continue to be dependent on raising additional funds to fund its operations. The Company intends to fund its future operations through cash on hand, additional private and/or public offerings of debt or equity securities or a combination of the foregoing. There are no assurances, however, that the Company will be able to obtain an adequate level of financial resources that are required to fund its operation.

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 interim condensed 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 interim 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 unaudited interim 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 interim 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, 2025, as found in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2026.

The balance sheet for December 31, 2025, was derived from the Company’s audited financial statements for the year ended December 31, 2025. 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 interim 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.

Use of estimates

The preparation of the interim condensed 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.

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 and cash equivalents in various banking institutions. The majority of the Company’s cash and cash equivalents and short-term bank deposits are invested with banks in United States. Such investments are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250. Cash balances could exceed insured amounts at any given time. Generally, these investments may be redeemed upon demand, and the Company believes that the financial institutions that hold the Company’s cash deposits are financially sound and, accordingly, bear minimal risk. As of March 31, 2026 and December 31, 2025, the Company had cash in excess of the FDIC insured amount totaling approximately $1,526 and $3,800, respectively.

The trade receivables of the Company are mainly derived from sales to a diverse set of customers located primarily in the United States. The Company performs ongoing credit evaluations of its customers and, to date, has not experienced any significant losses.

Trade receivables

The Company’s trade receivable balance consists of amounts due from its customers. Trade Receivables are recorded when the right to consideration becomes unconditional. 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 March 31, 2026 and December 31, 2025, the credit losses allowance was $42 and $10, respectively.

Earnings per share

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, par value $0.001 per share (the “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 of the Company, based on the conversion ratio, assuming conversion of all 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.

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 three months ended March 31, 2026 and 2025, no impairment was recorded.

Intangible Assets

Purchased intangible assets with finite lives are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, which range from 5 to 7 years. Intangible assets, consisting primarily of technology, tradename and trademarks and customer list, are amortized over their estimated useful lives on a straight-line basis or in proportion to their economic benefits realized.

For the three months ended March 31, 2026 and 2025, amortization expense amounted to $210 and $17.

The estimated useful lives of the Company’s intangible assets are as follows:

Leases

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 three months ended March 31, 2026, there were no operating leases in which the Company is the lessor.

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. Interest income for the three months ended March 31, 2026 and 2025 was immaterial.

The Company’s short-term net investment in a lease receivable as of March 31, 2026 and December 31, 2025 was $20 and is presented within trade receivables in the consolidated balance sheets. The Company’s long -term net investment in a lease receivable as of March 31, 2026 and December 31, 2025 was $20 and is presented within long-term trade receivables in the consolidated balance sheets.

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, commissions as well as allowances for returns.

Revenue from NanoVibronix product sales are 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 insertion 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 delivery to the customer.

When a contract includes one performance obligation, the entire transaction price is allocated to that performance obligation. 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 Company extends credit to its customers in the ordinary course of business. Payment terms are typically between 30 and 60 days from the date of invoice for both NanoVibronix and ENvue customers.

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 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 March 31, 2026 and December 31, 2025, the Company’s provision for warranty amounted to $57 and $47, respectively.

Deferred revenue

Deferred revenue includes payments received in advance of performance under the contract and are realized with the associated revenue recognized under the contract. The following table presents the changes in the deferred revenue for the three months ending March 31, 2026:

Fair Value Measurements

Fair value is defined as the exchange price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company measures financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The carrying value of cash equivalents, restricted cash, other accounts receivable, trade payables, and other accounts payable and accrued expenses approximate their fair value due to their short-term maturities.

The Company warrant liabilities are measured at fair value using Level 3 inputs.

Reclassification

Certain comparative figures have been reclassified to conform to the current period presentation.

Recently Adopted Accounting Standards

In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). This amendment introduces a practical expedient for the application of the current expected credit loss model to current accounts receivable and contract assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company adopted this guidance on January 1, 2026 on a prospective basis. The Company has elected the practical expedient provided by ASU 2025-05. Under this expedient, the Company assumes that economic conditions as of the balance sheet date remain unchanged for the remaining life of all current accounts receivable and current contract assets arising from transactions under ASC 606. The adoption did not have a material impact on the consolidated financial statements*.*

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 Interim Condensd Consolidated Statements of Operations and Comprehensive Loss 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 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.

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 April 2026, the FASB issued ASU 2026-01,Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock. The amendments in this update require entities to initially measure paid-in-kind (“PIK”) dividends on equity-classified preferred stock using the PIK dividend rate stated in the preferred stock agreement, rather than at fair value. The ASU is effective for annual periods beginning after December 15, 2026, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

NOTE 4 –PREPAID EXPENSES AND OTHER ACCOUNTS RECEIVABLES

Prepaid expenses and other receivables consist of the following:

NOTE 5 –INVENTORY

Inventory consists of the following components as of:

Inventory write-down charged to the cost of sales amounted to $122 and $0 for the three-month periods ended March 31, 2026, and 2025, respectively.

NOTE 6 –OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Other accounts payable and accrued expenses consist of the following:

NOTE 7 -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.

Reverse stock splits

On March 13, 2025, the Company effected a 1-for-11 reverse stock split (the “March 2025 Reverse Stock Split”). On August 11, 2025, the Company effected a 1-for-10 reverse stock split (the “August 2025 Reverse Stock Split” and together with the March 2025 Reverse Stock Split, the “Reverse Stock Splits”).

As a result of the March 2025 Reverse Stock Split, every eleven (11) 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 (10) 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. Any fractional shares that would otherwise have resulted from the Reverse Stock Splits were rounded up to the next whole number. In connection with the August 2025 Reverse Stock Split, the Company issued an aggregate of 6,618 additional shares to round up fractional shares to whole shares.

The number of authorized shares of Common Stock under the Company’s Amended and Restated Certificate of Incorporation, as amended, remained unchanged at 40,000,000 shares.

All references in these consolidated financial statements 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 400,000 shares of the Company’s Series G Convertible Preferred Stock (“Series G Preferred Stock”), with a par value $0.001 per share and stated value of $25 per share, and liability classified warrants to purchase up to 490,198 shares of Common Stock, of the Company 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. The Company also issued warrants to representative of the Company in connection with the 2025 Underwritten Offering (the “May 2025 Representative’s Warrants”) to purchase up to 24,510 shares of Common Stock with an exercise price of $20.40 per share, as issuance costs. The May 2025 Representative’s Warrants expire five years from the date of commencement of sales in the 2025 Underwritten Offering.

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 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 the Company’s option, 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 9% per annum dividend 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 9% dividend.

The aggregate net proceeds of the 2025 Underwritten Offering were approximately $8,200, after deducting approximately $1,800 of underwriting discounts, commissions and other offering costs and expenses.

Conversion of Series G Convertible Preferred Stock

Between May 16, 2025, and July 1, 2025, a majority of the Series G Preferred holders exercised their conversion right, converting 399,180 shares of Series G Preferred Stock into 709,419 shares of Common Stock. As of March 31, 2026, there were 820 outstanding shares of Series G Preferred Stock.

Series X Non-Voting Convertible Preferred Stock

On February 14, 2025, in connection with the ENvue Merger, the Company issued 57,720 shares of Series X Non-Voting Convertible Preferred Stock (the “Series X Preferred Stock”) to the certain investors of Predecessor ENvue. In addition, the Company issued 3,626 shares of Series X Preferred Stock to a to a service provider of Predecessor ENvue, replacing its equity interest in ENvue, resulting in a total of 61,346 shares of Series X Preferred Stock outstanding after the ENvue Merger.

The ENvue Merger was consummated and completed on February 14, 2025.

After giving effect to the ENvue Merger, pursuant to the terms and conditions of the Merger Agreement:(i) the holders of the outstanding equity of Predecessor ENvue immediately prior to the effective time of the First Merger (“First Effective Time”) own 19.9% of the Common Stock of the Company and 85.0% of the outstanding equity of the Company (assuming the Series X Preferred Stock is converting at a ratio of 100:1) immediately following the First Effective Time, which following stockholder approval will allow the Series X Preferred Stock to convert to common stock of the Company which may result in the holders of Predecessor ENvue to own 85% of the common stock of the Company, and (ii) the holders of our outstanding equity immediately prior to the First Effective Time own 80.1% of the Common Stock of the Company and 15.0% of the outstanding equity of the Company (assuming the Series X Preferred Stock is converting at a ratio of 100:1) immediately following the First Effective Time, which following stockholder approval which will allow the Series X Preferred Stock to convert to Common Stock of the Company which may result in our holders owning 15% of Common Stock of the Company.

Each share of Series X Preferred Stock has a stated value of $1,000 per share 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 accrued and 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.

On May 12, 2025, the Company filed an amendment to the Series X Certificate of Designations (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 $66.69 to $20.40.

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 $3,815.

On July 22, 2025, the Company repurchased 8,246 then outstanding shares of its Series X Preferred Stock from Alpha Capital Anstalt (“Alpha”) in accordance with the terms of the Certificate of Designations of the Series X Preferred Stock for $5,000 from the proceeds of the July 2025 Private Placement.

During the three months ended March 31, 2026, the Company repurchased a total of 2,573 shares of Series X Preferred Stock from Alpha for an aggregate repurchase price of approximately $1,560. As a result of these redemptions, the number of Series X Preferred Stock outstanding decreased from 53,100 shares as of December 31, 2025, to 50,527 shares as of March 31, 2026. The redemptions were executed in connection with new Series H Preferred Stock investments by Alpha where a portion of the investment proceeds were used to redeem existing Series X Preferred Stock. The repurchase resulted in a deemed contribution of $131.

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 Alpha (the “July 2025 Investor”), pursuant to which it agreed to sell to the July 2025 Investor (i) an aggregate of 8,889 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 467,836 shares of Common Stock (the “July 2025 Warrants” or the “Series H Warrants”) at an exercise price of $22.50 (the “July 2025 Private Placement” and such closing, the “Initial Closing”).

Pursuant to the terms of the July 2025 Purchase Agreement, the Company also agreed to issue 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 in a second closing (the “Second Closing”), subject to the satisfaction of customary closing conditions. Additionally, pursuant to the terms of the July 2025 Purchase Agreement, the Company has 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 July 2025 Warrants, the July 2025 Investor shall have the right to purchase up to 44,000 additional shares of Series H Preferred Stock “Additional Investment Right”.

The Initial Closing occurred on July 22, 2025, and the Second Closing occurred on October 30, 2025. The aggregate net proceeds from the July 2025 Private Placement were approximately $9,000, after deducting placement agent fees and other offering expenses payable by the Company of $958. The Series H Preferred Stock and the option to purchase additional 44,000 shares of Series H Preferred Stock were classified as equity, while the warrants and the obligation to issue additional warrants and Series H Preferred Stock were classified as liability. The Company allocated the financing proceeds to the freestanding financial instruments. Thus, the Company allocated $6,602 to equity and $2,772 to warrant liability. As a result of amendment to the warrant agreement on November 1, 2025, the Company reclassified warrant liability in the amount of $1,067 to equity.

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 9% per annum, payable on each conversion date of the Series H Preferred Stock in duly authorized, validly issued, fully paid and non-assessable shares of Common Stock at the conversion price then in effect. The stated value of the Series H Preferred Stock is $1,000 per share. The Company recorded $236 of dividends attributable to holders of the Series H Preferred Stock for the three months ended March 31, 2026.

In January 2026, the July 2025 Investor exercised $3,500 of the Additional Investment Right pursuant to the July 2025 Purchase Agreement, resulting in the issuance of 3,500 new shares of Series H Preferred Stock at a stated value of $1,000 per share.

On March 24, 2026, the holder also exercised an additional $400 of the Additional Investment Right, resulting in the issuance of 400 new shares of Series H Preferred Stock at a stated value of $1,000 per share.

In aggregate, during the three months ended March 31, 2026, the holder exercised a total of $3,900 of the Additional Investment Right resulting in the issuance of 3,900 new shares of Series H Preferred Stock, which remained outstanding as of March 31, 2026.

During the month of January 2026, the holder of the Series H Preferred Stock also converted an aggregate of $4,802 of Series H Preferred Stock into 2,377,228 shares of Common Stock and $451 of accrued dividends into 223,267 shares of Common Stock.

Certificate of Amendment to Series H Preferred Stock

On January 30, 2026, the Company entered into an 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 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 of the Additional Investment Right (as such concept is described in the July 2025 Purchase Agreement.

The Company concluded that the modification of the Series H Preferred Stock should be accounted for as an extinguishment. As such, the difference between the fair value of the modified Series H Preferred Stock and their carrying amount was accounted for as a deemed dividend in the amount of $1,097.

Down-round Feature

During the three months ended March 31, 2026, the Company issued 3,900 shares of Series H Preferred Stock to Alpha for aggregate gross proceeds of $3,900. In connection with these issuances, the Company recognized deemed dividends totaling approximately $16,974 resulting from down round feature adjustments to the Series H Preferred Stock conversion price under ASC 260-10-30-1, which requires that the Company shall measure the value of the effect of the feature as the difference between the fair value of the financial instrument before and after the conversion price reduction.

The deemed dividends consisted of $7,091 recognized on January 5, 2026, upon the exercise of additional investment rights at $2.02 per share, and $9,882 recognized on March 24, 2026 upon the exercise of Additional Investment Right at $1.04 per share.

Both amounts were recorded as an increase to additional paid-in capital with a corresponding charge to accumulated deficit, resulting in no net impact to total stockholders’ equity, and are reflected as an increase to net loss attributable to common stockholders for purposes of calculating net loss per share.

Dividend Accrual

The Series H Preferred Stock accrues dividends at a rate of 9% per annum on the stated value. During the three months ended March 31, 2026, the Company accrued dividends of approximately $236 on the outstanding Series H Preferred Stock. As of March 31, 2026, accumulated but unpaid dividends on the Series H Preferred Stock totaled $181, net of amounts converted to Common Stock.

The Series X Preferred Stock accrues dividends at a rate of 8% per annum on the stated value of $606.38 per share. During the three months ended March 31, 2026, the Company accrued dividends of approximately $623 on the outstanding Series X Preferred Stock. As of March 31, 2026, accumulated but unpaid dividends on the Series X Preferred Stock totaled $2,323.

September 2025 Registered Direct Offering

On September 16, 2025, the Company entered into a securities purchase agreement with Alpha, pursuant to which the Company issued and sold (i)74,114 shares of Common Stock and (ii) prefunded warrants to purchase up to 217,090 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 $7.01 per share of Common Stock and $7.009 per September 2025 Pre-Funded Warrant, was 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 $1,880, after deducting placement agent fees and other offering expenses of $163.

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,60,000 shares of the Company’s Common Stock were reserved for issuance. The Company effected the 2025 Reverse Stock Splits that consequently, reduced the number of shares of Common Stock of the Company reserved for issuance pursuant to awards under the 2024 Plan to 5,455 shares. As of March 31, 2026, there were 1,044 shares of Common Stock available to be issued under the plan, See Note 16.

During the three months ended March 31, 2026, and 2025, no employee options were exercised, no options were granted.

During the three months ended March 31, 2026, and 2025, stock-based compensation expense related to these options were $0.

The following table summarizes option activity for the three months ended March 31, 2026:

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)4,149 shares of Common Stock (the “January 2025 Exchange Shares”), (ii) a warrant to purchase up to 15,856 shares of Common stock (the “January 2025 Warrant”), and (iii) a pre-funded warrant to purchase up to 17,813 shares of Common Stock (the “January 2025 Pre-Funded Warrant”), in exchange for the Series A-1 Warrant held by the Holder to purchase up to 26,427 shares of Common Stock at an exercise price of $161.70 per share (the “Exchange”). As a result of the Exchange the Company cancelled the Series A-1 Warrant. The January 2025 Warrant has an exercise price of $68.296 per share.* *

NOTE 8–WARRANT LIABILITY

The May 2025 Warrants (see Note 3) 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.

The aggregate fair value of the May 2025 Warrants as of March 31, 2026, was $824 and was estimated using the Black Scholes Model and using the following assumptions: stock price $2.38, exercise price $20.40, dividend yield 0%; remaining term of 4.13 years; equity volatility of 152.31%; and a risk-free interest rate of 3.92%.

The Company recognized changes in the fair value of the warrant liability of $17 during the three months ended March 31, 2026, as financial income on the consolidated statement of operations.

Changes in the warrant liability balance

Below is the change in the warrant liability balance for the three months ended March 31, 2026:

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 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 $2,497 to Alpha, which such Alpha Note was funded in several tranches. The Alpha Note does not bear interest and is secured by Collateral (as defined in the ENvue Note). The aggregate principal amount owed under the Alpha Note was originally due and payable on the earlier of (i) the receipt of shareholder approval by the Company of the Parent Stockholder Matters (as defined in that certain Merger Agreement) and (ii) December 31, 2025. As part of the acquisition accounting, the Company recorded the loan at its fair value of $2,258. The difference between the face value and the fair value was recognized as interest expense over the life of the note. During the year ended December 31, 2025, the Company paid $1,417, toward redeeming the Alpha Note, resulting in an outstanding balance of $1,080.

On March 25, 2026, the Company and Alpha entered into an amendment to a loan to modify the maturity date and to extend it to December 31, 2026. All other terms of the loan remain unchanged. As of March 31, 2026, the loan balance was $1,080.

Convertible Debenture

On February 13, 2025, the Company entered into a Securities Purchase Agreement with Alpha, pursuant to which the Company issued a senior convertible debenture (the “Debenture”) with an initial principal amount of $500, subsequently amended and restated on March 26, 2025 to increase the principal amount to $1,300. The Debenture bore interest at 8.0% per annum and was convertible into shares of Common Stock at a conversion price of $48.906 per share, subject to anti-dilution adjustments. The Company elected the fair value option to account for the Debenture, with changes in fair value recorded in other income (expense) in the consolidated statements of operations.

For the three months ended March 31, 2025, the Company recorded a gain of $58 related to the change in fair value of the A&R Debenture, which was recognized in other income (expense) in the consolidated statements of operations. Interest expense on the A&R Debenture totaled $13 for the three months ended March 31, 2025 and is included within the change in fair value of the Debenture in the consolidated statements of operations.

On May 19, 2025, the Company repaid the A&R Debenture in full. There was no balance outstanding as of March 31, 2026.

NOTE 10 -LOSS PER SHARE APPLICABLE TO COMMON STOCKHOLDERS

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 months ended March 31, 2026, and 2025 have been excluded from the calculation of the diluted net loss per share because all such securities are anti-dilutive for all periods presented.

The following table sets forth the computation of the net loss per share for the period presented:

The following table summarizes the Company’s securities, in common stock equivalents, which have been excluded from the calculation of dilutive loss per share as their effect would be anti-dilutive:

The diluted loss per share equals basic loss per share for the three months ended March 31, 2026, and 2025 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 conducted the business throughtwo primary operating segments: NanoVibronix and ENvue. NanoVibronix derives revenues from selling its products directly to patients as well as through distributor agreements. ENvue derives revenues from selling its systems and nasoenteral tubes. Non-allocated administrative and other expenses are reflected in Corporate.

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 CODM allocates resources to and assesses the performance of each operating segment using information about the operating segment’s loss from operations.

Goodwill and Assets

Segment operating results

Geographic Information and Major Customer Data

The following is a summary of revenues within geographic areas:

Major Customer Data as a Percentage of Total Revenues

The following is a summary of revenues:

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:

There were no transfers between Level 3 during the three months ended March 31, 2026, and 2025.

The following table presents changes in Level 3 asset and liability measured at fair value for the three months ended March 31, 2026, and 2025:

The Company measures certain financial liabilities at fair value on a recurring basis, including its warrant liability and previously its convertible debenture, using Level 3 valuation techniques such as the Black-Scholes option pricing model and Monte Carlo simulation.

The following are the inputs used in the Company’s valuation models:

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:

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 $3 million.

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 $1,500, which consists of $1,432 for “lost profits” and $68 as reimbursement of arbitration costs, on the grounds that the Company allegedly failed to supply Protrade with certain patches utilized by users of DV0057 Painshield MD device. The arbitrator based the decision on the testimony of Protrade’s president who asserted that a user would use in excess of 33 patches per each device. The Company believes that the number of patches per device alleged by Protrade is grossly inflated, and that these claims were not properly raised before the arbitrator. Accordingly, on April 13, 2022, the Company submitted an application for the correction of the award which the arbitrator denied on June 22, 2022.

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.

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 March 30, 2026, the Appellate Division of the Second Department issued a decision and order which affirmed the judgment of the Supreme Court, Nassau County in its entirety and dismissed the appeal, stating inter alia that “Nanovibronix failed to establish that the arbitration award violated a strong public policy, was irrational, procured by fraud, or clearly exceeded a specifically enumerated limitation of the arbitrator’s power”. It further held that Nanovibronix had not demonstrated that it had shown sufficient new facts to the court on the motion to renew. The decision was conclusory and did not analyze the facts as argued by the Company nor did it distinguish them specifically. The Company is reviewing the decision and considering its available alternatives.

As of March 31, 2026, the Company accrued the amount of the arbitration award to Protrade of approximately $2,285, including interest.

NOTE 14 –RELATED PARTY TRANSACTION

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 $2,497 to Alpha, which such Alpha Note was funded in several tranches. The Alpha Note does not bear interest and is secured by Collateral (as defined in the Alpha Note). The aggregate principal amount owed under the Alpha Note is due and payable on the earlier of (i) the receipt of shareholder approval by the Company of the Parent Stockholder Matters (as defined in that certain Merger Agreement) and (ii) December 31, 2026, see Note 9.

Prior to the Envue Merger, Alpha was the principal shareholder of Predecessor ENvue, and following the completion of the ENvue Merger, Alpha continues to be a significant shareholder of the Company, subject to a 4.99% beneficial ownership limitation.

Equity Financings

As of March 31, 2026, Alpha holds 39,001 Series X Preferred Stock acquired in connection with the ENvue Merger.

In January 2026, Alpha, as the holder of the Series H Preferred Stock, exercised $3,500 of the Additional Investment Right pursuant to the July Purchase Agreement resulting in the issuance of 3,500 new shares of Series H Preferred Stock at a stated value of $1,000 per share (not in thousand).

On March 24, 2026, the Alpha exercised an additional $400 of the Additional Investment Right, resulting in the issuance of 400 new shares of Series H Preferred Stock at a stated value of $1,000 per share (not in thousand).

In aggregate, during the three months ended March 31, 2026, Alpha exercised a total of $3,900 of the Additional Investment Right resulting in the issuance of 3,900 new shares of Series H Preferred Stock, which remained outstanding as of March 31, 2026.

In January 2026, Alpha converted an aggregate of $4,802 of Series H Preferred Stock into 2,377,228 shares of Common Stock and, $451 of accrued dividends into 223,267 shares of Common Stock.

As of March 31, 2026, Alpha holds 10,209 Series H Preferred Stock (see Note 7).

NOTE 15 –AN IMMATERIAL ERROR IN PRIOR-PERIOD FINANCIAL STATEMENTS

In preparing the interim condensed consolidated financial statements for the three and six months ended June 30, 2025, the Company identified an error in the accounting for a warrant modification originally reported in the interim condensed consolidated financial statements for the three months ended March 31, 2025. The Company had incorrectly recorded $623 as warrant modification expense within “Other Expense” rather than within equity.

The Company evaluated the materiality of the error and concluded that the correction would not be material to the financial position or results of operations for the three months ended March 31, 2025.

The impact of the error on the Company’s interim condensed consolidated financial statements for the three months ended March 31, 2025 was as follows:(i) warrant modification expense within Other Expense was overstated by $623, resulting in an overstatement of net loss of $623; (ii) accumulated deficit was overstated by $623 as a result of the overstatement of net loss; (iii) additional paid-in capital was understated by $623; and (iv) the error had no impact on cash flows from operating, investing, or financing activities.

NOTE 16 -SUBSEQUENT EVENTS

Besser Initial Restricted Stock Units

On April 4, 2026, in connection with, and pursuant to the terms of that certain Amended and Restated Employment Agreement with Doron Besser, dated as of December 17, 2025, as amended on February 2, 2026, the Board approved, as recommended by the Compensation Committee (i) an award of 1,044,741 fully vested restricted stock units (the “Besser Initial RSUs”) with a date of grant as of April 4, 2026 (the “Initial Grant Date”), subject to the terms and conditions of the 2024 Plan; and (ii) on each quarterly anniversary of the Initial Grant Date, subject to the authorized share limit under the 2024 Plan, an additional gross-up award, if necessary, in order for Dr. Besser to maintain 9.0% of the Company’s issued and outstanding Common Stock, determined on a fully diluted basis as of the grant date of such applicable quarterly gross-up award. Following Board approval, the Besser Initial RSUs were granted to Dr. Besser on the Initial Grant Date.

On April 23, 2026, the Alpha exercised $1,700 of the Additional Investment Right pursuant to the July Purchase Agreement, resulting in the issuance of 1,700 new shares of Series H Preferred Stock at a stated value of $1,000 per share (not in thousand).

During the months of April and May 2026, the Alpha also converted an aggregate of 1,252 shares of Series H Preferred Stock into 1,201,305 shares of Common Stock and aggregate of $151 of accrued dividends into 144,886 shares of Common Stock.