NanoVibronix, Inc.

NANOVIBRONIX, INC.

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1 -DESCRIPTION OF BUSINESS

NanoVibronix, Inc. (the “Company”), a Delaware corporation, commenced operations on October 20, 2003, and is a medical device company focusing on non-invasive biological response-activating devices that target wound healing and pain therapy and can be administered at home, without the assistance of medical professionals.

The Company’s principal research and development activities are conducted in Israel through its wholly-owned subsidiary, NanoVibronix Ltd., a company registered in Israel, which commenced operations in October 2003.

On February 14, 2025, pursuant to the terms of that certain Agreement and Plan of Merger, dated as of February 14, 2025 (the “Merger Agreement”), by and among NanoVibronix, Inc. (the “Company”) NVEH Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of NVEH Merger Sub I, Inc. (“First Merger Sub”), NVEH Merger Sub II, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Second Merger Sub”), and Predecessor ENvue, the Company and Predecessor ENvue effected (i) a merger of First Merger Sub with and into Predecessor ENvue, with the First Merger Sub ceasing to exist and Predecessor ENvue becoming a wholly-owned subsidiary the Company and (ii) the merger of Predecessor ENvue with and into Second Merger Sub (the “Second Merger” and, together with the First Merger, the “ENvue Merger”), with Second Merger Sub being the surviving entity of the Second Merger (“Surviving Entity”). At the effective time of the Second Merger, the certificate of formation of the Surviving Entity was amended and restated to, among other things, to change the name of the Surviving Entity to “ENvue Medical Holdings LLC.” See Note 4 – Merger.

ENvue Medical Holdings LLC (previously: Envizion Medical Holding Corp.) (hereinafter: “ENvue**”**) is a Delaware corporation incorporated June 5, 2024. ENvue has two wholly owned subsidiaries: ENvue Medical (USA) Inc. (previously: Envizion Medical (USA) Inc.) and ENvue Medical Ltd. (previously: Envizion Medical Israel Ltd.).

ENvue is engaged in research, development, marketing, and sale of medical equipment in the field of enteral feeding and are in the initial stage of commercializing its products.

NOTE 2 -LIQUIDITY AND PLAN OF OPERATIONS

As of June 30, 2025, The Company has incurred recurring losses and negative cash flows from operations and has an accumulated deficit of $75,988. For the six-month period ended June 30, 2025, the Company used approximately $4,726 of cash in operations. 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 condensed interim consolidated financial statements do not include any adjustments to reflect the possible future effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

NOTE 3 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and principles of consolidation

The unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for the interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the financial position and results of operations of the Company. These condensed consolidated financial statements and notes thereto are unaudited and should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2024, as found in the Company’s Annual Report on Form 10-K, as amended, initially filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2025.

The balance sheet for December 31, 2024, was derived from the Company’s audited financial statements for the year ended December 31, 2024. The results of operations for the periods presented are not necessarily indicative of results that could be expected for the entire fiscal year. Certain information and footnote disclosures normally included in the consolidated financial statements in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC for interim reporting.

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, including ENvue as of the date of the merger. Intercompany accounts and transactions have been eliminated upon consolidation.

Use of estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Foreign currency translation

The currency of the primary economic environment in which the operations of the Company and certain subsidiaries are conducted is the U.S. dollar; thus, the dollar is the functional currency of the Company and certain subsidiaries.

The Company and certain subsidiaries’ transactions and balances denominated in dollars are presented at their original amounts. Non-dollar transactions and balances have been remeasured to dollars in accordance with ASC 830, “Foreign Currency Matters”. All transaction gains and losses from remeasurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statements of operations as financial income or expenses, as appropriate.

For certain subsidiaries whose functional currency has been determined to be a non-dollar currency, assets and liabilities are translated at period-end exchange rates and statement of operations items are translated at average exchange rates prevailing during the period. Such translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) in shareholders’ equity.

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less, at the date of purchase.

*Concentration of credit risk *

Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, trade receivables, and other accounts receivable. The Company holds cash in various banking institutions. Such funds are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250. Cash balances could exceed insured amounts at any given time. As of June 30, 2025, the Company had cash in excess of the FDIC insured amount totaling $3,362.

Trade receivables

The Company’s trade receivable balance consists of amounts due from its customers. The Current Expected Credit Losses (“CECL”) impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, which considers forecasts of future economic conditions in addition to information about past events and current conditions. Based on this model, the Company considers many factors, including the age of the balance, collection history, and current economic trends. Credit losses are written off after all collection efforts have ceased. Allowances for credit losses are recorded as a direct reduction from an asset’s amortized cost basis. Credit losses and recoveries are recorded in selling, general and administrative expenses in the consolidated statements of operations. Recoveries of financial assets previously written off are recorded when received As of June 30, 2025, the credit losses allowance was immaterial.

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 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 would be entitled to dividends that would be distributed to the holders of Common Stock, based on the conversion ratio, assuming conversion of all Convertible Series X Preferred shares into shares of Common Stock. The Company does not allocate losses to these participating securities as they do not share in the Company’s losses.

The Company’s basic net loss per share is calculated by dividing net loss attributable to common and preferred stockholders by the weighted-average number of shares, which include prefunded warrants, without consideration of potentially dilutive securities. The diluted net loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities. Diluted net loss per share is the same as basic net loss per share in periods when the effects of potentially dilutive shares of Common Stock are anti-dilutive.

Inventory

Inventories are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Cost is determined using the “first-in, first-out” method.

Inventory write-offs are provided to cover risks arising from slow-moving items or technological obsolescence. The Company periodically evaluates the quantities on hand relative to current and historical selling prices and historical and projected sales volume. Based on this evaluation, provisions are made when required to write-down inventory to its net market value.

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 six months ended June 30, 2025 and 2024, no impairment was recorded.

Intangible Assets

The estimated fair values of acquired intangibles are generally determined based upon future economic benefits such as earnings and cash flows. Acquired identifiable intangible assets are recorded at fair value and are amortized over their estimated useful lives, which is 5 –7 years.

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

Property and equipment, net

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets.

The estimated useful lives of the Company’s property and equipment are as follows:

Impairment of Long-Lived Assets

The long-lived assets of the Company, including finite-lived intangible assets, are reviewed for impairment in accordance with ASC No. 360, “Property, Plant and Equipment”, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the three and six months ended June 30, 2025 and 2024, no impairment was recorded.

Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance. The assessment considers whether the warrants are freestanding financial instruments, meet the definition of a liability under ASC 480, and meet all of the requirements for equity classification, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent reporting period end date while the warrants are outstanding. Warrants that meet all the criteria for equity classification, are required to be recorded as a component of additional paid-in capital. Warrants that do not meet all the criteria for equity classification, are required to be recorded as liabilities at their initial fair value on the date of issuance and remeasured to fair value at each balance sheet date thereafter. The liability-classified warrants are recorded under non-current liabilities. Changes in the estimated fair value of the warrants are recognized in Financial expenses or income in the unaudited interim condensed consolidated statements of operations.

The Company issued warrants in connection with the Series G Preferred financing, which were recorded as liabilities. The rest of the Company’s outstanding warrants are equity classified.

Accrued severance pay

The Company’s liability for severance pay is for its Israeli employees and is calculated pursuant to Israeli Severance Pay Law based on the most recent salary of the employees multiplied by the number of years of employment as of the balance sheet date and is in large part covered by regular deposits with recognized pension funds, deposits with severance pay funds and purchases of insurance policies. The value of these deposits and policies is recorded as an asset in the Company’s balance sheet. Accrued severance pay liability on June 30, 2025, and December 31, 2024, was $232 and $216, respectively.

Leases

The Company accounts for its leases in accordance with ASU 2016-02, “Leases” (Topic 842). This topic requires that a lessee recognize the assets and liabilities that arise from operating leases. The Company recognizes right-of-use assets and lease liabilities on the consolidated balance sheet for all leases with a term longer than 12 months and classifies them as operating leases. For leases with a term of 12 months or less, the Company elects not to recognize lease assets and lease liabilities on those leases. Lease liabilities have been measured by the present value of the Company’s remaining lease payments over the lease term using our incremental borrowing rates or implicit rates, when readily determined.

Revenue recognition

Revenues from product and services are recognized in accordance with ASC 606 “Revenue Recognition.” Five basic steps must be followed before revenue can be recognized; (1) Identifying the contract(s) with a customer that create(s) enforceable rights and obligations; (2) Identifying the performance obligations in the contract, such as promising to transfer goods or services to a customer; (3) Determining the transaction price, meaning the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer; (4) Allocating the transaction price to the performance obligations in the contract, which requires the company to allocate the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or services promised in the contract; and (5) Recognizing revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service to a customer.

The Company’s performance obligation is generally the sale and delivery of its products. Revenues from product sales is recorded at the net sales price, or “transaction price,” which includes estimates of variable consideration that result from discounts as well as allowances for returns. Revenue from product sales is recognized at a point in time when control of the product is transferred, which is generally upon shipment to the customer.

Regarding its ENvue sales, the Company regularly sells its Systems and Nasoenteral tubes on a stand-alone basis and therefore concludes these products are separate performance obligations. Revenue from product sales is recognized at a point in time when control of the product is transferred, which is generally upon shipment to the customer. Revenue from training services is recognized over time, while the Company provides the services, which are usually completed in under a week.

The Company also concluded that training services are capable of being distinct and separately identifiable and therefore should be accounted for as a separate performance obligation. When a contract includes one of these products or services, the entire transaction price is allocated to that product or service. When a contract includes a combination of products and services, the transaction price is allocated to each performance obligation on a stand-alone selling price basis. The stand-alone selling prices are generally determined based on the prices at which the Company separately sells the products and services. The Company’s contracts with its ENvue customers generally do not include rights of return.

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. As of June 30, 2025, the Company’s provision for warranty amounted to $64.

Income taxes

The Company accounts 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. The Company provides full valuation allowance, to reduce deferred tax assets to the amount that is more likely than not to be realized.

The Company implements 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.

The Company recognizes 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.

Stock-based compensation

The Company selected the Black-Scholes-Merton option pricing model as the most appropriate fair value method for its stock-options awards. The option-pricing model requires a number of assumptions, of which the most significant are the expected stock price volatility and the expected option term. Expected volatility was calculated based upon similar traded companies’ historical share price movements. The expected option term represents the period that the Company’s stock options are expected to be outstanding. The Company currently uses the simplified method and will continue to do so until sufficient historical exercise data supports using expected life assumptions. The risk-free interest rate is based on the yield from U.S. Treasury zero-coupon bonds with an equivalent term. The expected dividend yield assumption is based on the Company’s historical experience and expectation of no future dividend payouts. The Company has historically not paid cash dividends and has no foreseeable plans to pay cash dividends in the future. The Company recognizes forfeitures of awards as they occur.

Convertible Debenture

As permitted under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 825,Financial Instruments (“ASC 825”), the Company elects to account for its Debenture (as defined below), which meets the required criteria, at fair value at inception and at each subsequent reporting date. Subsequent changes in fair value are recorded as a component of non-operating loss in the consolidated statements of operations, except for adjustments related to instrument specific credit risk, which are recorded as other comprehensive income. This election is made on an instrument-by-instrument basis as permitted under ASC 825. As a result of electing the fair value option, direct costs and fees related to the Debenture are expensed as incurred.

The Company estimates the fair value of the Debenture using a Monte Carlo simulation model, which uses as inputs the fair value of our common stock and estimates for the equity volatility and volume volatility of our common stock, the time to expiration of the Debenture, the risk-free interest rate for a period that approximates the time to expiration, and probability of default. Therefore, we estimate our expected future volatility based on the actual volatility of our common stock and historical volatility of our common stock utilizing a lookback period consistent with the time to expiration. The time to expiration is based on the contractual maturity date, giving consideration to the voluntary, mandatory and potential accelerated redemption scenarios. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of measurement for time periods approximately equal to the time to expiration. Probability of default is estimated using our financial information to calculate a default risk specific to the Company.

The Company’s convertible debenture was repaid in May, during the three- and six-month period ended June 30, 2025, the Company recorded fair value adjustment in the amounts of $9 and $23, respectively.

*Variable interest entities *

The Company evaluates its variable interests in variable interest entities, or VIEs, and consolidates VIEs when the Company is the primary beneficiary. The Company determines whether it is the primary beneficiary of a VIE based on its assessment of whether the Company possesses both (i) the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the obligation to absorb losses that could be significant to the VIE or the right to receive benefits that could be significant to the VIE. The Company reevaluates the accounting for its VIEs upon the occurrence of events that could change the primary beneficiary conclusion.

Business combination

The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Goodwill generated from a business combination is primarily attributable to synergies.

When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include but are not limited to future expected cash flows from acquired technology and acquired customer relationships from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred (see also Note 4).

Recently issued accounting standards

In December 2023, the Financial Accounting Standard Board (“FASB”) issued ASU 2023-09,Income Taxes (Topic 740), Improvements to Income Tax Disclosures, which requires disaggregated information about the effective tax rate reconciliation as well as information on income taxes paid. The guidance is effective for the Company for annual periods beginning January 1, 2025. The Company is currently evaluating the impact on its financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03,Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40), Disaggregation of Income Statement Expenses, which requires disclosure of disaggregated information about certain expense captions presented in the Consolidated Statements of Operations as well as disclosure about selling expense. The guidance will be effective for the Company for annual periods beginning January 1, 2027 and interim periods beginning January 1, 2028, with early adoption permitted. It could be applied either prospectively or retrospectively. The Company is currently evaluating the impact on its financial statement disclosures.

In July 2025, the FASB issued Accounting Standards Update No. 2025-05, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”), which provides a practical expedient for estimating expected credit losses for current accounts receivable and current contract assets. ASU 2025-05 will be effective for annual periods beginning after December 15, 2025 and interim periods within those annual reporting periods and should be applied prospectively. The Company is currently evaluating the impact of ASU 2025-05 on its consolidated financial statements and related disclosures.

NOTE 4 –MERGER

Agreement and Plan of Merger

On February 14, 2025, pursuant to the terms of that certain Agreement and Plan of Merger (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 “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% (the “Exchange Cap”) 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)5,772 shares of Series X Non-Voting Convertible Preferred Stock (the “Series X Preferred Stock”) in excess of the Exchange Cap to the holders of Predecessor ENvue in consideration for 100% of Predecessor ENvue.

Given that both companies operate in the medical device sector and demonstrate natural synergies and strategic alignment in their operations, the merger was undertaken to combine and enhance their respective strengths. The Company concluded the merger resulted in the Company obtaining a controlling financial interest in VIE in accordance withASC 810, Consolidation. The Company determined that ENvue was considered to be a VIE as it did not have sufficient equity to finance its activities without additional subordinated financial support. The Company acquired all of the outstanding shares of ENvue and, therefore, is the sole equity holder and primary beneficiary. The Company has the obligation to the absorb losses and right to receive the benefits of ENvue, and the power to direct the activities that most significantly affect the economic performance of ENvue. Therefore, the Company is the primary beneficiary. Further, the Company concluded that ENvue qualified as a business and accounted for the transaction as the acquisition of a business in accordance with ASC 805. As the primary beneficiary, the Company was the acquirer in the transaction. In the second quarter of 2025, during the measurement period, the Company revised certain aspects of the purchase price allocation. As a result, goodwill and additional paid-in capital increased to reflect updated information available within the measurement period, in accordance with ASC 805,Business Combinations.

For additional details regarding the Series X Preferred Stock, refer to note 6 – stockholders’ equity.

The acquisition date fair value of the consideration transferred amounted to $41,864, which included a combination of the Company ordinary shares, Series X Preferred Stock and Pre-Funded Warrants. Issuance costs of Series X Preferred Stock were immaterial.

Acquisition-related expenses of approximately $461 were expensed by the Company in general and administrative expenses in its condensed consolidated statements of comprehensive loss for the six months ended June 30, 2025.

The transaction was accounted for as a business combination in accordance with ASC No. 805, “Business Combinations.” The total purchase price was preliminarily allocated using information currently available to the Company and may be subject to change as additional information is received during the respective measurement period, up to one year from the acquisition date. Preliminary allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date is as follows:

The excess purchase price has been recorded as “goodwill” in the amount of $38,631. The estimated useful life of the identifiable intangible assets is five toseven years. Goodwill is not expected to be tax deductible.

Supplemental Unaudited Pro Forma Information

Following are the supplemental consolidated financial results of the Company, NanoVibronix and ENvue on an unaudited pro forma basis, as if the acquisitions had been consummated as of the beginning of the fiscal year 2025 (i.e., January 1, 2025).

The unaudited pro forma financial information below combines the historical results of the Company with the historical results of ENvue for the six months ended June 30, 2025, as if the Merger had occurred on January 1, 2025.

The unaudited pro forma financial information presented is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the Merger been completed at the beginning of fiscal year 2025, nor is it indicative of the future operating results of the combined company. The pro forma results includes and adjustment related to purchase accounting, primarily amortization of acquisition-related intangible assets.

NOTE 5 –INVENTORY

Inventory consists of the following components:

Inventory write-down charged to the cost of sales amounted to $159 for the six months ended June 30, 2025, respectively, to reduce inventory to its net realizable value and for any excess or obsolete inventory.

NOTE 6 -STOCKHOLDERS’ EQUITY

Common Stock

The common stock confers upon the holders the right to receive notice to participate and vote in general meetings of the Company, and the right to receive dividends, if declared, and to participate in the distribution of the surplus assets and funds of the Company in the event of liquidation, dissolution or winding up of the Company.

Reverse stock splits

On February 8, 2023, the Company effected a reverse stock split of its common stock at a ratio of 1 post-split share for every 20 pre-split shares. The Company’s common stock began trading on a split-adjusted basis when the market opened on February 9, 2023 (the “2023 Reverse Stock Split”).

At the effective time of the 2023 Reverse Stock Split, every 20 shares of the Company’s issued and outstanding common stock were converted automatically into one issued and outstanding share of common stock without any change in the par value per share. Stockholders holding shares through a brokerage account had their shares automatically adjusted to reflect the 2023 Reverse Stock Split. The 2023 Reverse Stock Split affected all stockholders uniformly and did not alter any stockholder’s percentage interest in the Company’s equity, except to the extent that the 2023 Reverse Stock Split resulted in a stockholder owning a fractional share. Any fractional share of a stockholder resulting from the 2023 Reverse Stock Split was rounded up to the nearest whole number of shares. Proportional adjustments were made to the number of shares of the Company’s common stock issuable upon exercise or conversion of the Company’s equity awards, warrants and other convertible securities, as well as the applicable exercise or conversion price thereof. On February 16, 2023, the Company rounded up fractional shares to its nearest whole number of 1,573 shares. On March 31, 2024, the Company rounded up fractional shares to its nearest whole number of 4 shares.

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 2023 Reverse Stock Split and the March 2025 Reverse Stock Split, the “Reverse Stock Splits”).

As a result of the March 2025 Reverse Stock Split and the August 2025 Reverse Stock Split, every 11 and 10 shares, respectively, of issued and outstanding common stock were automatically combined into one 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. The March 2025 Reverse Stock Split reduced the number of shares of common stock outstanding from 871,633 shares to approximately 79,239 shares, subject to adjustment for the rounding up of fractional shares and the August 2025 Reverse Stock Split reduced the number of shares of common stock outstanding from 871,633 shares to approximately 79,239 shares, subject to adjustment for the rounding up of fractional 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. As a result of the split, the Company rounded up fractional shares to its nearest whole number of 6,618 shares.

All references in this Quarterly Report to the number of shares, price per share and weighted average number of shares of common stock outstanding prior to the Reverse Stock Splits have been adjusted to reflect the Reverse Stock Splits on a retroactive basis, unless otherwise noted.

Underwritten Public Offering, Series G Convertible Preferred Stock

On May 15, 2025, the Company announced the closing of an underwritten public offering (the “2025 Underwritten Offering”) of 40,000 shares of the Company’s Series G Convertible Preferred Stock (“Series G Preferred Stock”), with a par value $0.01 per share, and liability classified warrants to purchase up to 490,198 shares of common stock, par value $0.01 per share 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 $250.00. 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 liability classified warrants (the “May 2025 Representative’s Warrants”) to purchase up to 24,510 shares of common stock, as issuance costs with substantially the same terms as the May 2025 Warrants except that 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, in up to an aggregate of 220,588 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 will be paid upon conversion of the Series G Preferred Stock irrespective of the timing of conversion such that upon conversion, the conversion price will incorporate the five-year 9% dividend.

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.

Series X Non-Voting Convertible Preferred Stock

On February 14, 2025, in connection with the Merger (see Note 4), the Company issued 5,772 shares of Series X Non-Voting Convertible Preferred Stock (the “Series X Preferred Stock”) to the holders of Predecessor ENvue.

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

After giving effect to the Merger, pursuant to the terms and conditions of the Merger Agreement: (i)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 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. As of June 30, 2025,5,772 shares of Series X Preferred Stock were issued and outstanding.

Holders shall be entitled to receive, and the Company shall pay, dividends on shares of Series X Preferred Stock, based on the Stated Value, at a rate of eight percent (8%) per annum, commencing on the three (3) month anniversary of the Original Issue Date (as defined in the Series X Certificate of Designations) until the date the Company obtains the Stockholder Approval. Such dividends can be paid in the form of cash or additional issuances of shares of Series X Preferred Stock based on the Stated Value, with such type of payment determined in the sole discretion of the Company, and accrue and be compounded daily on the basis of a 360-day year and twelve (12) 30-day months and shall be paid the earlier of: (i) promptly after conversion of the Series X Preferred Stock or (ii) quarterly starting on the six (6) month anniversary of the Original Issue Date. For the three and six-month period ended June 30, 2025, the Company recorded $344 of dividend attributable to Series X Preferred stockholders.

On May 12, 2025, the Company filed the Series X Certificate of Amendment with the Secretary of State of the State of Delaware, thereby amending the Series X Certificate of Designations. The Series X Certificate of Amendment became effective with the Secretary of State of the State of Delaware upon filing. The amendment decreased the Series X Preferred Stock conversion price from $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.

Conversion of Series G Convertible Preferred Stock

Between May 16, 2025, and June 13, 2025, a majority of the Series G Preferred Stockholders exercised their optional conversion right, converting 39,367 shares of Series G Preferred Stock into 482,439 shares of Common Stock and an additional 217,099 shares of Common Stock for the make-whole dividend. As of June 30, 2025, there were 633 outstanding shares of Series G Preferred Stock.

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 our common stock were reserved for issuance. On March 14, 2025, the Company effected the 2025 Reverse Stock Split. Consequently, the number of shares of common stock of the Company reserved for issuance pursuant to awards under the 2024 Plan was reduced to 5,455 shares. As of June 30, 2025, there were 1,043 shares of common stock available to be issued under the plan.

During the three- and six-month periods ended June 30, 2025, no employee options were exercised, no options were granted and 95 options expired. During the three- and six-month periods ended June 30, 2024, no employee options were exercised,818 and 0 options were granted and 0 and 4 options expired, respectively.

The options granted during the six months ended June 30, 2024, vested immediately and were recorded at fair values of approximately $71. The contractual term for granted options is 10 years. During the three- and six-month periods ended June 30, 2024, stock-based compensation expense related to these options were approximately $28 and $135, respectively.

A summary of options activity is as follows:

Warrants

On August 30, 2023, the Company issued (a) Pre-Funded Warrants to purchase up to 26,427 shares of Common Stock with an exercise price of $0.001 per share, (b) Series A-1 Warrants to purchase up to 26,427 shares of Common Stock with an exercise price of $161.70 per share (the “Series A-1 Warrants”) and (c) Series A-2 Warrants to purchase up to 26,427 shares of Common Stock with an exercise price of $161.70 per share (the “Series A-2 Warrants”), or a total of 77,644 warrants, in conjunction with a private placement by and between the Company and an institutional investor, pursuant to a securities purchase agreement dated August 30, 2023 (the “Private Placement”). The Series A-1 Warrants and Series A-2 Warrants are exercisable immediately upon issuance and expire on March 1, 2029 and October 1, 2024, respectively.

In connection with the Private Placement, the Company issued placement agent warrants to H.C. Wainwright & Co., LLC, or its designees, as compensation in connection with the Private Placement, to purchase up to an aggregate of 1,982 shares of common stock at an exercise price equal to $236.50 per share (the “Placement Agent Warrants”). The Placement Agent Warrants are exercisable immediately upon issuance and expire March 1, 2029.

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 “3(a)(9) 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”). The Company cancelled the Series A-1 Warrant reacquired in the Exchange and the Series A-1 Warrant will not be reissued. The January 2025 Warrant has substantially the same terms as the Series A-1 Warrant, except that the shares of common stock issuable upon exercise of the January 2025 Warrant were subject to stockholder approval pursuant to the applicable rules and regulations of the Nasdaq (which such stockholder approval was obtained on February 24, 2025, at a special meeting of stockholders), is exercisable for a term of five and one half years from the date such stockholder approval is received and deemed effective under Delaware law, and has an exercise price of $68.296 per share.

Subsequent to the Exchange, the holder of the January 2025 Pre-Funded Warrant (i) exercised the January 2025 Pre-Funded Warrant in full on a cashless basis for an aggregate of 22,835 shares of common stock and (ii) exercised the January 2025 Warrant in full on a cashless basis for an aggregate of 9,151 shares of common stock.

As of June 30, 2025, a total of 526,534 warrants were outstanding, including 12,526 of pre-funded warrants.

NOTE 7 –WARRANT LIABILITY

Based on an evaluation, pursuant to ASC 815-40, the May 2025 Warrants (see note 6) do not meet all the equity classification criteria and therefore were determined to be classified as liabilities measured at fair value through earnings. The Company utilized the Black Scholes Model to calculate the value of the May 2025 Warrants issued during the three months ended June 30, 2025. The fair value of the May 2025 Warrantsand Representative’s Warrants of $5,306 and $265, respectively, was estimated at the date of issuance using the following assumptions: dividend yield 0%; expected term of 5.0 years; equity volatility of 145.65%; and a risk-free interest rate of 4.06%.

During the three and six months ended June 30, 2025, the Company recognized $1,410 for the change in fair value of the warrant liability in financial income (expense) on the consolidated statement of operations. The aggregate fair value of the Warrants of $4,161 was estimated on June 30, 2025 utilizing the Black Scholes Model and using the following assumptions: stock price $0.93, exercise price $2.04, dividend yield 0%; remaining term of 4.88 years; equity volatility of 150.86%; and a risk-free interest rate of 3.79%.

Changes in the warrant liability balance

Below is the change in the warrant liability balance for the six months ended June 30, 2025:

See note 13 for assets and liabilities which are measured at fair value on a recurring basis by level within the fair value hierarchy.

NOTE 8 –CONVERTIBLE DEBENTURE

On February 13, 2025, the Company entered into a Securities Purchase Agreement (the “PIPE Purchase Agreement”) with an institutional investor (the “Investor”), pursuant to which the Company sold in a private placement senior convertible debenture (the “Debenture”) due the earlier of (i) the date that is the 30-day anniversary of the effective date of stockholder approval of the issuance of the shares of common stock upon the conversion of the debentures and (ii) November 13, 2025 (the date that is nine months following the date of issuance of the Debenture) (“Maturity Date”), having an aggregate principal amount (the “Principal Amount”) of $500 (the “Debenture Transaction”). The closing of the Debenture Transaction occurred on February 14, 2025.

On March 26, 2025, the Company amended and restated the Debenture (the “A&R Debenture”) to increase the Principal Amount to $1,300 to provide for the funding by the Investor to ENvue (i) an aggregate of $250 by the Investor to ENvue on February 6, 2025, (ii) an aggregate of $250 by the Investor to ENvue on March 4, 2025, and (iii) and an aggregate of $300 by the Investor to ENvue on March 26, 2025.

On the Maturity Date, the Company shall pay the Investor in cash or, at the option of the Investor, in the form of conversion shares, or a combination thereof, the entire outstanding Principal Amount of the A&R Debenture, together with accrued and unpaid interest thereon, the applicable exit fee and any other amounts due thereunder. Following the receipt of Debenture Stockholder Approval, the A&R Debenture shall be convertible, in whole or in part, into shares of common stock, at the option of the Investor, at the initial conversion price of $48.906 (the “Conversion Price”), which is subject to customary anti-dilution adjustments, and which such Conversion Price shall not be lower than the floor price of $9.7812. The A&R Debenture bears interest at the rate of 8.0% per annum, payable on the Maturity Date.

Due to certain embedded features within the A&R Debenture, the Company elected to account for the A&R Debenture and all the embedded features at fair value at inception. Subsequent changes in fair value are recorded in financial income (expense), net in the consolidated statements of operations. As a result of electing the fair value option, direct costs and fees related to the Debenture were expensed as incurred.

For the three and six months ended June 30, 2025, the Company recorded a loss of $9 and $23, respectively, 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. On May 19, 2025, the Company repaid the A&R Debenture in full.

The following table presents the change in the balance of the A&R Debenture for periods identified:

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 Capital Anstalt (“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 shall be 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 will be recognized as interest expense over the life of the note.

During the period ended June 30, 2025, the Company paid $417 toward redeeming the Alpha Note, leaving a balance of $1,975. For the six months ended June 30, 2025, the Company recognized $135 of interest expense related to the note.

April 2025 Promissory Note and Guaranty

On April 11, 2025, ENvue issued a promissory note (the “April Note”) to Alpha (the “Lender”) in the principal amount of $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 bears interest at an annual rate equal to 8.0% and is payable “in kind” by adding such accrued interest to the April Note Principal Amount.

Pursuant to the terms of the April Note, commencing on the date of the issuance and sale of any shares common stock or Common Stock Equivalents (as defined in the April Note) by us, the Lender may require ENvue to redeem all or a portion of the April Note with the proceeds of such issuance and sale (the “Redemption Right”). The Redemption Right may be redeemed at any time after date of such issuance and sale by the Lender providing to ENvue written notice specifying the principal amount of the Note to be redeemed (the “Redemption Amount”), and the Redemption Amount shall be due and payable by ENvue on the second business day after the date of such notice.

The April Note additionally provides for certain customary events of default which upon occurrence, the Lender may, at its option, declare the entire April Note Principal Amount together with all accrued interest and all other amounts payable under the April Note immediately due and payable, provided however, that if a bankruptcy event occurs, the April Note Principal Amount and accrued interest on the April Note shall become immediately due and payable without any notice, declaration or other act on the part of the Lender.

In connection with ENvue’s issuance of the April Note, on April 11, 2025, we entered into that certain Guaranty (the “Guaranty”) in favor of the Lender, pursuant to which we have agreed to guarantee to the Lender the payment of all obligations and liabilities of ENvue under the April Note, including, without limitation, for principal, interest and any other amounts due and payable by ENvue under the April Note (the “Guaranteed Obligations”). Upon the occurrence of an Event of Default (as defined in the April Note), the Guaranteed Obligations shall be deemed immediately due and payable at the election of Lender and we shall pay on demand the Guaranteed Obligations to Lender.

On May 19, 2025, the Company paid the April Note in full with proceeds from the 2025 Underwritten Offering, pursuant to the terms of the April Note.

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 six months ended June 30, 2025, and 2024 have been excluded from the calculation of the diluted net loss per share because all such securities are anti-dilutive for all periods presented.

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 in the three and six months ended June 30, 2025, and 2024 because the Company had a net loss and the impact of the assumed exercise of stock options and the vesting of restricted stock would have been anti-dilutive.

NOTE 11 –SEGMENT INFORMATION

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly provided to the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented by operating segment in making operating decisions, allocating resources, and evaluating financial performance.

The Company conducted the business through two 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 its chief operating decision maker (CODM), who allocates resources to and assesses the performance of each operating segment using information about the operating segment’s loss from operations.

Goodwill and Assets

Segment operating results

Geographic Information and Major Customer Data

The following is a summary of revenues within geographic areas:

For the three and six months ended June 30, 2025, the Company generated approximately $26 and $523, respectively, in revenue from its largest direct medical distributor, Ultra Pain Products, LLC. This represents approximately 2% and 34%, respectively, of the company’s total revenue in each of the respective periods . For both the three and six months ended June 30, 2024, the Company’s largest customer comprised approximately 52% and 41% of total revenues in each of the respective periods.

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 six months ended June 30, 2025, and 2024.

The following table presents changes in Level 3 asset and liability measured at fair value for the six months ended June 30, 2025 and 2024:

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 May 30, 2025, the oral arguments were presented to the Appellate Court. A decision is expected at undetermined date later this year.

As of June 30, 2025, the Company accrued the amount of the arbitration award to Protrade of approximately $2.2 million, respectively, including interest which is classified in “Other accounts payable and accrued expenses”.

NOTE 14 –RELATED PARTY TRANSACTION

Aurora Cassirer served as a member of the Company’s board of directors until her resignation effective April 1, 2025. During her tenure, Ms. Cassirer also served on the audit committee, the corporate governance and nominating committee, and the compensation committee. Her resignation was not in connection with any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices, or any other matter. Ms. Cassirer is an attorney but did not provide any legal services or legal advice to the Company during the period that she was a member of the board**.**

The firm FisherBroyles LLP handled all of the Company’s Protrade litigation and appeals through December 31, 2024. For the year ended December 31, 2024, the Company was not billed and did not pay any legal fees to FisherBroyles. On January 1, 2024, Ms. Cassirer and the lawyers responsible for handling the Company’s Protrade litigation left FisherBroyles to join the firm Pierson Ferdinand LLP, which since that date has currently been the sole firm handling all of the Company’s Protrade litigation and appeals. For the six months ended June 30, 2025 and 2024, Pierson Ferdinand was paid $58 and $0, respectively, while Ms. Cassirer was a member of the board. As in prior years, Ms. Cassirer has not provided any legal services or legal advice to the Company.

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 Capital Anstalt (“Alpha”), which such Alpha Note was funded in several tranches, see note 9.

On February 13, 2025, the Company entered into a Securities Purchase Agreement (the “PIPE Purchase Agreement”) with Alpha, pursuant to which the Company sold in a private placement senior convertible debenture (the “Debenture”) due the earlier of (i) the date that is the 30-day anniversary of the effective date of stockholder approval of the issuance of the shares of common stock upon the conversion of the debentures and (ii) November 13, 2025 (the date that is nine months following the date of issuance of the Debenture) (“Maturity Date”), having an aggregate principal amount (the “Principal Amount”) of $500 (the “Debenture Transaction”). The closing of the Debenture Transaction occurred on February 14, 2025—see note 8.

On February 14, 2025, pursuant to the terms of the Merger Agreement and in connection with the Merger and the appointment of Doron Besser and Zeev Rotstein (together, the “Indemnitees”) to the Board of Directors, the Company and each of the Indemnitees entered into the Company’s standard form of indemnification agreement, which such indemnification agreements provide that the Company shall indemnify the Indemnitees to the fullest extent of permitted by applicable law in effect on the date hereof or as amended to increase the scope of permitted indemnification, against expenses, losses, liabilities, judgments, fines, penalties and amounts paid in settlement (including all interest, taxes, assessments and other charges in connection therewith) incurred by Indemnitee or on Indemnitee’s behalf in connection with any proceeding in any way connected with, resulting from or relating to Indemnitee’s corporate status.

On April 11, 2025, ENvue issued a promissory note (the “April Note”) to 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 bears interest at an annual rate equal to 8.0% and is payable “in kind” by adding such accrued interest to the April Note Principal Amount—see note 9.

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

In preparing the 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 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 condensed consolidated financial statements for the three months ended March 31, 2025, was an excess loss in the amount of $623, an excess of additional paid in capital $632 and an excess of loss per ordinary share of $0.02.

NOTE 16 -SUBSEQUENT EVENTS