Financial Analysis

NOTE 4 MERGER Agreement and Plan of Merger On February 14, 2025, pursuant to the terms of that certain Agreement and Plan of Merger (as amended, restated, amended and restated, supplemented or modified from time to time, the Merger Agreement), dated as of February 14, 2025, by and among us, NVEH Merger Sub I, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (First Merger Sub), NVEH Merger Sub II, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (Second Merger Sub), and ENvue Medical Holdings, Corp. (Predecessor ENvue or ENvue), the Company and Predecessor ENvue effected (i) a merger of First Merger Sub with and into Predecessor ENvue, with the First Merger Sub ceasing to exist and Predecessor ENvue becoming a wholly-owned subsidiary the Company (the First Merger, and effective time of such First Merger, the First Effective Time) and (ii) the merger of Predecessor ENvue with and into Second Merger Sub (the Second Merger and, together with the First Merger, the Merger), with Second Merger Sub being the surviving entity of the Second Merger (Surviving Entity). At the effective time of the Second Merger, the certificate of formation of the Surviving Entity was amended and restated to, among other things, to change the name of the Surviving Entity to ENvue Medical Holdings LLC. In connection with the Merger Agreement, the Company issued (i) 3,318 shares of common stock (the Merger Shares), which such number of shares r …

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NOTE 18 - 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. ENVUE MEDICAL, INC. Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) 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 years 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 t …

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NOTE 13 CONVERTIBLE DEBENTURE On February 13, 2025, the Company entered into a Securities Purchase Agreement (the PIPE Purchase Agreement) with Alpha Capital Anstalt (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. On March 26, 2025, the Company amended and restated the Debenture (the A&R Debenture) to increase the Principal Amount to $ 1,300 . On the Maturity Date, the Company shall pay Alpha in cash or, at the option of Alpha, 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 Alpha, at the initial conversion price of $ 48.906 (the Conversion Price), which is subject to customary an …

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NOTE 17 FAIR VALUE Financial Liabilities Measured at Fair Value on a Recurring Basis There were no transfers between Level 3 during the year ended December 31, 2025, and 2024. The following table presents changes in Level 3 asset and liability measured at fair value for the year ended December 31, 2025 and 2024: SCHEDULE OF CHANGES IN LEVEL 3 AND LIABILITY MEASURED AT FAIR VALUE Warrants Liability Balance December 31, 2024 $ - Issuance warrant liability 8,078 Reclassification of warrant liability to equity (1,067 ) Fair Value adjustments warrant liability (6,204 ) Balance December 31, 2025 $ 807 The following table sets forth the Companys assets and liabilities which are measured at fair value on a recurring basis by level within the fair value hierarchy: SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE Level I Level II Level III Total Fair Value Measurements as of December 31, 2025 Level I Level II Level III Total Warrant liability $ - - 807 807 …

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NOTE 20 INCOME TAXES U.S. tax reform : On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (the Tax Act). The Tax Act includes significant changes to the U.S. corporate income tax system including but not limited to: a federal corporate rate reduction from 35% to 21%; creation of the base erosion anti-abuse tax (BEAT), introduction of the Global Intangible Low Taxed Income (GILTI) provisions; the transition of U.S. international taxation from a worldwide tax system to a modified territorial tax system; modifications to the allowance of net business interest expense deductions; modification of net operating loss provisions; changes to 162(m) limitation rules and bonus depreciation provisions. The change to a modified territorial tax system resulted in a one-time U.S. tax liability on those earnings which have not previously been repatriated to the U.S. (the Transition Tax), with future dividend distributions not subject to U.S. federal income tax when repatriated. A majority of the provisions in the Tax Act became effective January 1, 2018. The Tax Act added a new code section 951A, which requires a U.S. shareholder of a Controlled Foreign Corporation (CFC) to include in current taxable income, its GILTI in a manner similar to Subpart F income. The statutory language also allows a deduction for corporate shareholders equal to 50% of the GILTI inclusion, which would be reduced to 37.5% starting in 2026. In general, GILTI imposes a tax on the net income o …

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NOTE 10 LEASES The Company has operating lease agreements with terms up to 3 years, including car and office space leases. The components of operating lease costs were as follows: SCHEDULE OF OPERATING LEASE COSTS Year Ended December 31, 2025 2024 Fixed lease cost $ 124 $ 61 Variable lease cost 3 1 Total net lease costs $ 127 $ 62 The following table presents supplemental cash flows information related to the lease costs for operating leases: Year Ended December 31, 2025 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows for operating leases $ 85 The Companys weighted-average remaining lease term relating to its operating leases is 2.21 years, with a weighted-average discount rate of 10 %. The following table presents information about the amount and timing of liabilities arising from the Companys operating leases as of December 31, 2025: SCHEDULE OF LIABILITIES ARISING FROM OPERATING LEASES 2026 $ 93 2027 29 2028 5 Total undiscounted operating lease payments 127 Less: Imputed interest 10 Present value of operating lease liabilities $ 117 Sales-type Lease 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. The Companys leases generally do not provide for a residual value guarantee. The Companys lease arrangements are generally comprised of fixed lease payments and do not include options to purchase …

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Recently issued accounting standards In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40), Disaggregation of Income Statement Expenses , which requires disclosure of disaggregated information about certain expense captions presented in the Consolidated Statements of Operations as well as disclosure about selling expense. The guidance will be effective for the Company for annual periods beginning January 1, 2027 and interim periods beginning January 1, 2028, with early adoption permitted. It could be applied either prospectively or retrospectively. The Company is currently evaluating the impact on its financial statement disclosures. In July 2025, the FASB issued Accounting Standards Update No. 2025-05, Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (ASU 2025-05), which provides a practical expedient for estimating expected credit losses for current accounts receivable and current contract assets. ASU 2025-05 will be effective for annual periods beginning after December 15, 2025 and interim periods within those annual reporting periods and should be applied prospectively. The Company is currently evaluating the impact of ASU 2025-05 on its consolidated financial statements and related disclosures. In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subto …

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NOTE 19 RELATED PARTY TRANSACTION Aurora Cassirer served as a member of the Companys 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 Companys 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 Companys 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 Companys 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 Companys Protrade litigation and appeals. For the year ended December 31, 2025 and 2024, Pierson Ferdinand was paid $ 323 and $ 69 , 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 pr …

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NOTE 16 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 Companys Chief Executive Officer is the Companys 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 Companys 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 segments loss from operations. SCHEDULE OF SEGMENT INFORMATION Goodwill and Assets NanoVibronix ENvue Corporate Total Balance sheet at December 31, 2025 Goodwill $ - $ 29,082 $ - $ 29,082 Assets $ 1,924 $ 39,200 $ - $ 41,124 Balance sheet at December 31, 2024 Goodwill $ - $ - $ - $ Assets $ 3,629 $ - $ - $ 3,629 Segment operating results Year ended December 31, 2025: NanoVibronix ENvue Corporate Tot …

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NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and principles of consolidation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The accompanying consolidated financial statements include the accounts of ENvue Medical, Inc. (formerly known as NanoVibronix, Inc.) (the Company) and its wholly-owned subsidiaries, including ENvue Medical Holdings LLC and its subsidiaries (collectively, ENvue) from the date of the ENvue Merger (as defined herein), and NanoVibronix Ltd. All intercompany accounts and transactions have been eliminated in consolidation. ENVUE MEDICAL, INC. Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) 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 prim …

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NOTE 11 - 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 will be 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 will be 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. The number of authorized shares of common stock under the Companys Amended and Restated Cer …

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NOTE 22 - SUBSEQUENT EVENTS Certificate of Amendment to Series H Preferred Stock On January 30, 2026, the Company entered into 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 $2,500,000 of the Additional Investment Right (as such concept is described in the Securities Purchase Agreement by and between the Company and the holders of the Series H Preferred Stock Employment Agreement Amendment Doron Besser On February 2, 2026, ENvue Medical Israel, Ltd., a wholly owned subsidiary of the Company, entered into a first amendment to Dr. Doron Bessers Amended and Restated Employment Agreement. The amendment revised the timing of the initial grant of restricted stock units (RSUs) and provides that additional restricted stock units (RSUs) may be granted on a quarterly basis, subject to Board approval, to maintain Dr. Bessers target equity ownership of 9 % on a fully diluted basis. The amendment also provides for a prorated equity true-up in the event of certain qualifying terminations. The initial grant was …

SubsequentEventsTextBlock · excerpt; the full note is in the filing