Business Wire | Nov 16, 2021 08:30AM EST

NanoVibronix Reports Third Quarter 2021 Financial Results

Nov. 16, 2021

ELMSFORD, N.Y.--(BUSINESS WIRE)--Nov. 16, 2021--NanoVibronix, Inc. (NASDAQ: NAOV), a medical device company utilizing the Company's proprietary and patented low intensity surface acoustic wave (SAW) technology, today reported its financial results for the quarter ended September 30, 2021.

Third Quarter Financial and Business Highlights

* Revenue of $499,000, an increase of 233% compared to the prior year period * Introduced CBD gel for topical treatment of pain and in combination with PainShield, to product line-up * Expanded total addressable market with entry into worker's compensation market through agreement with one of the largest national payers * Backlog of orders in excess of $600,000 as of September 30, 2021 * Balance sheet remains strong with $8.6 million in cash and $0 long-term debt as of September 30, 2021

"We are increasingly encouraged by the progress we believe we are making towards broad adoption and commercialization of our products," stated Brian Murphy, CEO of NanoVibronix. "As of September 30, we had a backlog of orders that exceeded this quarter's revenue, a telling metric that demonstrates growing sales throughput of our product and revenue to be recognized in the future. Looking beyond year end, we have commitments to deliver a more significant quantity of product than ever before and an improved contract manufacturing position that we expect will enable a significant increase in product delivery through the first quarter of 2022.

"Potential near term catalysts for our business include the recent launch of our first non-prescription device, PainShield Relief, for the mass consumer market, adoption of UroShield by the National Healthcare Service (NHS) in the U.K., expanded sales distribution as we enter the Canadian and Middle Eastern markets and increasing adoption of our products through our existing distributor network and finalizing CMS reimbursement for PainShield and UroShield, all of which we believe are advancing towards effectiveness later this year and early in 2022," Murphy added.

Murphy continued, "Given the current macro environment, we are working diligently to strengthen and optimize our inventory position by exploring additional componentry sources and manufacturing alternatives. In doing so, we are also identifying opportunities to rationalize our cost of goods and potentially improve unit economics on future sales as our business scales."

Murphy concluded, "Our balance sheet remains strong with $8.6 million in cash on hand and zero debt at the end of the third quarter. We are in a solid position to fund our growth and continue to advance our products towards full commercialization."

Third Quarter 2021 Financial Summary

Revenues were $499,000 for the third quarter of 2021, up 233% compared with $150,000 for the third quarter of 2020. The increase was primarily due to increased sales of PainShield devices as a result of new distribution agreements, including one new distributor that sells product to Veterans Administration (VA) facilities.

Gross profit was $228,000, or 46% of revenue, in the third quarter of 2021 compared with $99,000, or 66% of revenue, in the 2020 period. The increase in gross profit was primarily driven by higher sales while the decline in gross profit margin was the result of increased costs of manufacturing and shipping compared to last year.

Total operating expenses were $1.1 million in the third quarter of 2021 compared with $903,000 in the prior year period. The 10.7% increase was the result of an increase in general and administrative expense, primarily professional fees related to the company's special shareholder meeting and the addition of two new employees in the 2021 period compared to the prior year period.

Net loss was $6.7 million, or $(0.26) per basic and diluted share, compared with a net loss of $922,000 or $(0.10) per basic and diluted share for the previous quarter. Third quarter 2021 results include a change in fair value of derivative liabilities resulting in a non-cash loss of $5.7 million.

About NanoVibronix, Inc.

NanoVibronix, Inc. (NASDAQ: NAOV) is a medical device company headquartered in Elmsford, New York, with research and development in Nesher, Israel, focused on developing medical devices utilizing its patented low intensity surface acoustic wave (SAW) technology. The proprietary technology allows for the creation of low-frequency ultrasound waves that can be utilized for a variety of medical applications, including for disruption of biofilms and bacterial colonization, as well as for pain relief. The devices can be administered at home without the assistance of medical professionals. The Company's primary products include PainShield(r) and UroShield(r), which are portable devices suitable for administration at home without assistance of medical professionals. Additional information about NanoVibronix is available at: www.nanovibronix.com.

Forward-looking Statements

This press release contains "forward-looking statements." Such statements may be preceded by the words "intends," "may," "will," "plans," "expects," "anticipates," "projects," "predicts," "estimates," "aims," "believes," "hopes," "potential" or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company's control, and cannot be predicted or quantified; consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with: (i) the geographic, social and economic impact of COVID-19 on the Company's ability to conduct its business and raise capital in the future when needed, (ii) market acceptance of our existing and new products or lengthy product delays in key markets; (iii) negative or unreliable clinical trial results; (iv) inability to secure regulatory approvals for the sale of our products; (v) intense competition in the medical device industry from much larger, multinational companies; (vi) product liability claims; (vii) product malfunctions; (viii) our limited manufacturing capabilities and reliance on subcontractor assistance; (ix) insufficient or inadequate reimbursements by governmental and/or other third party payers for our products; (x) our ability to successfully obtain and maintain intellectual property protection covering our products; (xi) legislative or regulatory reform impacting the healthcare system in the U.S. or in foreign jurisdictions; (xii) our reliance on single suppliers for certain product components, (xiii) the need to raise additional capital to meet our future business requirements and obligations, given the fact that such capital may not be available, or may be costly, dilutive or difficult to obtain; (xiv) our conducting business in foreign jurisdictions exposing us to additional challenges, such as foreign currency exchange rate fluctuations, logistical and communications challenges, the burden and cost of compliance with foreign laws, and political and/or economic instabilities in specific jurisdictions; and (xv) market and other conditions. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the Securities and Exchange Commission (SEC), including the Company's Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC's web site at: http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events, or otherwise, except as required by law.

NanoVibronix, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

(Amounts in thousands, except share and per share data)



September December 30, 31, 2021 2020

ASSETS:

Current assets:

Cash and cash equivalents $ 8,599 $ 7,142

Restricted cash - 391

Trade receivables 28 25

Other accounts receivable and prepaid expenses 597 267

Inventory 201 145

Total current assets 9,425 7,970



Non-current assets:

Fixed assets, net 6 4

Other assets 16 25

Severance pay fund 199 199

Operating lease right-of-use assets, net 20 31

Total non-current assets 241 259

Total assets $ 9,666 $ 8,229



LIABILITIES AND STOCKHOLDERS' EQUITY:



Current liabilities:

Trade payables $ 62 $ 144

Other accounts payable and accrued expenses 194 488

Shares issued in excess of authorized - 2,257

Operating lease liabilities - current 10 13

Total current liabilities 266 2,902



Non-current liabilities:

Accrued severance pay $ 243 245

Deferred licensing income 165 199

Deferred revenue 271 -

Derivative liabilities - 2,471

Operating lease liabilities, non-current 10 18

Total liabilities 955 5,835



Commitments and contingencies (Note 9)



Stockholders' equity:

Series C Preferred stock of $0.001 par value -Authorized: 3,000,000 shares at September 30, 2021 1 1 and December 31, 2020; Issued and outstanding:666,667 at September 30, 2021 and December 31, 2020



Series D Preferred stock of $0.001 par value -Authorized: 506 shares at September 30, 2021 and - - December 31, 2020; Issued and outstanding: 153 atSeptember 30, 2021 and December 31, 2020



Series E Preferred stock of $0.001 par value -Authorized: 1,999,494 shares at September 30, 2021and December 31, 2020, respectively; Issued and 1 1 outstanding: 0 at September 30, 2021 and 875,000 atDecember 31, 2020



Common stock of $0.001 par value - Authorized:40,000,000 shares at September 30, 2021 and24,109,634 at December 31, 2020; Issued and 27 22 outstanding: 27,178,126 and 21,246,523 shares atSeptember 30, 2021 and December 31, 2020,respectively



Additional paid in capital 63,086 44,959

Accumulated other comprehensive income 59 66

Accumulated deficit (54,463 ) (42,655 )

Total stockholders' equity 8,711 2,394

Total liabilities and stockholders' equity $ 9,666 $ 8,229

NanoVibronix, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(Amounts in thousands except share and per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Revenues

$

499

$

150

$

920

$

533

Cost of revenues

271

51

407

345

Gross profit

228

99

513

188

Operating expenses:

Research and development

50

68

178

131

Selling and marketing

245

289

852

723

General and administrative

801

546

2,656

2,513

Total operating expenses

1,096

903

3,686

3,367

Loss from operations

(868

)

(804

)

(3,173

)

(3,179

)

Interest expense

-

(123

)

-

(123

)

Financial income (expense), net

(23

)

(15

)

(29

)

(25

)

Change in fair value of derivative liabilities

(5,714

)

-

(6,956

)

-

Gain on purchase of warrants

-

-

64

-

Warrant modification expense

-

-

(1,627

)

-

Loss before taxes on income

(6,605

)

(942

)

(11,721

)

(3,327

)

Income tax benefit / (expense)

(70

)

20

(87

)

7

Net loss

$

(6,675

)

$

(922

)

$

(11,808

)

$

(3,320

)

Basic and diluted net loss available for holders of common stock, Series C Preferred Stock and Series D Preferred Stock

$

(0.26

)

$

(0.10

)

$

(0.47

)

$

(0.43

)

Weighted average common shares outstanding:

Basic and diluted

26,096,957

9,344,254

25,014,919

7,649,242

Comprehensive loss:

Net loss available to common stockholders

(6,675

)

(922

)

(11,808

)

(3,320

Change in foreign currency translation adjustments

1

-

(7

)

-

Comprehensive loss available to common stockholders

(6,674

)

(922

)

(11,815

)

(3,320

)

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CONTACT: Investor Contact: Brett Maas, Managing Principal, Hayden IR, LLC brett@haydenir.com (646) 536-7331