Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Jul. 03, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | NanoVibronix, Inc. | |
Entity Central Index Key | 0001326706 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 4,313,764 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 93 | $ 1,338 |
Restricted cash | 350 | |
Trade receivables | 135 | 111 |
Other accounts receivable and prepaid expenses | 225 | 268 |
Inventory | 111 | 121 |
Total current assets | 914 | 1,838 |
Non-current assets: | ||
Fixed assets, net | 3 | 4 |
Severance pay fund | 204 | 194 |
Total non-current assets | 207 | 198 |
Total assets | 1,121 | 2,036 |
Current liabilities: | ||
Trade payables | 227 | 129 |
Other accounts payable and accrued expenses | 125 | 280 |
Total current liabilities | 352 | 409 |
Non-current liabilities: | ||
Accrued severance pay | 271 | 279 |
Total liabilities | 623 | 688 |
Commitments and contingencies (Note 7) | ||
Stockholders' equity: | ||
Common stock of $0.001 par value - Authorized: 24,000,000 shares at March 31, 2020 and December 31, 2019; Issued and outstanding: 4,313,764 and 4,203,764 shares at March 31, 2020 and December 31, 2019, respectively | 5 | 5 |
Additional paid in capital | 39,740 | 39,669 |
Accumulated deficit | (39,251) | (38,330) |
Total stockholders' equity | 498 | 1,348 |
Total liabilities and stockholders' equity | 1,121 | 2,036 |
Series C Preferred Stock [Member] | ||
Stockholders' equity: | ||
Preferred stock value | 2 | 2 |
Total stockholders' equity | 2 | 2 |
Series D Preferred Stock [Member] | ||
Stockholders' equity: | ||
Preferred stock value | ||
Total stockholders' equity | ||
Series E Preferred Stock [Member] | ||
Stockholders' equity: | ||
Preferred stock value | 2 | 2 |
Total stockholders' equity | $ 2 | $ 2 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 24,000,000 | 24,000,000 |
Common stock, shares issued | 4,313,764 | 4,203,764 |
Common stock, shares outstanding | 4,313,764 | 4,203,764 |
Series C Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 3,000,000 | 3,000,000 |
Preferred stock, shares issued | 2,993,142 | 2,993,142 |
Preferred stock, shares outstanding | 2,993,142 | 2,993,142 |
Series D Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 506 | 506 |
Preferred stock, shares issued | 304 | 304 |
Preferred stock, shares outstanding | 304 | 304 |
Series E Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,999,494 | 1,999,494 |
Preferred stock, shares issued | 1,715,000 | 1,825,000 |
Preferred stock, shares outstanding | 1,715,000 | 1,825,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 114 | $ 79 |
Cost of revenues | 63 | 26 |
Gross profit | 51 | 53 |
Operating expenses: | ||
Research and development | 47 | 152 |
Selling and marketing | 254 | 321 |
General and administrative | 657 | 1,803 |
Total operating expenses | 958 | 2,276 |
Loss from operations | (907) | (2,223) |
Financial income (expense), net | (5) | (32) |
Warrant modification expense | (412) | |
Loss before taxes on income | (912) | (2,667) |
Income tax benefit / (expense) | (9) | (12) |
Net loss | $ (921) | $ (2,679) |
Basic and diluted net loss available for holders of common stock, Series C Preferred Stock and Series D Preferred Stock | $ (0.13) | $ (0.40) |
Weighted average common shares outstanding: Basic and diluted | 7,252,510 | 6,652,110 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Series C Preferred Stock [Member] | Series D Preferred Stock [Member] | Series E Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Dec. 31, 2018 | $ 2 | $ 4 | $ 32,993 | $ (32,536) | $ 463 | ||
Beginning balance, shares at Dec. 31, 2018 | 2,733,142 | 304 | 3,801,552 | ||||
Stock-based compensation related to options granted to employees | 293 | 293 | |||||
Issuance of common stock as compensation for services | 1,042 | 1,042 | |||||
Issuance of common stock as compensation for services, shares | 275,000 | ||||||
Warrant modification expense | 412 | 412 | |||||
Net loss | (2,679) | (2,679) | |||||
Ending balance at Mar. 31, 2019 | $ 2 | $ 4 | 34,740 | (35,215) | (469) | ||
Ending balance, shares at Mar. 31, 2019 | 2,733,142 | 304 | 4,076,552 | ||||
Beginning balance at Dec. 31, 2019 | $ 2 | $ 2 | $ 5 | 39,669 | (38,330) | 1,348 | |
Beginning balance, shares at Dec. 31, 2019 | 2,993,142 | 304 | 1,825,000 | 4,203,764 | |||
Stock-based compensation | 71 | 71 | |||||
Exchange of Series E Preferred Stock into Common Stock | |||||||
Exchange of Series E Preferred Stock into Common Stock, shares | (110,000) | 110,000 | |||||
Net loss | (921) | (921) | |||||
Ending balance at Mar. 31, 2020 | $ 2 | $ 2 | $ 5 | $ 39,740 | $ (39,251) | $ 498 | |
Ending balance, shares at Mar. 31, 2020 | 2,993,142 | 304 | 1,715,000 | 4,313,764 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (921) | $ (2,679) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1 | |
Stock-based compensation | 71 | 1,335 |
Noncash interest expense | 7 | |
Change in fair value of derivative liabilities | 5 | |
Other expense related to extension of warrants | 412 | |
Changes in operating assets and liabilities: | ||
Trade receivable | (24) | 27 |
Other accounts receivable and prepaid expenses | 43 | 87 |
Inventory | 10 | (46) |
Trade payables | 98 | 37 |
Other accounts payable and accrued expenses | (155) | (126) |
Accrued severance pay, net | (18) | 4 |
Net cash used in operating activities | (895) | (937) |
Cash flows from financing activities: | ||
Proceeds from issuance of convertible notes and warrants | 225 | |
Net cash provided by financing activities | 225 | |
Net increase in cash, cash equivalents and restricted cash | (895) | (712) |
Cash, cash equivalents and restricted cash at beginning of period | 1,338 | 896 |
Cash, cash equivalents and restricted cash at end of period | 443 | 184 |
Supplemental non-cash financing and investing activities: | ||
Cash paid for interest | ||
Cash paid for taxes | ||
Discount on convertible notes | $ 225 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | 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 noninvasive 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 (Israel 2003) Ltd., a company registered in Israel, which commenced operations in October 2003. |
Liquidity and Plan of Operation
Liquidity and Plan of Operations | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity and Plan of Operations | NOTE 2 - LIQUIDITY AND PLAN OF OPERATIONS The Company’s ability to continue to operate is dependent mainly on its ability to successfully market and sell its products and the receipt of additional financing until profitability is achieved. The Company currently incurs and historically has incurred losses from operations and expects to do so in the foreseeable future. In 2019, the Company raised $3,620 through the issuance of its Series E Preferred Stock and $630 through the issuance of its Common Stock. The Company did not raise any money in the first quarter of 2020. Despite the cash infusion in 2019, the Company will not have sufficient resources to fund its operations for the next twelve months from the date of this filing. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. During the next twelve months management expects that the Company will need to raise additional capital to finance its losses and negative cash flows from operations and may continue to be dependent on additional capital raising as long as its products do not reach commercial profitability. Management’s plans include the continued commercialization of the Company’s products and raising capital through the sale of additional equity securities, debt or capital inflows from strategic partnerships. There are no assurances, however, that the Company will be successful in obtaining the level of financing needed for its operations. If the Company is unsuccessful in commercializing its products and raising capital, it will need to reduce activities, curtail or cease operations. The financial statements do not include any adjustments with respect to the carrying amounts of assets and liabilities and their classification that might be necessary should the Company be unable to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and principles of consolidation The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for the interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. The unaudited consolidated financial statements include the accounts of all subsidiaries in which the Company holds a controlling financial interest as of the financial statement date. The unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The terms “we,” “us,” “our,” and the “Company” refer to NanoVibronix, Inc. and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. Unaudited interim financial information 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 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, 2019, as found in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on May 20, 2020. The balance sheet for December 31, 2019 was derived from the Company’s audited financial statements for the year ended December 31, 2019. The results of operations for the periods presented are not necessarily indicative of results that could be expected for the entire fiscal year due to seasonality and other factors. 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. 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 believe 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 and transaction Non-U.S. dollar denominated transactions and balances have been re-measured to U.S. dollars. All transaction gains and losses from re-measurement of monetary balance sheet items denominated in non-U.S. dollar currencies are reflected in the statements of operations as financial income or expenses, as appropriate. Gains and losses from foreign currency translation for the three months ended March 31, 2020 and 2019 were $1 and $16, respectively. Revenue recognition It is the Company’s policy that revenues from product sales is 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 creates 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 amount of revenue recognized is the amount allocated to the satisfied performance obligation. Adoption of ASC 606 has not changed the timing and nature of the Company’s revenue recognition and there has been no material effect on the Company’s financial statements. Revenue from product sales is recorded at the net sales price, or “transaction price,” which includes estimates of variable consideration that result from coupons, discounts, chargebacks and distributor fees, processing fees, as well as allowances for returns and government rebates. The Company constrains revenue by giving consideration to factors that could otherwise lead to a probable reversal of revenue. Collectability of revenue is reasonably assured based on historical evidence of collectability between the Company and its customers. See Note 6 for a detailed breakout of revenue. Revenues from sales to distributors are recognized at the time the products are delivered to the distributors (“sell-in”). The Company does not grant rights of return, credits, rebates, price protection, or other privileges on its products to distributors. Recently issued accounting pronouncements not yet adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right of use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Public business entities should apply the amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted for all public business entities and all nonpublic business entities upon issuance. The Company (as an EGC) that is taking advantage of the extended transition period offered to private entities would apply this for fiscal years beginning after December 15, 2021. The Company does not believe that the adoption will have a material effect on the Company’s condensed interim consolidated financial statements and related disclosures. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) and also issued subsequent amendments to the initial guidance: ASU 2018-19, ASU 2019-04, and ASU 2019-05 (collectively, “Topic 326”). Topic 326 requires measurement and recognition of expected credit losses for financial assets held. The Company will be required to adopt this ASU for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The adoption of Topic 326 is not expected to have a material on the Company’s financial statements and financial statement disclosures. Recently adopted accounting standards In July 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815)” (“ASU 2017-11”), which addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. The Company adopted ASU 2017-11 on January 1, 2019 and there was no material impact on the financial statements. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement”, which adds disclosure requirements to Topic 820 for the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This ASU is effective for interim and annual reporting periods beginning after December 15, 2019. Although the Company adopted ASU 2018-13 on January 1, 2020, there was no material impact on the financial statements. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 4 - STOCKHOLDERS’ EQUITY Stock-based compensation and Options During the three-month period ended March 31, 2020 and 2019, 0 and 120,000 options were granted, respectively. The options were granted to a non-employee in 2019 and were recorded at a fair value of $183 and vested immediately. During the three-month period ended March 31, 2020 and 2019, stock-based compensation expense of $71 and $1,335 was recorded for options that vested, respectively. The fair value for options granted in the first quarter of 2019 is estimated at the date of grant using a Black-Scholes-Merton options pricing model with the following underlying assumptions: Price at valuation $ 3.40 Exercise price $ 3.40 Risk free interest 2.79 % Expected term (in years) 5 Volatility 48 % The total stock-based expense recognized in the financial statements for services received from employees and non-employees is shown in the following table. Three Months Ended March 31, 2020 2019 Selling and marketing 11 11 General and administrative 60 1,324 Total $ 71 $ 1,335 As of March 31, 2020, the total unrecognized estimated compensation cost related to non-vested stock options granted prior to that date was $185, which is expected to be recognized over a weighted average period of approximately 0.69 years. Series E Preferred Stock conversion to common stock Each share of Series E Preferred Stock is convertible at any time and from time to time at the option of a holder of Series E Preferred Stock into one share of the Company’s common stock, provided that each holder would be prohibited from converting Series E Preferred Stock into shares of the Company’s common stock if, as a result of such conversion, any such holder, together with its affiliates, would own more than 9.99% of the total number of shares of the Company’s common stock then issued and outstanding. This limitation may be waived with respect to a holder upon such holder’s provision of not less than 61 days’ prior written notice to the Company. In February 2020, a shareholder converted 110,000 shares of Series E Preferred Stock into 110,000 shares of common stock at a conversion rate of 1 to 1. No purchase was made in order to convert these shares. |
Loss Per Share Applicable to Co
Loss Per Share Applicable to Common Stockholder | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Loss Per Share Applicable to Common Stockholder | NOTE 5 - LOSS PER SHARE APPLICABLE TO COMMON STOCKHOLDER Basic net loss per common share (“Basic EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period. All outstanding stock options and warrants for the three and three months ended March 31, 2020 and 2019 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 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: March 31, 2020 March 31, 2019 Series D Preferred Stock 303,782 303,782 Series E Preferred Stock 1,715,000 - Stock Options - employee and non-employee 1,556,332 734,756 Warrants 266,667 266,667 Total 3,841,781 1,305,205 The diluted loss per share equals basic loss per share in the three months ended March 31, 2020 and 2019 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. |
Geographic Information and Majo
Geographic Information and Major Customer Data | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Geographic Information and Major Customer Data | NOTE 6 - GEOGRAPHIC INFORMATION AND MAJOR CUSTOMER DATA Summary information about geographic areas: The Company manages its business on the basis of one reportable segment and derives revenues from selling its products directly to patients as well as through distributor agreements. The following is a summary of revenues within geographic areas: Three Months Ended March 31, 2020 2019 United States $ 110 $ 68 Europe 3 10 Israel 1 1 Total $ 114 $ 79 During the three-month period ended March 31, 2020 and 2019, revenues from distributors accounted for 99% and 82% of total revenues, respectively. The Company’s long-lived assets are all located in Israel. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 7- COMMITMENTS AND CONTINGENCIES Leases The Company leases office facilities and motor vehicles under operating leases, which expire on various dates, the latest of which is 2020. Rent and related expenses were $12 for the three months ended March 31, 2020 and 2019. Other Risks On March 12, 2020, the World Health Organization declared COVID-19 to be a pandemic, and the COVID-19 pandemic has resulted in significant financial market volatility and uncertainty. A continuation or worsening of the levels of market disruption and volatility seen in the recent past could have an adverse effect on our ability to access capital, on our business, results of operations and financial condition, and on the market price of our common shares. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company has been consistently in a loss position in the U.S. and at present does not expect that the NOL carryback provision of the CARES Act would result in a material cash benefit to the Company. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 10 - SUBSEQUENT EVENTS On April 9, 2020, pursuant to a licensing agreement entered into in March 2020, the Company received 10 year warrants to purchase 127,000 shares of Sanuwave Health, Inc. at a price of $0.19 per share. On May 20, 2020, the Company granted 15,000 options to purchase common stock of the Company to a consultant at $1.86 per share in exchange for services. The options vest in tranches over 12 months and expire in 10 years. In June 2020, the Company experienced a cybersecurity incident. Specifically, the Company believes that unauthorized third parties were able to use an email domain similar to the Company’s to convince two of the Company’s customers to send payments in the aggregate amount of approximately $308 to unauthorized bank accounts that should have been sent to the Company. One of the customers has informed the Company that they successfully reclaimed $78 of the fraudulent transfers and deposited such amount into the Company’s account on June 22, 2020. The remaining balance of $230 is still owed and the Company still expects to collect. The Company’s management has launched an investigation into the incident and have notified the appropriate government authorities. The Company currently does not maintain an insurance related to cybersecurity breaches. The Company is exploring a range of steps to enhance its security protections and prevent future unauthorized activity. The Company is also working with a cybersecurity investigation firm to fully access the incident and take additional remedial measures. In addition to investigation, the Company will immediately enforce internal control policies such as changing passwords on a regular basis and customers who send wires will confirm with a phone call before sending. We have not incurred, nor do we expect to incur significant costs related to this incident. On June 22, 2020, we completed a bridge financing, pursuant to which we received from Globis Capital Partners LP, a loan in an aggregate principal amount of $200,000, maturing in one year with interest accruing at 10% per annum, and 2020 Warrants to purchase an aggregate of 100,000 shares of common stock at an initial exercise price of $2.50 per share, subject to adjustment, and were immediately exercisable. The principal amount and all accrued but unpaid interest on the Note are due and payable on the date (the “Payment Date”) that is the earlier of (i) June 22, 2021 or (ii) the date on which all amounts under the Note shall become due and payable in the event of default. The Note bears interest at a rate of 10% per annum, payable on the Payment Date or the earlier payment in full of the Note. The Warrant is exercisable at any time or times after the six month anniversary of the date of issuance, but not after its expiration. The exercise price of the Warrant is adjustable for certain events, such as distribution of stock dividends, stock splits or fundamental transactions including mergers or sales of assets. The holder of the Warrant will not have the right to exercise any portion of the Warrant if the holder (together with its affiliates) would beneficially own in excess of 9.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrant. In no event will the number of shares to be issued upon (A) exercise of the Warrant and (B) conversion of the Note exceed, in the aggregate, 9.99% of the total shares of the Company’s common stock outstanding on the date immediately preceding the date of issuance. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of presentation and principles of consolidation The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for the interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. The unaudited consolidated financial statements include the accounts of all subsidiaries in which the Company holds a controlling financial interest as of the financial statement date. The unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The terms “we,” “us,” “our,” and the “Company” refer to NanoVibronix, Inc. and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. |
Unaudited Interim Financial Information | Unaudited interim financial information 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 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, 2019, as found in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on May 20, 2020. The balance sheet for December 31, 2019 was derived from the Company’s audited financial statements for the year ended December 31, 2019. The results of operations for the periods presented are not necessarily indicative of results that could be expected for the entire fiscal year due to seasonality and other factors. 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. |
Use of Estimates | 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 believe 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 and Transaction | Foreign currency translation and transaction Non-U.S. dollar denominated transactions and balances have been re-measured to U.S. dollars. All transaction gains and losses from re-measurement of monetary balance sheet items denominated in non-U.S. dollar currencies are reflected in the statements of operations as financial income or expenses, as appropriate. Gains and losses from foreign currency translation for the three months ended March 31, 2020 and 2019 were $1 and $16, respectively. |
Revenue Recognition | Revenue recognition It is the Company’s policy that revenues from product sales is 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 creates 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 amount of revenue recognized is the amount allocated to the satisfied performance obligation. Adoption of ASC 606 has not changed the timing and nature of the Company’s revenue recognition and there has been no material effect on the Company’s financial statements. Revenue from product sales is recorded at the net sales price, or “transaction price,” which includes estimates of variable consideration that result from coupons, discounts, chargebacks and distributor fees, processing fees, as well as allowances for returns and government rebates. The Company constrains revenue by giving consideration to factors that could otherwise lead to a probable reversal of revenue. Collectability of revenue is reasonably assured based on historical evidence of collectability between the Company and its customers. See Note 6 for a detailed breakout of revenue. Revenues from sales to distributors are recognized at the time the products are delivered to the distributors (“sell-in”). The Company does not grant rights of return, credits, rebates, price protection, or other privileges on its products to distributors. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently issued accounting pronouncements not yet adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right of use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Public business entities should apply the amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted for all public business entities and all nonpublic business entities upon issuance. The Company (as an EGC) that is taking advantage of the extended transition period offered to private entities would apply this for fiscal years beginning after December 15, 2021. The Company does not believe that the adoption will have a material effect on the Company’s condensed interim consolidated financial statements and related disclosures. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) and also issued subsequent amendments to the initial guidance: ASU 2018-19, ASU 2019-04, and ASU 2019-05 (collectively, “Topic 326”). Topic 326 requires measurement and recognition of expected credit losses for financial assets held. The Company will be required to adopt this ASU for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The adoption of Topic 326 is not expected to have a material on the Company’s financial statements and financial statement disclosures. |
Recently Adopted Accounting Standards | Recently adopted accounting standards In July 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815)” (“ASU 2017-11”), which addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. The Company adopted ASU 2017-11 on January 1, 2019 and there was no material impact on the financial statements. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement”, which adds disclosure requirements to Topic 820 for the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This ASU is effective for interim and annual reporting periods beginning after December 15, 2019. Although the Company adopted ASU 2018-13 on January 1, 2020, there was no material impact on the financial statements. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of Fair Value Assumptions for Options Granted | The fair value for options granted in the first quarter of 2019 is estimated at the date of grant using a Black-Scholes-Merton options pricing model with the following underlying assumptions: Price at valuation $ 3.40 Exercise price $ 3.40 Risk free interest 2.79 % Expected term (in years) 5 Volatility 48 % |
Schedule of Stock Based Expenses Recognized for Services from Employees and Non-Employees | The total stock-based expense recognized in the financial statements for services received from employees and non-employees is shown in the following table. Three Months Ended March 31, 2020 2019 Selling and marketing 11 11 General and administrative 60 1,324 Total $ 71 $ 1,335 |
Loss Per Share Applicable to _2
Loss Per Share Applicable to Common Stockholder (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Summary of Common Share Equivalents Been Excluded from Dilutive Loss Per Share as Anti-dilutive | 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: March 31, 2020 March 31, 2019 Series D Preferred Stock 303,782 303,782 Series E Preferred Stock 1,715,000 - Stock Options - employee and non-employee 1,556,332 734,756 Warrants 266,667 266,667 Total 3,841,781 1,305,205 |
Geographic Information and Ma_2
Geographic Information and Major Customer Data (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Summary of Revenue within Geographic Areas | The Company manages its business on the basis of one reportable segment and derives revenues from selling its products directly to patients as well as through distributor agreements. The following is a summary of revenues within geographic areas: Three Months Ended March 31, 2020 2019 United States $ 110 $ 68 Europe 3 10 Israel 1 1 Total $ 114 $ 79 |
Liquidity and Plan of Operati_2
Liquidity and Plan of Operations (Details Narrative) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Proceeds from issuance of Series E Preferred Stock | $ 3,620 |
Proceeds from issuance of common stock | $ 630 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accounting Policies [Abstract] | ||
Gains and losses from foreign currency translation | $ 1 | $ 16 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Feb. 29, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | |
Number of options, granted | 0 | 120,000 | |
Stock-based compensation expense | $ 71 | $ 1,335 | |
Non-vested stock options granted, unrecognized estimated compensation cost | $ 185 | ||
Fair value options vesting term | 8 months 9 days | ||
Conversion description | Conversion rate of 1 to 1 | ||
Series E Preferred Stock [Member] | |||
Preferred stock, conversion description | Each share of Series E Preferred Stock is convertible at any time and from time to time at the option of a holder of Series E Preferred Stock into one share of the Company's common stock, provided that each holder would be prohibited from converting Series E Preferred Stock into shares of the Company's common stock if, as a result of such conversion, any such holder, together with its affiliates, would own more than 9.99% of the total number of shares of the Company's common stock then issued and outstanding. This limitation may be waived with respect to a holder upon such holder's provision of not less than 61 days' prior written notice to the Company. | ||
Number of shares issued for conversion | 110,000 | ||
Common Stock [Member] | |||
Number of shares issued for conversion | 110,000 | ||
Non-Employee [Member] | |||
Fair value of options, vested | $ 183 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Fair Value Assumptions for Options Granted (Details) | 3 Months Ended |
Mar. 31, 2019$ / shares | |
Equity [Abstract] | |
Price at valuation | $ 3.40 |
Exercise price | $ 3.40 |
Risk free interest | 2.79% |
Expected term (in years) | 5 years |
Volatility | 48.00% |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Stock Based Expenses Recognized for Services from Employees and Non-Employees (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation | $ 71 | $ 1,335 |
Selling and Marketing [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation | 11 | 11 |
General and Administrative [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation | $ 60 | $ 1,324 |
Loss Per Share Applicable to _3
Loss Per Share Applicable to Common Stockholder - Summary of Common Share Equivalents Been Excluded from Dilutive Loss Per Share as Anti-dilutive (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Total | 3,841,781 | 1,305,205 |
Series D Preferred Stock [Member] | ||
Total | 303,782 | 303,782 |
Series E Preferred Stock [Member] | ||
Total | 1,715,000 | |
Stock Options - Employee and Non-Employee [Member] | ||
Total | 1,556,332 | 734,756 |
Warrants [Member] | ||
Total | 266,667 | 266,667 |
Geographic Information and Ma_3
Geographic Information and Major Customer Data (Details Narrative) - segment | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Number of reportable segments | 1 | |
Sales Revenue [Member] | ||
Concentration risk, percentage | 99.00% | 82.00% |
Geographic Information and Ma_4
Geographic Information and Major Customer Data - Summary of Revenue within Geographic Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | $ 114 | $ 79 |
United States [Member] | ||
Revenues | 110 | 68 |
Europe [Member] | ||
Revenues | 3 | 10 |
Israel [Member] | ||
Revenues | $ 1 | $ 1 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | Mar. 27, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent and related expenses | $ 12 | $ 12 | |
Income tax, description | The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Jun. 22, 2020 | Jun. 21, 2020 | May 20, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Apr. 09, 2020 |
Number of option granted to purchase common stock | 0 | 120,000 | ||||
Subsequent Event [Member] | ||||||
Payments to unauthorized bank accounts | $ 308 | |||||
Reclamation of fraudulent transfers | $ 78 | |||||
Receivables | $ 230 | |||||
Subsequent Event [Member] | Consultant [Member] | ||||||
Number of option granted to purchase common stock | 15,000 | |||||
Options exercisable price | $ 1.86 | |||||
Options term | 10 years | |||||
Subsequent Event [Member] | Globis Capital Partners LP [Member] | ||||||
Purchase of warrants | 100,000 | |||||
Warrants price per share | $ 2.50 | |||||
Debt instrument, principal amount | $ 200,000 | |||||
Debt instrument, maturity term | 1 year | |||||
Debt instrument, interest rate | 10.00% | |||||
Debt instrument, description | The principal amount and all accrued but unpaid interest on the Note are due and payable on the date (the "Payment Date") that is the earlier of (i) June 22, 2021 or (ii) the date on which all amounts under the Note shall become due and payable in the event of default. The Note bears interest at a rate of 10% per annum, payable on the Payment Date or the earlier payment in full of the Note. | |||||
Common stock beneficial percentage | 9.99% | |||||
Common stock and warrants exercise percentage description | In no event will the number of shares to be issued upon (A) exercise of the Warrant and (B) conversion of the Note exceed, in the aggregate, 9.99% of the total shares of the Company's common stock outstanding on the date immediately preceding the date of issuance. | |||||
Subsequent Event [Member] | Licensing Agreement [Member] | Sanuwave Health, Inc. [Member] | ||||||
Warrants term | 10 years | |||||
Purchase of warrants | 127,000 | |||||
Warrants price per share | $ 0.19 |