NanoVibronix (NAOV) 10-Q 15 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 15, 2018
Document And Entity Information
Entity Registrant Name	NanoVibronix, Inc.
Entity Central Index Key	1,326,706
Document Type	10-Q
Trading Symbol	NAOV
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		3,935,865
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,018

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands		Mar. 31, 2018	Dec. 31, 2017
CURRENT ASSETS:
Cash and cash equivalents		$ 3,491	$ 4,360
Trade receivables		23	24
Inventories		78	76
Prepaid expenses and other accounts receivable		29	56
Total current assets		3,621	4,516
NON-CURRENT ASSETS:
Long-term prepaid expense		5	5
Severance pay fund		343	338
Property and equipment, net		6	6
Total non- current assets		354	349
Total assets		3,975	4,865
CURRENT LIABILITIES:
Trade payables		40	168
Other accounts payable		543	629
Total current liabilities		583	797
LONG-TERM LIABILITIES:
Accrued severance pay		438	434
Total long-term liabilities		438	434
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS' EQUITY:
Stock capital - Common stock of $ 0.001 par value - Authorized: 24,000,000 shares at March 31, 2018 and December 31, 2017; Issued and outstanding: 3,935,865 at March 31, 2018 and December 31, 2017, respectively.		4	4
Additional paid-in capital		32,119	32,010
Accumulated deficit		(29,171)	(28,382)
Total stockholders' equity		2,954	3,634
Total liabilities and stockholders' equity		3,975	4,865
Preferred C Stocks [Member]
STOCKHOLDERS' EQUITY:
Preferred stock		2	2
Preferred D Stocks [Member]
STOCKHOLDERS' EQUITY:
Preferred stock	[1]
[1]	Represents an amount lower than $ 1.

CONSOLIDATED BALANCE SHEETS (U3

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Common stock, at par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized	24,000,000	24,000,000
Common stock, issued	3,935,865	3,935,865
Common stock, outstanding	3,935,865	3,935,865
Preferred C Stocks [Member]
Preferred stock, at par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized	5,500,000	5,500,000
Preferred stock, issued	2,483,142	2,483,142
Preferred stock, outstanding	2,483,142	2,483,142
Preferred D Stocks [Member]
Preferred stock, at par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized	506	506

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement [Abstract]
Revenues, net	$ 77	$ 52
Cost of revenues	22	16
Gross profit	55	36
Operating expenses:
Research and development	136	150
Selling and marketing	229	94
General and administrative	480	593
Total operating expenses	845	838
Operating loss	(790)	(802)
Financial income (expense), net	13	(64)
Loss before taxes on income	(777)	(866)
Taxes on income	12	11
Net loss	(789)	(877)
Deemed dividend related to extension of time to exercise common stock purchase warrants		841
Total comprehensive loss applicable to holders of Common Stock	$ (789)	$ (1,718)
Net loss per basic and diluted shares applicable to common shareholders (in dollars per share)	$ (0.12)	$ (0.37)
Weighted average shares used in computing basic and diluted loss per share (in shares)	6,419,007	4,583,971

STATEMENTS OF CHANGES IN STOCKH

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - 3 months ended Mar. 31, 2018 - USD ($) $ in Thousands	Preferred C Stocks [Member]	Preferred D Stocks [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Total
Balance at Beginning at Dec. 31, 2017	$ 2	$ 0	$ 4	$ 32,010	$ (28,382)	$ 3,634
Balance at Beginning (in shares) at Dec. 31, 2017	2,483,142	304	3,935,865
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation related to options granted to employees				109		109
Total comprehensive loss					(789)	(789)
Balance at End at Mar. 31, 2018	$ 2	$ 0	$ 4	$ 32,119	$ (29,171)	$ 2,954
Balance at End (in shares) at Mar. 31, 2018	2,483,142	304	3,935,865

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities:
Net loss	$ (789)	$ (877)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	2	1
Stock-based compensation	109	351
Benefit component of Promissory Notes		5
Revaluation of warrants to purchase Common stock		35
Changes in operating assets and liabilities	(189)	78
Accrued interest on Promissory Notes		2
Net cash used in operating activities	(867)	(405)
Cash flows from investment activities:
Purchase of property and equipment	(2)
Net cash used in investment activities	(2)
Cash flows from financing activities:
Proceeds from issuance of Convertible Promissory Note and warrants		350
Net cash provided by financing activities		350
Decrease in cash and cash equivalents	(869)	(55)
Cash and cash equivalents at the beginning of the period	4,360	106
Cash and cash equivalents at the end of the period	$ 3,491	$ 51

ORGANIZATION AND BASIS OF PRESE

ORGANIZATION AND BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND BASIS OF PRESENTATION	NOTE 1:- ORGANIZATION AND BASIS OF PRESENTATION Organization NanoVibronix, Inc. (“the Company”), a U.S. (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. Basis of Presentation and Principles of Consolidation The Company’s unaudited consolidated financial statements are prepared in accordance with generally accepted accounting principals and with instructions to Form 10-Q and 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, 2017, as found in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 30, 2018. The balance sheet for December 31, 2017 was derived from the Company’s audited financial statements for the year ended December 31, 2017. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of results that could be expected for the entire fiscal year.

LIQUIDITY, FINANCIAL CONDITION

LIQUIDITY, FINANCIAL CONDITION AND MANAGEMENT PLANS	3 Months Ended
	Mar. 31, 2018
Liquidity Financial Condition And Management Plans
LIQUIDITY, FINANCIAL CONDITION AND MANAGEMENT PLANS	NOTE 2:- LIQUIDITY, FINANCIAL CONDITION AND MANAGEMENT PLANS 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 has incurred losses as well as negative cash outflows from operating activities every period and plans to occur losses and negative cash outflows from operating activities through fiscal 2018. The Company’s management believes that the Company has sufficient capital to execute its business plan over the next twelve months from the date of the filing of this 10-Q. If the Company is unable to successfully commercialize its products over the next twelve months it may need to raise additional capital at a later time. There are no assurances that the Company would be able to raise additional capital, if required, on terms favorable to it.

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies applied in the annual consolidated financial statements of the Company as of December 31, 2017 are applied consistently in these financial statements.

RECENTLY ADPOTED AND ISSUED ACC

RECENTLY ADPOTED AND ISSUED ACCOUNTING STANDARD	3 Months Ended
	Mar. 31, 2018
Recently Adpoted And Issued Accounting Standard
RECENTLY ADPOTED AND ISSUED ACCOUNTING STANDARD	NOTE 4:- RECENTLY ADPOTED AND ISSUED ACCOUNTING STANDARD Recently adopted accounting standards: In May 2014, the Financial Accounting Standards Board (FASB), issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (ASC 606) Revenue Recognition Generally the Company considers all revenues as arising from contracts with customers. Revenue is recognized based on the five step process outlined in ASC606: Step 1 – Identify the Contract with the Customer Step 2 – Identify Performance Obligations in the Contract Step 3 – Determine the Transaction Price Step 4 – Allocate the Transaction Price Step 5 – Satisfaction of the Performance Obligations (and Recognize Revenue) – When an asset is transferred and the customer obtains control of the asset (or the services are rendered), the Company recognizes revenue. At contract inception, the Company determines if each performance obligation is satisfied at a point in time or over time. For device sales, revenue is recognized at a point in time when the goods are transferred to the customer and they obtain control of the asset. For maintenance contracts, revenue is recognized over time as the performance obligations in the contracts are completed. Product sales The Company sells its products through distributors and directly to patients. Under ASC 606, revenue from product sales is recognized at the point in time when the delivery is made and when title and risk of loss transfers to these customers. Prior to recognizing revenue, the Company makes estimates of the transaction price, including variable consideration for customer rights of return using an expected value method. Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Product sales are recorded net of estimated product returns and other deductions. In May 2017 the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting Recently issued accounting standards In February 2016, the FASB issued ASU 201602, Leases (Topic 842). ASU 201602 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 201602 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. We are currently evaluating the impact of our pending adoption of ASU 201602 on our consolidated financial statements.

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	3 Months Ended
	Mar. 31, 2018
Stockholders' Equity Note [Abstract]
STOCKHOLDERS' EQUITY	NOTE 5:- STOCKHOLDERS’ EQUITY (in thousands) During the three-month period ended March 31, 2018 and 2017, the Company recorded share based compensation in a total amount of $109 and $351, respectively. As of March 31, 2018, the total unrecognized estimated compensation cost related to non-vested stock options granted prior to that date was $680, which is expected to be recognized over a weighted average period of approximately 2.4 years.

COMMITMENTS AND CONTINGENT LIAB

COMMITMENTS AND CONTINGENT LIABILITIES	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENT LIABILITIES	NOTE 6:- COMMITMENTS AND CONTINGENT LIABILITIES (in thousands) The Company currently leases its office facilities on a month to month lease. Rent and related expenses were $7 and $6 for the three months ended March 31, 2018 and 2017, respectively.

LOSS PER SHARE

LOSS PER SHARE	3 Months Ended
	Mar. 31, 2018
Earnings Per Share [Abstract]
LOSS PER SHARE	NOTE 7:- LOSS PER SHARE All outstanding share options and warrants for the three months ended March 31, 2018 and 2017 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 share equivalents, which have been excluded from the calculation of dilutive loss per share as their effect would be anti-dilutive: March 31, March 31, 2017 Series D Preferred Shares 303,782 — Stock options 272,533 853,884 Warrants 501,580 612,795 Total 1,077,895 1,466,679

GEOGRAPHIC INFORMATION AND MAJO

GEOGRAPHIC INFORMATION AND MAJOR CUSTOMER DATA	3 Months Ended
	Mar. 31, 2018
Segment Reporting [Abstract]
GEOGRAPHIC INFORMATION AND MAJOR CUSTOMER DATA	NOTE 8:- 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, (in thousands) 2018 2017 United States $ 67 $ 21 Europe 3 16 Israel 4 — India 3 3 Rest of the world — 12 $ 77 $ 52 During the three month period ended March 31, 2018 and 2017, revenues from distributors accounted for 8% and 35% of total revenues, respectively The Company’s long-lived assets are all located in Israel.

LOSS PER SHARE (Tables)

LOSS PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2018
Earnings Per Share [Abstract]
Schedule of dilutive loss per share	The following table summarizes the Company’s securities, in common share equivalents, which have been excluded from the calculation of dilutive loss per share as their effect would be anti-dilutive: March 31, March 31, 2017 Series D Preferred Shares 303,782 — Stock options 272,533 853,884 Warrants 501,580 612,795 Total 1,077,895 1,466,679

GEOGRAPHIC INFORMATION AND MA16

GEOGRAPHIC INFORMATION AND MAJOR CUSTOMER DATA (Tables)	3 Months Ended
	Mar. 31, 2018
Segment Reporting [Abstract]
Schedule of revenues 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, (in thousands) 2018 2017 United States $ 67 $ 21 Europe 3 16 Israel 4 — India 3 3 Rest of the world — 12 $ 77 $ 52

STOCKHOLDERS' EQUITY (Details N

STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Class of Stock [Line Items]
Share-based compensation	$ 109	$ 351
Employee Stock Option [Member]
Class of Stock [Line Items]
Non-vested stock options granted	$ 680
Non-vested stock options granted weighted average period	2 years 4 months 24 days

COMMITMENTS AND CONTINGENT LI18

COMMITMENTS AND CONTINGENT LIABILITIES (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Office Equipment [Member]
Operating Leased Assets [Line Items]
Rent and related expenses	$ 7	$ 6

LOSS PER SHARE (Details)

LOSS PER SHARE (Details) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	1,077,895	1,466,679
Preferred D Stocks [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	303,782
Stock Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	272,533	853,884
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	501,580	612,795

GEOGRAPHIC INFORMATION AND MA20

GEOGRAPHIC INFORMATION AND MAJOR CUSTOMER DATA (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 77	$ 52
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	67	21
Europe
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	3	16
Israel
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	4
India
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	3	3
Rest of World [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues		$ 12

GEOGRAPHIC INFORMATION AND MA21

GEOGRAPHIC INFORMATION AND MAJOR CUSTOMER DATA (Details Narrative)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Customer Concentration Risk [Member] | Sales Revenue, Net [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Percentage of revenues from distributors	8.00%	35.00%