Mergers and Acquisitions - The company completed a merger on February 14, 2025, with Predecessor ENvue, resulting in ENvue Medical Holdings LLC becoming a wholly-owned subsidiary[121]. - Following the merger, holders of Predecessor ENvue's equity own 85.0% of the outstanding equity of the company, assuming conversion of Series X Preferred Stock[136]. Financial Performance - For the three months ended March 31, 2025, revenues were approximately $1,025,000, an increase of approximately 11% compared to $921,000 for the same period in 2024, primarily due to the merger with ENvue[165]. - Gross profit for the three months ended March 31, 2025, was approximately $369,000, a decrease of approximately 44% from $664,000 in 2024, with gross profit as a percentage of revenues dropping to 36% from 72%[167][168]. - Research and development expenses increased by approximately 338% to $530,000 for the three months ended March 31, 2025, compared to $121,000 in 2024, representing 52% of total revenues[169][170]. - Selling and marketing expenses rose by approximately 112% to $349,000 for the three months ended March 31, 2025, compared to $165,000 in 2024, accounting for 34% of total revenues[171]. - General and administrative expenses increased by approximately 42% to $1,342,000 for the three months ended March 31, 2025, compared to $946,000 in the same period of 2024[173]. - General and administrative expenses as a percentage of total revenues were approximately 131% for the three months ended March 31, 2025, up from 103% in 2024[175]. - Net loss decreased by approximately $1,907,000 or 324% to approximately $2,495,000 for the three months ended March 31, 2025, from approximately $588,000 in the same period of 2024[177]. - Cash used in operating activities was approximately $1,343,000 for the three months ended March 31, 2025, compared to approximately $579,000 for the same period in 2024[184]. - Cash provided by financing activities was approximately $1,050,000 during the three months ended March 31, 2025, primarily from the issuance of a short-term loan payable[185]. - The company incurred net losses of approximately $2,523,000 during the three months ended March 31, 2025, with negative cash flow from operating activities of $1,343,000[178]. - As of March 31, 2025, the company had cash of approximately $601,000, down from approximately $752,000 as of December 31, 2024[183]. Stock and Securities - The company raised approximately $10 million from the underwritten public offering of 400,000 shares of Series G Convertible Preferred Stock on May 16, 2025[124]. - Holders of Series G Preferred Stock are entitled to receive cumulative dividends at a rate of 9% per annum until the fifth anniversary of issuance[123]. - The company issued a promissory note for $360,000 on April 11, 2025, with an interest rate of 8.0% and a maturity date of June 11, 2025[127]. - A reverse stock split of 1-for-11 was executed on March 12, 2025, affecting all common stock share amounts[132]. - The company entered into a private placement agreement on February 13, 2025, selling a senior convertible debenture with an aggregate principal amount of $1.3 million[138]. - The A&R Debenture has a conversion price of $4.8906, subject to customary anti-dilution adjustments[139]. - The January 2025 Warrant has an exercise price of $6.8296 per share and is exercisable for a term of five and a half years from stockholder approval received on February 24, 2025[142]. Market and Operational Insights - The company has initiated commercialization efforts for its medical devices through its subsidiary ENvue[121]. - The percentage of revenues attributable to PainShield MD was 56% for the three months ended March 31, 2025, compared to 59% in 2024, while PainShield Plus accounted for 19% in 2025, up from 10% in 2024[166]. - The largest direct medical equipment distributor, Ultra Pain Products LLC, contributed 49% of revenues in Q1 2025, up from 38% in Q1 2024[166]. - The company’s revenues may fluctuate due to varying consumer purchases, indicating that growth may not be linear or consistent[165]. - Major changes in assets were primarily attributable to the merger, significantly impacting the overall asset base of the company[182]. - Future operating results may be affected by various factors, including regulatory approvals, clinical trial phases, and geopolitical conditions[186]. Compliance and Regulatory Matters - The company did not regain compliance with Nasdaq's minimum bid price requirement by October 7, 2024, leading to a hearing request to avoid delisting[145][146]. - On April 9, 2025, the company received confirmation of compliance with Nasdaq's Bid Price Rule and Equity Rule, following a reverse stock split[148][149]. Financial Outlook - The company expects to continue incurring losses and negative cash flows from operations, indicating a need for additional capital to finance ongoing operations[179].

Financial Performance - Revenues for the three months ended September 30, 2024, were $376 thousand, down from $458 thousand for the same period in 2023, a decrease of about 18%[7] - Gross profit for the nine months ended September 30, 2024, was $1,225 thousand, compared to $889 thousand for the same period in 2023, an increase of approximately 38%[7] - Net loss for the three months ended September 30, 2024, was $998 thousand, compared to a net loss of $727 thousand for the same period in 2023, indicating a worsening of approximately 37%[7] - For the nine months ended September 30, 2024, the net loss was $2,274,000 compared to a net loss of $2,898,000 for the same period in 2023, indicating a decrease in losses[9] - Gross profit for the three months ended September 30, 2024, was approximately $133,000, a decrease of 62% or $216,000 from $349,000 in 2023, with gross profit as a percentage of revenues dropping from 76% to 35%[51] - For the nine months ended September 30, 2024, revenues increased by approximately 91% to $2,114,000 from $1,106,000 in 2023[52] - Gross profit for the nine months ended September 30, 2024, was approximately $1,225,000, an increase of 53% or $425,000 compared to $800,000 in 2023, with gross profit as a percentage of revenues decreasing from 72% to 58%[53] Cash Flow and Liquidity - Cash decreased significantly from $3,283 million on December 31, 2023, to $1,305 million on September 30, 2024, a reduction of about 60%[6] - The company reported a net cash used in operating activities of $1,968,000 for the nine months ended September 30, 2024, compared to $3,111,000 for the same period in 2023, showing an improvement in cash flow management[9] - Cash at the end of the period was $1,305,000, down from $3,787,000 at the end of the previous year, indicating a significant reduction in liquidity[9] - The company has incurred negative cash flows from operating activities and expects to continue this trend through at least fiscal year 2024, raising concerns about its ability to sustain operations[11] - The company has not generated sufficient resources to fund operations for the next twelve months, leading to substantial doubt about its ability to continue as a going concern[11] - The company has substantial doubt about its ability to continue as a going concern due to insufficient resources to fund operations for the next twelve months[60] Expenses - Operating expenses increased to $1,103 thousand for the three months ended September 30, 2024, from $1,019 thousand in the same period of 2023, an increase of about 8%[7] - Research and development expenses for the three months ended September 30, 2024, were $249 thousand, significantly higher than $33 thousand in the same period of 2023, reflecting a substantial increase in investment[7] - Research and development expenses for the nine months ended September 30, 2024, were approximately $557,000, an increase of 353% from $123,000 in 2023, representing 26% of total revenues[53] - General and administrative expenses decreased by approximately 16% to $2,335,000 for the nine months ended September 30, 2024, from $2,780,000 in 2023, with expenses as a percentage of total revenues dropping from 251% to 110%[53] Assets and Liabilities - Total assets decreased from $6,674 million on December 31, 2023, to $4,682 million on September 30, 2024, representing a decline of approximately 30%[6] - Total current liabilities increased from $2,454 million on December 31, 2023, to $2,521 million on September 30, 2024, an increase of approximately 3%[6] - Total liabilities rose from $2,686 million on December 31, 2023, to $2,810 million on September 30, 2024, an increase of about 5%[6] - As of September 30, 2024, total stockholders' equity was $1,872,000, a decrease from $3,988,000 as of December 31, 2023, reflecting ongoing financial challenges[8] Stock and Financing - The number of weighted average common stock outstanding increased from 1,721,026 shares for the three months ended September 30, 2023, to 2,803,181 shares for the same period in 2024, an increase of approximately 63%[7] - The company completed a private placement on August 30, 2023, raising approximately $4,215,000 in net proceeds for general corporate purposes[22] - The company is dependent on additional financing to cover losses and negative cash flows, which may impact its product development and commercial strategy[11] - The company received a Nasdaq compliance letter indicating it did not meet the minimum bid price requirement of $1.00 per share[44] - The company has been notified of potential delisting from Nasdaq due to not meeting the $5,000,000 minimum stockholders' equity requirement[44] Legal and Compliance Issues - Protrade Systems, Inc. claims damages of approximately $3 million against the Company for breach of an Exclusive Distribution Agreement[38] - The arbitrator awarded Protrade $1,500,250, which includes $1,432,000 for "lost profits" and $68,250 for arbitration costs[38] - The Company accrued approximately $2 million for the arbitration award to Protrade as of September 30, 2024, including interest[48] - The Company intends to appeal the arbitration award and has filed an appeal with the Appellate Division, Second Department[48] - The company received a letter from Nasdaq indicating non-compliance with the minimum bid price requirement of $1.00 per share, with a compliance period until October 7, 2024[60] Operational Challenges - The ongoing conflict in Israel may adversely affect the company's operations, including potential disruptions in supply chains and labor availability[59] - The company may face challenges in raising additional capital, which is necessary to finance losses and negative cash flows from operations[60] Internal Controls and Governance - As of March 31, 2024, the company's disclosure controls and procedures were deemed ineffective due to material weaknesses in internal control over financial reporting[56] - The company has remediated the material weakness related to the issuance of shares in excess of authorized shares, implementing new approval procedures for equity issuances[57] - The company has expanded consultations with third-party specialists to enhance documentation and monitoring of financial reporting processes[57] - Management is reviewing and refining the overall design of the company's internal control environment to improve effectiveness[57] - The company has implemented a risk assessment process with the assistance of a third-party service provider to strengthen internal controls over financial reporting[57] Miscellaneous - The report was signed by Brian Murphy, CEO, and Stephen Brown, CFO, on November 14, 2024[64]

Financial Performance - Revenue for the three months ended June 30, 2024, was $817 thousand, an increase of 177.6% compared to $294 thousand for the same period in 2023[7]. - Gross profit for the six months ended June 30, 2024, was $1,092 thousand, up 68.7% from $646 thousand in the same period of 2023[7]. - Net loss for the three months ended June 30, 2024, was $688 thousand, compared to a net loss of $1,074 thousand for the same period in 2023, indicating an improvement of 36.0%[7]. - The net loss for the six months ended June 30, 2024, was $1,276,000, compared to a net loss of $2,171,000 for the same period in 2023[11]. - For the three months ended June 30, 2024, revenues increased by approximately 178% to $817,000 compared to $294,000 in the same period of 2023[41]. - Gross profit for the three months ended June 30, 2024 was approximately $428,000, representing a 98% increase from $216,000 in 2023, with a gross margin percentage decrease from 73% to 52%[41]. - For the six months ended June 30, 2024, revenues increased by approximately 168% to $1,738,000 compared to $648,000 in the same period of 2023[43]. - Gross profit for the six months ended June 30, 2024 was approximately $1,092,000, an increase of 142% from $451,000 in 2023, with a gross margin percentage decrease from 70% to 63%[43]. Cash and Assets - Total assets decreased from $6,674 million on December 31, 2023, to $5,696 million on June 30, 2024, representing a decline of approximately 14.6%[6]. - Cash decreased from $3,283 million on December 31, 2023, to $2,170 million on June 30, 2024, a reduction of 33.9%[6]. - As of June 30, 2024, the company had cash totaling $2,170,000, down from $3,283,000 at the beginning of the period[11]. - As of June 30, 2024, the company had a cash balance of approximately $2,170,000, down from $3,283,000 as of December 31, 2023[44]. - Cash used in operating activities was approximately $1,132,000 for the six months ended June 30, 2024, compared to $2,429,000 for the same period in 2023[44]. Liabilities and Equity - Total stockholders' equity decreased from $3,988 million on December 31, 2023, to $2,841 million on June 30, 2024, a decline of approximately 28.8%[6]. - Total liabilities increased from $2,686 million on December 31, 2023, to $2,855 million on June 30, 2024, an increase of 6.3%[6]. - The company has accrued approximately $2.0 million for the arbitration award to Protrade as of June 30, 2024, including interest[48]. Operating Expenses - Operating expenses for the three months ended June 30, 2024, totaled $1,102 thousand, a decrease of 10.0% from $1,225 thousand in the previous quarter[7]. - Research and development expenses surged by approximately 434% to $187,000 for the three months ended June 30, 2024, primarily due to product redevelopment costs[42]. - Selling and marketing expenses decreased by approximately 12% to $199,000 for the three months ended June 30, 2024, compared to $227,000 in 2023[42]. - General and administrative expenses decreased by approximately 88% to $716,000 for the three months ended June 30, 2024, down from $963,000 in 2023[42]. - Research and development expenses for the six months ended June 30, 2024 increased by approximately 242% to $308,000, driven by product redevelopment and clinical trial costs[43]. Going Concern and Financial Challenges - The company expects to incur losses and negative cash flows from operating activities through at least fiscal year 2024, indicating ongoing financial challenges[12]. - The company has incurred significant losses and negative cash flows, raising substantial doubt about its ability to continue as a going concern[12]. - Management has substantial doubt about the Company's ability to continue as a going concern due to insufficient resources to fund operations for the next twelve months[51]. - The financial statements do not include adjustments that might be necessary if the Company is unable to continue as a going concern[51]. - The Company may need to reduce activities or cease operations if it is unsuccessful in commercializing its products and raising capital[51]. Capital Raising and Compliance - The Company must satisfy Nasdaq's continued listing requirements, including a minimum stockholders' equity of $2.5 million and a minimum closing bid price of $1.00 per share[52]. - The Company received a letter from Nasdaq indicating non-compliance with the minimum bid price requirement, with a compliance period of 180 days until October 7, 2024[52]. - The Company may need to raise additional capital to finance its losses and negative cash flows from operations, with no assurances of favorable terms[51]. - The ongoing conflict in the region may disrupt business operations and affect the ability to raise additional funds[51]. - The Company plans to use proceeds from equity financings or strategic alliances to meet short-term liquidity requirements and advance long-term plans[44]. Legal and Arbitration Matters - The company accrued approximately $2 million for the arbitration award to Protrade as of June 30, 2024, including interest, classified in "Other accounts payable and accrued expenses"[32]. - The arbitrator awarded Protrade $1,500,250 for "lost profits" and arbitration costs due to the company's failure to supply a year's supply of patches[32]. - The company intends to vigorously pursue its opposition to the arbitration award in all appropriate forums[32]. - Legal fees paid to FisherBroyles LLP for the Protrade litigation amounted to $76,034 for the six months ended June 30, 2024[33]. Market and Product Development - The global wound care device market was approximately $20.8 billion in 2022 and is projected to grow to $27.2 billion by 2027, representing a CAGR of 5.4% from 2022 to 2027[37]. - The company’s product candidates may not be developed or commercialized successfully, posing risks to future financial performance[35]. - The company has identified material weaknesses in its internal control over financial reporting and is taking steps to remediate these issues[46][47]. - The company is facing risks related to operations in Israel due to recent conflicts, which may affect its ability to raise capital and conduct business[49].

Financial Performance - For the three months ended March 31, 2024, revenues increased by approximately 160% to $921,000 compared to $354,000 for the same period in 2023, primarily due to increased sales from the UPPI distributor and new customers from Veteran Administration facilities [91]. - Gross profit for the three months ended March 31, 2024, was approximately $664,000, representing an increase of about 183% from $235,000 in the same period of 2023, with a gross profit margin of 72% compared to 66% in 2023 [93][94]. - Net loss decreased by approximately 46%, from approximately $1,097,000 in Q1 2023 to approximately $588,000 in Q1 2024 [103]. - Cash used in operating activities was approximately $579,000 in Q1 2024, compared to $1,200,000 in Q1 2023 [111]. Research and Development - Research and development expenses rose to approximately $121,000 for the three months ended March 31, 2024, a 120% increase from $55,000 in the same period of 2023, mainly due to the initiation of a clinical trial at the University of Michigan [95]. - Research and development expenses as a percentage of total revenues decreased from 16% in Q1 2023 to approximately 13% in Q1 2024 [96]. Expenses - Selling and marketing expenses decreased by approximately 23%, from $214,000 in Q1 2023 to approximately $165,000 in Q1 2024 [98]. - General and administrative expenses decreased by approximately 7%, from $1,021,000 in Q1 2023 to approximately $947,000 in Q1 2024 [100]. - Interest expense remained constant at $34,000 for both Q1 2024 and Q1 2023 [102]. Cash Position - As of March 31, 2024, the company had a cash balance of $2,700,000 after using $583,000 in operations during the three months ended March 31, 2024, raising concerns about its ability to continue as a going concern [76]. - Cash balance as of March 31, 2024, was approximately $2,700,000, down from approximately $3,283,000 as of December 31, 2023 [110]. - Cash provided by financing activities was approximately $0 in Q1 2024, compared to $7,000 in Q1 2023 [113]. Market Outlook - The global wound care device market is projected to grow from approximately $20.8 billion in 2022 to $27.2 billion by 2027, at a CAGR of 5.4% [75]. Compliance and Legal Matters - The company accrued approximately $2.0 million for the arbitration award to Protrade, which includes interest, as of March 31, 2024 [83]. - The company received a letter from Nasdaq indicating non-compliance with the minimum bid price requirement of $1.00 per share, with a compliance period of 180 days until October 7, 2024 [84][85]. - The company had no material commitments to capital expenditures as of March 31, 2024, other than $2 million owed under a court decision [108]. Future Concerns - The company expects to continue incurring losses and negative cash flows from operations, raising substantial doubt about its ability to continue as a going concern [105].

Sales and Market Performance - The company reported a significant increase in sales of PainShield and UroShield in 2023, following a slight decline in 2022, with specific figures not disclosed[21]. - PainShield has sold over 8,000 units since its introduction in 2009, targeting pain management for conditions such as tendonitis and sports injuries[117]. - The market for PainShield is significant, with approximately 76.5 million adult Americans suffering from chronic pain, representing about 26% of the adult population[104]. - The global catheter market was valued at USD 37.3 billion in 2018, with a projected CAGR of 9.7% through 2026, indicating strong market potential for UroShield[74]. - The business opportunity for UroShield in the U.S. is estimated to be in the hundreds of millions of dollars, contingent on obtaining permanent marketing authorization from the FDA[88]. Product Development and Clinical Trials - The company completed seven clinical studies with UroShield, evaluating approximately 220 patients, showing no serious adverse events and beneficial outcomes such as reduced catheter-associated urinary tract infections (CAUTI)[25]. - In August 2023, the company announced positive results from a recent clinical study of UroShield, indicating its effectiveness in reducing infection and improving patient experiences[27]. - PainShield demonstrated a 55.2% improvement in baseline pain scores in a clinical trial for trigeminal neuralgia, compared to a 2.3% improvement in the control group[27]. - Clinical trials have shown that UroShield significantly reduces pain and discomfort related to catheter use, with a notable reduction in antibiotic use[91]. - A community-based Patient Reported Outcomes (PRO) study is planned to measure UroShield's impact on CAUTI prevention, blockage prevention, and pain reduction[84]. Regulatory and Reimbursement Challenges - The company faced challenges with reimbursement for PainShield, having been denied by CMS in September 2022 due to a lack of "life-cycle" testing, and is currently evaluating resubmission options[23]. - The company emphasizes the importance of insurance coverage and reimbursement from third-party payers for the sales volumes and prices of its products[23]. - PainShield is currently under evaluation for reimbursement by Medicare, with the company exploring options to secure reimbursement values[108]. - The company has engaged regulatory counsel and FDA consultants to facilitate applications for reimbursement and clearance under FDA policies[24]. Distribution and Market Expansion - UroShield was approved for sale by NHS Supply Chain, providing full clinical support to all patients needing the device[34]. - The contract with NHS Supply Chain for UroShield has been extended for up to four years, ensuring continued supply[35]. - UroShield actuators will be fully reimbursed by the NHS starting November 1, 2023, allowing clinicians to prescribe the product through NHS contracts[36]. - A non-binding letter of intent was signed with Apogepha Arzneimittel GmbH to explore distribution of UroShield in Germany and other European markets[37]. - The company is expanding clinical development and marketing efforts in North America for PainShield, with ongoing research to support reimbursement code applications[24]. Technology and Innovation - UroShield is designed to prevent bacterial colonization and biofilm formation, increasing antibiotic efficacy and decreasing pain associated with urinary catheter use[59]. - Clinical trials demonstrated that UroShield prevented biofilm in all patients with the active device compared to 63.6% in the control group, with a significant decrease in pain and discomfort[61]. - The company is developing Renooskin for the facial rejuvenation market, with previous studies indicating comparable efficacy to Retinol A[156]. - The WoundShield instillation patch allows for the administration of therapeutic agents into the wound area through a sonophoresis effect, enhancing treatment efficacy[128]. Financial and Economic Factors - The company has a history of losses and expects continued losses due to various economic factors[13]. - Global economic instability, including conflicts such as the Russia-Ukraine situation, may adversely affect the company's financial condition[13]. - Increasing inflation could negatively impact the company's operations and cash flows[13]. - The ability to raise funding for clinical studies and obtain FDA approval is critical for the company's future[13]. Intellectual Property and Compliance - The company is focused on securing intellectual property rights to protect its innovations and enhance commercial opportunities[157]. - The company holds a patent portfolio that includes at least four issued U.S. patents related to its proprietary surface acoustic wave (SAW) technology, with expiration dates ranging from December 19, 2023, to August 20, 2033[161]. - The company operates under strict compliance with U.S. fraud and abuse laws, which can lead to civil and criminal penalties for violations[191]. - The company is classified as a "smaller reporting company," which may affect its attractiveness to investors[13].

Financial Performance - For the three months ended September 30, 2023, revenues increased by approximately 372% to $458,000 compared to $97,000 for the same period in 2022[85]. - Gross profit for the three months ended September 30, 2023 was approximately $349,000, an increase of approximately 336% from $80,000 in the same period in 2022[87]. - Revenues for the nine months ended September 30, 2023, were approximately $1,106,000, an increase of approximately 30%, or $252,000, compared to $854,000 in the same period of 2022[99]. - Gross profit for the nine months ended September 30, 2023, was approximately $800,000, an increase of approximately 71%, or $333,000, from $467,000 in the same period of 2022[102]. - Net loss decreased by approximately $228,000, or 24%, to approximately $727,000 for the three months ended September 30, 2023, from approximately $955,000 in the same period of 2022[98]. Expenses - Research and development expenses decreased by approximately 7% to $33,000 for the three months ended September 30, 2023, down from $49,000 in 2022[90]. - Selling and marketing expenses decreased by approximately 12% to $190,000 for the three months ended September 30, 2023, compared to $217,000 in 2022[93]. - General and administrative expenses increased by approximately 8% to $796,000 for the three months ended September 30, 2023, up from $738,000 in 2022[95]. - Research and development expenses decreased by approximately 30%, or $53,000, to approximately $123,000 for the nine months ended September 30, 2023, from $176,000 in the same period of 2022[104]. - Selling and marketing expenses decreased by approximately 17%, or $129,000, to approximately $631,000 for the nine months ended September 30, 2023, from $760,000 in the same period of 2022[107]. - General and administrative expenses for the nine months ended September 30, 2023, were approximately $2,780,000, a decrease of approximately 2%, or $55,000, from $2,835,000 in the same period of 2022[109]. Market and Revenue Sources - The percentage of revenues attributable to PainShield Plus was 53% for the three months ended September 30, 2023, compared to 0% in 2022[86]. - The percentage of revenues derived from distributors increased to 96% for the three months ended September 30, 2023, up from 83% in 2022[86]. - The global wound care device market is projected to grow from approximately $20.8 billion in 2022 to $27.2 billion by 2027, at a CAGR of 5.4%[73]. Compliance and Financial Position - The company reported stockholders' equity of approximately $2.2 million, below the Nasdaq minimum requirement of $2.5 million[80]. - The company has until November 20, 2023, to demonstrate compliance with Nasdaq's minimum stockholders' equity requirement[81]. - General and administrative expenses as a percentage of total revenues were approximately 174% for the three months ended September 30, 2023, compared to 761% for the same period in 2022[96]. - Interest expense for the three months ended September 30, 2023, was $35,000, up from $0 in the same period of 2022[97]. - Cash used in operating activities was approximately $3,111,000 for the nine months ended September 30, 2023, compared to $5,704,000 for the same period in 2022[122]. - As of September 30, 2023, the company had a cash balance of approximately $3,787,000, compared to approximately $2,713,000 as of December 31, 2022[121].

Financial Performance - For the three months ended June 30, 2023, revenues were approximately $294,000, a decrease of 39% compared to $485,000 for the same period in 2022[81]. - Net loss decreased by approximately $228,000, or 18%, to approximately $1,074,000 for the three months ended June 30, 2023, compared to approximately $1,302,000 in the same period of 2022[94]. - Revenues for the six months ended June 30, 2023, were approximately $648,000, a decrease of approximately 14%, or $109,000, from $757,000 in the same period of 2022[95]. Profitability - Gross profit for the three months ended June 30, 2023, was approximately $216,000, a decrease of 23% from $281,000 in the same period in 2022, with a gross profit margin of 73%[83][84]. - Gross profit increased by approximately 17%, or $64,000, to approximately $451,000 for the six months ended June 30, 2023, compared to $387,000 in the same period of 2022[97]. - Gross profit as a percentage of revenues was approximately 70% for the six months ended June 30, 2023, compared to 51% for the same period in 2022[98]. Expenses - Research and development expenses decreased to approximately $35,000 for the three months ended June 30, 2023, from $61,000 in the same period in 2022, representing 12% of total revenues[86][87]. - Selling and marketing expenses were approximately $227,000 for the three months ended June 30, 2023, down 32% from $333,000 in the same period in 2022, accounting for 77% of total revenues[89][90]. - General and administrative expenses decreased to approximately $963,000 for the three months ended June 30, 2023, from $1,155,000 in the same period in 2022, representing 328% of total revenues[91][92]. - Research and development expenses decreased by approximately 29%, or $37,000, to approximately $90,000 for the six months ended June 30, 2023, from $127,000 in the same period of 2022[99]. - Selling and marketing expenses decreased by approximately 19%, or $102,000, to approximately $441,000 for the six months ended June 30, 2023, compared to $543,000 in the same period of 2022[102]. - General and administrative expenses decreased by approximately 5%, or $113,000, to approximately $1,984,000 for the six months ended June 30, 2023, from $2,097,000 in the same period of 2022[104]. Cash Flow and Liquidity - Cash used in operating activities was approximately $2,429,000 for the six months ended June 30, 2023, compared to $3,740,000 for the same period in 2022[114]. - Cash and cash equivalents decreased to approximately $253,000 as of June 30, 2023, from approximately $2,713,000 as of December 31, 2022[113]. - The company expects to continue incurring losses and negative cash flows from operating activities, raising substantial doubt about its ability to continue as a going concern[109]. Market Outlook - The global wound care device market is projected to grow from approximately $20.8 billion in 2022 to $27.2 billion by 2027, at a CAGR of 5.4%[69]. Compliance and Legal Issues - The company reported stockholders' equity of approximately $2.2 million as of March 31, 2023, below the Nasdaq minimum requirement of $2.5 million[76]. - The company submitted a plan to regain compliance with Nasdaq's minimum stockholders' equity standard by July 7, 2023, and was granted an extension through November 20, 2023[77]. - The company faced a legal claim from Protrade Systems, Inc. for damages estimated at $3 million, with an arbitration award of $1,500,250 against the company[70][71]. - The company’s revenues may fluctuate significantly due to varying orders from major customers, indicating potential volatility in financial performance[81].

Financial Performance - Revenues for the three months ended March 31, 2023, were approximately $354,000, an increase of 30% or $82,000 compared to $272,000 in the same period of 2022[85]. - Gross profit increased by approximately 122% to $235,000 for the three months ended March 31, 2023, compared to $106,000 in the same period of 2022[88]. - Gross profit as a percentage of revenues improved to approximately 66% for the three months ended March 31, 2023, from 39% in the same period of 2022[89]. - Research and development expenses decreased to approximately $55,000 for the three months ended March 31, 2023, from $66,000 in the same period of 2022, representing a decrease of 17%[89]. - Selling and marketing expenses were approximately $214,000 for the three months ended March 31, 2023, a slight increase of 2% from $210,000 in the same period of 2022[92]. - General and administrative expenses increased by approximately 8% to $1,021,000 for the three months ended March 31, 2023, compared to $942,000 in the same period of 2022[95]. - Net loss decreased by approximately $35,000, or 3%, to approximately $1,097,000 for the three months ended March 31, 2023, from $1,132,000 in the same period of 2022[99]. - Cash used in operating activities was approximately $1,200,000 for the three months ended March 31, 2023, compared to $1,741,000 for the same period in 2022[105]. - As of March 31, 2023, the company had cash and cash equivalents of approximately $1,512,000, down from approximately $2,713,000 as of December 31, 2022[104]. - The company expects to continue incurring losses and negative cash flows from operating activities, indicating a need for additional capital to sustain operations[100]. Legal and Regulatory Matters - As of March 31, 2023, the company accrued approximately $1.9 million related to the arbitration award to Protrade, including $0.4 million in interest[76]. - The company is involved in ongoing legal proceedings with Protrade, which claims damages estimated at $3 million[69]. - The company faced delays in production and regulatory approvals due to COVID-19, which may continue to affect operations and financial condition[68]. - The company is subject to risks related to global economic instability, inflation, and market acceptance of its products[65]. - The company has reduced disclosure obligations as a "smaller reporting company," which may affect investor attractiveness[65]. Business Operations - The company focuses on noninvasive biological response-activating devices for wound healing and pain therapy, with products like WoundShield, PainShield, and UroShield[67]. - The company relies on third-party manufacturers and professionals, which may be impacted by external economic factors[68]. - The company experienced a reverse stock split at a ratio of 1-for-20 on February 8, 2023, and regained compliance with Nasdaq listing requirements on February 28, 2023[82]. - The company reported a history of losses and anticipates continued losses, which may impact future financial performance[65]. - The company has a critical accounting policy that requires subjective judgments and estimates, with no material changes since December 31, 2022[83].

Production and Operational Challenges - The company reported a significant delay in production due to COVID-19, with a temporary shutdown of its third-party manufacturer in China for 60 days, impacting sales orders initially scheduled for Q1 2020[326]. - The company experienced operational disruptions due to COVID-19, affecting staffing and the ability to obtain financial records[326]. Financial Performance - Revenues for the year ended December 31, 2022, were approximately $752,000, a decrease of 56% or $943,000 compared to $1,695,000 in 2021, primarily due to the suspension of PainShield Plus by the FDA[364]. - Gross profit for 2022 was approximately $167,000, representing a gross profit margin of 22%, down from $770,000 and 45% in 2021, attributed to decreased revenues and increased costs[366][367]. - The net loss for the year ended December 31, 2022, decreased by approximately $8,834,000 or 62% to approximately $5,448,000 from $14,282,000 in 2021[380]. - Cash used in operating activities was approximately $7,035,000 in 2022, an increase of $2,668,000 compared to $4,367,000 in 2021[387]. - As of December 31, 2022, the company had cash of approximately $2,713,000, down from $7,737,000 as of December 31, 2021[386]. - The company expects to continue incurring losses and negative cash flows from operating activities, raising substantial doubt about its ability to continue as a going concern[381]. Expenses and Cost Management - Research and development expenses were approximately $283,000 in 2022, a decrease of 3% from $293,000 in 2021, with R&D expenses as a percentage of total revenues rising to 38% from 17%[368][369]. - Selling and marketing expenses decreased by 12% to approximately $965,000 in 2022, with expenses as a percentage of total revenues increasing to 128% from 65% in 2021 due to lower revenues[370][371]. - General and administrative expenses were approximately $3,931,000 in 2022, a decrease of 22% from $5,059,000 in 2021, mainly due to a prior year arbitration settlement expense[373]. Regulatory and Compliance Updates - The U.S. CMS approved the company's PainShield™ for Medicare reimbursement on a national basis, with the product now available under HCPCS code K1004[335]. - The company received FDA 510(k) clearance for PainShield MD PLUS on November 28, 2023, allowing it to apply ultrasonic energy for treatment of selected medical conditions[344]. - The company is working with a third-party laboratory to conduct testing for PainShield Relief to support its resubmission for reimbursement after an initial rejection[346]. - The company faced a Nasdaq deficiency notice due to its stock price falling below the minimum bid price of $1.00 per share, with a compliance period granted until August 29, 2022[339]. - A reverse stock split was executed on February 8, 2023, at a ratio of 1-for-20, allowing the company to regain compliance with Nasdaq listing requirements[343]. Legal and Licensing Agreements - The company accrued approximately $1.9 million for the arbitration award to Protrade as of December 31, 2022, which includes $0.4 million of interest accrued in 2022[334]. - The company signed a license agreement with Sanuwave Health, Inc. for the manufacture and delivery of WoundShield technology, which includes a $250,000 milestone payment and 10% royalty on gross revenues from sales or rentals[336]. Future Outlook - Future operating results may be affected by various factors, including distributor ordering patterns and regulatory approvals, with potential impacts from economic conditions and currency fluctuations[390].

Financial Performance - For the three months ended September 30, 2022, revenues were approximately $97,000, a decrease of 81% or $402,000 compared to $499,000 in the same period of 2021[85]. - Gross profit for the three months ended September 30, 2022, was approximately $80,000, down 65% or $148,000 from $228,000 in the same period of 2021[87]. - Gross profit as a percentage of revenues increased to approximately 82% for the three months ended September 30, 2022, compared to 46% in the same period of 2021[88]. - Revenues for the nine months ended September 30, 2022, were approximately $854,000, a decrease of approximately 7%, or $66,000, from $920,000 in 2021[103]. - Gross profit for the nine months ended September 30, 2022, was approximately $467,000, a decrease of approximately 9%, or $46,000, from $513,000 in 2021[105]. - Net loss decreased by approximately $5,720,000, or 86%, to approximately $955,000 for the three months ended September 30, 2022, from approximately $6,675,000 in the same period of 2021[101]. - Net loss for the nine months ended September 30, 2022, decreased by approximately $8,419,000, or 71%, to approximately $3,389,000 from approximately $11,808,000 in the same period of 2021[117]. Expenses - Research and development expenses for the three months ended September 30, 2022, were approximately $49,000, slightly down from $50,000 in the same period of 2021[89]. - Research and development expenses as a percentage of total revenues were approximately 51% for the three months ended September 30, 2022, compared to 10% in the same period of 2021[89]. - Selling and marketing expenses for the three months ended September 30, 2022, were approximately $217,000, a decrease of 11% or $28,000 from $245,000 in the same period of 2021[91]. - Selling and marketing expenses as a percentage of total revenues were approximately 224% for the three months ended September 30, 2022, compared to 49% for the same period in 2021[93]. - General and administrative expenses decreased by approximately 8%, or $63,000, to approximately $738,000 for the three months ended September 30, 2022, from $801,000 in 2021[95]. - General and administrative expenses as a percentage of total revenues were approximately 332% for the nine months ended September 30, 2022, compared to 289% in 2021[112]. Cash Flow - Cash used in operating activities was approximately $5,704,000 for the nine months ended September 30, 2022, compared to $3,504,000 for the same period in 2021[124]. - The company had a cash balance of just over $1,972,000 as of September 30, 2022, down from approximately $7,737,000 as of December 31, 2021[123]. Regulatory and Legal Issues - The company has substantial doubt about its ability to continue as a going concern due to insufficient resources to fund operations for the next twelve months[70]. - The company is facing regulatory challenges, including a notification from the FDA to discontinue new marketing of PainShield Plus products until formal approval is obtained[82]. - The company is involved in ongoing legal proceedings with Protrade Systems, Inc., which claims damages estimated at $3 million[73]. Revenue Sources - The portion of revenues derived from distributors was 83% for the three months ended September 30, 2022, down from 95% in the same period of 2021[86].