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].
NanoVibronix(NAOV) - 2024 Q2 - Quarterly Report