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].
NanoVibronix(NAOV) - 2022 Q4 - Annual Report