ENvue Medical (FEED) risk factors, FY2024 10-K

Other

1. 01NanoVibronix may become involved in securities litigation or stockholder derivative litigation in connection with the Merger, and this could divert the attention of NanoVibronix management and harm the combined company’s business, and insurance coverage may not be sufficient to cover all related costs and damages
2. 02NanoVibronix stockholders may not realize a benefit from the Merger commensurate with the ownership dilution they will experience in connection with the Merger
3. 03For U.S. federal income tax purposes, the Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code
4. 04The market price of NanoVibronix’s common stock after the Merger may be subject to significant fluctuations and volatility, and the stockholders of the company may be unable to resell their shares at a profit and may incur losses
5. 05Changes in the business operations, strategies and focus of the combined company following the Merger may not result in an improvement in the value of NanoVibronix common stock
6. 06The concentration of the capital stock ownership with insiders of NanoVibronix after the Merger will likely limit the ability of the stockholders of NanoVibronix to influence corporate matters
7. 07NanoVibronix may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition, results of operations and stock price, which could cause you to lose some or all of your investment
8. 08Pursuant to the terms of the Merger Agreement, we are required to obtain stockholder approval for conversion of all outstanding shares of our Series X Preferred Stock into shares of our common stock. We cannot guarantee that our stockholders will approve this matter

Risks Related to NanoVibronix’s Business

1. 09We have a history of losses, and we expect to continue to incur losses and may not achieve or maintain profitability
2. 10The Company’s financial statements have been prepared on a going concern basis, and do not include adjustments that might be necessary if the Company is unable to continue as a going concern. Management has substantial doubt about the Company’s ability to continue as a going concern
3. 11Global economic and political instability and conflicts, such as the conflict between Russia and Ukraine, could adversely affect our business, financial condition or results of operations
4. 12Increasing inflation could adversely affect our business, financial condition, results of operations or cash flows
5. 13If we fail to obtain an adequate level of reimbursement for our approved products by third party payers, there may be no commercially viable markets for our approved products or the markets may be much smaller than expected
6. 14The medical device and therapeutic product industries are highly competitive and subject to rapid technological change. If our competitors are able to develop and market products that are safer and more effective than any products we may develop, our commercial opportunities will be reduced or eliminated
7. 15We face the risk of product liability claims and may not be able to obtain insurance
8. 16Our product candidates may not be developed or commercialized successfully
9. 17If we fail to retain our key management, or to attract and keep additional key personnel, we may be unable to successfully execute our business plan
10. 18Our need to increase the size of our organization in order to successfully manage our growth
11. 19Our failure to protect our intellectual property rights could diminish the value of our solutions, weaken our competitive position and reduce our revenue
12. 20We could incur substantial costs and disruption to our business as a result of any dispute related to, or claim of infringement of another party’s intellectual property rights, which could harm our business and operating results
13. 21We may, in the future, be involved in one or more lawsuits, claims or other proceedings. These suits could concern issues including contract disputes, employment actions, employee benefits, taxes, environmental, health and safety, fraud and abuse, personal injury and product liability matters
14. 22On October 3, 2022, the court issued a decision granting Protrade its petition to confirm the award and denying the cross-motion
15. 23Our business and operations would suffer in the event of computer system failures, cyber-attacks or deficiencies in our cyber-security
16. 24We may acquire businesses or products, or form strategic alliances, in the future, and may not realize the benefits of such acquisitions
17. 25Certain stockholders could attempt to influence changes within NanoVibronix, which could adversely affect NanoVibronix’s operations, financial condition and the value of NanoVibronix’s common stock

Risks Related to NanoVibronix’s Regulatory and Compliance Matters

1. 26We are subject to extensive governmental regulation, including the requirement of U.S. Food and Drug Administration approval or clearance before our product candidates may be marketed and after approval or clearance and during the marketing of our products
2. 27UroShield has not been cleared or approved by the FDA, nor has it undergone the same type of review as an FDA-approved or cleared device
3. 28Failure to obtain regulatory approval in foreign jurisdictions will prevent us from marketing our products abroad
4. 29We are uncertain regarding the success of our clinical trials for our products in development
5. 30Healthcare reform measures could adversely affect our business and financial results
6. 31If we fail to comply with the U.S. federal and state fraud and abuse and other health care laws and regulations, we could be subject to criminal and civil penalties and exclusion from the Medicare and Medicaid programs, which would have a material adverse effect on our business and results of operations

Risks Related to NanoVibronix’s Operations in Israel

1. 32We conduct our operations in Israel. Conditions in Israel, including the recent attack by Hamas and other terrorist organizations from the Gaza Strip, and the region, and Israel’s war against them, may affect our operations
2. 33Because a certain portion of our expenses is incurred in currencies other than the U.S. dollar, our results of operations may be harmed by currency fluctuations and inflation
3. 34It may be difficult for investors in the United States to enforce any judgments obtained against us or any of our directors or officers

Risks Related to NanoVibronix’s Organization and Securities

1. 35The price of our securities may be volatile, and the market price of our securities may drop below the price you pay
2. 36We have a significant number of warrants and options, and future sales of our common stock upon exercise of these options or warrants, or the perception that future sales may occur, may cause the market price of our common stock to decline, even if our business is doing well
3. 37Although our shares of common stock are listed on Nasdaq, we currently have a limited trading volume, which results in higher price volatility for, and reduced liquidity of, our common stock
4. 38If we fail to comply with the continued listing requirements of Nasdaq, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted
5. 39There can be no assurance that we will ultimately regain compliance with all applicable requirements for continued listing on Nasdaq
6. 40We are a smaller reporting company, and we cannot be certain if the reduced disclosure requirements applicable to our filing status will make our common stock less attractive to investors
7. 41Anti-takeover provisions of our certificate of incorporation, our bylaws and Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove the current members of our board and management
8. 42If securities or industry analysts do not publish research or reports or publish unfavorable research about our business, the price of our securities and their trading volume could decline
9. 43We may be subject to ongoing restrictions related to grants from the Israeli Office of the Chief Scientist
10. 44Because we do not expect to pay cash dividends for the foreseeable future, you must rely on appreciation of our common stock price for any return on your investment. Even if we change that policy, we may be restricted from paying dividends on our common stock
11. 45Our ability to use our net operating loss carry forwards and certain other tax attributes may be limited
12. 46If we fail to maintain effective internal control over financial reporting, our business, financial condition or results of operations may be adversely affected

Risks Related to ENvue’s Financial Condition, Business and Operations

1. 47The financial statement footnotes of the Company include disclosure regarding the substantial doubt about the ability of the Company to continue as a going concern
2. 48ENvue’s financial statement footnotes include disclosure regarding the substantial doubt about our ability to continue as a going concern and indicated that, as of December 31, 2024, they had recurring losses with minimal revenue from operations
3. 49We are subject to operating risks, including excess or constrained capacity and operational inefficiencies, which could adversely affect our results of operations
4. 50Our products and information technology systems are critical to our business. Issues with product development or enhancements, IT system integration, implementation, updates and upgrades could disrupt our operations and have a material impact on our business and operating results
5. 51Political events, trade and other international disputes, war, and terrorism could harm or disrupt international commerce and the global economy and could have a material effect on our business as well as our potential customers, suppliers, contract manufacturers, distributors, and other business partners
6. 52We conduct certain of our operations in Israel. Conditions in Israel, including the October 2023 attack by Hamas and other terrorist organizations from the Gaza Strip and Israel’s war against them, may affect our operations
7. 53The impact of planned changes in the Israeli Judicial System on capital raising in the high-tech sector is difficult to predict
8. 54Our “Israeli identity” may have negative impact on our sales
9. 55Our operations may be impacted by natural disasters, which may become more frequent or severe as a result of climate change and may adversely impact our business and operating results as well as those of our potential customers and suppliers

Risks Related to the ENvue System

1. 56If we are not successful in enhancing awareness of our ENvue System, driving adoption across our current target population and expanding the population of eligible patients, our sales, business, financial condition and results of operations will be negatively affected
2. 57Our commercial success and revenues will depend on the future adoption of the ENvue System into patient work streams in facilities and other healthcare settings. If we are unable to successfully drive interest in our ENvue System, our business, financial condition and results of operations would be harmed
3. 58If we are unable to successfully scale our marketing, training and quality control systems our business, financial condition and results of operations would be harmed
4. 59We may be unable to compete successfully with competitive technologies, which could harm our sales, business, financial condition and results of operations
5. 60Use of our ENvue System requires appropriate training and inadequate training may lead to negative clinician experiences, which could harm our business, financial condition, and results of operations
6. 61We are highly dependent on our senior management team and key personnel, and our business could be harmed if we are unable to attract and retain personnel necessary for our success
7. 62We expect to increase the size of our organization in the future, and we may experience difficulties in managing the operational elements or timing of this growth. If we are unable to manage or appropriately time the anticipated growth of our business, our future revenue and operating results may be harmed
8. 63We may not be able to achieve or maintain satisfactory pricing and margins for our ENvue System, which could harm our business and results of operations
9. 64Future sales of our ENvue System may depend on providers’ and patients’ ability to obtain reimbursement from third-party payors, such as insurance carriers
10. 65Our results of operations may be harmed if we are unable to accurately forecast clinician demand for our ENvue System or any future products
11. 66Adoption of our ENvue System depends on positive clinical data as well as medical providers’ acceptance of the data and our products, and negative clinical data, publicly reported adverse events, or perceptions among these medical providers would harm our sales, business, financial condition, and results of operations

Risks Related to ENvue Legal, Regulatory and Compliance Matters

1. 67Complying with regulations enforced by FDA and other regulatory authorities is expensive and time consuming, and failure to comply could result in substantial penalties
2. 68We may not receive the necessary authorizations to market future versions, if any, of our ENvue System or any future new product candidates, and any failure to timely do so may adversely affect our ability to grow our business
3. 69Our ENvue System is a Class II medical device and received FDA clearance under the 510(k) pathway for marketing to adults (ages 22 and above) only
4. 70Certain modifications to our products may require new 510(k) clearance or other marketing authorizations
5. 71Ongoing changes in healthcare regulation could negatively affect our revenues, business and financial condition
6. 72These modifications may have an effect on the way we conduct our business in the EEA
7. 73Changes in internet regulations could adversely affect our business
8. 74Our business could be adversely affected by professional and legal challenges to our business model or by new state actions restricting our ability to provide our products and services in certain states
9. 75Security breaches, data breaches, cyber attacks, other cybersecurity incidents or the failure to comply with privacy, security and data protection laws could materially impact our operations, patient care could suffer, we could be liable for damages, and our business, operations and reputation could be harmed

Risks Related to ENvue’s Intellectual Property

1. 76Our success depends in part on our proprietary technology, and if we are unable to successfully enforce our intellectual property rights, our competitive position may be harmed
2. 77If we infringe or violate the patents or proprietary rights of other parties or are subject to an intellectual property infringement or misappropriation claim, our ability to grow our business may be severely limited
3. 78Our failure to secure trademark registrations could adversely affect our ability to market our products and operate our business
4. 79We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers
5. 80Obtaining and maintaining patent protection depends on compliance with various procedures and other requirements, and our patent protection could be reduced or eliminated in case of non-compliance with these requirements
6. 81Patent terms may be inadequate to protect our competitive position on our products for an adequate amount of time
7. 82We may be subject to claims challenging the inventorship of our patents and other intellectual property
8. 83We use AI in our business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations

Risks Related to the 2025 Reverse Stock Split

1. 84The 2025 Reverse Stock Split may not increase the price of our common stock over the long-term and our common stock may be delisted
2. 85There can be no assurance that we will satisfy the conditions required by the Panel regarding the market price or ultimately regain compliance with all applicable requirements for continued listing on Nasdaq and maintain listing of our common stock
3. 86The 2025 Reverse Stock Split may decrease the liquidity of our common stock
4. 87The 2025 Reverse Stock Split may result in some stockholders owning “odd lots” that may be more difficult to sell or require greater transaction costs per share to sell
5. 88The 2025 Reverse Stock Split may lead to a decrease in our overall market capitalization