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MERGER

3 Months Ended

Mar. 31, 2025

NOTE 4 – MERGER

Agreement and Plan of Merger

On February 14, 2025, pursuant to the terms of that certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of February 14, 2025, by and among us, NVEH Merger Sub I, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“First Merger Sub”), NVEH Merger Sub II, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Second Merger Sub”), and ENvue Medical Holdings, Corp. (“Predecessor ENvue” or “ENvue”), the Company and Predecessor ENvue effected (i) a merger of First Merger Sub with and into Predecessor ENvue, with the First Merger Sub ceasing to exist and Predecessor ENvue becoming a wholly-owned subsidiary the Company and (ii) the merger of Predecessor ENvue with and into Second Merger Sub (the “Second Merger” and, together with the First Merger, the “Merger”), with Second Merger Sub being the surviving entity of the Second Merger (“Surviving Entity”). At the effective time of the Second Merger, the certificate of formation of the Surviving Entity was amended and restated to, among other things, to change the name of the Surviving Entity to “ENvue Medical Holdings LLC.” In connection with the Merger Agreement, we issued (i) 33,182 shares of common stock (the “Merger Shares”), which such number of shares represented no more than 4.9% (the “Exchange Cap”) of the outstanding shares of common stock as of immediately before the First Effective Time and (ii) Pre-Funded Warrants to purchase up to 124,408 shares of our common stock (the “Merger Pre-Funded Warrants”) at an exercise price of $0.0001 per share, and (iii) 57,720 shares of Series X Non-Voting Convertible Preferred Stock (the “Series X Preferred Stock”) in excess of the Exchange Cap to the holders of Predecessor ENvue in consideration for 100% of Predecessor ENvue. Each share of Series X Preferred Stock will be convertible into 90,9091 shares of our common stock, subject to and contingent upon the affirmative vote of a majority of the shares of common stock present or represented and entitled to vote at a meeting of stockholders of Company to approve, for purposes of the Nasdaq Listing Rules, the issuance of shares of our common stock to the stockholders of Predecessor ENvue upon conversion of any and all shares of Series X Preferred Stock in accordance with the terms of the Certificate of Designation for the Series X Non-Voting Convertible Preferred Stock (the “Series X Certificate of Designation”).

The Merger was consummated and completed on February 14, 2025.

After giving effect to the Merger, pursuant to the terms and conditions of the Merger Agreement: (i) the holders of the outstanding equity of Predecessor ENvue immediately prior to the effective time of the First Merger (“First Effective Time”) own 19.9% of the common stock of the Company and 85.0% of the outstanding equity of the Company (assuming the Series X Preferred Stock is converting at a ratio of 1,000:1) immediately following the First Effective Time, which following stockholder approval will allow the Series X Preferred Stock to convert to common stock of the Company which may result in the holders of Predecessor ENvue to own 85% of the common stock of the Company, and (ii) the holders of our outstanding equity immediately prior to the First Effective Time own 80.1% of the common stock of the Company and 15.0% of the outstanding equity of the Company (assuming the Series X Preferred Stock is converting at a ratio of 1,000:1) immediately following the First Effective Time, which following stockholder approval which will allow the Series X Preferred Stock to convert to common stock of the Company which may result in our holders owning 15% of common stock of the Company.

Subsequent to March 31, 2025, on May 12, 2025, the Company entered into an Amendment Agreement (the “Series X Amendment Agreement”) with the Requisite Series X Holders (as defined in the Series X Certificate of Designations). Pursuant to the Series X Amendment Agreement, the Requisite Series X Holders agreed to amend the Series X Certificate of Designations by filing a Certificate of Amendment (“Series X Certificate of Amendment”) to the Series X Certificate of Designations with the Secretary of State of the State of Delaware to (i) increase the number of authorized shares of Series X Preferred Stock (as defined below) from 57,720 shares to 62,220 shares and (ii) upon the closing of the Company’s proposed public offering pursuant to a registration statement on Form S-1, to reduce the conversion price of the Series X Preferred Stock to the conversion price of the Preferred Stock as such conversion price shall be set forth in the Certificate of Designations of the Preferences, Rights and Limitations of the Series G Convertible Preferred Stock.

On May 12, 2025, the Company filed the Series X Certificate of Amendment with the Secretary of State of the State of Delaware, thereby amending the Series X Certificate of Designations. The Series X Certificate of Amendment became effective with the Secretary of State of the State of Delaware upon filing.

Fair value of the acquisition

The following table summarizes the allocation of the purchase price as of the ENvue acquisition:

Purchase price:
Common Stock consideration	4,400,000
Series X Preferred Stock consideration	35,000,000
Total purchase price	39,400,000

Allocated tangible assets:
Net working capital	(940,000	)
Inventory	395,000
Fixed assets, net	112,000
Right-of-use assets	58,000
Lease liability LT	(14,000	)
Total allocated tangible assets	(389,000	)

Purchase price allocated to intangible assets
Tradename and trademarks	560,000
Proprietary technology	3,500,000
Customer relationships	1,820,000
Goodwill (unallocated intangible value)	33,909,000

The excess purchase price has been recorded as “goodwill” included as part of “Intangible assets” in the amount of $33,909,000. The estimated useful life of the identifiable intangible assets is five to seven years. The goodwill is amortizable for tax purposes.