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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended
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Mar. 31, 2026
Accounting Policies [Abstract] |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and principles of consolidation The unaudited interim consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for the interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the financial position and results of operations of the Company. These interim condensed consolidated financial statements and notes thereto are unaudited and should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2025, as found in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2026. The balance sheet for December 31, 2025, was derived from the Company’s audited financial statements for the year ended December 31, 2025. The results of operations for the periods presented are not necessarily indicative of results that could be expected for the entire fiscal year. Certain information and footnote disclosures normally included in the consolidated financial statements in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC for interim reporting. The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, including ENvue as of the date of the ENvue Merger. Intercompany accounts and transactions have been eliminated upon consolidation. ENVUE MEDICAL, INC. Notes to the Interim Condensed Consolidated Financial Statements (unaudited) (Amounts in thousands except share and per share data) Use of estimates The preparation of the interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Concentration of credit risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, trade receivables, and other accounts receivable. The Company holds cash and cash equivalents in various banking institutions. The majority of the Company’s cash and cash equivalents and short-term bank deposits are invested with banks in United States. Such investments are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250. Cash balances could exceed insured amounts at any given time. Generally, these investments may be redeemed upon demand, and the Company believes that the financial institutions that hold the Company’s cash deposits are financially sound and, accordingly, bear minimal risk. As of March 31, 2026 and December 31, 2025, the Company had cash in excess of the FDIC insured amount totaling approximately $1,526 and $3,800, respectively. The trade receivables of the Company are mainly derived from sales to a diverse set of customers located primarily in the United States. The Company performs ongoing credit evaluations of its customers and, to date, has not experienced any significant losses. Trade receivables The Company’s trade receivable balance consists of amounts due from its customers. Trade Receivables are recorded when the right to consideration becomes unconditional. The Current Expected Credit Losses (“CECL”) impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, which considers forecasts of future economic conditions in addition to information about past events and current conditions. Based on this model, the Company considers many factors, including the age of the balance, collection history, and current economic trends. Credit losses are written off after all collection efforts have ceased. Allowances for credit losses are recorded as a direct reduction from an asset’s amortized cost basis. Credit losses and recoveries are recorded in selling, general and administrative expenses in the consolidated statements of operations. Recoveries of financial assets previously written off are recorded when received. As of March 31, 2026 and December 31, 2025, the credit losses allowance was $42 and $10, respectively. Earnings per share The Company computes net loss per share using the two-class method required for participating securities. The two-class method requires income available to common stockholders for the period to be allocated between shares of Common Stock, par value $0.001 per share (the “Common Stock”) and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The Company’s Series X Preferred Shares and Series H Preferred Shares would be entitled to dividends that would be distributed to the holders of Common Stock of the Company, based on the conversion ratio, assuming conversion of all Series X Preferred Shares and Series H Preferred Shares into shares of Common Stock. The Company does not allocate losses to these participating securities as they do not share in the Company’s losses. ENVUE MEDICAL, INC. Notes to the Interim Condensed Consolidated Financial Statements (unaudited) (Amounts in thousands except share and per share data) The Company’s basic net loss per share is calculated by dividing net loss attributable to common and preferred stockholders by the weighted-average number of shares, which include prefunded warrants, without consideration of potentially dilutive securities. The diluted net loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities. Diluted net loss per share is the same as basic net loss per share in periods when the effects of potentially dilutive shares of Common Stock are anti-dilutive. Goodwill Goodwill has been recorded as a result of the acquisition. Goodwill represents the excess of the purchase price in a business combination over the fair value of identifiable tangible and intangible assets acquired. Goodwill is not amortized but rather is subject to an impairment test. ASC No. 350, “Intangibles - Goodwill and other” (“ASC No. 350”) requires goodwill to be tested for impairment at the reporting unit level at least annually or between annual tests in certain circumstances and written down when impaired. ASC No. 350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If it does result in a more likely than not indication of impairment, the quantitative goodwill impairment test is performed. Alternatively, ASC No. 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to perform the quantitative goodwill impairment test. The Company performs the quantitative goodwill impairment test during the fourth quarter of each fiscal year, or more frequently if impairment indicators are present and compares the fair value of the reporting unit with its carrying value. During the three months ended March 31, 2026 and 2025, no impairment was recorded. Intangible Assets Purchased intangible assets with finite lives are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, which range from 5 to 7 years. Intangible assets, consisting primarily of technology, tradename and trademarks and customer list, are amortized over their estimated useful lives on a straight-line basis or in proportion to their economic benefits realized. For the three months ended March 31, 2026 and 2025, amortization expense amounted to $210 and $17. The estimated useful lives of the Company’s intangible assets are as follows: SCHEDULE OF INTANGIBLE ASSETS ESTIMATED USEFUL LIVES
Intangible Assets |  | Years |
Tradename and trademarks |  |  | 5 |
Technology |  |  | 7 |
Customer list |  |  | 5 |
ENVUE MEDICAL, INC. Notes to the Interim Condensed Consolidated Financial Statements (unaudited) (Amounts in thousands except share and per share data) Leases The Company may sell its insertion systems to customers through bundled lease arrangements which typically include insertion systems and nasoenteral tubes. Revenues under these bundled lease arrangements are allocated considering the relative standalone selling prices of the lease and non-lease components included in the bundled arrangement. The primary accounting provision the Company uses to classify transactions as sales-type or operating leases is whether the lease transfers ownership of the underlying asset to the lessee by the end of the lease term. Systems included in arrangements meeting this condition are accounted for as sales-type leases and revenue is recognized at lease commencement. When leases are determined to be operating leases, revenue is recognized over the term of the lease. For the three months ended March 31, 2026, there were no operating leases in which the Company is the lessor. Revenue from sales-type leases is presented on a gross basis when the Company enters into a lease to realize value from a product that it would otherwise sell in its ordinary course of business. Interest income for the three months ended March 31, 2026 and 2025 was immaterial. The Company’s short-term net investment in a lease receivable as of March 31, 2026 and December 31, 2025 was $20 and is presented within trade receivables in the consolidated balance sheets. The Company’s long -term net investment in a lease receivable as of March 31, 2026 and December 31, 2025 was $20 and is presented within long-term trade receivables in the consolidated balance sheets. Revenue recognition Revenues from product and services are recognized in accordance with ASC 606 “Revenue Recognition.” Five basic steps must be followed before revenue can be recognized: (1) Identifying the contract(s) with a customer that create(s) enforceable rights and obligations; (2) Identifying the performance obligations in the contract, such as promising to transfer goods or services to a customer; (3) Determining the transaction price, meaning the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer; (4) Allocating the transaction price to the performance obligations in the contract, which requires the company to allocate the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or services promised in the contract; and (5) Recognizing revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service to a customer. ENVUE MEDICAL, INC. Notes to the Interim Condensed Consolidated Financial Statements (unaudited) (Amounts in thousands except share and per share data) The Company’s performance obligation is generally the sale and delivery of its products. Revenues from product sales is recorded at the net sales price, or “transaction price,” which includes estimates of variable consideration that result from discounts, commissions as well as allowances for returns. Revenue from NanoVibronix product sales are recognized at a point in time when control of the product is transferred, which is generally upon shipment to the customer. Regarding its ENvue sales, the Company regularly sells its insertion systems and nasoenteral tubes on a stand-alone basis and therefore concludes these products are separate performance obligations. Revenue from product sales is recognized at a point in time when control of the product is transferred, which is generally upon delivery to the customer. When a contract includes one performance obligation, the entire transaction price is allocated to that performance obligation. When a contract includes a combination of products and services, the transaction price is allocated to each performance obligation on a stand-alone selling price basis. The stand-alone selling prices are generally determined based on the prices at which the Company separately sells the products and services. The Company’s contracts with its ENvue customers generally do not include rights of return. The Company extends credit to its customers in the ordinary course of business. Payment terms are typically between 30 and 60 days from the date of invoice for both NanoVibronix and ENvue customers. The Company applied the practical expedient in ASC 606 and did not evaluate payment terms of one year or less for the existence of a significant financing component. The related revenue is recognized net of any taxes collected from customers which are subsequently remitted to governmental entities (e.g., sales tax and other indirect taxes). The Company elected to not disclose information about the remaining performance obligations that have original expected durations of one year or less. In some of its contracts, the Company provides assurance warranty services to its customers, in accordance with legal provisions or industry standards to ensure the quality of the products. As such, the Company recognizes a provision for warranties in its financial statements as applicable. As of March 31, 2026 and December 31, 2025, the Company’s provision for warranty amounted to $57 and $47, respectively. Deferred revenue Deferred revenue includes payments received in advance of performance under the contract and are realized with the associated revenue recognized under the contract. The following table presents the changes in the deferred revenue for the three months ending March 31, 2026: SCHEDULE OF DEFERRED REVENUE
Balance as of December 31, 2025 |  | $ | 175 |
Revenue recognized |  |  | (175 | )
Balance as of March 31, 2026 |  | $ | - |
ENVUE MEDICAL, INC. Notes to the Interim Condensed Consolidated Financial Statements (unaudited) (Amounts in thousands except share and per share data) Fair Value Measurements Fair value is defined as the exchange price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company measures financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying value of cash equivalents, restricted cash, other accounts receivable, trade payables, and other accounts payable and accrued expenses approximate their fair value due to their short-term maturities. The Company warrant liabilities are measured at fair value using Level 3 inputs. Reclassification Certain comparative figures have been reclassified to conform to the current period presentation. Recently Adopted Accounting Standards In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). This amendment introduces a practical expedient for the application of the current expected credit loss model to current accounts receivable and contract assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company adopted this guidance on January 1, 2026 on a prospective basis. The Company has elected the practical expedient provided by ASU 2025-05. Under this expedient, the Company assumes that economic conditions as of the balance sheet date remain unchanged for the remaining life of all current accounts receivable and current contract assets arising from transactions under ASC 606. The adoption did not have a material impact on the consolidated financial statements. Recently issued accounting standards In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40), Disaggregation of Income Statement Expenses, which requires disclosure of disaggregated information about certain expense captions presented in the Interim Condensd Consolidated Statements of Operations and Comprehensive Loss as well as disclosure about selling expense. The guidance will be effective for the Company for annual periods beginning January 1, 2027, and interim periods beginning January 1, 2028, with early adoption permitted. It could be applied either prospectively or retrospectively. The Company is currently evaluating the impact on its financial statement disclosures. In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which clarifies current guidance for determining the accounting acquirer for a transaction effected primarily by exchanging equity interests in which the legal acquiree is a variable interest entity that meets the definition of a business. ASU 2025-03 is effective for annual reporting periods beginning after December 15, 2026, including interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, to modernize the accounting for costs related to internal-use software and better align it with current software development practices. The amended guidance removes references to project stages and clarifies when entities are required to begin capitalizing eligible costs. This guidance will be effective for the Company for annual periods beginning January 1, 2028, with early adoption permitted. The guidance may be applied prospectively, retrospectively, or using a modified prospective transition method. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In April 2026, the FASB issued ASU 2026-01, Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock. The amendments in this update require entities to initially measure paid-in-kind (“PIK”) dividends on equity-classified preferred stock using the PIK dividend rate stated in the preferred stock agreement, rather than at fair value. The ASU is effective for annual periods beginning after December 15, 2026, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

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