NanoVibronix Reports Third Quarter 2021 Financial Results

Momentum Continues with Solid Execution of Product Commercialization Strategy

NanoVibronix, Inc. (NASDAQ: NAOV), a medical device company utilizing the Company's proprietary and patented low intensity surface acoustic wave (SAW) technology, today reported its financial results for the quarter ended September 30, 2021.

Third Quarter Financial and Business Highlights

• Revenue of $499,000, an increase of 233% compared to the prior year period
• Introduced CBD gel for topical treatment of pain and in combination with PainShield, to product line-up
• Expanded total addressable market with entry into worker's compensation market through agreement with one of the largest national payers
• Backlog of orders in excess of $600,000 as of September 30, 2021
• Balance sheet remains strong with $8.6 million in cash and $0 long-term debt as of September 30, 2021

“We are increasingly encouraged by the progress we believe we are making towards broad adoption and commercialization of our products,” stated Brian Murphy, CEO of NanoVibronix. “As of September 30, we had a backlog of orders that exceeded this quarter’s revenue, a telling metric that demonstrates growing sales throughput of our product and revenue to be recognized in the future. Looking beyond year end, we have commitments to deliver a more significant quantity of product than ever before and an improved contract manufacturing position that we expect will enable a significant increase in product delivery through the first quarter of 2022.

“Potential near term catalysts for our business include the recent launch of our first non-prescription device, PainShield Relief, for the mass consumer market, adoption of UroShield by the National Healthcare Service (NHS) in the U.K., expanded sales distribution as we enter the Canadian and Middle Eastern markets and increasing adoption of our products through our existing distributor network and finalizing CMS reimbursement for PainShield and UroShield, all of which we believe are advancing towards effectiveness later this year and early in 2022,” Murphy added.

Murphy continued, “Given the current macro environment, we are working diligently to strengthen and optimize our inventory position by exploring additional componentry sources and manufacturing alternatives. In doing so, we are also identifying opportunities to rationalize our cost of goods and potentially improve unit economics on future sales as our business scales.”

Murphy concluded, “Our balance sheet remains strong with $8.6 million in cash on hand and zero debt at the end of the third quarter. We are in a solid position to fund our growth and continue to advance our products towards full commercialization.”

Third Quarter 2021 Financial Summary

Revenues were $499,000 for the third quarter of 2021, up 233% compared with $150,000 for the third quarter of 2020. The increase was primarily due to increased sales of PainShield devices as a result of new distribution agreements, including one new distributor that sells product to Veterans Administration (VA) facilities.

Gross profit was $228,000, or 46% of revenue, in the third quarter of 2021 compared with $99,000, or 66% of revenue, in the 2020 period. The increase in gross profit was primarily driven by higher sales while the decline in gross profit margin was the result of increased costs of manufacturing and shipping compared to last year.

Total operating expenses were $1.1 million in the third quarter of 2021 compared with $903,000 in the prior year period. The 10.7% increase was the result of an increase in general and administrative expense, primarily professional fees related to the company’s special shareholder meeting and the addition of two new employees in the 2021 period compared to the prior year period.

Net loss was $6.7 million, or $(0.26) per basic and diluted share, compared with a net loss of $922,000 or $(0.10) per basic and diluted share for the previous quarter. Third quarter 2021 results include a change in fair value of derivative liabilities resulting in a non-cash loss of $5.7 million.

About NanoVibronix, Inc.

NanoVibronix, Inc. (NASDAQ: NAOV) is a medical device company headquartered in Elmsford, New York, with research and development in Nesher, Israel, focused on developing medical devices utilizing its patented low intensity surface acoustic wave (SAW) technology. The proprietary technology allows for the creation of low-frequency ultrasound waves that can be utilized for a variety of medical applications, including for disruption of biofilms and bacterial colonization, as well as for pain relief. The devices can be administered at home without the assistance of medical professionals. The Company’s primary products include PainShield® and UroShield®, which are portable devices suitable for administration at home without assistance of medical professionals. Additional information about NanoVibronix is available at: www.nanovibronix.com.

Forward-looking Statements

This press release contains “forward-looking statements.” Such statements may be preceded by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control, and cannot be predicted or quantified; consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with: (i) the geographic, social and economic impact of COVID-19 on the Company’s ability to conduct its business and raise capital in the future when needed, (ii) market acceptance of our existing and new products or lengthy product delays in key markets; (iii) negative or unreliable clinical trial results; (iv) inability to secure regulatory approvals for the sale of our products; (v) intense competition in the medical device industry from much larger, multinational companies; (vi) product liability claims; (vii) product malfunctions; (viii) our limited manufacturing capabilities and reliance on subcontractor assistance; (ix) insufficient or inadequate reimbursements by governmental and/or other third party payers for our products; (x) our ability to successfully obtain and maintain intellectual property protection covering our products; (xi) legislative or regulatory reform impacting the healthcare system in the U.S. or in foreign jurisdictions; (xii) our reliance on single suppliers for certain product components, (xiii) the need to raise additional capital to meet our future business requirements and obligations, given the fact that such capital may not be available, or may be costly, dilutive or difficult to obtain; (xiv) our conducting business in foreign jurisdictions exposing us to additional challenges, such as foreign currency exchange rate fluctuations, logistical and communications challenges, the burden and cost of compliance with foreign laws, and political and/or economic instabilities in specific jurisdictions; and (xv) market and other conditions. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s web site at: http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events, or otherwise, except as required by law.

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