v3.25.2
MERGER
 6 Months Ended
Jun. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
MERGER

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) 3,318 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 12,526 shares of our common stock (the “Merger Pre-Funded Warrants”) at an exercise price of $0.001 per share, and (iii) 5,772 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.

 

Given that both companies operate in the medical device sector and demonstrate natural synergies and strategic alignment in their operations, the merger was undertaken to combine and enhance their respective strengths. The Company concluded the merger resulted in the Company obtaining a controlling financial interest in VIE in accordance with ASC 810, Consolidation. The Company determined that ENvue was considered to be a VIE as it did not have sufficient equity to finance its activities without additional subordinated financial support. The Company acquired all of the outstanding shares of ENvue and, therefore, is the sole equity holder and primary beneficiary. The Company has the obligation to the absorb losses and right to receive the benefits of ENvue, and the power to direct the activities that most significantly affect the economic performance of ENvue. Therefore, the Company is the primary beneficiary. Further, the Company concluded that ENvue qualified as a business and accounted for the transaction as the acquisition of a business in accordance with ASC 805. As the primary beneficiary, the Company was the acquirer in the transaction. In the second quarter of 2025, during the measurement period, the Company revised certain aspects of the purchase price allocation. As a result, goodwill and additional paid-in capital increased to reflect updated information available within the measurement period, in accordance with ASC 805, Business Combinations.

 

For additional details regarding the Series X Preferred Stock, refer to note 6 – stockholders’ equity.

 

The acquisition date fair value of the consideration transferred amounted to $41,864, which included a combination of the Company ordinary shares, Series X Preferred Stock and Pre-Funded Warrants. Issuance costs of Series X Preferred Stock were immaterial.

 

Acquisition-related expenses of approximately $461 were expensed by the Company in general and administrative expenses in its condensed consolidated statements of comprehensive loss for the six months ended June 30, 2025.

 

 

The transaction was accounted for as a business combination in accordance with ASC No. 805, “Business Combinations.” The total purchase price was preliminarily allocated using information currently available to the Company and may be subject to change as additional information is received during the respective measurement period, up to one year from the acquisition date. Preliminary allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date is as follows:

 

Purchase price:    
Common Stock and Pre-Funded Warrants consideration   179 
Series X Preferred Stock consideration   41,685 
Total purchase price   41,864 
      
Allocated tangible assets:     
Net working capital   (3,198)
Inventory   395 
Property and equipment   112 
Right-of-use assets   58 
Lease liability   (14)
Total allocated tangible assets   (2,647)
      
Purchase price allocated to intangible assets     
Tradename and trademarks   560 
Proprietary technology   3,500 
Customer relationships   1,820 
Goodwill (unallocated intangible value)   38,631 

 

The excess purchase price has been recorded as “goodwill” in the amount of $38,631. The estimated useful life of the identifiable intangible assets is five to seven years. Goodwill is not expected to be tax deductible.

 

Supplemental Unaudited Pro Forma Information

 

Following are the supplemental consolidated financial results of the Company, NanoVibronix and ENvue on an unaudited pro forma basis, as if the acquisitions had been consummated as of the beginning of the fiscal year 2025 (i.e., January 1, 2025).

   Six Months Ended 
   June 30, 2025 
Net revenue  $1,574 
Net loss  $(6,386)

 

The unaudited pro forma financial information below combines the historical results of the Company with the historical results of ENvue for the six months ended June 30, 2025, as if the Merger had occurred on January 1, 2025.

 

The unaudited pro forma financial information presented is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the Merger been completed at the beginning of fiscal year 2025, nor is it indicative of the future operating results of the combined company. The pro forma results includes and adjustment related to purchase accounting, primarily amortization of acquisition-related intangible assets.