NanoVibronix, Inc.

Item 1A. Risk Factors

The following description of risk factors includes any material changes to, and supersedes the description of, the risk factors addressed below associated with our business, financial condition and results of operations previously disclosed in Item 1A. Risk Factors of our Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2023, as initially filed with the SEC on April 8, 2024. Our business, financial condition, and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described below, any one or more of which could, directly or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results, and stock price.

The following discussion of risk factors contains forward-looking statements. These risk factors may be important to understanding other statements in this Form 10-Q. The following information should be read in conjunction with the condensed consolidated financial statements and related notes in Part I, Item 1, Financial Statements and Part I, Item 2, Managements Discussion and Analysis of Financial Condition and Results of Operations of this Form 10-Q.

We conduct our operations in Israel Conditions in Israel, includingand, the recent attack by Hamas and other terrorist organizations from refore, our business, results of operations and liquidity may be adversely affected by political, economic and military instability in Israel, including the Gaza Strip andongoing multi-front war between Israels war against them, may affect our operations and terrorist groups and hostile state actors in the Middle East.

Because we are incorporated under the laws of the state of Israel and our operations are conducted in Israel, our business and operations are directly affected by economic, political, geopolitical, and military conditions in Israel. Since the establishment of the State of Israel in 1948, a number of armed conflicts have occurred between Israel and its neighboring countries and terrorist organizations active in the region. These conflicts have involved missile strikes, hostile infiltrations, and terrorism against civilian targets in various parts of Israel, which have negatively affected business conditions in Israel.

Most recently, in October 2023, Hamas terrorists infiltrated Israels southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on the Israeli population and industrial centers located along Israels border with the Gaza Strip and in other areas within the State of Israel. Following the attack, Israels security cabinet declared war against Hamas and a military campaign against the terrorist organization commenced in parallel to their continued rocket and terror attacks. Moreover, the clash between

Following the attack by Hamas on Israels southern border, Hezbollah in Lebanon has also launched missiles, rockets, and shooting attacks against Israeli military sites, troops, and Israeli towns in northern Israel. In response to these attacks, the Israel and i army has carried out a number of targeted strikes on sites belonging to Hezbollah in southern Lebanon, may escalate in the future into a greate and begun conducting a limited ground operation in southern Lebanon, which has the potential to escalate into a wider regional conflict, especially in the northern part of Israel where our .

In addition, Iran recently launched direct attacks on Israel. Iran is also believed to have a strong influence among extremist groups in the region, such as Hamas in Gaza, Hezbollah in Lebanon, the Houthi movement in Yemen and various rebel militia groups in Syria and Iraq. The Houthis, a military organization based in Yemen, have launched a series of attacks on global shipping routes in the Red Sea, as well as direct attacks on various parts of Israel office is located which stores app.

Such incidents contribute to regional instability and could potentially escalate into broader conflicts with Iran and its proximately $1.6 milles in the middle east, affecting Israels political and trade relation wors, especially with of our inventory.neighboring countries and global allies. The situation remains fluid, and the potential for further escalation exists.

Any hostilities involving Israel, or the interruption or curtailment of trade within Israel or between Israel and its trading partners, or the ability to ship our products overseas, could adversely affect our operations and results of operations and could make it more difficult for us to raise capital. Parties with whom we may do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing us to make alternative arrangements when necessary. The conflict situation in Israel could cause situations where medical product certifying or auditing bodies could not be able to visit manufacturing facilities of our subcontractors in Israel in order to review our certifications or clearances, thus possibly leading to temporary suspensions or even cancellations of our product clearances or certifications. The conflict situation in Israel could also result in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements.

There have been travel advisories issued related to travel to Israel, restriction on travel, and delays and disruptions as related to imports and exports may be imposed in the future. An inability to receive supplies and materials, shortages of materials or difficulties in procuring our materials, among others, or conversely, our ability to ship products to our US facilities or overseas customers, may adversely impact our ability to commercialize and manufacture our product candidates and products in a timely manner. This could cause a number of delays and/or issues for our operations, including delay of the review of our product candidates by regulatory agencies, which in turn would have a material adverse impact on our ability to commercialize our product candidates.

Additionally, members of our management and employees are located and reside in Israel. Shelter-in-place and work-from-home measures, government-imposed restrictions on movement and travel, and other precautions taken to address the ongoing conflict may temporarily disrupt our management and employees ability to effectively perform their daily tasks.

The IDF, the national military of Israel, is a conscripted military service, subject to certain exceptions. None of our employees are subject to military service in the IDF and have been called to serve, but many do serve on guard duty in their local communities from time to time. It is possible that there will be further military reserve duty call-ups in the future, which may affect our business due to a shortage of skilled labor and loss of institutional knowledge, and necessary mitigation measures we may take to respond to a decrease in labor availability, such as overtime and third-party outsourcing, for example, which may have unintended negative effects and adversely impact our results of operations, liquidity, or cash flows.

It is currently not possible to predict the duration or severity of the ongoing conflict or its effects on our business, operations, and financial conditions. The ongoing conflict is rapidly evolving and developing, and could disrupt our business and operations, interrupt our sources and availability of supply, and hamper our ability to raise additional funds or sell our securities, among others.

The Companys 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 Companys ability to continue as a going concern.

The Companys unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. During the three months ended JuneSeptember 30, 2024, the Companys cash used in operations was $1,113978,000 leaving a cash balance of $2,1701,305,000 as of JuneSeptember 30, 2024. Because the Company does not have sufficient resources to fund our operations for the next twelve months from the date of this filing, management has substantial doubt about the Companys ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company will need to raise additional capital to finance its losses and negative cash flows from operations and may continue to be dependent on additional capital raising as long as our products do not reach commercial profitability. There are no assurances that the Company would be able to raise additional capital on terms favorable to it. If the Company is unsuccessful in commercializing its products and raising capital, it will need to reduce activities, curtail, or cease operations.

If 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.

Our Common Stock is currently listed for trading on Nasdaq. We must satisfy Nasdaqs continued listing requirements, including, among other things, a minimum stockholders equity of$2.5 million and a minimum closing bid price of $1.00 per share or risk delisting, which would have a material adverse effect on our business. A delisting of our Common Stock from Nasdaq could materially reduce the liquidity of our Common Stock and result in a corresponding material reduction in the price of our Common Stock. In addition, delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities.

On April 10, 2024, the Company received a letter (the Letter) from the Listing Qualifications Department of Nasdaq indicating that, based upon the closing bid price of the Companys Common Stock for the 30 consecutive business days between February 27, 2024 and April 9, 2024, the Company did not meet the minimum bid price of $1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the Rule). The lLetter also indicated that the Company will be as provided with a compliance period of 180 calendar days, or until October 7, 2024 (the Compliance Period), in which to regain compliance pursuant to Nasdaq Listing Rule 5810(c)(3)(A).

In orPursuant to the Letter in order to regain compliance with Nasdaqs minimum bid price requirement, the Companys Common Stock mustwas required to maintain a minimum closing bid price of $1.00 for at least ten consecutive business days during the Compliance Period. In the event the Company does not regain compliance by the end of the Compliance Period, the Company may be eligible for additional time to regain compliance. To qualify, the Company will be as required to meet the continued listing requirement for the market value of its publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and will neas required to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split if necessary. If the Company meetst these requirements, the Company may be granted have been eligible for an additional 180 calendar days to regain compliance; however, if it appears to Nasdaq that the .

The Company will be unable to cure the deficiency, or if the Company is not odid not regain compliance with therwise eligible for the additional cure period,  Rule by October 7, 2024, and on October 8, 2024, Nasdaq will provide noticefied that the Companys Common Stock will be subject to delisting. There can be no assurance that that the Company will beas not eligible for thean additional 180 calendar daday compliance period, if applicable, or that the Nasdaq staff would grant because the Company does not comply with the Companys request for continued listing subs$5,000,000 minimum stockholders equent to any deity initial listing notification. In the everequirement of such a notification, tfor The Company may appeNasdaq Capital the Nasdaq staffs determination to delist itMarket, and accordingly, the Companys securities.

The letter has no immediate impa were subject on the to delisting of from Nasdaq unless the Companys Common Stock, which will continue to be li timely requested and traded on T hearing before the Nasdaq Capital Market, subject to tHearings Panel (the Panel). The Companys compliance with the other listi subsequently timely requested a hearing requirements of The Nasdaq Capital Market.

Tbefore the Panel, which has stayed any furthere ca action be no assurance thy Nasdaq at we will be able to regain and maintainleast pending compliance. If we do not regain compliance by etion of the hearing and the endxpiration of theany extension that may be granted by Nasdaq or we fail to satisfy another Nasdaq requirement for continued listing, Nasdaq staff could provide notice that our Common Stock will become subject to delisting. In such event, Nasdaq rules permit us to appeal the Panel. The hearing is scheduled to be held on December 5, 2024.

There can be no assurance that the decision to reject its proposed cPanel will grant the Compliance plany an or any delisting determinatadditional extension to a Nasdaq Hearings Panel. Accordingly, there can be no guarantee that we wiperiod or that the Company will ultimately regain compliance with all be aapplicable to maintain our requirements for continued listing on The Nasdaq listingCapital Market.