UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM
10-Q



[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For
the quarterly period ended June 30, 2020



OR



[  ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For
the transition period from to



Commission
File Number: 001-36445







NanoVibronix,
Inc.

(Exact
name of registrant as specified in its charter)



|Delaware                                                                               |  | 01-0801232                                                     
|-------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------
|(State
        or other jurisdiction of
        incorporation
        or organization) |  | (I.R.S.
        Employer
        Identification
        Number)



|525
    Executive Blvd. Elmsford, New York  |  | 10523         
|------------------------------------------- |  | --------------
|(Address
    of principal executive office) |  | (Zip
    Code)



Registrant’s
telephone number, including area code: (914) 233-3004



Securities
registered pursuant to Section 12(b) of the Act:



|Title
    of each class                      |  | Trading
    Symbol |  | Name
    of each exchange on which registered
|-------------------------------------------- |  | ------------------ |  | ---------------------------------------------
|Common
    stock, par value $0.001 per share |  | NAOV               |  | NASDAQ
    Capital Market                    



Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports)
and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]



Indicate
by check mark whether the registrant has submitted electronically and every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant has been required
to submit and post such files). Yes [X] No [  ]



Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



|Large
    accelerated filer | [  ] | Accelerated
    filer         | [  ]
|--------------------------- | ---- | ----------------------------- | ----
|                            |      |                               |     
|Non-accelerated
    filer   | [  ] | Smaller
    reporting company | [X] 
|                            |      |                               |     
|                            |      | Emerging
    growth company   | [X] 



If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]



The
number of shares outstanding of the registrant’s Common Stock as of August 18, 2020 was 4,988,764 shares.


















NanoVibronix,
Inc.

Quarter
Ended June 30, 2020



Table
of Contents



|                              |                                                                                                                            | Page
|----------------------------- | -------------------------------------------------------------------------------------------------------------------------- | ----
|PART I. FINANCIAL INFORMATION |                                                                                                                           
|                              |                                                                                                                            |     
|Item
    1.                   | Condensed Consolidated Financial Statements (Unaudited)                                                                    | 1   
|                              |                                                                                                                            |     
|                              | Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019                                            | 1   
|                              |                                                                                                                            |     
|                              | Condensed Consolidated Statements of Operations for the Three Months and Six Months Ended June 30, 2020 and 2019           | 2   
|                              |                                                                                                                            |     
|                              | Condensed Consolidated Statements of Stockholders’ Equity for the Three Months and Six Months Ended June 30, 2020 and 2019 | 3   
|                              |                                                                                                                            |     
|                              | Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019                            | 4   
|                              |                                                                                                                            |     
|                              | Notes to Condensed Consolidated Financial Statements                                                                       | 5   
|                              |                                                                                                                            |     
|Item
    2.                   | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                      | 12  
|                              |                                                                                                                            |     
|Item
    3.                   | Quantitative and Qualitative Disclosures about Market Risk                                                                 | 20  
|                              |                                                                                                                            |     
|Item
    4.                   | Controls and Procedures                                                                                                    | 20  
|                              |                                                                                                                            |     
|PART II. OTHER INFORMATION    |                                                                                                                           
|                              |                                                                                                                            |     
|Item
    1.                   | Legal Proceedings                                                                                                          | 21  
|                              |                                                                                                                            |     
|Item
    1A.                  | Risk Factors                                                                                                               | 22  
|                              |                                                                                                                            |     
|Item
    2.                   | Unregistered Sales of Equity Securities and Use of Proceeds                                                                | 25  
|                              |                                                                                                                            |     
|Item
    3.                   | Defaults Upon Senior Securities                                                                                            | 25  
|                              |                                                                                                                            |     
|Item
    4.                   | Mine Safety Disclosures                                                                                                    | 25  
|                              |                                                                                                                            |     
|Item
    5.                   | Other Information                                                                                                          | 25  
|                              |                                                                                                                            |     
|Item
    6.                   | Exhibits                                                                                                                   | 25  
|                              |                                                                                                                            |     
|Signatures                    |                                                                                                                            | 22  



i







PART
I - FINANCIAL INFORMATION



ITEM
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



NanoVibronix,
Inc.

Condensed
Consolidated Balance Sheets (Unaudited)

(Amounts in thousands except share and
per share data)



|                                                                                                                                                                                                                                       |  | June 30, 2020 |         |   | December 31, 2019 |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ----------------- | -
|ASSETS:                                                                                                                                                                                                                                |  |               |         |   |                   |  
|Current assets:                                                                                                                                                                                                                        |  |               |         |   |                   |  
|Cash and cash equivalents                                                                                                                                                                                                              |  | $             | -       |   |                   | $
|Restricted cash                                                                                                                                                                                                                        |  |               | 202     |   |                   |  
|Trade receivables                                                                                                                                                                                                                      |  |               | 257     |   |                   |  
|Other accounts receivable and prepaid expenses                                                                                                                                                                                         |  |               | 158     |   |                   |  
|Inventory                                                                                                                                                                                                                              |  |               | 148     |   |                   |  
|Total current assets                                                                                                                                                                                                                   |  |               | 765     |   |                   |  
|                                                                                                                                                                                                                                       |  |               |         |   |                   |  
|Non-current assets:                                                                                                                                                                                                                    |  |               |         |   |                   |  
|Fixed assets, net                                                                                                                                                                                                                      |  |               | 3       |   |                   |  
|Other assets                                                                                                                                                                                                                           |  |               | 32      |   |                   |  
|Severance pay fund                                                                                                                                                                                                                     |  |               | 209     |   |                   |  
|Total non-current assets                                                                                                                                                                                                               |  |               | 244     |   |                   |  
|Total assets                                                                                                                                                                                                                           |  | $             | 1,009   |   |                   | $
|                                                                                                                                                                                                                                       |  |               |         |   |                   |  
|LIABILITIES AND STOCKHOLDERS’ EQUITY:                                                                                                                                                                                                  |  |               |         |   |                   |  
|                                                                                                                                                                                                                                       |  |               |         |   |                   |  
|Current liabilities:                                                                                                                                                                                                                   |  |               |         |   |                   |  
|Trade payables                                                                                                                                                                                                                         |  | $             | 136     |   |                   | $
|Other accounts payable and accrued expenses                                                                                                                                                                                            |  |               | 189     |   |                   |  
|Common stock payable                                                                                                                                                                                                                   |  |               | 844     |   |                   |  
|Notes payable to a related party, net of discount of $123                                                                                                                                                                              |  |               | 77      |   |                   |  
|Notes payable, current                                                                                                                                                                                                                 |  |               | 4       |   |                   |  
|Total current liabilities                                                                                                                                                                                                              |  |               | 1,250   |   |                   |  
|                                                                                                                                                                                                                                       |  |               |         |   |                   |  
|Non-current liabilities:                                                                                                                                                                                                               |  |               |         |   |                   |  
|Accrued severance pay                                                                                                                                                                                                                  |  |               | 279     |   |                   |  
|Deferred licensing income                                                                                                                                                                                                              |  |               | 226     |   |                   |  
|Notes payable, non-current                                                                                                                                                                                                             |  |               | 38      |   |                   |  
|Total liabilities                                                                                                                                                                                                                      |  |               | 1,793   |   |                   |  
|                                                                                                                                                                                                                                       |  |               |         |   |                   |  
|Commitments and contingencies (Note 10)                                                                                                                                                                                                |  |               |         |   |                   |  
|                                                                                                                                                                                                                                       |  |               |         |   |                   |  
|Stockholders’ equity:                                                                                                                                                                                                                  |  |               |         |   |                   |  
|Series C Preferred stock of $0.001 par value - Authorized: 3,000,000 shares at June
    30, 2020 and December 31, 2019; Issued and outstanding: 2,993,142 and 2,733,142 at June 30, 2020 and December 31, 2019                         |  |               | 2       |   |                   |  
|                                                                                                                                                                                                                                       |  |               |         |   |                   |  
|Series D Preferred stock of $0.001 par value - Authorized: 506 shares at June 30, 2020 and December 31, 2019; Issued and outstanding: 304 at June 30, 2020 and December 31, 2019                                                       |  |               | -       |   |                   |  
|                                                                                                                                                                                                                                       |  |               |         |   |                   |  
|Series E Preferred stock of $0.001 par value - Authorized: 1,999,494 shares at June 30, 2020 and December 31, 2019, respectively; Issued and outstanding: 1,715,000 and 1,825,000 at June 30, 2020 and December 31, 2019, respectively |  |               | 2       |   |                   |  
|                                                                                                                                                                                                                                       |  |               |         |   |                   |  
|Common stock of $0.001 par value - Authorized: 20,000,000 shares at June 30, 2020 and
    December 31, 2019; Issued and outstanding: 4,313,764 and 4,203,764 shares at June 30, 2020 and December 31, 2019, respectively               |  |               | 5       |   |                   |  
|                                                                                                                                                                                                                                       |  |               |         |   |                   |  
|Additional paid in capital                                                                                                                                                                                                             |  |               | 39,935  |   |                   |  
|Accumulated deficit                                                                                                                                                                                                                    |  |               | (40,728 | ) |                   |  
|Total stockholders’ equity                                                                                                                                                                                                             |  |               | (784    | ) |                   |  
|Total liabilities and stockholders’ equity                                                                                                                                                                                             |  | $             | 1,009   |   |                   | $



The
accompanying notes are an integral part of these condensed consolidated financial statements



1







NanoVibronix,
Inc.

Condensed
Consolidated Statements of Operations (Unaudited)

(Amounts in thousands except share and
per share data)



|                                                                                                                            |  | Three
    Months Ended June 30, |           |   | Six
    Months Ended June 30, |  
|--------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | --------- | - | ----------------------------- | -
|                                                                                                                            |  | 2020                            |           |   | 2019                          |  
|                                                                                                                            |  |                                 |           |   |                               |  
|Revenues                                                                                                                    |  | $                               | 269       |   |                               | $
|Cost
    of revenues                                                                                                        |  |                                 | 231       |   |                               |  
|Gross profit                                                                                                                |  |                                 | 38        |   |                               |  
|                                                                                                                            |  |                                 |           |   |                               |  
|Operating expenses:                                                                                                         |  |                                 |           |   |                               |  
|Research and development                                                                                                    |  |                                 | 16        |   |                               |  
|Selling and marketing                                                                                                       |  |                                 | 180       |   |                               |  
|General
    and administrative                                                                                              |  |                                 | 1,310     |   |                               |  
|                                                                                                                            |  |                                 |           |   |                               |  
|Total
    operating expenses                                                                                                |  |                                 | 1,506     |   |                               |  
|                                                                                                                            |  |                                 |           |   |                               |  
|Loss from operations                                                                                                        |  |                                 | (1,468    | ) |                               |  
|                                                                                                                            |  |                                 |           |   |                               |  
|Financial income
    (expense), net                                                                                         |  |                                 | (5        | ) |                               |  
|Change in fair value
    of derivative liabilities                                                                          |  |                                 | -         |   |                               |  
|Loss on extinguishment
    of derivative liability                                                                          |  |                                 | -         |   |                               |  
|Warrant
    modification expense                                                                                            |  |                                 | -         |   |                               |  
|                                                                                                                            |  |                                 |           |   |                               |  
|Loss before taxes on income                                                                                                 |  |                                 | (1,473    | ) |                               |  
|                                                                                                                            |  |                                 |           |   |                               |  
|Income
    tax benefit / (expense)                                                                                          |  |                                 | (4        | ) |                               |  
|                                                                                                                            |  |                                 |           |   |                               |  
|Net loss                                                                                                                    |  | $                               | (1,477    | ) |                               | $
|                                                                                                                            |  |                                 |           |   |                               |  
|Basic and diluted
    net loss available for holders of common stock, Series C Preferred Stock and Series D Preferred Stock |  | $                               | (0.20     | ) |                               | $
|                                                                                                                            |  |                                 |           |   |                               |  
|Weighted average common shares outstanding:                                                                                 |  |                                 |           |   |                               |  
|Basic and diluted                                                                                                           |  |                                 | 7,252,510 |   |                               |  



The
accompanying notes are an integral part of these condensed consolidated financial statements





2







NanoVibronix,
Inc.

Condensed
Consolidated Statements of Stockholders’ Equity (Unaudited)



(Amounts in thousands except share and
per share data)





|                                         |  | Series
                                         C
                                                                  Preferred
                                         Stock |           |  | Series
                                         D
                                                                  Preferred
                                         Stock |   |   | Series
                                         E
                                                                  Preferred
                                         Stock |  |  | Common
    Stock |  |  | Additional
    Paid - in |   |  | Accumulated |  |           | Total
    Stockholders’ | 
|---------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ---------------- |  |  | ------------------------ | - |  | ----------- |  | --------- | ----------------------- | 
|                                         |  | Shares                                                                                                                                                                       |           |  | Amount                                                                                                                                                                       |   |   | Shares                                                                                                                                                                       |  |  | Amount           |  |  | Shares                   |   |  | Amount      |  |           | Shares                  | 
|Balance,
    March 31, 2019              |  |                                                                                                                                                                              | 2,733,142 |  |                                                                                                                                                                              | $ | 2 |                                                                                                                                                                              |  |  | 304              |  |  | $                        | - |  |             |  | -         |                         | 
|Stock-based
    compensation             |  |                                                                                                                                                                              | -         |  |                                                                                                                                                                              |   | - |                                                                                                                                                                              |  |  | -                |  |  |                          | - |  |             |  | -         |                         | 
|Exercise
    of options                  |  |                                                                                                                                                                              | -         |  |                                                                                                                                                                              |   | - |                                                                                                                                                                              |  |  | -                |  |  |                          | - |  |             |  | -         |                         | 
|Issuance
    of preferred series E stock |  |                                                                                                                                                                              | -         |  |                                                                                                                                                                              |   | - |                                                                                                                                                                              |  |  | -                |  |  |                          | - |  |             |  | 1,600,000 |                         | 
|Reclassification
    of warrants         |  |                                                                                                                                                                              | -         |  |                                                                                                                                                                              |   | - |                                                                                                                                                                              |  |  | -                |  |  |                          | - |  |             |  | -         |                         | 
|Net
    loss                             |  |                                                                                                                                                                              | -         |  |                                                                                                                                                                              |   | - |                                                                                                                                                                              |  |  | -                |  |  |                          | - |  |             |  | -         |                         | 
|Balance,
    June 30, 2019               |  |                                                                                                                                                                              | 2,733,142 |  |                                                                                                                                                                              | $ | 2 |                                                                                                                                                                              |  |  | 304              |  |  | $                        | - |  |             |  | 1,600,000 |                         | 





|                                                          |  | Series
                                         C
                                                                                Preferred
                                         Stock |           |  | Series
                                         D
                                                                                Preferred
                                         Stock |   |   | Series
                                         E
                                                                                Preferred
                                         Stock |  |  | Common
    Stock |  |  | Additional
    Paid - in |   |  | Accumulated |  |           | Total
    Stockholders’ | 
|--------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | - | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  |  | ---------------- |  |  | ------------------------ | - |  | ----------- |  | --------- | ----------------------- | 
|                                                          |  | Shares                                                                                                                                                                                     |           |  | Amount                                                                                                                                                                                     |   |   | Shares                                                                                                                                                                                     |  |  | Amount           |  |  | Shares                   |   |  | Amount      |  |           | Shares                  | 
|Balance,
    December 31, 2018                            |  |                                                                                                                                                                                            | 2,733,142 |  |                                                                                                                                                                                            | $ | 2 |                                                                                                                                                                                            |  |  | 304              |  |  | $                        | - |  |             |  | -         |                         | 
|Issuance
    of common stock as compensation for services |  |                                                                                                                                                                                            | -         |  |                                                                                                                                                                                            |   | - |                                                                                                                                                                                            |  |  | -                |  |  |                          | - |  |             |  | -         |                         | 
|Stock-based
    compensation                              |  |                                                                                                                                                                                            | -         |  |                                                                                                                                                                                            |   | - |                                                                                                                                                                                            |  |  | -                |  |  |                          | - |  |             |  | -         |                         | 
|Exercise
    of options                                   |  |                                                                                                                                                                                            | -         |  |                                                                                                                                                                                            |   | - |                                                                                                                                                                                            |  |  | -                |  |  |                          | - |  |             |  | -         |                         | 
|Issuance
    of preferred series E stock                  |  |                                                                                                                                                                                            | -         |  |                                                                                                                                                                                            |   | - |                                                                                                                                                                                            |  |  | -                |  |  |                          | - |  |             |  | 1,600,000 |                         | 
|Reclassification
    of warrants                          |  |                                                                                                                                                                                            | -         |  |                                                                                                                                                                                            |   | - |                                                                                                                                                                                            |  |  | -                |  |  |                          | - |  |             |  | -         |                         | 
|Warrant
    modification expense                          |  |                                                                                                                                                                                            | -         |  |                                                                                                                                                                                            |   | - |                                                                                                                                                                                            |  |  | -                |  |  |                          | - |  |             |  | -         |                         | 
|Net
    loss                                              |  |                                                                                                                                                                                            | -         |  |                                                                                                                                                                                            |   | - |                                                                                                                                                                                            |  |  | -                |  |  |                          | - |  |             |  | -         |                         | 
|Balance,
    June 30, 2019                                |  |                                                                                                                                                                                            | 2,733,142 |  |                                                                                                                                                                                            | $ | 2 |                                                                                                                                                                                            |  |  | 304              |  |  | $                        | - |  |             |  | 1,600,000 |                         | 









|                                   |  | Series C
                                                                                Preferred Stock |           |  | Series D
                                                                                Preferred Stock |   |   | Series E
                                                                                Preferred Stock |  |  | Common Stock |  |  | Additional Paid - in |   |  | Accumulated |  |           | Total Stockholders’ | 
|---------------------------------- |  | -------------------------------------------------------------------------------------------------------- | --------- |  | -------------------------------------------------------------------------------------------------------- | - | - | -------------------------------------------------------------------------------------------------------- |  |  | ------------ |  |  | -------------------- | - |  | ----------- |  | --------- | ------------------- | 
|                                   |  | Shares                                                                                                   |           |  | Amount                                                                                                   |   |   | Shares                                                                                                   |  |  | Amount       |  |  | Shares               |   |  | Amount      |  |           | Shares              | 
|Balance, March 31, 2020            |  |                                                                                                          | 2,993,142 |  |                                                                                                          | $ | 2 |                                                                                                          |  |  | 304          |  |  | $                    | - |  |             |  | 1,715,000 |                     | 
|Stock-based compensation           |  |                                                                                                          | -         |  |                                                                                                          |   | - |                                                                                                          |  |  | -            |  |  |                      | - |  |             |  | -         |                     | 
|Warrants issued with notes payable |  |                                                                                                          | -         |  |                                                                                                          |   | - |                                                                                                          |  |  | -            |  |  |                      | - |  |             |  | -         |                     | 
|Net loss                           |  |                                                                                                          | -         |  |                                                                                                          |   | - |                                                                                                          |  |  | -            |  |  |                      | - |  |             |  | -         |                     | 
|Balance, June 30, 2020             |  |                                                                                                          | 2,993,142 |  |                                                                                                          | $ | 2 |                                                                                                          |  |  | 304          |  |  | $                    | - |  |             |  | 1,715,000 |                     | 





|                                                       |  | Series C Preferred
                                         Stock |           | Series D Preferred
                                         Stock |  | Series E Preferred
                                         Stock |   | Common Stock |  | Additional Paid - in |     | Accumulated |  | Total
Stockholders’
|------------------------------------------------------ |  | ----------------------------------------------------------------- | --------- | ----------------------------------------------------------------- |  | ----------------------------------------------------------------- | - | ------------ |  | -------------------- | --- | ----------- |  | -------------------
|                                                       |  | Shares                                                            |           | Amount                                                            |  | Shares                                                            |   | Amount       |  | Shares               |     | Amount      |  | Shares             
|Balance, December 31, 2019                             |  |                                                                   | 2,993,142 |                                                                   |  | $                                                                 | 2 |              |  |                      | 304 |             |  | $                  
|Stock-based compensation                               |  |                                                                   | —         |                                                                   |  |                                                                   | — |              |  |                      | —   |             |  |                    
|Exchange of Series E Preferred Stock into Common Stock |  |                                                                   | —         |                                                                   |  |                                                                   | — |              |  |                      | —   |             |  |                    
|Warrants issued with notes payable                     |  |                                                                   | —         |                                                                   |  |                                                                   | — |              |  |                      | —   |             |  |                    
|Net loss                                               |  |                                                                   | —         |                                                                   |  |                                                                   | — |              |  |                      | —   |             |  |                    
|Balance, June 30, 2020                                 |  |                                                                   | 2,993,142 |                                                                   |  | $                                                                 | 2 |              |  |                      | 304 |             |  | $                  



The
accompanying notes are an integral part of these condensed consolidated financial statements



3







NanoVibronix,
Inc.

Condensed
Consolidated Statements of Cash Flows (Unaudited)

(Amounts in thousands except share and
per share data)



|                                                                            |  | Six Months Ended June 30, |       
|--------------------------------------------------------------------------- |  | ------------------------- | ------
|                                                                            |  | 2020                      |       
|Cash flows from operating activities:                                       |  |                           |       
|Net loss                                                                    |  | $                         | (2,398
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                           |       
|Depreciation and amortization                                               |  |                           | 1     
|Stock-based compensation                                                    |  |                           | 143   
|Noncash interest expense                                                    |  |                           | -     
|Warrants received as licensing fee                                          |  |                           | (23   
|Change in fair value of equity investment                                   |  |                           | (9    
|Change in fair value of derivative liabilities                              |  |                           | -     
|Other expense related to extension of warrants                              |  |                           | -     
|Loss on extinguishment of derivative liability                              |  |                           | -     
|Common stock payable to consultant                                          |  |                           | 844   
|Changes in operating assets and liabilities:                                |  |                           |       
|Trade receivable                                                            |  |                           | (146  
|Other accounts receivable and prepaid expenses                              |  |                           | 110   
|Inventory                                                                   |  |                           | (27   
|Trade payables                                                              |  |                           | 7     
|Other accounts payable and accrued expenses                                 |  |                           | (91   
|Deferred revenue                                                            |  |                           | 226   
|Accrued severance pay, net                                                  |  |                           | (15   
|Net cash used in operating activities                                       |  |                           | (1,378
|                                                                            |  |                           |       
|Cash flows from financing activities:                                       |  |                           |       
|Proceeds from issuance of notes payable to a related party                  |  |                           | 200   
|Proceeds from issuance of notes payable                                     |  |                           | 42    
|Payments of convertible notes                                               |  |                           | -     
|Proceeds from issuance of Preferred Series E stock                          |  |                           | -     
|Proceeds from exercise of options                                           |  |                           | -     
|Net cash provided by financing activities                                   |  |                           | 242   
|                                                                            |  |                           |       
|Net increase (decrease) in cash, cash equivalents and restricted cash       |  |                           | (1,136
|Cash, cash equivalents and restricted cash at beginning of period           |  |                           | 1,338 
|                                                                            |  |                           |       
|Cash, cash equivalents and restricted cash at end of period                 |  | $                         | 202   
|                                                                            |  |                           |       
|Supplemental non-cash financing and investing activities:                   |  |                           |       
|Cash paid for interest                                                      |  | $                         | -     
|Cash paid for taxes                                                         |  | $                         | -     
|Discount on notes payable                                                   |  | $                         | 123   
|Discount on convertible notes                                               |  | $                         | -     



The
accompanying notes are an integral part of these condensed consolidated financial statements



4







NanoVibronix,
Inc.

Notes
to Consolidated Financial Statements (Unaudited)

(Amounts
in thousands except share and per share data)



NOTE
1 - DESCRIPTION OF BUSINESS



NanoVibronix,
Inc. (the “Company”), a Delaware corporation, commenced operations on October 20, 2003 and is a medical device company
focusing on noninvasive biological response-activating devices that target wound healing and pain therapy and can be administered
at home, without the assistance of medical professionals.



The
Company’s principal research and development activities are conducted in Israel through its wholly owned subsidiary, NanoVibronix
(Israel 2003) Ltd., a company registered in Israel, which commenced operations in October 2003.



NOTE
2 - LIQUIDITY AND PLAN OF OPERATIONS



The
Company’s ability to continue to operate is dependent mainly on its ability to successfully market and sell its products
and the receipt of additional financing until profitability is achieved. The Company currently incurs and historically has incurred
losses from operations and expects to do so in the foreseeable future. In 2020, the Company raised $200 through the issuance of
notes payable from a related party and received $42 from the Paycheck Protection Program. Despite the recent financing,
the Company will not have sufficient resources to fund its operations for the next twelve months from the date of this filing.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. During the next twelve
months management expects that 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 its products do not reach commercial
profitability.



Management’s
plans include the continued commercialization of the Company’s products and raising capital through the sale of additional
equity securities, debt or capital inflows from strategic partnerships. There are no assurances, however, that the Company will
be successful in obtaining the level of financing needed for its operations. If the Company is unsuccessful in commercializing
its products and raising capital, it will need to reduce activities, curtail or cease operations. The financial statements do
not include any adjustments with respect to the carrying amounts of assets and liabilities and their classification that might
be necessary should the Company be unable to continue as a going concern.



NOTE
3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Basis
of presentation and principles of consolidation



The
Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States of America (“US GAAP”) for the interim financial information and with instructions to
Form 10-Q and Article 10 of Regulation S-X. The unaudited consolidated financial statements include the accounts of all subsidiaries
in which the Company holds a controlling financial interest as of the financial statement date.



The
unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The terms “we,”
“us,” “our,” and the “Company” refer to NanoVibronix, Inc. and its wholly owned subsidiary.
All intercompany accounts and transactions have been eliminated in consolidation.



Unaudited
interim financial information



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 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 31,2019, as found in the Company’s Annual Report on Form 10-K filed
with the Securities and Exchange Commission (the “SEC”) on May 20, 2020.



5







The
balance sheet for December 31, 2019 was derived from the Company’s audited financial statements for the year ended December
31, 2019. The results of operations for the periods presented are not necessarily indicative of results that could be expected
for the entire fiscal year due to seasonality and other factors. 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.



Use
of estimates



The
preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments
and assumptions. The Company believe 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.



Cash and cash equivalents



Cash
consists of funds on hand and held in bank accounts. Cash equivalents includes demand deposits placed with banks or other financial
institutions and all highly liquid investments with original maturities of three months or less. Restricted cash of $202 represents
cash restricted per a court order which resulted from a dispute between the Company and a former officer and director, see Note
10.





Foreign
currency translation and transaction



Non-U.S.
dollar denominated transactions and balances have been re-measured to U.S. dollars. All transaction gains and losses from re-measurement
of monetary balance sheet items denominated in non-U.S. dollar currencies are reflected in the statements of operations as financial
income or expenses, as appropriate. Gains and losses from foreign currency translation for the six months ended June 30, 2020
and 2019 were $6 and $28, respectively.



Revenue
recognition



It
is the Company’s policy that revenues from product sales is 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 creates
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. The amount of revenue recognized is the amount allocated to the satisfied performance obligation. Adoption of ASC
606 has not changed the timing and nature of the Company’s revenue recognition and there has been no material effect on
the Company’s financial statements.



Revenue
from product sales is recorded at the net sales price, or “transaction price,” which includes estimates of variable
consideration that result from coupons, discounts, chargebacks and distributor fees, processing fees, as well as allowances for
returns and government rebates. The Company constrains revenue by giving consideration to factors that could otherwise lead to
a probable reversal of revenue. Collectability of revenue is reasonably assured based on historical evidence of collectability
between the Company and its customers. See Note 7 for a detailed breakout of revenue.



Revenues
from sales to distributors are recognized at the time the products are delivered to the distributors (“sell-in”).
The Company does not grant rights of return, credits, rebates, price protection, or other privileges on its products to distributors.



Fair
Value Measurements



When
required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent,
objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the
fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level
of input that is significant to the fair value measurement. Level 1 uses quoted prices in active markets for identical assets
or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount
of the total gains or losses for the period are included in earnings that are attributable to the change in unrealized gains or
losses relating to those assets and liabilities still held at the reporting date. We measure our investment in equity securities
at fair value on a recurring basis. The Company’s equity securities are valued using inputs observable in active markets
and are therefore classified as Level 1 within the fair value hierarchy.



6









Recently
issued accounting pronouncements not yet adopted



In
February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires that a lessee recognize the assets and liabilities
that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments
(the lease liability) and a right of use asset representing its right to use the underlying asset for the lease term. For leases
with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not
to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases
at the beginning of the earliest period presented using a modified retrospective approach. Public business entities should apply
the amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal
years. Early application is permitted for all public business entities and all nonpublic business entities upon issuance. The
Company (as an EGC) that is taking advantage of the extended transition period offered to private entities would apply this for
fiscal years beginning after December 15, 2021. The Company does not believe that the adoption will have a material effect on
the Company’s condensed interim consolidated financial statements and related disclosures.



In
June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU
2016-13”) and also issued subsequent amendments to the initial guidance: ASU 2018-19, ASU 2019-04, and ASU 2019-05 (collectively,
“Topic 326”). Topic 326 requires measurement and recognition of expected credit losses for financial assets held.
The Company will be required to adopt this ASU for fiscal years beginning after December 15, 2022, including interim periods within
those fiscal years. The adoption of Topic 326 is not expected to have a material on the Company’s financial statements and
financial statement disclosures.



Recently
adopted accounting standards



In
August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure
Requirements for Fair Value Measurement”, which adds disclosure requirements to Topic 820 for the range and weighted average
of significant unobservable inputs used to develop Level 3 fair value measurements. This ASU is effective for interim and annual
reporting periods beginning after December 15, 2019. Although the Company adopted ASU 2018-13 on January 1, 2020, there was no
material impact on the financial statements.



NOTE
4 - STOCKHOLDERS’ EQUITY



Stock-based
compensation and Options



During
the six-month period ended June 30, 2020 and 2019, 15,000 and 120,000 options were granted, respectively.

The
options granted in 2020 were to a non-employee and were recorded at a fair value of $14 and vest quarterly over 12 months. The
options granted in 2019 were to a non-employee and were recorded at a fair value of $183 and vested immediately. During the three
and six-month period ended June 30, 2020, there was stock-based compensation expense of $72 and $143, respectively. During the
three and six-month period ended June 30, 2019, there was stock-based compensation expense of $111 and $1,446, respectively.



The
fair value for options granted in the 2020 is estimated at the date of grant using a Black-Scholes-Merton options pricing model
with the following underlying assumptions:



|Price at valuation       |  | $ | 1.86 |  
|------------------------ |  | - | ---- | -
|Exercise price           |  | $ | 1.86 |  
|Risk free interest       |  |   | 0.34 | %
|Expected term (in years) |  |   | 5    |  
|Volatility               |  |   | 60.2 | %



7







The
total stock-based expense recognized in the financial statements for services received from employees and non-employees is shown
in the following table.



|                           |  | Three Months Ended |    |  | Six Months Ended |  
|-------------------------- |  | ------------------ | -- |  | ---------------- | -
|                           |  | June 30,           |    |  | June 30,         |  
|                           |  | 2020               |    |  | 2019             |  
|                           |  |                    |    |  |                  |  
|Research and development   |  |                    | 1  |  |                  |  
|Selling and marketing      |  |                    | 11 |  |                  |  
|General and administrative |  |                    | 60 |  |                  |  
|                           |  |                    |    |  |                  |  
|Total                      |  | $                  | 72 |  |                  | $







As
of June 30, 2020, the total unrecognized estimated compensation cost related to non-vested stock options granted prior to that
date was $122, which is expected to be recognized over a weighted average period of approximately 0.62 years.



Series
E Preferred Stock conversion to common stock



Each
share of Series E Preferred Stock is convertible at any time and from time to time at the option of a holder of Series E Preferred
Stock into one share of the Company’s common stock, provided that each holder would be prohibited from converting Series
E Preferred Stock into shares of the Company’s common stock if, as a result of such conversion, any such holder, together
with its affiliates, would own more than 9.99% of the total number of shares of the Company’s common stock then issued and
outstanding. This limitation may be waived with respect to a holder upon such holder’s provision of not less than 61 days’
prior written notice to the Company.



In
February 2020, a shareholder converted 110,000 shares of Series E Preferred Stock into 110,000 shares of common stock at a conversion
rate of 1 to 1. No purchase was made in order to convert these shares.



NOTE
5 – NOTES PAYABLE



In
May, 2020, the Company was granted a loan (the “PPP Loan”) in the amount of $42, pursuant to the Paycheck Protection
Program (the “PPP”) under Division A, Title I of the Coronavirus Aid, Relief, and Economic Securities (“CARES”)
Act, which was enacted March 27, 2020. The application for these funds required the Company to, in good faith, certify that the
current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification
further required the Company to consider its current business activity and its ability to access other sources of liquidity sufficient
to support ongoing operations in a manner that is not significantly detrimental to the business. The Company made this good faith
assertion based upon the adverse impact the COVID-19 pandemic had on its business and the global economy. While the Company has
made this assertion in good faith based upon all available guidance, management will continue to assess their continued qualification
if and when updated guidance is released by the Treasury Department. The receipt of these funds, and the forgiveness of the loan
attendant to these funds, is dependent on the Company having initially qualified for the loan and qualifying for the forgiveness
of such loan based on its future adherence to the forgiveness criteria.



The
PPP Loan, which was in the form of a note that was granted on May 14, 2020, matures in two years and
accrues interest at a rate of 1.00% per annum, payable in monthly payments commencing six months after loan
disbursement. The Company also has the option to negotiate with the lender to extend the maturity date to up to five years.
The note may be prepaid by the Company at any time prior to maturity with no prepayment penalties. Funds from the PPP Loan
may only be used for payroll costs and any payments of certain covered interest, lease and utility payments. The Company
intends to use the entire PPP Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan
may be forgiven if they are used for qualifying expenses as described in the CARES Act. The ultimate forgiveness of the PPP
Loan is also predicated upon regulatory authorities concurring with management’s good faith assessment that the current
economic uncertainty made the loan request necessary to support ongoing operations. If, despite the Company’s
good-faith belief that given the circumstances the Company satisfied all eligibility requirements for the PPP Loan, the
Company is later determined to have violated any applicable laws or regulations or it is otherwise determined that the
Company was ineligible to receive the PPP Loan, the Company may be required to repay the PPP Loan in its entirety and/or be
subject to additional penalties. In the event the PPP Loan, or any portion thereof, is forgiven, the amount forgiven is
applied to outstanding principal



8







On June 22, 2020, the Company issued and sold
to a related party an unsecured promissory note in the principal amount of $200, which accrues interest at 10% per annum and matures
in one year. In addition to the promissory note, the Company granted a seven-year equity warrant to purchase 100,000 shares
of the Company’s common stock. The exercise price for each warrant share is equal to $2.50, and the warrants may also be
exercised, in whole or in part, by means of a cashless exercise. The warrants were recognized as a debt discount and is amortized
over the life of the note. The warrants were valued at $123 using a Black Scholes Merton pricing model with the following
underlying assumptions:



|Price at valuation       |  | $ | 2.21 |  
|------------------------ |  | - | ---- | -
|Exercise price           |  | $ | 2.50 |  
|Risk free interest       |  |   | 0.34 | %
|Expected term (in years) |  |   | 7    |  
|Volatility               |  |   | 60.7 | %



NOTE
6 - LOSS PER SHARE APPLICABLE TO COMMON STOCKHOLDER



Basic
net loss per common share (“Basic EPS”) is computed by dividing net loss available to common stockholders by the weighted
average number of shares of common stock outstanding during the period. All outstanding stock options and warrants for the three
and six months ended June 30, 2020 and 2019 have been excluded from the calculation of the diluted net loss per share because
all such securities are anti-dilutive for all periods presented.



The
following table summarizes the Company’s securities, in common stock equivalents, which have been excluded from the calculation
of dilutive loss per share as their effect would be anti-dilutive:



|                                          |  | June 30, 2020 |           |  | June 30, 2019 | 
|----------------------------------------- |  | ------------- | --------- |  | ------------- | 
|Series D Preferred Stock                  |  |               | 303,782   |  |               | 
|Series E Preferred Stock                  |  |               | 1,715,000 |  |               | 
|Stock Options - employee and non-employee |  |               | 1,571,332 |  |               | 
|Warrants                                  |  |               | 266,667   |  |               | 
|Total                                     |  |               | 3,856,781 |  |               | 



NOTE
7 - GEOGRAPHIC INFORMATION AND MAJOR CUSTOMER DATA



Summary
information about geographic areas:



The
Company manages its business on the basis of one reportable segment and derives revenues from selling its products directly to
patients as well as through distributor and licensing agreements. The following is a summary of revenues within geographic areas:



|              |  | Three Months Ended June 30, |     |  | Six Months Ended June 30, |  
|------------- |  | --------------------------- | --- |  | ------------------------- | -
|              |  | 2020                        |     |  | 2019                      |  
|United States |  | $                           | 151 |  |                           | $
|Europe        |  |                             | 117 |  |                           |  
|Israel        |  |                             | 1   |  |                           |  
|India         |  |                             | -   |  |                           |  
|Canada        |  |                             | -   |  |                           |  
|Total         |  | $                           | 269 |  |                           | $



9







During
the three-month period ended June 30, 2020 and 2019, revenues from distributors accounted for 88% and 40% of total revenues, respectively.



During
the six-month period ended June 30, 2020 and 2019, revenues from distributors accounted for 91% and 50% of total revenues, respectively.



NOTE
8 – OTHER ASSETS



On
April 9, 2020, pursuant to a licensing agreement entered into in March 2020, the Company received 10-year warrants to purchase
127,000 shares of Sanuwave Health, Inc. at a price of $0.19 per share. The fair value for warrants received is estimated at the
date of grant using a Black-Scholes-Merton pricing model with the following underlying assumptions:



|Price at valuation       |  | $ | 0.19 – 0.26   |  
|------------------------ |  | - | ------------- | -
|Exercise price           |  | $ | 0.19          |  
|Risk free interest       |  |   | 0.66 - 0.73   | %
|Expected term (in years) |  |   | 10            |  
|Volatility               |  |   | 140.6 – 142.3 | %



We
consider this to be level 3 inputs and is valued at each reporting period. The fair value of these warrants on April 9,
2020 and June 30, 2020 was $23 and $32, respectively. The change in fair value for the six months ended June 30, 2020 was $9.



NOTE
9 – COMMON STOCK PAYABLE



On
February 11, 2019, the Company entered into a consulting agreement (the “Agreement”) with Bespoke Growth Partners,
Inc. (“Bespoke”), pursuant to which, amongst other things, Bespoke was entitled to receive up to 650,000 shares of
common stock of the Company, of which 275,000 shares were issued on the date of signing. On August 5, 2020, the Company paid $75
and issued an additional 375,000 shares of common stock to Bespoke under the Agreement. Such issuance was undertaken in reliance
upon the exemption from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof
and Rule 506 of Regulation D promulgated thereunder. As of June 30, 2020, 375,000 shares of common stock, valued at $2.25 per
share, or $844, was owed to Bespoke.



NOTE
10 - COMMITMENTS AND CONTINGENCIES



Leases



The
Company leases office facilities and motor vehicles under operating leases, which expire on various dates, the latest of which
is 2020.



Rent and related expenses were $13 and
$25, for the three and six months ended June 30, 2020, respectively, and $15 and $27 for the three and six
months ended June 30, 2019, respectively.



Other
Risks



On
March 12, 2020, the World Health Organization declared COVID-19 to be a pandemic, and the COVID-19 pandemic has resulted in significant
financial market volatility and uncertainty. A continuation or worsening of the levels of market disruption and volatility seen
in the recent past could have an adverse effect on our ability to access capital, on our business, results of operations and financial
condition, and on the market price of our common shares.



On
March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the
COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for
taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back
to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company has been consistently
in a loss position in the U.S. and at present does not expect that the NOL carryback provision of the CARES Act would result in
a material cash benefit to the Company.



In
June 2020, the Company experienced a cybersecurity incident. Specifically, the Company believes that one or two unauthorized third
parties were able to use an email domain similar to the Company’s to convince two of the Company’s customers to send
payments in the aggregate amount of approximately $308 to unauthorized bank accounts that should have been sent to the Company.
The total amount of customer payments has been recovered and received by the Company.



10







Legal
Proceedings



We
are subject to a lawsuit filed by our former officer and director, Jona Zumeris, on December 17, 2019 in the Haifa Israel District
Financial Court, seeking damages of approximately $900,000 for breach of the Separation Agreement executed on July 4, 2018, and
to which matter both parties have agreed to proceed to settle in mediation scheduled to begin in late May 2020. We believe that
a major part of the allegations included in the suit are without merit, however, due to the uncertainties of litigation or mediation,
we can give no assurance that we will be able to reach reasonable settlement, or if it were to proceed in court, prevail on the
claims made against us in such lawsuit. The Israeli court issued a court order demanding that we restrict approximately $700,000
of the Company’s money until the matter is adjudicated. The Company appealed the court order. In February 2020, the Company
agreed to restrict approximately $350,000 and agreed to try to settle the matter in mediation which commenced in May 2020. The
cash restriction is relating to this dispute is reflected on the balance sheet as “restricted cash.” The court did
not require the Company to keep such cash reserves in an escrow or any other restricted account, nor have they implemented any
monitoring procedures on this matter. As such, the Company’s bank accounts do not have any restrictions in place which prohibit
the Company from using its available funds at their discretion. A settlement was not reached in May and although the mediation
process has not yet concluded, the Company believes that it and will now likely go to trial, although no date has been set.



NOTE
11 - SUBSEQUENT EVENTS



In
July 2020, the Company granted 122,000 options to board members and 50,000 options to a non-employee consultant.



On
July 7, 2020, a shareholder converted 300,000 shares of Series E Preferred Stock into 300,000 shares of common stock at a conversion
rate of 1 to 1. No purchase was made in order to convert these shares.



On
September 14, 2018, the Company received a letter from the Listing Qualifications Staff (the “Staff”) of The Nasdaq
Stock Market LLC (“Nasdaq”) notifying the Company that it was no longer in compliance with the minimum stockholders’
equity requirement for continued listing on the Nasdaq Capital Market. Nasdaq Listing Rule 5550(b)(1) requires listed companies
to maintain stockholders’ equity of at least $2.5 million (the “Equity Requirement”).



Following
a hearing on May 2, 2019, a Nasdaq Hearings Panel was appointed to review the Company’s compliance with the Equity Requirement,
and on August 5, 2020, the Staff issued a letter to the Company in which it indicated that, since the Company had failed to report
stockholders’ equity of at least $2.5 million in each of its last three periodic reports filed with the Securities and Exchange
Commission, its common shares would be subject to delisting on August 14, 2020, unless the Company requests an appeal of this
determination by 4:00 p.m. Eastern Time on August 12, 2020 (the “Hearing Request”).



The
Company submitted a Hearing Request on August 12, 2020 and a hearing has been scheduled for September 10, 2020. The Hearing Request
will automatically stay any suspension or delisting action pending a decision of a Nasdaq Hearings Panel. At the hearing, the
Company will provide the Nasdaq Hearings Panel with an update on its compliance plan and, if necessary, request a further extension
of time in which to regain compliance. Pursuant to the Nasdaq Listing Rules, the Nasdaq Hearings Panel has the discretion to grant
an additional extension of time of up to 180 calendar days, as measured from August 5, 2020.



There can be no assurance that
the Company’s plan will be accepted by the Nasdaq Hearings Panel or that, if it is, the Company will be able to regain compliance
with the applicable Nasdaq listing requirements. If the Company’s common stock is delisted, it could be more difficult to
buy or sell the Company’s common stock or to obtain accurate quotations, and the price of the Company’s common stock
could suffer a material decline. Delisting could also impair the Company’s ability to raise capital.



11







ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



The
following discussion and analysis of the results of operations and financial condition of NanoVibronix. (the “Company”)
as of June 30, 2020 and for the three and six months ended June 30, 2020 and 2019 should be read in conjunction with our
financial statements and the notes to those financial statements that are included elsewhere in this Quarterly Report on Form
10-Q. This discussion and analysis should be read in conjunction with the Company’s audited financial statements and related
disclosures as of December 31, 2019 and for the year then ended, which are included in the Form 10-K filed with the Securities
and Exchange Commission (“SEC”) on May 20, 2020. References in this Management’s Discussion and Analysis of
Financial Condition and Results of Operations to “us”, “we”, “our” and similar terms refer
to the Company. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains statements
that are forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties
and other factors. These statements are often identified by the use of words such as “may,” “will,” “expect,”
“believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,”
and similar expressions or variations. Actual results could differ materially because of the factors discussed in “Risk
Factors” elsewhere in this Quarterly Report, in our other reports filed with the SEC, and other factors that we may not
know.



Cautionary
Note Regarding Forward-Looking Statements



This
Quarterly Report on Form 10-Q contains “forward-looking statements,” which include information relating to future
events, future financial performance, financial projections, strategies, expectations, competitive environment and
regulation. Words such as “may,” “should,” “could,” “would,”
“predicts,” “potential,” “continue,” “expects,” “anticipates,”
“future,” “intends,” “plans,” “believes,” “estimates,” and
similar expressions, as well as statements in future tense, identify forward-looking statements. Forward-looking statements
should not be read as a guarantee of future performance or results and may not be accurate indications of when such
performance or results will be achieved. Forward-looking statements are based on information we have when those statements
are made or management’s good faith belief as of that time with respect to future events, and are subject to risks and
uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the
forward-looking statements. Important factors that could cause such differences include, but are not limited to:



|● | Our
    ability to continue as a going concern.                                                                                                                                      
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                      
|● | The
    delisting of our common stock from the NASDAQ Capital Market.                                                                                                                
|  |                                                                                                                                                                                      
|● | The
    geographic, social and economic impact of COVID-19 on the Company’s business operations.                                                                                     
|  |                                                                                                                                                                                      
|● | The
    timing of clinical studies and eventual U.S. Food and Drug Administration approval of our other product candidates.                                                          
|  |                                                                                                                                                                                      
|● | Regulatory
    actions that could adversely affect the price of or demand for our approved products.                                                                                 
|  |                                                                                                                                                                                      
|● | Market
    acceptance of existing and new products.                                                                                                                                  
|  |                                                                                                                                                                                      
|● | Favorable
    or unfavorable decisions about our products from government regulators, insurance companies or other third-party payers.                                               
|  |                                                                                                                                                                                      
|● | Our
    ability to regain compliance with the continued listing requirements of the Nasdaq Capital Market and the risk that our common
    stock will be delisted if we cannot do so.
|  |                                                                                                                                                                                      
|● | Our
    intellectual property portfolio.                                                                                                                                             
|  |                                                                                                                                                                                      
|● | Our
    ability to recruit and retain qualified regulatory and research and development personnel.                                                                                   
|  |                                                                                                                                                                                      
|● | The
    impact of cybersecurity risks and incidents and the related actual or potential costs and consequences of such risks and incidents,
    including costs to limit such risks. 



12







|● | Unforeseen
    changes in healthcare reimbursement for any of our approved products.                    
|- | --------------------------------------------------------------------------------------------------------
|  |                                                                                                         
|● | Lack
    of financial resources to adequately support our operations.                                   
|  |                                                                                                         
|● | Difficulties
    in maintaining commercial scale manufacturing capacity and capability.                 
|  |                                                                                                         
|● | Our
    ability to generate internal growth.                                                            
|  |                                                                                                         
|● | Changes
    in our relationship with key collaborators.                                                 
|  |                                                                                                         
|● | Changes
    in the market valuation or earnings of our competitors or companies viewed as similar to us.
|  |                                                                                                         
|● | Our
    failure to comply with regulatory guidelines.                                                   
|  |                                                                                                         
|● | Uncertainty
    in industry demand and patient wellness behavior.                                       
|  |                                                                                                         
|● | General
    economic conditions and market conditions in the medical device industry.                   
|  |                                                                                                         
|● | Future
    sales of large blocks of our common stock, which may adversely impact our stock price.       
|  |                                                                                                         
|● | Our
    ability to comply with our contractual covenants, including in respect to our debt.             
|  |                                                                                                         
|● | Depth
    of the trading market in our common stock.                                                    



The
foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein
or risk factors that we are faced with that may cause our actual results to differ from those anticipated in our forward-looking
statements. For a discussion of these and other risks that relate to our business and financial performance, you should carefully
review the risks and uncertainties described under the heading “Item 1A. Risk Factors” and elsewhere in this Quarterly
Report on Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and those described from
time to time in our future reports filed with the Securities and Exchange Commission. Moreover, new risks regularly emerge, and
it is not possible for us to predict or articulate all risks we face, nor can we assess the impact of all risks on our business
or the extent to which any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking
statements. All forward-looking statements included in this Form 10-Q are based on information available to us on the date of
this Quarterly Report on Form 10-Q. Except to the extent required by applicable laws or rules, we undertake no obligation to publicly
update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.



Overview



We
are a medical device company focusing on non-invasive biological response-activating devices that target wound healing
and pain therapy and can be administered at home, without the assistance of medical professionals. Our WoundShield, PainShield
and UroShield products are backed by novel technology which relates to ultrasound delivery through surface acoustic waves.



Implications
of being an Emerging Growth Company



We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, or the Securities Act,
as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of
certain exemptions from various reporting requirements applicable to other public companies that are not “emerging growth
companies” including, but not limited to:



13







|● | being
    permitted to present only two years of audited financial statements and only two years of related disclosure in “Management’s
    Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q;                                                                                                                       
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                    
|● | being
    permitted to provide less extensive narrative disclosure than other public companies including not being required to comply
    with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and reduced disclosure obligations
    regarding executive compensation in our periodic reports, proxy statements and registration statements;
|  |                                                                                                                                                                                                                                                                                                                                                                                    
|● | being
    permitted to utilize exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and
    stockholder approval of any golden parachute payments not previously approved;                                                                                                                                                             
|  |                                                                                                                                                                                                                                                                                                                                                                                    
|● | being
    permitted to defer complying with certain changes in accounting standards; and                                                                                                                                                                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                                                                                                    
|● | being
    permitted to use test-the-waters communications with qualified institutional buyers and institutional accredited investors.                                                                                                                                                                                                                                              



We
intend to take advantage of these and other exemptions available to “emerging growth companies.” We could remain an
“emerging growth company” until the earliest of (a) the last day of the fiscal year following the fifth anniversary
of the date of the first sale of common stock in an offering registered under the Securities Act of 1933, as amended, (b) the
last day of the first fiscal year in which our annual gross revenues exceed $1.07 billion, (c) the last day of our fiscal year
in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act
of 1934, or Exchange Act (which would occur if the market value of our equity securities that is held by non-affiliates exceeds
$700 million as of the last business day of our most recently completed second fiscal quarter), or (d) the date on which we have
issued more than $1 billion in nonconvertible debt during the preceding three-year period.



The
JOBS Act permits an “emerging growth company” like us to take advantage of an extended transition period to comply
with new or revised accounting standards applicable to public companies. This means that an “emerging growth company”
can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have
elected to delay such adoption of new or revised accounting standards.



Recent
Events and Developments



COVID-19



In
December 2019, a strain of coronavirus (“COVID-19”) was reported to have surfaced in Wuhan, China, and has reached
multiple other countries, resulting in government-imposed quarantines, travel restrictions and other public health safety measures
in China and other affected countries. The ongoing COVID-19 pandemic has and may continue to adversely impact our business, as
our operations are based in and rely on third parties located in countries affected by the outbreak. Our third-party manufacturer,
which is based in China, temporarily shut down for sixty days due to the outbreak and became fully operational in April 2020 which
led to a significant delay in the production of goods needed to fulfil our sales orders, which were scheduled to be fulfilled
in our first quarter of 2020. We were able to fulfil these orders in the second quarter of 2020. Additionally, the notified
regulatory body we rely on to obtain European CE approval is located in Italy and has been shut down for approximately
six weeks from March to April 2020, which delayed our submission for CE mark approval for the year 2020. The CE Mark was subsequently
approved in April 2020. The various precautionary measures taken by many governmental authorities around the world in order to
limit the spread of COVID-19 has had and may continue to have an adverse effect on the global markets and global economy, including
on the availability and pricing of employees, resources, materials, manufacturing and delivery efforts and other aspects of the
global economy. The financial downturn has compelled us to furlough or reduce working hours for much of our operating staff, and
has forced remaining staff as well as third-party contractors, and our clients may encounter cash-flow issues that will delay
their payments to us. In addition, remaining staff members have been forced to operate remotely from their homes, which is continuing
to result in delays in obtaining certain financial records. We also rely on third-party professionals to provide services such
as the preparation of our financial statements and to conduct audits, and many of these parties have been affected by government-imposed
precautionary measures, thereby delaying our receipt of these services. Such government-imposed precautionary measures may have
been relaxed in certain countries or states, but there is no assurance that more strict measures will be put in place again due
to a resurgence in COVID-19 cases. Therefore, the COVID-19 pandemic has and may again disrupt production and cause delays in the
supply and delivery of our products, may continue to affect our operation, may further divert the attention and efforts of the
medical community to coping with COVID-19 and disrupt the marketplace in which we operate and may have a material adverse effect
on our operations. Assessment of the complete extent to which COVID-19 impacts our results will depend on future developments,
which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19
and the actions to contain COVID-19 or treat its impact, among others. The continuation of the COVID-19 pandemic could materially
disrupt our business and operations, hamper our ability to raise additional funds or sell or securities, continue to slow down
the overall economy, curtail consumer spending, interrupt our sources of supply, and make it hard to adequately staff our operations.



14







Cybersecurity
Incident



In
June 2020, the Company experienced a cybersecurity incident. Specifically, the Company believes that one or two unauthorized third
parties were able to use an email domain similar to the Company’s to convince two of the Company’s customers to send
payments in the aggregate amount of approximately $308,000 to unauthorized bank accounts that should have been sent to the Company.
Both customers were able to reclaim the fraudulent transfers and subsequently deposited them into the Company’s bank account;
$78,000 was paid in June 2020, and $230,000 was paid in July 2020.



The
Company’s management notified the appropriate government authorities and is exploring a range of steps to enhance
its security protections and prevent future unauthorized activity. We have not incurred, nor do we expect to incur significant
costs related to investigating this incident.



Effective
June 22, 2020, the Company entered into a two-year exclusive agreement with Ultra Pain Products, Inc. for the distribution of
the Company’s proprietary PainShieldTM devices and components through and by Durable Medical Equipment (DME) Distributors
throughout the United States.



Nasdaq
Delisting



On
September 14, 2018, the Company received a letter from the Listing Qualifications Staff (the “Staff”) of The Nasdaq
Stock Market LLC (“Nasdaq”) notifying the Company that it was no longer in compliance with the minimum stockholders’
equity requirement for continued listing on the Nasdaq Capital Market. Nasdaq Listing Rule 5550(b)(1) requires listed companies
to maintain stockholders’ equity of at least $2.5 million (the “Equity Requirement”).



Following
a hearing on May 2, 2019, a Nasdaq Hearings Panel was appointed to review the Company’s compliance with the Equity Requirement,
and on August 5, 2020, the Staff issued a letter to the Company in which it indicated that, since the Company had failed to report
stockholders’ equity of at least $2.5 million in each of its last three periodic reports filed with the Securities and Exchange
Commission, its common shares would be subject to delisting on August 14, 2020, unless the Company requests an appeal of this
determination by 4:00 p.m. Eastern Time on August 12, 2020 (the “Hearing Request”).



The
Company submitted a Hearing Request on August 12, 2020 and a hearing has been scheduled for September 10, 2020. The Hearing Request
will automatically stay any suspension or delisting action pending a decision of a Nasdaq Hearings Panel. At the hearing, the
Company will provide the Nasdaq Hearings Panel with an update on its compliance plan and, if necessary, request a further extension
of time in which to regain compliance. Pursuant to the Nasdaq Listing Rules, the Nasdaq Hearings Panel has the discretion to grant
an additional extension of time of up to 180 calendar days, as measured from August 5, 2020.



15







There can be no assurance that
the Company’s plan will be accepted by the Nasdaq Hearings Panel or that, if it is, the Company will be able to regain compliance
with the applicable Nasdaq listing requirements. If the Company’s common stock is delisted, it could be more difficult to
buy or sell the Company’s common stock or to obtain accurate quotations, and the price of the Company’s common stock
could suffer a material decline. Delisting could also impair the Company’s ability to raise capital.



Critical
Accounting Policies



A
critical accounting policy is one that is both important to the portrayal of our financial condition and results of operation
and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates
about the effect of matters that are inherently uncertain. Our critical accounting policies are more fully described in both (i)
“Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and (ii) Note
3 of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December
31, 2019. There have not been any material changes to such critical accounting policies since December 31, 2019.



The
currency of the primary economic environment in which our operations are conducted is the U.S. dollar (“$” or “dollar”).
Accordingly, our functional currency is the dollar.



Results
of Operations



Three
Months Ended June 30, 2020 Compared to Three Months Ended June 30, 2019



Revenues.
For the three months ended June 30, 2020 and 2019, our revenues were approximately $269,000 and $263,000 respectively, an increase
of approximately 2%, or $6,000 between the periods. Our revenues may fluctuate as we add new consumers or when existing distributors
or consumers make large purchases of our products during one period and no purchases during another period. Therefore, any growth
or decrease in revenues by quarter may not be linear or consistent.



For
the three months ended June 30, 2020, the percentage of revenues attributable to our products was: PainShield - 100% and UroShield
0%. For the three months ended June 30, 2019, the percentage of revenues attributable to our products was: PainShield - 64% and
UroShield - 36%. For the three months ended June 30, 2020 and 2019, the percentage of revenues attributable to our disposable
products was 4% and 2%, respectively. For the three months ended June 30, 2020 and 2019, the portion of our revenues that was
derived from distributors was 88% and 40%, respectively.



Gross
Profit. For the three months ended June 30, 2020 and 2019, gross profit was approximately $38,000 and $207,000, respectively,
a decrease of approximately 82% or $169,000, mainly due to an agreement with a distributor where the Company sold roughly $112,000
of products in the second quarter of 2020 at a steep discount in order to gain entry into a new market. The Company has since
discontinued selling further products to this distributor.



Gross
profit as a percentage of revenues was approximately 14% and 79% for the three months ended June 30, 2020 and 2019, respectively.
The decrease in gross profit as a percentage is mainly due to the reason described above.



Research
and Development Expenses. For the three months ended June 30, 2020 and 2019, research and development expenses were approximately
$16,000 and $150,000, respectively, between the periods. The decrease was mainly due to there being no clinical trials during
the three months ended June 30, 2020 as well as the furloughing of our staff members in the second quarter of 2020 due to the
impacts of the COVID-19 pandemic.



Research
and development expenses as a percentage of total revenues were approximately 6% and 57% for the three months ended June 30, 2020
and 2019, respectively.



Our
research and development expenses consist mainly of payroll expenses to employees involved in research and development activities,
stock-based compensation expenses, expenses related to subcontracting, patents application and registration, clinical trial and
facilities expenses associated with and allocated to research and development activities.



16







Selling
and Marketing Expenses. For the three months ended June 30, 2020 and 2019, selling and marketing expenses were approximately
$180,000 and $271,000, respectively, a decrease of approximately 34%, or $91,000, between the periods. The decrease was primarily
due to a significant reduction in sales and marketing activities including related traveling or conventions attended during the
first quarter of 2020 as well as a temporary reduction of salaries placed during the second quarter of 2020, both due to the impacts
of the COVID-19 pandemic.



Selling
and marketing expenses as a percentage of total revenues were approximately 67% and 103% for the three months ended June 30, 2020
and 2019, respectively.



Selling
and marketing expenses consist mainly of payroll expenses to direct sales and marketing employees, stock-based compensation expenses,
travel expenses, conventions, advertising and marketing expenses, rent and facilities expenses associated with and allocated to
selling and marketing activities.



General and Administrative Expenses.
For the three months ended June 30, 2020 and 2019, general and administrative expenses were approximately $1,310,000 and
$682,000, respectively, an increase of approximately 92%, or $628,000, between the periods. The increase
was primarily due to the settlement with Bespoke for $918,750, partially offset by a $208,000 decrease in professional
fees of approximately $197,000 in 2020 compared to $405,000 in 2019 as well as a temporary reduction of salaries placed during
the second quarter of 2020 due to the impacts of the COVID-19 pandemic.



General and administrative expenses as a percentage
of total revenues were approximately 487% and 259% for the three months ended June 30, 2020 and 2019, respectively.



Our general and administrative expenses consist
mainly of the settlement with Bespoke, payroll expenses for management and administrative employees, stock-based compensation
expenses, accounting, legal and facilities expenses associated with general and administrative activities and costs associated
with being a publicly traded company.



Financial
expenses, net. For the three months ended June 30, 2020 and 2019, financial expenses, net was approximately $5,000 compared
to a $24,000, respectively, a decrease of approximately $19,000, between the periods. The decrease in 2020 was derived primarily
from exchange rate adjustments.



Change
in fair value of derivative liabilities. For the three months ended June 30, 2020 and 2019, there was a change in fair value
of derivative liabilities resulting in a gain of approximately $0 and $107,000, respectively. The income in 2019 was derived from
the valuation of derivative liabilities.



Loss
on extinguishment of derivative liability. For the three months ended June 30, 2020 and 2019, there was a loss on extinguishment
of derivative liability of approximately $0 and $288,000, respectively. The loss in 2019 was derived from the extinguishment of
embedded derivative liabilities upon repayment of its related debt.



Tax
expenses. For the three months ended June 30, 2020 and 2019, tax expenses were $4,000 and $6,000. The tax expense is computed
by multiplying income before taxes at our Israeli subsidiary by the appropriate tax rate.



Net
loss. Our net loss increased by approximately $370,000, or 33%, to approximately $1,477,000 for the
three months ended June 30, 2020 from approximately $1,107,000 in the same period of 2019. The decrease in net loss resulted primarily
from the factors described above.



Six
Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019



Revenues.
For the six months ended June 30, 2020 and 2019, our revenues were approximately $383,000 and $342,000 respectively, an increase
of approximately 12%, or $41,000 between the periods. Our revenues may fluctuate as we add new consumers or when existing distributors
or consumers make large purchases of our products during one period and no purchases during another period. Therefore, any growth
or decrease in revenues by quarter may not be linear or consistent.



17







For
the six months ended June 30, 2020, the percentage of revenues attributable to our products was: PainShield - 100% and UroShield
0%. For the six months ended June 30, 2019, the percentage of revenues attributable to our products was: PainShield - 70% and
UroShield - 30%. For the six months ended June 30, 2020 and 2019, the percentage of revenues attributable to our disposable products
was 4% and 3%, respectively. For the six months ended June 30, 2020 and 2019, the portion of our revenues that was derived from
distributors was 91% and 50%, respectively.



Gross
Profit. For the six months ended June 31, 2020 and 2019, gross profit was approximately $89,000 and $260,000, respectively,
a decrease of approximately 66% or $171,000, mainly due mainly due to an agreement with a distributor where the Company sold roughly
$112,000 of products in the second quarter of 2020 at a steep discount in order to gain entry into a new market. The Company has
since discontinued selling further products to this distributor.



Gross
profit as a percentage of revenues was approximately 23% and 76% for the six months ended June 30, 2020 and 2019, respectively.
The decrease in gross profit as a percentage is mainly due to the reason described above.



Research
and Development Expenses. For the six months ended June 30, 2020 and 2019, research and development expenses were approximately
$63,000 and $302,000, respectively between the periods. The decrease was mainly due to there being no clinical trials during the
six months ended June 30, 2020 as well as the furloughing of our staff members in the second quarter of 2020 due to the impacts
of the COVID-19 pandemic.



Research
and development expenses as a percentage of total revenues were approximately 16% and 88% for the six months ended June 30, 2020
and 2019, respectively.



Our
research and development expenses consist mainly of payroll expenses to employees involved in research and development activities,
stock-based compensation expenses, expenses related to subcontracting, patents application and registration, clinical trial and
facilities expenses associated with and allocated to research and development activities.



Selling
and Marketing Expenses. For the six months ended June 30, 2020 and 2019, selling and marketing expenses were approximately
$434,000 and $592,000, respectively, a decrease of approximately 27%, or $158,000, between the periods. The decrease was primarily
due to a significant reduction in sales and marketing activities including related traveling or conventions attended during the
first quarter of 2020 as well as a temporary reduction of salaries placed during the second quarter of 2020, both due to the impacts
of the COVID-19 pandemic.



Selling
and marketing expenses as a percentage of total revenues were approximately 113% and 173% for the six months ended June 30, 2020
and 2019, respectively.



Selling
and marketing expenses consist mainly of payroll expenses to direct sales and marketing employees, stock-based compensation expenses,
travel expenses, conventions, advertising and marketing expenses, rent and facilities expenses associated with and allocated to
selling and marketing activities.



General and Administrative Expenses.
For the six months ended June 30, 2020 and 2019, general and administrative expenses were approximately $1,967,000 and
$2,485,000, respectively, a decrease of approximately 21%, or $518,000, between the periods. The decrease was primarily
due to the general and administrative portion of stock-based compensation expense of approximately $1,424,000 in 2019 compared
to $120,000 in 2020, as well as a decrease in professional fees and a temporary reduction of salaries placed during the second
quarter of 2020 due to the impacts of the COVID-19 pandemic which was partially offset by the settlement with Bespoke for $918,750.



General and administrative expenses as a percentage
of total revenues were approximately 514% and 727% for the six months ended June 30, 2020 and 2019, respectively.



Our general and administrative expenses consist
mainly of the settlement with Bespoke, payroll expenses for management and administrative employees, stock-based compensation
expenses, accounting, legal and facilities expenses associated with general and administrative activities and costs associated
with being a publicly traded company.



Financial
expenses, net. For the six months ended June 30, 2020 and 2019, financial expenses, net was approximately $10,000 compared
to a $51,000, respectively, a decrease of approximately $41,000, between the periods. The change was derived primarily from exchange
rate adjustments and interest expense on notes.



18







Change
in fair value of derivative liabilities. For the six months ended June 30, 2020 and 2019, there was a change in fair value
of derivative liabilities resulting in a gain of approximately $0 and $102,000, respectively, an increase of approximately $102,000,
between the periods. The income in 2019 was derived from the valuation of derivative liabilities.



Loss
on extinguishment of derivative liability. For the six months ended June 30, 2020 and 2019, there was a loss on extinguishment
of derivative liability of approximately $0 compared to a $288,000, respectively. The loss in 2019 was derived from the extinguishment
of embedded derivative liabilities upon repayment of its related debt.



Warrant
modification expense.For the six months ended June 30, 2020 and 2019, warrant modification expense was approximately $0 and
$412,000, respectively. The warrant modification expense in 2019 was related to an amendment to warrants that extended the expiration
date by two years.



Tax
expenses. For the six months ended June 30, 2020 and 2019, tax expenses were $13,000 and $18,000. The tax expense is computed
by multiplying income before taxes at our Israeli subsidiary by the appropriate tax rate.



Net
loss. Our net loss decreased by approximately $1,388,000, or 37%, to approximately $2,398,000 for the
six months ended June 30, 2020 from approximately $3,786,000 in the same period of 2019. The decrease in net loss resulted primarily
from the factors described above.



Liquidity
and Capital Resources



We
incurred losses in the amount of approximately $2,398,000 during the six-month period ended June 30, 2020 and accumulated
negative cash flow from operating activities of $1,378,000 for the six-month period ended June 30, 2020.



We
expect to continue to incur losses and negative cash flows from operating activities and as a result. Without additional funding,
we will not have sufficient resources to fund its operations for the next twelve months from the date of this filing. These conditions
raise substantial doubt about our ability to continue as a going concern.



During
the six-month period ended June 30, 2020, we raised $200,000 through the issuance of notes payable to a related party and
received $42,000 from the Paycheck Protection Program. During the next twelve months management expects that we 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 its products do not reach commercial profitability. Our future capital requirements and the adequacy
of our available funds will depend on many factors, including our ability to successfully commercialize our products, our development
of future products and competing technological and market developments. We have been relying on past financing activities to meet
our short-term liquidity requirements but may need to sell additional securities to advance our long-term plans. We have historically
met our cash needs through a combination of issuance of equity, borrowing activities and sales.



It
is our current belief that if we do not continue to see significant increases in revenues, or if we are unable to raise additional
capital at a later time in the next twelve months, we may need to reduce our operating budget as well as sales and marketing expenses
which may impair our ability to execute our business objectives. However, we may be unable to raise sufficient additional capital
when we require it or upon terms favorable to us. Delisting from NASDAQ Capital Markets would adversely affect our ability to
raise additional financing through the public or private sale of equity securities, would significantly affect the ability of
investors to trade our securities and would negatively affect the value and liquidity of our Common Stock. In addition, the terms
of any securities we issue in future financings may be more favorable to new investors and may include preferences, superior voting
rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders of
any of our securities then outstanding. If we are unable to obtain adequate funds on reasonable terms, we may need to curtail
operations significantly, or enter into financing agreements with unattractive terms in order to provide sufficient working capital
for our operations.



Furthermore,
the COVID-19 pandemic has created significant economic uncertainty and volatility in the credit and capital markets. A continuation
or worsening of the levels of market disruption and volatility seen in the recent past could have an adverse effect on our ability
to access capital, on our business, results of operations and financial condition, and on the market price of our common stock.



19







We
do not have any material commitments to capital expenditures as of June 30, 2020, and we are not aware of any material trends
in capital resources that would impact our business.



Cash
flows



General.
As of June 30, 2020, we had restricted cash of approximately $202,000, compared to approximately $2,371,000 as of June 30, 2019.
The decrease is due to limited financing activities in the first and second quarters of 2020. We have historically met our cash
needs through a combination of issuance of equity, borrowing activities and sales. Our cash requirements are generally for product
development, research and development cost, marketing and sales activities, finance and administrative cost, capital expenditures
and general working capital.



Cash
used in our operating activities was approximately $1,378,000 for the six months ended June 30, 2020 and $1,729,000 for the same
period in 2019.



Cash
provided by financing activities was approximately $242,000 for the six months ended June 30, 2020 compared to $3,204,000 for
the six months ended June 30, 2019.



Off
Balance Sheet Arrangements



Except
as disclosed, as of June 30, 2020, we have no off-balance sheet transactions, arrangements, obligations (including contingent
obligations), or other relationships with unconsolidated entities or other persons that have, or may have, a material effect on
our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures
or capital resources.



Factors
That May Affect Future Operations



We believe that our future operating results
will continue to be subject to quarterly variations based upon a wide variety of factors, including the ordering patterns of our
distributors, timing of regulatory approvals, the implementation of various phases of our clinical trials and manufacturing efficiencies
due to the learning curve of utilizing new materials and equipment as well issues that may continue to occur due to the development
of the coronavirus outbreak. While there were significant delays in the production of goods due to COVID-19 issues, presently,
we are no longer experiencing such delays in the production of our products. Additionally, the COVID-19
pandemic has also caused significant disruptions to the global financial markets, which may impact our ability to raise
additional capital.That said, there are no assurances that if a second wave of the pandemic occurs that we will not experience
significant delays in the future. Our operating results could also be impacted by a weakening of the Euro and strengthening of
the New Israeli Shekel, or NIS, both against the U.S. dollar. Lastly, other economic conditions we cannot foresee may affect customer
demand, such as individual country reimbursement policies pertaining to our products.



Item
3. Quantitative and Qualitative Disclosures about Market Risk



Not
applicable.



Item
4. Controls and Procedures



Management
of the Company, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness
of the Company’s disclosure controls and procedures as of June 30, 2020, the end of the period covered by this quarterly
report on Form 10-Q. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under
the Securities Exchange Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company
that are designed to provide reasonable assurance that information required to be disclosed by the company in the reports it files
or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s
rules and forms. Disclosure controls and procedures are also designed to provide reasonable assurance that such information is
accumulated and communicated to the company’s management, including its Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure. Based on their evaluation, as of the end of the period covered by this
Form 10-Q, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) were
not effective because of the material weaknesses in our internal control over financial reporting as described in Item 9A in our
Annual Report on Form 10-K for the fiscal ended December 31, 2019, filed with the Securities and Exchange Commission on May 20,
2020.



20







In
addition, due to the recent cybersecurity incident reported in June 2020, we will review our established controls and procedures
that involve cybersecurity matters to determine the potential material impact to the Company’s financial results, operations,
and/or reputation to insure such incidents are immediately reported by management to the Board of Directors, or individual members
or committees thereof, as appropriate, in accordance with our escalation framework and insure the Company has established procedures
to ensure that management responsible for overseeing the effectiveness of disclosure controls is informed in a timely manner of
known cybersecurity risks and incidents that may materially impact our operations and that timely public disclosure is made as
appropriate.



During
2019, management developed a remediation plan, whereby we implemented changes to our internal controls for these material weaknesses.
Our remediation activities included: (a) expanded consultations with third party specialists on complex accounting matters, financial
reporting and regulatory filings, (b) enhanced documentation to support a more precise review process, and (c) enhanced monitoring
of the review process. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the
material weaknesses identified in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019. Although the Company
has taken numerous steps, our remediation plan is not complete due to the lack of a written testing plan to conclude if our controls
and procedures and management were operating effectively; and our remediation plan has not operated for a sufficient period of
time for the Company to complete testing to conclude that our newly implemented controls and procedures were operating effectively
as of June 30, 2020.



Changes
in Internal Control over Financial Reporting



Other
than described above in this Item 4, there has been no change in our internal control over financial reporting that occurred during
the second quarter of 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over
financial reporting.



Part
II - OTHER INFORMATION



Item
1. Legal Proceedings



From
time to time, we may be involved in certain claims and litigation arising out of the ordinary course and conduct of business.
Management assesses such claims and, if it considers that it is probable that an asset had been impaired or a liability had been
incurred and the amount of loss can be reasonably estimated, provisions for loss are made based on management’s assessment
of the most likely outcome.



We
are subject to a lawsuit filed by our former officer and director, Jona Zumeris, on December 17, 2019 in the Haifa Israel District
Financial Court, seeking damages of approximately $900,000 for breach of the Separation Agreement executed on July 4, 2018, and
to which matter both parties have agreed to proceed to settle in mediation scheduled to begin in late May 2020. We believe that
a major part of the allegations included in the suit are without merit, however, due to the uncertainties of litigation or mediation,
we can give no assurance that we will be able to reach reasonable settlement, or if it were to proceed in court, prevail on the
claims made against us in such lawsuit. The Israeli court issued a court order demanding that we restrict approximately $700,000
of the Company’s money until the matter is adjudicated. The Company appealed the court order. In February 2020, the Company
agreed to restrict approximately $350,000 and agreed to try to settle the matter in mediation which commenced in May 2020. The
court did not require the Company to keep such cash reserves in an escrow or any other restricted account, nor have they implemented
any monitoring procedures on this matter. As such, the Company’s bank accounts do not have any restrictions in place which
prohibit the Company from using its available funds at their discretion. A settlement was not reached in May and although the
mediation process has not yet concluded, the Company believes that it and will now likely go to trial, although no date has been
set.



21







There
are no other material proceedings in which any of our directors, officers or affiliates or any registered or beneficial shareholder
of more than 5% of our common stock, or any associate of any of the foregoing is an adverse party or has a material interest adverse
to our interest.



Item
1A. Risk Factors



The
following description of risk factors includes any material changes to, and supersedes the description of, risk factors associated
with our business, financial condition and results of operations previously disclosed in “Item 1A. Risk Factors” of
our 2019 10-K, as filed with the SEC on May 20, 2020. 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, “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-Q.



The
recent coronavirus outbreak may adversely affect our business.



In
December 2019, a strain of coronavirus (“COVID-19”) was reported to have surfaced in Wuhan, China, and has reached
multiple other countries, resulting in government-imposed quarantines, travel restrictions and other public health safety measures
in China and other affected countries. The ongoing COVID-19 pandemic has and may continue to adversely impact our business, as
our operations are based in and rely on third parties located in countries affected by the outbreak. Our third-party manufacturer,
which is based in China, temporarily shut down for sixty days due to the outbreak and became fully operational in April 2020 which
led to a significant delay in the production of goods needed to fulfil our sales orders which were scheduled to be fulfilled
in our first quarter of 2020. We were able to fulfil these orders in the second quarter of 2020. Additionally, the notified
regulatory body we rely on to obtain European CE approval is located in Italy and has been shut down for approximately
six weeks from March to April 2020, which delayed our submission for CE mark approval for the year 2020. The CE Mark was subsequently
approved in April 2020. The various precautionary measures taken by many governmental authorities around the world in order to
limit the spread of COVID-19 has had and may continue to have an adverse effect on the global markets and global economy, including
on the availability and pricing of employees, resources, materials, manufacturing and delivery efforts and other aspects of the
global economy. The financial downturn has compelled us to furlough or reduce working hours for much of our operating staff, and
has forced remaining staff as well as third-party contractors, and our clients may encounter cash-flow issues that will delay
their payments to us. In addition, remaining staff members have been forced to operate remotely from their homes, which is continuing
to result in delays in obtaining certain financial records. We also rely on third-party professionals to provide services
such as the preparation of our financial statements and to conduct audits, and many of these parties have been affected by government-imposed
precautionary measures, thereby delaying our receipt of these services. Such government-imposed precautionary measures may have
been relaxed in certain countries or states, but there is no assurance that more strict measures will be put in place again due
to a resurgence in COVID-19 cases. Therefore, the COVID-19 pandemic has and may again disrupt production and cause delays in the
supply and delivery of our products, may continue to affect our operation, may further divert the attention and efforts of the
medical community to coping with COVID-19 and disrupt the marketplace in which we operate and may have a material adverse effect
on our operations. Assessment of the complete extent to which COVID-19 impacts our results will depend on future developments,
which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19
and the actions to contain COVID-19 or treat its impact, among others. The continuation of the COVID-19 pandemic could materially
disrupt our business and operations, hamper our ability to raise additional funds or sell or securities, continue to slow down
the overall economy, curtail consumer spending, interrupt our sources of supply, and make it hard to adequately staff our operations.



22







If
we fail to maintain effective internal control over financial reporting, our business, financial condition or results of operations
may be adversely affected.



As
a public reporting company, we are required to establish and maintain effective internal control over financial reporting. Failure
to establish such internal control, or any failure of such internal control once established, could adversely impact our public
disclosures regarding our business, financial condition or results of operations. Any failure of our internal control over financial
reporting could also prevent us from maintaining accurate accounting records and discovering accounting errors and financial frauds.



Rules
adopted by the Securities and Exchange Commission pursuant to Section 404 require annual assessment of our internal control over
financial reporting. The standards that must be met for management to assess the internal control over financial reporting as
effective are complex, and require significant documentation, testing and possible remediation to meet the detailed standards.
We may encounter problems or delays in completing activities necessary to make an assessment of our internal control over financial
reporting. If we cannot assess our internal control over financial reporting as effective, investor confidence and share value
may be negatively impacted. In addition, management’s assessment of internal control over financial reporting may identify
weaknesses and conditions that need to be addressed in our internal control over financial reporting or other matters that may
raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control
over financial reporting (including those weaknesses identified in our periodic reports), or disclosure of management’s
assessment of our internal control over financial reporting may have an adverse impact on the price of our securities.



As
disclosed in Part II, Item 4, “Controls and Procedures,” we have identified a material weakness in our internal control
over financial reporting due to a lack of a full and complete testing of our disclosure controls and procedures. We concluded
that our internal control over financial reporting and related disclosure controls and procedures were not effective as of June
30, 2020. Our management has implemented remediation measures and expects that such measures will be sufficient to fully remediate
the material weakness in our internal control over financial reporting that existed at June 30, 2020; however, we cannot guarantee
that these steps will be sufficient to remediate the deficiencies or that we will not have a material weakness in the future.
If our remedial measures are insufficient to address the material weakness or if additional material weaknesses arise in the future,
our interim or annual financial statements may contain material misstatements or omissions and we could be required to restate
our financial results.



Our
business and operations would suffer in the event of computer system failures, cyber-attacks or deficiencies in our cyber-security
or those of third-party providers.



In
the ordinary course of our business, we collect and store sensitive data, including intellectual property, research data, our
proprietary business information and that of our suppliers, technical information about our products, clinical trial plans and
employee records. Similarly, our third-party providers possess certain of our sensitive data and confidential information. The
secure maintenance of this information is critical to our operations and business strategy. Despite the implementation of security
measures, our internal computer systems, and those of third parties on which we rely, are vulnerable to damage from computer viruses,
malware, ransomware, cyber fraud, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks
or cyber-intrusions over the Internet, attachments to emails, persons inside our organization, or persons with access to systems
inside our organization. The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including
by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication
of attempted attacks and intrusions from around the world have increased. Any such breach could compromise our networks and the
information stored there could be accessed, publicly disclosed, encrypted, lost or stolen. Any such access, inappropriate disclosure
of confidential or proprietary information or other loss of information, including our data being breached at third-party providers,
could result in legal claims or proceedings, liability or financial loss under laws that protect the privacy of personal information,
disruption of our operations or our product development programs and damage to our reputation, which could adversely affect our
business.



23







Furthermore,
we and our third-party providers rely on electronic communications and information system to conduct our operations. We and our
third-party providers have been, and may continue to be, targeted by parties using fraudulent e-mails and other communications
in attempts to misappropriate bank accounting information, passwords, or other personal information or to introduce viruses or
other malware to our information systems. In June 2020, we experienced a cybersecurity incident. Specifically, we believe that
one or two unauthorized third parties were able to use an email domain similar to ours to convince two of our customers to send
payments in the aggregate amount of approximately $308,000 to unauthorized bank accounts that should have been sent to us. As
of the date of this filing, all funds have been recovered by the Company. Our management has launched an investigation into the
incident and has notified the appropriate government authorities. We are exploring a range of steps to enhance our security protections
and prevent future unauthorized activity. Though we endeavor to mitigate these threats, such cyber-attacks against us or our third-party
providers and business partners remain a serious issue. The pervasiveness of cybersecurity incidents in general and the risks
of cyber-crime are complex and continue to evolve. Although we are making significant efforts to maintain the security and integrity
of our information systems and are exploring various measures to manage the risk of a security breach or disruption, there can
be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would
not be successful or damaging.



If
we fail to comply with the continued listing requirements of the NASDAQ Capital Market, 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 the NASDAQ Capital Market. We must satisfy NASDAQ’s continued listing requirements,
including, among other things, a minimum stockholders’ equity of $2.5 million or risk delisting, which would have
a material adverse effect on our business. A delisting of our common stock from the NASDAQ Capital Market 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
September 14, 2018, we received a letter from the Listing Qualifications Staff (the “Staff”) of The Nasdaq Stock Market
LLC notifying the Company that it was no longer in compliance with the minimum stockholders’ equity requirement for continued
listing on the NASDAQ Capital Market. Nasdaq Listing Rule 5550(b)(1) requires listed companies to maintain stockholders’
equity of at least $2.5 million (the “Equity Requirement”).



Following
a hearing on May 2, 2019, a Nasdaq Hearings Panel was appointed to review our compliance with the Equity Requirement, and on August
5, 2020, the Staff issued a letter to us in which it indicated that, since we had failed to report stockholders’ equity
of at least $2.5 million in each of its last three periodic reports filed with the Securities and Exchange Commission, our common
shares would be subject to delisting on August 14, 2020, unless we request an appeal of this determination by 4:00 p.m. Eastern
Time on August 12, 2020 (the “Hearing Request”).



On August 12, 2020, we timely requested a Hearing
Request, which automatically stayed any suspension or delisting action pending a decision of a Nasdaq Hearings Panel. At the hearing,
we will provide the Nasdaq Hearings Panel with an update on its compliance plan and, if necessary, request a further extension
of time in which to regain compliance. Pursuant to the Nasdaq Listing Rules, the Nasdaq Hearings Panel has the discretion to grant
an additional extension of time of up to 180 calendar days, as measured from August 5, 2020.



However, there can be no assurance
that our plan will be accepted by the Nasdaq Hearings Panel or that, if it is, we will be able to regain compliance with the applicable
Nasdaq listing requirements. If our common stock is delisted, it could be more difficult to buy or sell our common stock or to
obtain accurate quotations, and the price of our common stock could suffer a material decline. Delisting could also impair our
ability to raise capital.



24







If
our common stock were delisted from NASDAQ, trading of our common stock would most likely take place on an over-the-counter market
established for unlisted securities, such as the OTCQB or the Pink Market maintained by OTC Markets Group Inc. An investor would
likely find it less convenient to sell, or to obtain accurate quotations in seeking to buy, our common stock on an over-the-counter
market, and many investors would likely not buy or sell our common stock due to difficulty in accessing over-the-counter markets,
policies preventing them from trading in securities not listed on a national exchange or other reasons. In addition, as a delisted
security, our common stock would be subject to SEC rules as a “penny stock,” which impose additional disclosure requirements
on broker-dealers. The regulations relating to penny stocks, coupled with the typically higher cost per trade to the investor
of penny stocks due to factors such as broker commissions generally representing a higher percentage of the price of a penny stock
than of a higher-priced stock, would further limit the ability of investors to trade in our common stock. For these reasons and
others, delisting would adversely affect the liquidity, trading volume and price of our common stock, causing the value of an
investment in us to decrease and having an adverse effect on our business, financial condition and results of operations, including
our ability to attract and retain qualified employees and to raise capital.



Item
2. Unregistered Sales of Equity Securities and Use of Proceeds



None



Item
3. Defaults Upon Senior Securities



Not
applicable.



Item
4. Mine Safety Disclosures



Not
Applicable.



Item
5. Other Information



Not
Applicable.



Item
6. Exhibits



EXHIBIT
INDEX



|Exhibit
    No. |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.1            |  | Form of Note (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on June 26, 2020).                                                                                                                                                                                                                                                                                                                                                    
|10.2            |  | Form of Warrant (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on June 26, 2020).                                                                                                                                                                                                                                                                                                                                                 
|10.3*           |  | Note between the Company and Cross River Bank (SBA – Payroll Protection Program loan), dated May 14, 2020.                                                                                                                                                                                                                                                                                                                                          
|4.1             |  | Form of Certificate of Designation of Series E Convertible Preferred Stock (incorporated by reference to Exhibit 4.1 to the Form 10-Q filed on November 19, 2019).                                                                                                                                                                                                                                                                                  
|31.1*           |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                  
|31.2*           |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                  
|32.1*           |  | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                  
|32.2*           |  | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                  
|101*            |  | The
    following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted
    in XBRL (eXtensible Business Reporting Language), (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Comprehensive
    Loss, (iii) Consolidated Statements of Changes in Equity (Deficiency) (iv) Consolidated Statements of Cash Flows and (v) the
    Notes to the Consolidated Financial Statements



|* | Filed
    herewith.
|- | -------------------



25







SIGNATURES



Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.



|                          | NANOVIBRONIX,
    INC.
|------------------------- | ----------------------
|                          |                       
|Date:
    August 19, 2020 | By:                   
|                          | Name:                 
|                          | Title:                



|Date:
    August 19, 2020 | By:    | /s/
    James S. Cardwell  
|------------------------- | ------ | ---------------------------
|                          | Name:  | James
    S. Cardwell      
|                          | Title: | Chief
    Financial Officer



26