Full Press Release Details
MEDICAL HOLDINGS, CORP. (FORMERLY ENVIZION HOLDINGS CORP.)
TO FINANCIAL STATEMENTS
| Page | |
| Audited Consolidated Financial Statements | |
| Reports of Independent Auditors (PCAOB ID: 1281) | F-2 |
| Consolidated Balance Sheets | F-3 |
| Consolidated Statements of Operations | F-5 |
| Consolidated Statements of Shareholders' Equity | F-6 |
| Consolidated Statements of Cash Flows | F-7 |
| Notes to Consolidated Financial Statements | F-8 |
OF INDEPENDENT AUDITORS
the Shareholders and the Board of Directors of
MEDICAL HOLDINGS CORP. (AS SUCCESSOR TO ENVIZION MEDICAL LTD)
have audited the consolidated financial statements of Envue Medical Holdings Corp. (Successor) (the Company), which comprise the consolidated
balance sheets as of December 31, 2023 (Predecessor) and 2022 (Predecessor), and the related consolidated statements of operations, shareholders'
equity and cash flows for the years then ended, and the related notes (collectively referred to as the "consolidated financial
our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company at
December 31, 2023 (Predecessor) and 2022 (Predecessor), and the results of its operations and its cash flows for the years then ended
in accordance with accounting principles generally accepted in the United States of America.
conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities
under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section
of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the
relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion.
Doubt About the Company's Ability to Continue as a Going Concern
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note
1 to the financial statements, the Company's Predecessor has suffered recurring losses and negative cash flows from operations,
and has stated that substantial doubt exists about the Company's ability to continue as a going concern. Management's evaluation
of the events and conditions and management's plans regarding these matters are also described in Note 1. The financial statements
do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this
of Management for the Financial Statements
is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally
accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.
preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate,
that raise substantial doubt about the Company's ability to continue as a going concern for one year after the date that the financial
statements are available to be issued.
Responsibilities for the Audit of the Financial Statements
objectives are to obtain reasonable assurance about whether the financial statements as a whole are free of material misstatement, whether
due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance
but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material
misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence
the judgment made by a reasonable user based on the financial statements.
performing an audit in accordance with GAAS, we:
are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit,
significant audit findings, and certain internal control-related matters that we identified during the audit.
| Tel-Aviv, Israel | KOST FORER GABBAY & KASIERER |
| February 14, 2025 | A Member of Ernst & Young Global |
ENVUE MEDICAL HOLDINGS CORP. (AS SUCCESSOR TO ENVIZION MEDICAL LTD.)
dollars in thousands
| Predecessor | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | 103 | 290 | ||||||
| Restricted cash | 30 | 95 | ||||||
| Account receivables (net of allowance for credit losses of $9 and $0 at December 31, 2023 and 2022, respectively) | 167 | 277 | ||||||
| Other account receivables | 59 | 250 | ||||||
| Inventory | 307 | 1,287 | ||||||
| Total current assets | 666 | 2,199 | ||||||
| LONG-TERM ASSETS: | ||||||||
| Right-of-use assets | 197 | 600 | ||||||
| Property, plant and equipment, net | 459 | 679 | ||||||
| Total long-term assets | 656 | 1,279 | ||||||
| Total assets | 1,322 | 3,478 |
accompanying notes are an integral part of the consolidated financial statements
ENVUE MEDICAL HOLDINGS CORP. (AS SUCCESSOR TO ENVIZION MEDICAL LTD.)
dollars in thousands
| Predecessor | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Account payables | 934 | 612 | ||||||
| Other accounts payables | 1,772 | 1,415 | ||||||
| Current portion of lease liability | 139 | 198 | ||||||
| Short-term loans | 2,260 | - | ||||||
| Total current liabilities | 5,105 | 2,225 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Warrant liability | 21 | 125 | ||||||
| SAFE liability | 92 | - | ||||||
| Lease liability | 22 | 372 | ||||||
| Total long-term liabilities | 135 | 497 | ||||||
| COMMITMENTS AND CONTIGENCIES | ||||||||
| SHAREHOLDERS' EQUITY: | ||||||||
| Predecessor Ordinary shares of NIS 0.01 par value - Authorized: 10,000,000 shares at December 31, 2023 and 2022; Issued and outstanding: 2,896,821 and 2,888,597 shares as of December 31, 2023 and December 31, 2022, respectively | 8 | 8 | ||||||
| Additional paid-in capital | 27,334 | 26,974 | ||||||
| Accumulated deficit | (31,260 | ) | (26,226 | ) | ||||
| Total shareholders' equity (deficit) | (3,918 | ) | 756 | |||||
| Total liabilities and shareholders' equity | 1,322 | 3,478 |
accompanying notes are an integral part of the consolidated financial statements.
ENVUE MEDICAL HOLDINGS CORP. (AS SUCCESSOR TO ENVIZION MEDICAL LTD.)
STATEMENTS OF OPERATIONS
dollars in thousands (except share and per share data)
| Predecessor | ||||||||
| Year ended December 31 , | ||||||||
| 2023 | 2022 | |||||||
| Revenues | 1,137 | 506 | ||||||
| Cost of sales | (1,692 | ) | (788 | ) | ||||
| Gross profit (loss) | (555 | ) | (282 | ) | ||||
| Research and development | (1,704 | ) | (2,340 | ) | ||||
| Selling and marketing | (1,922 | ) | (2,892 | ) | ||||
| General and administrative | (1,961 | ) | (2,824 | ) | ||||
| Operating income (loss) | (6,142 | ) | (8,338 | ) | ||||
| Finance income (expense), net | 1,121 | 963 | ||||||
| Income (loss) before taxes on income | (5,021 | ) | (7,375 | ) | ||||
| Taxes on income | (13 | ) | (22 | ) | ||||
| Net loss | (5,034 | ) | (7,397 | ) | ||||
| Basic and diluted loss per share | (1.74 | ) | (2.82 | ) | ||||
| Weighted average number of ordinary share used in computing basic and diluted net loss per share | 2,893,770 | 2,623,364 |
accompanying notes are an integral part of the consolidated financial statements.
ENVUE MEDICAL HOLDINGS CORP. (AS SUCCESSOR TO ENVIZION MEDICAL LTD.)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
dollars in thousands
| Predecessor | ||||||||||||||||||||
| Ordinary shares | Additional paid-in | Accumulated | Total shareholders' | |||||||||||||||||
| Number | Amount | capital | deficit | equity (deficit) | ||||||||||||||||
| Balance as of January 1, 2022 | 2,237,763 | $ | 6 | $ | 21,422 | $ | (18,829 | ) | $ | 2,599 | ||||||||||
| Issuance of ordinary shares | 650,834 | 2 | 5,214 | - | 5,216 | |||||||||||||||
| Share-based payment | - | - | 338 | - | 338 | |||||||||||||||
| Net loss | - | - | - | (7,397 | ) | (7,397 | ) | |||||||||||||
| Balance as of December 31, 2022 | 2,888,597 | $ | 8 | $ | 26,974 | $ | (26,226 | ) | $ | 756 | ||||||||||
| Capital contributions from related parties | - | - | 141 | - | 141 | |||||||||||||||
| Exercise of warrants into ordinary shares | 8,224 | *) | 207 | - | 207 | |||||||||||||||
| Share-based payment | - | - | 12 | - | 12 | |||||||||||||||
| Net loss | - | - | - | (5,034 | ) | (5,034 | ) | |||||||||||||
| Balance as of December 31, 2023 | 2,896,821 | $ | 8 | $ | 27,334 | $ | (31,260 | ) | $ | (3,918 | ) |
Represents an amount lower than $1.
accompanying notes are an integral part of the consolidated financial statements.
MEDICAL HOLDINGS CORP. (AS SUCCESSOR TO ENVIZION MEDICAL LTD.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
| Predecessor Year ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | (5,034 | ) | (7,397 | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | 263 | 149 | ||||||
| Remeasurement of embedded derivatives | (152 | ) | - | |||||
| Finance expenses | 764 | 235 | ||||||
| Decrease in operating lease right-of-use assets | 191 | 112 | ||||||
| Decrease in operating lease liabilities | (197 | ) | (134 | ) | ||||
| Share-based payment expense | 12 | 338 | ||||||
| Remeasurement of warrants liability | (953 | ) | (1,157 | ) | ||||
| Remeasurement of SAFE liability | (792 | ) | - | |||||
| Decrease (increase) in other account receivables | 191 | (91 | ) | |||||
| Decrease (increase) in account receivables | 110 | (88 | ) | |||||
| Decrease (increase) in inventory | 964 | (64 | ) | |||||
| Increase in account payables | 323 | 397 | ||||||
| Increase in other account payables | 357 | 493 | ||||||
| Net cash used in operating activities | (3,953 | ) | (7,207 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of Property, plant and equipment | (27 | ) | (589 | ) | ||||
| Net cash used in investing activities | (27 | ) | (589 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Exercise of warrants to ordinary shares | 207 | - | ||||||
| Capital contributions | 141 | |||||||
| Proceeds from short term loan | 1,150 | - | ||||||
| Proceeds from bifurcated embedded derivatives | 516 | - | ||||||
| Proceeds from issuance of SAFE liability | 883 | |||||||
| Proceeds from issuance of Warrants liability | 849 | 665 | ||||||
| Proceeds from issuance of ordinary shares | - | 5,296 | ||||||
| Net cash provided by financing activities | 3,746 | 5,961 | ||||||
| Exchange differences on balances of cash and cash equivalents | (18 | ) | (235 | ) | ||||
| Increase in cash and cash equivalents and restricted cash | (252 | ) | (2,070 | ) | ||||
| Cash and cash equivalents and restricted cash at the beginning of the year | 385 | 2,455 | ||||||
| Cash and cash equivalents and restricted cash at the end of the year | 133 | 385 | ||||||
| Supplemental disclosures of cash flows activities: | ||||||||
| Non-cash activity: | ||||||||
| Recognition (derecognition) of right-of-use asset and lease liability | (213 | ) | 704 | |||||
| Cash paid during the year for: | ||||||||
| Income taxes | 4 | 2 | ||||||
| Reconciliation of cash, cash equivalents and restricted cash: | ||||||||
| Cash and cash equivalents | 103 | 290 | ||||||
| Restricted cash | 30 | 95 | ||||||
| 133 | 385 |
accompanying notes are an integral part of the consolidated financial statements.
MEDICAL HOLDINGS CORP. (AS SUCCESSOR TO ENVIZION MEDICAL LTD.)
TO CONSOLIDATED FINANCIAL STATEMENTS
dollars in thousands
Predecessor was a publicly traded company traded on the Tel-Aviv stock exchange under the ticker ENVM.
January 31, 2024, the Predecessor filed a petition to initiate insolvency proceedings under the Israeli law. In March 2024, the Israeli
court appointed a trustee to manage the operations of the Predecessor (see note 17).
June 20, 2024, Alpha Capital Anstalt, by means of the Envue Medical Holdings Corp. (previously: Envizion Medical Holding Corp.) (the
"Company"), completed the acquisition of the Predecessor's key assets, mainly its technology (IP), customer relationships,
inventory and its 100% holding of the shares of Envue Medical (USA) Inc. (previously: Envizion Medical (USA) Inc.), a wholly owned subsidiary
which acted as a distributor of the Predecessor (collectively: "the Predecessor operation"). The Company was incorporated
on June 5, 2024, under the laws of the State of Delaware.
MEDICAL HOLDINGS CORP. (AS SUCCESSOR TO ENVIZION MEDICAL LTD.)
TO CONSOLIDATED FINANCIAL STATEMENTS
dollars in thousands
2:- SIGNIFICANT ACCOUNTING POLICIES
accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the
United States of America ("GAAP"). The consolidated financial statements include the accounts of the Predecessor and its
subsidiary. Intercompany accounts and transactions have been eliminated upon consolidation.
preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and
assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information
available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those estimates.
Predecessor operates in one operating and reportable segment, and this segment is the only reporting unit. Operating segments are defined
as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker,
who is the Predecessor's CEO, in deciding how to allocate resources and assessing performance. The Predecessor's chief operating
decision maker allocates resources and assesses performance based upon financial information at the consolidated level.
majority of the revenues of the Predecessor are generated in U.S. dollars ("dollars"). In addition, a significant portion
of the Predecessor and its subsidiary costs are incurred in dollars. The Predecessor's management has determined that the dollar
is the primary currency of the economic environment in which the Predecessor and its subsidiary principally operate. Thus, the functional
and reporting currency of the Predecessor and its subsidiary is the dollar.
monetary accounts maintained in currencies other than the dollar are remeasured into dollars in accordance with ASC 830, "Foreign
Currency Matters." All transaction gains and losses from remeasurement of monetary balance sheet items are reflected in earnings
as finance income or expense, as appropriate.