Business Context and Reporting Period
This Form 8-K was filed by NanoVibronix, Inc. (not Envue Medical, Inc.) on February 22, 2019. The report details a material definitive agreement entered into on February 21, 2019, with Bespoke Growth Partners, Inc. to provide strategic consulting services.
Key Financial Metrics
The filing does not provide standard financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The only financial data disclosed relates to the specific transaction:
- Cash Payment: $50,000 paid to Bespoke upon signing.
- Equity Issuance (Initial): 275,000 shares of common stock issued upon signing.
- Equity Issuance (Contingent): Potential issuance of 375,000 additional shares over the term of the agreement (75,000 at 3 months, 200,000 at 7 months, 100,000 at 10 months).
Material Changes
The primary material change is the entry into a one-year consulting agreement. This agreement involves immediate cash outflow and equity dilution, with potential for further dilution based on the passage of time and non-termination of the contract. The agreement includes a blocker provision preventing Bespoke's beneficial ownership from exceeding 9.99% of outstanding shares.
Guidance, Outlook, and Risks
Management Commentary: The agreement is intended to advance the Company's business plan, including potential joint ventures, strategic alliances, and mergers and acquisitions.
Risks and Contingencies:
- Dilution Risk: Future share issuances are contingent on the agreement remaining in effect for specific periods.
- Ownership Cap: Issuance of shares is blocked if it causes Bespoke's ownership to exceed 9.99%.
- Termination: The Company may terminate the agreement with 30 days' notice, which would halt future equity issuances.
- Indemnification: The Company agreed to indemnify Bespoke against losses, except for acts of willful misconduct or gross negligence.
Investor Verification Checklist
- Verify the current share count to calculate the exact dilution impact of the 275,000 initial shares and potential future issuances.
- Confirm the current market price of the stock to assess the total value of the equity compensation package.
- Review the Company's cash position to ensure the $50,000 fee does not impact operational liquidity.
- Monitor future filings to track the vesting of the contingent shares at the 3, 7, and 10-month anniversaries.