NIMU 10-K & 10-Q changes, risk factors and insider trading

Currently, we do not have an independent audit committee. Our one independent director (who resigned August 28, 2025) along with the other Directors functions as our audit committee and is comprised of four directors, threenone of whom are not considered to be “independent” in accordance with the requirements of Rule 10A-3 under the Securities Exchange Act of 1934. An independent audit committee plays a crucial role in the corporate governance process, assessment of the Company’s processes relating to its risks and control environment, oversight of financial reporting, and evaluation of internal and independent audit processes. The lack of an independent audit committee may prevent the Board of Directors from being independent in its judgments and its ability to pursue the committee’s responsibilities, this could compromise management of our business.

In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present shareholders. We are currently authorized to issue an aggregate of 401,000,000 shares of capital stock, consisting of 400,000,000 shares of common stock and 1,000,000 designated shares of preferred stock with preferences and rights to be determined by our Board of Directors. As of OctoberJanuary 25,30, 2024,2026, there were outstanding 154,810,655 shares of our common stock, 100 shares of our Series B preferred stock and there were no outstanding options to purchase shares of our common stock. We may also issue additional shares of our common stock or other securities that are convertible into or exercisable for common stock in connection with hiring or retaining employees, future acquisitions, future sales of our securities for capital raising purposes, or for other business purposes. The future issuance of any such additional shares of our common stock may create downward pressure on the trading price of the common stock. We may issue additional shares, warrants or other convertible securities in the future in conjunction with capital raising efforts, including at a price (or exercise price) below the price at which shares of our common stock are then currently traded on the OTC PINK.

We previously were engaged in the development, manufacture and marketing of non-invasive, whole body periodic acceleration (“WBPA”) therapeutic platforms, which are motorized platforms that move a subject repetitively head to foot. The Company discontinued operations in May 2019,2019; accordingly, certain assets, liabilities and expenses are classified as discontinued operations.

General and administrative costs and expenses. General and administrative (“G&A”) costs and expenses was $177,000$160,000 for the year ended July 31, 2024,2025, as compared to $169,000$177,000 for the year ended July 31, 2023.2024. This $8,000$17,000 net increasedecrease was primarily associated with professional fees incurred in the year ended July 31, 2024.

An accounts payable adjustment resulting in a reduction of $118,000 was made in the year ended July 31, 2024 (see Note 9).2024.

Total operating costs and expenses. Total operating costs and expenses from continuing operations was $160,000 for the year ended July 31, 2025, as compared to $59,000 for the year ended July 31, 2024, as compared to $169,000 for the year ended July 31, 2023.2024. This $110,000$101,000 decreaseincrease was primarily due to a $118,000 accounts payable adjustment (see Note 9) offset by a $8,000$17,000 increasedecrease in professional fees.

Net loss. Net loss was $222,000 for the year ended July 31, 2025, as compared to $113,000 for the year ended July 31, 2024, as compared to $199,000 for the year ended July 31, 2023.2024. This $86,000$109,000 decreaseincrease was primarily attributable to a $118,000 accounts payable adjustment (seein Noteprior 9)fiscal offsetyear bythat was recognized as a $32,000reduction in increaseoperating isexpenses primarily attributable to interest expense and professional fees..

Net cash used in operating activities increased to $182,000$117,000 for the year ended July 31, 20242025 as compared to $158,000$182,000 for the year ended July 31, 2023.2024. This $24,000$65,000 increasedecrease was principally due to increasesdecreases in cash used for accounts payable and accrued expenses.

On August 15, 2023, wethe Company entered into a Promissorynew Notepromissory note agreement with Frost Gamma in the principal amount of $200,000$200,000, withwhich also Frostaccrues Gammainterest Investments Trust (the “2023 Frost Gamma Note”),at a trust controlled by Dr. Phillip Frost, a current director, which beneficially owns in excessrate of 10% of NIMS’ common stock. The interest rate payable by NIMS on the 2023 Frost Gamma Note is 11% per annum, payable on the maturity date ofJune July30, 31,2026, as amended on January 5, 2026. This promissory 2025 (the “Maturity Date”). The 2023 Frost Gamma Notenote may also be prepaid in advance of the Maturitymaturity Datedate without penalty.

On September 16,25, 2022,2024, weOctober 23, 2024, January 23, 2025 and August 27, 2025, the Company entered into twonew Promissorypromissory Notesnote agreements with Frost Gamma in the aggregate principal amount of $75,000$120,000, eachwhich withalso Frostaccrues Gammainterest Investments Trust (the “2022 Frost Gamma Note),at a trust controlled by Dr. Phillip Frost, a current director, and with Jane Hsiao, Ph.D., the Company’s Chairman and Interim CEO (the “2022 Hsiao Note”), both which beneficially own in excessrate of 10% of NIMS’ common stock. The interest rate payable by NIMS on the 2022 Frost Gamma Note and 2022 Hsiao Note is 11% per annum, payable on the Maturitymaturity date Dateon ofJune July30, 31, 2025,2026, as amended on AugustJanuary 15,5, 2023.2026. The 2022promissory Frost Gamma Note and 2022 Hsiao Notenotes may also be prepaid in advance of the Maturitymaturity Datedate without penalty.

On January 5, 2026, the Company and each of Dr. Frost and Dr. Hsiao entered into amendments for each of the outstanding promissory to extend the maturity date from December 31, 2025 to June 30, 2026 Our plans include assessing potential mergers and acquisitions. We will need to raise additional capital. There can be no assurance that we will be able to raise additional capital on terms acceptable to us or at all.

This Interim Report on Form 10-Q contains, in addition to historical information, certain forward-looking statements regarding Non-Invasive Monitoring Systems, Inc. (the “Company” or “NIMS,” also referred to as “us”, “we” or “our”). These forward-looking statements represent our expectations or beliefs concerning the Company’s performance, financial condition, business strategies, and other information and that involve substantial risks and uncertainties. For this purpose, any statements contained in this Report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. The Company’s actual results, results of operations, some of which are beyond the Company’s control, could differ materially from the activities and results implied by the forward-looking forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to the Company’s: history of operating losses and accumulated deficit; need for additional financing; dependence on management; risks related to proprietary rights; other factors described herein as well as the factors contained in “Item 1A –- Risk Factors” of our AnnualTransition Report on Form Form 10-KT for the period ended December 31, 2025. We do not undertake any obligation to update forward-looking statements, except as required required by applicable law. These forward-looking statements are only predictions and reflect our views as of the date they are made with respect to future events and financial performance.

Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to income taxes. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. A more detailed discussion on the application of these and other accounting policies policies can be found in Note 2 in the Notes to the Consolidated Financial Statements set forth in Item 81 of the Annualthis Report on Form 10-KT. 10-Q. While we believe that the factors we evaluate provide us with a meaningful basis for establishing and applying sound accounting policies, we cannot guarantee that the results will always be accurate. Since the determination of these estimates requires the exercise of judgment, actual results could differ from such estimates.

We hadhave discontinued operations in May 2019. The Company is assessing potential mergers, acquisitionsacquisitions, and strategic collaborations.

Three and six months ended MarchJune 31,30, 2026 Comparedcompared to Threethree and six months Endedended MarchJune 31,30, 2025

General and administrative costs and expenses. General and administrative (“G&A”) costs and expenses were $144,000$261,000 and $404,000 for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to $23,000$26,000 and $49,000 for the three and six months ended June 30, 2025, respectively. The $355,000 increase for the six months ended MarchJune 31,30, 2025. The $121,000 increase2026, was primarily due to professional fees associated with the planned Merger with Gravitics.

Interest expense. Net interest expense was $19,000$23,000 and $43,000 for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to $16,000 and $32,000 for the three and six months ended March 31,June 30, 2025. The $3,000 increase to interest expense is duerelated to the related party Promissory Notes described in Note 6 to the accompanying unaudited condensed consolidated financial statements.

Net loss. Net loss was $163,000$284,000 and $447,000 for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to $39,000$42,000 and $81,000 for the three and six months ended MarchJune 31,30, 2025.2025, Thisrespectively. $124,000 The $242,000 and $366,000 increase isfor the three and six months ended June 30, 2026, respectively, was primarily attributabledue to professionalincreased feesG&A plannedthat Mergerwas withpartially Graviticsoffset andby increased interest expense resultingon related fromparty promissory notes.notes payable.

Going Concern. The Company’s condensed consolidated financial statements have been prepared and presented on a basis assuming it will continue as a going concern. As reflected in the accompanying condensed consolidated financial statements, the Company had net losses of approximately $163,000$447,000 and $81,000 for the threesix months ended MarchJune 31, 30, 2026 and 2025, respectively, and has experienced continuous cash outflows from operating activities. The Company also has an accumulated deficit of approximately $29,565,000 as of June 30, 2026. The Company had approximately $160,000 of cash and a total shareholders’ deficit of $1,159,000 as$1,443,000 ofat MarchJune 31,30, 2026. TheThese Company had $24,000 of cash at March 31, 2026 and negative working capital of approximately $1,159,000. Thesematters matters raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s operations have been primarily financed through private sales of its equity securities and advances under promissory notes. At March 31,June 30, 2026, we had approximately $24,000$160,000 of cash and negativeaccumulated working capitaldeficit of approximately $1,159,000.$29,565,000. We believe that the cash on hand at MarchJune 31,30, 2026 is not sufficient to meet our anticipated cash requirements for the next 12 months. WeNo areassurance currentlycan be exploring promissorygiven notesthat andsuch aadditional plannedfinancing Merger.will be available on acceptable terms or at all.

Net cash used in operating activities was $82,000$336,000 and $24,000$48,000 for threesix months ended MarchJune 31,30, 2026 and 2025, respectively. This $58,000$288,000 increase increase in cash used in operating was primarily due to increases in professional fees plannedfor Mergersix withmonths Graviticsended asJune noted30, above in management’s discussion and analysis of the results of operations.2026.

Net cash provided by financing activities was $100,000$490,000 and $40,000 for threesix months ended MarchJune 31,30, 2026 and 2025, respectively, aswas aprimarily due result ofto the proceeds from related party Promissory Notes described in Note 6 to the accompanying unaudited condensed consolidated financial statements.