10-KT: NIMS Reports Q4 Losses, Eyes Gravitics Merger for Space Pivot

Non-Invasive Monitoring Systems Inc. (NIMS) filed its transition report, revealing continued operating losses and a proposed merger with Gravitics Inc. to pivot into the space structures industry.

Summary

• NIMS is a shell company, having discontinued its original whole body periodic acceleration (WBPA) operations in May 2019.
• Reported a net loss of $49,000 for the five months ended December 31, 2025, an improvement from $101,000 in the same period of 2024.
• General and administrative (G&A) costs decreased to $21,000 for the five months ended December 31, 2025, from $77,000 in the prior year period, primarily due to reduced professional fees and insurance expense from insufficient capital.
• The cash balance was $6,000 at December 31, 2025, with negative working capital of approximately $978,000.
• The accumulated deficit reached $29.1 million and a shareholders deficit of $996 as of December 31, 2025.
• Entered a Merger Agreement with Gravitics Inc. on March 6, 2026, to acquire Gravitics, pivoting NIMS into designing and manufacturing large space structures.
• The merger is subject to several closing conditions, including Gravitics shareholder approval, NIMS shareholder approval for a Reverse Stock Split, FINRA approval, a Nasdaq uplisting, and a $40.0 million public offering.
• Promissory notes from related parties (Frost Gamma Investments Trust and Dr. Jane Hsiao) totaling $620,000 as of December 31, 2025, with an 11% interest rate, had their maturity dates extended from December 31, 2025, to June 30, 2026.
• Identified material weaknesses in internal controls over financial reporting due to insufficient personnel for segregation of duties and undocumented control procedures.
• The company does not have an independent audit or compensation committee, with only one independent director (who resigned in August 2025).

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a highly speculative situation. While the proposed merger offers a potential pivot into a high-growth industry, the company's current financial distress, significant governance issues, and reliance on related-party financing present substantial risks. The success of the merger and subsequent capital raise are highly uncertain.

Positives

• Net loss decreased to $49,000 for the five months ended December 31, 2025, from $101,000 in the prior year period, representing a $52,000 reduction.
• General and administrative costs significantly decreased by $56,000, from $77,000 to $21,000, primarily due to reduced professional fees and insurance expense.
• Entered into a Merger Agreement with Gravitics Inc. to pivot into the space structures industry, offering a potential new business direction for the shell company.
• Maturity dates for related party promissory notes totaling $620,000 were extended to June 30, 2026, providing short-term liquidity relief.

Negatives

• Continued history of operating losses and an accumulated deficit of $29.1 million as of December 31, 2025.
• Substantial doubt exists about the ability to continue as a going concern due to recurring losses and insufficient capital.
• Cash balance of only $6,000 and negative working capital of approximately $978,000 at December 31, 2025.
• Reliance on related party debt financing, with $620,000 in notes payable to Frost Gamma Investments Trust and Dr. Jane Hsiao as of December 31, 2025, and an additional $100,000 note in January 2026.
• Material weaknesses identified in internal controls over financial reporting, including insufficient segregation of duties and undocumented procedures.
• Lack of an independent audit or compensation committee, with only one independent director who resigned in August 2025, raising significant corporate governance concerns.
• Experienced delays in filing certain annual and periodic reports with the SEC in the past fiscal year.
• Common stock is a 'penny stock' trading on the OTC PINK, which may make it more difficult for investors to sell and adversely affect the market price.
• No anticipation of paying dividends on common stock in the foreseeable future.
• Shareholders may experience significant dilution from future equity issuances, especially if a $40.0 million public offering for the merger is consummated.

Risks

• Failure to meet customary closing conditions for the Gravitics merger, preventing its consummation.
• Inability to continue as a going concern without additional equity or debt financing due to a history of operating losses and an accumulated deficit.
• Additional funding may not be available on acceptable terms or at all, potentially leading to significant shareholder dilution if equity is issued.
• Recurrence of delays in filing annual and periodic reports with the SEC, which could negatively impact investor confidence and stock liquidity.
• Exposure to risks related to management's assessment of disclosure controls and procedures and internal controls over financial reporting, including identified material weaknesses.
• Shareholders must rely on a non-independent board (only one independent director resigned in August 2025) to perform audit and compensation committee functions.
• No anticipation of paying dividends on common stock in the foreseeable future.
• Common stock being a 'penny stock' may make it more difficult for investors to sell shares and adversely affect the market price.
• Stock price volatility and potential lack of an active, liquid trading market for common stock.
• Fluctuations in quarterly results of operations could cause the stock price to decline.
• Future issuance of additional shares of common stock and preferred stock could lead to dilution of ownership interests.

Future Outlook

The company expects that its existing funds will not be sufficient to support current operations over the next twelve months and will require additional capital. Plans include assessing potential mergers and acquisitions, with a specific Merger Agreement signed with Gravitics Inc. to pivot into the space structures business. This merger is contingent on several conditions, including shareholder approvals, a Nasdaq uplisting, and a firm commitment underwritten public offering of at least $40.0 million. The closing of the merger is expected on or before June 30, 2026, and the company intends to change its name and trading symbol post-merger, with a new Board designated by Gravitics.

Management Comments

• "We do not undertake any obligation to update forward-looking statements, except as required by applicable law."
• "Our plans include assessing potential mergers and acquisitions. We will need to raise additional capital."
• "The Company does not employ a sufficient number of individuals to maintain optimal segregation of duties."
• "The internal control procedures over the completeness and accuracy of the general ledger information and the risk assessment process are not formally documented and may not be designed and operate with a level of precision adequate to prevent or detect misstatements."
• "Notwithstanding the existence of these material weaknesses in the Company's internal control over financial reporting, the Company's management believes that the consolidated financial statements included in this Form 10-K fairly present in all material respects the Company's financial condition, results of operations and cash flows for the periods presented."

Industry Context

StockSavvy.ai notes that NIMS's transition from a defunct medical device company to a shell company seeking a merger is a common strategy for distressed public entities to provide a vehicle for private companies to go public. The proposed merger with Gravitics Inc., a company focused on large space structures, positions NIMS to enter the rapidly expanding space economy, a sector attracting significant investment and innovation. This pivot is a complete departure from its historical business and represents a high-risk, high-reward strategy to capitalize on a booming industry.

Comparison to Industry Standards

• StockSavvy.ai observes that NIMS, as a shell company with no current operations, cannot be directly compared to operational industry standards.
• The proposed merger with Gravitics Inc. would place the combined entity in the nascent but competitive space structures industry, where key players include established aerospace contractors like Lockheed Martin and Boeing, as well as newer, agile companies such as Axiom Space (developing commercial space stations) and Nanoracks (specializing in in-space services and platforms).
• Gravitics' focus on 'orbital carriers, cargo logistics spacecraft, and space station modules' suggests it aims to compete in areas where companies like SpaceX (Starship development for cargo/crew to orbit) and Blue Origin (developing orbital infrastructure) are also active.
• The requirement for a $40.0 million public offering for the merger indicates a need for substantial capital, which is typical for ambitious space ventures, but also highlights the significant financial hurdle for a company of Gravitics' presumed stage.

Management Changes

Corporate Governance

Related Party Transactions

• Occupies principal corporate office space from Frost Real Estate Holdings, LLC, a company controlled by Dr. Phillip Frost (director and beneficial shareholder), with rent reduced to $0 per month since February 2016.
• Outstanding notes payable to Frost Gamma Investments Trust (controlled by Dr. Phillip Frost) totaling $470,000 as of December 31, 2025, accruing interest at 11% per annum, with maturity extended to June 30, 2026.
• Outstanding notes payable to Dr. Jane Hsiao (Chairman, Interim CEO, and beneficial shareholder) totaling $150,000 as of December 31, 2025, accruing interest at 11% per annum, with maturity extended to June 30, 2026.
• Entered into an additional promissory note with Frost Gamma Investments Trust for $100,000 on January 2, 2026, at 11% interest, due June 30, 2026.
• The company is under common control with multiple entities, including OPKO Health, Inc., which has a 1% ownership interest and accounts for it as an equity method investment.
• Dr. Frost is a director and over 5% shareholder of Cocrystal Pharma, Inc., where NIMS's CFO also serves as CFO and Co-CEO.

Stakeholder Impact

• Shareholders face significant dilution risk from future equity issuances for capital raising and the merger. Current investment is in a shell company with substantial doubt about its ability to continue as a going concern. The proposed merger offers a potential pivot to a new industry but is highly speculative and contingent on many factors.
• Employees are minimally impacted as the company has discontinued operations and maintains limited administration. Future employment would depend on the success of the Gravitics merger.
• Related party creditors (Frost Gamma and Dr. Hsiao) have extended maturity dates on promissory notes, indicating continued support but also prolonged exposure to the company's financial distress.
• Customers and suppliers are not applicable as the company has no current operations or inventory.

Next Steps

• Gravitics Inc. must obtain shareholder approval for the merger.
• NIMS shareholders must approve a Reverse Stock Split.
• FINRA approval for the Reverse Stock Split is required.
• Uplisting of NIMS common stock to The Nasdaq Stock Market or another national securities exchange must be approved.
• A firm commitment underwritten public offering of at least $40.0 million must be consummated.
• Conversion of certain promissory notes payable on June 30, 2026, simultaneously with the Uplisting and Offering.
• Gravitics must deliver its audited financial statements.
• Receipt of certain third-party consents for the merger.
• NIMS plans to change its business focus to that of Gravitics.
• NIMS intends to change its name and trading symbol post-merger.
• New directors designated by Gravitics will be appointed to the Board, with Colin Doughan as Chairman, and current directors will resign.
• The closing of the merger is expected on or before June 30, 2026.
• The company will need to raise additional capital to continue as a going concern.

Key Dates

Recommendation

A seasoned investor or institution would likely recommend 'Sell' or 'Strong Sell' for NIMS based on this filing. The company is a shell with a history of operating losses, an accumulated deficit, and critically low cash, raising substantial doubt about its ability to continue as a going concern. While the proposed merger with Gravitics Inc. offers a potential pivot into the space industry, it is highly speculative and contingent on numerous significant conditions, including a large capital raise and uplisting, which are far from guaranteed. The identified material weaknesses in internal controls and severe corporate governance deficiencies (lack of independent directors/committees) further compound the risk. The stock is a penny stock, limiting liquidity. The current financial state and the high uncertainty of the future business direction make it a very high-risk investment with a poor risk-reward profile for most investors.

Keywords

Shell company, Gravitics, Merger Agreement, Space structures, Orbital carriers, Cargo logistics, Space station modules, Going concern, Operating losses, Accumulated deficit, Related party debt, Internal controls, Corporate governance, Penny stock, Dilution, SEC filing delays, NIMU, Non-Invasive Monitoring Systems