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Item 1.01
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Entry into a Material Definitive Agreement
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On March 23, 2017, NanoVibronix, Inc. (the “Company”)
completed a bridge financing, pursuant to which the Company received from an accredited investor $100,000 of loan and issued to
the investor a convertible promissory note (the “Note”) in an aggregate principal amount of $100,000 and a seven-year
warrant (the “Warrant”) to purchase an aggregate of 40,000 shares of common stock (the “Warrant Shares”)
at an exercise price of $5.90 per share (the “Exercise Price”).
The principal amount and all accrued but unpaid interest on
the Note will become due and payable on the date (the “Maturity Date”) that is the earlier of the (i) 5-year anniversary
of the date of issuance, or (ii) the date the Company completes an equity financing pursuant to which the Company issues and sells
shares of capital stock resulting in aggregate proceeds of at least $2,000,000 (a “Qualified Financing”). The Note
bears interest at a rate of 6% per annum, payable on the Maturity Date. To the extent not previously converted, on the Maturity
Date, the investor will receive, at the option of the investor, either (a) cash equal to the original principal amount of the Note
and interest then accrued and unpaid thereon, or (b) shares of common stock or Series C Convertible Preferred Stock of the Company,
at a price per share equal to the lesser of: (x) 80% of the amount equal to the quotient obtained by dividing (i) the estimated
value of the Company as of the Maturity Date, as determined in good faith by the Company’s board of directors, by (ii) the
aggregate number of outstanding shares of the Company’s common stock, as of the Maturity Date on a fully diluted basis, and
(y) $5.90 per share, as such amount may be adjusted for any stock split, stock dividend, reclassification or similar events affecting
the capital stock of the Company. Upon consummation of a Qualified Financing, the investor may elect to have the outstanding principal
and accrued but unpaid interest thereon converted into shares of the same class and series of equity securities sold in such Qualified
Financing, provided that the investor may elect to receive shares of Series C Convertible Preferred Stock instead of shares of
common stock, to the extent that common stock are issued in such Qualified Financing, at a price per share equal to the lesser
of: (a) 80% of the price per share at which such securities are sold in such Qualified Financing and (b) $5.90 per share, as such
amount may be adjusted for any stock split, stock dividend, reclassification or similar events affecting the Company’s capital
stock. If there is a change of control and the Note has not been previously converted otherwise, the investor may, at its option,
(a) receive an amount in cash equal to the sum of the original principal amount of the Note and interest then accrued and unpaid
thereon, or (b) convert the Note and all accrued and unpaid interest thereon into shares of common stock or Series C Convertible
Preferred Stock of the Company immediately prior to the closing of such change of control transaction at a price per share equal
to the lesser of: (x) 80% of the amount equal to the quotient obtained by dividing (i) the estimated value of the Company
implied by the exchange ratio set forth in the agreement governing such change of control transaction, as determined in good faith
by the Company’s board of directors, by (ii) the aggregate number of outstanding shares of the Company’s common
stock, immediately prior to such change of control on a fully diluted basis, and (y) $5.90 per share, as such amount may be adjusted
for any stock split, stock dividend, reclassification or similar events affecting the Company’s capital stock.
The Warrant is immediately
exercisable. The Warrant may be exercised on a cashless basis if there is no effective registration statement registering the resale
of the Warrant Shares after the six month anniversary of the issuance date of the Warrant. The Exercise Price is adjustable
for certain events, such as distribution of stock dividends, stock splits or fundamental transactions including mergers or sales
of assets. A holder of the Warrant will not have the right to exercise any portion of the Warrant if the holder (together with
its affiliates) would beneficially own in excess of 9.99% of the number of shares of the Company’s common stock outstanding
immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the
Warrant. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99%, provided
that any increase in such percentage shall not be effective until 61 days after such notice to the Company.
The foregoing descriptions of the Note and
the Warrant are qualified in their entirety by the full text of the form of each document which are filed as Exhibits 10.1 and
10.2 to this Current Report on Form 8-K and incorporated in this Item 1.01 by reference.