Nyxoah(US:NYXH)2025-03-20 20:05PART I Key Information This section outlines the principal risks associated with the company's business, financial position, product development, commercialization, and regulatory compliance, including a history of losses, dependence on the Genio system's success, regulatory hurdles, and identified material weaknesses in internal financial controls Risk Factors This subsection details the company's limited operating history, reliance on the Genio system, regulatory challenges, and internal control weaknesses - The company has a limited operating history, has incurred losses since inception, and its future performance is highly dependent on the commercial acceptance of its sole product, the Genio system29 - Nyxoah has identified material weaknesses in its internal control over financial reporting for the year ended December 31, 2024, which could lead to failure in meeting reporting obligations or result in material misstatements31288 - The company faces significant regulatory risks, including the need to obtain and maintain marketing authorizations in key markets like the United States, and is subject to extensive government oversight2931 Information on the Company Nyxoah is a medical technology company focused on developing and commercializing the Genio system, an innovative hypoglossal neurostimulation (HGNS) therapy for Obstructive Sleep Apnea (OSA), pursuing FDA approval in the U.S. and expanding its commercial infrastructure in select European markets History and Development of the Company This section traces Nyxoah's corporate history from its incorporation to its public listings and outlines its capital expenditure focus - Nyxoah SA was incorporated in Belgium on July 15, 2009, becoming publicly listed on Euronext Brussels in September 2020 and on The Nasdaq Global Market in July 2021298 Capital Expenditures (in millions) | Year | Capital Expenditure (€) | | :--- | :--- | | 2024 | 5.9 million | | 2023 | 10.5 million | | 2022 | 16.3 million | - Principal capital expenditures in 2023 and 2024 were focused on capitalized development expenses, establishing a U.S. production line, and investments in new clean rooms and laboratory equipment301302 Business Overview This section details Nyxoah's flagship product, the Genio system, its market differentiation, and progress in clinical trials and market authorization - Nyxoah's lead product is the Genio system, a CE-Marked, minimally invasive hypoglossal neurostimulation (HGNS) therapy for moderate to severe Obstructive Sleep Apnea (OSA)303 - The DREAM pivotal trial, designed to support U.S. marketing authorization, met its primary endpoints, with an announcement made on March 19, 2024, and the company expects to be commercially available in the U.S. in the first quarter of 2025303310318 Estimated Annual Total Addressable Market (TAM) | Region | Target Patients | Estimated Annual Market Opportunity | | :--- | :--- | :--- | | Europe | 515,000 | ~$10 billion | | United States | 510,000 | ~$10 billion | - The Genio system is differentiated by its battery-free, leadless, single-incision implant design that provides bilateral stimulation, potentially treating a broader patient population, including those with Complete Concentric Collapse (CCC)306308315 Organizational Structure This section outlines the company's corporate structure, including its significant subsidiaries and their respective activities Significant Subsidiaries | Name | Country | Activity | Holding | | :--- | :--- | :--- | :--- | | Nyxoah Ltd | Israel | Medical Technology R&D | 100% | | Nyxoah Pty Ltd | Australia | Medical Technology R&D | 100% | | Nyxoah, Inc. | United States | Medical Technology R&D; pre-commercialization | 100% | | Nyxoah GmbH | Germany | Commercialization of medical devices | 100% | Property, Plant and Equipment This section describes the company's property arrangements, noting that all facilities are leased across various locations - The company leases all of its properties, including its corporate headquarters in Mont-Saint-Guibert, Belgium, manufacturing facilities in Milmort, Belgium, R&D facilities in Tel Aviv, Israel, and offices in Summit, New Jersey, USA530531532533534 Operating and Financial Review and Prospects Nyxoah's financial performance reflects its stage as a growing medical technology company, with revenue increasing to €4.5 million in 2024, but net losses widening to €59.2 million due to significant investments in R&D, clinical trials, and commercial infrastructure, with liquidity supported by recent capital raises expected to fund operations through mid-2026 Operating Results This section analyzes the company's financial performance, highlighting revenue growth and increased operating losses due to strategic investments - The company's financial strategy is focused on obtaining regulatory approval in new markets (especially the U.S.), growing its commercial organization, investing in clinical support and product innovation, and securing third-party payor reimbursement540542543545546 Comparison of Operations (Year Ended Dec 31) | (In Thousands €) | 2024 | 2023 | YoY Change | YoY % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | 4,521 | 4,348 | 173 | 4% | | Gross Profit | 2,969 | 2,692 | 277 | 10% | | R&D Expenses | (34,325) | (26,651) | (7,674) | 29% | | SG&A Expenses | (28,461) | (21,687) | (6,774) | 31% | | Operating Loss | (58,809) | (45,102) | (13,707) | 30% | | Loss for the period | (59,236) | (43,212) | (16,024) | 37% | - Revenue for 2024 increased by 4% to €4.5 million, driven by growing commercialization of the Genio system in Europe, including expansion into Italy and the UK561 - The operating loss widened by 30% in 2024, primarily due to a €7.6 million (29%) increase in R&D expenses and a €6.8 million (31%) increase in SG&A expenses to support clinical trials, product development, and commercial scale-up564571576 Liquidity and Capital Resources This section details the company's cash position, capital raises, and projected liquidity runway - As of December 31, 2024, the company had cash and cash equivalents of €34.2 million and financial assets of €51.4 million600 - The company believes its current cash position is sufficient to fund operations for at least 12 months from the report date and through the middle of 2026, supported by capital raises totaling €110.6 million in 2024550600612 Cash Flow Summary (Year Ended Dec 31, in thousands €) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | (49,226) | (44,778) | | Net cash from (used in) investing activities | (16,325) | 32,011 | | Net cash from financing activities | 77,439 | 16,858 | Directors, Senior Management and Employees This section details the composition of the company's leadership and workforce, providing biographies for executive officers and non-executive directors, outlining compensation structure, and describing board practices and committee compositions, with a significant increase in personnel to support R&D and commercial activities as of year-end 2024 Directors and Senior Management This section introduces the executive team and non-executive board members, highlighting key leadership changes and their expertise - The executive team is led by CEO Olivier Taelman, with key additions and changes in 2024 including John Landry as CFO (replacing Loic Moreau) and Scott Holstine as CCO618619620622 - The non-executive board is chaired by founder Robert Taub (represented by Robelga SRL) and includes members with extensive experience in life sciences, medical devices, and finance from companies like HighCape Capital, Cochlear, and BASF618623624626 Compensation This section details the compensation structure for the CEO, executive management, and non-executive directors, including salaries, bonuses, and equity awards CEO Compensation (2024) | Component | Amount (€) | | :--- | :--- | | Base salary | 424,283 | | Performance bonus | 298,029 | | Pension contributions | 19,860 | | Fringe benefits | 18,381 | - In 2024, CEO Olivier Taelman was granted 420,000 warrants, while other executive management team members received an aggregate base salary of €693,546 and performance bonuses of €348,138650651 - Non-executive directors receive an annual fixed fee (€45,000 for directors, €82,000 for the Chairman) plus additional fees for committee service, and in 2024, all non-executive directors were also granted 14,806 Restricted Share Units (RSUs) each634636 Board Practices This section describes the company's governance structure, board committees, and deviations from Nasdaq listing rules as a foreign private issuer - The company has a one-tier governance structure and has established four board committees: Audit, Remuneration, Nomination, and Science & Technology670679 - As a foreign private issuer, Nyxoah follows certain Belgian corporate governance practices in lieu of Nasdaq requirements, such as not having a majority of independent directors on the full board and different composition rules for its Remuneration and Nomination committees666882 - The company deviates from the Belgian Corporate Governance Code by granting share-based incentives (warrants and RSUs) to non-executive directors, arguing it is necessary to attract top talent in the life sciences industry and align their interests with shareholders698 Employees This section provides an overview of the company's workforce size and its growth across different functions Full-Time Equivalents (FTEs) by Function | Function | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Sales, General & Administration | 56.5 | 40.4 | 34.9 | | Research & Development | 127.1 | 106.4 | 102.6 | | Total | 183.6 | 146.8 | 137.5 | - The company's workforce grew to 183.6 FTEs in 2024 from 146.8 in 2023, with significant growth in both R&D and SG&A functions to support clinical trials and commercial expansion701 Major Shareholders and Related Party Transactions This section identifies the company's major shareholders, with significant stakes held by Cochlear Investments Pty Ltd (15.1%), founder Robert Taub (10.7%), Vestal Point Capital, LP (8.0%), and entities affiliated with Gilde Healthcare (7.8%), and details related party transactions, including compensation for directors and executives Major Shareholders This section lists the company's principal shareholders and their respective ownership percentages Beneficial Ownership (as of March 1, 2025) | Shareholder | Ownership % | | :--- | :--- | | Cochlear Investments Pty Ltd | 15.1% | | Robert Taub | 10.7% | | Vestal Point Capital, LP | 8.0% | | TOGETHER Partnership | 7.9% | | Entities affiliated with Gilde Healthcare | 7.8% | | Resmed Inc. | 4.6% | | FMR LLC | 4.5% | | Jürgen Hambrecht | 3.7% | - As of March 1, 2025, all current directors and executive management as a group beneficially own 17.0% of the company's ordinary shares710 Related Party Transactions This section outlines transactions with related parties, including executive compensation and board member participation in offerings - CEO Olivier Taelman performs his duties under a service agreement and, as of August 2024, also as an employee of Nyxoah Inc. following a temporary relocation to the U.S717718 - Board Chairman Robert Taub participated in the May 2024 underwritten public offering, an action approved by the board under the related parties procedure719 Financial Information This section confirms that the detailed consolidated financial statements are provided elsewhere in the report, states that the company has never paid dividends and does not anticipate doing so, intending to retain all earnings for business operation and expansion, and notes no significant changes have occurred since the balance sheet date of December 31, 2024 - The company has never declared or paid cash dividends and does not intend to in the foreseeable future, retaining all funds for business expansion723 - Dividend distributions are subject to Belgian law, requiring sufficient distributable profits and the allocation of 5% of annual net profit to a legal reserve until it reaches 10% of share capital724725 - There have been no significant changes to the company's financial condition since December 31, 2024726 Additional Information This section covers key corporate and tax information, confirming no material contracts outside the ordinary course of business and no Belgian exchange controls limiting payments to U.S. residents, and providing a detailed summary of material U.S. and Belgian tax considerations for shareholders, including potential PFIC classification and the 30% Belgian withholding tax on dividends Taxation This section provides an overview of U.S. and Belgian tax implications for shareholders, including PFIC status and dividend withholding tax - For U.S. holders, the company does not expect to be classified as a Passive Foreign Investment Company (PFIC) for the current taxable year, but this is an annual determination and cannot be assured256754 - Dividends paid by the company are generally subject to a 30% Belgian withholding tax, which may be reduced under applicable tax treaties, such as the U.S.-Belgium Tax Treaty768795 - A Belgian tax on stock exchange transactions of 0.35% (capped at €1,600 per transaction) applies to the sale and purchase of shares on the secondary market if carried out through a Belgian intermediary or by a Belgian investor811 Quantitative and Qualitative Disclosures About Market Risk The company's primary market risks are foreign exchange risk and credit risk, with credit risk considered low, and foreign exchange risk stemming from expenses denominated in USD, NIS, and AUD, where a 5% strengthening of the USD against the Euro in 2024 would have increased the net loss by €87,000, and the company does not currently hedge its currency risk exposure - The company's main market risks are credit risk and foreign exchange risk, with credit risk considered minimal as it arises from reputable institutions and governments846847 - Foreign exchange risk is primarily from expenses in U.S. dollars (USD), Israeli new shekel (NIS), and Australian dollars (AUD), and the company does not generally hedge this exposure848850 Foreign Exchange Risk Sensitivity (2024) | Currency Change vs. Euro | Impact on Net Loss (€) | | :--- | :--- | | +5% USD Strength | €87,000 higher | | -5% USD Strength | €79,000 lower | | +5% NIS Strength | €35,000 higher | | -5% NIS Strength | €32,000 lower | | +5% AUD Strength | €22,000 higher | | -5% AUD Strength | €20,000 lower | PART II Controls and Procedures Management concluded that as of December 31, 2024, the company's disclosure controls and procedures and its internal control over financial reporting were not effective due to continued material weaknesses related to insufficient accounting personnel and inadequate documentation of control procedures, with remediation efforts underway but not complete by year-end - Management concluded that disclosure controls and procedures were not effective as of December 31, 2024, due to ongoing material weaknesses in internal control over financial reporting862 - Material weaknesses identified relate to: 1) Insufficient accounting and supervisory personnel with the appropriate technical experience and training 2) Insufficient documented evidence of control procedures, including IT General Controls, preventing validation of their operating effectiveness865866 - Remediation actions are in progress, including formalizing a risk assessment, designing an internal control framework within a GRC tool, and engaging an external advisor to validate design effectiveness, however, these efforts had not fully resolved the weaknesses by year-end866867871 - Despite the material weaknesses, management believes the consolidated financial statements for the period are fairly presented in all material respects869 Other Information This section covers various governance and compliance topics, identifying Kevin Rakin as the Audit Committee Financial Expert, confirming the adoption of a Code of Ethics, detailing principal accountant fees to EY totaling €758,000 in 2024, outlining the company's adherence to Belgian governance practices as a foreign private issuer, and describing its board-overseen cybersecurity risk management strategy, with no material cybersecurity incidents reported Principal Accountant Fees and Services This section details the fees paid to the principal accountant, EY, for audit and tax services Accountant Fees (in thousands €) | Fee Type | 2024 | 2023 | | :--- | :--- | :--- | | Audit Fees | 748 | 526 | | Tax Fees | 10 | 20 | | Total | 758 | 546 | - All services provided by the principal accountant, EY, were pre-approved by the Audit Committee877 Corporate Governance This section explains how the company, as a foreign private issuer, aligns its corporate governance with Belgian practices rather than certain Nasdaq rules - As a foreign private issuer, the company follows Belgian corporate governance practices in lieu of certain Nasdaq listing rules, including those related to shareholder meeting quorum, compensation/nomination committee composition, and the requirement for a majority of independent directors on the board881882 Cybersecurity This section outlines the company's cybersecurity risk management strategy, board oversight, and confirms no material incidents - The company's cybersecurity program is based on recognized frameworks like NIST and is overseen by the Board of Directors, with day-to-day management led by the Chief Financial Officer885891893 - The company's strategy includes regular monitoring, vulnerability assessments, employee training, and an incident response plan to manage cybersecurity threats886887 - The company has not experienced any material cybersecurity incidents, and related expenses have been immaterial890 PART III Financial Statements The consolidated financial statements for Nyxoah SA cover the three years ended December 31, 2024, showing total assets grew to €158.4 million in 2024 from €124.2 million in 2023, primarily funded by increased equity from capital raises, with a net loss of €59.2 million for 2024, widening from a €43.2 million loss in 2023 due to increased R&D and SG&A spending, and significant cash used in operations (€49.2 million) and investing activities (€16.3 million) offset by €77.4 million from financing activities Consolidated Balance Sheet Highlights (in thousands €) | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Assets | 158,406 | 124,157 | | Cash and cash equivalents | 34,186 | 21,610 | | Financial assets | 51,369 | 36,138 | | Intangible assets | 50,381 | 46,608 | | Total Liabilities | 45,152 | 26,135 | | Total Equity | 113,254 | 98,022 | Consolidated Statement of Loss Highlights (in thousands €) | Account | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Revenue | 4,521 | 4,348 | 3,084 | | Gross profit | 2,969 | 2,692 | 1,934 | | Operating loss | (58,809) | (45,102) | (32,499) | | Loss for the period | (59,236) | (43,212) | (31,225) | Consolidated Statement of Cash Flow Highlights (in thousands €) | Account | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (49,226) | (44,778) | (28,756) | | Net cash from / (used in) investing activities | (16,325) | 32,011 | (89,946) | | Net cash from financing activities | 77,439 | 16,858 | (983) | Exhibits This section lists all exhibits filed as part of the annual report, including the company's Articles of Association, material contracts such as the Cochlear Collaboration Agreement and the EIB Loan Facility Agreement, various warrant plans, certifications by the CEO and CFO, and the consent of the independent registered public accounting firm - Key exhibits filed include the Articles of Association, Description of Securities, various material contracts (Cochlear, Man & Science, EIB), and multiple warrant plans (2020, 2021, 2022, 2024)898900 - Certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Sarbanes-Oxley Act Sections 302 and 906 are included as exhibits900