Nyxoah(NYXH) - 2025 Q2 - Quarterly Report

Business Update The company provides updates on clinical trials for the Genio® system and its European commercialization progress Clinical Update The company successfully completed the DREAM IDE pivotal study, receiving FDA marketing approval for the Genio® system, and achieved primary endpoints in the BETTER SLEEP trial - The DREAM study met its primary endpoints with an Apnea-Hypopnea Index (AHI) responder rate of 63.5% (p=0.002) and an Oxygen Desaturation Index (ODI) responder rate of 71.3% (p<0.001)[8] - The study demonstrated a median 12-month AHI reduction of 70.8%[8] - On August 8, 2025, the company received FDA marketing approval for its Genio® system, enabling commercial launch in the United States[9] - The BETTER SLEEP trial achieved its primary endpoint in both CCC and non-CCC patient cohorts, with an overall statistically significant 11-point reduction in AHI4 (p<0.001)[12] - Data from the BETTER SLEEP study was used to expand the company's CE mark for the Genio® system to treat patients demonstrating CCC at the soft palate level[16] - The FDA granted Breakthrough Device Designation for the Genio® system in September 2021 to shorten the approval path for treating CCC patients in the U.S., and the IDE application for the ACCCESS study was approved in July 2022[17] European Commercialization The company generated 2.4 million EUR in H1 2025 from European commercialization, expanding into new markets like the UK and Middle East Revenue from European Commercialization | Period | Revenue (million EUR) | | :----- | :-------------------- | | Q2 2025 | 1.3 | | H1 2025 | 2.4 | - The company's commercial strategy focuses on creating a Center of Excellence ecosystem with high clinical expertise[20] - Nyxoah entered the SSDP with the NHS in the UK in Q4 2024 and initiated commercialization in the Middle East region (Dubai, Kuwait, Abu Dhabi) in Q1 2025 and Q2 2025[20] Financial Highlights The company experienced revenue growth but a significant increase in operating expenses, leading to a larger net loss and reduced cash position Key Financial Performance For the first half of 2025, Nyxoah experienced revenue growth but also a significant increase in operating expenses, leading to a larger net loss and reduced cash position Key Financial Highlights (Six Months Ended June 30) | Metric | H1 2025 (million EUR) | H1 2024 (million EUR) | Change (YoY) | | :------------------------------------ | :-------------------- | :-------------------- | :----------- | | Revenue | 2.4 | 2.0 | +0.4 (+20%) | | Cost of goods sold | 0.9 | 0.7 | +0.2 (+28.6%) | | Selling, general and administrative expenses | 23.1 | 12.4 | +10.7 (+86.7%) | | Research and development expenses (before capitalization) | 20.6 | 18.0 | +2.6 (+14.7%) | | Net financial result | (2.1) | 1.0 | -3.1 | | Net loss | (43.0) | (25.0) | -18.0 | | Cash and cash equivalents and financial assets (as of June 30/Dec 31) | 43.0 (June 30, 2025) | 85.6 (Dec 31, 2024) | -42.6 | - The increase in Selling, General and Administrative expenses was primarily due to costs supporting the commercialization of the Genio® system and scale-up preparations for the U.S. market following FDA approval[22] - The net negative financial result was mainly driven by the exchange rate depreciation of the U.S. dollar versus the Euro and interest expense on the term loan entered into in July 2024[24] 2025 Outlook The company anticipates continued sales growth in Germany and other European and Middle Eastern markets, contingent on favorable reimbursement, and expects U.S. commercial launch following recent FDA approval Commercialization and Market Expansion The company anticipates continued sales growth in Germany and other European and Middle Eastern markets, contingent on favorable reimbursement. The recent FDA marketing approval for the Genio® system on August 8, 2025, is expected to enable its commercial launch in the United States - The company expects to continue ramping up sales in Germany and other European countries, as well as in select European and Middle East markets, subject to favorable reimbursement[27] - FDA marketing approval for the Genio® system was received on August 8, 2025, enabling its commercial launch in the United States[27] Risk Factors This section refers to the 2024 annual report for a detailed description of principal risks, covering financial, operational, and regulatory aspects Overview of Principal Risks The company refers to its 2024 annual report for a detailed description of risk factors, which broadly cover financial stability, product development, market commercialization, operational dependencies, and legal/regulatory compliance - Principal risks and uncertainties include the company's financial situation and need for additional capital, clinical development of product candidates, commercialization and reimbursement, dependence on third parties and key personnel, market and country operations, manufacturing, legal and regulatory compliance, intellectual property, and organization and operations[29] Forward-Looking Statements This section cautions that the report contains forward-looking statements subject to inherent risks and uncertainties, with no obligation to update unless legally required Nature and Cautionary Note This section highlights that the report contains forward-looking statements, which are subject to inherent risks and uncertainties. Readers are advised against undue reliance on these statements, and the company disclaims any obligation to update them unless legally mandated - Forward-looking statements are identified by words such as 'anticipate,' 'believe,' 'expect,' and 'plan,' and involve inherent risks and uncertainties[30] - Actual results may differ materially due to factors including competitive developments, clinical trial and product development activities, regulatory approval requirements, reliance on third-party collaborations, commercial potential estimation, intellectual property protection, limited operating history, and ability to obtain additional funding[30] - The company expressly disclaims any obligation to update forward-looking statements unless specifically required by applicable law or regulation[30] Unaudited Condensed Consolidated Interim Financial Information This section presents the unaudited condensed consolidated interim financial statements, including the statement of financial position, loss, equity changes, and cash flows Interim Consolidated Statement of Financial Position The company's financial position as of June 30, 2025, shows a decrease in total assets and total equity compared to December 31, 2024, while total liabilities remained relatively stable Consolidated Statement of Financial Position (in thousand EUR) | Item | June 30, 2025 (thousand EUR) | December 31, 2024 (thousand EUR) | Change (thousand EUR) | | :--------------------------------- | :--------------------------- | :--------------------------- | :-------------------- | | ASSETS | | | | | Non-current assets | 61,356 | 60,323 | +1,033 | | Current assets | 55,114 | 98,083 | -42,969 | | Total assets | 116,470 | 158,406 | -41,936 | | EQUITY AND LIABILITIES | | | | | Total equity attributable to shareholders | 73,397 | 113,254 | -39,857 | | Non-current liabilities | 22,127 | 23,623 | -1,496 | | Current liabilities | 20,946 | 21,529 | -583 | | Total liabilities | 43,073 | 45,152 | -2,079 | | Total equity and liabilities | 116,470 | 158,406 | -41,936 | Interim Consolidated Statements of Loss and Other Comprehensive Loss For the three and six months ended June 30, 2025, the company reported increased revenue but also significantly higher operating expenses and a larger net loss compared to the prior year Consolidated Statements of Loss and Other Comprehensive Loss (in thousand EUR) | Item | 3 Months Ended June 30, 2025 (thousand EUR) | 3 Months Ended June 30, 2024 (thousand EUR) | 6 Months Ended June 30, 2025 (thousand EUR) | 6 Months Ended June 30, 2024 (thousand EUR) | | :----------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Revenue | 1,340 | 771 | 2,404 | 1,992 | | Cost of goods sold | (490) | (281) | (896) | (735) | | Gross profit | 850 | 490 | 1,508 | 1,257 | | Research and Development Expense | (10,059) | (7,472) | (19,048) | (14,671) | | Selling, General and Administrative Expense | (10,672) | (6,383) | (23,063) | (12,355) | | Operating loss for the period | (19,850) | (13,307) | (40,488) | (25,520) | | Financial income | 2,858 | 2,069 | 5,480 | 3,477 | | Financial expense | (3,337) | (1,445) | (7,579) | (2,436) | | Loss for the period before taxes | (20,329) | (12,683) | (42,587) | (24,479) | | Income taxes | (278) | (441) | (404) | (551) | | Loss for the period | (20,607) | (13,124) | (42,991) | (25,030) | | Basic Loss Per Share (in EUR) | (0.551) | (0.428) | (1.149) | (0.843) | | Diluted Loss Per Share (in EUR) | (0.551) | (0.428) | (1.149) | (0.843) | Interim Consolidated Statements of Changes in Equity The company's equity decreased significantly for the six months ended June 30, 2025, primarily due to the net loss for the period, partially offset by equity-settled share-based payments Changes in Equity (in thousand EUR) | Item | January 1, 2025 (thousand EUR) | June 30, 2025 (thousand EUR) | | :------------------------------------ | :----------------------------- | :--------------------------- | | Total equity attributable to shareholders | 113,254 | 73,397 | | Loss for the period | — | (42,991) | | Other comprehensive income for the period | — | 230 | | Equity-settled share-based payments | — | 2,904 | Interim Consolidated Statements of Cash Flows For the six months ended June 30, 2025, the company experienced increased cash usage in operating activities, generated net cash from investing activities (primarily from asset sales), and used cash in financing activities Consolidated Statements of Cash Flows (in thousand EUR) | Cash Flow Activity | H1 2025 (thousand EUR) | H1 2024 (thousand EUR) | | :------------------------------------ | :--------------------- | :--------------------- | | Net cash used in operating activities | (35,253) | (23,593) | | Net cash generated/(used) in investing activities | 26,786 | (15,564) | | Net cash generated/(used) from financing activities | (1,202) | 44,981 | | Cash and cash equivalents at June 30 | 22,729 | 27,724 | - Net cash generated in investing activities for H1 2025 was primarily due to proceeds from the sale of financial assets[43] - Net cash used in financing activities for H1 2025 contrasts with H1 2024, which saw significant cash generation from share issuances[43] Notes to the Unaudited Condensed Interim Consolidated Financial Information This section provides detailed notes supporting the interim consolidated financial statements, covering accounting policies, estimates, segment reporting, and specific financial line items General Information Nyxoah SA is a Belgian medical technology company developing and commercializing the CE-Marked Genio® system for Obstructive Sleep Apnea, with subsidiaries in Israel, Australia, USA, and Germany - Nyxoah SA is a medical technology company focused on the development and commercialization of innovative solutions to treat Obstructive Sleep Apnea (OSA)[46] - Its lead solution is the Genio® system, a CE-Marked, patient-centric, minimally invasive, next-generation hypoglossal neurostimulation therapy for OSA[46] - The Genio® system is the first neurostimulation system for OSA to include a battery-free and leadless neurostimulator capable of delivering bilateral hypoglossal nerve stimulation[47] - The company has wholly owned subsidiaries in Israel, Australia, the USA, and Germany[49] Material Accounting Policies Interim financial statements adhere to IAS 34, consistent with 2024 annual statements, but the company's deficits raise going concern doubts, which management aims to mitigate with future funding - The interim condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 – Interim Financial Reporting ('IFRS')[51] - The company has consistently operated with deficits and sustained negative cash flows since its inception, resulting in an accumulated loss of €260.2 million and total assets of €116.5 million as at June 30, 2025[55] - Existing cash and cash equivalents and marketable securities are projected to fund operations until early 2026, raising significant doubt about going concern[57] - Despite funding challenges, management is confident in raising sufficient funding for at least 12 months following the date these financials are authorized for issuance, given the positive outcome from the DREAM trial and FDA approval for the Genio® system[58] Critical Accounting Estimates and Assumptions The preparation of interim financial statements requires management to make significant judgments, estimates, and assumptions, which are consistent with those used in the 2024 year-end consolidated financial statements - The preparation of interim financial statements requires management to make judgments, estimates and assumptions that may significantly affect the reported amounts[62] - The critical accounting estimates used are consistent with those followed in the preparation of the Company's annual consolidated financial statements as of and for the year ended December 31, 2024[63] Segment Reporting Based on its organizational structure and the financial information reviewed by its chief operating decision maker (the CEO), the company has concluded that its total operations represent a single reportable segment - The company has concluded that its total operations represent one reportable segment[64] - The chief operating decision maker is the CEO[64] Fair Value Most current assets and liabilities approximate fair value, while derivative financial instruments and synthetic warrants are measured at fair value through profit and loss using specific valuation models - The carrying amount of cash and cash equivalents, trade receivables, other receivables, financial assets and other current assets approximate their value due to their short-term character[65] - Derivative financial liabilities and assets (foreign currency swaps and forwards) are measured at fair value through profit and loss, determined by the financial institution[67] - Synthetic warrants are measured at fair value through profit and loss using a binomial tree model, with expected volatility of 66.205% as a key unobservable input[67] Fair Value of Financial Assets and Liabilities (in thousand EUR) | Item | Carrying Value (June 30, 2025, thousand EUR) | Fair Value (June 30, 2025, thousand EUR) | Carrying Value (Dec 31, 2024, thousand EUR) | Fair Value (Dec 31, 2024, thousand EUR) | | :-------------------------------------- | :------------------------------------------- | :----------------------------------------- | :------------------------------------------- | :----------------------------------------- | | Financial Assets | | | | | | Other long-term receivables (level 3) | 452 | 452 | 395 | 395 | | Prepayment option (level 3) | 170 | 170 | 112 | 112 | | Trade and other receivables (level 3) | 3,974 | 3,974 | 4,293 | 4,293 | | Foreign currency swaps and forwards (level 2) | 493 | 493 | — | — | | Other current assets (level 3) | 292 | 292 | 739 | 739 | | Cash and cash equivalents (level 1) | 22,729 | 22,729 | 34,186 | 34,186 | | Financial assets (level 1) | 20,257 | 20,257 | 51,369 | 51,369 | | Financial Liabilities | | | | | | Loan facility agreement (level 3) | 7,093 | 7,915 | 6,898 | 7,151 | | Synthetic warrants (level 3) | 2,696 | 2,696 | 3,204 | 3,204 | | Foreign currency swaps and forwards (level 2) | — | — | 353 | 353 | | Recoverable cash advances (level 3) | 9,385 | 9,385 | 8,871 | 8,871 | | Trade and other liabilities (level 1 and 3) | 10,961 | 10,961 | 11,338 | 11,338 | Subsidiaries The company maintains 100% ownership of its four subsidiaries: Nyxoah LTD in Israel, Nyxoah PTY LTD in Australia, Nyxoah Inc. in the USA, and Nyxoah GmbH in Germany - The Company owns 100% of the shares of Nyxoah LTD (Israel), Nyxoah PTY LTD (Australia), Nyxoah Inc. (USA), and Nyxoah GmbH (Germany)[71][72] Property, Plant and Equipment Acquisitions of property, plant, and equipment for the first half of 2025 totaled 0.8 million EUR, primarily for the U.S. production line and laboratory equipment, with depreciation charges increasing to 457,000 EUR - Total acquisitions for the six months ended June 30, 2025, amounted to €0.8 million, mainly related to the U.S. production line under construction and laboratory equipment[73] - The depreciation charge amounted to €457,000 for the six months ended June 30, 2025, compared to €336,000 in the prior year period[74] Intangible Assets The net book value of intangible assets increased to 51.4 million EUR as of June 30, 2025, with 1.5 million EUR in capitalized development expenses for the improved second-generation Genio® system Intangible Assets Net Book Value (in thousand EUR) | Item | June 30, 2025 (thousand EUR) | June 30, 2024 (thousand EUR) | | :---------------- | :--------------------------- | :--------------------------- | | Net book value | 51,407 | 49,310 | - Capitalized development expenses amounted to €1.5 million for the six months ended June 30, 2025, related to the improved second-generation Genio® system and clinical trials[76] - Amortization of intangible assets amounted to €477,000 for the six months ended June 30, 2025, and is included in research and development expense[75] Right-of-Use Assets and Lease Liabilities For the first half of 2025, the company entered into new lease agreements totaling 34,000 EUR, with lease liability repayments of 0.7 million EUR and depreciation on right-of-use assets of 0.6 million EUR - New lease agreements for the six months ended June 30, 2025, amounted to €34,000[77] - Repayments of lease liabilities totaled €0.7 million for the six months ended June 30, 2025[77] - Depreciation on right-of-use assets amounted to €0.6 million for the six months ended June 30, 2025[77] Other Long-Term Receivables Other long-term receivables totaled 1.8 million EUR as of June 30, 2025, primarily from an R&D tax incentive, cash guarantees, and a prepayment option, with the Belgian R&D tax credit regime amended to accelerate refunds Other Long-Term Receivables (in thousand EUR) | Item | June 30, 2025 (thousand EUR) | December 31, 2024 (thousand EUR) | | :-------------------------- | :--------------------------- | :--------------------------- | | R&D tax incentive | 1,177 | 1,110 | | Prepayment option | 170 | 112 | | Cash guarantees | 452 | 395 | | Total other long term receivables | 1,799 | 1,617 | - The Belgian R&D tax credit regime was amended by the Law of May 12, 2024, changing the refund period from 5 years to 4 years as of 2024[80] Inventory Total inventory increased to 5.3 million EUR as of June 30, 2025, driven by increased activities to prepare for commercialization in the U.S. and further scale-up in the EU Inventory (in thousand EUR) | Item | June 30, 2025 (thousand EUR) | December 31, 2024 (thousand EUR) | | :-------------- | :--------------------------- | :--------------------------- | | Raw materials | 1,290 | 1,080 | | Work in progress | 2,351 | 2,546 | | Finished goods | 1,691 | 1,090 | | Total Inventory | 5,332 | 4,716 | - The increase in inventory is due to increasing activities to prepare for commercialization in the U.S. and further scale-up of commercialization in the EU in 2025[81] Trade Receivables, Contract Assets, and Other Receivables Total trade receivables, contract assets, and other receivables decreased by 304,000 EUR to 5.8 million EUR as of June 30, 2025, mainly due to decreases in VAT and trade receivables, with 1.5 million EUR reclassified to contract assets Trade Receivables, Contract Assets and Other Receivables (in thousand EUR) | Item | June 30, 2025 (thousand EUR) | December 31, 2024 (thousand EUR) | | :------------------------------------------ | :--------------------------- | :--------------------------- | | Trade receivables | 1,330 | 3,382 | | Contract assets | 1,508 | — | | R&D incentive receivable (Australia) | 196 | 155 | | VAT receivable | 401 | 741 | | Current tax receivable | 788 | 967 | | Foreign currency swaps and forwards | 493 | — | | Other | 1,136 | 911 | | Total trade receivables, contract assets and other receivables | 5,852 | 6,156 | - The decrease of €304,000 is mainly due to a decrease in VAT receivable by €340,000 and a decrease in trade receivables and contract assets by €0.5 million, partly offset by an increase in foreign currency swaps and forwards of €493,000[82] - As of June 30, 2025, the Company reclassified €1.5 million trade receivables to contract assets because invoices become payable upon the implantation of the Genio® system in the patient, making the right to consideration conditional[84] Other Current Assets Other current assets decreased by 0.7 million EUR to 942,000 EUR as of June 30, 2025, primarily due to decreases in accrued income and deferred charges Other Current Assets (in thousand EUR) | Item | June 30, 2025 (thousand EUR) | December 31, 2024 (thousand EUR) | | :--------------- | :--------------------------- | :--------------------------- | | Deferred charges | 650 | 918 | | Accrued income | 292 | 739 | | Total other current assets | 942 | 1,657 | - The decrease of €0.7 million in other current assets is due to a decrease in accrued income amounting to €447,000 and a decrease in deferred charges amounting to €268,000[86] Cash and Cash Equivalents Cash and cash equivalents decreased to 22.7 million EUR as of June 30, 2025, from 34.2 million EUR at December 31, 2024, mainly due to a 14.9 million EUR decrease in short-term deposits Cash and Cash Equivalents (in thousand EUR) | Item | June 30, 2025 (thousand EUR) | December 31, 2024 (thousand EUR) | | :------------------ | :--------------------------- | :--------------------------- | | Short term deposit | 13,328 | 28,220 | | Current accounts | 9,401 | 5,966 | | Total cash and cash equivalents | 22,729 | 34,186 | - Cash and cash equivalents decreased by €11.4 million, mainly due to a €14.9 million decrease of short-term deposits, partially offset by a €3.4 million increase of current accounts[87] Financial Assets Current financial assets, primarily term accounts, totaled 20.3 million EUR as of June 30, 2025, including 14.5 million EUR in USD-denominated assets, exposing the company to foreign currency exchange risk - Current financial assets relate to term accounts with an initial maturity longer than 3 months but less than 12 months, measured at amortized costs[88] - As at June 30, 2025, current financial assets totaled €20.3 million, consisting of $17.0 million (€14.5 million) and €5.8 million[89] - The USD-denominated assets could generate foreign currency exchange gains or losses due to USD/EUR exchange rate fluctuations[89] Share Capital, Share Premium, and Reserves As of June 30, 2025, share capital was 6.4 million EUR with 37,435,640 shares and 332.6 million EUR in share premium, with reserves including share-based payment, other comprehensive income, and retained loss - As at June 30, 2025, the share capital of the Company amounts to €6.4 million represented by 37,435,640 shares, and the share premium amounts to €332.6 million before deduction of transaction costs[95] - In H1 2025, the company issued 2,000 new shares on May 12 and 6,375 new shares on June 13, both pursuant to the exercise of warrants[105] - Reserves include the share-based payment reserve, other comprehensive income (comprised of currency translation differences and remeasurements of post-employment benefit obligations), and retained loss[106] - Other comprehensive income for the six months ended June 30, 2025, increased by €230,000 due to currency translation differences[106] Share-Based Compensation The company has four outstanding equity-settled share-based incentive plans, with 2,797,941 warrants outstanding and 146,531 Restricted Stock Units (RSUs) granted in H1 2025, leading to a total share-based payment expense of 2.9 million EUR Equity-Settled Warrant Plans Summary | Metric | 2025 (units) | 2024 (units) | | :------------------------------------------------------- | :----------- | :----------- | | Outstanding at January 1 | 2,258,319 | 1,635,606 | | Granted | 658,374 | 385,250 | | Forfeited | (37,377) | (13,625) | | Exercised | (13,875) | (24,275) | | Expired | (67,500) | (35,975) | | Outstanding as at June 30 | 2,797,941| 1,946,981| | Exercisable as at June 30 | 1,715,849| 1,210,613| - During H1 2025, 658,374 warrants were granted from the 2024 and 2025 plans, and 13,875 warrants were exercised[108][109][110] - On June 11, 2025, the Company granted a total of 146,531 Restricted Stock Units (RSUs) to 7 directors, which will vest at the shareholders' meeting in June 2026[117] - The Company recognized €2.9 million in share-based payment expense for the six months ended June 30, 2025 (compared to €1.5 million in H1 2024)[118] Financial Debt Financial debt totaled 19.2 million EUR as of June 30, 2025, primarily comprising recoverable cash advances (9.4 million EUR) and the EIB loan facility agreement (7.1 million EUR) with associated synthetic warrants (2.7 million EUR) Financial Debt (in thousand EUR) | Item | June 30, 2025 (thousand EUR) | December 31, 2024 (thousand EUR) | | :-------------------------------- | :--------------------------- | :--------------------------- | | Recoverable cash advances - Non-current | 9,139 | 8,623 | | Recoverable cash advances - Current | 246 | 248 | | EIB finance agreement - Non-current | 7,093 | 6,898 | | Synthetic warrants - Non-current | 2,696 | 3,204 | | Total Financial Debt | 19,174 | 18,973 | - On July 3, 2024, the Company signed a €37.5 million loan facility agreement with the European Investment Bank (EIB), with the first tranche of €10 million disbursed on July 26, 2024[127] - In connection with the EIB loan, the EIB was granted 468,384 synthetic warrants with a strike price of €8.54, exercisable after the maturity of Tranche A (5 years) or earlier in exceptional situations[128] Sensitivity Analysis of Recoverable Cash Advances (Fair Value as of end of 2025, in thousand EUR) | Variation of discount rates * | -25% (thousand EUR) | 0% (thousand EUR) | 25% (thousand EUR) | | :-------------------------- | :------------------ | :---------------- | :----------------- | | -25% | 9,786 | 10,152 | 10,400 | | 0% | 8,947 | 9,385 | 9,687 | | 25% | 8,213 | 8,705 | 9,049 | * A change of -25% in the discount rates implies that the discount rate used for the fixed part of the recoverable cash advances is 3.8% instead of 5% while the one used for the variable part is 9.4% instead of 12.5%. Provisions Total provisions decreased to 404,000 EUR as of June 30, 2025, mainly due to a decrease in constructive obligations, while the company faces a patent infringement lawsuit from Inspire Medical, Inc. with legal costs recognized in R&D expenses Provisions (in thousand EUR) | Item | June 30, 2025 (thousand EUR) | December 31, 2024 (thousand EUR) | | :-------------------------- | :--------------------------- | :--------------------------- | | Provision for constructive obligation | 309 | 672 | | Other provisions | 95 | 328 | | Total provisions | 404 | 1,000 | - On May 30, 2025, the Company was sued by Inspire Medical, Inc. for alleged infringement of 3 Inspire patents[131] - Given the early stage of litigation, the Company is unable to predict the likelihood of success or quantify any risk of loss, and therefore has not accrued for potential litigation losses as of June 30, 2025. Legal costs incurred are recognized in Research and Development Expense[133] Trade Payables Total trade payables slightly decreased by 97,000 EUR to 9.4 million EUR as of June 30, 2025, primarily due to a decrease in invoices to be received, partially offset by an increase in payables Trade Payables (in thousand EUR) | Item | June 30, 2025 (thousand EUR) | December 31, 2024 (thousand EUR) | | :----------------- | :--------------------------- | :--------------------------- | | Payables | 4,437 | 3,749 | | Invoices to be received | 4,971 | 5,756 | | Total Trade payables | 9,408 | 9,505 | - The decrease in total trade payables of €97,000 is due to a decrease in invoices to be received of €0.8 million, partly compensated by an increase in trade payables of €0.7 million[134] Income Taxes and Deferred Taxes Total income tax expense for H1 2025 was 404,000 EUR, mainly due to increased income tax payable by subsidiaries and an additional accrual for uncertain tax positions, with the current tax liability primarily related to uncertain tax positions Income Tax Income/(Expense) (in thousand EUR) | Period | H1 2025 (thousand EUR) | H1 2024 (thousand EUR) | | :-------------------------- | :--------------------- | :--------------------- | | Current tax income/(expense) | (407) | (547) | | Deferred tax income/(expense) | 3 | (4) | | Total Income Tax Income/(Expense) | (404) | (551) | - The current tax expense mainly relates to an increase of income tax payable by certain subsidiaries (€286,000) and an additional accrual of the liability for uncertain tax positions (€121,000)[135] - The current tax liability of €4.0 million mainly relates to a liability for uncertain tax positions for an amount of €3.8 million[136] Other Liabilities Other liabilities decreased by 453,000 EUR to 5.8 million EUR as of June 30, 2025, primarily due to decreases in payroll-related liabilities and foreign currency swaps, partially offset by increases in accrued expenses Other Liabilities (in thousand EUR) | Item | June 30, 2025 (thousand EUR) | December 31, 2024 (thousand EUR) | | :---------------------------------- | :--------------------------- | :--------------------------- | | Holiday pay accrual | 774 | 903 | | Salary | 2,583 | 3,354 | | Accrued expenses | 963 | 511 | | Foreign currency swaps and forwards - current | — | 353 | | Other | 1,451 | 1,103 | | Total other liabilities | 5,771 | 6,224 | - The decrease of €453,000 is mainly due to a decrease of €0.9 million in payroll related liabilities and a decrease of €353,000 in the fair value of foreign currency swaps and forwards[137] - This decrease was partly offset by an increase of €452,000 in accrued expenses and an increase of €348,000 in Other liabilities[137] Foreign Currency Swaps and Forwards The company uses foreign currency swaps and forwards to manage currency risk from expected USD, AUD, and NIS expenses, with financial assets from these derivatives totaling 493,000 EUR as of June 30, 2025 - The Company is exposed to currency risk primarily due to expected future USD, AUD, and NIS expenses and uses foreign currency swaps and forwards to reduce this exposure[139] Notional Amounts of Foreign Currency Swaps and Forwards (in thousand EUR) | Instrument | June 30, 2025 (thousand EUR) | June 30, 2025 (thousand USD/ILS) | | :-------------------------------- | :--------------------------- | :------------------------------- | | Foreign currency swaps EUR - USD | 3,500 | 4,006 | | Foreign currency forwards EUR - USD | 2,000 | 2,111 | | Foreign currency swaps EUR - ILS | 8,000 | 1,953 | | Foreign currency forwards ILS - EUR | 10,000 | 2,414 | | Foreign currency swaps ILS - EUR | 14,000 | 3,371 | Derivative Financial Instruments (in thousand EUR) | Item | June 30, 2025 (thousand EUR) | | :-------------------------- | :--------------------------- | | Financial assets (Total) | 493 | | Foreign currency swaps | 231 | | Foreign currency forwards | 262 | | Financial liabilities (Total) | — | Results of Operation Revenue increased to 2.4 million EUR for H1 2025, primarily from Germany, England, and UAE, but operating expenses significantly rose, with R&D expenses increasing by 14.7% and SG&A expenses by 86.7%, mainly due to U.S. commercialization preparations Revenue and Cost of Goods Sold (Six Months Ended June 30, in thousand EUR) | Metric | 2025 (thousand EUR) | 2024 (thousand EUR) | | :----------------- | :------------------ | :------------------ | | Revenue | 2,404 | 1,992 | | Cost of goods sold | 896 | 735 | - For H1 2025, sales were generated primarily in Germany (€2.1 million), England (€268,000), and UAE (€32,000)[146] Operating Expenses (Six Months Ended June 30, 2025, in thousand EUR) | Expense Type | Total Cost (thousand EUR) | Capitalized (thousand EUR) | Operating Expense for the Period (thousand EUR) | | :----------------------------------- | :------------------------ | :------------------------- | :---------------------------------------------- | | Research and development | 20,602 | (1,554) | 19,048 | | Selling, general and administrative | 23,063 | — | 23,063 | | Other income/(expense) | (171) | 56 | (115) | | Total | 43,494 | (1,498) | 41,996 | - Selling, general and administrative expenses increased by €10.7 million or 86.7% for H1 2025, mainly due to increased costs to support U.S. commercialization preparations[154] - Research and development expenses (before capitalization) increased by €2.6 million or 14.7% for H1 2025, due to higher R&D activities and consulting fees, offset by decreased clinical study expenses[151] Employee Benefits Total employee benefits significantly increased to 21.6 million EUR for H1 2025, up from 12.1 million EUR in H1 2024, primarily driven by higher staff costs in both selling, general and administrative, and research and development functions Total Employee Benefits (Six Months Ended June 30, in thousand EUR) | Item | 2025 (thousand EUR) | 2024 (thousand EUR) | | :---------------- | :------------------ | :------------------ | | Salaries | 16,418 | 8,958 | | Social charges | 1,619 | 1,091 | | Pension charges | 299 | 220 | | Share-based payment | 2,862 | 1,499 | | Other | 352 | 321 | | Total employee benefits | 21,550 | 12,089 | Employee Benefits Allocation (Six Months Ended June 30, in thousand EUR) | Expense Category | 2025 (thousand EUR) | 2024 (thousand EUR) | | :------------------------------------ | :------------------ | :------------------ | | Selling, general and administrative expenses | 13,270 | 4,876 | | Research & Development expenses | 8,280 | 7,213 | | Total employee benefits | 21,550 | 12,089 | Financial Income Financial income increased to 5.5 million EUR for H1 2025, up from 3.5 million EUR in H1 2024, mainly due to fair value adjustments on foreign currency swaps and synthetic warrants, and increased interest income, with exchange gains amounting to 3.0 million EUR Financial Income (Six Months Ended June 30, in thousand EUR) | Item | 2025 (thousand EUR) | 2024 (thousand EUR) | | :------------------------------------------ | :------------------ | :------------------ | | Interests | 1,458 | 970 | | Exchange differences | 2,951 | 2,498 | | Fair value adjustment foreign currency swaps and forwards | 493 | — | | Fair value adjustment synthetic warrants | 508 | — | | Fair value adjustment prepayment option | 58 | — | | Other | 12 | 9 | | Total financial income | 5,480 | 3,477 | - The increase in financial income is mainly explained by fair value adjustments on foreign currency swaps and forwards and on synthetic warrants, in addition to an increase in interest income[159] - Exchange gains amounted to €3.0 million for H1 2025, mainly driven by the monthly revaluation on balance sheet items and realized exchange gains on currency swaps and forwards and USD financial assets[160] Financial Expense Financial expenses significantly increased to 7.6 million EUR for H1 2025, from 2.4 million EUR in H1 2024, primarily driven by a substantial increase in exchange differences (6.1 million EUR) due to the Euro's appreciation against the USD Financial Expense (Six Months Ended June 30, in thousand EUR) | Item | 2025 (thousand EUR) | 2024 (thousand EUR) | | :------------------------------------------ | :------------------ | :------------------ | | Fair value adjustment foreign currency swaps and forwards | — | 288 | | Recoverable cash advances, Accretion of interest | 539 | 519 | | Interest and bank charges | 761 | 120 | | Interest on lease liabilities | 71 | 74 | | Exchange differences | 6,141 | 1,435 | | Other | 67 | — | | Total financial expense | 7,579 | 2,436 | - The financial expenses increased mainly due to an increase in exchange differences, amounting to €6.1 million for H1 2025[162] - The main contributor to the currency loss is the revaluation of the Company's USD cash balance and USD financial assets due to the Euro's appreciation (approximately 12.81% between January 1 and June 30, 2025) during consolidation[165] Loss Per Share (EPS) The basic and diluted loss per share for H1 2025 was (1.149) EUR, an increase from (0.843) EUR in H1 2024, with no dilutive effect from outstanding warrants due to net losses Loss Per Share (Six Months Ended June 30) | Metric | 2025 (EUR) | 2024 (EUR) | | :------------------------------------ | :--------- | :--------- | | Loss of year attributable to equity holders | (42,991,000) | (25,030,000) | | Weighted average number of common shares outstanding (units) | 37,429,260 | 29,706,019 | | Basic earnings per share | (1.149) | (0.843) | | Diluted earnings per share | (1.149) | (0.843) | - As the Company is incurring net losses, outstanding warrants have no dilutive effect, resulting in no difference between the Basic and Diluted EPS[168] Other Commitments As of June 30, 2025, the company committed to a progress payment of 1.15 million USD to a key supplier for manufacturing services and inventory purchases, with the payment made in July 2025 - On June 27, 2025, the Company entered into an agreement with a key supplier to make a progress payment of USD 1,150,000 related to manufacturing services and inventory purchases, with the payment made in July 2025[173] Related Party Transactions This section details remuneration for key management (2.0 million EUR for H1 2025) and transactions with non-executive directors and significant shareholders, including a collaboration agreement with Cochlear Limited for a U.S. production line Remuneration of Key Management (Six Months Ended June 30, in thousand EUR) | Item | 2025 (thousand EUR) | 2024 (thousand EUR) | | :------------------------------------ | :------------------ | :------------------ | | Short-term remuneration & compensation | 1,425 | 951 | | Post-employment benefits | 35 | 11 | | Share based payment | 554 | 329 | | Total | 2,014 | 1,291 | Transactions with Non-Executive Directors (Six Months Ended June 30, in thousand EUR) | Item | 2025 (thousand EUR) | 2024 (thousand EUR) | | :------------------------------------ | :------------------ | :------------------ | | Set up of Production Line (Cochlear) | 52 | 176 | | Board Remuneration (Total) | 252 | 290 | | Warrant expense (IFRS 2) | 800 | 218 | - The Company and Cochlear Limited entered into a collaboration agreement in January 2023 related to the transfer of assets and support for setting up a production line in the U.S., with a financial impact of €52,000 for H1 2025[182] - The Company announced a partnership with ResMed in Germany on September 28, 2023, to increase OSA awareness and therapy penetration[183] Events After the Balance-Sheet Date In July 2025, the company reorganized its global R&D function, and on August 8, 2025, received FDA marketing approval for its Genio® system, enabling U.S. commercial launch and expected positive revenue impact in H2 2025 - In July 2025, the Company reorganized its global R&D function, transitioning all ongoing R&D activities from Israel to the U.S. and Belgium, with no impairment identified[189] - On August 8, 2025, the Company received FDA marketing approval for its Genio® system, enabling the commercial launch in the United States[190] - This FDA approval is expected to have a positive impact on the Company's revenue beginning in the second half of 2025[190] Responsibility Statement The board of directors certifies that the interim financial statements and management report provide a true and fair view of the company's financial position, results, development, and principal risks Responsibility Statement The board of directors certifies that the interim financial statements and management report provide a true and fair view of the company's financial position, results, development, and principal risks - The condensed consolidated interim financial statements, prepared in accordance with applicable standards, give a true and fair view of the assets, liabilities, financial position, and results of the Company and its consolidated undertakings[194] - The interim management report provides a true and fair overview of the development, results, and position of the Company and its consolidated undertakings, as well as a description of the principal risks and uncertainties they face[194]