IceCure(ICCM) - 2025 Q4 - Annual Report

Financial Performance and Funding - As of December 31, 2025, the company has accumulated losses of $120,436 thousand and generated losses of $15,057 thousand for the year ended December 31, 2025[49]. - The company expects to continue incurring significant operating losses and will primarily fund operations through current financial resources, product sales, and additional equity or debt financing[49]. - The current cash and cash equivalents position of approximately $8.9 million is insufficient to fund planned operations for at least the next 12 months[64]. - The company may need to raise substantial additional funding to continue operations, which may not be available on acceptable terms[64]. - The global economy has experienced extreme volatility, impacting liquidity, consumer confidence, and economic growth, which may adversely affect the company's financial condition and share price[69]. - The company anticipates incurring costs associated with operating as a public company, estimated at least $1 million annually[56]. - Future revenues will depend on market acceptance, competition, pricing, and reimbursement from third-party payors for the ProSense and XSense systems[58]. Regulatory Approvals and Compliance - The company has received regulatory approval for the ProSense system for treating low-risk breast cancer in women aged 70 and above, but significant revenue generation remains a challenge[59]. - The company plans to seek additional regulatory approvals to expand the market for its products, which may incur significant costs[60]. - The company has received FDA De Novo authorization for ProSense for low-risk breast cancer, but market penetration may be slower than anticipated, affecting revenue and financial results[74]. - The XSense system has received FDA 510(k) clearance but lacks marketing authorization for breast cancer treatment, which could limit the addressable market and impact financial performance[75]. - Regulatory changes and potential disruptions at the FDA could delay the approval and commercialization of new products, negatively impacting business operations[104]. - The company must comply with EU Medical Devices Directive and Medical Device Regulations to sell products in the European Economic Area, requiring a conformity assessment procedure[140]. - The FDA granted marketing authorization for the ProSense system for low-risk breast cancer treatment in women aged 70 and above, requiring a post-market surveillance study[154]. Market and Competition - The company is highly dependent on the successful development and commercialization of its ProSense and XSense systems, with the transition to XSense being critical as ProSense components approach end-of-life[71]. - The company faces intense competition in the medical device market, particularly from major players like Boston Scientific Corporation and Siemens Healthineers, which could limit market share and sales opportunities[109]. - The company may encounter significant competition from other firms with greater resources, which could affect market share and profitability[85]. - The success of the company's customer acquisition strategy is crucial; failure to attract or retain customers could significantly harm revenue and financial results[86]. Operational Risks - The company faces risks related to supply chain issues, as certain components for ProSense are nearing end-of-life and may not be available from multiple suppliers, potentially increasing manufacturing costs[76]. - The company may not be able to replace manufacturing capabilities in a timely manner if disruptions occur, which could lead to long-term loss of sales and profits[91]. - The company relies on third-party service providers for critical components and services, which could adversely affect product quality and business operations if these providers fail to maintain high standards[92]. - The company relies on Terumo Corporation for distribution and regulatory approvals in Japan; any failure in this relationship could adversely affect sales prospects[77][80]. Legal and Litigation Risks - The company faces potential litigation risks, including class actions, which could negatively impact financial results and divert management resources[117]. - Product liability claims and recalls pose financial risks, with the medical device industry being historically litigious[118]. - The company may face substantial penalties if unable to comply with federal and state healthcare fraud and abuse laws, including the Anti-Kickback Statute and the False Claims Act[171]. - The medical device industry is under heightened scrutiny, with potential civil and criminal penalties for violations of governmental regulations, which could adversely affect financial results[174]. Human Resources and Staffing - At the end of 2025, the company had 67 full-time employees and two part-time employees, indicating a lean staffing model that may hinder growth if additional skilled personnel cannot be recruited[105]. - The company’s ability to attract and retain skilled personnel is critical for executing its business model, with intense competition for qualified individuals in the medical device field[93]. Intellectual Property and Innovation - The company relies on patent rights and trade secrets for competitive advantage, and failure to protect these could harm its market position[198]. - Third-party intellectual property claims may delay product development and commercialization efforts[206]. - The company faces risks related to potential infringement of third-party patents, which could result in costly litigation or redesigns of products[207]. - Changes in patent laws could increase uncertainties and costs related to patent applications and enforcement, potentially adversely affecting the company's business and financial condition[210]. Economic and Market Conditions - Changes in economic conditions could adversely affect customer spending and the company's financial condition, impacting revenue and growth prospects[124]. - The implementation of volume-based procurement policies in China could lead to reduced margins and necessitate renegotiation of distributor arrangements[102]. - The company is subject to strict price controls in non-U.S. markets, which may adversely affect profitability and revenue generation[101]. Data Privacy and Cybersecurity - Compliance with U.S. data protection laws, including the California Consumer Privacy Act (CCPA), may increase compliance costs and potential liability for the company[176]. - The company expects to collect and process sensitive health information, which raises privacy and data protection concerns that could negatively impact operations[175]. - Cybersecurity breaches could disrupt operations and lead to significant costs, impacting product development and regulatory approval efforts[120]. ESG and Corporate Governance - Environmental, social, and corporate governance (ESG) issues are increasingly important to stakeholders and may affect the company's reputation and financial condition[195]. - Failure to adapt to new ESG regulations could lead to decreased investor confidence and customer demand[197]. Shareholder and Market Dynamics - Approximately 48.0% of the company's Ordinary Shares are beneficially owned by principal shareholders, officers, and directors, allowing them significant control over shareholder matters[223]. - The company has never paid cash dividends and does not anticipate doing so in the foreseeable future, which may affect investor expectations[226]. - Future sales or issuances of Ordinary Shares could depress the market price, making it difficult for the company to raise funds through equity sales[221]. - The market price of the company's Ordinary Shares may be highly volatile, influenced by various factors including clinical trial results and regulatory approvals[219].