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IceCure Medical Ltd.

IceCure Medical Ltd.ICCMEarnings & Financial Report

Nasdaq

IceCure Medical Ltd. develops and commercializes minimally invasive cryoablation medical devices designed to treat benign and malignant tumors, including breast, lung, kidney and bone lesions. It caters to healthcare providers across North America, Europe, and Asia-Pacific, delivering accessible, low-risk minimally invasive tumor treatment solutions for clinical settings.

What changed in IceCure Medical Ltd.'s 20-F — 2022 vs 2023

Top changes in IceCure Medical Ltd.'s 2023 20-F

585 paragraphs added · 531 removed · 404 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS. 1 ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE. 1 ITEM 3. KEY INFORMATION. 1 A. [Reserved] 1 B. Capitalization and Indebtedness. 1 C. Reasons for the Offer and Use of Proceeds. 1 D. Risk Factors. 1 ITEM 4. INFORMATION ON THE COMPANY. 48 A.
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS. 1 ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE. 1 ITEM 3. KEY INFORMATION. 1 A. [Reserved] 1 B. Capitalization and Indebtedness. 1 C. Reasons for the Offer and Use of Proceeds. 1 D. Risk Factors. 1 ITEM 4. INFORMATION ON THE COMPANY. 44 A.
History and Development of the Company. 48 B. Business Overview. 49 C. Organizational Structure. 83 D. Property, Plants and Equipment. 83
History and Development of the Company. 44 B. Business Overview. 45 C. Organizational Structure. 79 D. Property, Plants and Equipment. 79

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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We will be dependent upon success in our customer acquisition strategy . Our business will be dependent upon success in our customer acquisition strategy. If we fail to maintain a high quality of device technology, we may fail to retain or add new customers. If we fail, our revenue, financial results and business may be significantly harmed.
Our business will be dependent upon success in our customer acquisition strategy. If we fail to maintain a high quality of device technology, we may fail to retain or add new customers. If we fail, our revenue, financial results and business may be significantly harmed.
The 3-year recurrence-free survival rates were: 86% in group 1; 97% in group 2; 92% in group 3; and 53% group 4, indicating the survival to be better in smaller tumors (p The peer reviewed publication also highlighted that the use of cryoablation treatment with only one needle for the majority of the patients in the trial represented an advantage in comparison to systems that use argon gas, which usually requires the use of 2-3 needles for a procedure on the same tumors size.
The 3-year recurrence-free survival rates were: 86% in group 1; 97% in group 2; 92% in group 3; and 53% group 4, indicating the survival to be better in smaller tumors (p 53 The peer reviewed publication also highlighted that the use of cryoablation treatment with only one needle for the majority of the patients in the trial represented an advantage in comparison to systems that use argon gas, which usually requires the use of 2-3 needles for a procedure on the same tumors size.
Our failure to comply with applicable regulatory requirements could result in enforcement action by the FDA, state or foreign regulatory authorities, which may include any of the following sanctions: ● untitled letters or warning letters; ● fines, injunctions, consent decrees and civil penalties; ● recalls, termination of distribution, administrative detention, or seizure of our products; ● customer notifications or repair, replacement or refunds; 23 ● operating restrictions or partial suspension or total shutdown of production; ● delays in or refusal to grant our requests for future clearances or approvals or foreign marketing authorizations of new products, new intended uses, or modifications to existing products; ● withdrawals or suspensions of product clearances or approvals, resulting in prohibitions on sales of our products; ● FDA refusal to issue certificates to foreign governments needed to export products for sale in other countries; and criminal prosecution.
Our failure to comply with applicable regulatory requirements could result in enforcement action by the FDA, state or foreign regulatory authorities, which may include any of the following sanctions: ● untitled letters or warning letters; ● fines, injunctions, consent decrees and civil penalties; ● recalls, termination of distribution, administrative detention, or seizure of our products; ● customer notifications or repair, replacement or refunds; ● operating restrictions or partial suspension or total shutdown of production; ● delays in or refusal to grant our requests for future clearances or approvals or foreign marketing authorizations of new products, new intended uses, or modifications to existing products; ● withdrawals or suspensions of product clearances or approvals, resulting in prohibitions on sales of our products; ● FDA refusal to issue certificates to foreign governments needed to export products for sale in other countries; and criminal prosecution.
Any potential acquisition or strategic partnership may entail numerous risks, including: ● increased operating expenses and cash requirements; ● the assumption of additional indebtedness or contingent liabilities; ● the issuance of our equity securities; ● assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel; ● the diversion of our management’s attention from our existing product programs and initiatives in pursuing such a strategic merger or acquisition; ● retention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships; ● risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and marketing approvals; and ● our inability to generate revenues from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.
Any potential acquisition or strategic partnership may entail numerous risks, including: ● increased operating expenses and cash requirements; ● the assumption of additional indebtedness or contingent liabilities; ● the issuance of our equity securities; ● assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel; ● the diversion of our management’s attention from our existing product programs and initiatives in pursuing such a strategic merger or acquisition; 10 ● retention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships; ● risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and marketing approvals; and ● our inability to generate revenues from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.
Among other things, the Medical Devices Regulation: ● strengthen the rules on placing devices on the market and reinforce surveillance once they are available; ● establish explicit provisions on manufacturers’ responsibilities for follow-up regarding the quality, performance and safety of devices placed on the market; 31 ● improve the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number; ● set up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and ● strengthened rules for the assessment of certain high-risk devices, which may have to undergo an additional check by experts before they are placed on the market.
Among other things, the Medical Devices Regulation: ● strengthen the rules on placing devices on the market and reinforce surveillance once they are available; ● establish explicit provisions on manufacturers’ responsibilities for follow-up regarding the quality, performance and safety of devices placed on the market; ● improve the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number; ● set up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and ● strengthened rules for the assessment of certain high-risk devices, which may have to undergo an additional check by experts before they are placed on the market.
As a result of this adoption, our financial statements may not be comparable to companies that comply with the public company effective date; ● any rules that may be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report on the financial statements; and ● our ability to furnish two rather than three years of income statements and statements of cash flows in various required filings.
As a result of this adoption, our financial statements may not be comparable to companies that comply with the public company effective date; 36 ● any rules that may be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report on the financial statements; and ● our ability to furnish two rather than three years of income statements and statements of cash flows in various required filings.
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate significant revenue, attain profitability or commercialize our products in scale. 22 In addition, the delivery of healthcare in the European Union, including the establishment and operation of health services, is almost exclusively a matter for national, rather than EU, law and policy.
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate significant revenue, attain profitability or commercialize our products in scale. In addition, the delivery of healthcare in the European Union, including the establishment and operation of health services, is almost exclusively a matter for national, rather than EU, law and policy.
For example, the FDA recently announced forthcoming steps that the FDA intends to take to modernize the premarket notification pathway under Section 510(k) of the FDCA. Our products must be manufactured in accordance with federal, state and foreign regulations, and we could be forced to recall our devices or terminate production if we fail to comply with these regulations.
For example, the FDA recently announced forthcoming steps that the FDA intends to take to modernize the premarket notification pathway under Section 510(k) of the FDCA. 21 Our products must be manufactured in accordance with federal, state and foreign regulations, and we could be forced to recall our devices or terminate production if we fail to comply with these regulations.
Additionally, if we qualify for such benefits and programs and they are subsequently terminated or reduced, it could have an adverse effect on our financial condition and results of operations. 44 We may be required to pay monetary remuneration to our Israeli employees for their inventions, even if the rights to such inventions have been duly assigned to us.
Additionally, if we qualify for such benefits and programs and they are subsequently terminated or reduced, it could have an adverse effect on our financial condition and results of operations. We may be required to pay monetary remuneration to our Israeli employees for their inventions, even if the rights to such inventions have been duly assigned to us.
The regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic registrant may be significantly higher. We may be subject to securities litigation, which is expensive and could divert management attention. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation.
The regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic registrant may be significantly higher. 37 We may be subject to securities litigation, which is expensive and could divert management attention. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation.
Foreign Corrupt Practices Act, or the FCPA, its books and records provisions or its anti-bribery provisions. Any of these factors could significantly harm our future international expansion and operations and, consequently, our results of operations. 13 We face intense competition in the market, and as a result we may be unable to effectively compete in our industry.
Foreign Corrupt Practices Act, or the FCPA, its books and records provisions or its anti-bribery provisions. Any of these factors could significantly harm our future international expansion and operations and, consequently, our results of operations. We face intense competition in the market, and as a result we may be unable to effectively compete in our industry.
In the United States, we cleared the 510(k) application process and received regulatory approval to market our ProSense system and related accessories systems for the treatment of kidney and liver tumors. Specifically, FDA 510(k) clearance covers IceSense3, ProSense, and MultiSense systems, including the ancillary products thereto, such as Probes and ancillary products, and software updates.
In the United States, we cleared the 510(k) application process and received regulatory clearance to market our ProSense system and related accessories systems for the treatment of kidney and liver tumors. Specifically, FDA 510(k) clearance covers IceSense3, ProSense, and MultiSense systems, including the ancillary products thereto, such as Probes and ancillary products, and software updates.
In particular, there have been and continue to be a number of initiatives at the U.S. federal and state levels that seek to reduce healthcare costs and improve the quality of healthcare. 21 Our industry is highly regulated and changes in law may adversely impact our business, operations or financial results.
In particular, there have been and continue to be a number of initiatives at the U.S. federal and state levels that seek to reduce healthcare costs and improve the quality of healthcare. Our industry is highly regulated and changes in law may adversely impact our business, operations or financial results.
Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business. 34 Third-party claims of intellectual property infringement may prevent or delay our development and commercialization efforts.
Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business. Third-party claims of intellectual property infringement may prevent or delay our development and commercialization efforts.
Because of the numerous risks and uncertainties associated with developing a medical device, we are unable to predict the extent of any future losses or when we will become profitable, if at all. The regulatory marketing approvals that we currently have are insufficient to generate significant revenue.
Because of the numerous risks and uncertainties associated with developing a medical device, we are unable to predict the extent of any future losses or when we will become profitable, if at all. 2 The regulatory marketing approvals that we currently have are insufficient to generate significant revenue.
Even though we believe we carry commercially reasonable business interruption and liability insurance, we might suffer losses as a result of business interruptions that exceed the coverage available under our insurance policies or for which we do not have coverage. For example, we are not insured against terrorist attacks or cyberattacks.
Even though we believe we carry commercially reasonable business interruption and liability insurance, we might suffer losses as a result of business interruptions that exceed the coverage available under our insurance policies or for which we do not have coverage. For example, we are not insured against terrorist attacks.
Given our reliance on certain suppliers, we may be susceptible to supply shortages while looking for alternate suppliers (see “Item 4.B. Business Overview – Production and Manufacturing ” for additional information). 10 We may not be able to replace our current manufacturing capabilities in a timely manner.
Given our reliance on certain suppliers, we may be susceptible to supply shortages while looking for alternate suppliers (see “Item 4.B. Business Overview – Production and Manufacturing ” for additional information). We may not be able to replace our current manufacturing capabilities in a timely manner.
A successful claim brought against us in excess of, or outside of, our insurance coverage could have a material adverse effect on our business, financial condition and results of operations. Our management team has limited experience managing a U.S. reporting company.
A successful claim brought against us in excess of, or outside of, our insurance coverage could have a material adverse effect on our business, financial condition and results of operations. 13 Our management team has limited experience managing a U.S. reporting company.
The loss of key personnel may have an adverse effect on our operations and financial performance International expansion of our business exposes us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States or Israel.
The loss of key personnel may have an adverse effect on our operations and financial performance. 11 International expansion of our business exposes us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States or Israel.
These products or services may compete with our products or services. Future patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
These products or services may compete with our products or services. Future patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. 32 Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
As exchange rates vary, sales and other operating results, when translated, may differ materially from our or the capital market’s expectations. The termination or reduction of tax and other incentives that the Israeli government provides to Israeli companies may increase our costs and taxes.
As exchange rates vary, sales and other operating results, when translated, may differ materially from our or the capital market’s expectations. 40 The termination or reduction of tax and other incentives that the Israeli government provides to Israeli companies may increase our costs and taxes.
Our, or our partners’, failure to adequately demonstrate the safety and effectiveness of a product under development could delay or prevent regulatory approval of the product and could have a material adverse effect on our business, prospects, financial condition and results of operations. 18 The results of pre-clinical studies, early-stage clinical trials, data obtained from real-world use, and published third-party studies may not be indicative of results in future clinical trials and we cannot assure you that any clinical trials will yield the results we anticipate, be successful or lead to results sufficient for the necessary regulatory approvals.
Our, or our partners’, failure to adequately demonstrate the safety and effectiveness of a product under development could delay or prevent regulatory approval of the product and could have a material adverse effect on our business, prospects, financial condition and results of operations. 16 The results of pre-clinical studies, early-stage clinical trials, data obtained from real-world use, and published third-party studies may not be indicative of results in future clinical trials and we cannot assure you that any clinical trials will yield the results we anticipate, be successful or lead to results sufficient for the necessary regulatory approvals.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. 36 We may not be able to protect our intellectual property rights throughout the world.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. We may not be able to protect our intellectual property rights throughout the world.
In addition, we intend to rely on exemptions from certain U.S. rules which will permit us to follow Israeli legal requirements rather than certain of the requirements that are applicable to U.S. domestic registrants. 41 We will follow Israeli laws and regulations that are applicable to Israeli companies.
In addition, we intend to rely on exemptions from certain U.S. rules which will permit us to follow Israeli legal requirements rather than certain of the requirements that are applicable to U.S. domestic registrants. We will follow Israeli laws and regulations that are applicable to Israeli companies.
Our current capital expenditures are primarily for manufacturing facility and equipment, computers, software, research and development equipment and office improvements substantially all in Israel, and we expect to finance these expenditures primarily from cash on hand. 48 B. Business Overview.
Our current capital expenditures are primarily for manufacturing facility and equipment, computers, software, research and development equipment and office improvements substantially all in Israel, and we expect to finance these expenditures primarily from cash on hand. B. Business Overview.
In addition, the Israeli Companies Law, 5759-1999, or the Companies Law, imposes restrictions on our ability to declare and pay dividends. 39 Raising additional capital may cause dilution to our existing shareholders and may adversely affect the rights of existing shareholders.
In addition, the Israeli Companies Law, 5759-1999, or the Companies Law, imposes restrictions on our ability to declare and pay dividends. Raising additional capital may cause dilution to our existing shareholders and may adversely affect the rights of existing shareholders.
A data breach affecting sensitive personal information, including health information, also could result in significant legal and financial exposure and reputational damages that could potentially have an adverse effect on our business. 28 HIPAA requires Covered Entities (like many of our potential customers) and business associates, like us, to develop and maintain policies and procedures with respect to protected health information that is used or disclosed, including the adoption of administrative, physical and technical safeguards to protect such information.
A data breach affecting sensitive personal information, including health information, also could result in significant legal and financial exposure and reputational damages that could potentially have an adverse effect on our business. 25 HIPAA requires Covered Entities (like many of our potential customers) and business associates, like us, to develop and maintain policies and procedures with respect to protected health information that is used or disclosed, including the adoption of administrative, physical and technical safeguards to protect such information.
Further, public scrutiny of, or complaints about, technology companies or their data handling or data protection practices, even if unrelated to our business, industry or operations, may lead to increased scrutiny of technology companies, including us, and may cause government agencies to enact additional regulatory requirements, or to modify their enforcement or investigation activities, which may increase our costs and risks. 29 If we do not obtain and maintain international regulatory registrations, clearances or approvals for our products, we will be unable to market and sell our products.
Further, public scrutiny of, or complaints about, technology companies or their data handling or data protection practices, even if unrelated to our business, industry or operations, may lead to increased scrutiny of technology companies, including us, and may cause government agencies to enact additional regulatory requirements, or to modify their enforcement or investigation activities, which may increase our costs and risks. 26 If we do not obtain and maintain international regulatory registrations, clearances or approvals for our products, we will be unable to market and sell our products.
This certificate entitles the manufacturer to affix the CE mark and the Notified Body number to its medical devices after having prepared and signed a related EC Declaration of Conformity. 20 As a general rule, demonstration of conformity of medical devices and their manufacturers with the essential requirements must be based, among other things, on the evaluation of clinical data supporting the safety and performance of the products during normal conditions of use.
This certificate entitles the manufacturer to affix the CE mark and the Notified Body number to its medical devices after having prepared and signed a related EC Declaration of Conformity. 18 As a general rule, demonstration of conformity of medical devices and their manufacturers with the essential requirements must be based, among other things, on the evaluation of clinical data supporting the safety and performance of the products during normal conditions of use.
Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital, distract management from operating our business and may harm our reputation and financial results. 26 We may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws and health information privacy and security laws.
Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital, distract management from operating our business and may harm our reputation and financial results. 23 We may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws and health information privacy and security laws.
In general, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents, all of which could have a material adverse effect on our business and financial condition. 35 We may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming, and unsuccessful.
In general, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents, all of which could have a material adverse effect on our business and financial condition. 31 We may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming, and unsuccessful.
The market price for the Ordinary Shares may be influenced by many factors, including : ● inability to obtain the approvals necessary to commence further clinical trials; ● unsatisfactory results of clinical trials; ● announcements of regulatory approval or the failure to obtain it, or specific label indications or patient populations for its use, or changes or delays in the regulatory review process; ● announcements of therapeutic innovations or new products by us or our competitors; ● adverse actions taken by regulatory authorities with respect to our clinical trials, manufacturing supply chain or sales and marketing activities; ● changes or developments in laws or regulations applicable to the cryoablation of tumors or any other indication that we may seek to develop; 37 ● any adverse changes to our relationship with manufacturers or suppliers; ● any intellectual property infringement actions in which we may become involved; ● announcements concerning our competitors or the biotechnology industry in general; ● our commencement of, or involvement in, litigation; ● any major changes to our board of directors or management; ● our ability to recruit and retain qualified regulatory, research and development personnel; ● legislation or changes to healthcare payment systems; ● the depth of the trading market in our Ordinary Shares; ● termination or expiration of the lock-up agreements or other restrictions limiting our ability or that of any of our existing shareholders to sell our Ordinary Shares (or any other securities that we may issue, if any); ● general economic weakness, including inflation, or industry and market conditions; ● business interruptions resulting from an epidemic or pandemic, such as COVID-19, geopolitical actions, including war and terrorism, or natural disasters; ● the granting or exercise of employee stock options or other equity awards; and ● changes in investors’ and securities analysts’ perception of the business risks and conditions of our business.
The market price for the Ordinary Shares may be influenced by many factors, including: ● inability to obtain the approvals necessary to commence further clinical trials; ● unsatisfactory results of clinical trials; ● announcements of regulatory approval or the failure to obtain it, or specific label indications or patient populations for its use, or changes or delays in the regulatory review process; ● announcements of therapeutic innovations or new products by us or our competitors; ● adverse actions taken by regulatory authorities with respect to our clinical trials, manufacturing supply chain or sales and marketing activities; ● changes or developments in laws or regulations applicable to the cryoablation of tumors or any other indication that we may seek to develop; ● any adverse changes to our relationship with manufacturers or suppliers; ● any intellectual property infringement actions in which we may become involved; ● announcements concerning our competitors or the biotechnology industry in general; ● our commencement of, or involvement in, litigation; ● any major changes to our board of directors or management; ● our ability to recruit and retain qualified regulatory, research and development personnel; ● legislation or changes to healthcare payment systems; ● the depth of the trading market in our Ordinary Shares; ● termination or expiration of the lock-up agreements or other restrictions limiting our ability or that of any of our existing shareholders to sell our Ordinary Shares (or any other securities that we may issue, if any); 33 ● general economic weakness, including inflation, or industry and market conditions; ● business interruptions resulting from an epidemic or pandemic, geopolitical actions, including war and terrorism, or natural disasters; ● the granting or exercise of employee stock options or other equity awards; and ● changes in investors’ and securities analysts’ perception of the business risks and conditions of our business.
However, there can be no assurance that we will obtain regulatory approvals for all indications we have applied, or intend to apply for, or at all. 3 In addition to our dependency on receiving adequate regulatory approvals to market our products to our target market (geographic and indication-specific), our ability to generate significant revenues and achieve profitability also depends on our success in many areas, including but not limited to: ● complete research and development of our MultiSense and ProSense systems and any future products in a timely and successful manner; ● obtain market acceptance, if and when approved, of our ProSense and MultiSense systems and any future products from the medical community, patients and third-party payors; ● enter into agreements with commercial partners; ● obtain sufficient clinical evidence from our trials and commercial procedures, and publish such data; ● maintain and enhance a commercially viable, sustainable, scalable, reproducible and transferable manufacturing process for our ProSense and next generation single Probe and MultiSense systems and any future product candidates that is compliant with current good manufacturing practices, or cGMPs, or any other applicable regulations or standards; ● establish and maintain supply and, if applicable, manufacturing relationships with third parties that can provide, in both amount and quality, adequate products to support development and the market demand for our ProSense and next generation single Probe and MultiSense systems and any future products, if and when approved for marketing by regulators; ● maintain sufficient average selling price for our products and the revenues margin that we generate; ● launch and commercialize any products for which we obtain regulatory and marketing approval, either directly by establishing a sales force, marketing and distribution infrastructure, and/or with collaborators or distributors; ● accurately identifying demand for our ProSense and next generation single Probe and MultiSense systems or any future products; ● ensure our products are approved for reimbursement from governmental agencies, health care providers and insurers in jurisdictions where they have been approved for marketing; ● address any competing technological and market developments that impact our technology or its prospective usage by medical professionals; ● negotiate favorable terms in any collaboration, licensing or other arrangements into which we may enter and perform our obligations under such collaborations; ● attract, hire and retain qualified personnel; and ● locate and lease or acquire suitable facilities to support our clinical development, manufacturing facilities and commercial expansion.
However, there can be no assurance that we will obtain regulatory approvals for all indications we have applied, or intend to apply for, or at all. 3 In addition to our dependency on receiving adequate regulatory approvals to market our products to our target market (geographi c and indication-specific), our ability to generate significant revenues and achieve profitability also depends on our success in many areas, including but not limited to: ● complete research and development of our MultiSense and ProSense systems and any future products in a timely and successful manner; ● obtain market acceptance, if and when approved, of our ProSense and MultiSense systems and any future products from the medical community, patients and third-party payors; ● enter into agreements with commercial partners; ● obtain sufficient clinical evidence from our trials and commercial procedures, and publish such data; ● maintain and enhance a commercially viable, sustainable, scalable, reproducible and transferable manufacturing process for our ProSense, XSense and MultiSense systems and any future product candidates that is compliant with current good manufacturing practices, or cGMPs, or any other applicable regulations or standards; ● establish and maintain supply and, if applicable, manufacturing relationships with third parties that can provide, in both amount and quality, adequate products to support development and the market demand for our ProSense, XSense and MultiSense systems and any future products, if and when approved for marketing by regulators; ● maintain sufficient average selling price for our products and the revenues margin that we generate; ● launch and commercialize any products for which we obtain regulatory and marketing approval, either directly by establishing a sales force, marketing and distribution infrastructure, and/or with collaborators or distributors; ● accurately identifying demand for our ProSense, XSense and MultiSense systems or any future products; ● ensure our products are approved for reimbursement from governmental agencies, health care providers and insurers in jurisdictions where they have been approved for marketing; ● address any competing technological and market developments that impact our technology or its prospective usage by medical professionals; ● negotiate favorable terms in any collaboration, licensing or other arrangements into which we may enter and perform our obligations under such collaborations; ● attract, hire and retain qualified personnel; and ● locate and lease or acquire suitable facilities to support our clinical development, manufacturing facilities and commercial expansion.
As part of our strategy of raising awareness for our products and proprietary technologies within the medical community, although no formal agreement exists, in light of the ASBrS’ importance in our industry, we are operating in the United States with them as the leading organization and also with other organizations, such as the SIR, SIO and others that sets guidelines for breast cancer treatment.
As part of our strategy of raising awareness for our products and proprietary technologies within the medical community, although no formal agreement exists, in light of the ASBrS’s importance in our industry, we are operating in the United States with them as the leading organization and also with other organizations, such as the SIR, SIO and others that sets guidelines for breast cancer treatment.
Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and share price. The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, increases in inflation rates and uncertainty about economic stability.
Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and share price. The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, fluctuations in unemployment rates, fluctuations in inflation rates and uncertainty about economic stability.
Although we are also a public company in Israel, our management team may not successfully or efficiently manage our transition to being a public company in the United States that is subject to significant regulatory oversight and reporting obligations under the U.S. federal securities laws and the continuous scrutiny of securities analysts and investors.
Although we were also a public company in Israel, our management team may not successfully or efficiently manage our transition to being a public company in the United States that is subject to significant regulatory oversight and reporting obligations under the U.S. federal securities laws and the continuous scrutiny of securities analysts and investors.
All of these penalties could adversely affect our ability to operate our business and our financial results. 27 Changes in laws or regulations relating to data protection, or any actual or perceived failure by us to comply with such laws and regulations or our privacy policies, could materially and adversely affect our business or could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results.
All of these penalties could adversely affect our ability to operate our business and our financial results. 24 Changes in laws or regulations relating to data protection, or any actual or perceived failure by us to comply with such laws and regulations or our privacy policies, could materially and adversely affect our business or could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results.
Regulatory Approvals We have received a broad range of regulatory approvals for our products in the United States, Europe, China (IceSense3 system only), Singapore, Hong Kong, Mexico, Australia, Israel, Colombia, Costa Rica, India (only for disposables (see “ – India ” below for additional information), Thailand, Russia, South Africa and Taiwan.
Regulatory Approvals We have received a broad range of regulatory approvals for our products in the United States, Canada, Europe, China (IceSense3 system only), Singapore, Hong Kong, Mexico, Australia, Israel, Colombia, Costa Rica, India (only for disposables (see “ – India ” below for additional information), Thailand, Russia, South Africa, Taiwan and Brazil.
We have limited experience in commercializing our ProSense system and we may face several challenges with respect to our commercialization efforts, including, among others, that: ● we may not have adequate financial or other resources to complete the development of our next generation single Probe and MultiSense systems or any future products; ● we may not be able to manufacture our ProSense system in commercial quantities, at an adequate quality or at an acceptable cost; ● we may not be able to establish adequate sales, marketing and distribution channels for our products; 6 ● healthcare professionals, medical providers and patients may not accept our products; ● we may not be aware of possible complications from the continued use of our ProSense system since we have limited clinical experience with respect to the actual use of our ProSense system; ● technological breakthroughs solutions in the ablation of tissues may reduce the demand for our ProSense system; ● third-party payors may not agree to reimburse sufficiently, or at all patients or healthcare providers for any or all of the procedures conducted with our ProSense system, which may adversely affect medical providers, and patients’ willingness to use our ProSense system; ● we may face third-party claims of intellectual property infringement; ● we may fail to obtain or maintain regulatory clearance or approvals in our target markets (geographic and indication-specific) or may face adverse regulatory or legal actions even if regulatory approval is obtained; ● prices may adversely affect patients’ willingness to use our ProSense system; and ● guidelines published by the medical community may not recommend the use of our ProSense and next generation single Probe and MultiSense systems or any future products for certain indications, which may adversely affect healthcare users willingness to use our ProSense and next generation single Probe and MultiSense systems or any future products.
We have limited experience in commercializing our ProSense system and we may face several challenges with respect to our commercialization efforts, including, among others, that: ● we may not have adequate financial or other resources to complete the development of our MultiSense system or any future products; ● we may not be able to manufacture our ProSense system in commercial quantities, at an adequate quality or at an acceptable cost; ● we may not be able to establish adequate sales, marketing and distribution channels for our products; ● healthcare professionals, medical providers and patients may not accept our products; ● we may not be aware of possible complications from the continued use of our ProSense system since we have limited clinical experience with respect to the actual use of our ProSense system; ● technological breakthroughs solutions in the ablation of tissues may reduce the demand for our ProSense system; ● third-party payors may not agree to reimburse sufficiently, or at all patients or healthcare providers for any or all of the procedures conducted with our ProSense system, which may adversely affect medical providers, and patients’ willingness to use our ProSense system; ● we may face third-party claims of intellectual property infringement; ● we may fail to obtain or maintain regulatory clearance or approvals in our target markets (geographic and indication-specific) or may face adverse regulatory or legal actions even if regulatory approval is obtained; ● prices may adversely affect patients’ willingness to use our ProSense system; and ● guidelines published by the medical community may not recommend the use of our ProSense, XSense and MultiSense systems or any future products for certain indications, which may adversely affect healthcare users willingness to use our ProSense, XSense and MultiSense systems or any future products.
We anticipate that our expenses will increase substantially if and as we: ● continue the research and development of our technology; ● discover that there are robust technology changes in our field; ● seek regulatory and marketing approvals for our medical devices, and more specifically, our ProSense system for treatment of breast cancer; ● subject to the receipt of the applicable regulatory approvals, establish and expand a sales, marketing, and distribution infrastructure to commercialize our current ProSense system and our future next generation single Probe and MultiSense systems, and its disposables; 2 ● seek to identify, assess, acquire, license, and/or develop other medical devices companies and subsequent generations of our current medical devices; ● seek to maintain, protect, and expand our intellectual property portfolio; ● seek to attract and retain skilled personnel; ● create additional infrastructure to support our operations as a public company and our product development and planned future commercialization efforts; and ● experience any delays or encounter issues with respect to any of the above, including, but not limited to, failed studies, complex results, safety issues or other regulatory challenges that require longer follow-up of existing studies or additional supportive studies in order to pursue marketing approval.
We anticipate that our expenses will increase substantially if and as we: ● continue the research and development of our technology; ● discover that there are robust technology changes in our field; ● seek regulatory and marketing approvals for our medical devices, and more specifically, our ProSense system for treatment of breast cancer; ● subject to the receipt of the applicable regulatory approvals, establish and expand a sales, marketing, and distribution infrastructure to commercialize our current ProSense system and our future XSense and MultiSense systems, and its disposables; ● seek to identify, assess, acquire, license, and/or develop other medical devices companies and subsequent generations of our current medical devices; ● seek to maintain, protect, and expand our intellectual property portfolio; ● seek to attract and retain skilled personnel; ● create additional infrastructure to support our operations as a public company and our product development and planned future commercialization efforts; and ● experience any delays or encounter issues with respect to any of the above, including, but not limited to, failed studies, complex results, safety issues or other regulatory challenges that require longer follow-up of existing studies or additional supportive studies in order to pursue marketing approval.
The occurrence of any of these events would have a material adverse effect on our business, financial condition and results of operations and could result in shareholders losing their entire investment. Our, or our partners’, clinical trials may encounter delays, suspensions or other problems.
The occurrence of any of these events would have a material adverse effect on our business, financial condition and results of operations and could result in shareholders losing their entire investment. Our clinical trials or the clinical trials of our partners may encounter delays, suspensions or other problems.
Our research and development efforts have been financed in part through royalty-bearing grants in an aggregate amount of approximately $2.6 million (including accumulated interest) that we received from the IIA as of December 31, 2022.
Our research and development efforts have been financed in part through royalty-bearing grants in an aggregate amount of approximately $2.6 million (including accumulated interest) that we received from the IIA as of December 31, 2023.
The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on June 30, 2023.
The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on June 30, 2024.
If we do not receive approval via the 510(k) pathway or De Novo classification, we may seek to receive a PMA (see “ Item 4.D. Business Overview - Government Regulation – PMA Pathway ” for additional information).
If we do not receive approval via the 510(k) pathway or De Novo classification, we may seek to receive a PMA (see “ Item 4.B. Business Overview–- Government Regulation – PMA Pathway ” for additional information).
Based on the projected composition of our income and valuation of our assets, we do not expect to be a PFIC for 2022, and we do not expect to become a PFIC in the future, although there can be no assurance in this regard.
Based on the projected composition of our income and valuation of our assets, we do not expect to be a PFIC for 2023, and we do not expect to become a PFIC in the future, although there can be no assurance in this regard.
With respect to the royalty-bearing grants we are committed to pay royalties at a rate of 3% to 3.5% on sales proceeds from our products that were developed under IIA programs up to the total amount of grants received, linked to the U.S. dollar and bearing interest at an annual rate of LIBOR applicable to U.S. dollar deposits.
With respect to the royalty-bearing grants we are committed to pay royalties at a rate of 3% to 3.5% on sales proceeds from our products that were developed under IIA programs up to the total amount of grants received and bearing interest rate at an annual rate of SOFR applicable to U.S. dollar deposits.
On October 18, 2022, we submitted a De Novo classification request regulatory filing with the FDA for marketing authorization based on our ICE3 clinical trial interim analysis of ProSense for the indication of early-stage (Luminal A T1 invasive) low-risk breast cancer in patients who are at high risk to surgery (not suitable for surgical alternatives), representing approximately 43,000 women in the U.S. annually.
On October 18, 2022, we submitted a De Novo classification request regulatory filing with the FDA for marketing authorization based on our ICE3 clinical trial interim analysis of ProSense for the indication of early-stage (Luminal A T1 invasive) low-risk breast cancer in patients who are at high risk to surgery (not suitable for surgical alternatives), the demographic of which comprises of approximately 43,000 women in the U.S. annually.
The class assignment is a factor in determining the type of premarketing submission or application, if any, that will be required before marketing products in the United States. On October 18, 2022, we requested that De Novo classification be accepted for our “IceCure Family” systems for breast cancer indication.
The class assignment is a factor in determining the type of premarketing submission or application, if any, that will be required before marketing products in the United States. On October 18, 2022, we requested that De Novo classification would be granted for our “IceCure Family” systems for breast cancer indication.
Business – Government Regulation ” and “Item 4.B. Business – Malignant Breast Tumors ” for additional information.
Business Overview – Government Regulation ” and “Item 4.B. Business Overview – Malignant Breast Tumors ” for additional information.
However, there is usually a different configuration for the probe handle between the systems used to treat breast tumors (with a primarily straight handle) and used to treat other indications (with a 90-degrees handle) due to the different imaging device that is used in each instance (see “Item 4.B. Business – Our Products ” for additional information).
However, there is usually a different configuration for the probe handle between the systems used to treat breast tumors (with a primarily straight handle) and used to treat other indications (with a 90-degrees handle) due to the different imaging devices that are used in each instance (see “Item 4.B. Business – Our Products ” for additional information).
Because of this De Novo classification request, we will be required to accept special controls imposed by the FDA, mainly on the production process and post-market monitoring.
Because of this De Novo classification request, we would be required to accept special controls imposed by the FDA, mainly on the production process and post-market monitoring.
Specifically, we intend to seek to obtain FDA approval to commercialize our products for the treatment of malignant breast tumors. 53 ● Obtaining clinical data (by conducting both sponsored and independent clinical trials for our systems) and by gaining the support of these key opinion leaders. ● Expanding our distribution network for further commercialization, which may include distribution and/or license agreements or other forms of collaborative agreements. ● Obtaining the relevant approvals to allow for reimbursement to end-users of our systems. ● Having cryoablation treatment included in the recommendation guidelines as a valid treatment option of certain medical associations, such as the ASBrS. ● Continuing research and development efforts aimed at developing our next generation single Probe and MultiSense systems.
Specifically, we intend to seek to obtain FDA approval to commercialize our products for the treatment of malignant breast tumors. ● Obtaining clinical data (by conducting both sponsored and independent clinical trials for our systems) and by gaining the support of these key opinion leaders. ● Expanding our distribution network for further commercialization, which may include distribution and/or license agreements or other forms of collaborative agreements. ● Obtaining the relevant approvals to allow for reimbursement to end-users of our systems. ● Having cryoablation treatment included in the recommendation guidelines as a valid treatment option of certain medical associations, such as the ASBrS. ● Continuing research and development efforts aimed at developing our MultiSense system.
The entire cryoablation procedure of freeze-thaw-freeze with our ProSense system generally takes between 15 to 40 minutes, depending on the size, type and location of the tumor. The same system configuration can be used and was designed to treat both malignant and non-malignant tumors.
The entire cryoablation procedure of freeze-thaw-freeze with our ProSense system generally takes between 15 to 40 minutes, the precise time depending on the size, type and location of the tumor. The same system configuration can be used for and was designed to treat both malignant and non-malignant tumors.
Among the provisions of the Affordable Care Act of importance to our potential product candidates, the Affordable Care Act established an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents; expands eligibility criteria for Medicaid programs; increased the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; created a new Medicare Part D coverage gap discount program; required certain Affordable Care Act marketplace and other private payor plans to include coverage for preventative services, including vaccinations recommended by the ACIP without cost share obligations (i.e., co-payments, deductibles or co-insurance) for plan members; established a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research, along with funding for such research; and established a Center for Medicare and Medicaid Innovation at the Centers for Medicare & Medicaid Services, or CMS, to test innovative payment and service delivery models to lower Medicare and Medicaid spending.
Among the provisions of the Affordable Care Act of importance to our potential product candidates, the Affordable Care Act established an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents; expands eligibility criteria for Medicaid programs; increased the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; created a new Medicare Part D coverage gap discount program; required certain Affordable Care Act marketplace and other private payor plans to include coverage for preventative services, including vaccinations recommended by the ACIP without cost share obligations (i.e., co-payments, deductibles or co-insurance) for plan members; established a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research, along with funding for such research; and established a Center for Medicare and Medicaid Innovation at the Centers for Medicare & Medicaid Services, or CMS, to test innovative payment and service delivery models to lower Medicare and Medicaid spending. 19 In addition, other legislative changes have been adopted since the Affordable Care Act was enacted.
Using our innovative ProSense LN2 cryoablation system (and, in the future, potentially using additional systems) and propriety disposable probes and introducers, we intend to create a recurring revenues stream by selling single use probes to the users of our ProSense system.
Using our innovative ProSense LN2 cryoablation system (and, in the future, potentially using our next generation systems) and propriety disposable probes and introducers, we intend to create a recurring revenues stream by selling single use probes to the users of our ProSense system.
History and Development of the Company. We are an Israeli corporation based in Caesarea, Israel and were incorporated in Israel in 2006. On February 2, 2011, we became a public company in Israel and our shares were listed for trade on the TASE.
We are an Israeli corporation based in Caesarea, Israel and were incorporated in Israel in 2006. On February 2, 2011, we became a public company in Israel and our shares were listed for trade on the TASE.
Even if we obtain regulatory approval to market our ProSense system or any future products, including the next generation single Probe and MultiSense systems, our future revenues will depend on the market size (geographic and indication-specific) in which any such product receives approval and our ability to achieve sufficient market acceptance, competition, pricing, reimbursement from third-party payors for our ProSense and next generation single Probe and MultiSense systems or any future product candidates.
Even if we obtain regulatory approval to market our ProSense system or any future products, including the XSense and MultiSense systems, our future revenues will depend on the market size (geographic and indication-specific) in which any such product receives approval and our ability to achieve sufficient market acceptance, competition, pricing, reimbursement from third-party payors for our ProSense, XSense and MultiSense systems or any future product candidates.
Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our ProSense and next generation single Probe and MultiSense systems and any future product candidates. We cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all.
Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our ProSense, XSense and MultiSense systems and any future product candidates. We cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all.
To succeed, we must, among other critical matters, gain consumer acceptance for our ProSense and next generation single Probe and MultiSense systems, as compared to other solutions currently available in the market for the treatment of tumors and potential future medical devices incorporating our principal technology or offering other advanced cryoablation, heat ablation or other non or minimal invasive solutions.
To succeed, we must, among other critical matters, gain consumer acceptance for our ProSense, XSense and MultiSense systems, as compared to other solutions currently available in the market for the treatment of tumors and potential future medical devices incorporating our principal technology or offering other advanced cryoablation, heat ablation or other non or minimal invasive solutions.
The sale or the proposed sale of substantial amounts of our Ordinary Shares or other equity securities in the public markets or in private transactions may adversely affect the market price of our Ordinary Shares and our share price may decline substantially. 38 Our principal shareholders, officers and directors currently beneficially own approximately 55.7% of our Ordinary Shares.
The sale or the proposed sale of substantial amounts of our Ordinary Shares or other equity securities in the public markets or in private transactions may adversely affect the market price of our Ordinary Shares and our share price may decline substantially. Our principal shareholders, officers and directors currently beneficially own approximately 56% of our Ordinary Shares.
Business Overview – Our Products – Regulatory Approvals ” for additional information). In addition, in order to generate significant revenue, we are seeking to pursue additional regulatory approvals for our products for specific indications in countries where we already have general regulatory approvals.
Business Overview – Our Products – Regulatory Approvals ” for additional information). In addition, in order to generate significant revenue, we are applying for additional regulatory approvals for our products for specific indications in countries where we already have general regulatory approvals.
We may not receive, or may be delayed in receiving, the necessary clearances or approvals for our ProSense, next generation single Probe and MultiSense systems or future products in order to commercialize these products in specific countries or regions or in a specific indication, and failure to timely obtain necessary clearances or approvals for our existing or future products would adversely affect our ability to grow our business.
We may not receive, or may be delayed in receiving, the necessary clearances or approvals for our ProSense, XSense and MultiSense systems or future products in order to commercialize these products in specific countries or regions or in a specific indication, and failure to timely obtain necessary clearances or approvals for our existing or future products would adversely affect our ability to grow our business.
Business – Government Regulation – FDA Regulation of Medical Devices ” and “Item 3.D. Risk Factors – Risks Related to Product Development and Regulatory Approval ” for additional information). In addition, competition in the medical devices and cancer treatment market is intense.
Business Overview – Government Regulation – FDA Regulation of Medical Devices ” and “Item 3.D. Risk Factors – Risks Related to Product Development and Regulatory Approval ” for additional information). In addition, there is significant competition in the medical devices and cancer treatment market.
Since our next generation MultiSense system will have more than one probe, it will have freezing capabilities that both our current and next generation systems do not have, such as the ability to treat tumors in more than one location simultaneously.
Since our next generation MultiSense system will have more than one probe, it will have freezing capabilities that both our current and next generation systems do not have, such as the ability to treat regular-sized or larger tumors in more than one location simultaneously.
Another key step to gain market acceptance depends on the American Society of Breast Surgeons, or the ASBrS, amending their guidelines to support cryoablation as an alternative to surgery, applying for CPT1 codes for cryoablation for breast cancer (with the support of the ASBrS), negotiate medical coverage for our systems from medical insurers and collaborating with a major distributor of medical devices (see ““Item 4.B.
Other key steps to gaining market acceptance depends on the American Society of Breast Surgeons, or the ASBrS, amending their guidelines to support cryoablation as an alternative to surgery, applying for CPT1 codes for cryoablation for breast cancer (with the support of the ASBrS), negotiate medical coverage for our systems from medical insurers and collaborating with a major distributor of medical devices (see ““Item 4.B.
Several minutes after the procedure is completed, the ice ball thaws and as a result thereof, there is no need for surgical removal of the dead tumor tissue, as the dead tissue is absorbed by the body in a natural process.
Several minutes after the procedure is completed, the ice ball thaws and, as a result thereof, there is no need for surgical removal of the dead tumor tissue as the dead tissue is naturally absorbed by the body.
There is limited case law available to assist us in understanding the nature of these duties or the implications of these provisions. These provisions may be interpreted to impose additional obligations and liabilities on holders of our Ordinary Shares that are not typically imposed on shareholders of U.S. companies. 47 ITEM 4. INFORMATION ON THE COMPANY A.
There is limited case law available to assist us in understanding the nature of these duties or the implications of these provisions. These provisions may be interpreted to impose additional obligations and liabilities on holders of our Ordinary Shares that are not typically imposed on shareholders of U.S. companies.
Our ProSense and next generation single Probe and MultiSense systems, and any other product in our development pipeline, is not yet approved for third-party payor coverage or reimbursement in some of the geographical markets in which we operate, or plan to operate in the future.
Our ProSense, XSense and MultiSense systems, and any other product in our development pipeline, is not yet approved for third-party payor coverage or reimbursement in some of the geographical markets in which we operate, or plan to operate in the future.
Our future success depends upon expanding our commercial operations in the United States, Europe and Southeast Asia, as well as entering additional markets (geographic and indication-specific) to commercialize our next generation single Probe and MultiSense systems and any other future products.
Our future success depends upon expanding our commercial operations in the United States, Europe and Southeast Asia, as well as entering additional markets (geographic and indication-specific) to commercialize our XSense and MultiSense systems and any other future products.
In addition, we are not required to file annual, quarterly and current reports and financial statements with the SEC as frequently or as promptly as U.S. domestic companies registered under the Exchange Act. In 2021 and 2022, our capital expenditures amounted to $533 thousand and $ 888 thousand, respectively.
In addition, we are not required to file annual, quarterly and current reports and financial statements with the SEC as frequently or as promptly as U.S. domestic companies registered under the Exchange Act. In 2022 and 2023, our capital expenditures amounted to $891 thousand and $480 thousand, respectively.
We might have insufficient financial resources to improve our ProSense system or complete the development of our next generation single Probe and MultiSense systems, and any other future products, and advance technologies and develop new devices at competitive prices.
We might have insufficient financial resources to improve our ProSense system or complete the development of our MultiSense system, and any other future products, and advance technologies and develop new devices at competitive prices.
The inclusion criteria were patients over 65 years old with core biopsy-proven invasive ductal carcinoma with unifocal primary disease, tumor size less than 1.5 cm, Nottingham grade 1-2, estrogen and/or progesterone receptor positive and HER2 negative and breast size adequate for safe cryoablation. In February 2019, the last patient was recruited.
The inclusion criteria were patients over 65 years old with core biopsy-proven invasive ductal carcinoma with unifocal primary disease, tumor size less than 1.5 cm, Nottingham grade 1-2, estrogen and/or progesterone receptor positive and HER2 negative and breast size adequate for safe cryoablation.
They will therefore be able to exert significant control over matters submitted to our shareholders for approval. As of March 29, 2023, our principal shareholders, officers and directors beneficially own approximately 55.7% of our Ordinary Shares.
They will therefore be able to exert significant control over matters submitted to our shareholders for approval. As of March 29, 2024, our principal shareholders, officers and directors beneficially own approximately 56% of our Ordinary Shares.
Our reliance on these third-party suppliers also subjects us to other risks that could harm our business, including: ● we are not currently a major customer of many of our suppliers, and these suppliers may therefore give other customers’ needs higher priority than ours; ● third parties may threaten or enforce their intellectual property rights against our suppliers, which may cause disruptions or delays in shipment, or may force our suppliers to cease conducting business with us; ● we may not be able to obtain an adequate supply in a timely manner or on commercially reasonable terms; ● our suppliers, especially new suppliers, may make errors in manufacturing that could negatively affect the efficacy or safety of our products or cause delays in shipment; ● we may have difficulty locating and qualifying alternative suppliers; ● the costs of shipping components has increased and we may not be able to pass along such increased costs to our customers; ● switching components or suppliers may require product redesign, validation or verification processes and possibly submission to the FDA or other similar foreign regulatory agencies, which could significantly impede or delay our commercial activities; ● one or more of our suppliers may be unwilling or unable to supply components of our products; ● the occurrence of a fire, natural disaster or other catastrophe impacting one or more of our suppliers may affect their ability to deliver products to us in a timely manner; and ● our suppliers may encounter financial or other business hardships unrelated to our demand, which could inhibit their ability to fulfill our orders and meet our requirements.
Our reliance on these third-party suppliers also subjects us to other risks that could harm our business, including: ● we are not currently a major customer of many of our suppliers, and these suppliers may therefore give other customers’ needs higher priority than ours; ● third parties may threaten or enforce their intellectual property rights against our suppliers, which may cause disruptions or delays in shipment, or may force our suppliers to cease conducting business with us; ● we may not be able to obtain an adequate supply in a timely manner or on commercially reasonable terms; ● our suppliers, especially new suppliers, may make errors in manufacturing that could negatively affect the efficacy or safety of our products or cause delays in shipment; ● we may have difficulty locating and qualifying alternative suppliers; ● the costs of shipping components has increased and we may not be able to pass along such increased costs to our customers; ● switching components or suppliers may require product redesign, validation or verification processes and possibly submission to the FDA or other similar foreign regulatory agencies, which could significantly impede or delay our commercial activities; ● one or more of our suppliers may be unwilling or unable to supply components of our products; ● the occurrence of a fire, natural disaster or other catastrophe impacting one or more of our suppliers may affect their ability to deliver products to us in a timely manner; and ● our suppliers may encounter financial or other business hardships unrelated to our demand, which could inhibit their ability to fulfill our orders and meet our requirements. 8 In addition, the product development process of cryoablation systems based on the liquid nitrogen coolant material is complex and requires unique specialists and technology for design and manufacture systems core modules and elements.
Their dominant market position and significant control over the market could significantly limit our ability to introduce or effectively market and generate sales and capture market share. 50 To date, we have incurred significant operating losses, generated minimal revenues from product sales, and as of December 31, 2022 and 2021, our accumulated deficit was $75.4 million and $58.4 million, respectively.
Their dominant market positions and significant control over the market could significantly limit our ability to introduce or effectively market and generate sales and capture market share. To date, we have incurred significant operating losses, generated minimal revenues from product sales, and as of December 31, 2023 and 2022, our accumulated deficit was $90.1 million and $75.4 million, respectively.
We expect our research and development expenses to increase in connection with our planned expanded research and development efforts, including those conducted in connection with the development of our next generation single Probe and MultiSense systems, and as we seek to receive approval from applicable regulatory authorities to commence commercialization of our ProSense system for treatment in breast cancer and other indications.
Our research and development expenses may increase in connection with our planned expanded research and development efforts, including those conducted in connection with the development of our MultiSense system, and as we seek to receive approval from applicable regulatory authorities to commence commercialization of our ProSense system for treatment in breast cancer and other indications.
Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our Ordinary Shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (c) the date on which we have issued more than $1 billion in nonconvertible debt during the preceding three-year period.
Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our Ordinary Shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (c) the date on which we have issued more than $1 billion in nonconvertible debt during the preceding three-year period. 44 We are a foreign private issuer as defined by the rules under the Securities Act and the Exchange Act.
As a result, these shareholders, if they acted together, could significantly influence or even unilaterally approve matters requiring approval by our shareholders, including the election of directors and the approval of mergers or other business combination transactions. The interests of these shareholders may not always coincide with our interests or the interests of other shareholders.
As a result, these shareholders, if they acted together, could significantly influence or even unilaterally approve matters requiring approval by our shareholders, including the election of directors and the approval of mergers or other business combination transactions.
Any natural disaster or catastrophic event could have a significant negative impact on our operations and financial results. Moreover, any such event could delay the development of our product candidates. Our business and operations would suffer in the event of computer system failures, cyber-attacks or a deficiency in our cybersecurity.
Any natural disaster or catastrophic event could have a significant negative impact on our operations and financial results. Moreover, any such event could delay the development of our product candidates (see “Item 16.K. Cybersecurity ” for additional information). Our business and operations would suffer in the event of computer system failures, cyber-attacks or a deficiency in our cybersecurity.
We have funded our operations to date primarily through raising capital on Nasdaq and TASE, private offerings, minimal sales of our ProSense system and its components, including affiliated needles, or Probes, guiding needles, or Introducers and other products, which we collectively refer to as disposables, loans, convertible loans and royalty-bearing grants that we received from the Israeli Innovation Authority, or the IIA, formerly known as the Office of the Chief Scientist of the Ministry of Economy and Industry. 1 We have only a limited operating history upon which you can evaluate our business and prospects.
We have funded our operations to date primarily through raising capital on Nasdaq, private offerings, minimal sales of our ProSense system and its components, including affiliated needles, or Probes, guiding needles, or Introducers and other products, which we collectively refer to as disposables, loans, convertible loans and royalty-bearing grants that we received from the Israeli Innovation Authority, or the IIA, formerly known as the Office of the Chief Scientist of the Ministry of Economy and Industry.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

39 edited+27 added−3 removed156 unchanged
For tumors in other organs, other alternatives to surgical removal or cryoablation are available, such as thermal ablation, (including, radio frequency ablation, microwave ablation and high intensity focused ultrasound). Our primary direct competitors also include other cryoablation companies, such as Galil Medical Ltd., part of Boston Scientific Corporation, EndoCare, Inc., part of Siemens Healthineers AG, and Hygea Medical Technology Co.
For tumors in other organs, other alternatives to surgical removal or cryoablation are available, such as thermal ablation, (including, radio frequency ablation, microwave ablation and high intensity focused ultrasound). Our primary direct competitors also include other cryoablation companies, such as Galil Medical Ltd., part of Boston Scientific Corporation, EndoCare, Inc., part of Siemens Healthineers AG, Hygea Medical Technology Co.
This payment assignment for the procedure went into effect on January 1, 2023, opening the potential for facilities to be paid, on a case-by-case basis, for these procedures subject to our receipt of FDA marketing authorization of ProSense for breast cancer.
This payment assignment for the procedure went into effect on January 1, 2023, opening the potential for facilities to be paid, on a case-by-case basis, for these procedures subject to our receipt of FDA marketing authorization of ProSense for breast cancer.
Additional coverage, including payment for the physician, is expected upon establishment of the permanent CPT Category I code, which is conditioned on several factors, including our receipt of FDA marketing authorization of ProSense for breast cancer.
Additional coverage, including payment for the physician, is expected upon establishment of the permanent CPT Category I code, which is conditioned on several factors, including our receipt of FDA marketing authorization of ProSense for breast cancer.
Our future marketing and activities relating to the reporting of wholesaler or estimated retail prices for our products and other information affecting federal, state and third-party reimbursement for our products, and the sale and marketing of our product and any future product candidates, are subject to scrutiny under this law. 79 ● HIPAA which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters and, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and its implementing regulations, also imposes certain obligations, including contractual terms and technical safeguards, with respect to maintaining the privacy, security and transmission of individually identifiable health information. ● HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions. ● The Federal Physician Payments Sunshine Act within the Affordable Care Act, and its implementing regulations, which requires that certain manufacturers of devices and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report information related to certain payments or other transfers of value made or distributed to physicians and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, physicians and teaching hospitals and to report annually certain ownership and investment interests held by physicians and their immediate family members; and ● Analogous state and foreign fraud and abuse laws and regulations, such as anti-kickback and false claims laws, which may apply to sales and marketing arrangements and claims involving healthcare items or services reimbursed by any third party payor, including commercial insurers, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by federal laws, thus complicating compliance efforts.
Our future marketing and activities relating to the reporting of wholesaler or estimated retail prices for our products and other information affecting federal, state and third-party reimbursement for our products, and the sale and marketing of our product and any future product candidates, are subject to scrutiny under this law. ● HIPAA which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters and, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and its implementing regulations, also imposes certain obligations, including contractual terms and technical safeguards, with respect to maintaining the privacy, security and transmission of individually identifiable health information. ● HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions. ● The Federal Physician Payments Sunshine Act within the Affordable Care Act, and its implementing regulations, which requires that certain manufacturers of devices and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report information related to certain payments or other transfers of value made or distributed to physicians and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, physicians and teaching hospitals and to report annually certain ownership and investment interests held by physicians and their immediate family members; and ● Analogous state and foreign fraud and abuse laws and regulations, such as anti-kickback and false claims laws, which may apply to sales and marketing arrangements and claims involving healthcare items or services reimbursed by any third party payor, including commercial insurers, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by federal laws, thus complicating compliance efforts.
In addition, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it. ● The Federal False Claims Act imposes civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities (including manufacturers) for, among other things, knowingly presenting, or causing to be presented false or fraudulent claims for payment by a federal healthcare program or making a false statement or record material to payment of a false claim or avoiding, decreasing or concealing an obligation to pay money to the federal government.
In addition, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it. 75 ● The Federal False Claims Act imposes civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities (including manufacturers) for, among other things, knowingly presenting, or causing to be presented false or fraudulent claims for payment by a federal healthcare program or making a false statement or record material to payment of a false claim or avoiding, decreasing or concealing an obligation to pay money to the federal government.
Despite this, we believe that our LN2-based cryoablation technology is superior over our competitors, including Galil Medical and EndoCare, for a variety of reasons, including the following: ● our cryoablation LN2 technology allows deeper freezing temperature, up to -160° Celsius, which results in a faster and more efficient destruction of the tumor cells; ● our LN2 technology allow us to achieve lower temperatures faster, thereby resulting in a shorter procedure; ● our effective ablating zone for one probe is greater than that of technologies utilizing argon-based technology probes (we are able to use one probe for a three-centimeter tumor while argon-based technologies need more than one probe to create the same killing zone); ● Using one probe in our technology is more cost effective, less complicated, faster and easier to use for most physicians; ● the price of argon gas is significantly higher and less available in some territories than LN2 which makes our procedures more cost effective; and ● argon gas is stored in a 4,800 PSI gas balloons, which potentially creates a risk of explosion whereas our LN2 is stored in low pressure containers which presents less risk.
Despite this, we believe that our LN2-based cryoablation technology is superior than those of our competitors, including Galil Medical and EndoCare, for a variety of reasons, including the following: ● our cryoablation LN2 technology allows deeper freezing temperature, up to -160° Celsius, which results in a faster and more efficient destruction of the tumor cells; ● our LN2 technology allow us to achieve lower temperatures faster, thereby resulting in a shorter procedure; ● our effective ablating zone for one probe is greater than that of technologies utilizing argon-based technology probes (we are able to use one probe for a three-centimeter tumor while argon-based technologies need more than one probe to create the same killing zone); ● Using one probe in our technology is more cost effective, less complicated, faster and easier to use for most physicians; ● the price of argon gas is significantly higher and less available in some territories than LN2 which makes our procedures more cost effective; and ● argon gas is stored in a 4,800 PSI gas balloons, which potentially creates a risk of explosion whereas our LN2 is stored in low pressure containers which presents less risk.
In the current environment of managed care, with economically-motivated buyers, consolidation among healthcare providers, increased competition and declining reimbursement rates, we have been increasingly required to compete on the basis of price, value, reliability and efficiency, which we believe we have been able to do and hope to continue to do. 70 We believe that our cryoablation technology, and especially our LN2-based technology, has advantages over heat ablation technologies, which include, but are not limited to the below competitive advantages relative to heat ablation technologies. ● Pain: Because of the freezing effect on tissue, our procedure is less painful than heat ablation. ● Anesthesia: Due to the lower amount of pain that is generally caused by procedures from cryoablation, patients generally require less anesthesia. ● Accuracy: Image guided visualization of the cryoablation ice ball is clearer than heat ablation as the freezing does not cause evaporation, thereby allowing the cryoablation to be more accurate than thermal heat ablation.
In the current environment of managed care, with economically-motivated buyers, consolidation among healthcare providers, increased competition and declining reimbursement rates, we have been increasingly required to compete on the basis of price, value, reliability and efficiency, which we believe we have been able to do and hope to continue to do. 66 We believe that our cryoablation technology, and especially our LN2-based technology, has advantages over heat ablation technologies, which include, but are not limited to the below competitive advantages relative to heat ablation technologies. ● Pain: Because of the freezing effect on tissue, our procedure is less painful than heat ablation. ● Anesthesia: Due to the lower amount of pain that is generally caused by procedures from cryoablation, patients generally require less anesthesia. ● Accuracy: Image guided visualization of the cryoablation ice ball is clearer than heat ablation as the freezing does not cause evaporation, thereby allowing the cryoablation to be more accurate than thermal heat ablation.
While Shanghai Medtronic Zhikang conducts all marketing, sales, and certain professional training, Beijing Turing will be responsible for the import, installation, and after-sales service of IceSense3 systems in mainland China. 66 The agreement has an initial term of 36 months, with a minimum purchase target of $3.5 million (the “Minimum Purchase Target”) within this term.
While Shanghai Medtronic Zhikang conducts all marketing, sales, and certain professional training, Beijing Turing will be responsible for the import, installation, and after-sales service of IceSense3 systems in mainland China. The agreement has an initial term of 36 months, with a minimum purchase target of $3.5 million (the “Minimum Purchase Target”) within this term.
Failure to comply with the conditions of approval can result in materially adverse enforcement action, including withdrawal of the approval. Most modifications to a PMA approved device, including changes to the design, labeling, or manufacturing process, require prior approval before being implemented. Prior approval is obtained through submission of a PMA supplement.
Failure to comply with the conditions of approval can result in materially adverse enforcement action, including withdrawal of the approval. 70 Most modifications to a PMA approved device, including changes to the design, labeling, or manufacturing process, require prior approval before being implemented. Prior approval is obtained through submission of a PMA supplement.
The most common pathways for obtaining marketing authorization are 510(k) clearance and PMA. 72 All of our medical device products sold in the United States are subject to regulation as medical devices under the FDCA, as implemented and enforced by the FDA.
The most common pathways for obtaining marketing authorization are 510(k) clearance and PMA. All of our medical device products sold in the United States are subject to regulation as medical devices under the FDCA, as implemented and enforced by the FDA.
LN2 supply by small 2 L Dewars and are easy to handle and allow office-based procedures. We believe that these technological advantages will enable us to compete effectively with our competitors.
LN2 supply by small 2 L Dewars and are easy to handle and allow office-based procedures. 67 We believe that these technological advantages will enable us to compete effectively with our competitors.
We are progressing in our plans to meet the new requirements. 77 Further, the advertising and promotion of our products in the EU and the EEA is subject to the laws of individual EU and EEA member states implementing the EU Medical Devices Directive, Directive 2006/114/EC concerning misleading and comparative advertising, and Directive 2005/29/EC on unfair commercial practices, as well as other EU and EEA member state laws governing the advertising and promotion of medical devices.
We are progressing in our plans to meet the new requirements. 73 Further, the advertising and promotion of our products in the EU and the EEA is subject to the laws of individual EU and EEA member states implementing the EU Medical Devices Directive, Directive 2006/114/EC concerning misleading and comparative advertising, and Directive 2005/29/EC on unfair commercial practices, as well as other EU and EEA member state laws governing the advertising and promotion of medical devices.
Further, should we move our production outside of Israel, we may be subject to repayment of 120% or more of the grants. 82 The royalty rate we have undertaken to pay the IIA is 3.5%, and in any event up to the level of the grant, including accumulated interest, being linked to the exchange rate of the U.S. dollar and bearing Libor interest.
Further, should we move our production outside of Israel, we may be subject to repayment of 120% or more of the grants. 78 The royalty rate we have undertaken to pay the IIA is 3.5%, and in any event up to the level of the grant, including accumulated interest, being linked to the exchange rate of the U.S. dollar and bearing Libor interest.
We cannot assure that we have adequately complied with all regulatory requirements or that one or more of the referenced sanctions will not be applied to us as a result of a failure to comply. 76 International Regulation International sales of medical devices are subject to foreign government regulations, which vary substantially from country to country.
We cannot assure that we have adequately complied with all regulatory requirements or that one or more of the referenced sanctions will not be applied to us as a result of a failure to comply. 72 International Regulation International sales of medical devices are subject to foreign government regulations, which vary substantially from country to country.
Further, it is also possible that additional governmental action is taken in response to the COVID-19 pandemic. 81 Additional laws and regulations governing international operations Since we further expand our operations outside of the United States, we must dedicate additional resources to comply with numerous laws and regulations in each jurisdiction in which we plan to operate.
Further, it is also possible that additional governmental action is taken in response to the COVID-19 pandemic. 77 Additional laws and regulations governing international operations Since we further expand our operations outside of the United States, we must dedicate additional resources to comply with numerous laws and regulations in each jurisdiction in which we plan to operate.
We expect that current laws, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we, or any collaborators, may receive for any approved products. 80 U.S.
We expect that current laws, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we, or any collaborators, may receive for any approved products. 76 U.S.
These patents are not currently used, and are not expected to be used, by the Company for the development of our current and future technology and products and we do not expect the expiry and pending expiry to influence our business. 69 In addition, to our patent portfolio, we have the following issued trademarks.
These patents are not currently used, and are not expected to be used, by the Company for the development of our current and future technology and products and we do not expect the expiry and pending expiry to influence our business. 65 In addition, to our patent portfolio, we have the following issued trademarks.
The competitive position of our systems will depend, in part, upon the extent of coverage and adequate reimbursement for the procedures in which such products are used. 78 Coverage policies and third-party reimbursement rates may change at any time.
The competitive position of our systems will depend, in part, upon the extent of coverage and adequate reimbursement for the procedures in which such products are used. 74 Coverage policies and third-party reimbursement rates may change at any time.
The total sum of royalties, including accumulated interest, we are required to repay the IIA, as of December 31, 2022 was approximately $2.1 million, net, after deducting the sums we paid as royalties to the IIA. C. Organizational Structure.
The total sum of royalties, including accumulated interest, we are required to repay the IIA, as of December 31, 2023 was approximately $2.1 million, net, after deducting the sums we paid as royalties to the IIA. C. Organizational Structure.
As noted above, the FDA may require a company to collect clinical data on a device in the post-market setting. 75 The collection of such data may be required as a condition of PMA approval.
As noted above, the FDA may require a company to collect clinical data on a device in the post-market setting. 71 The collection of such data may be required as a condition of PMA approval.
Expiration Date Country Mark Renewal Due Date 4063706 77/615,741 N/A US ICECURE® 11/29/2030 (20 year) 4146269 85/430,438 N/A US ICECURE LOGO 05/22/2031 (20 year) 017884253 04/04/2018 N/A Europe ICECURE LOGO 04/04/2027 (10 year) 5251758 86/790,477 N/A US PROSENSE® 07/25/2023 (5 year) 017884265 17884265 N/A Europe PROSENSE® 04/04/2028 (10 year) 27566828 27566828 N/A China PROSENSE 02/06/2029 (10 year) 27566823 27566823 N/A China PROSENSE (CHINESE) 11/13/2027 (10 year) 010241305 010241305 N/A Europe ICECURE 09/05/2031 (10 year) 010241297 010241297 N/A Europe ICESENSE3 09/05/2031 (10 year) 010241263 010241263 N/A Europe ICESENSE 09/05/2031 (10 year) 018042365 018042365 N/A Europe ICECURE (NEW LOGO) 03/28/2029 (10 year) 6301784 2019-125291 N/A Japan PROSENSE 10/08/2030 (10 year) 6301783 2019-125290 N/A Japan ICECURE (ENGLISH) 10/08/2030 (10 year) 6301782 2019-125289 N/A Japan ICECURE (Logo) 10/08/2030 (10 year) Production and Manufacturing The majority of the manufacturing of the ProSense console’s components is outsourced, and we complete the final assembly in our facility in Israel.
Expiration Date Country Mark Renewal Due Date 4063706 77/615,741 N/A US ICECURE® 11/29/2030 (20 year) 4146269 85/430,438 N/A US ICECURE LOGO 05/22/2031 (20 year) 017884253 04/04/2018 N/A Europe ICECURE LOGO 04/04/2028 (10 year) 5251758 86/790,477 N/A US PROSENSE® 07/25/2026 (5 year) 017884265 17884265 N/A Europe PROSENSE® 04/04/2028 (10 year) 27566828 27566828 N/A China PROSENSE 02/06/2029 (10 year) 27566823 27566823 N/A China PROSENSE (CHINESE) 11/13/2027 (10 year) 010241305 010241305 N/A Europe ICECURE 09/05/2031 (10 year) 010241297 010241297 N/A Europe ICESENSE3 09/05/2031 (10 year) 010241263 010241263 N/A Europe ICESENSE 09/05/2031 (10 year) 018042365 018042365 N/A Europe ICECURE (NEW LOGO) 03/28/2029 (10 year) 6301784 2019-125291 N/A Japan PROSENSE 10/08/2030 (10 year) 6301783 2019-125290 N/A Japan ICECURE (ENGLISH) 10/08/2030 (10 year) 6301782 2019-125289 N/A Japan ICECURE (Logo) 10/08/2030 (10 year) Allowed 90857406 N/A US ICECURE (New Logo) Not yet registered Allowed 97544323 N/A US XSENSE Not yet registered Production and Manufacturing The majority of the manufacturing of the ProSense console’s components is outsourced, and we complete the final assembly in our facility in Israel.
Court of Appeals for the 5th Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the Affordable Care Act are invalid as well.
Court of Appeals for the 5t h Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the Affordable Care Act are invalid as well.
Title Type of Patent Application Type of Patent Protection Expiration Date Country PCT No. 7967815 12/731,219 Cryosurgical Instrument with Enhanced Heat Transfer Utility patent Machine 03/25/2030 US PCT/US2011/025663 102378600 201180000141.8 Utility patent Machine 02/22/2031 China EP2549941 2549941 Utility patent Machine 02/22/2031 Great Britain 2549941 Utility patent Machine 02/22/2031 France 602011054052.1 Utility patent Machine 02/22/2031 Germany 502019000004651 Utility patent Machine 02/22/2031 Italy 7967814 12/700,761 Cryoprobe with Vibrating Mechanism Utility patent Machine 02/05/2029 US N/A 8162812 12/722,845 Combined Cryotherapy and Brachytherapy Device and Method Utility patent Machine and Process 03/12/2029 US N/A 67 7938822 12/778,172 Heating and Cooling of Cryosurgical Instrument Using a Single Cryogen Utility patent Machine 05/12/2030 US PCT/US2011/031722 103079487 201180022782.3 Utility patent Machine 04/08/2031 China EP2533716 2533716 Utility patent Machine 04/08/2031 Great Britain 2533716 Utility patent Machine 04/08/2031 France 602011018919.0 Utility patent Machine 04/08/2031 Germany 502015000073978 Utility patent Machine 04/08/2031 Italy 8080005 12/846,047 Closed Loop Cryosurgical Pressure and Flow Regulated System Utility patent Machine 06/10/2030 US N/A 103096824 201180043677.8 Cryosurgical Instrument for Treating Large Volume of Tissue Utility patent Machine 09/01/2031 China PCT/US2011/050214 EP2593028 2593028 Utility patent Machine 09/01/2031 Great Britain 2593028 Utility patent Machine 09/01/2031 France 602011040633.7 Utility patent Machine 09/01/2031 Germany 502017000124372 Utility patent Machine 09/01/2031 Italy 8591505 13/339,506 Cryosurgical Instrument with Redirected Flow Utility patent Machine 05/19/2031 US PCT/US2011/067858 103402449 201180068737.1 Utility patent Machine 12/29/2031 China EP2683315 2683315 Utility patent Machine 12/29/2031 Great Britain 2683315 Utility patent Machine 12/29/2031 France 602011031296.0 Utility patent Machine 12/29/2031 Germany 502016000113273 Utility patent Machine 12/29/2031 Italy 7137978 10/637,904 Cryosurgical Instrument and its Accessory System Utility patent Machine 12/02/2023 US N/A 7481806 11/531,058 Cryosurgical Instrument and its Accessory System Utility patent Machine 08/11/2023 US N/A 7731711 12/336,866 Cryosurgical Instrument and its Accessory System Utility patent Process 08/11/2023 US N/A 7425211 11/462,244 Cryogenic Probe for Treating Large Volume of Tissue Utility patent Machine 11/24/2026 US N/A 7803154 11/832,778 Cryogenic Probe for Treating Large Volume of Tissue Utility patent Machine 11/24/2026 US N/A 8709005 13/232,203 Coiled Heat Exchanger for Cryosurgical Instrument Utility patent Machine 12/10/2031 US PCT/US2011/051529 103442657 201180069176.7 Utility patent Machine 09/14/2031 China 1190057 14103188.0 Utility patent Machine 09/14/2031 Hong Kong EP2696785 2696785 Utility patent Machine 09/14/2031 Great Britain 2696785 Utility patent Machine 09/14/2031 France 602011031962.0 Utility patent Machine 09/14/2031 Germany 502016000122670 Utility patent Machine 09/14/2031 Italy 9050075 14/133980 Utility patent Machine 05/11/2031 US 68 8906004 14/204,175 Coiled Heat Exchanger for Cryosurgical Instrument Utility patent Machine 05/11/2031 US N/A 9808302 15/125,258 Phase Separation of Cryogen in Cryosurgical Instrument Utility patent Machine and Process 05/11/2031 US PCT/US2014/064292 9039689 14/547,483 Phase Separation of Cryogen in Cryosurgical Instrument Utility patent Machine 01/28/2026 US N/A Patent Number to be Assigned 16-785,686 Cryogen Pump Utility patent Machine and process 02/10/2040 US N/A 7219498 2021-12530 Cryogen Pump Utility patent Machine and process 01/13/2041 Japan N/A EP3868320 21151413.8 Cryogen Pump Utility patent Machine and process 1/13/2041 Europe N/A 21151413.8 Cryogen Pump Utility patent Machine and process 1/13/2041 France N/A 21151413.8 Cryogen Pump Utility patent Machine and process 1/13/2041 Germany N/A 21151413.8 Cryogen Pump Utility patent Machine and process 1/13/2041 Italy N/A 21151413.8 Cryogen Pump Utility patent Machine and process 1/13/2041 Spain N/A 21151413.8 Cryogen Pump Utility patent Machine and process 1/13/2041 Switzerland N/A 21151413.8 Cryogen Pump Utility patent Machine and process 1/13/2041 The Netherlands N/A 21151413.8 Cryogen Pump Utility patent Machine and process 1/13/2041 Turkey N/A 21151413.8 Cryogen Pump Utility patent Machine and process 1/13/2041 UK N/A Our intellectual property covers our technological platform, as well as innovative developments that will be used in our future products.
Title Type of Patent Application Type of Patent Protection Expiration Date Country PCT No. 7967815 12/731,219 Cryosurgical Instrument with Enhanced Heat Transfer Utility patent Machine 03/25/2030 US PCT/US2011/025663 102378600 201180000141.8 Utility patent Machine 02/22/2031 China EP2549941 2549941 Utility patent Machine 02/22/2031 Great Britain 2549941 Utility patent Machine 02/22/2031 France 602011054052.1 Utility patent Machine 02/22/2031 Germany 502019000004651 Utility patent Machine 02/22/2031 Italy 7967814 12/700,761 Cryoprobe with Vibrating Mechanism Utility patent Machine 02/05/2029 US N/A 8162812 12/722,845 Combined Cryotherapy and Brachytherapy Device and Method Utility patent Machine and Process 03/12/2029 US N/A 63 7938822 12/778,172 Heating and Cooling of Cryosurgical Instrument Using a Single Cryogen Utility patent Machine 05/12/2030 US PCT/US2011/031722 103079487 201180022782.3 Utility patent Machine 04/08/2031 China EP2533716 2533716 Utility patent Machine 04/08/2031 Great Britain 2533716 Utility patent Machine 04/08/2031 France 602011018919.0 Utility patent Machine 04/08/2031 Germany 502015000073978 Utility patent Machine 04/08/2031 Italy 8080005 12/846,047 Closed Loop Cryosurgical Pressure and Flow Regulated System Utility patent Machine 06/10/2030 US N/A 103096824 201180043677.8 Cryosurgical Instrument for Treating Large Volume of Tissue Utility patent Machine 09/01/2031 China PCT/US2011/050214 EP2593028 2593028 Utility patent Machine 09/01/2031 Great Britain 2593028 Utility patent Machine 09/01/2031 France 602011040633.7 Utility patent Machine 09/01/2031 Germany 502017000124372 Utility patent Machine 09/01/2031 Italy 8591505 13/339,506 Cryosurgical Instrument with Redirected Flow Utility patent Machine 05/19/2031 US PCT/US2011/067858 103402449 201180068737.1 Utility patent Machine 12/29/2031 China EP2683315 2683315 Utility patent Machine 12/29/2031 Great Britain 2683315 Utility patent Machine 12/29/2031 France 602011031296.0 Utility patent Machine 12/29/2031 Germany 502016000113273 Utility patent Machine 12/29/2031 Italy 7425211 11/462,244 Cryogenic Probe for Treating Large Volume of Tissue Utility patent Machine 11/24/2026 US N/A 7803154 11/832,778 Cryogenic Probe for Treating Large Volume of Tissue Utility patent Machine 11/24/2026 US N/A 8709005 13/232,203 Coiled Heat Exchanger for Cryosurgical Instrument Utility patent Machine 12/10/2031 US PCT/US2011/051529 103442657 201180069176.7 Utility patent Machine 09/14/2031 China 1190057 14103188.0 Utility patent Machine 09/14/2031 Hong Kong EP2696785 2696785 Utility patent Machine 09/14/2031 Great Britain 2696785 Utility patent Machine 09/14/2031 France 602011031962.0 Utility patent Machine 09/14/2031 Germany 502016000122670 Utility patent Machine 09/14/2031 Italy 9050075 14/133980 Utility patent Machine 05/11/2031 US 64 8906004 14/204,175 Coiled Heat Exchanger for Cryosurgical Instrument Utility patent Machine 05/11/2031 US N/A 9808302 15/125,258 Phase Separation of Cryogen in Cryosurgical Instrument Utility patent Machine and Process 05/11/2031 US PCT/US2014/064292 9039689 14/547,483 Phase Separation of Cryogen in Cryosurgical Instrument Utility patent Machine 01/28/2026 US N/A Patent Number to be Assigned 16-785,686 Cryogen Pump Utility patent Machine and process 02/10/2040 US N/A 7219498 2021-12530 Cryogen Pump Utility patent Machine and process 01/13/2041 Japan N/A EP3868320 21151413.8 Cryogen Pump Utility patent Machine and process 1/13/2041 Europe N/A 21151413.8 Cryogen Pump Utility patent Machine and process 1/13/2041 France N/A 21151413.8 Cryogen Pump Utility patent Machine and process 1/13/2041 Germany N/A 21151413.8 Cryogen Pump Utility patent Machine and process 1/13/2041 Italy N/A 21151413.8 Cryogen Pump Utility patent Machine and process 1/13/2041 Spain N/A 21151413.8 Cryogen Pump Utility patent Machine and process 1/13/2041 Switzerland N/A 21151413.8 Cryogen Pump Utility patent Machine and process 1/13/2041 The Netherlands N/A 21151413.8 Cryogen Pump Utility patent Machine and process 1/13/2041 Turkey N/A 21151413.8 Cryogen Pump Utility patent Machine and process 1/13/2041 UK N/A Patent Number to be Assigned 2022-91916 Temperature Control Algorithm Utility patent Machine and process 06/06/2042 Japan N/A Our intellectual property covers our technological platform, as well as innovative developments that will be used in our future products.
In addition, we have a number of other trademarks in the United Kingdom that we intend on abandoning. Registration No. Application No.
We also have a number of other trademarks in the United Kingdom that we intend on abandoning. Registration No. Application No.
Our headquarters are located at 7 Ha’Eshel St., Caesarea, 3079504, Israel, where we currently occupy approximately 819 square meters (approximately 8,815 square feet). We lease our facilities and our lease ends on July 2023, extendable to July 2026. ITEM 4A. UNRESOLVED STAFF COMMENTS Not applicable.
Our headquarters are located at 7 Ha’Eshel St., Caesarea, 3079504, Israel, where we currently occupy approximately 879 square meters (approximately 9,461 square feet). We lease our facilities and our lease ends on July 2023, extendable to July 2026. ITEM 4A. UNRESOLVED STAFF COMMENTS Not applicable.
Item 4.D. Business Overview – Revenues and Growth Strategy ” for additional information). In addition to our distribution agreements and other aspects of our product revenues and growth strategies, as described below, commercialization of our products is also highly dependent on the receipt of Current Procedural Terminology, or CPT, characterization in the United States.
In addition to our distribution agreements and other aspects of our product revenues and growth strategies, as described below, commercialization of our products is also highly dependent on the receipt of Current Procedural Terminology, or CPT, characterization in the United States.
The type of information required to support a PMA supplement and the FDA’s time for review of a PMA supplement vary depending on the nature of the modification. 74 Breakthrough Devices Program The goal of the Breakthrough Devices Program is to provide patients and health care providers with timely access to these medical devices by speeding up their development, assessment, and review, while preserving the statutory standards for premarket approval, 510(k) clearance, and De Novo marketing authorization, consistent with the FDA’s mission to protect and promote public health.
Breakthrough Devices Program The goal of the Breakthrough Devices Program is to provide patients and health care providers with timely access to these medical devices by speeding up their development, assessment, and review, while preserving the statutory standards for premarket approval, 510(k) clearance, and De Novo marketing authorization, consistent with the FDA’s mission to protect and promote public health.
Furthermore, under the distribution agreement’s terms, we will be responsible for obtaining and maintaining any and all regulatory approvals in mainland China required for marketing, promotion, distribution, sale and use of the products issued by mainland China’s NMPA, its local branches or any other government authorities.
The Distribution Agreement may be terminated in certain circumstances, including in the event of default, material breach or insolvency. 62 Furthermore, under the distribution agreement’s terms, we will be responsible for obtaining and maintaining any and all regulatory approvals in mainland China required for marketing, promotion, distribution, sale and use of the products issued by mainland China’s NMPA, its local branches or any other government authorities.
Ltd. for interventional radiology. Hygea Medical Technology Co. Ltd. is a company that also uses LN2-based technology. Unlike these competitors who have a multi probe system in the market, we are still developing our MultiSense system.
Ltd., and Beijing Sunshine Yibang Medical Technology Co., Ltd (the latter two of which operate mainly in China) for interventional radiology. Hygea Medical Technology Co. Ltd. is a company that also uses LN2-based technology. Unlike these competitors who have a multi probe system in the market, we are still developing our MultiSense system.
Class III devices are devices for which general controls, by themselves, are insufficient and for which there is insufficient information to determine that application of special controls would provide a reasonable assurance of safety and effectiveness. Class III devices are subject to general controls and typically require FDA approval of a premarket approval, or PMA, application before marketing.
Class III devices are devices for which general controls, by themselves, are insufficient and for which there is insufficient information to determine that application of special controls would provide a reasonable assurance of safety and effectiveness.
PTO in February 2020 for a cryogenic pump, a utility patent, with claims drawn to a machine and to process, which has an expected expiration date of February 10, 2040. Patent No. Application No.
In addition to our issued patents, we also have one patent application (application No. 16/785,686), which we filed with the U.S. PTO in February 2020 for a cryogenic pump, a utility patent, with claims drawn to a machine and to process, which has an expected expiration date of February 10, 2040. Patent No. Application No.
Unless it is exempt from premarket review requirements, a medical device must receive marketing authorization from the FDA prior to being commercially marketed, distributed or sold in the United States.
Class III devices are subject to general controls and typically require FDA approval of a premarket approval, or PMA, application before marketing. 68 Unless it is exempt from premarket review requirements, a medical device must receive marketing authorization from the FDA prior to being commercially marketed, distributed or sold in the United States.
In order to cause our products to receive entry into additional CPT categories, we intend to work with the ASBrS and conduct registry trials to collect additional data that we believe will support the use of our system and technology as a viable treatment option for breast cancer.
Even if we are successful in obtaining approval for our products for entry into additional CPT category codes, these changes generally take over 12 months to go into effect, usually at the start of a new calendar year. 60 In order to cause our products to receive entry into additional CPT categories, we intend to work with the ASBrS and conduct registry trials to collect additional data that we believe will support the use of our system and technology as a viable treatment option for breast cancer.
Under the temporary CPT Category III code, the ProSense procedure is priced for coverage by the CMS at approximately $3,400 for the facility fee alone.
Under the temporary CPT Category III code, the ProSense procedure is priced for coverage by the CMS at approximately $3,500 for the facility fee alone. The Company may request an extension to the temporary CPT Category III code, which is due to expire in February 2029.
In addition, we believe that by completing the development, and initiating commercialization of our next generation MultiSense system will enable us to compete even more effectively with our competitors. 71 Government Regulation Our products and business are subject to extensive federal, state, local and foreign laws and regulations, including those relating to the protection of the environment, health and safety and our failure to comply with applicable requirements could harm our business.
Government Regulation Our products and business are subject to extensive federal, state, local and foreign laws and regulations, including those relating to the protection of the environment, health and safety and our failure to comply with applicable requirements could harm our business.
After a device receives 510(k) clearance or de novo classification, any modification that could significantly affect the safety or effectiveness of the device, or that would constitute a major change in its intended use, including significant modifications to any of our products or procedures, requires submission and clearance of a new 510(k) application or de novo classification or approval of a PMA.
The device sponsor must then fulfill more rigorous PMA requirements, or can request a risk-based classification determination for the device in accordance with the “de novo” process, which is a route to market for novel medical devices that are low to moderate risk and are not substantially equivalent to a predicate device. 69 After a device receives 510(k) clearance or de novo classification, any modification that could significantly affect the safety or effectiveness of the device, or that would constitute a major change in its intended use, including significant modifications to any of our products or procedures, requires submission and clearance of a new 510(k) application or de novo classification or approval of a PMA.
The FDA may also subject us to other enforcement actions, including, but not limited to, issuing a warning letter or untitled letter to us, seizing our products, imposing civil penalties, or initiating criminal prosecution. 73 De Novo Pathway Medical device types that the FDA has not previously classified as Class I, II, or III are automatically classified as Class III regardless of the level of risk they pose.
The FDA may also subject us to other enforcement actions, including, but not limited to, issuing a warning letter or untitled letter to us, seizing our products, imposing civil penalties, or initiating criminal prosecution.
At this time, we have yet to initiate any marketing efforts for these indications. Mainland China On June 12, 2022, we signed an exclusive distribution agreement for the IceSense3 and disposable probes with Shanghai Medtronic Zhikang and Beijing Turing.
In 2021 we received $498 thousand in furtherance of the first purchase order. In addition, in 2022 and 2023 we received $30 thousand and $14 thousand in orders respectively. Mainland China On June 12, 2022, we signed an exclusive distribution agreement for the IceSense3 and disposable probes with Shanghai Medtronic Zhikang and Beijing Turing.
Intellectual Property Our intellectual property portfolio consists of 30 issued patents (17 in the United States, 7 in Europe, 5 in China and 1 in Hong Kong), as further detailed in the table below. In addition to our issued patents, we also have one patent application (application No. 16/785,686), which we filed with the U.S.
Intellectual Property Our intellectual property portfolio consists of 51 issued patents (14 in the United States, 23 in Europe, 6 in Great Britain, 5 in China, 2 in Japan, and 1 in Hong Kong), as further detailed in the table below.
Removed
Even if we are successful in obtaining approval for our products for entry into additional CPT category codes, these changes generally take over 12 months to go into effect, usually at the start of a new calendar year.
Added
Item 4.B. Business Overview – Revenues and Growth Strategy ” for additional information). We currently have distribution agreements in Japan, Thailand, Mainland China, Italy, France, Spain, Australia, Hong Kong, Taiwan, Poland, Turkey, India, Brazil, Portugal and other countries. We are reviewing new opportunities for collaboration with distributors in Germany as well.
Removed
The Distribution Agreement may be terminated in certain circumstances, including in the event of default, material breach or insolvency.
Added
We believe that the following are our material distribution agreements. United States In the United States, we are working with leading breast surgeons and breast interventional radiologists in order to initiate collaborations in the field of freezing malignant breast tumors.
Removed
The device sponsor must then fulfill more rigorous PMA requirements, or can request a risk-based classification determination for the device in accordance with the “de novo” process, which is a route to market for novel medical devices that are low to moderate risk and are not substantially equivalent to a predicate device.
Added
At the Radiological Society of North America, or RSNA, conference held in 2018, our freezing technology was declared one of 15 groundbreaking solutions in this field. In 2021 and 2022, our technology was also presented at the RSNA conference.
Added
Specifically, in 2021, interim data from the ICE3 clinical trial was presented and selected to be featured in a daily bulletin by RSNA. At the 2022 conference, the ProSense was featured in a poster presentation titled “To Freeze Or Not To Freeze?
Added
That Is The Question: Cryoablation For The Treatment Of Breast Cancer” by Kenneth Tomkovich, MD, Co-Primary investigator for IceCure’s ICE3 clinical trial, and Diagnostic and Interventional Radiologist with Princeton Radiology, CentraState Medical Center, and Penn Princeton Medical Center in Princeton, New Jersey.
Added
In the United States, unlike in other territories, as described below, we are entering a consolidated market and, in addition to our existing growth strategy, we will need to refine our marketing approach in order to generate significant revenue.
Added
At this time, we have yet to initiate any marketing efforts for these indications.
Added
Terumo Japan In August 2019, we entered into an exclusive distribution agreement, or the Terumo Japan Agreement, for licensing, registration, import, marketing, sale, promotion and distribution of our ProSense system and its disposable products with breast tumors, with a leading global medical company, Terumo Corporation, or Terumo, in Japan and Singapore; provided, however, that with respect to the exclusivity clause, (i) we shall continue to have the ability to sell our system and disposables in Japan until Terumo obtains regulatory permit for marketing and distribution of our ProSense system and (ii) notwithstanding the foregoing, the exclusivity condition shall continue in force only for so long as Terumo purchases a minimum agreed upon number of products during the term of the Terumo Japan Agreement.
Added
We believe that the Terumo Japan Agreement will accelerate the commercialization of our ProSense system and associated disposables to treat malignant breast tumors in Japan and Singapore. The Terumo Japan Agreement requires Terumo to obtain necessary regulatory permits for marketing and distribution in Japan and obtaining reimbursement approvals.
Added
In Singapore, we have received the applicable regulatory approvals for our products; however, in February 2023, Termuo notified us that they suspended their distribution activities in Singapore with effect from March 31, 2023.
Added
The Terumo Japan Agreement is for an initial term of five years from the date of receipt of regulatory approvals for the sale of the Company’s products in Japan and is automatically extended for additional terms of five years each, unless a party notifies the other party of its intention to terminate the Terumo Japan Agreement at least one year prior to the end of the term, or at any time upon the mutual agreement of the parties in writing.
Added
A party shall have the right to terminate the Terumo Japan Agreement upon a breach of a material provision of the Terumo Japan Agreement by the other party or upon the insolvency of such other party, subject to certain conditions.
Added
In addition, the Terumo Japan Agreement may be terminated by either party under certain terms, including the option of revocation by the Company if Terumo does not purchase at least 60% of the minimum quantities defined in the Terumo Japan Agreement for the purchase of products and if Terumo fails to obtain the regulatory approvals on the dates stipulated in the Terumo Japan Agreement.
Added
In some cases, upon revocation or termination of the agreement, Terumo will assign to the Company the regulatory filings and regulatory approvals for the marketing and distribution of the ProSense system in Japan.
Added
The minimum aggregate consideration that Terumo owes us under the Terumo Japan Agreement is approximately $13.2 million, of which, as of the date of this annual report on Form 20-F, we have received $4 million as proceeds for distribution rights, knowledge sharing, the first purchase order, and another $441 thousand for sale of our products and services.
Added
Our revenues pursuant to the Terumo Japan Agreement amounted to $348 thousand in 2019, $1,722 thousand in 2020, $1,109 thousand in 2021, $547 thousand in 2022, and $274 thousand in 2023. 61 Terumo Thailand In December 2020, we entered into an exclusive distribution agreement with Terumo Thailand (an affiliate of Terumo), or the Terumo Thailand Agreement, for licensing, registration, import, marketing, sale, promotion and distribution of ProSense system and its disposables, in Thailand.
Added
The exclusivity condition shall continue in force only for so long as Terumo Thailand purchases a minimum agreed upon number of products during the term of the agreement. The distribution agreement is intended to accelerate the commercialization of our ProSense system and associated disposables to treat malignant and benign tumors in the breast, kidney, lung and other applications in Thailand.
Added
The agreement requires Terumo Thailand to obtain necessary regulatory permit for marketing and distribution in Thailand.
Added
The Terumo Thailand Agreement is for an initial term of six years and is automatically extended for additional terms of six years each, unless a party notifies the other party of its intention to terminate the Terumo Thailand Agreement at least one year prior to the end of the term, or at any time upon the mutual agreement of the parties in writing.
Added
A party shall have the right to terminate the Terumo Thailand Agreement upon a breach of a material provision of the Terumo Thailand Agreement by the other party or upon the insolvency of such other party, subject to certain conditions.
Added
In addition, the Terumo Thailand Agreement may be terminated by either party under certain terms, including the option of revocation by the Company if Terumo does not purchase at least 60% of the minimum quantities defined in the Terumo Thailand Agreement for the purchase of products, and the option of revocation by Terumo Thailand if the Company discontinues its business relating to the ProSense system and its disposables or does not bring action with respect to an infringement of the exclusive distribution right within a reasonable time frame.
Added
To date, we have received up-front payments in a total aggregate amount of $450,000 under the Terumo Thailand Agreement.
Added
The minimal aggregate consideration that Terumo Thailand owes us under the agreement is approximately $7.2 million, of which $450,000 is to be paid in three equal installments of $150,000 for the sole distribution rights, transferring the regulatory approval from our regulatory agent to Terumo Thailand and knowledge sharing and $329,000 for the first purchase order.
Added
India In May 2023, our ProSense system was installed and inaugurated at Kovai Medical Center and Hospital in Coimbatore, India, constituting the first instance of cryoablation for breast cancer treatment being offered in India. Brazil In June 2021, we entered into an exclusive distribution agreement for the sale, marketing and distribution of our products in Brazil with Ktrfios.
Added
In addition, we believe that by completing the development, and initiating commercialization of our next generation MultiSense system will enable us to compete even more effectively with our competitors.
Added
De Novo Pathway Medical device types that the FDA has not previously classified as Class I, II, or III are automatically classified as Class III regardless of the level of risk they pose.
Added
The type of information required to support a PMA supplement and the FDA’s time for review of a PMA supplement vary depending on the nature of the modification.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

100 edited+31 added−24 removed101 unchanged
The period-to-period comparison of results is not necessarily indicative of results for future periods.
The period-to-period comparison of results is not necessarily indicative of results for future periods.
The period-to-period comparison of results is not necessarily indicative of results for future periods.
The period-to-period comparison of results is not necessarily indicative of results for future periods.
Tlalit Bussi Tel-Tzure has served as our Vice President, Business Development and Global Marketing, since December 2018. Ms. Bussi Tel-Tzure has more than 20 years of sales, business developments and marketing of medical device companies.
Tlalit Bussi Tel-Tzure, Vice President, Business Development and Global Marketing Ms. Tlalit Bussi Tel-Tzure has served as our Vice President, Business Development and Global Marketing, since December 2018. Ms. Bussi Tel-Tzure has more than 20 years of sales, business developments and marketing of medical device companies.
Tamir has also served as executive chairman of the board of directors of Fertigo Medical Ltd. since November 2018 and as a member of the advisory board of Biodesign Israel, a Stanford University program for medical entrepreneurship and innovation, since June 2018. Prior to that, Mr.
Tamir has also served as executive chairman of the board of directors of Fertigo Medical Ltd. since November 2018, as a member of the advisory board of Biodesign Israel, a Stanford University program for medical entrepreneurship and innovation, since June 2018. Prior to that, Mr.
For these purposes, ceasing to serve as a director for a period of two years or less would not be deemed to sever the consecutive nature of such director’s service.
For these purposes, ceasing to serve as a director for a period of two years or less would not be deemed to sever the consecutive nature of such director’s service.
Our future capital requirements will depend on many factors, including: ● our ability to sell our products according to our plans; ● the progress and cost of our research and development activities; ● the costs associated with the manufacturing our products; ● the costs of our clinical trials and obtaining regulatory approvals; ● the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights; ● the cost of our commercialization efforts, marketing, sales and distribution of our products the potential costs of contracting with third parties to provide marketing and distribution services for us or for building such capacities internally; and ● the magnitude of our general and administrative expenses.
Our future capital requirements will depend on many factors, including: ● our ability to sell our products according to our plans; ● the progress and cost of our research and development activities; ● the costs associated with the manufacturing our products; 87 ● the costs of our clinical trials and obtaining regulatory approvals; ● the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights; ● the cost of our commercialization efforts, marketing, sales and distribution of our products the potential costs of contracting with third parties to provide marketing and distribution services for us or for building such capacities internally; and ● the magnitude of our general and administrative expenses.
External directors are elected by a majority vote at a shareholders’ meeting, as long as either: ● at least a majority of the shares held by shareholders who are not controlling shareholders and do not have personal interest in the appointment (excluding a personal interest that did not result from the shareholder’s relationship with the controlling shareholder) have voted in favor of the proposal (shares held by abstaining shareholders shall not be considered); or ● the total number of shares voted against the election of the external director, does not exceed 2% of the aggregate voting rights of the company.
External directors are elected by a majority vote at a shareholders’ meeting, as long as either: ● at least a majority of the shares held by shareholders who are not controlling shareholders and do not have personal interest in the appointment (excluding a personal interest that did not result from the shareholder’s relationship with the controlling shareholder) have voted in favor of the proposal (shares held by abstaining shareholders shall not be considered); or 96 ● the total number of shares voted against the election of the external director, does not exceed 2% of the aggregate voting rights of the company.
Under the Companies Law, the term “affiliation” and the similar types of disqualifying relationships include (subject to certain exceptions): ● an employment relationship; ● a business or professional relationship even if not maintained on a regular basis (excluding insignificant relationships); ● control; and ● service as an office holder, excluding service as a director in a private company prior to the initial public offering of its shares if such director was appointed as a director of the private company in order to serve as an external director following the initial public offering.
Under the Companies Law, the term “affiliation” and the similar types of disqualifying relationships include (subject to certain exceptions): ● an employment relationship; 97 ● a business or professional relationship even if not maintained on a regular basis (excluding insignificant relationships); ● control; and ● service as an office holder, excluding service as a director in a private company prior to the initial public offering of its shares if such director was appointed as a director of the private company in order to serve as an external director following the initial public offering.
Critical Accounting Estimates We prepare our financial statements in accordance with U.S. GAAP. At the time of the preparation of the financial statements, our management is required to use estimates, evaluations, and assumptions which affect the application of the accounting policy and the amounts reported for assets, obligations, income, and expenses. Any estimates and assumptions are continually reviewed.
E. Critical Accounting Estimates We prepare our financial statements in accordance with U.S. GAAP. At the time of the preparation of the financial statements, our management is required to use estimates, evaluations, and assumptions which affect the application of the accounting policy and the amounts reported for assets, obligations, income, and expenses. Any estimates and assumptions are continually reviewed.
He was admitted as a chartered financial analyst of the Institute of Chartered Financial Analysts, United States in September 1993. Yang Huang, Director Mr. Yang Huang has served on our board of directors since April 2020. Mr. Huang has 20 years of senior sales and marketing management experience in the field of medical devices. Mr.
He was admitted as a chartered financial analyst of the Institute of Chartered Financial Analysts, United States in September 1993. 92 Yang Huang, Director Mr. Yang Huang has served on our board of directors since April 2020. Mr. Huang has 20 years of senior sales and marketing management experience in the field of medical devices. Mr.
He also served as business unit head for Stryker from September 2013 through January 2015 and as sales manager at Johnson & Johnson from October 2000 through August 2013. Mr. Huang has graduated from Cheung Kong Graduate School of Business, China and Zhejiang Medical University, China. 95 Sharon Levita, Director Ms.
He also served as business unit head for Stryker from September 2013 through January 2015 and as sales manager at Johnson & Johnson from October 2000 through August 2013. Mr. Huang has graduated from Cheung Kong Graduate School of Business, China and Zhejiang Medical University, China. Sharon Levita, Director Ms.
Regulations promulgated pursuant to the Companies Law provide that a director in a public company whose shares are listed for trading on specified exchanges outside of Israel, including the Nasdaq Capital Market, who qualifies as an independent director under the relevant non-Israeli rules and who meets certain non-affiliation criteria, which are less stringent than those applicable to independent directors as set forth above, would be deemed an “independent” director pursuant to the Companies Law provided: (i) he or she has not served as a director for more than nine consecutive years; and (ii) he or she has been approved as such by the audit committee.
Regulations promulgated pursuant to the Companies Law provide that a director in a public company whose shares are listed for trading on specified exchanges outside of Israel, including Nasdaq, who qualifies as an independent director under the relevant non-Israeli rules and who meets certain non-affiliation criteria, which are less stringent than those applicable to independent directors as set forth above, would be deemed an “independent” director pursuant to the Companies Law provided: (i) he or she has not served as a director for more than nine consecutive years; and (ii) he or she has been approved as such by the audit committee.
Muchnik received his M.Sc. in technology management from the Holon Technology Institute, Israel and Bachelor of Technology in mechanical engineering from the Ort Braude Academic College, Israel. 94 Merav Nir Dotan, Vice President, Human Resources Mrs. Merav Nir Dotan has served as our Vice President, Human Resources, since November 2021. Mrs.
Muchnik received his M.Sc. in technology management from the Holon Technology Institute, Israel and Bachelor of Technology in mechanical engineering from the Ort Braude Academic College, Israel. Merav Nir Dotan, Vice President, Human Resources Mrs. Merav Nir Dotan has served as our Vice President, Human Resources, since November 2021. Mrs.
We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the development of our MultiSense system, and continue our commercialization efforts. Furthermore, we expect to incur additional costs associated with operating as a public company listed on Nasdaq.
We expect our expenses to increase in the future in connection with our ongoing activities, particularly as we continue the development of our MultiSense system and continue our commercialization efforts. Furthermore, we expect to incur additional costs associated with operating as a public company listed on Nasdaq.
Under the Nasdaq Stock Market Rules, a foreign private issuer may generally follow its home country rules of corporate governance in lieu of the comparable requirements of the Nasdaq Rules, except for certain matters including the composition and responsibilities of the audit committee. C.
Under the Nasdaq Stock Market Rules, a foreign private issuer may generally follow its home country rules of corporate governance in lieu of the comparable requirements of the Nasdaq Rules, except for certain matters including the composition and responsibilities of the audit committee. 94 C.
Malik received her bachelor’s degree from the Open University of Israel, and her master’s degree from Haifa University, Israel. Naum Muchnik, Vice President, Research, Development and Engineering Mr. Naum Muchnik has served as our Vice President, Research, Development and Engineering since March 2018. Prior to that, Mr.
Malik received her bachelor’s degree from the Open University of Israel, and her master’s degree from Haifa University, Israel. 91 Naum Muchnik, Vice President, Research, Development and Engineering Mr. Naum Muchnik has served as our Vice President, Research, Development and Engineering since March 2018. Prior to that, Mr.
Under regulations promulgated pursuant to the Companies Law, a company with no controlling shareholder whose shares are listed for trading on specified exchanges outside of Israel, including the Nasdaq Capital Market, may adopt exemptions from various corporate governance requirements of the Companies Law, so long as such company satisfies the requirements of applicable foreign country laws and regulations, including applicable stock exchange rules, that apply to companies organized in that country and relating to the appointment of independent directors and the composition of audit and compensation committees.
Under regulations promulgated pursuant to the Companies Law, a company with no controlling shareholder whose shares are listed for trading on specified exchanges outside of Israel, including Nasdaq, may adopt exemptions from various corporate governance requirements of the Companies Law, so long as such company satisfies the requirements of applicable foreign country laws and regulations, including applicable stock exchange rules, that apply to companies organized in that country and relating to the appointment of independent directors and the composition of audit and compensation committees.
Galit Malik, Vice President, Operations Ms. Galit Malik has served as our Vice President, Operations and Service since December 2022. Prior to that she has served as our Director of Operations and Service from February 2019 to December 2022. Before joining the Company, Ms.
Galit Malik, Vice President, Operations and Services Ms. Galit Malik has served as our Vice President, Operations and Service since December 2022. Prior to that she has served as our Director of Operations and Service from February 2019 to December 2022. Before joining the Company, Ms.
Directors, Senior Management and Employees - Board Practices - Approval of Related Party Transactions under Israeli law ”); 102 (iii) determining the approval process for transactions that are “non-negligible” (i.e., transactions with a controlling shareholder that are classified by the audit committee as non-negligible, even though they are not deemed extraordinary transactions), as well as determining which types of transactions would require the approval of the audit committee, optionally based on criteria which may be determined annually in advance by the audit committee; (iv) examining our internal controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools to dispose of its responsibilities; (v) examining the scope of our auditor’s work and compensation and submitting a recommendation with respect thereto to our board of directors or shareholders, depending on which of them is considering the appointment of our auditor; (vi) establishing procedures for the handling of employees’ complaints as to deficiencies in the management of our business and the protection to be provided to such employees; and (vii) where the board of directors approves the working plan of the internal auditor, examining such working plan before its submission to the board of directors and proposing amendments thereto.
Directors, Senior Management and Employees – Board Practices – Approval of Related Party Transactions under Israeli law” ); (iii) determining the approval process for transactions that are “non-negligible” (i.e., transactions with a controlling shareholder that are classified by the audit committee as non-negligible, even though they are not deemed extraordinary transactions), as well as determining which types of transactions would require the approval of the audit committee, optionally based on criteria which may be determined annually in advance by the audit committee; (iv) examining our internal controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools to dispose of its responsibilities; (v) examining the scope of our auditor’s work and compensation and submitting a recommendation with respect thereto to our board of directors or shareholders, depending on which of them is considering the appointment of our auditor; (vi) establishing procedures for the handling of employees’ complaints as to deficiencies in the management of our business and the protection to be provided to such employees; and (vii) where the board of directors approves the working plan of the internal auditor, examining such working plan before its submission to the board of directors and proposing amendments thereto.
The changes to the accounting estimates are credited during the period in which the change to the estimate is made. 91 Use of estimates in the preparation of financial statements: The preparation of consolidated financial statements in conformity with U.S.
The changes to the accounting estimates are credited during the period in which the change to the estimate is made. Use of estimates in the preparation of financial statements: The preparation of consolidated financial statements in conformity with U.S.
Oded Tamir. 98 According to regulations promulgated under the Companies law, at least one of the external directors is required to have “financial and accounting expertise,” unless another member of the audit committee, who is an independent director under the Nasdaq Stock Market rules, has “financial and accounting expertise,” and the other external director or directors are required to have “professional expertise.” An external director may not be appointed to an additional term unless: (1) such director has “accounting and financial expertise;” or (2) he or she has “professional expertise,” and on the date of appointment for another term there is another external director who has “accounting and financial expertise” and the number of “accounting and financial experts” on the board of directors is at least equal to the minimum number determined appropriate by the board of directors.
According to regulations promulgated under the Companies law, at least one of the external directors is required to have “financial and accounting expertise,” unless another member of the audit committee, who is an independent director under the Nasdaq Stock Market rules, has “financial and accounting expertise,” and the other external director or directors are required to have “professional expertise.” An external director may not be appointed to an additional term unless: (1) such director has “accounting and financial expertise;” or (2) he or she has “professional expertise,” and on the date of appointment for another term there is another external director who has “accounting and financial expertise” and the number of “accounting and financial experts” on the board of directors is at least equal to the minimum number determined appropriate by the board of directors.
Mayron has served as chairman of the board of directors of Resymmetry Ltd. since July 2016 to January 2022, InnoCan Pharma Corporation (CSE: INNO, FWB: IP4, OTC: INNPF) since November 2017, Virility Medical LTD since October 2019 to March 2022 and as a member of the board of directors of BioLight Life Sciences Investments Ltd.
Mayron has served as chairman of the board of directors of Resymmetry Ltd. from July 2016 to January 2022, InnoCan Pharma Corporation (CSE: INNO, FWB: IP4, OTC: INNPF) since November 2017, Virility Medical LTD from October 2019 to March 2023 and as a member of the board of directors of BioLight Life Sciences Investments Ltd.
(TASE: KDST) since December 2020, and Netiv Ha’or, a subsidiary of the Israel Electric Corporation Ltd., from March 2020 to February 2023, and as chairman and director in a variety of non-profit organizations. Prior to that, Mr. Birger served as member of the board of directors of MCS Medical Compression Systems (DBN) Ltd.
(TASE: KDST) from December 2020 to December 2023, and director of Netiv Ha’or, a subsidiary of the Israel Electric Corporation Ltd., from March 2020 to March 2023, and as chairman and director in a variety of non-profit organizations. Prior to that, Mr. Birger served as member of the board of directors of MCS Medical Compression Systems (DBN) Ltd.
Levita received her B.A in economics and accounting from the Haifa University, Israel and her M.A in business administration from the Bar-Ilan University, Israel. Ms. Levita is also a certificated public accountant in Israel. Oded Tamir, Director Mr. Oded Tamir has served on our board of directors since August 2013. Mr.
Levita received her B.A in economics and accounting from the University of Haifa and her M.A in business administration from the Bar-Ilan University. Ms. Levita is also a certificated public accountant in Israel. Oded Tamir, Director Mr. Oded Tamir has served on our board of directors since September 2013. Mr.
Mayron also completed a special senior management and global leadership programs at the Massachusetts Institute of Technology (M.I.T), Boston and managerial skills for international business and executive international marketing programs at Insead University, France. 93 Eyal Shamir, Chief Executive Officer and Director Mr.
Mayron also completed a special senior management and global leadership programs at the Massachusetts Institute of Technology (M.I.T), Boston and managerial skills for international business and executive international marketing programs at Insead University, France. 90 Eyal Shamir, Chief Executive Officer and Director Mr.
Birger has been serving as the chairman of the board of directors of Sight Diagnostic Ltd. since June 2014 and as an interim CEO since June 2022, as chairman of the board of directors of Nurami Medical Ltd., or Nurami, from April 2016 to March 2022, and thereafter as a director of Nurami, as chairman of Ultrasight Medical Imaging Ltd. since June 2019, a director of Intelicanna Ltd.
Birger has been serving as the chairman of the board of directors of Sight Diagnostic Ltd. from June 2014 to March 2024 and as an interim CEO from July 2022 to March 2024, as chairman of the board of directors of Nurami Medical Ltd., or Nurami, from April 2016 to March 2022, and thereafter as a director of Nurami, as chairman of Ultrasight Medical Imaging Ltd. since June 2019, chairman of Intelicanna Ltd.
Management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. Actual results could differ from those estimates. We describe our significant accounting policies more fully in Note 2 to our financial statements for the year ended December 31, 2022, included elsewhere in this annual report on Form 20-F.
Management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. Actual results could differ from those estimates. 88 We describe our significant accounting policies more fully in Note 2 to our financial statements for the year ended December 31, 2023, included elsewhere in this annual report on Form 20-F.
Deferred revenue represents amounts received by us for which the related revenues have not been recognized because one or more of the revenue recognition criteria have not been met. 92 ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and Senior Management.
Deferred revenue represents amounts received by us for which the related revenues have not been recognized because one or more of the revenue recognition criteria have not been met. 89 ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and Senior Management.
Arrangements for Election of Directors and Members of Management With the exception of our director, Yang Huang, who was appointed by Epoch Partner Investments Limited, one of our shareholders, there are no arrangements or understandings with major shareholders, customers, suppliers or others pursuant to which any of our executive management or our directors were selected (see “ Item 7.B.
Arrangements for Election of Directors and Members of Management With the exception of our director, Yang Huang, who was appointed by Epoch, one of our shareholders, there are no arrangements or understandings with major shareholders, customers, suppliers or others pursuant to which any of our executive management or our directors were selected (see “ Item 7.B.
Levav has served as a member on the board of directors of Applied Spectral Imaging from December 2018 to September 2020 and as its quality and regulatory affairs manager since January 2015 to December 2018.
Levav has served as a member on the board of directors of Applied Spectral Imaging from December 2018 to August 2020 and as its quality and regulatory affairs manager since January 2015 to December 2018.
The table does not include any amounts we paid to reimburse any of such persons for costs incurred in providing us with services during this period. All amounts reported in the tables below reflect the cost to the Company, in thousands of U.S. Dollars, for the year ended December 31, 2022.
The table does not include any amounts we paid to reimburse any of such persons for costs incurred in providing us with services during this period. 93 All amounts reported in the tables below reflect the cost to the Company, in thousands of U.S. Dollars, for the year ended December 31, 2023.
Eyal Shamir has served as our Chief Executive Officer since September 2016 and on our board of directors since December 2017. Mr. Shamir has over 15 years of experience as chief executive officer of medical device companies.
Eyal Shamir has served as our Chief Executive Officer since September 2016 and on our board of directors since December 2017. Mr. Shamir has over 20 years of experience as chief executive officer of medical device companies.
Directors, Senior Management and Employees - Board Practices - External Directors ” below). 97 Under the Companies Law, any shareholder holding at least one percent of our outstanding voting power may request at an annual meeting of shareholders to nominate a director.
Directors, Senior Management and Employees – Board Practices – External Directors” below). Under the Companies Law, any shareholder holding at least one percent of our outstanding voting power may request at an annual meeting of shareholders to nominate a director.
Ronen Tsimerman, Chief Financial Officer and Chief Operation Officer Mr. Ronen Tsimerman has served as our Chief Financial Officer since May 2017 and as our Chief Operation Officer since May 2018. Mr. Tsimerman has over 15 years of experience as chief financial officer of public and private companies.
Ronen Tsimerman, Chief Financial Officer and Chief Operation Officer Mr. Ronen Tsimerman has served as our Chief Financial Officer since May 2017 and as our Chief Operation Officer since May 2018. Mr. Tsimerman has over 20 years of experience as chief financial officer of public and private companies.
Comparison of the Years Ended December 31, 2022 and 2021 Results of Operations The following table summarizes our results of operations for the periods presented.
Comparison of the Years Ended December 31, 2023 and 2022 Results of Operations The following table summarizes our results of operations for the periods presented.
The increase of selling and marketing expenses in 2022 compared to 2021, reflects our strategy regarding the expansion of our marketing activities.
The increase of selling and marketing expenses in 2023 compared to 2022, reflects our strategy regarding the expansion of our marketing activities.
Independent Directors Under the Companies Law An “independent director” is either an external director or a director who meets the same non-affiliation criteria as an external director (except for (i) the requirement that the director be an Israeli resident (which does not apply to companies such as ours whose securities have been offered outside of Israel or are listed outside of Israel) and (ii) the requirement for accounting and financial expertise or professional qualifications), as determined by the audit committee, and who has not served as a director of the company for more than nine consecutive years.
As of the Date hereof, the Company have a controlling shareholder and therefore cannot use such exemptions. 98 Independent Directors Under the Companies Law An “independent director” is either an external director or a director who meets the same non-affiliation criteria as an external director (except for (i) the requirement that the director be an Israeli resident (which does not apply to companies such as ours whose securities have been offered outside of Israel or are listed outside of Israel) and (ii) the requirement for accounting and financial expertise or professional qualifications), as determined by the audit committee, and who has not served as a director of the company for more than nine consecutive years.
As of the date hereof, our external directors are Ms. Sharon Levita and Mr.
As of the date hereof, our external directors are Ms. Sharon Levita and Mr. Oded Tamir.
Major Shareholders and Related Party Transactions ” for additional information). B. Compensation The following table presents all compensation paid by us to each of our five most highly compensated senior managers for the year ended December 31, 2022.
Major Shareholders and Related Party Transactions” for additional information). B. Compensation The following table presents all compensation paid by us to each of our five most highly compensated senior managers for the year ended December 31, 2023.
Revenues are affected mostly by the different selling prices depending on sales channels, territories and the mix of products and currency fluctuation, mainly the U.S. Dollar against the EURO and revenue recognition from granting the exclusive distribution rights in Japan, and Thailand.
Revenues are affected mostly by the varying ratio between selling and placing systems, different selling prices depending on sales channels, territories and the mix of products and currency fluctuation, mainly the U.S. Dollar against the Euro and revenue recognition from granting exclusive distribution rights in Japan.
Nir Dotan has over two decades of experience in human resources and organizational management. Mrs. Nir Dotan was previously Vice President of Human Resources at Hanita Lenses, a medical device manufacturer and provider of intraocular lens solutions for cataract surgery. In addition, from January 2021 through November 2021, Mrs.
Nir Dotan has over two decades of experience in human resources and organizational management. Mrs. Nir Dotan was previously Vice President of Human Resources at Hanita Lenses, a medical device manufacturer and provider of intraocular lens solutions for cataract surgery, from 2009 to 2020. In addition, from December 2020 through January 2022, Mrs.
Components of Operating Results Revenues Our revenues primarily consist of (i) selling our ProSense system and its disposables and related services; and (ii) revenues from granting the exclusive distribution rights to our products in Japan, and Thailand to Terumo Corporation, which also include providing technical, regulatory and clinical materials and support in obtaining regulatory approvals in Japan.
Components of Operating Results Revenues Our revenues primarily consist of (i) selling or placing our ProSense and IceSense3 systems and selling their disposables and related services; and (ii) revenues from granting the exclusive distribution rights to our products in Japan to Terumo Corporation, which also include providing technical, regulatory and clinical materials and support in obtaining regulatory approvals in Japan.
The following table sets forth information regarding our executive officers, key employees and directors as of the date of this annual report: Name Age Position Ron Mayron 59 Chairman of the Board of Directors Eyal Shamir 62 Chief Executive Officer, Director Ronen Tsimerman 53 Chief Financial Officer, Chief Operation Officer Shay Levav 46 Vice President, Regulatory, Quality Assurance and Clinical Applications Tlalit Bussi Tel-Tzure 51 Vice President, Business Development and Global Marketing Galit Malik 50 Vice President, Operations and Service Naum Muchnik 46 Vice President, Research, Development and Engineering Merav Nir Dotan 54 Vice President, Human Resources Doron Birger (1)(2)(4)(5) 71 Director Vincent Chun Hung Chan (5) 59 Director Yang Huang 44 Director Sharon Levita (1)(2)(3)(4)(5) 54 Director Oded Tamir (1)(2)(3)(4)(5) 67 Director (1) Member of the Compensation Committee (2) Member of the Audit Committee and Financial Statement Examination Committee (3) External Director (as defined under Israeli law) (4) Independent Director (as defined under Israeli law) (5) Independent Director (as defined under Nasdaq Stock Market rules) Ron Mayron, Chairman of the Board of Directors Mr.
The following table sets forth information regarding our executive officers, key employees and directors as of the date of this annual report: Name Age Position Ron Mayron 60 Chairman of the Board of Directors Eyal Shamir 63 Chief Executive Officer, Director Ronen Tsimerman 54 Chief Financial Officer, Chief Operation Officer Shay Levav 47 Vice President, Regulatory, Quality Assurance and Clinical Applications Shad Good 46 Vice President, Sales for North America Tlalit Bussi Tel-Tzure 52 Vice President, Business Development and Global Marketing Galit Malik 51 Vice President, Operations and Services Naum Muchnik 47 Vice President, Research, Development and Engineering Merav Nir Dotan 55 Vice President, Human Resources Doron Birger (1)(2)(4)(5) 72 Director Vincent Chun Hung Chan (5) 60 Director Yang Huang 45 Director Sharon Levita (1)(2)(3)(4)(5) 55 Director Oded Tamir (1)(2)(3)(4)(5) 68 Director (1) Member of the Compensation Committee (2) Member of the Audit Committee and Financial Statement Examination Committee (3) External Director (as defined under Israeli law) (4) Independent Director (as defined under Israeli law) (5) Independent Director (as defined under Nasdaq Stock Market rules) Ron Mayron, Chairman of the Board of Directors Mr.
Overview Since our inception through December 31, 2022, we have funded our operations principally from public offerings of our Ordinary Shares on the TASE and Nasdaq Capital Market, from the private issuance of Ordinary Shares, options, convertible securities, loans, revenues from sale of products and grants received from the IIA.
Overview Since our inception through December 31, 2023, we have funded our operations principally from public offerings of our Ordinary Shares on Nasdaq and, until July 2023, on TASE and from the private issuance of Ordinary Shares, options, convertible securities, loans, revenues from sale of products and distribution agreements, and grants received from the IIA.
(TASE: BOLT) since August 2015, G-Med Ltd. since September 2015, Kaizen Bio-Tec Ltd. since May 2017, Simplivia Ltd. since May 2019, Kadimastem LTD (TASE: KDST) since December 2020 and Entera Bio Ltd. (NASDAQ: ENTX) since December 2020 and DNA Biomedical Solutions (TASE: DNA) since March 2021, Ir-Med, Inc. (OTC:IRME) since March 2021, NureXone (CDNX) since August 2021. Mr.
(TASE: BOLT) since August 2015, G-Med Ltd. since September 2015, Kaizen Bio-Tec Ltd. since May 2017, Simplivia Ltd. since May 2019, Kadimastem LTD (TASE: KDST) from December 2020 to December 2023, and Entera Bio Ltd. (NASDAQ: ENTX) since March 2021 and DNA Biomedical Solutions (TASE: DNA) from March 2021 to May 2023, Ir-Med, Inc.
As of December 31, 2022, we had $23.7 million in cash and cash equivalents. 88 Our primary recurring use of cash is payment of our operating costs, which consist primarily of employee-related expenses, such as compensation and benefits, as well as to our suppliers and subcontractors for components and services provided for our products and research and development, general operating expenses for travel, marketing, facilities and overhead costs, general and administrative and capital expenditures.
Our primary recurring use of cash is payment of our operating costs, which consist primarily of employee-related expenses, such as compensation and benefits, as well as to our suppliers and subcontractors for components and services provided for our products and research and development, general operating expenses for travel, marketing, facilities and overhead costs, general and administrative and capital expenditures.
Levita has served as vice president operations and site leader of Mazor, as part of Medtronic, from December 2018 to January 2020 and as chief financial officer and vice president business operations of Mazor Robotics Ltd. from February 2008 to December 2018. Ms.
Levita served as business development and strategy director at Medtronics from February 2020 to August 2023, as vice president operations and site leader of Mazor, as part of Medtronic, from December 2018 to January 2020 and as chief financial officer and vice president business operations of Mazor Robotics Ltd. from February 2008 to December 2018. Ms.
After deducting placement agent fees, commissions and other offering expenses, our net proceeds from this offering were $13.6 million. Several of our long-term institutional shareholders, including Epoch, participated in the transaction on the same terms as other investors. In addition, since our inception, we received an aggregate of $2.6 million (including accumulated interest) from the IIA.
After deducting placement agent fees, commissions and other offering expenses, our net proceeds from this offering were $13.6 million. Several of our long-term institutional shareholders, including Epoch, participated in the transaction on the same terms as other investors.
Further, we cannot predict impacts, trends and uncertainties involving the global economy’s and the war’s effects on economic activity, our supply chain, our third-party partners and the extent to which our revenue, income, profitability, liquidity, or capital resources may be materially and adversely affected.
We cannot predict impacts, trends and uncertainties involving the global economy and Israel’s multi-front war related to economic activity, our supply chain, our third-party partners and the extent to which our revenue, income, profitability, liquidity, or capital resources may be materially and adversely affected.
Such exemptions include an exemption from the requirement to appoint external directors and the requirement that an external director be a member of certain committees, as well as exemption from limitations on directors’ compensation. As of the Date hereof, the Company have a controlling shareholder and therefore cannot use such exemptions.
Such exemptions include an exemption from the requirement to appoint external directors and the requirement that an external director be a member of certain committees, as well as exemption from limitations on directors’ compensation.
Results of Operations— Comparison of the year ended December 31, 2022 to the year ended December 31, 2021— Research and Development Expenses, net.” D Trend Information Current geopolitical tensions resulting from the Russia-Ukraine war has impacted companies in Israel and around the world.
Results of Operations— Comparison of the year ended December 31, 2023 to the year ended December 31, 2022— Research and Development Expenses, net.” D Trend Information Current geopolitical tensions resulting from Israel’s multi-front war have affected companies in Israel and around the world.
Year Ended December 31, U.S. dollars in thousands 2022 2021 Payroll and related benefits (including share-based compensation) $ 5,969 $ 3,748 Raw materials, subcontracted work and consulting 1,742 1,440 Clinical trials 495 200 Others 917 489 Total $ 9,123 $ 5,877 Research and development, or R&D, expenses increased by 55% to $9,123 thousand, compared to $5,877 thousand in 2021.
Year Ended December 31, U.S. dollars in thousands 2023 2022 Payroll and related benefits (including share-based compensation) $ 5,395 $ 5,969 Raw materials, subcontracted work and consulting 1,593 1,742 Clinical trials 436 495 Others 849 917 Total $ 8,273 $ 9,123 Research and development, or R&D, expenses decreased by 9% to $8,273 thousand, compared to $9,123 thousand in 2022.
He has also served as commercialization business manager of Carestream Health Inc. from 2012 to 2015, as its operations quality manager since 2001 to 2012, and service engineer since 2000 to 2001. Mr. Levav holds a B.A. from the Ruppin Academy Center, Israel. Tlalit Bussi Tel-Tzure, Vice President, Business Development and Global Marketing Ms.
He has also served as commercialization business manager of Carestream Health Inc. from 2012 to 2015, as its operations quality manager since 2001 to 2012, and service engineer since 2000 to 2001. Mr. Levav holds a B.A. from the Ruppin Academy Center, Israel. Shad Good, Vice President, Sales for North America Mr.
This restriction extends for a period of two years with regard to the former external director and his or her spouse or child and for one year with respect to other relatives of the former external director. 100 External directors may be removed only by a special general meeting of shareholders called by the board of directors after the board has determined the occurrence of circumstances allow such dismissal, at the same special majority of shareholders required for their election or by a court, and in both cases only if the external directors cease to meet the statutory qualifications for their appointment or if they violate their duty of loyalty to our company.
External directors may be removed only by a special general meeting of shareholders called by the board of directors after the board has determined the occurrence of circumstances allow such dismissal, at the same special majority of shareholders required for their election or by a court, and in both cases only if the external directors cease to meet the statutory qualifications for their appointment or if they violate their duty of loyalty to our company.
Thereafter, an external director may be reelected by shareholders to serve in that capacity for up to two additional three-year terms, provided that: (1) his or her service for each such additional term is recommended by one or more shareholders holding at least one percent of the company’s voting rights and is approved at a shareholders meeting by a disinterested majority, where the total number of shares held by non-controlling, disinterested shareholders voting for such reelection exceeds two percent of the aggregate voting rights in the company and subject to additional restrictions set forth in the Companies Law with respect to the affiliation of the external director nominee as described below; or (2) his or her service for each such additional term is recommended by the board of directors and is approved at a shareholder meeting by the same disinterested majority required for the initial election of an external director (as described above); or (3) the external director offered his or her service for each such additional term and was approved in accordance with the provisions of section (1) above. 99 The term of office for external directors for Israeli companies traded on certain foreign stock exchanges, including the Nasdaq Stock Market, may be extended indefinitely in increments of additional three-year terms, in each case provided that the audit committee and the board of directors of the company confirm that, in light of the external director’s expertise and special contribution to the work of the board of directors and its committees, the reelection for such additional period(s) is beneficial to the company, and provided that the external director is reelected subject to the same shareholder vote requirements as if elected for the first time (as described above).
Thereafter, an external director may be reelected by shareholders to serve in that capacity for up to two additional three-year terms, provided that: (1) his or her service for each such additional term is recommended by one or more shareholders holding at least one percent of the company’s voting rights and is approved at a shareholders meeting by a disinterested majority, where the total number of shares held by non-controlling, disinterested shareholders voting for such reelection exceeds two percent of the aggregate voting rights in the company and subject to additional restrictions set forth in the Companies Law with respect to the affiliation of the external director nominee as described below; or (2) his or her service for each such additional term is recommended by the board of directors and is approved at a shareholder meeting by the same disinterested majority required for the initial election of an external director (as described above); or (3) the external director offered his or her service for each such additional term and was approved in accordance with the provisions of section (1) above.
The audit committee may not include the chairman of the board; a controlling shareholder of the company or a relative of a controlling shareholder; a director employed by or providing services on a regular basis to the company, to a controlling shareholder or to an entity controlled by a controlling shareholder; or a director who derives most of his or her income from a controlling shareholder.
The audit committee may not include the chairman of the board; a controlling shareholder of the company or a relative of a controlling shareholder; a director employed by or providing services on a regular basis to the company, to a controlling shareholder or to an entity controlled by a controlling shareholder; or a director who derives most of his or her income from a controlling shareholder. 99 In addition, a majority of the members of the audit committee of a publicly traded company must be independent directors under the Companies Law.
Cryoablation is the process by which benign and malignant tumors are ablated (destroyed) through freezing such tumors while in a patient’s body. Our proprietary cryoablation technology is a minimally invasive alternative to surgical intervention, for tumors, including those found in breast, lungs, kidneys, bones and other indications. Our lead commercial cryoablation product is the ProSense system.
Our proprietary cryoablation technology is a minimally invasive alternative to surgical intervention, for tumors, including those found in breast, lungs, kidneys, bones and other indications. Our lead commercial cryoablation product is the ProSense system.
Year Ended December 31, U.S. dollars in thousands 2022 2021 Revenues $ 3,085 $ 4,138 Cost of revenues 1,640 1,943 Gross profit $ 1,445 $ 2,195 Research and development expenses 9,123 5,877 Marketing and sales expenses 3,204 1,917 General and administrative expenses 5,857 4,125 Operating loss $ 16,739 $ 9,724 Financial expenses, net 239 171 Net loss and comprehensive loss $ 16,978 $ 9,895 Basic and diluted net loss per share $ 0.46 $ 0.35 Revenues The following table summarizes our revenues through types for the periods presented.
Year Ended December 31, U.S. dollars in thousands 2023 2022 Revenues $ 3,229 $ 3,085 Cost of revenues 1,929 1,640 Gross profit $ 1,300 $ 1,445 Research and development expenses 8,273 9,123 Marketing and sales expenses 4,437 3,204 General and administrative expenses 4,166 5,857 Operating loss $ 15,576 $ 16,739 Financial expenses (income), net (924 ) 239 Net loss and comprehensive loss $ 14,652 $ 16,978 Basic and diluted net loss per share $ 0.32 $ 0.46 Revenues The following table summarizes our revenues through types for the periods presented.
Mayron has also served as the founder and chief executive officer of RonMed Ltd. Prior to that, Mr. Mayron served as chairman of the board of directors of Wize Pharma Inc.
(OTC:IRME) since March 2021, NureXone (CDNX) from December 2021 to July 2023. Mr. Mayron has also served as the founder and chief executive officer of RonMed Ltd. Prior to that, Mr. Mayron served as chairman of the board of directors of Wize Pharma Inc.
Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. 90 As of December 31, 2022, our cash and cash equivalents were $23,659 thousand, and we had working capital of $23,794 thousand and an accumulated deficit of $75,409 thousand.
Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. As of December 31, 2023, our cash and cash equivalents, including short-term deposits, were $11,062 thousand, and we had working capital of $10,313 thousand and an accumulated deficit of $90,061 thousand.
Year Ended December 31, U.S. dollars in thousands 2022 2021 Payroll and related benefits (including Share-based compensation) $ 896 $ 796 Raw materials, subcontractors, and auxiliary materials (including changes in inventories) 298 828 Shipping 48 50 Royalties to IIA 93 123 Depreciation 111 33 Others 194 113 Total $ 1,640 $ 1,943 Gross profit $ 1,445 $ 2,195 Gross margin % 47 % 53 % 86 Our cost of revenues for the year ended December 31, 2022 decreased by 16% to $1,640 thousand, compared to $1,943 thousand for the year ended December 31, 2021, whereas our gross profit for the year ended December 31, 2022 decreased by $750 thousand, or 34%, to $1,445 thousand, compared to $2,195 thousand in the year ended December 31, 2021.
Year Ended December 31, U.S. dollars in thousands 2023 2022 Raw materials, subcontractors, and auxiliary materials (including changes in inventories) $ 905 $ 298 Payroll and related benefits (including share-based compensation)) 551 896 Depreciation 161 111 Royalties to IIA 96 93 Shipping 42 48 Others 174 194 Total $ 1,929 $ 1,640 Gross profit $ 1,300 $ 1,445 Gross margin % 40 % 47 % Our cost of revenues for the year ended December 31, 2023 increased by 18% to $1,929 thousand, compared to $1,640 thousand for the year ended December 31, 2022, whereas our gross profit for the year ended December 31, 2023 decreased by $145 thousand, or 10%, to $1,300 thousand, compared to $1,445 thousand in the year ended December 31, 2022.
Financial expense and income Financial expenses and income consist primarily of exchange rate differences on cash and cash equivalents, deposits and other assets and liabilities which are denominated in NIS and Euros, and interest income from deposits.
Our general and administrative expenses might increase as a result of the expansion of our business. Financial expense and income Financial expenses and income consist primarily of interest income from deposits and exchange rate differences on cash and cash equivalents, deposits and other assets and liabilities which are denominated in NIS and EUR.
Year Ended December 31, U.S. dollars in thousands 2022 2021 Payroll and related benefits (including Share-based compensation) $ 1,599 $ 1,036 Consultants and professional services 431 215 Travel 274 126 Advertising and promotion expenses 74 60 Sales Commissions 13 60 Conferences 301 93 Others 512 327 Total $ 3,204 $ 1,917 Selling and marketing expenses for the year ended December 31, 2022 increased by 67% to $3,204 compared to $1,917 thousand in 2021.
Year Ended December 31, U.S. dollars in thousands 2023 2022 Payroll and related benefits (including Share-based compensation) $ 2,239 $ 1,599 Consultants and professional services 987 566 Travel 354 274 Conferences 323 301 Advertising and promotion 92 74 Sales Commissions 49 13 Others 393 377 Total $ 4,437 $ 3,204 Selling and marketing expenses for the year ended December 31, 2023 increased by 38% to $4,437 compared to $3,204 thousand in 2022.
Furthermore, pursuant to these regulations, such company may reappoint a person as an independent director for additional terms, beyond nine years, which do not exceed three years each, if each of the audit committee and the board of directors determine, in that order, that in light of the independent director’s expertise and special contribution to the board of directors and its committees, the reappointment for an additional term is in the company’s best interest. 101 Alternate Directors Our articles of association provide, as allowed by the Companies Law, that any director may, subject to the conditions set thereto including approval of the nominee by our board of directors, appoint a person as an alternate to act in his place, to remove the alternate and appoint another in his place and to appoint an alternate in place of an alternate whose office is vacated for any reason whatsoever.
Furthermore, pursuant to these regulations, such company may reappoint a person as an independent director for additional terms, beyond nine years, which do not exceed three years each, if each of the audit committee and the board of directors determine, in that order, that in light of the independent director’s expertise and special contribution to the board of directors and its committees, the reappointment for an additional term is in the company’s best interest.
Year Ended December 31, U.S. dollars in thousands 2022 2021 Systems $ 1,002 $ 1,560 Disposables 1,336 1,208 Exclusive distribution agreements 747 1,370 Total $ 3,085 $ 4,138 85 Our revenues for the year ended December 31, 2022 decreased by $1,053 thousand, or 25% to $3,085 thousand, compared to $4,138 thousand for the year ended December 31, 2021.
Year Ended December 31, U.S. dollars in thousands 2023 2022 Disposables $ 1,503 $ 1,336 Systems 1,452 1,002 Exclusive distribution agreements 274 747 Total $ 3,229 $ 3,085 Our revenues for the year ended December 31, 2023 increased by $144 thousand, or 5% to $3,229 thousand, compared to $3,085 thousand for the year ended December 31, 2022.
However, the enforceability of the noncompetition provisions may be limited under applicable law. In addition, we have entered into agreements with each executive officer and director pursuant to which we have agreed to indemnify each of them up to a certain amount and to the extent that these liabilities are not covered by directors’ and officers’ insurance.
In addition, we have entered into agreements with each executive officer and director pursuant to which we have agreed to indemnify each of them up to a certain amount and to the extent that these liabilities are not covered by directors’ and officers’ insurance. For a description of the terms of our options and option plans, see “Item 6.E.
Our board of directors has determined that the minimum number of directors of our company who are required to have accounting and financial expertise is one.
Our board of directors has determined that the minimum number of directors of our company who are required to have accounting and financial expertise is one. 95 The board of directors must elect one director to serve as the chairman of the board of directors to preside at the meetings of the board of directors, and may also remove that director as chairman.
For the Year Ended December 31, USD in thousands 2022 2021 2020 Net cash used in operating activities (14,292 ) (12,605 ) (3,690 ) Net cash provided by (used in) investing activities (891 ) 3,792 (4,670 ) Net cash provided by financing activities 13,577 30,889 5,858 Net increase (decrease) in cash and cash equivalents (1,606 ) 22,076 (2,502 ) Operating Activities Cash flows from operating activities consist primarily of loss adjusted for various non-cash items, including depreciation and amortization and share-based compensation expenses.
USD in thousands 2023 2022 Net cash used in operating activities (12,521 ) (14,292 ) Net cash provided by (used in) investing activities (713 ) (891 ) Net cash provided by financing activities 83 13,577 Net increase (decrease) in cash and cash equivalents (13,151 ) (1,606 ) Operating Activities Cash flows from operating activities consist primarily of loss adjusted for various non-cash items, including depreciation and amortization and share-based compensation expenses.
Pursuant to the January 2021 SPA, we received an aggregate amount of $15 million, against issuance of 11,485,697 Ordinary Shares. The January 2021 Investors were granted a 12-month participation right following the January 2021 Second Closing, in future financings equal to 50% of the subsequent financing, subject to certain conditions.
The January 2021 Investors were granted a 12-month participation right following the January 2021 Second Closing, in future financings equal to 50% of the subsequent financing, subject to certain conditions.
Operating Expenses Our current operating expenses consist of three components — research and development expenses, marketing and sales expenses and general and administrative expenses. Research and Development Expenses Our research and development expenses consist primarily of salaries and related benefits, subcontractor’s expenses, materials and other related research and development expenses, clinical studies and regulation expenses.
Research and Development Expenses Our research and development expenses consist primarily of salaries and related benefits, subcontractors’ expenses, materials and other related research and development expenses, clinical studies and regulation expenses.
Year Ended December 31, U.S. dollars in thousands 2022 2021 Payroll and related benefits (including Share-based compensation) $ 2,262 $ 1,403 Professional services 3,369 2,440 Others 226 282 Total $ 5,857 $ 4,125 General and administrative expenses for the year ended December 31, 2022 increased by 42% to $5,857 thousand, compared to $4,125 thousand for the year ended December 31, 2021.
The period-to-period comparison of results is not necessarily indicative of results for future periods. 83 Year Ended December 31, U.S. dollars in thousands 2023 2022 Professional services $ 1,996 $ 3,369 Payroll and related benefits (including share-based compensation) 1,886 2,262 Others 284 226 Total $ 4,166 $ 5,857 General and administrative expenses for the year ended December 31, 2023 decreased by 29% to $4,166 thousand, compared to $5,857 thousand for the year ended December 31, 2022.
Sharon Levita has served on our board of directors as an external director since September 2019. Ms. Levita also serves as business development and strategy leader at Medtronic. Prior to that, Ms.
Sharon Levita has served on our board of directors as an external director since September 2019. Ms. Levita has also served as chief financial officer at ForSight Robotics Ltd. since September 2023. Prior to that, Ms.
Our sales in Israel and other territories, including Europe, amounted to $1,321 thousand for the year ended December 31, 2022, similar to $1,323 thousand for the year ended December 31, 2021.
Our sales in Israel and other territories, including Europe, amounted to $1,558 thousand for the year ended December 31, 2023, compared to $1,247 thousand for the year ended December 31, 2022, an increase of $311 thousand of 25%.
Investing Activities Net cash used in investing activities in the year ended December 31, 2022, was $891 thousand compared to net cash of $3,792 thousand provided in the year ended December 31, 2021. Net cash used in investing activities for year ended December 31, 2022 is attributable to the purchase of $891 thousand in property and equipment.
The net cash provided by investing activities for the year ended December 31, 2022 is attributed to the purchase of $891 thousand in property and equipment. Financing Activities Net cash provided by financing activities decreased by $13,494 to $83 thousand for the year ended December 31, 2023, compared to $13,577 thousand for the year ended December 31, 2022.
The decrease in gross profit and gross margin was primarily attributable to the decrease of $623 thousand in revenue recognition from our exclusive distribution agreements in Japan and Thailand, which was partially offset by the increase in sales of disposables, which generates a higher gross margin than systems. The gross margin from sales of products for both years was 30%.
The decrease in gross profit and gross margin was primarily attributable to the decrease in revenue recognition from our exclusive distribution agreements in Japan, which was partially offset by sales increases of our systems and disposables, the latter of which generates a higher gross margin. 82 Research and development expenses The following table summarizes our research and development costs for the periods presented.
General and Administrative Expenses General and administrative expenses consist primarily of salaries and related benefits, professional services fees for accounting, legal, directors’ fees, facilities, and associate costs, insurance and other general and administrative expenses. We expect our general and administrative expenses to increase as a result of the expansion of our business.
We expect that our sales and marketing expenses will materially increase as we continue to enhance our market penetration efforts and recruit additional sales and marketing employees. 80 General and Administrative Expenses General and administrative expenses consist primarily of salaries and related benefits, professional services fees for accounting, legal, directors’ fees, facilities, and associate costs, insurance and other general and administrative expenses.
Sales of systems for the year ended December 31, 2022 were $1,002 thousand, compared to $1,560 thousand for the year ended December 31, 2021, a decrease of $558 thousand, or 36%.
Sales of systems for the year ended December 31, 2023 were $1,452 thousand, compared to $1,002 thousand for the year ended December 31, 2022, an increase of $450 thousand, or 45%.
We expect that our research and development expenses will materially increase as we continue to develop our new products, pursue new regulatory indications in the US and other territories, collect updated clinical data, and recruit additional research and development and regulation employees. 84 Sales and Marketing Our sales and marketing expenses consist primarily of salaries and related benefits, payments to consultants, costs associated with conventions, travel and other marketing and sales expenses.
Our research and development expenses might increase as we continue to develop our new products, pursue new regulatory indications in the US and other territories, collect updated clinical data, and recruit additional research and development and regulation employees.
The net cash provided by investing activities for year ended December 31, 2021 is attributed to realization of deposits of $4,621 thousand, which was partially offset by investment of restricted deposits of $296 thousand and purchase of property and equipment consisting of to $533 thousand.
Net cash used in investing activities for year ended December 31, 2023 is attributable to the purchase of $480 thousand in property and equipment and to investment in short-term deposits of $529 thousand, which are offset, in part, by the realization of restricted deposits of $296 thousand.
Net loss Net loss for the year ended December 31, 2022 increased by 72% to $16,978, compared to $9,895 thousand for the year ended December 31, 2021. This increase was primarily attributable to: (i) the decrease in revenues, (ii) the increase in operation expenses, and (iii) the increase in net financial expenses, as described above. B. Liquidity and Capital Resources.
Net loss Net loss for the year ended December 31, 2023 decreased by 14% to $14,652, compared to $16,978 thousand for the year ended December 31, 2022. This decrease was primarily attributable to a decrease in operations expenses and a decrease in net financial expenses. 84 B. Liquidity and Capital Resources.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Chief executive officer. Under the Companies Law, the compensation of a public company’s chief executive officer is required to be approved by: (i) the company’s compensation committee; (ii) the company’s board of directors, and (iii) the company’s shareholders by a Special Majority.
Under the Companies Law, the compensation of a public company’s chief executive officer is required to be approved by: (i) the company’s compensation committee; (ii) the company’s board of directors, and (iii) the company’s shareholders by a Special Majority.
Our board of directors has adopted an audit committee charter setting forth, among others, the responsibilities of the audit committee consistent with the rules of the SEC and Nasdaq Listing Rules (in addition to the requirements for such committee under the Companies Law), including, among others, the following: ● oversight of our independent registered public accounting firm and recommending the engagement, compensation or termination of engagement of our independent registered public accounting firm to the board of directors in accordance with Israeli law; ● recommending the engagement or termination of the person filling the office of our internal auditor, reviewing the services provided by our internal auditor and reviewing effectiveness of our system of internal control over financial reporting; ● recommending the terms of audit and non-audit services provided by the independent registered public accounting firm for pre-approval by our board of directors; and ● reviewing and monitoring, if applicable, legal matters with significant impact, finding of regulatory authorities’ findings, receive reports regarding irregularities and legal compliance, acting according to “whistleblower policy” and recommend to our board of directors if so required. 103 Nasdaq Stock Market Requirements for Audit Committee Under the Nasdaq Stock Market rules, we are required to maintain an audit committee consisting of at least three members, all of whom are independent and are financially literate and one of whom has accounting or related financial management expertise.
Our board of directors has adopted an audit committee charter setting forth, among others, the responsibilities of the audit committee consistent with the rules of the SEC and Nasdaq Listing Rules (in addition to the requirements for such committee under the Companies Law), including, among others, the following: ● oversight of our independent registered public accounting firm and recommending the engagement, compensation or termination of engagement of our independent registered public accounting firm to the board of directors in accordance with Israeli law; ● recommending the engagement or termination of the person filling the office of our internal auditor, reviewing the services provided by our internal auditor and reviewing effectiveness of our system of internal control over financial reporting; ● recommending the terms of audit and non-audit services provided by the independent registered public accounting firm for pre-approval by our board of directors; and ● reviewing and monitoring, if applicable, legal matters with significant impact, finding of regulatory authorities’ findings, receive reports regarding irregularities and legal compliance, acting according to “whistleblower policy” and recommend to our board of directors if so required. 100 Nasdaq Stock Market Requirements for Audit Committee Under the Nasdaq Stock Market rules, we are required to maintain an audit committee consisting of at least three members, all of whom are independent and are financially literate and one of whom has accounting or related financial management expertise.
If a majority of the board of directors has a personal interest, then shareholder approval is generally also required. Disclosure of Personal Interests of a Controlling Shareholder Under the Companies Law, the disclosure requirements that apply to an office holder also apply to a controlling shareholder of a public company.
If a majority of the board of directors has a personal interest, then shareholder approval is generally also required. 107 Disclosure of Personal Interests of a Controlling Shareholder Under the Companies Law, the disclosure requirements that apply to an office holder also apply to a controlling shareholder of a public company.
Our compensation committee reviews and recommends to our board of directors: with respect to our executive officers’ and directors’: (1) annual base compensation (2) annual incentive bonus, including the specific goals and amounts; (3) equity compensation; (4) employment agreements, severance arrangements, and change in control agreements and provisions; (5) retirement grants and/or retirement bonuses; and (6) any other benefits, compensation, compensation policies or arrangements. 104 The duties of the compensation committee include the recommendation to the company’s board of directors of a policy regarding the terms of engagement of office holders, to which we refer as a compensation policy.
Our compensation committee reviews and recommends to our board of directors: with respect to our executive officers’ and directors’: (1) annual base compensation (2) annual incentive bonus, including the specific goals and amounts; (3) equity compensation; (4) employment agreements, severance arrangements, and change in control agreements and provisions; (5) retirement grants and/or retirement bonuses; and (6) any other benefits, compensation, compensation policies or arrangements. 101 The duties of the compensation committee include the recommendation to the company’s board of directors of a policy regarding the terms of engagement of office holders, to which we refer as a compensation policy.
Our Chief Executive Officer will be entitled to recommend performance objectives to such executive officers, and such performance objectives will be approved by our compensation committee (and, if required by law, by our board of directors). 106 The performance measurable objectives of our Chief Executive Officer will be determined annually by our compensation committee and board of directors.
Our Chief Executive Officer will be entitled to recommend performance objectives to such executive officers, and such performance objectives will be approved by our compensation committee (and, if required by law, by our board of directors). The performance measurable objectives of our Chief Executive Officer will be determined annually by our compensation committee and board of directors.
The compensation committee is responsible for: (1) recommending the compensation policy to a company’s board of directors for its approval (and subsequent approval by the shareholders); and (2) duties related to the compensation policy and to the compensation of a company’s office holders, including: ● recommending whether a compensation policy should continue in effect, if the then-current policy has a term of greater than three years (approval of either a new compensation policy or the continuation of an existing compensation policy must in any case occur every three years); ● recommending to the board of directors periodic updates to the compensation policy; ● assessing implementation of the compensation policy; ● determining whether the terms of compensation of certain office holders of the company need not be brought to approval of the shareholders; and ● determining whether to approve the terms of compensation of office holders that require the committee’s approval.
The compensation committee is responsible for: (1) recommending the compensation policy to a company’s board of directors for its approval (and subsequent approval by the shareholders); and (2) duties related to the compensation policy and to the compensation of a company’s office holders, including: ● recommending whether a compensation policy should continue in effect, if the then-current policy has a term of greater than three years (approval of either a new compensation policy or the continuation of an existing compensation policy must in any case occur every three years); 102 ● recommending to the board of directors periodic updates to the compensation policy; ● administering the clawback policy; ● assessing implementation of the compensation policy; ● determining whether the terms of compensation of certain office holders of the company need not be brought to approval of the shareholders; and ● determining whether to approve the terms of compensation of office holders that require the committee’s approval.
However, if the shareholders of the company do not approve a compensation arrangement with an executive officer that is inconsistent with the company’s stated compensation policy, the compensation committee and board of directors may override the shareholders’ decision if each of the compensation committee and the board of directors provide detailed reasons for their decision, including regarding to the shareholders of the Company objection.
However, if the shareholders of the company do not approve a compensation arrangement with an executive officer that is inconsistent with the company’s stated compensation policy, the compensation committee and board of directors may override the shareholders’ decision if each of the compensation committee and the board of directors provide detailed reasons for their decision, including regarding to the shareholders of the Company objection. 108 Chief executive officer.
Our Israeli non-employee service providers and controlling shareholders may only be granted options under Section 3(9) of the Tax Ordinance, which does not provide for similar tax benefits. The ESOP also permits the grant to Israeli grantees of options that do not qualify under Section 102(b)(2).
Our Israeli non-employee service providers and controlling shareholders may only be granted options under Section 3(i) of the Tax Ordinance, which does not provide for similar tax benefits. The ESOP also permits the grant to Israeli grantees of options that do not qualify under Section 102(b)(2).
Item 6.C. Directors, Senior Management and Employees - Board Practices - Approval of Related Party Transactions under Israeli law ”), unless at the time of the approval a majority of the committee’s members are present, which majority consists of independent directors under the Companies Law, including at least one external director.
Item 6.C. Directors, Senior Management and Employees – Board Practices – Approval of Related Party Transactions under Israeli law” ), unless at the time of the approval a majority of the committee’s members are present, which majority consists of independent directors under the Companies Law, including at least one external director.
The compensation policy must also include the following principles: ● with the exception of office holders who report directly to the chief executive officer, the link between variable compensation and long-term performance and measurable criteria; ● the relationship between variable and fixed compensation, and the ceiling for the value of variable compensation at the time of its grant; ● the conditions under which a director or executive would be required to repay compensation paid to him or her if it was later shown that the data upon which such compensation was based was inaccurate and was required to be restated in the company’s financial statements; ● the minimum holding or vesting period for variable, equity-based compensation; and ● maximum limits for severance compensation. 105 The compensation policy must also consider appropriate incentives from a long-term perspective.
The compensation policy must also include the following principles: ● with the exception of office holders who report directly to the chief executive officer, the link between variable compensation and long-term performance and measurable criteria; ● the relationship between variable and fixed compensation, and the ceiling for the value of variable compensation at the time of its grant; ● the conditions under which a director or executive would be required to repay compensation paid to him or her if it was later shown that the data upon which such compensation was based was inaccurate and was required to be restated in the company’s financial statements; ● the minimum holding or vesting period for variable, equity-based compensation; and ● maximum limits for severance compensation.
Such insurance also includes side A directors’ and officers’ liability insurance, for the benefit of all of our directors and officers. 108 Indemnification The Companies Law and the Israeli Securities Law, 5728-1968, or the Securities Law, provide that a company may indemnify an office holder against the following liabilities and expenses incurred for acts performed by him or her as an office holder, either pursuant to an undertaking made in advance of an event or following an event, provided its articles of association include a provision authorizing such indemnification: ● a financial liability imposed on him or her in favor of another person by any judgment concerning an act performed in his or her capacity as an office holder, including a settlement or arbitrator’s award approved by a court; ● reasonable litigation expenses, including attorneys’ fees, expended by the office holder (a) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (1) no indictment (as defined in the Companies Law) was filed against such office holder as a result of such investigation or proceeding; and (2) no financial liability as a substitute for the criminal proceeding (as defined in the Companies Law) was imposed upon him or her as a result of such investigation or proceeding, or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; or (b) in connection with a monetary sanction; ● reasonable litigation expenses, including attorneys’ fees, expended by the office holder or imposed on him or her by a court: (1) in proceedings that the company institutes, or that another person institutes on the company’s behalf, against him or her; (2) in a criminal proceedings of which he or she was acquitted; or (3) as a result of a conviction for a crime that does not require proof of criminal intent; and ● expenses incurred by an office holder in connection with an Administrative Procedure under the Securities Law, including reasonable litigation expenses and reasonable attorneys’ fees.
Indemnification The Companies Law and the Israeli Securities Law, 5728-1968, or the Securities Law, provide that a company may indemnify an office holder against the following liabilities and expenses incurred for acts performed by him or her as an office holder, either pursuant to an undertaking made in advance of an event or following an event, provided its articles of association include a provision authorizing such indemnification: ● a financial liability imposed on him or her in favor of another person by any judgment concerning an act performed in his or her capacity as an office holder, including a settlement or arbitrator’s award approved by a court; ● reasonable litigation expenses, including attorneys’ fees, expended by the office holder (a) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (1) no indictment (as defined in the Companies Law) was filed against such office holder as a result of such investigation or proceeding; and (2) no financial liability as a substitute for the criminal proceeding (as defined in the Companies Law) was imposed upon him or her as a result of such investigation or proceeding, or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; or (b) in connection with a monetary sanction; ● reasonable litigation expenses, including attorneys’ fees, expended by the office holder or imposed on him or her by a court: (1) in proceedings that the company institutes, or that another person institutes on the company’s behalf, against him or her; (2) in a criminal proceedings of which he or she was acquitted; or (3) as a result of a conviction for a crime that does not require proof of criminal intent; and ● expenses incurred by an office holder in connection with an Administrative Procedure under the Securities Law, including reasonable litigation expenses and reasonable attorneys’ fees.
Subject to the aforesaid limitations, under the indemnification agreements, we exculpate and release our office holders from any and all liability to us related to any breach by them of their duty of care to us to the fullest extent permitted by law. 109 Limitations The Companies Law provides that we may not exculpate or indemnify an office holder nor enter into an insurance contract that would provide coverage for any liability incurred as a result of any of the following: (1) a breach by the office holder of his or her duty of loyalty unless (in the case of indemnity or insurance only, but not exculpation) the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice us; (2) a breach by the office holder of his or her duty of care if the breach was carried out intentionally or recklessly (as opposed to merely negligently); (3) any act or omission committed with the intent to derive an illegal personal benefit; or (4) any fine, monetary sanction, penalty or forfeit levied against the office holder.
Limitations The Companies Law provides that we may not exculpate or indemnify an office holder nor enter into an insurance contract that would provide coverage for any liability incurred as a result of any of the following: (1) a breach by the office holder of his or her duty of loyalty unless (in the case of indemnity or insurance only, but not exculpation) the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice us; (2) a breach by the office holder of his or her duty of care if the breach was carried out intentionally or recklessly (as opposed to merely negligently); (3) any act or omission committed with the intent to derive an illegal personal benefit; or (4) any fine, monetary sanction, penalty or forfeit levied against the office holder.
Our ESOP was adopted by our board of directors in May 2017 and expires in May 2027. Our employees, directors, officer, consultants, advisors, suppliers and any other person or entity whose services are considered valuable to us are eligible to participate in this plan.
Our employees, directors, officer, consultants, advisors, suppliers and any other person or entity whose services are considered valuable to us are eligible to participate in this plan. Our 2024 plan was adopted by our board of directors in February 2024 and expires in February 2034.
If the transaction is an extraordinary transaction, the office holder must also disclose any personal interest held by: ● the office holder’s relatives; or ● any corporation in which the office holder or his or her relatives holds 5% or more of the shares or voting rights, serves as a director or general manager or has the right to appoint at least one director or the general manager. 110 An office holder is not, however, obliged to disclose a personal interest if it derives solely from the personal interest of his or her relative in a transaction that is not considered an extraordinary transaction.
If the transaction is an extraordinary transaction, the office holder must also disclose any personal interest held by: ● the office holder’s relatives; or ● any corporation in which the office holder or his or her relatives holds 5% or more of the shares or voting rights, serves as a director or general manager or has the right to appoint at least one director or the general manager.
Employees As of December 31, 2020, we had 35 full-time employees and 11 part-time employees. As of December 31, 2021, we had 55 full-time employees and 9 part-time employees. As of December 31, 2022, we had 65 full-time employees and 7 part-time employees. The majority of our employees are located in Israel.
Employees As of December 31, 2021, we had 55 full-time employees and 9 part-time employees. As of December 31, 2022, we had 65 full-time employees and 7 part-time employees. As of December 31, 2023, we had 71 full-time employees and 6 part-time employees. The majority of our employees are located in Israel.
Upon termination of employment without Cause, as defined in the ESOP, all unvested options will expire, and all vested options will generally be exercisable for three (3) months following termination, or such other period as determined by the plan administrator, subject to the terms of the ESOP and the governing option agreement.
Upon termination of employment without Cause, as defined in both ESOP plans, all unvested awards will expire, and all vested options will generally be exercisable for three (3) or nine (9) months, depending on the plan, respectively, following termination, or such other period as determined by the plan administrator, subject to the terms of the ESOP plans and the governing award agreement.
Upon termination of employment due to death, retirement or disability, all the vested options at the time of termination will be exercisable for twenty-four (24) months following termination, or such other period as determined by the plan administrator, subject to the terms of the ESOP and the governing option agreement.
Upon termination of employment due to death, retirement or disability, all the vested awards at the time of termination will be exercisable for twenty-four (24) or twelve (12) months, depending on the plan, respectively, following termination, or such other period as determined by the plan administrator, subject to the terms of the ESOP plans and the governing award agreement. F.
Our ESOP is administered by our board of directors, regarding the granting of options and the terms of option grants, including exercise price, method of payment, vesting schedule, acceleration of vesting and the other matters necessary in the administration of these plan.
Our ESOP plans are administered by our board of directors, regarding the granting of options and the terms of option grants (and regarding our 2024 plan, also the granting of restricted share units and restricted shares), including exercise price, method of payment, vesting schedule, acceleration of vesting and the other matters necessary in the administration of these plan.
However, in Israel, we are subject to certain Israeli labor laws, regulations and national labor court precedent rulings, as well as certain provisions of collective bargaining agreements applicable to us by virtue of extension orders issued in accordance with relevant labor laws by the Israeli Ministry of Economy and which apply such agreement provisions to our employees even though they are not part of a union that has signed a collective bargaining agreement.
However, in Israel, we are subject to certain Israeli labor laws, regulations and national labor court precedent rulings, as well as certain provisions of collective bargaining agreements applicable to us by virtue of extension orders issued in accordance with relevant labor laws by the Israeli Ministry of Economy and which apply such agreement provisions to our employees even though they are not part of a union that has signed a collective bargaining agreement. 109 All of our employment and consulting agreements include employees’ and consultants’ undertakings with respect to non-competition and assignment to us of intellectual property rights developed in the course of employment and confidentiality.
Approval of Related Party Transactions under Israeli Law General Under the Companies Law, we may approve an action by an office holder from which the office holder would otherwise have to refrain, as described above, if: ● the office holder acts in good faith and the act or its approval does not cause harm to the company; and ● the office holder disclosed the nature of his or her interest in the transaction (including any significant fact or document) to the company at a reasonable time before the company’s approval of such matter.
There are no service contracts between us or any of our subsidiaries, on the one hand, and our directors in their capacity as directors, on the other hand, providing for benefits upon termination of service. 106 Approval of Related Party Transactions under Israeli Law General Under the Companies Law, we may approve an action by an office holder from which the office holder would otherwise have to refrain, as described above, if: ● the office holder acts in good faith and the act or its approval does not cause harm to the company; and ● the office holder disclosed the nature of his or her interest in the transaction (including any significant fact or document) to the company at a reasonable time before the company’s approval of such matter.
In addition, any extraordinary transaction with a controlling shareholder or in which a controlling shareholder has a personal interest with a term of more than three years requires the abovementioned approval every three years; however, such transactions not involving the receipt of services or compensation can be approved for a longer term, provided that the audit committee determines that such longer term is reasonable under the circumstances. 111 The Companies Law requires that every shareholder that participates, in person, by proxy or by voting instrument, in a vote regarding a transaction with a controlling shareholder, must indicate in advance or in the ballot whether or not that shareholder has a personal interest in the vote in question.
In addition, any extraordinary transaction with a controlling shareholder or in which a controlling shareholder has a personal interest with a term of more than three years requires the abovementioned approval every three years; however, such transactions not involving the receipt of services or compensation can be approved for a longer term, provided that the audit committee determines that such longer term is reasonable under the circumstances.
The Companies Law also permits a company to undertake in advance to indemnify an office holder, provided that if such indemnification relates to financial liability imposed on him or her, as described above, then the undertaking should be limited and shall detail the following foreseen events and amount or criterion: ● to events that in the opinion of the board of directors can be foreseen based on the company’s activities at the time that the undertaking to indemnify is made; and ● in amount or criterion determined by the board of directors, at the time of the giving of such undertaking to indemnify, to be reasonable under the circumstances.
An “Administrative Procedure” is defined as a procedure pursuant to chapters H3 (Monetary Sanction by the Israeli Securities Authority), H4 (Administrative Enforcement Procedures of the Administrative Enforcement Committee) or I1 (Arrangement to prevent Procedures or Interruption of procedures subject to conditions) to the Securities Law. 105 The companies Law also permits a company to undertake in advance to indemnify an office holder, provided that if such indemnification relates to financial liability imposed on him or her, as described above, then the undertaking should be limited and shall detail the following foreseen events and amount or criterion: ● to events that in the opinion of the board of directors can be foreseen based on the company’s activities at the time that the undertaking to indemnify is made; and ● in amount or criterion determined by the board of directors, at the time of the giving of such undertaking to indemnify, to be reasonable under the circumstances.
The duty of care requires an office holder to act with the level of skill with which a reasonable office holder in the same position would have acted under the same circumstances.
Fiduciary Duties of Office Holders The Companies Law imposes a duty of care and a duty of loyalty on all office holders of a company. The duty of care requires an office holder to act with the level of skill with which a reasonable office holder in the same position would have acted under the same circumstances.
In addition, our compensation policy contains compensation recovery provisions which allows us under certain conditions to recover bonuses paid in excess, enables our Chief Executive Officer to approve an immaterial change in the terms of employment of an executive officer (provided that the changes of the terms of employment are in accordance our compensation policy) and allows us to exculpate, indemnify and insure our executive officers and directors subject to certain limitations set forth thereto.
The equity-based compensation shall be granted from time to time and be individually determined and awarded according to the performance, educational background, prior business experience, qualifications, role and the personal responsibilities of the executive officer. 103 In addition, our compensation policy contains compensation recovery provisions which allows us under certain conditions to recover bonuses paid in excess, enables our Chief Executive Officer to approve an immaterial change in the terms of employment of an executive officer (provided that the changes of the terms of employment are in accordance our compensation policy) and allows us to exculpate, indemnify and insure our executive officers and directors subject to certain limitations set forth thereto.
The compensation committee must be comprised of at least three directors, including all of the external directors, who must constitute a majority of the members of the compensation committee. Each compensation committee member that is not an external director must be a director whose compensation is in accordance with the amount paid to an external director of the Company.
Each compensation committee member that is not an external director must be a director whose compensation is in accordance with the amount paid to an external director of the Company.
Insurance Under the Companies Law, a company may obtain insurance for any of its office holders against the following liabilities incurred due to acts he or she performed as an office holder, if and to the extent provided for in the company’s articles of association: ● breach of his or her duty of care to the company or to another person, to the extent such a breach arises out of the negligent conduct of the office holder; ● a breach of his or her duty of loyalty to the company, provided that the office holder acted in good faith and had reasonable cause to assume that his or her act would not prejudice the company’s interests; and ● a financial liability imposed upon him or her in favor of another person.
The duty of loyalty of an office holder requires an office holder to act in good faith and for the benefit of the company, and includes a duty to: ● refrain from any conflict of interest between the performance of his duties in the company and his performance of his other duties or personal affairs; ● refrain from any action that is competitive with the company’s business; ● refrain from exploiting any business opportunity of the company to receive a personal gain for himself or others; and ● disclose to the company any information or documents relating to the company’s affairs which the office holder has received due to his position as an office holder. 104 Insurance Under the Companies Law, a company may obtain insurance for any of its office holders against the following liabilities incurred due to acts he or she performed as an office holder, if and to the extent provided for in the company’s articles of association: ● breach of his or her duty of care to the company or to another person, to the extent such a breach arises out of the negligent conduct of the office holder; ● a breach of his or her duty of loyalty to the company, provided that the office holder acted in good faith and had reasonable cause to assume that his or her act would not prejudice the company’s interests; and ● a financial liability imposed upon him or her in favor of another person.
In case the remuneration of the directors is in accordance with regulations applicable to remuneration of the external directors then such remuneration shall be exempt from the approval of the general meeting.
In case the remuneration of the directors is in accordance with regulations applicable to remuneration of the external directors then such remuneration shall be exempt from the approval of the general meeting. Where the director is also a controlling shareholder, the requirements for approval of transactions with controlling shareholders apply.
In addition, the compensation committee may exempt the engagement terms of a candidate to serve as the chief executive officer from shareholders’ approval, if the compensation committee determines that the compensation arrangement is consistent with the company’s stated compensation policy, that the chief executive officer did not have a prior business relationship with the company or a controlling shareholder of the company, and that subjecting the approval to a shareholder vote would impede the company’s ability to attain the candidate to serve as the company’s chief executive officer (and provide detailed reasons for the latter). 112 The approval of each of the compensation committee and the board of directors, with regard to the office holders and directors above, must be in accordance with the company’s stated compensation policy; however, under special circumstances, the compensation committee and the board of directors may approve compensation terms of a chief executive officer that are inconsistent with the company’s compensation policy provided that they have considered those provisions that must be included in the compensation policy according to the Companies Law and that shareholder approval was obtained by a Special Majority requirement.
In addition, the compensation committee may exempt the engagement terms of a candidate to serve as the chief executive officer from shareholders’ approval, if the compensation committee determines that the compensation arrangement is consistent with the company’s stated compensation policy, that the chief executive officer did not have a prior business relationship with the company or a controlling shareholder of the company, and that subjecting the approval to a shareholder vote would impede the company’s ability to attain the candidate to serve as the company’s chief executive officer (and provide detailed reasons for the latter).
We currently have directors’ and officers’ liability insurance, providing total coverage of $15 million.
We currently have directors’ and officers’ liability insurance, providing total coverage of $15 million. Such insurance also includes side A directors’ and officers’ liability insurance, for the benefit of all of our directors and officers.
All of our employment and consulting agreements include employees’ and consultants’ undertakings with respect to non-competition and assignment to us of intellectual property rights developed in the course of employment and confidentiality. With respect to our employees in Israel, the enforceability of such provisions is limited by Israeli law. 113 E. Share Ownership See “Item 7.A. Major Shareholders” below.
With respect to our employees in Israel, the enforceability of such provisions is limited by Israeli law. E. Share Ownership See “Item 7.A. Major Shareholders” below. Employee Equity Incentive Plan We maintain two equity incentive plans, the 2006 plan and the 2024 plan. As of March 29, 2024, the number of options allotted in the 2006 plan is 3,693,240.
Our independent registered public accounting firm and our internal auditor are invited to attend all meetings of our financial statements examination committee. Compensation Committee Under the Companies Law, the board of directors of any public company must establish a compensation committee.
Compensation Committee Under the Companies Law, the board of directors of any public company must establish a compensation committee. The compensation committee must be comprised of at least three directors, including all of the external directors, who must constitute a majority of the members of the compensation committee.
Removed
The equity-based compensation shall be granted from time to time and be individually determined and awarded according to the performance, educational background, prior business experience, qualifications, role and the personal responsibilities of the executive officer.
Added
The compensation policy must also consider appropriate incentives from a long-term perspective.
Removed
Where the director is also a controlling shareholder, the requirements for approval of transactions with controlling shareholders apply. 107 Fiduciary Duties of Office Holders The Companies Law imposes a duty of care and a duty of loyalty on all office holders of a company.
Added
Subject to the aforesaid limitations, under the indemnification agreements, we exculpate and release our office holders from any and all liability to us related to any breach by them of their duty of care to us to the fullest extent permitted by law.
Removed
The duty of loyalty of an office holder requires an office holder to act in good faith and for the benefit of the company, and includes a duty to: ● refrain from any conflict of interest between the performance of his duties in the company and his performance of his other duties or personal affairs; ● refrain from any action that is competitive with the company’s business; ● refrain from exploiting any business opportunity of the company to receive a personal gain for himself or others; and ● disclose to the company any information or documents relating to the company’s affairs which the office holder has received due to his position as an office holder.
Added
An office holder is not, however, obliged to disclose a personal interest if it derives solely from the personal interest of his or her relative in a transaction that is not considered an extraordinary transaction.
Removed
An “Administrative Procedure” is defined as a procedure pursuant to chapters H3 (Monetary Sanction by the Israeli Securities Authority), H4 (Administrative Enforcement Procedures of the Administrative Enforcement Committee) or I1 (Arrangement to prevent Procedures or Interruption of procedures subject to conditions) to the Securities Law.
Added
The Companies Law requires that every shareholder that participates, in person, by proxy or by voting instrument, in a vote regarding a transaction with a controlling shareholder, must indicate in advance or in the ballot whether or not that shareholder has a personal interest in the vote in question.
Removed
There are no service contracts between us or any of our subsidiaries, on the one hand, and our directors in their capacity as directors, on the other hand, providing for benefits upon termination of service.
Added
The approval of each of the compensation committee and the board of directors, with regard to the office holders and directors above, must be in accordance with the company’s stated compensation policy; however, under special circumstances, the compensation committee and the board of directors may approve compensation terms of a chief executive officer that are inconsistent with the company’s compensation policy provided that they have considered those provisions that must be included in the compensation policy according to the Companies Law and that shareholder approval was obtained by a Special Majority requirement.
Removed
Equity Incentive Plan Employee Stock Option Plan We maintain one equity incentive plan, the ESOP. As of December 31, 2022, the number of options and warrants allotted is 3,075,935. In addition, the number of options that have vested and have not yet been exercised or expired are 1,058,965.
Added
In addition, the number of options that have vested and have not yet been exercised or expired in the 2006 plan is 2,066,598. Our 2006 plan was adopted by our board of directors in May 2017 and expires in May 2027.
Added
Our employees, directors, officer, consultants, advisors, suppliers and any other person or entity whose services are considered valuable to us are eligible to participate in this plan.
Added
In April 2024, our board of directors adopted an addendum to our 2024 plan to confer eligibility for participation in and permit the grant of awards under the 2024 plan for any U.S. employees, directors, officers, consultants, advisors, suppliers and any other persons or entities whose services are considered valuable to us in accordance with the treatment of qualified incentive stock options and non-qualified incentive stock options under U.S. federal taxation law under Internal Revenue Code of 1986 (U.S.
Added
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation. Not applicable. 110

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

12 edited+6 added−2 removed11 unchanged
Ordinary Shares issuable under share options or warrants that are exercisable within 60 days after March 29, 2023, are deemed outstanding for the purpose of computing the percentage ownership of the person holding the options or warrants but are not deemed outstanding for the purpose of computing the percentage ownership of any other person.
Ordinary Shares issuable under share options or warrants that are exercisable within 60 days after March 29, 2024, are deemed outstanding for the purpose of computing the percentage ownership of the person holding the options or warrants but are not deemed outstanding for the purpose of computing the percentage ownership of any other person.
Transactions with Our Major Shareholder In connection with a currently pending litigation filed by a shareholder against the Company, the members of the board of directors, the controlling shareholder and the investors who took part in the private placement that was approved by our shareholders on March 7, 2021, our major shareholder, Epoch Partner Investments Limited, has agreed to reimburse us 30% of our expenses related to consultants used in the case.
Transactions with Our Major Shareholder In connection with a currently pending litigation filed by a shareholder against the Company, the members of the board of directors, the controlling shareholder and the investors who took part in the private placement that was approved by our shareholders on March 7, 2021, our major shareholder, Epoch, has agreed to reimburse us 30% of our expenses related to consultants used in the case.
On the other hand, there were decreases in the percentage ownership of Epoch Partner Investments Limited, or Epoch, whose percentage ownership in the Company decreased to 52.7% of our issued and outstanding share capital, or 24,049,707 shares, and Alpha Capital Anstalt, whose percentage ownership in the Company decreased below 5% to 0.789% of our issued and outstanding share capital, or 290,378 shares.
On the other hand, there were decreases in the percentage ownership of Epoch whose percentage ownership in the Company decreased to 52.7% of our issued and outstanding share capital, or 24,049,707 shares, and Alpha Capital Anstalt, whose percentage ownership in the Company decreased below 5% to 0.789% of our issued and outstanding share capital, or 290,378 shares.
On the other hand, there were decreases in the percentage ownership of Epoch Partner Investments Limited, or Epoch, whose percentage ownership in the Company decreased to 55.36% of our issued and outstanding share capital, or 19,807,283 shares, and Alpha Capital Anstalt, whose percentage ownership in the Company decreased to 8.42% of our issued and outstanding share capital, or 3,013,482 shares.
On the other hand, there were decreases in the percentage ownership of Epoch whose percentage ownership in the Company decreased to 55.36% of our issued and outstanding share capital, or 19,807,283 shares, and Alpha Capital Anstalt, whose percentage ownership in the Company decreased to 8.42% of our issued and outstanding share capital, or 3,013,482 shares.
Mr. Li Haixiang has the voting and dispositive power over the shares held by Epoch. The mailing address of Mr. Li Haixiang is 70/F Two International Finance Centre, Suite 7013, Central, Hong Kong.
(1) Includes 25,211,488 Ordinary Shares. Mr. Li Haixiang has the voting and dispositive power over the shares held by Epoch. The mailing address of Mr. Li Haixiang is 70/F Two International Finance Centre, Suite 7013, Central, Hong Kong.
The following table sets forth information regarding beneficial ownership of our Ordinary Shares as of March 29, 2023, by: ● each person, or group of affiliated persons, known to us to be the beneficial owner of more than 5% of our outstanding Ordinary Shares; ● each of our directors and executive officers; and ● all of our directors and executive officers as a group. 114 Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to Ordinary Shares.
The following table sets forth information regarding beneficial ownership of our Ordinary Shares as of March 29, 2024, by: ● each person, or group of affiliated persons, known to us to be the beneficial owner of more than 5% of our outstanding Ordinary Shares; ● each of our directors and executive officers; and ● all of our directors and executive officers as a group.
Record Holders Based on a review of information provided to us by our transfer agent, as of March 29, 2023, there were three holders of record of our Ordinary Shares, including two record holders in the United States, one of which was Cede & Co., the nominee of the Depositary Trust Company.
Record Holders Based on a review of information provided to us by our transfer agent, as of April 1, 2024, there were four holders of record of our Ordinary Shares, including two record holders in the United States.
Share Ownership -—Equity Incentive Plan. ” If the relationship between us and an executive officer or a director is terminated, except for Cause (as defined in the various option plan agreements and the ESOP), options that are vested will generally remain exercisable for three months after such termination. 116 Sale of Ordinary Shares On December 21, 2022, in connection with a “best efforts” public offering, we entered into a securities purchase agreement with certain investors, including our controlling shareholder, Epoch, pursuant to which we agreed issued an aggregate of 8,787,880 Ordinary Shares, at a price to the public of $1.65 per share.
Sale of Ordinary Shares On December 21, 2022, in connection with a “best efforts” public offering, we entered into a securities purchase agreement with certain investors, including our controlling shareholder, Epoch, pursuant to which we agreed issued an aggregate of 8,787,880 Ordinary Shares, at a price to the public of $1.65 per share.
No. of Shares Beneficially Owned Percentage Owned Holders of more than 5% of our voting securities: Epoch Partner Investments Limited (1) 24,049,707 52.7 % Directors and senior management who are not 5% holders: Ron Mayron* 170,295 ** Eyal Shamir* 484,735 1.05 % Ronen Tsimerman 265,163 ** Shay Levav 57,671 ** Tlalit Bussi Tel-Tzure 116,899 ** Galit Malik 33,799 ** Naum Muchnik 156,006 ** Merav Nir Dotan 20,167 ** Doron Birger* — — Vincent Chun Hung Chan* — — Sharon Levita* — — Oded Tamir* — — Yang Huang* 39,270 ** All directors and senior management as a group (13 persons) 1,344,005 2.93 % (1) Includes 24,049,707 Ordinary Shares.
No. of Shares Beneficially Owned Percentage Owned Holders of more than 5% of our voting securities: 25,211,488 52.6 % Epoch Partner Investments Limited (1) Directors and senior management who are not 5% holders: Ron Mayron* 222,574 ** Eyal Shamir* 520,641 1.1 % Ronen Tsimerman 307,525 ** Shay Levav 104,175 ** Tlalit Bussi Tel-Tzure 156,490 ** Galit Malik 56,343 ** Naum Muchnik 105,296 ** Merav Nir Dotan 58,095 ** Doron Birger* - Vincent Chun Hung Chan* - Sharon Levita* - Oded Tamir* 10,000 ** Yang Huang* 73,319 ** Shad Good - All directors and senior management as a group (14 persons) 3.4 % * Indicates director of the Company. ** Less than 1%.
As part of this public offering, we sold 4,242,424 Ordinary Shares to Epoch at $1.65 per share, resulting in gross proceeds from Epoch to us of approximately $7 million.
As part of this public offering, we sold 4,242,424 Ordinary Shares to Epoch at $1.65 per share, resulting in gross proceeds from Epoch to us of approximately $7 million. 112 On January 12, 2024, we entered into an equity distribution agreement, with Maxim Group LLC, as sales agent, pursuant to which we may offer and sell Ordinary Shares having an aggregate offering price of up to $9,700,000 from time to time through Maxim Group LLC.
This information is based upon a Schedule 13G/A filed by Epoch Partner Investments Limited with the SEC on February 14, 2023. * Indicates director of the Company. ** Less than 1%. 115 Changes in Percentage Ownership by Major Shareholders Over the course of 2022, there were no major increases in the percentage ownership of our major shareholders.
This information is based information provided by Epoch to us on March 22, 2024. 111 Changes in Percentage Ownership by Major Shareholders Over the course of 2023, there were no major increases in the percentage ownership of any of our major shareholders.
Over the course of 2020, there were increases in the percentage ownership of our major shareholders. On August 5, 2020, we held a public offering in which Epoch participated and invested $2,592 thousand against issuance of 2,211,250 shares. Following the offering, Epoch held approximately 58.83% of our issued and outstanding share capital.
There was a decrease in the percentage ownership of Epoch to 52.6% of our issued and outstanding share capital, or 24,049,707 shares. Over the course of 2022, there were no major increases in the percentage ownership of our major shareholders.
Removed
The number of record holders is not representative of the number of beneficial holders of our Ordinary Shares, as the shares of all shareholders for a publicly traded company such as ours which is listed on the Tel Aviv Stock Exchange are recorded in the name of our Israeli share registrar, REGISTRATION CO.
Added
Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to Ordinary Shares.
Removed
OF UNITED MIZRAHI BANK LTD, and the shares held of record by Cede & Co. include beneficial owners whose shares are held in street name by brokers and other nominees.
Added
Share Ownership –Equity Incentive Plan.” If the relationship between us and an executive officer or a director is terminated, except for Cause (as defined in the various option plan agreements and the ESOP), options that are vested will generally remain exercisable for three or nine months after such termination, depending on the plan.
Added
The Ordinary Shares will be offered and sold pursuant to our currently effective registration statement on Form F-3 (File No. 333-267272), the prospectus contained therein and the prospectus supplement filed with the SEC dated January 12, 2024. We are not obligated to sell any Ordinary Shares under the equity distribution agreement.
Added
We will pay Maxim Group LLC a commission equal to 2.5% of the gross sales price per share sold pursuant to the terms of the agreement and will provide Maxim Group LLC with customary indemnification and contribution rights. We also agreed to reimburse Maxim Group LLC for certain specified expenses.
Added
As of March 29, 2024, we have sold 2,209,465 Ordinary Shares pursuant to the equity distribution agreement, having aggregate gross proceeds of $3.0 million and aggregate net proceeds of $2.8 million. Epoch has indicated an interest in purchasing, for investment purposes and not for resale, an aggregate of up to $2.5 million of Ordinary Shares in the offering.
Added
Because indications of interest are not binding agreements or commitments to purchase, Epoch could determine to purchase more, fewer or no Ordinary Shares in this offering, and Maxim Group LLC could determine to sell more, fewer or no Ordinary Shares to Epoch.

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