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Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is 0.15pp more bullish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Real-time Form 4 intelligence. Smarter insider tracking.
Net-tone change vs last year's 10-K.
MD&A
+0.10pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
adverse+20
adversely+14
claims+12
against+12
harm+12
Positive rising
successful+10
effective+8
achieve+8
successfully+6
success+6
Risk Factors (Item 1A)
27,288 words
Item 1A. Risk Factors.
There are numerous and varied risks, known and unknown, that may prevent us from achieving our goals. You should carefully consider the risks described below and the other information included in this Annual Report on Form 10-K, including the consolidated financial statements and related notes. If any of the following risks, or any other risks not described below, actually occur, it is likely that our business, financial condition, and/or operating results could be materially adversely affected. The risks and uncertainties described below include forward-looking statements and our actual results may differ from those discussed in these forward-looking statements.
Summary Risk Factors
Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors” immediately following this prospectus summary. These risks include, among others, the following:
we have a history of net losses and may experience future losses;
our history of recurring losses and negative cash flows from operating activities, significant future commitments and the uncertainty regarding the adequacy of our liquidity to pursue our complete business objectives, and substantial regarding our ability to continue as a going ;
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
closed+1
Positive rising
effective+1
leading+1
exclusively+1
able+1
achievement+1
MD&A (Item 7)
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for fiscal years 2025 and 2024. For a comparison of our results of operations and financial condition for fiscal years 2024 and 2023, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2024 Annual Report on Form 10-K, filed with the SEC on March 12, 2025.
Overview
We are a medical device company specializing in the development and commercialization of products for the treatment of carotid artery disease and other vascular conditions. Our portfolio includes two commercial products based on our proprietary CGuard carotid stent technology, designed to provide market-leading embolic protection during and after stenting procedures. A stent is an expandable scaffold-like metallic device placed in an artery to widen the lumen and restore blood flow.
Our first product, the CGuard Carotid Embolic Prevention System (“CGuard EPS”), integrates a self-expanding nitinol stent with a MicroNet mesh sleeve as a single device for carotid artery revascularization. In January 2024, we received CE Mark recertification for CGuard EPS under the EU Medical Device Regulation (“MDR”). Our CGuard EPS previously held CE Mark approval under the former Medical Device Directive (“MDD”). CGuard EPS is marketed in over 30 countries outside the United States through a network of distributors.
Our second product, the CGuard Prime Carotid Stent System (“CGuard Prime”), uses the same stent and MicroNet mesh with a differentiated deployment mechanism. CGuard Prime received premarket approval (“PMA”) by the U.S. Food and Drug Administration (“FDA”) on June 23, 2025, and is marketed exclusively in the United States through our direct salesforce. It also received MDR CE Mark approval on June 12, 2025.
For more information regarding our business and operations, see “Item 1 – Business” above.
Recent Developments
Private Placements
May 2023 Private Placement Offering
On May 12, 2023, we entered into a securities purchase agreement pursuant to which we issued and sold in a private placement (the “May 2023 Private Placement Offering”) (i) an aggregate of 10,266,270 shares of common stock (the “May 2023 Shares”), (ii) pre-funded warrants to purchase up to 15,561,894 shares of common stock (the “May 2023 Pre-Funded Warrants”), and (iii) warrants to purchase up to an aggregate of 51,656,328 shares of common stock (the “May 2023 Warrants”), consisting of Series H warrants, Series I warrants, Series J warrants and Series K warrants.
The May 2023 Shares and associated warrants were sold at an offering price of $1.6327 per share and associated warrants, and the May 2023 Pre-Funded Warrants were sold at an offering price of $1.6326 per May Pre-Funded Warrant and associated warrants. Aggregate gross proceeds totaled approximately $42.2 million, and after deducting placement agent fees and other issuance costs of approximately $4.6 million, net proceeds to the Company were approximately $37.6 million.
Terms of the May 2023 Pre-Funded Warrants
The May 2023 Pre-Funded Warrants were immediately exercisable at an exercise price of $0.0001 per share and did not expire until exercised in full. As of the date of this Annual Report on Form 10-K, the May 2023 Pre-Funded Warrants have been exercised in full. Under their terms, holders were not able to exercise a Pre- May 2023 Funded Warrant if the exercise would result in the holder beneficially owning more than 4.99% or 9.99% of our outstanding shares of common stock (as elected by the holder), subject to customary permitted increases with advance notice.
Terms of the May 2023 Warrants (Series H, I, J and K)
The May 2023 Warrants were immediately exercisable at an exercise price of $1.3827 per share and are exercisable until the earlier of (i) five years after issuance and (ii) the applicable milestone-triggered expiration date, as follows:
Series H Warrants: expire 20 trading days following our public release of one-year primary and secondary endpoint results from the C-GUARDIANS pivotal trial.
Series I Warrants: expire 20 trading days following the announcement of PMA by the FDA for CGuard Prime 135 cm carotid stent system.
Series J Warrants: expire 20 trading days following our announcement of FDA approval for the SwitchGuard system and CGuard Prime 80 cm carotid stent system.
Series K Warrants: expire 20 trading days following the end of the fourth fiscal quarter after the fiscal quarter in which the first U.S. commercial sale of the CGuard carotid stent system occurs.
The May 2023 Warrants may be exercised on a cashless basis if there is no effective registration statement for the underlying shares of common stock issuable upon the exercise thereof. A registration statement on Form S-3 (File No. 333-272149) registering the shares underlying the May 2023 Warrants was declared effective on June 2, 2023.
Milestone-Based Exercises Under the May 2023 Warrants
Following the achievement of the applicable milestones during 2024 and 2025, the May 2023 Warrants were exercised as follows:
Series H Warrant Exercise
After we announced positive one-year results from the C-GUARDIANS pivotal trial, all Series H Warrants were exercised in full into 292,996 shares of common stock and 12,621,090 pre-funded warrants. Gross proceeds totaled approximately $17.9 million, and after deducting placement agent fees and issuance costs of approximately $1.0 million, net proceeds were approximately $16.9 million.
Series I Warrant Exercise
Following our June 24, 2025 announcement that the FDA granted PMA approval for CGuard Prime in the United States, all Series I Warrants were exercised in full into 2,352,393 shares of common stock and 10,561,685 pre-funded warrants. Gross proceeds totaled approximately $17.9 million, and net proceeds were approximately $16.9 million after issuance costs of approximately $1.0 million.
August 2025 Private Placement Offering
On July 30, 2025, we entered into a securities purchase agreement with investors pursuant to which we issued and sold in a private placement (the “August 2025 Private Placement Offering”) an aggregate of 6,791,380 shares (the “August 2025 Shares”) of common stock and pre-funded warrants (the “August 2025 Pre-Funded Warrants”) to purchase up to 9,764,804 shares of common stock, at an offering price of $2.42 per August 2025 Share and $2.4199 per August 2025 Pre-Funded Warrant. The August 2025 Pre-Funded Warrants are immediately exercisable at an exercise price of $0.0001 per share and will not expire until exercised in full.
Aggregate gross proceeds totaled approximately $40.1 million, after deducting placement agent fees and other issuance costs of approximately $3.1 million, net proceeds to the Company were approximately $37 million.
PMA approval of the CGuard Prime Carotid Stent System and Commercial Launch in the United States
On June 23, 2025, the FDA granted PMA approval of CGuard Prime in the United States.
Following such approval, in July 2025, we announced the official commercial launch of CGuard Prime in the United States. In October 2024, we established our global headquarters in Miami, Florida to support the U.S. launch and commercialization of CGuard Prime.
CE Mark Approval for CGuard Prime Under European MDR
On June 12, 2025, we received CE Mark approval under the EU’s MDR for CGuard Prime.
Critical Accounting Policies
We prepared our consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). U.S. GAAP represents a comprehensive set of accounting and disclosure rules and requirements, and applying these rules and requirements requires management judgments and estimates including, in certain circumstances, choices between acceptable U.S. GAAP alternatives. The following is a discussion of our most critical accounting policies, judgments and uncertainties that are inherent in our application of U.S. GAAP.
Use of estimates
As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to the determination of the lease terms in operating leases.
Leases
Operating leases are included in operating lease right-of-use (“ROU”) assets, Accounts payable and accruals - Other, and operating lease liabilities. ROU assets represent Company’s right to use an underlying asset for the lease term and lease liabilities represent obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, we use the incremental borrowing rate based on the information available at the lease commencement date as the rate implicit in the lease is not readily determinable. The determination of the incremental borrowing rate requires management judgment based on information available at lease commencement. The lease terms may include periods covered by options to extend the lease when it is reasonably certain that we will exercise such options, and periods covered by options to terminate the lease when it is reasonably certain that we will not exercise such options. Operating lease cost is recognized on a straight-line basis over the lease term. Lease agreements that include lease and non-lease components are accounted for as a single lease component. The Company elected the short-term lease recognition exemption for leases with a lease term of 12 months or less.
Results of Operations
Year ended December 31, 2025 compared to the year ended December 31, 2024
Revenues . For the year ended December 31, 2025, revenue was $8,979,000, an increase of $1,970,000, or 28.1%, compared to $7,009,000 during the year ended December 31, 2024. The increase was driven by the commercial launch of the CGuard Prime product through direct sales in the U.S. following FDA approval in June 2025, and continued growth in sales of the CGuard EPS product through distributors in international markets.
With respect to regions, the increase in revenue was primarily attributable to $1,385,000 increase in North America due to the commercial launch of CGuard Prime in the U.S. in the second half of 2025, and a $585,000 increase in international markets from continued penetration of our CGuard EPS product.
Gross Profit . For the year ended December 31, 2025, gross profit (revenue less cost of revenues) was $2,649,000 compared to gross profit of $1,506,000 for 2024. The increase resulted mainly from the increase in revenue year-on-year.
Gross margin represents our gross profit as a percentage of our revenue. Gross margin was 29.5% for the year ended December 31, 2025, an increase of 8.0 percentage points compared to 21.5% for the year ended December 31, 2024. This increase in gross margin resulted primarily from a more favorable revenue mix driven by direct U.S. sales, which carry higher margins due to a higher average selling price per unit compared with international distributor sales.
Research and Development Expenses . For the year ended December 31, 2025, research and development expenses were $15,003,000, an increase of $1,369,000, or 10.0%, compared to $13,634,000 during the year ended December 31, 2024. This increase resulted primarily due to higher staff levels in connection with our expansion in the U.S., and higher development and clinical expenses for the SwitchGuard NPS and CGuard Prime 80 cm carotid stent system, respectively. These increases were partially offset by a decrease in expenses for the C-GUARDIANS clinical study and related product preparation activity prior to the FDA approval of CGuard Prime in June 2025.
Selling and Marketing Expenses . For the year ended December 31, 2025, selling and marketing expenses were $16,553,000, an increase of $10,484,000, or 172.7%, compared to $6,069,000 during the year ended December 31, 2024. This increase resulted primarily from higher commercial staffing levels in connection with the commercial launch of CGuard Prime in the U.S.
General and Administrative Expenses . For the year ended December 31, 2025, general and administrative expenses were $20,707,000, an increase of $5,401,000, or 35.3%, compared to $15,306,000 during the year ended December 31, 2024. The increase was primarily driven by new hires, professional services expenses, and occupancy-related costs related to the Company’s expansion of U.S. operations to support the commercial launch of CGuard Prime.
Financial Income, net . For the year ended December 31, 2025, financial income was $891,000, a decrease of $666,000, compared to $1,557,000 during the year ended December 31, 2024. The decrease in financial income primarily resulted from a $403,000 increase in financial expenses related to changes in exchange rates and a $264,000 decrease in income from investment in marketable securities and money market funds due to lower interest rates.
Tax Expenses . For the year ended December 31, 2025, tax expenses increased by $4,000 compared to the year ended December 31, 2024. Our expenses for income taxes reflect primarily the tax liability due to potential tax exposure.
Net Loss . Our net loss for the year ended December 31, 2025 was $48,786,000, an increase of $16,781,000, or 52.4%, compared to $32,005,000 during the year ended December 31, 2024. The increase in net loss resulted primarily from an increase of $17,254,000 in operating expenses.
Liquidity and Capital Resources
We had an accumulated deficit as of December 31, 2025, of $302.3 million, as well as a net loss of $48.8 million and negative operating cash flows for fiscal year 2025. We expect to continue incurring losses and negative cash flows from operations until we expand our commercial revenue to a scale that funds our commercial resources, development activities and support functions. As a result of these expected losses and negative cash flows from operations, along with our current cash position, we believe we do not have sufficient resources to fund operations for at least the next 12 months. Therefore, there is substantial doubt about our ability to continue as a going concern.
Our plans include continued commercialization of our products and raising capital through sale of additional equity securities, debt or capital inflows from strategic partnerships and exercise of warrants. There are no assurances, however, that we will be successful in obtaining the level of financing needed for our operations. If we are unsuccessful in commercializing our products or raising capital, we may need to reduce activities, curtail or cease operations.
In May 2023, we closed the May 2023 Private Placement Offering that resulted in aggregate gross proceeds of approximately $42.2 million, before deducting fees payable to the placement agent and other offering expenses payable by us. If the May 2023 Warrants are exercised in cash in full this would result in an additional $71.4 million of gross proceeds (of which approximately $33.8 million has been received as of the date of this Annual Report on Form 10-K). There can be no assurance that we will achieve any of the remaining milestones set forth in the May 2023 Warrants or that the outstanding May 2023 Warrants will be exercised in cash in full.
Following the announcement of the one year follow up study results from the Company’s C-GUARDIANS trial, Series H Warrants to purchase 12,914,086 shares of common stock were exercised in full into 292,996 shares of common stock and pre-funded warrants to purchase 12,621,090 shares of common stock. The net proceeds from the exercise of the Series H Warrants were $16.9 million after deducting placement agent fees. The Series H warrants, each exercisable at $1.3827 per common share and $1.3826 per pre-funded warrant, were issued as part of the May 2023 Private Placement Offering.
Following the announcement of the PMA approval of the CGuard Prime carotid stent system in the United States, Series I warrants to purchase 12,914,078 shares of common stock were exercised in full into 2,352,393 shares of common stock and pre-funded warrants to purchase 10,561,685 shares of common stock during June and July 2025. The net proceeds from the exercise of the Series I Warrants were $16.9 million after deducting placement agent fees. The Series I warrants, each exercisable at $1.3827 per common share and $1.3826 per pre-funded warrant, were issued as part of the May 2023 Private Placement Offering.
In May 2024, we entered into an Equity Distribution Agreement (the “Distribution Agreement”) with Piper Sandler & Co., as sales agent (“Piper Sandler”). Pursuant to the Distribution Agreement, we may offer and sell from time to time, at our option, through or to Piper Sandler shares of our common stock having an aggregate offering price of up to $75 million (the “ATM Facility”). We will pay Piper Sandler a commission at a fixed rate of 3.0% of the aggregate gross proceeds from each sale of the shares under the Distribution Agreement. As of the date hereof, we sold 1,366,190 shares pursuant to the Distribution Agreement for aggregate gross proceeds of approximately $3,473,314.
In July 2025, we closed August 2025 that resulted in aggregate gross proceeds of approximately $40.1 million, before deducting fees payable to the placement agent and other offering expenses payable by us.
Year ended December 31, 2025 compared to the year ended December 31, 2024
General . As of December 31, 2025, we had cash and cash equivalents of $8,939,000 and marketable securities of $45,272,000, as compared to $18,916,000 of cash and cash equivalents and $15,721,000 marketable securities as of December 31, 2024. We have historically met our cash needs through a combination of issuing new shares, borrowing activities and product sales. Our cash requirements are generally for manufacturing costs, research and development activities, sales and marketing efforts, finance and administrative expenses, capital expenditures and general working capital.
For the year ended December 31, 2025, net cash used in our operating activities increased by $13,235,000 to $35,103,000, from $21,868,000 during the same period in 2024. The primary reason for the increase in cash used in our operating activities was an increase of $13,163,000 in compensation costs paid during the year ended December 31, 2025 (from $12,013,000 in the year ended December 31, 2024 to $25,176,000 in the year ended December 31, 2025) and an increase of $1,509,000 in payments for third party related expenses and for professional services, offset, in part, by an increase of $1,374,000 in payments received from customers to $8,590,000 during the year ended December 31, 2025, from $7,216,000 during the same period in 2024.
Cash used in our investing activities was $30,560,000 during the year ended December 31, 2025, compared to cash provided by our investing activities of $12,641,000 during the year ended December 31, 2024. The primary reason for the increase in cash used in our investing activities is investments of $43,748,000, net of withdrawal in marketable securities.
Cash provided by financing activities for the year ended December 31, 2025, was $55,569,000. The source of the cash provided by financing activities during the year ended December 31, 2025, were the proceeds from the August 2025 Private Placement Offering as well as proceeds from issuance of shares received from our ATM Facility that resulted in approximately of $38,714,000 aggregate net proceeds and proceeds from the exercise of Series I Warrants of $16,855,000. Cash provided by financing activities for the year December 31, 2024, was $18,452,000. The principal source of the cash provided by financing activities during the year ended December 31, 2024, was the proceeds from exercise of warrants of $16,854,000 net of issuance costs and funds received from our ATM Facility that resulted in approximately $1,598,000 of aggregate net proceeds.
Contractual Obligations
Operating lease payments represent our commitment for future rent made under non-cancelable lease for our offices in the U.S. and Israel. The total future payments for our operating lease obligation on December 31, 2025, were approximately $3,966,000. For additional details regarding our lease, see Note 7 to our consolidated financial statements included in this Annual Report on Form 10-K.
Off Balance Sheet Arrangements
We have no off-balance sheet transactions, arrangements, obligations (including contingent obligations), or other relationships with unconsolidated entities or other persons that have, or may have, a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.
Factors That May Affect Future Operations
We believe that our future operating results will continue to be subject to quarterly variations based upon a wide variety of factors, including the cyclical nature of the ordering patterns of our distributors, timing of regulatory approvals, the implementation of various phases of our clinical trials and manufacturing efficiencies due to the learning curve of utilizing new materials and equipment. Our operating results could also be impacted by a weakening of the Euro and strengthening of the NIS, both against the U.S. dollar. Lastly, other economic conditions we cannot foresee may affect customer demand, such as individual country reimbursement policies pertaining to our products.
we will need to raise additional capital to meet our business requirements in the future, and such capital raising may be costly or difficult to obtain and could dilute our stockholders’ ownership interests;
we may become subject to claims by much larger and better capitalized competitors enforcing their intellectual property rights against us or seeking to invalidate our intellectual property or our rights thereto;
completing clinical trials for CGuard Prime Stent System and SwitchGuard NPS in the United States require meeting a number of regulatory requirements and must be conducted in compliance with the FDA’s IDE regulations. Failure to maintain compliance with IDE regulations could have a material adverse effect on our business;
clinical trials necessary to support a pre-market approval application will be lengthy and expensive and will require the enrollment of a large number of patients, and suitable patients may be difficult to identify and recruit. Any such delay or failure of clinical trials could prevent us from commercializing our stent products, which would materially and adversely affect our results of operations and the value of our business;
the results of our clinical trials may be insufficient to obtain regulatory approval for our products;
our products may in the future be subject to product notifications, recalls, or voluntary market withdrawals that could harm our reputation, business and financial results;
we may be subject, directly or indirectly, to applicable U.S. federal and state anti-kickback, falseclaims laws, physician payment transparency laws, fraud and abuse laws or similar healthcare and security laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings;
we may be exposed to product liability claims and insurance may not be sufficient to cover these claims;
even if additional products receive FDA approval, we may fail to obtain an adequate level of reimbursement for our products by third party payors, such that there may be no commercially viable markets for our products or the markets may be much smaller than expected;
in the United States and European Union, our business could be significantly and adversely affected by healthcare reform initiatives and/or other legislation or judicial interpretations of existing or future healthcare laws and/or regulations;
if we are unable to obtain and maintain intellectual property protection covering our products, others may be able to make, use or sell our products, which would adversely affect our revenue;
we are an international business, and we are exposed to various global and local risks that could have a material adverse effect on our financial condition and results of operations venue;
our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidity risk;
there are inherent limitations in all control systems, and misstatements due to error or fraud may occur and not be detected;
we anticipate being subject to fluctuations in currency exchange rates because we expect a substantial portion of our revenues will be generated in Euros and U.S. dollars, while a significant portion of our expenses will be incurred in New Israeli Shekels;
if there are significant shifts in the political, economic and military conditions in Israel and its neighbors, it could have a material adverse effect on our business relationships and profitability;
it may be difficult for investors in the United States to enforce any judgments obtained against us or some of our directors or officers;
the market prices of our common stock and our publicly traded warrants are subject to fluctuation and have been and may continue to be volatile, which could result in substantial losses for investors;
if we fail to maintain compliance with the Nasdaq minimum listing requirements, our common stock will be subject to delisting. Our ability to publicly or privately sell equity securities and the liquidity of our common stock could be adversely affected if our common stock delisted; and
changes to trade policy, including tariff and customs regulations, or failure to comply with such regulations may have an adverse effect on our reputation, business, financial condition and results of operations.
Risks Related to Our Financial Condition
We have a history of net losses and may experience future losses.
We have yet to establish any history of profitable operations. We reported a net loss of $48.8 million for the fiscal year ended December 31, 2025, and had a net loss of approximately $32.0 million during the fiscal year ended December 31, 2024. As of December 31, 2025, we had an accumulated deficit of $302.3 million. We expect to incur additional operating losses for the foreseeable future. There can be no assurance that we will be able to achieve sufficient revenues throughout the year or be profitable in the future.
Management has concluded that there is substantial doubt about our ability to continue as a going concern, and the report of our independent registered public accounting firm contains an explanatory paragraph as to our ability to continue as a going concern, which could prevent us from obtaining new financing on reasonable terms or at all.
Because we have had recurring losses and negative cash flows from operating activities, substantial doubt exists regarding our ability to remain as a going concern at the same level at which we are currently performing. Accordingly, the report of Kesselman & Kesselman, our independent registered public accounting firm, with respect to our financial statements for the year ended December 31, 2025, includes an explanatory paragraph as to our potential inability to continue as a going concern. The doubts regarding our potential ability to continue as a going concern may adversely affect our ability to obtain new financing on reasonable terms or at all.
We will need to raise additional capital to meet our business requirements in the future, and such capital raising may be costly or difficult to obtain and could dilute our stockholders’ ownership interests.
In order for us to pursue our business objectives without materially curtailing our operations, we will need to raise additional capital, which additional capital may not be available on reasonable terms or at all. For instance, we will need to raise additional funds to accomplish the following:
commercialization efforts in the United States following FDA approval of CGuard Prime;
expansion of manufacturing and operational capabilities, including scaling up production to meet expected demand and establishing necessary infrastructure in the United States;
development of our current and future products, including potential enhancements to CGuard Prime and advancing SwitchGuard NPS;
pursuing growth opportunities, such as expanding commercial activities in key international markets and strengthening regional distribution networks;
growing our U.S. commercial organization, including hiring and retaining qualified personnel to support sales, marketing, and operations;
responding to competitive pressures and evolving market dynamics, including potential reimbursement challenges and pricing pressures;
meeting regulatory and compliance obligations, including post-market surveillance, product registrations, and adherence to evolving regulatory frameworks; and
maintaining compliance with applicable laws and corporate governance requirements.
In May 2023, we issued four series of warrants that expire upon the earlier of (i) five years following issuance or (ii) 20 trading days following the occurrence of certain milestones specific to each series. If all of the four series of warrants are exercised in cash in full, this would result in $71.4 million of gross proceeds. In July 2024, we received gross proceeds of approximately $17.9 million following the exercise of the Series H Warrants in full. In July 2025, we received gross proceeds of approximately $17.9 million following the exercise of the Series I Warrants in full. In July 2025, we completed a private placement that generated approximately $40.1 million in gross proceeds. For additional information, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments – Private Placements.” There can be no assurance that we will achieve any of the milestones set forth in the remaining unexercised Warrants or that these Warrants will be exercised in cash in full.
Any additional capital raised through the sale of equity or equity-backed securities may dilute our stockholders’ ownership percentages and could also result in a decrease in the market value of our equity securities.
The terms of any securities issued by us in future capital transactions may be more favorable to new investors, and may include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders of any of our securities then outstanding.
In addition, we may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely impact our financial condition.
Risk Related to Commercialization of Our Products
We have only recently transitioned to a commercial stage medical device company in the United States, which may make it difficult for analysts and investors to evaluate the success of our business to date and to assess our future viability.
We only recently launched CGuard Prime in the United States following FDA approval in June 2025. Consequently, any predictions that analysts and investors make about our future success or viability may not be as accurate as they could be if we had more experience commercializing CGuard Prime in the United States. To be profitable, we will need to successfully transition our focus to expand our commercialization capabilities through our direct sales organization and build our distribution capabilities to support the commercial launch of CGuard Prime in the United States. Ultimately, we may not be successful in such a transition.
CGuard Prime has been commercially launched in the United States, and we have limited experience manufacturing, selling, marketing and distributing products in the U.S. The timing of uptake and distribution efforts are unpredictable and there is a risk that we may not achieve and sustain commercial success for the CGuard Prime.
In July 2025, we announced the official commercial launch of CGuard Prime in the U.S. following FDA approval in June 2025, and we are currently executing on the commercialization plan. As part of our plan, we are building out sales, marketing and distribution capabilities and have engaged with a contract manufacturer to supplement our internal manufacturing capacity. Historically, prior to the commencement of our commercialization activities in the U.S., we did not have experience in manufacturing, selling, marketing or distributing products in the U.S. To be able to successfully commercialize CGuard Prime we may need to further develop our existing manufacturing, sales, marketing and distribution capabilities, which is expensive and time-consuming, or enter into arrangements with third parties to perform these services.
In October 2024, we established our global headquarters in Miami, Florida to support the U.S. commercial launch of CGuard Prime. During 2024, we started the build-out of the infrastructure for commercial operations in the U.S. designed to support the commercialization of CGuard Prime. In addition, to support our anticipated production growth in connection with the commercialization of CGuard Prime, we have engaged Aptyx a contract manufacturer that is a developer and manufacturer of complex components and devices for the life sciences, to transfer the manufacturing of CGuard Prime finished goods to full-scale production at their ISO Class 7 cleanroom facility in North Carolina.
There are risks involved in establishing our own sales, marketing and distribution capabilities and partnering with a third-party manufacturer. We must commit significant financial and managerial resources to develop a marketing and sales force with technical expertise and with supporting distribution capabilities. Factors that may inhibit our efforts to commercialize our products directly and without strategic partners include:
our inability to recruit and retain adequate numbers of effective manufacturing, sales and marketing personnel;
the inability of sales personnel to obtain access to or persuade physicians to use our stents;
the inability to price our products at a sufficient price point to ensure an adequate and attractive level of profitability;
the difficulty of obtaining reimbursement from governmental and commercial payers;
the lack of complementary products offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and
unforeseen costs and expenses associated with creating and sustaining an independent manufacturing, sales and marketing organization.
We are continuing to expand our commercialization capabilities and to build our distribution capabilities to support the commercialization of CGuard Prime. We expect that it will take time for this team to generate significant sales momentum, if it does so at all. We may not be successful in recruiting and retaining the manufacturing, sales and marketing personnel necessary to sell CGuard Prime, and we may not be successful in marketing CGuard Prime, which would have a material adverse effect on our business, financial condition and results of operations.
In addition, other factors that have and may continue to inhibit our efforts to successfully commercialize CGuard Prime in the United States include our ability to access key health care decision makers, price CGuard Prime at a sufficient price point to ensure an adequate and attractive level of profitability, and maintain sufficient financial resources to cover the costs and expenses associated with creating and sustaining a capable sales and marketing organization and related commercial infrastructure. If we are not successful in setting our marketing, pricing and reimbursement strategies, recruiting and maintaining effective sales and marketing personnel or building and maintaining the infrastructure to support commercial operations in the United States and elsewhere, we will have difficultysuccessfully commercializing CGuard Prime in the U.S. market, which would adversely affect our business and financial condition.
If we are unable to establish and maintain our own manufacturing, sales, marketing and distribution capabilities or enter into successful arrangements with third parties to perform these services, our future product revenues and profitability may be materially adversely affected. If we are not successful in commercializing CGuard Prime in the United States, we may be required to collaborate or partner with a third-party medical device or biotechnology company with existing products. To the extent we collaborate or partner, the financial value will be shared with another party and we will need to establish and maintain a successfulcollaboration arrangement, and we may not be able to enter into these arrangements on acceptable terms or in a timely manner in order to establish CGuard Prime in the U.S. market. To the extent that we enter into co-promotion or other arrangements, any revenues we receive will depend upon the efforts of third parties, which may not be successful and are only partially in our control. In that event, our product revenues may be lower than if we marketed and sold our products directly with the highest priority, and we may be required to reduce or eliminate much of our commercial infrastructure and personnel as a result of such collaboration or partnership.
CGuard Prime, or any other product candidate that may receive marketing approval in the future, may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success and the market opportunity for CGuard Prime or any other product candidate may be smaller than our estimates.
CGuard Prime, or any other product candidate that may be approved in the future by the appropriate regulatory authorities for marketing and sale, may fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community. Physicians are often reluctant to switch their patients from existing medical devices even when new and potentially more effective or convenient products enter the market.
Efforts to educate the medical community and third-party payors on the benefits of CGuard Prime over its competition have required significant resources and may not ultimately be successful. If CGuard Prime, or any other product candidate that may be approved in the future for marketing and sale in the future, does not achieve an adequate level of market acceptance, we may not generate significant revenues and we may not become profitable. The degree of market acceptance of CGuard Prime, or any other product candidate that may be approved in the future, will depend on a number of factors, including:
● the advantages of the product compared to competitive products;
● the number of competitors approved for similar uses;
● the relative promotional effort and marketing success of us as compared with our competitors;
● how the product is positioned in physician treatment guidelines and pathways;
● the prevalence and severity of any side effects;
● the functionality and ease of use of the product;
● the efficacy and safety of the product;
● our ability to offer the product for sale at competitive prices;
● the product’s tolerability, consistency of performance, convenience and ease of administration compared to alternative product;
● the willingness of the target patient population to try, and of physicians to utilize, the product;
● limitations or warnings, including use restrictions, contained in the product’s approved labeling;
● the strength of sales, marketing and distribution support;
● the timing of market introduction of our approved products as well as competitive products;
● adverse publicity about the product or favorable publicity about competitive products;
● potential product liability claims;
● changes in the standard of care for the targeted indications of the product; and
● availability and amount of coverage and reimbursement from government payors, managed care plans and other third-party payors.
In addition, the potential market opportunities for CGuard Prime and any other product are difficult to estimate precisely. Our estimates of the potential market opportunities are predicated on many assumptions, including industry knowledge and publications, third-party research reports and other surveys. While we believe that our internal assumptions are reasonable, these assumptions involve the exercise of significant judgment on the part of our management, are inherently uncertain and the reasonableness of these assumptions has not been assessed by an independent source. If any of the assumptions prove to be inaccurate, the actual markets for our therapeutic candidate could be smaller than our estimates of the potential market opportunities.
If the commercial launch of CGuard Prime in the United States for which we established a direct sales organization and distribution capabilities is not successful for any reason, we could incur substantial costs and our investment in our direct sales organization and distribution capabilities would be lost if we cannot retain or reassign our sales, marketing, market access and medical affairs personnel.
To achieve commercial success for CGuard Prime in the United States, we have expended and anticipate that we will continue to expend significant resources to support our direct sales organization and distribution capabilities. There are risks involved with establishing our own sales, marketing, distribution, training and support capabilities. For example, recruiting and training sales and marketing personnel is expensive and time consuming and could delay our ability to focus on other priorities. If the commercial launch of CGuard Prime in the United States is not successful for any reason, this would be costly, and our investment would be lost if we cannot retain or reassign our sales, marketing, market access and medical affairs personnel or terminate on favorable terms any agreements entered into with third parties to support our commercialization efforts.
Factors that may inhibit or limit our efforts to commercialize CGuard Prime in the United States on our own include:
our inability to train and retain adequate numbers of effective sales, marketing, training and support personnel;
the inability of sales personnel to obtain access to physicians, including key opinion leaders, or to educate an adequate number of physicians of the benefits of CGuard Prime over alternative treatment options; and
unforeseen costs and expenses associated with establishing and maintaining an independent sales, marketing, training and support organization.
If our direct sales organization and distribution capabilities fail, or are otherwise unsuccessful, it would materially adversely impact the commercialization of CGuard Prime in the United States, impact our ability to generate revenue and harm our business.
While we derive most of our revenue from the sale of CGuard EPS in CE marked countries, our ability to generate significant revenues and achieveprofitability depends, among other things, on our abilities to successfully commercialize CGuard Prime and receive FDA approval of SwitchGuard and other products we may develop. If we fail to successfully commercializae CGuard Prime or obtain FDA approval for SwitchGuard or any other products we may develop, our results of operations and the value of our business would be materially and adversely affected.
We derive most of our revenue from sales of our CGuard EPS in CE marked countries and certain other select jurisdictions, and we only recently announced the official commercial launch of CGuard Prime in July 2025. In addition, we have not received any approvals for SwitchGuard and there can be no assurance that we will be able to receive regulatory approvals to commence marketing and sales for our products in any jurisdiction where we are seeking approvals. Our ability to generate significant revenues and achieveprofitability depends on our ability to successfully commercialize and manufacture commercial quantities of CGuard Prime and obtain required regulatory approvals for SwitchGuard and any other products we may develop at an acceptable cost. In addition, there may be insufficient demand for CGuard Prime, SwitchGuard and any other products we commercialize or develop. If we fail to generate sufficient revenues from these products, our results of operations and the value of our business and securities would be materially and adversely affected.
Physicians may not widely adopt our products unless they determine, based on experience, long-term clinical data and published peer reviewed journal articles, among other standard-of-care considerations, that the use of our stents provides a safe and effective alternative to other existing treatments for coronary artery disease and carotid artery disease.
We believe that physicians will not widely adopt our products unless they determine, based on experience, long-term clinical data, published peer-reviewed journal articles and payor coverage policies, among other factors, that the use of our products provide a safe and effective alternative to other existing treatments for the conditions we are seeking to address.
If we fail to demonstrate safety and efficacy that is at least comparable to existing and future therapies available on the market, our ability to successfully market our products will be significantly limited. Even if the data collected from clinical studies or clinical experience indicate positive results, each physician’s actual experience with our products will vary. Clinical trials conducted with our products may involve procedures performed by physicians who are technically proficient and are high-volume stent users of such products. Consequently, both short-term and long-term results reported in these clinical trials may be significantly more favorable than typical results of practicing physicians, which could negatively affect rates of adoptions of our products. We also believe that published peer-reviewed journal articles and recommendations and support by influential physicians regarding our products will be important for market acceptance and adoption, and we cannot assure you that we will receive these recommendations and support, or that supportive articles will be published.
We operate in an intensely competitive and rapidly changing business environment, and there is a substantial risk our products could become obsolete or uncompetitive.
The medical device market is highly competitive. We compete with many medical device companies globally in connection with our current products and products under development. We face intense competition from numerous pharmaceutical and biotechnology companies in the therapeutics area, as well as competition from academic institutions, government agencies and research institutions. Abbott Laboratories, Boston Scientific Corporation, Medtronic, Cordis Corporation and Terumo Medical Corporation produce a polytetrafluoroethylene mesh-covered stent and a double layer metal stent. As we develop and seek regulatory approval in the United States for our new TCAR neuroprotection system, SwitchGuard NPS, and continue to seek greater market share for CGuard Prime, we expect to compete with Silk Road Medical, which was acquired by Boston Scientific Corporation, in the TCAR market. Most of our current and potential competitors, including but not limited to those listed above, have, and will continue to have, substantially greater financial, technological, research and development, regulatory and clinical, manufacturing, marketing and sales, distribution and personnel resources than we do. There can be no assurance that we will have sufficient resources to successfully commercialize our products, if they are approved for sale. The worldwide market for stent products is characterized by intensive development efforts and rapidly advancing technology. Our future success will depend largely upon our ability to anticipate and keep pace with those developments and advances. Current or future competitors could develop alternative technologies, products or materials that are more effective, easier to use or more economical than what we or develop. If our technologies or products become obsolete or uncompetitive, our related revenue would decrease. This would have a material adverse effect on our business, financial condition and results of operations.
We may not be able to achieve or maintain satisfactory pricing and margins for our products.
Manufacturers of medical devices have a history of price competition, and we can give no assurance that we will be able to achievesatisfactory prices for our products or maintain prices at the levels we have historically achieved. Any decline in the amount that payers reimburse our customers for CAS could make it difficult for customers to continue using, or to adopt, our products and could create additional pricing pressure for us. In addition, the introduction of competitive stents that could be used in CAS procedures and other products could also put pressure on the pricing of our products. If we are forced to lower the price we charge for our products, our gross margins will decrease, which will adversely affect our ability to invest in and grow our business. If we are unable to maintain our prices, or if our costs increase and we are unable to offset such increase with an increase in our prices, our margins could erode. We will continue to be subject to significant pricing pressure, which could harm our business and results of operations. Also, our use of distributors in non-U.S. countries may adversely impact our gross margins.
We may become subject to claims by much larger and better capitalized competitors enforcing their intellectual property rights against us or seeking to invalidate our intellectual property or our rights thereto.
Based on the prolific litigation that has occurred in the stent industry and the fact that we may pose a competitive threat to some large and well-capitalized companies that own or control patents relating to stents and their use, manufacture and delivery, we believe that it is possible that one or more third parties will assert a patent infringement claim against the manufacture, use or sale of our stents based on one or more of these patents. These companies also own patents relating to the use of drugs to treat restenosis, stent architecture, catheters to deliver stents, and stent manufacturing and coating processes and compositions, as well as general delivery mechanism patents like rapid exchange, which might be alleged to cover one or more of our products. In addition, it is possible that a lawsuit of which we are not aware asserting patent infringement, misappropriation of intellectual property, or related claims may have already been filed against us. As the number of competitors in the stent market grows and our commercial sales expand geographically, the possibility of patent infringement by us or claim against us increases.
Our competitors have maintained their positions in the market by, among other things, establishing intellectual property rights relating to their products and enforcing these rights aggressively against their competitors and new entrants into the market. All the major companies in the field of stents and related markets, including Boston Scientific, C.R. Bard, Inc., W.L. Gore & Associates and Medtronic, have been repeatedly involved in patent litigation relating to stents since at least 1997. The field of stents and related markets have experienced rapid technological change and obsolescence in the past, and our competitors have strong incentives to stop or delay the introduction of new products and technologies. We may pose a competitive threat to many of the companies in these markets. Accordingly, these companies will have a strong incentive to take steps, through patent litigation or otherwise, to prevent us from distributing our products. Such litigation or claims would divert attention and resources away from the development and/or commercialization of our products and could result in an adverse court judgment that would make it impossible or impractical to sell our products in one or more territories.
Risks Related to our Clinical Trials and Regulatory Matters
Completion of clinical trials for CGuard Prime 80 cm in TCAR procedures (C-GUARDIANS II), SwitchGuard NPS (C-GUARDIANS III), and any other investigational product candidates requires compliance with FDA IDE regulations, and failure to meet these requirements could materially harm our business .
We recently completed patient enrollment in the C-GUARDIANS II IDE trial to evaluate the safety and efficacy of the CGuard Prime 80 cm carotid stent system used with the ENROUTE NPS during TCAR procedures, following FDA approval of the IDE on October 3, 2024. The study enrolled its first patient on December 6, 2024 and we completed enrollment of 50 patients in the first quarter of 2026. For additional information, see “Item 1 – Business – On-going and Planned Clinical Trials – C-GUARDIANS II for TCAR procedures.” In addition, FDA approved the IDE for C-GUARDIANS III on June 6, 2025, a pivotal study evaluating the SwitchGuard NPS when used in conjunction with the CGuard Prime 80 cm system for TCAR. The C-GUARDIANS III study is expected to begin enrollment of patients during the second quarter of 2026. For additional information, see “Item 1 – Business – On-going and Planned Clinical Trials – C-GUARDIANS III for TCAR procedures using SwitchGuard NPS.”
These and any future clinical studies must comply with FDA IDE regulations and Good Clinical Practice requirements, including IRB approvals, predefined protocols, informed consent, monitoring, data integrity, and reporting obligations. Delays in patient enrollment, site activation, supply availability, protocol deviations, investigator performance, or regulatory compliance issues could delay or disrupt these studies.
Because the TCAR indication for CGuard Prime and the SwitchGuard NPS remain investigational, the results from C-GUARDIANS II, C-GUARDIANS III, or any future clinical trials may not demonstrate safety and effectiveness to the FDA’s satisfaction. Failure to generate acceptable clinical data could delay or prevent FDA approval of these expanded indications or new products, limit our commercial opportunities in the TCAR market, and materially harm our business, financial condition, and results of operations.
Clinical trials necessary to support regulatory submissions for our products, including the C-GUARDIANS II study evaluating the CGuard Prime 80 cm stent system for TCAR procedures and the C-GUARDIANS III study evaluating the SwitchGuard NPS, are often lengthy and difficult to conduct, and delays or failures in these trials could adversely affect our business.
We are currently conducting C-GUARDIANS II, an FDA-approved IDE study evaluating the safety and effectiveness of the CGuard Prime 80 cm carotid stent system when used with the ENROUTE NPS during TCAR procedures. Although CGuard Prime received PMA approval in June 2025 for transfemoral use, the TCAR indication remains investigational and will require a PMA supplement supported by C-GUARDIANS II data. We are also conducting C-GUARDIANS III, an FDA-approved IDE study evaluating the SwitchGuard NPS, which is expected to support a 510(k) submission for SwitchGuard as a standalone neuroprotection system for TCAR.
Clinical trials for these products may encounter delays related to patient enrollment, site activation, protocol adherence, availability of investigational product, competing studies, and investigator engagement. TCAR-eligible patients represent a more limited subset of the carotid stenosis population, and suitable patients may be difficult to identify and recruit, particularly across centers with variable TCAR procedure volumes. Patients may withdraw consent, fail to complete required follow-up, or experience unrelated adverse events that complicate interpretation of study data.
If we are unable to complete these studies successfully, or if the resulting data do not demonstrate safety and effectiveness to the FDA’s satisfaction, we may be unable to obtain approval for the TCAR indication for CGuard Prime or clearance for the SwitchGuard NPS. Any such delays or failures could materially harm our business, financial condition, results of operations, and our commercial opportunities in the TCAR market.
The results of our C-GUARDIANS II and C-GUARDIANS III trials, as well as any other clinical trials, may be insufficient to obtain regulatory approval for our products.
We will only receive regulatory approval for additional indications of CGuard Prime, SwitchGuard or any other product we develop if we can demonstrate to the satisfaction of the FDA or the applicable foreign regulatory agency, in well designed and conducted clinical trials, that the product is safe and effective. If we are unable to demonstrate that a product is safe and effective in advanced clinical trials involving large numbers of patients, we will be unable to submit the necessary application to receive regulatory approval to commercialize the product. We face risks that:
the product may not prove to be safe or effective;
the product’s benefits may not outweigh its risks;
the results from advanced clinical trials may not confirm the positive results from pre-clinical studies and early clinical trials;
the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;
the FDA or comparable foreign regulatory authorities may interpret data from pre-clinical and clinical testing in different ways than us; and
the FDA or other regulatory agencies may require additional or expanded trials and data.
Patients may discontinue their participation in our clinical studies, which may negatively impact the results of these studies and extend the timeline for completion of our development programs.
Clinical trials for our products require sufficient patient enrollment. We may not be able to enroll a sufficient number of patients in a timely or cost-effective manner. Patients enrolled in our clinical studies may discontinue their participation at any time during the study as a result of a number of factors, including withdrawing their consent or experiencing adverse clinical events, which may or may not be judged to be related to our products under evaluation. If a large number of patients in a study discontinue their participation in the study, the results from that study may not be positive or may not support a filing for regulatory approval of the product.
In addition, the time required to complete clinical trials is dependent upon, among other factors, the rate of patient enrollment. Patient enrollment is a function of many factors, including the following:
the size of the patient population;
the nature of the clinical protocol requirements;
the availability of other treatments or marketed therapies (whether approved or experimental);
our ability to recruit and manage clinical centers and associated trials;
the proximity of patients to clinical sites; and
the patient eligibility criteria for the study.
Even if we obtain regulatory approvals, our products will be subject to ongoing regulatory review and if we fail to comply with continuing U.S. and applicable foreign regulations, we could lose those approvals and our business would be seriouslyharmed.
Even if products we develop receive regulatory approval or clearance, we will be subject to ongoing reporting obligations, and the products and the manufacturing operations will be subject to continuing regulatory review, including FDA inspections. The outcome of this ongoing review may result in the withdrawal of a product from the market, the interruption of the manufacturing operations and/or the imposition of labeling and/or marketing limitations. Since many more patients are exposed to drugs and medical devices following their marketing approval, serious but infrequent adverse reactions that were not observed in clinical trials may be observed during the commercial marketing of the product. In addition, the manufacturer and the manufacturing facilities we will use to produce any product will be subject to periodic review and inspection by the FDA and other similar foreign regulators. Later discovery of previously unknown problems with any product, manufacturer or manufacturing process, or failure to comply with regulatory requirements, may result in actions such as:
restrictions on such product, manufacturer or manufacturing process;
warning letters from the FDA or other regulatory authorities;
withdrawal of the product from the market;
suspension or withdrawal of regulatory approvals;
refusal to approve pending applications or supplements to approved applications that we submit;
voluntary or mandatory recall;
fines;
refusal to permit the import or export of our products;
product seizure or detentions;
injunctions or the imposition of civil or criminalpenalties; or
adverse publicity.
If we, or supplier, third-party contractor, partner or clinical investigator is slow to adapt, or are unable to adapt, to changes in existing regulatory requirements or the adoption of new regulatory requirements or policies, we may lose marketing approval for any of our products, if any of our products are approved, resulting in decreased.
Even if products we develop receive marketing approval, we or others may later discover that the product is less effective than previously believed or causes undesirable side effects that were not previously identified, which could compromise our ability or that of any collaborators to market the product, and could cause regulatory authorities to take certain regulatory actions.
It is possible that our clinical trials may indicate an apparent positive effect of a product that is greater than the actual positive effect, if any, or alternatively fail to identify undesirable side effects. For example, we, or others, may discover that our products are less safe and effective than previously believed. If, we, or others, discover that a product is less effective than previously believed or causes undesirable side effects that were not previously identified, any of the following adverse events could occur:
regulatory authorities may withdraw their approval of the product or seize the product;
we, or any of our collaborators, may be required to recall the product, change the way the product is administered or conduct additional clinical trials;
additional restrictions may be imposed on the marketing of, or the manufacturing processes of, the particular product;
we, or any of our collaborators, may be subject to fines, injunctions or the imposition of civil or criminalpenalties;
regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication including with the product;
we, or any of our collaborators, may be required to create a Medication Guide outlining the risks of the previously unidentified side effects for distribution to patients;
we could be sued and held liable for harm caused to patients;
physicians and patients may stop using our product; and
our reputation may suffer.
Any of these events could harm our business and operations and could negatively impact our stock price.
Our products may in the future be subject to product notifications, recalls, or voluntary market withdrawals that could harm our reputation, business and financial results.
After regulatory approval has been obtained for medical device products, the product and the manufacturer are subject to continual review, including the review of adverse events and clinical results that are reported after our products are made available to patients, and there can be no assurance that such approval will not be withdrawn or restricted. Regulators may also subject approvals to restrictions or conditions or impose post-approval obligations on the holders of these approvals, and the regulatory status of such products may be jeopardized if such obligations are not fulfilled. If post-approval studies are required, such studies may involve significant time and expense.
The manufacturing and marketing of medical devices involves an inherent risk that our products may prove to be defective and cause a health risk even after regulatory clearances have been obtained. Medical devices may also be modified after regulatory clearance is obtained to such an extent that additional regulatory clearance is necessary before the device can be further marketed. In these events, we may voluntarily implement a recall or market withdrawal or may be required to do so by a regulatory authority.
In the European Economic Area, we must comply with the medical device vigilance system under Regulation (EU) 2017/745 on medical devices, or the MDR. Under this system, manufacturers are generally required to report seriousincidents involving medical devices via an electronic system incorporated into the EU database on medical devices, called EUDAMED. Furthermore, manufacturers are required to take Field Safety Corrective Actions (“FSCAs”) to reduce a risk of death or seriousdeterioration in the state of health associated with the use of a medical device that is already placed on the market. An FSCA may include the recall, modification, exchange, destruction or retrofitting of the device. FSCAs must be communicated by the manufacturer or its legal representative to its customers and/or to the end users of the device through Field Safety Notices. FSCAs must be reported to the relevant competent authorities, even if the FSCA was undertaken in a third country in relation to a device which is also legally made available on the Union market and the reason for the FSCA is not limited to the device made available in the third country.
Any adverse event involving our products could result in other future voluntary corrective actions, such as recalls or customer notifications, or agency action, such as inspection or enforcement action. Adverse events have been reported to us in the past, and we cannot guarantee that they will not occur in the future. Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, would require the dedication of our time and capital, distract management from operating our business and could harm our reputation and financial results.
We have only limited experience in regulatory affairs, which may affect our ability, or the time required, to navigate complex regulatory requirements and obtain necessary regulatory approvals, if such approvals are received at all. Regulatory delays or denials may increase our costs, cause us to lose revenue and materially and adversely affect our results of operations and the value of our business.
Because long-term success measures have not been completely validated for our products, especially SwitchGuard and any other product we may develop, regulatory agencies may take a significant amount of time in evaluating product approval applications. Treatments may exhibit a favorable measure using one metric and an unfavorable measure using another metric. Any change in accepted metrics may result in reconfiguration of, and delays in, our clinical trials. Additionally, we have only limited experience in filing and prosecuting the applications necessary to gain regulatory approvals, and our clinical, regulatory and quality assurance personnel are currently composed of only ten employees. As a result, we may experience delays in connection with obtaining regulatory approvals for our products.
In addition, the products we and any potential licensees license, develop, manufacture and market are subject to complex regulatory requirements, particularly in the United States, Europe and Asia, which can be costly and time-consuming. There can be no assurance that such approvals will be granted on a timely basis, if at all. Furthermore, there can be no assurance of continued compliance with all regulatory requirements necessary for the manufacture, marketing and sale of the products we will offer in each market where such products are expected to be sold, or that products we have commercialized will continue to comply with applicable regulatory requirements. If a government regulatory agency were to conclude that we were not in compliance with applicable laws or regulations, the agency could institute proceedings to detain or seize our products, issue a recall, impose operating restrictions, enjoin future violations and assess civil and criminalpenaltiesagainst us, our officers or employees and could recommend criminalprosecution. Furthermore, regulators may proceed to ban, or request the recall, repair, replacement or refund of the cost of, any device manufactured or sold by us. Furthermore, there can be no assurance that all necessary regulatory approvals will be obtained for the manufacture, marketing and sale in any market of any new product developed or that any potential licensee will develop using our licensed technology.
Even if our products are approved by regulatory authorities, if we or our suppliers fail to comply with ongoing regulatory requirements, or if we experience unanticipatedproblems with our products, these products could be subject to restrictions or withdrawal from the market.
Any regulatory approvals that we receive for our products will require surveillance to monitor the safety and efficacy of the product and may require us to conduct post-approval clinical studies. In addition, if a regulatory authority approves our products, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export and recordkeeping for our products will be subject to extensive and ongoing regulatory requirements.
Moreover, if we obtain regulatory approval for any of our products, we will only be permitted to market our products for the indication approved by the regulatory authority, and such approval may involve limitations on the indicated uses or promotional claims we may make for our products. In addition, later discovery of previously unknown problems with our products, including adverse events of unanticipatedseverity or frequency, or with our suppliers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:
restrictions on the marketing or manufacturing of our products, withdrawal of the product from the market, or voluntary or mandatory product recalls;
fines, warning letters, or untitled letters;
holds on clinical trials;
refusal by the regulatory authority to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals;
product seizure or detention, or refusal to permit the import or export of our products; and
injunctions, the imposition of civil penalties or criminalprosecution.
The FDA and the Federal Trade Commission (“FTC”) also requires that our sales and marketing efforts, as well as promotions, be consistent with various laws and regulations. Approved medical device promotions must be consistent with and not contrary to labeling, balanced, truthful and not false or misleading, adequately substantiated (when required), and include adequate directions for use and any warnings that may be required in the use of the device. In addition to the requirements applicable to approved products, we may also be subject to enforcement action in connection with any promotion of an investigational new device. A sponsor or investigator, or any person acting on behalf of a sponsor or investigator, may not represent in a promotional context that an investigational new device is safe or effective for the purposes for which it is under investigation or otherwise promote the device.
If the FDA or FTC investigates our marketing and promotional materials or other communications and finds that any of our investigational devices, or future commercial products, if any, are being marketed or promoted in violation of the applicable regulatory restrictions, we could be subject to the enforcement actions listed above, among others. Any enforcement action (or related lawsuit, which could follow such action) brought against us in connection with allegedviolations of applicable device promotion requirements, or prohibitions, could harm our business and our reputation, as well as the reputation of any devices that may be approved for marketing in the U.S. in the future.
The applicable regulatory authorities’ policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our products. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability.
Failure to obtain regulatory approval in foreign jurisdictions will prevent us from marketing our products in such jurisdictions.
We market CGuard EPS in certain international markets. In order to market any of our products in other foreign jurisdictions, we must obtain separate regulatory approvals from the appropriate governing body in each applicable country. The approval processes vary among countries and can involve additional testing, and the time required to obtain approval may differ from that required to obtain CE mark or FDA approval. Foreign regulatory approval processes may include all of the risks associated with obtaining CE mark or FDA approval in addition to other risks. We may not obtain foreign regulatory approvals on a timely basis, if at all. CE mark approval or any future FDA approval does not ensure approval by regulatory authorities in other countries. We may not be able to file for regulatory approvals and may not receive necessary approvals to commercialize our products in certain markets.
We are subject to federal, state and foreign healthcare laws and regulations and implementation of, or changes to, such healthcare laws and regulations could adversely affect our business and results of operations.
In both the United States and certain foreign jurisdictions, there are laws and regulations specific to the healthcare industry which may affect all aspects of our business, including development, testing, marketing, sales, pricing, and reimbursement. Additionally, there have been a number of legislative and regulatory proposals in recent years to change the healthcare system in ways that could impact our ability to sell our products. If we are found to be in violation of any of these laws or any other federal or state regulations, we may be subject to administrative, civil and/or criminalpenalties, damages, fines, individual imprisonment, exclusion from federal healthcare programs and the restructuring of our operations. Any of these could have a material adverse effect on our business and financial results. Since many of these laws have not been fully interpreted by the courts, there is an increased risk that we may be found in violation of one or more of their provisions. Any action against us for violation of these laws, even if we ultimately are successful in our defense, will cause us to incur significant legal expenses and divert our management’s attention away from the operation of our business.
We may be subject, directly or indirectly, to applicable U.S. federal and state anti-kickback, falseclaims laws, physician payment transparency laws, fraud and abuse laws or similar healthcare and security laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.
Healthcare providers, physicians and others will play a primary role in the recommendation, ordering and utilization of any products for which we obtain regulatory approval. If we obtain U.S. Food & Drug Administration approval for any of our products and begin commercializing those products in the United States, our operations may be subject to various federal and state fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute, the federal FalseClaims Act, and physician payment sunshine laws and regulations. These laws may impact, among other things, our potential sales, marketing and education programs. In addition, we may be subject to patient privacy regulation by both the federal government and the states in which we conduct our business. The laws that may affect our ability to operate include:
● the federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs;
● federal civil and criminalfalseclaims laws and civil monetary penalty laws, including the FalseClaims Act, which may be pursued through civil whistleblower or qui tam actions, impose criminal and civil penaltiesagainst individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment or approval from Medicare, Medicaid or other third-party payors that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;
● federal criminal statutes created through the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfullyfalsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters;
● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 and their respective implementing regulations, which imposes requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information;
● the federal transparency requirements under The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act, enacted into law in the United States in March 2010 (known collectively as the “Affordable Care Act”), including the provision commonly referred to as the Physician Payments Sunshine Act, which requires manufacturers of drugs, biologics, devices and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the U.S. Department of Health and Human Services information related to payments or other transfers of value made to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and
● state and federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers.
Additionally, we may be subject to state and non-U.S. equivalents of each of the healthcare laws described above, among others, some of which may be broader in scope and may apply regardless of the payor. Many U.S. states have adopted laws similar to the federal Anti-Kickback Statute, some of which apply to the referral of patients for healthcare services reimbursed by any source, not just governmental payors, including private insurers. Several states impose marketing restrictions or require medical device companies to make marketing or price disclosures to the state. There are ambiguities as to what is required to comply with these state requirements, and if we fail to comply with an applicable state law requirement, we could be subject to penalties.
Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our future business activities could be subject to challenge under one or more of such laws. In addition, healthcare reform legislation has strengthened these laws. For example, the Affordable Care Act, among other things, amended the intent requirement of the federal Anti-Kickback and criminal healthcare fraud statutes. As a result of such amendment, a person or entity no longer needs to have actual knowledge of these statutes or specific intent to violate them in order to have committed a violation. Moreover, the Affordable Care Act provides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FalseClaims Act.
Violations of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including penalties, fines and/or exclusion or suspension from federal and state healthcare programs such as Medicare and Medicaid and debarment from contracting with the U.S. government. In addition, private individuals have the ability to bring actions on behalf of the U.S. government under the FalseClaims Act as well, as under the false claim laws of several states.
Efforts to ensure that our business arrangements with third parties comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our existing or future business practices do not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. Any such actions instituted against us could have a significant adverse impact on our business, including the imposition of civil, criminal and administrative penalties, damages, disgorgement, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations. Even if we are successful in defendingagainst such actions, we may nonetheless be subject to substantial costs, reputational harm and adverse effects on our ability to operate our business. In addition, the approval and commercialization of any of our products outside the United States will also likely subject us to non-U.S. equivalents of the healthcare laws mentioned above, among other non-U.S. laws.
If any of our employees, agents, or the physicians or other providers or entities with whom we expect to do business are found to have violated applicable laws, we may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs, or, if we are not subject to such actions, we may suffer reputational harm for conducting business with persons or entities found, or accused of being, in violation of such laws. Any such events could adversely affect our ability to operate our business and our results of operations.
We may be exposed to product liability claims and insurance may not be sufficient to cover these claims.
We may be exposed to product liability claims based on the use of any of our products, or products incorporating our licensed technology, in the market or clinical trials. We may also be exposed to product liability claims based on the sale of any products under development following the receipt of regulatory approval. Product liability claims could be asserted directly by consumers, health-care providers or others. We have obtained product liability insurance coverage; however, such insurance may not provide full coverage for our future clinical trials, products to be sold, and other aspects of our business. Insurance coverage is becoming increasingly expensive, and we may not be able to maintain current coverage or expand our insurance coverage to include future clinical trials or the sale of new products or existing products in new territories, at a reasonable cost or in sufficient amounts to protect againstlosses due to product liability or at all. A successful product liability claim, or series of claims brought against us could result in judgments, fines, damages and liabilities that could have a material adverse effect on our business, financial condition and results of operations. We may incur significant expense investigating and defending these claims, even if they do not result in liability. Moreover, even if no judgments, fines, damages or liabilities are imposed on us, our reputation could suffer, which could have a material adverse effect on our business, financial condition and results of operations.
Even if one or more of our products are approved by the FDA, we may fail to obtain an adequate level of reimbursement for our products by third party payors, such that there may be no commercially viable markets for our products, or the markets may be much smaller than expected.
The availability and levels of reimbursement by governmental and other third-party payors affect the market for our products. The efficacy, safety, performance and cost-effectiveness of our products and of any competing products are factors that may impact the availability and level of reimbursement. Reimbursement and healthcare payment systems in international markets vary significantly by country and include both government sponsored healthcare and private insurance. To obtain reimbursement or pricing approval in some countries, we may be required to produce clinical data, which may involve one or more clinical trials that compares the cost-effectiveness of our products to other available therapies. We may not obtain international reimbursement or pricing approvals in a timely manner, if at all. Our failure to receive international reimbursement or pricing approvals would negatively impact market acceptance of our products in the international markets in which those approvals are sought.
We believe that future reimbursement may be subject to increased restrictions both in the U.S. and in international markets. There is increasing pressure by governments worldwide to contain healthcare costs by limiting both the coverage and the level of reimbursement for therapeutic products and by refusing, in some cases, to provide any coverage for products that have not been approved by the relevant regulatory agency. Future legislation, regulation or reimbursement policies of third-party payors may adversely affect the demand for our products and limit our ability to sell our products on a profitable basis. In addition, third party payors continually attempt to contain or reduce the costs of healthcare by challenging the prices charged for healthcare products and services. If reimbursement for our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, market acceptance of our products would be impaired, and future revenues, if any, would be adversely affected.
In the United States and European Union, our business could be significantly and adversely affected by healthcare reform initiatives and/or other legislation or judicial interpretations of existing or future healthcare laws and/or regulations.
The environment for health care policy generally may change when new Presidential administrations take office. President Trump has begun to reduce the numbers of employees that work at the Department of Health and Human Services, that includes the FDA and CMS. In addition, laws like the Affordable Care Act may be subject to modifications under the current leadership. With a reduction of employees at FDA, this would likely slow down the reviews and approvals of products. In addition, the reduction of employees from CMS may also slow down the payment for those individuals who have coverage under Medicare, Medicaid and the Affordable Care Act. It is difficult to assess what may occur. Uncertainties remain regarding what negativeunintended consequences these provisions will have on patient access to new technologies, pricing and the market for our products. Any significant reductions in coverage or payment for services under Medicare, Medicaid and the Affordable Care Act may affect those beneficiaries who cannot get access to certain FDA approved products. In addition, lower reimbursement by government programs may shift costs to employees who have coverage from their employers or private payors. While there are some uncertainties regarding the U.S. coverage and payment for medical devices, the strength of the health care providers and payors are likely to work to mitigate some adverse issues that may impact the health care system.
Since its enactment, there have been judicial and Congressional challenges to certain aspects of the Affordable Care Act, to modify, repeal or otherwise invalidate all, or certain provisions of, the Affordable Care Act. The enactment of the Tax Act, on December 14, 2018, removed penalties for not complying with the Affordable Care Act’s individual mandate to carry health insurance. The regulatory process of implementation of the Affordable Care Act will remain ongoing and may also increase our regulatory burdens and operating costs. Litigation and legislation related to the Affordable Care Act are likely to continue, with unpredictable and uncertain results. We cannot predict with certainty what effect further changes to the Affordable Care Act, and other similar health care laws that are enacted, would have on our business.
In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted. These changes included aggregate reductions to Medicare payments to providers of up to two percent per fiscal year, which will remain in effect through 2031 unless additional Congressional action is taken. It is unclear what impact new quality and payment programs may have on our business, financial condition, results of operations or cash flows. Individual states in the United States have also become increasingly aggressive in passing legislation and implementing regulations designed to control product pricing, including price or patient reimbursement constraints, and discounts, and require marketing cost disclosure and transparency measures. We believe that additional state and federal health care reform measures may be adopted in the future that could have a material adverse effect on our industry generally and on our customers. Any changes in, or uncertainty with respect to, future reimbursement rates could cause an impact our customers’ demand for our products, which in turn could have a material adverse effect on our business, financial condition, results of operations, or cash flows. For example, CMS issued a national coverage determination on October 11, 2023, finding that Medicare coverage for percutaneous transluminal angioplasty of the carotid artery concurrent with stenting with an FDA-approved or -cleared device to be reasonable and necessary. Further, the federal, state and local governments, Medicare, Medicaid, managed care organizations, and foreign governments have considered in the past, are currently considering, and may in the future consider healthcare policies and proposals intended to curb rising healthcare costs, including those that could significantly affect both private and public reimbursement for healthcare services. For example, the One Big Beautiful Bill Act of 2025 (OBBBA) went into effect on July 4, 2025, and greatly modified Medicaid reimbursements and enrollment to include work requirements and periodic eligibility determinations, all of which could reduce Medicaid enrollment. Future significant changes in the healthcare systems in the United States or other countries, including changes intended to reduce expenditures along with uncertainty about whether and how changes may be implemented, could have a negative impact on the demand for our products. We are unable to predict with certainty whether other healthcare policies, including policies stemming from legislation or regulations affecting our business, may be proposed or enacted in the future; what effect such policies would have on our business; or the effect ongoing uncertainty about these matters will have on our customers’ purchasing decisions.
Third-party payors are developing increasingly sophisticated methods of controlling healthcare costs and increasingly challenging the prices charged for medical products and services. Additionally, the containment of healthcare costs has become a priority of federal and state governments and the prices of drugs have been a focus in this effort. The United States government, state legislatures and foreign governments have shown significant interest in implementing cost-containment programs, including price controls and transparency requirements, restrictions on reimbursement and requirements for substitution of generic products. For example, HHS began implementation in 2025 of “Most Favored Nation” drug pricing by setting the Medicare price of single-source brand drugs without generic or biosimilar competition to the lowest price available in wealthy countries with a per capita GDP of at least 60% of that in the United States. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could limit our revenue and operating results.
We cannot predict the impact that such actions against the Affordable Care Act and other laws enacted after its enactment will have on our business, and there is uncertainty as to what healthcare programs and regulations may be implemented or changed at the federal and/or state level in the United States, or the effect of any future legislation or regulation. However, it is possible that such initiatives could have an adverse effect on our ability to obtain approval and/or successfully commercialize products in the United States in the future. For example, any changes that reduce, or impede the ability to obtain, reimbursement for the type of products we intend to commercialize in the United States (or our products more specifically, if approved) or reduce medical procedure volumes could adversely affect our business plan to introduce our products in the United States.
In May 2017, the European parliament and the council of the European Union approved the MDR which has replaced the existing medical device directives (93/42/EEC) and (90/385/EEC). The regulation entered into full application on May 26, 2021. The MDR (as amended on January 10, 2025) imposes strict requirements on medical device manufacturers and strengthens the supervising competences of the competent authorities of EEA member states, the notified bodies and the authorized representatives. If we fail to comply with the MDR and applicable national legislation on medical devices in EEA member states, it can adversely affect our business, operating results and prospects. Any new regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of future products.
On January 12, 2025, Regulation (EU) 2021/2282 of the European Parliament and of the Council of December 15, 2021 on health technology assessment and amending Directive 2011/24/EU, or the EU HTA Regulation, became applicable. The EU HTA Regulation stipulates joint clinical assessments at EU level for certain medical devices. A Joint Clinical Assessment (JCA) under the EU HTA Regulation is a centralized, EU-level evaluation of the comparative clinical effectiveness and safety of health technologies, including medical devices. The JCA is designed to influence pricing and reimbursement decisions of EU member states at the national level, although its result does not pre-determine national decisions concerning reimbursement. Within the scope of the EU HTA Regulation are, among others, medical devices classified as class IIb or III under the MDR for which the relevant expert panels have provided a scientific opinion in the framework of the clinical evaluation consultation procedure. The medical devices under the EU HTA Regulation are subject to selection by the European Commission at least every two years, based on statutory criteria. Furthermore, the EU HTA Regulation provides a framework for voluntary cooperation of member states regarding the non-clinical assessment of health technologies and collaborative assessments on medical devices not already covered by the mandatory joint clinical assessment. The EU HTA Regulation may increase compliance costs and adversely affect pricing of our products.
Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, cleared or approved or commercialized in a timely manner or at all, which could negatively impact our business.
The ability of the FDA to review and clear or approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions. Average review times at the FDA have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
Disruptions at the FDA and other agencies may also slow the time necessary for new medical devices or modifications to cleared or approved medical devices to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. Most recently, the federal government was shut down for approximately 43 days from October 1 to November 12, 2025, due to a lapse in appropriations, during which federal employees were furloughed and many agencies, including components of the HHS, operated with reduced staffing or suspended activities. In early 2025, following the inauguration of President Trump, the Trump Administration began terminating federal government employees, including approximately 3,500 employees at the FDA. Prior shutdowns, such as the 35-day shutdown beginning December 22, 2018, similarly resulted in furloughs and delays in regulatory review activities. Any future government shutdowns, funding lapses, continuing resolutions, or similar events could result in reduced agency staffing, delays in regulatory reviews, interruptions to critical government functions, or uncertainty in agency operations, each of which could materially and adversely affect our business, financial condition, and results of operations.
Risk Factors Related to Our Intellectual Property
If we are unable to obtain and maintain intellectual property protection covering our products, others may be able to make, use or sell our products, which would adversely affect our revenue.
Our ability to protect our products from unauthorized or infringing use by third parties depends substantially on our ability to obtain and maintain valid and enforceable patents. Similarly, the ability to protect our trademark rights might be important to prevent third party counterfeiters from selling poor quality goods using our designated trademarks and trade names. Due to evolving legal standards relating to the patentability, validity and enforceability of patents covering medical devices and pharmaceutical inventions and the scope of claims made under these patents, our ability to enforce patents is uncertain and involves complex legal and factual questions. Accordingly, rights under any of our pending patent applications and patents may not provide us with meaningful commercial protection for our products or may not afford a commercial advantageagainst our competitors or their competitive products or processes. In addition, patents may not be issued from any pending or future patent applications owned by or licensed to us, and moreover, patents that may be issued to us now or in the future may later be found invalid or unenforceable. Further, even if valid and enforceable, our patents may not be sufficiently broad to prevent others from marketing products like ours, despite our patent rights.
The validity of our patent claims depends, in part, on whether prior art references exist that describe or render obvious our inventions as of the filing date of our patent applications. We may not have identified all prior art, such as U.S. and foreign patents or published applications or published scientific literature, that could adversely affect the patentability of our issued patents and pending patent applications. For example, some material references may be in a foreign language and may not be uncovered during examination of our patent applications. Additionally, patent applications in the United States are maintained in confidence for up to 18 months after their filing. In some cases, however, patent applications remain confidential in the U.S. Patent and Trademark Office for the entire time prior to issuance as a U.S. patent. Patent applications filed in countries outside the U.S. are not typically published until at least 18 months from their first filing date. Similarly, publication of discoveries in scientific or patent literature often lags behind actual discoveries. Therefore, we cannot be certain that we were the first to invent, or the first to file patent applications relating to our stent technologies and related surgical technologies that we are developing. Third parties may initiate adversarial proceedings, known as an inter-partes review (IPR) in the U.S. Patent and Trademark Office to challenge the validity of our patent claims in the United States. It is possible that we may be unsuccessful in the proceedings, resulting in a loss of some portion or all of our patent rights in the United States.
In addition, statutory differences in patentable subject matter among jurisdictions may limit the protection we can obtain on certain of the technologies we develop. The laws of some foreign jurisdictions do not offer the same protection or may make it more difficult to enforce proprietary rights than in the United States. This risk may be exacerbated if we move our manufacturing to certain countries in Asia. If we encounter such difficulties, or are otherwise precluded from effectively protecting our intellectual property rights in any foreign jurisdictions, our business prospects could be substantially harmed.
Our initiation of litigation to enforce our patent rights may prompt adversaries in such litigation to challenge the validity, scope, ownership, or enforceability of our patents. Third parties can sometimes bring challengesagainst a patent holder to resolve these issues, as well. If a court decides that any such patents are not valid, not enforceable, not wholly owned by us, or are of a limited scope, we may not have the right to stop others from using our inventions. Also, even if our patent rights are determined by a court to be valid and enforceable, they may not be sufficiently broad to prevent others from marketing products similar to ours or designing around our patents, despite our patent rights, nor do they provide us with freedom to operate unimpeded by the patent and other intellectual property rights of others that may cover our products. We may be forced into litigation to uphold the validity of the claims in our patent portfolio, as well as our ownership rights to such intellectual property, and litigation is often an uncertain and costly process.
We may not be able to protect our trade secrets adequately. Although we rely on non-disclosure and confidentiality agreements with employees, consultants and other parties to protect, in part, trade secrets and other proprietary technology, these agreements may be breached, and we may not have adequate remedies for such breach. Moreover, others may independently develop equivalent proprietary information, and third parties may otherwise gain access to our trade secrets and proprietary knowledge. Any disclosure of confidential data into the public domain or to third parties could allow competitors to learn our trade secrets and use the information in competition against us.
The failure to obtain or maintain patents, licensing agreements and other intellectual property rights that are sufficiently broad and protective could impact our ability to compete effectively.
To compete effectively, we need to develop and maintain a proprietary position with regard to our own technologies, intellectual property, licensing agreements, product candidates and business. Legal standards relating to the validity and scope of patent claims in the US and other countries tend to be uncertain and changeable. Therefore, the degree of future protection for our proprietary rights in our core technologies and any products that might be made using these technologies is also uncertain. The risks and uncertainties that we face with respect to our patents and other proprietary rights include the following:
while some of our patents have been issued, the pending patent applications we have filed may not result in issued patents or may take longer than we expect to result in issued patents;
a third party may initiate an inter parties review, or IPR, proceedings in the U.S.;
we may be subject to interference proceedings in the U.S.;
a third party may initiate opposition proceedings in foreign countries;
any patents that are issued may not provide meaningful protection;
we may not be able to develop additional proprietary technologies that are patentable;
other companies may challenge patents licensed or issued to us;
other companies may develop new and alternative technologies that do not fall within the scope of our patents;
other companies may design around patents we have developed; and
enforcement of patents is complex, uncertain and expensive.
If patent rights covering our products and methods are not sufficiently broad or not issued at all by the United States Patent and Trademark Office (the “USPTO”) or by foreign patent offices, we may not have adequate protection against competitors with similar products and technologies. Furthermore, if the USPTO or foreign patent offices issue patents to us or our licensors, others may challenge the patents or design around the patents, or the patent office or the courts may invalidate the patents. Thus, any patents we own or license from third parties may not provide any protection against our competitors.
We cannot be certain that patents will be issued as a result of any pending applications, and we cannot be certain that any of our issued patents will give us adequate protection from competing products. For example, issued patents may be circumvented or challenged, declared invalid or unenforceable, or narrowed in scope. In addition, since publication of discoveries in the scientific or patent literature often lags behind actual discoveries, we cannot be certain that we were the first to make our inventions or to file patent applications covering those inventions.
It is also possible that others may obtain issued patents that could prevent us from commercializing our products or require us to obtain licenses requiring the payment of significant fees or royalties in order to enable us to conduct our business.
In addition to patents and patent applications, we depend upon trade secrets and proprietary know-how to protect our proprietary technology. We require our employees, consultants, advisors and collaborators to enter into confidentiality agreements that prohibit the disclosure of confidential information to any other parties. We require our employees and consultants to disclose and assign to us their ideas, developments, discoveries and inventions. These agreements may not, however, provide adequate protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use or disclosure.
Intellectual property rights of third parties could adversely affect our ability to commercialize our products and services, and we might be required to litigate or obtain licenses from third parties in order to develop or market our products. Such litigation or licenses could be costly or not available on commercially reasonable terms.
It is inherently difficult to conclusively assess our freedom to operate without infringing on third-party rights. Our competitive position may be adversely affected if existing patents or patents resulting from patent applications issued to third parties or other third-party intellectual property rights are held to cover our products or services or elements thereof, or our manufacturing or uses relevant to our development plans. In such cases, we may not be in a position to develop or commercialize products or services unless we successfully pursue litigation to nullify or invalidate the third-party intellectual property right concerned or enter into a license agreement with the intellectual property right holder, if available on commercially reasonable terms. There may also be pending patent applications that if they result in issued patents, could be alleged to be infringed by our new products or services. If such an infringement claim should be brought and be successful, we may be required to pay substantial damages, be forced to abandon our new products or services or seek a license from any patent holders. No assurances can be given that a license will be available on commercially reasonable terms, if at all.
It is also possible that we have failed to identify relevant third-party patents or applications. For example, certain U.S. patent applications that will not be filed outside the United States remain confidential until patents issue. Patent applications in the United States and elsewhere are published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date. Therefore, patent applications covering our new products or services could have been filed by others without our knowledge. Additionally, pending patent applications can, subject to certain limitations, be later amended in a manner that could cover our services, our new products or the use of our new products. Third-party intellectual property right holders may also actively bring infringementclaimsagainst us. We cannot guarantee that we will be able to successfully settle or otherwise resolve such infringementclaims. If we are unable to successfully settle future claims on terms acceptable to us, we may be required to engage in or continue costly, unpredictable and time-consuming litigation and may be prevented from or experience substantial delays in pursuing the development of and/or marketing our new products or services. If we fail in any such dispute, in addition to being forced to pay damages, we may be temporarily or permanently prohibited from commercializing our new products or services that are held to be infringing. We might, if possible, also be forced to redesign our new products so that we no longer infringe the third-party intellectual property rights. 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.
Patent policy and rule changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents.
Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of any patents that may issue from our patent applications or narrow the scope of our patent protection. The laws of foreign countries may not protect our rights to the same extent as the laws of the United States. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. We therefore cannot be certain that we were the first to file the invention claimed in our owned and licensed patent or pending applications, or that we or our licensor were the first to file for patent protection of such inventions. Assuming all other requirements for patentability are met, in the United States prior to March 15, 2013, the first to make the claimed invention without unduedelay in filing, is entitled to the patent, while generally outside the United States, the first to file a patent application is entitled to the patent. After March 15, 2013, under the Leahy-Smith America Invents Act, or the Leahy-Smith Act, enacted on September 16, 2011, the United States has moved to a first to file system. The Leahy-Smith Act also includes a number of significant changes that affect the way patent applications are prosecuted and also affect patent litigation. 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.
We may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time-consuming, and unsuccessful.
Competitors may infringe our intellectual property. If we were to initiate legal proceedings against a third party to enforce a patent covering one of our products or services, the defendant could counterclaim that the patent covering our product is invalid and/or unenforceable. In patent litigation in the United States, defendantcounterclaimsalleginginvalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an allegedfailure to meet any of several statutory requirements, including lack of novelty, obviousness, or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO or made a misleading statement, during prosecution. Under the Leahy-Smith Act, the validity of U.S. patents may also be challenged in post-grant and inter partes review proceedings before the USPTO. The outcome following legal assertions of invalidity and unenforceability is unpredictable.
Derivation and interference proceedings initiated by third parties or brought by us may be necessary to determine the priority and ownership of inventions and/or their scope with respect to our patent or patent applications or those of our licensors. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Our defense of litigation or interference proceedings may fail and, even if successful, may result in substantial costs and distract our management and other employees. In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties, or enter into development partnerships that would help us bring our new products or services to market.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions, or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our shares of common stock.
We may not be able to protect our intellectual property rights throughout the world.
A company may attempt to commercialize competing products utilizing our proprietary design, trademarks or tradenames in foreign countries where we do not have sufficient patent protection and where legal recourse may be limited. This may have a significant commercial impact on our foreign business operations.
Filing, prosecuting and defending patents or trademarks on our current and future products in all countries throughout the world would be prohibitively expensive. The requirements for patentability and trademarking may differ in certain countries, particularly developing countries. The laws of some foreign countries do not protect intellectual property rights to the same extent as laws in the United States. Consequently, we may not be able to prevent third parties from utilizing our inventions and trademarks in all countries outside the United States. Competitors may use our technologies or trademarks in jurisdictions where we have not obtained patent or trademark protection to develop or market their own products and further, may export otherwise infringing products to territories where we have patent and trademark protection, but enforcement on infringing activities is inadequate. These products or trademarks may compete with our products or trademarks, and our patents, trademarks 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. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trademarks and other intellectual property protection, which could make it difficult for us to stop the infringement of our patents and trademarks or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent and trademarks rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents and trademarks at risk of being invalidated or interpreted narrowly and our patent or trademark applications at risk, and could provoke third parties to assert claimsagainst us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. In addition, certain countries in Europe and certain developing countries, including India and China, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In those countries, we may have limited remedies if our patents are infringed or if we are compelled to grant a license to our patents to a third party, which could materially diminish the value of those patents. This could limit our potential revenue opportunities. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we own or license. Finally, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws.
Risks Related to Our Business and Operations
CGuard EPS, CGuard Prime, and SwitchGuard NPS are complex medical devices that require training for qualified personnel.
CGuard EPS, CGuard Prime, and SwitchGuard NPS are complex medical devices that require training for qualified personnel, including physicians. Although our distributors and direct salespeople will be required to ensure that CGuard EPS, CGuard Prime, and SwitchGuard NPS are prescribed only by trained clinicians, the potential for misuse of these products still exists due to their complexity. Such misuse could result in adverse medical consequences for patients that could damage our reputation, subject us to costly product liability litigation and otherwise have a material adverse effect on our business, financial condition and results of operations.
If we fail to maintain or establish reliable supply arrangements, or if we experience interruptions in the supply of key materials or components, our ability to manufacture and commercialize our products could be adversely affected.
We rely on external suppliers for certain raw materials, components, and sub-assemblies used in the manufacture of CGuard EPS, CGuard Prime, and our products under development. Some of these items are sourced from a single supplier. If any supplier is unable or unwilling to meet our quality standards, delivery schedules, or quantity requirements, or if they cease supplying us, we may not be able to obtain suitable alternative materials or components on acceptable terms, or at all.
Several critical components of our products are currently provided by single-source vendors. For example, in 2022 our mesh supplier notified us that it would no longer be able to supply the polymer fiber used to produce our MicroNet mesh because of supply constraints affecting its PET resin source. We subsequently purchased sufficient inventory to support our anticipated production needs through early 2028, and we have identified and begun validating an alternative PET resin with comparable mechanical and biocompatibility characteristics. However, there can be no assurance that this validation will be successful, that the alternative material will receive required regulatory approvals, or that additional or replacement PET sources will be available when needed. If we are unable to secure timely approval of an alternative PET resin supplier or are unable to qualify additional suppliers, we could face manufacturing delays, supply interruptions, increased component costs, or an inability to meet commercial demand.
Because CGuard Prime is approved in the United States under a PMA, any change to certain suppliers, components, or raw materials, including the PET resin used in MicroNet, requires FDA approval through a PMA supplement. Similar approvals or notifications may be required by foreign regulatory authorities. These processes can be time-consuming and may delay our ability to implement supplier changes or address supply shortages. As a result, commercial supply or clinical studies involving products under development could be adversely affected.
We also depend on a third-party sterilization vendor for our finished products. If this vendor experiences disruptions, capacity limitations, compliance issues, or quality failures, or if we are unable to obtain timely regulatory approval to qualify an alternative sterilization provider, we could face delays or interruptions in product release and distribution.
Any interruption in our supply chain, including raw materials, specialized components, or sterilization services, could impair our ability to meet demand, maintain inventory levels, or support ongoing commercial sales and clinical activities. This could materially harm our business, financial condition, and results of operations.
Our business is dependent upon the total market opportunity for CAS and our ability to penetrate it through continued adoption of CAS by hospitals and physicians.
Our future growth and profitability largely depend on the total market opportunity for CAS, the determination of which is inherently imprecise, and our ability to penetrate it, which is largely dependent upon our ability to increase physician awareness and adoption of CAS and on the willingness of physicians to recommend the procedure to more of their patients. While we are confident in our estimate of the annual total addressable market for our CAS products, especially since it is based on a number of internal and third-party estimates, it may prove to be incorrect. If the actual number of patients who would benefit from our products and the annual total addressable market for our products is smaller than we have estimated, it may impair our sales growth and have an adverse impact on our business. With respect to our ability to penetrate this market opportunity, physicians may not use our products unless they are able to determine, based on experience, clinical data, medical society recommendations and other analyses, that our products provide a safe and effective treatment alternative for carotid artery disease and other vascular conditions . Even if we are able to raise awareness and increase adoption of CAS among physicians, physicians tend to be slow in changing their medical treatment practices and may be hesitant to select our products or CAS for recommendation to patients for a variety of reasons, including:
Long-standing relationships with competing companies and distributors that sell other products;
Competitive response and negative selling efforts from providers of alternative carotid revascularization products;
Perceived liability risk generally associated with the use of new products and procedures;
Lack or perceived lack of sufficient clinical evidence, including long-term data or a randomized controlled trial, supporting clinical benefits;
Lack of experience with CAS as a treatment alternative to CEA;
Familiarity and experience with CEA, and reluctance to change to or use new products and procedures; and
Time commitment and skill development that may be required to gain familiarity and proficiency with CAS and our products.
Physicians play a significant role in determining the course of a patient’s treatment for carotid artery disease and, as a result, the type of treatment that will be recommended or provided to a patient. We focus part of our sales, marketing and education efforts primarily on interventional cardiologists, vascular surgeons, and neurosurgeons and aim to educate referring physicians such as internal medicine specialties, cardiologists, radiologists, neurologists, and general practitioners regarding the patient population that would benefit from CAS. However, we cannot assure you that we will achieve broad education or market acceptance among these practitioners. For example, if diagnosing physicians who serve as the primary point of contact for patients are not made aware of CAS, they may not refer patients to physicians for treatment using our products, and those patients may instead not seek treatment at all or may be treated with alternative procedures. In addition, some physicians may choose to utilize CAS on only a subset of their total patient population or may not adopt CAS at all. If a physician experiences an adverse event in one or more of their CAS patients or elects to convert CAS to CEA mid-procedure, they may not continue offering and performing CAS at the same rate or at all. Further, CAS may not fit into the workstreams of certain physicians. If we are not able to effectively demonstrate that CAS is beneficial in a broad range of patients, adoption of CAS will be limited and may not occur as rapidly as we anticipate, which would have a material adverse effect on our business, financial condition and results of operations. We cannot assure you that CAS or our products will achieve broad market acceptance among hospitals and physicians. Any failure of CAS or our products to satisfy demand or to achieve meaningful market acceptance and penetration will harm our future prospects and have a material adverse effect on our business, financial condition and results of operations.
In most cases, before physicians can use our products for the first time, our products must be approved for use by a hospital’s new product or value analysis committee, or the staff of a hospital or health system. Following such approval, we may be required to enter into a purchase contract. Such approvals or requirements to enter into a purchase contract could deter or delay the use of our products by physicians. We cannot provide assurance that our efforts to obtain such approvals, enter into purchase contracts, or generate adoption will be successful or increase the use of our products, and if we are not successful, it could have a material adverse effect on our business, financial condition and results of operations.
In addition, if patient receptivity toward CAS becomes less favorable in the future, this shift could negatively impact market acceptance of CAS. Any negative change due to patient receptivity could also be compounded by patients reporting to physicians or other patients through word-of-mouth or social media.
Adoption of CAS depends upon appropriate physician training, and inadequate training may lead to adverse patient outcomes, adversely affect adoption of CAS and adversely affect our business.
The success of CAS depends in part on the skill of the physician who is performing the procedure and on our customers’ adherence to appropriate patient selection and proper techniques provided in training sessions conducted by our training faculty. Physicians rely on their previous medical training and experience when performing CAS, and we cannot guarantee that all such physicians will have the necessary surgical and endovascular skills to perform the procedure. If physicians perform CAS in a manner that is inconsistent with its labeled indications, with components that are not our products or without adhering to or completing our training sessions, their patient outcomes may not be consistent with the outcomes achieved in our and other clinical trials, studies or registries of CAS. This result may negatively impact the perception of patient benefit and safety and limit adoption of CAS and our products that facilitate the procedure, which would have a material adverse effect on our business, financial condition and results of operations. Additionally, hospitals and physician organizations may adopt physician credentialing guidelines requiring CAS training that is more extensive than our training program. If physicians conclude that we do not provide adequate CAS training, they may be less likely to adopt CAS and our products, which could have a material adverse effect on our business, financial condition and results of operations.
The failure of third parties to meet their contractual, regulatory, and other obligations could adversely affect our business.
We have engaged Aptyx, a contract manufacturer, to expand our manufacturing capacity of CGuard Prime finished goods to full-scale production at their ISO Class 7 cleanroom facility in North Carolina. Using a third party poses a number of risks, such as: (i) they may not perform to our standards or legal requirements; (ii) they may not produce reliable results; (iii) they may not perform in a timely manner; (iv) they may not maintain confidentiality of our proprietary information; (v) disputes may arise with respect to ownership of rights to technology developed with our partners; and (vi) disagreements could cause delays in, or termination of, the research, development or commercialization of our products or result in litigation or arbitration. Moreover, some third parties are located in markets subject to political and social risk, corruption, violence, infrastructure problems and natural disasters, in addition to country-specific privacy and data security risk given current legal and regulatory environments. Failure of third parties to meet their contractual, regulatory, and other obligations may materially affect our business.
We face manufacturing risks that could adversely affect our ability to manufacture products, reduce our gross margins and negatively affect our business and operating results.
Our business strategy following the commercial launch of CGuard Prime depends on our ability to manufacture, and our contract manufacturers’ ability to manufacture, our current and future products in sufficient quantities and on a timely basis to meet customer demand, while adhering to product quality standards, complying with regulatory quality system requirements and managing manufacturing costs. We currently manufacture our CGuard EPS and our CGuard Prime at our own facility in Israel where we handle the entire assembly process for CGuard EPS and CGuard Prime, including knitting and securing the sleeve to the stent and the crimping of the sleeved stent into a delivery catheter. In addition, to support our anticipated production growth following the commercialization of CGuard Prime, we have engaged Aptyx, a contract manufacturer, to expand our manufacturing capacity of CGuard Prime finished goods to full-scale production at their ISO Class 7 cleanroom facility in North Carolina. If our or our manufacturing partners’ facilities suffersdamage, or a force majeure event, this could materially affect our ability to operate.
We are also subject to numerous other risks relating to our manufacturing capabilities, including:
quality and reliability of components, sub-assemblies and materials that we source from third-party suppliers, who are required to meet our quality specifications, the majority of which are our single-source suppliers for the products they supply;
our or our manufacturing partners’ inability to secure components, sub-assemblies and materials in a timely manner, in sufficient quantities or on commercially reasonable terms;
our or our manufacturing partners’ inability to maintain compliance with quality system requirements or pass regulatory quality inspections;
our or our manufacturing partners’ failure to develop products in a timely manner or to required specifications or to increase production capacity or volumes to meet demand;
our or our manufacturing partners’ inability to design or modify production processes to enable us to produce future products efficiently or implement changes in current products in response to design or regulatory requirements; and
difficulty identifying and qualifying, and obtaining new regulatory approvals, for alternative suppliers for components in a timely manner.
As demand for our products increases, we will have to invest additional resources to purchase components, sub-assemblies and materials, hire and train employees, and enhance our manufacturing processes. If we or our manufacturing partners fail to increase our production capacity efficiently, we may not be able to fulfill customer orders on a timely basis, our sales may not increase in line with our expectations, and our operating margins could fluctuate or decline. In addition, although we expect some of our products in development to share product features, components, sub-assemblies and materials with our existing products, the manufacture of these products may require modification of our or our manufacturing partners’ current production processes or unique production processes, the hiring of specialized employees, the identification of new suppliers for specific components, sub-assemblies and materials or the development of new manufacturing technologies. It may not be possible for us or our manufacturing partners to manufacture these products at a cost or in quantities sufficient to make these products commercially viable or to maintain current gross margins, all of which could have a material adverse effect on our business, financial condition and results of operations.
Finally, the production of our stents must occur in a highly controlled, clean environment to minimize particles and other yield and quality-limiting contaminants. In spite of stringent quality controls, weaknesses in process control or minute impurities in materials may cause a substantial percentage of defective products in a lot. If we or our third-party manufacturer are unable to maintain stringent quality controls, or if contamination problems arise, our clinical development and commercialization efforts could be delayed, which would harm our business and results of operations.
Our results of operations could be materially harmed if we are unable to accurately forecast customer demand for our products and manage our inventory.
We seek to maintain sufficient levels of inventory in order to protect ourselves from supply interruptions, but keep limited components, sub-assemblies, materials and finished products on hand. To ensure adequate inventory supply and manage our operations with our manufacturing partners and suppliers, we forecast anticipated materials requirements and demand for our products in order to predict inventory needs and then place orders with our suppliers based on these predictions. Our ability to accurately forecast demand for our products would be negatively affected by many factors, including our rapid growth, product recalls, pandemics, failure to accurately manage our expansion strategy, product introductions by competitors, an increase or decrease in customer demand for our products, our failure to accurately forecast customer acceptance of new products, changes to hospital capacity, staffing, procedure and protocol changes, unanticipated changes in general market conditions or regulatory matters, weakening of economic conditions or consumer confidence and the realization of other risks as described in this section.
Inventory levels in excess of customer demand may result in a portion of our inventory becoming obsolete or expiring, as well as inventory write-downs or write-offs. Conversely, if we underestimate customer demand for our products or our own requirements for components, sub-assemblies and materials, our manufacturing partners and suppliers may not be able to deliver components, sub-assemblies and materials to meet our requirements. If we do not have adequate supply of components, sub-assemblies and materials there may be interruptions, delays or cancellations of deliveries of our products to our customers, any of which would damage our reputation, customer relationships and business. In addition, several components, sub-assemblies and materials incorporated into our products require lengthy order lead times, and additional supplies or materials may not be available when required on terms that are acceptable to us or our manufacturing partners, or at all, and our manufacturing partners and suppliers may not be able to allocate sufficient capacity in order to meet our increased requirements, any of which could have an adverse effect on our ability to meet customer demand for our products and our results of operations.
Our quarterly and annual results may fluctuate significantly and may not fully reflect the underlying performance of our business.
Our quarterly and annual results of operations, including our revenue, net income or net loss and cash flow, may vary significantly in the future, and period-to-period comparisons of our operating results may not be meaningful. Accordingly, the results of any one quarter or period should not be relied upon as an indication of future performance. Our quarterly and annual financial results may fluctuate as a result of a variety of factors, many of which are outside our control and, as a result, may not fully reflect the underlying performance of our business. Fluctuations in quarterly and annual results may decrease the value of our common stock. Because our quarterly results may fluctuate, period-to-period comparisons may not be the best indication of the underlying results of our business and should only be relied upon as one factor in determining how our business is performing.
Defects or failures associated with our products could lead to additional recalls, safety alerts or litigation, as well as significant costs and negative publicity.
Our business is subject to significant risks associated with the manufacture, distribution and use of medical devices that are placed inside the human body, including the risk that patients may be severelyinjured by or even die from the misuse or malfunction of our products caused by design flaws or manufacturing defects. In addition, component failures, design defects, off-label uses or inadequate disclosure of product-related information could also result in an unsafe condition or the injury or death of a patient. These problems could lead to a recall or market withdrawal of, or issuance of a safety alert relating to, our products and could result in significant costs, negative publicity and adverse competitive pressure. The circumstances giving rise to recalls are unpredictable, and any recalls of existing or future products increase the probability of inspection by, or additional scrutiny from, the FDA and could have a material adverse effect on our business, financial condition and results of operations.
The medical device industry has historically been subject to extensive litigation over product liability claims. Operating in the area of the neck with the brain as the end organ is dangerous and presents risks of adverse events such as bleeding, arterial dissection, cranial nerve injury, myocardial infarction, stroke and death, which subject us to a greater risk of being involved in litigation than companies with products used in less critical areas of the body. We may be subject to product liability claims if our products cause, or merely appear to have caused, an injury or death, even if due to physician error. In addition, an injury or death that is caused by the activities of our suppliers, such as those that provide us with components and materials, or by an aspect of a treatment used in combination with our products, such as a complementary drug or anesthesia, may be the basis for a claim against us by patients, hospitals, physicians or others purchasing or using our products, even if our products were not the actual cause of such injury or death. We may choose to settle any claims to avoid fault and complication, not due to failure of our products. An adverse outcome involving one of our products could result in reduced market acceptance and demand for all of our products and could harm our reputation and our ability to market our products in the future. In some circumstances, adverse events arising from or associated with the design, manufacture or marketing of our products could result in the suspension or delay of regulatory reviews of our premarket notifications or applications for marketing. Any of the foregoing problems could disrupt our business and have a material adverse effect on our business, financial condition and results of operations.
Although we carry product liability insurance in the United States and in other countries in which we conduct business, including for clinical trials and product marketing, we can give no assurance that such coverage will be available or adequate to satisfy any claims. Product liability insurance is expensive, subject to significant deductibles and exclusions, and may not be available on acceptable terms, if at all. If we are unable to obtain or maintain insurance at an acceptable cost or on acceptable terms with adequate coverage or otherwise protect against potential product liability claims, we could be exposed to significant liabilities. A product liability claim, recall or other claim with respect to uninsured liabilities or for amounts in excess of insured liabilities could have a material adverse effect on our business, financial condition and results of operations. Defending a suit, regardless of its merit or eventual outcome, could be costly, could divert management’s attention from our business and might result in adverse publicity, which could result in reduced acceptance of our products in the market, product recalls or market withdrawals.
We are required to file adverse event reports under MDR and regulations with the FDA, which reports are publicly available on the FDA’s website. We are required to file MDRs if our products may have caused or contributed to a seriousinjury or death or malfunctioned in a way that could likely cause or contribute to a seriousinjury or death if it were to recur. Any such MDR that reports a significant adverse event could result in negative publicity, which could harm our reputation and future sales.
The use, misuse or off-label use of our products may result in injuries that lead to product liability suits, which could be costly to our business.
The CGuard Prime carotid stent system has been approved by the FDA for the treatment of patients who require carotid revascularization and meet certain treatment parameters. If physicians expand the patient population in which they elect to use our products that is outside of the intended use approved by the FDA, then the use, misuse, or off-label use of our products may result in outcomes and adverse events including stroke, myocardial infarction and death, potentially leading to product liability claims. However, we cannot prevent a physician from using our products for off-label applications or using components or products that are not our products when performing CAS. In addition, we cannot guarantee that physicians are trained by us or their peers prior to utilizing our products. Complications resulting from the use of our products off-label or use by physicians who have not been trained appropriately, or at all, may expose us to product liability claims and harm our reputation. Moreover, if the FDA determines that our promotional materials or physician training, including our paid consultants’ educational materials, constitutes promotion of an off-label use, it could request that we modify our training or promotional materials or subject us to enforcement action, including warning letters, untitled letters, fines, penalties, or seizures. If we are found to have promoted such off-label uses, we may become subject to significant liability. The federal government has levied large civil and criminalfines and/or other penaltiesagainst companies for allegedimproper promotion and has investigated, prosecuted, and/or enjoined several companies from engaging in off-label promotion.
In addition, if our products are defectively designed, manufactured or labeled, contain defective components or are misused, we may become subject to costlylitigation initiated by physicians, hospitals or patients. Product liability claims are especially prevalent in the medical device industry and could harm our reputation, divert management’s attention from our core business, be expensive to defend and may result in sizable damage awards against us. Although we maintain product liability insurance, we may not have sufficient insurance coverage for future product liability claims. We may not be able to obtain insurance in amounts or scope sufficient to provide us with adequate coverage against all potential liabilities. Any product liability claims brought against us, with or without merit, could increase our product liability insurance rates or prevent us from securing continuing coverage, harm our reputation, significantly increase our expenses, and reduce product sales. Product liability claims could cause us to incur significant legal fees and deductibles and claims in excess of our insurance coverage would be paid out of cash reserves, harming our financial condition and operating results.
We face risks associated with litigation and claims.
We have in the past and may, in the future, be involved in one or more lawsuits, claims or other proceedings arising in or outside the ordinary course of business that could negatively affect our business operations and financial condition. These suits could concern issues including contract disputes, employment actions, employee benefits, taxes, environmental, health and safety, fraud and abuse, personal injury, product liability matters and securities class actions, which are typically expensive to defend. Such claims and litigation proceedings may be brought by third parties, including our competitors, advisors, service providers, partners or collaborators, employees, and governmental or regulatory bodies. Any claims and lawsuits, and the disposition of such claims and lawsuits, could be time-consuming and expensive to resolve, divert management attention and resources, and lead to attempts on the part of other parties to pursue similar claims. We may not be able to determine the amount of any potential losses and other costs we may incur due to the inherent uncertainties of litigation and settlement negotiations. In the event we are required or decide to pay amounts in connection with any claims or lawsuits, such amounts could be significant and could have a material adverse impact on our liquidity, business, financial condition and results of operations. In addition, depending on the nature and timing of any such dispute, a resolution of a legal matter could materially affect our future operating results, our cash flows, or both. Additionally, we may be unable to maintain our existing directors’ and officers’ liability insurance in the future at satisfactory rates or adequate coverage amounts and may incur significant increases in insurance costs.
Our business and operations would suffer in the event of computer system failures, cyber-attacks or deficiencies in our cyber-security.
In the ordinary course of our business, we collect and store sensitive data, including intellectual property, research data, our proprietary business information and that of our suppliers, technical information about our products, clinical trial plans and employee records. Similarly, our third-party providers possess certain of our sensitive data and confidential information. The securityof this information is critical to our operations and business strategy. Despite the implementation of security measures, our internal computer systems, and those of third parties on which we rely, are vulnerable to damage from computer viruses, malware, ransomware, cyber fraud, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet, attachments to emails, persons inside our organization, or persons with access to systems inside our organization. The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, encrypted, lost or stolen. Any such access, inappropriate disclosure of confidential or proprietary information or other loss of information, including our data being breached at third-party providers, could result in legal claims or proceedings, liability or financial loss under laws that protect the privacy of personal information, disruption of our operations or our product development programs and damage to our reputation, which could adversely affect our business. For example, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
If we are unable to manage the anticipated growth of our business, our future revenue and operating results may be harmed.
Our past growth has provided, and our future growth may create, challenges to our organization. The number of our employees has increased significantly during the past several years and in the future, we expect to hire and train new personnel as we continue to grow and expand our operations. Any growth that we experience in the future will require us to expand our sales, general and administrative personnel, manufacturing and distribution operations, and facilities and information technology, or IT, and infrastructure. In addition to the need to scale our organization, future growth will impose significant added responsibilities on management, including the need to identify, recruit, train and integrate additional employees. Rapid expansion in personnel could mean that less experienced people manufacture, market and sell our products, which could result in inefficiencies and unanticipated costs, reduced quality and disruptions to our operations. In addition, rapid and significant growth may strain our administrative and operational infrastructure. Our ability to manage our business and growth will require us to continue to improve our operational, financial and management controls, reporting systems and procedures. If we are unable to manage our growth effectively, it may be difficult for us to execute our business strategy, and our business could be harmed.
As demand for our products or any of our future products increases, we will need to continue to scale our capacity, expand customer service, billing and systems processes and enhance our internal quality assurance program. We cannot assure you that any increases in scale, related improvements and quality assurance will be successfully implemented or that appropriate personnel will be available to facilitate the growth of our business. Failure to implement necessary procedures, transition to new processes or hire the necessary personnel could result in higher costs or inability to meet increased demand. If we encounter difficulty meeting market demand, quality standards or physician expectations, our reputation could be harmed and our business could suffer.
The loss of key members of our senior management team or our inability to attract and retain highly skilled scientists and laboratory and field personnel could adversely affect our business .
We depend on the skills, experience and performance of our senior management and research personnel. The efforts of each of these persons will be critical to us as we continue to further develop our products, increase sales and broaden our product offerings. If we were to lose one or more of these key employees, we may experience difficulties in competing effectively, developing our technologies and implementing our business strategies. Our research and development programs and commercial laboratory operations depend on our ability to attract and retain highly skilled scientists and technicians. We may not be able to attract or retain qualified scientists and technicians in the future due to the intense competition for qualified personnel among life science businesses. There can be no assurance that we will be able to attract and retain necessary personnel on acceptable terms given the intense competition among medical device, biotechnology, pharmaceutical and healthcare companies, universities and non-profit research institutions for experienced management, scientists, researchers, sales and marketing and manufacturing personnel. If we are unable to attract, retain and motivate our key personnel to accomplish our business objectives, we may experience constraints that will adversely affect our ability to support our operations, and our results of operations may be materially and adversely affected.
We are an international business, and we are exposed to various global and local risks that could have a material adverse effect on our financial condition and results of operations.
We operate globally and develop and market products in multiple countries. Consequently, we face complex legal and regulatory requirements in multiple jurisdictions, which may expose us to certain financial and other risks. In addition, we are subject to global events beyond our control, including war, public health crises, such as pandemics and epidemics, trade disputes and other international events. Any of these changes could have a material adverse effect on our reputation, business, financial condition or results of operations.
International sales and operations are subject to a variety of risks, including:
foreign currency exchange rate fluctuations;
greaterdifficulty in staffing and managing foreign operations;
greater risk of uncollectible accounts;
longer collection cycles;
logistical and communications challenges;
potential adverse changes in laws and regulatory practices, including export license requirements, trade barriers, tariffs and tax laws;
changes in labor conditions;
burdens and costs of compliance with a variety of foreign laws;
political and economic instability;
the escalation of hostilities in Israel, which could impair our ability to manufacture our products;
increases in duties and taxation;
foreign tax laws and potential increased costs associated with overlapping tax structures;
greaterdifficulty in protecting intellectual property;
the risk of third-party disputes over ownership of intellectual property and infringement of third-party intellectual property by our products; and
general economic and political conditions in these foreign markets.
International markets are also affected by economic pressure to contain reimbursement levels and healthcare costs. Profitability from international operations may be limited by risks and uncertainties related to regional economic conditions, regulatory and reimbursement approvals, competing products, infrastructure development, intellectual property rights protection and our ability to implement our overall business strategy. We expect these risks will increase as we pursue our strategy to expand operations into new geographic markets. We may not succeed in developing and implementing effective policies and strategies in each location where we conduct business. Any failure to do so may harm our business, results of operations and financial condition.
Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidity risk.
Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to be volatile, or if they deteriorate, including as a result of the impact of military conflict, such as the security situation in Israel and Russia and Ukraine, terrorism or other geopolitical events, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates, limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging and delayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, which could result in an inability to satisfy demand for our products and a loss of market share.
In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business, and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequately respond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.
There can be no assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers, suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule and on budget.
We are subject to financial reporting and other requirements that place significant demands on our resources.
We are subject to reporting and other obligations under the Securities Exchange Act of 1934, as amended, including the requirements of Section 404 of the Sarbanes-Oxley Act of 2002. Section 404 requires us to conduct an annual management assessment of the effectiveness of our internal controls over financial reporting. These reporting and other obligations place significant demands on our management, administrative, operational, internal audit and accounting resources. Any failure to maintain effective internal controls could have a material adverse effect on our business, operating results and stock price. Moreover, effective internal control is necessary for us to provide reliable financial reports and prevent fraud. If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed.
There are inherent limitations in all control systems, and misstatements due to error or fraud may occur and not be detected.
The ongoing internal control provisions of Section 404 of the Sarbanes-Oxley Act of 2002 require us to identify material weaknesses in internal control over financial reporting, which is a process to provide reasonable assurance regarding the reliability of financial reporting for external purposes in accordance with accounting principles generally accepted in the United States. Our management, including our chief executive officer and chief financial officer, does not expect that our internal controls and disclosure controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefit of controls must be relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, in our company have been detected. These inherent limitations include the reality that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Further, controls can be circumvented by individual acts of some persons, by collusion of two or more persons, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may be inadequate because of changes in conditions, such as growth of the company or increased transaction volume, or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
In addition, discovery and disclosure of a material weakness, by definition, could have a material adverse impact on our financial statements. Such an occurrence could discourage certain customers or suppliers from doing business with us and adversely affect how our stock trades. This could in turn negatively affect our ability to access equity markets for capital.
Scrutiny of sustainability and environmental, social, and governance (“ESG”) initiatives could increase our costs or otherwise adversely impact our business.
Public companies have recently faced scrutiny related to ESG practices and disclosures from certain investors, capital providers, shareholder advocacy groups, other market participants and other stakeholder groups. Such scrutiny may result in increased costs, enhanced compliance or disclosure obligations, or other adverse impacts on our business, financial condition, or results of operations. Scrutiny may come from stakeholders both supporting and opposing ESG initiatives, adding complexity to our compliance and communication efforts.
If our ESG practices and reporting do not meet investor or other stakeholder expectations, we may be subject to investor or regulator engagement regarding such matters. Failure to comply with applicable ESG rules or regulations could lead to penalties, enforcement actions, adverse publicity, or could negatively affect our reputation, access to capital, or employee retention.
Evolving ESG-related regulations, such as sustainability reporting requirements, supply-chain diligence obligations, and international frameworks (including the EU Corporate Sustainability Reporting Directive (CSRD)), may also affect our contract manufacturers, suppliers, and other third parties. Any inability of such third parties to comply with applicable ESG standards may disrupt our supply chain or otherwise negatively effect our business, financial condition, or results of operations.
Increasing inflation could adversely affect our business, financial condition, results of operations or cash flows.
Inflation and some of the measures taken by or that may be taken by the governments in countries where we operate in an attempt to curb inflation may have negative effects on the economies of those countries generally. If the United States or other countries where we operate experience substantial inflation in the future, our business may be adversely affected. This could have a material adverse impact on our business, financial condition, results of operations or cash flows.
Changes to trade policy, including tariff and customs regulations, or failure to comply with such regulations may have an adverse effect on our reputation, business, financial condition and results of operations.
Changes in U.S. or international social, political, regulatory and economic conditions or in laws and policies governing trade, manufacturing, development and investment in the countries where we currently conduct our business could adversely affect our business, reputation, financial condition and results of operations. Changes or proposed changes in U.S. or other countries’ trade policies may result in restrictions and economic disincentives on international trade.
We currently manufacture, package and distribute all of our products, including CGuard Prime, which we commercially launched in July 2025 following FDA approval of the PMA in June 2025, at our own facility in Israel. To support our anticipated production growth following the commercialization of CGuard Prime, we have engaged Aptyx to expand our manufacturing capacity of CGuard Prime finished goods to full-scale production at their ISO Class 7 cleanroom facility in North Carolina. While we are in the process of establishing manufacturing operations in the United States with Aptyx, this transition will take time, and until it is operational, we expect to rely entirely on product shipments from Israel to the U.S. market.
The U.S. government has recently imposed, or is currently considering imposing, tariffs on certain products, including medical devices, on certain trade partners, including Israel. On February 20, 2026, the Supreme Court ruled that the International Emergency Economic Powers Act (“IEEPA”) does not authorize a U.S. President to impose tariffs during peacetime national emergencies and that the challenge to the legality of the tariffs imposed under IEEPA (the “incremental tariffs”) was within the exclusive jurisdiction of the U.S. Court of International Trade. In response to this ruling, the U.S. President signed a proclamation imposing a new 10% global tariff under Section 122 of the Trade Act of 1974, effective February 24, 2026, and subsequently increased these tariffs to 15% on February 21, 2026. Section 122 tariffs are subject to a 150-day statutory limit unless extended by Congress. In addition, the Office of the U.S. Trade Representative has announced it will initiate new Section 301 investigations into trading partners’ unfair practices, which could result in additional tariffs.
Tariffs, economic sanctions and other changes in U.S. trade policy have in the past and could in the future trigger retaliatory actions by affected countries, and certain foreign governments have instituted or are considering imposing retaliatory measures on certain U.S. goods. Further, any emerging protectionist or nationalist trends (whether regulatory- or consumer-driven) either in the United States or in other countries could affect the trade environment. Our business, like many other corporations, would be impacted by changes to the trade policies of the United States and foreign countries (including governmental action related to tariffs, international trade agreements, or economic sanctions). We cannot predict whether, and to what extent, trade policies will change in the future. If tariffs or other trade restrictions are imposed on products manufactured in Israel while we remain dependent on Israeli manufacturing, our cost of goods sold for the U.S. market may increase materially, which could negatively impact our gross margins and limit our pricing flexibility. Additionally, changes to trade agreements or customs regulations between the U.S. and Israel could increase lead times, introduce logistical complexities, or require modifications to our supply chain planning. These or similar trade-related developments may have a material adverse effect on our business, financial condition, and results of operations.
Changes in tax laws could have a material adverse effect on our business, cash flow, results of operations or financial conditions.
We are subject to tax laws, regulations, and policies of several taxing jurisdictions. Changes in tax laws, as well as other factors, could cause us to experience fluctuations in our tax obligations and effective tax rates and otherwise adversely affect our tax positions and/or our tax liabilities. Recently, legislation commonly known as the One Big Beautiful Bill Act (OBBBA) was signed into law in July 2025, which enacts significant changes to U.S tax and related laws, including but not limited to current deduction of domestic research expenses, increasing the limit of the deduction of interest expense to thirty percent of EBITDA and one hundred percent bonus depreciation on eligible property acquired after January 19, 2025. There were no changes to the Company’s tax expense or effective income tax rate given the Company’s valuation allowance position. Further, many countries, and organizations such as the Organization for Economic Cooperation and Development have proposed implementing changes to existing tax laws. Any of these developments or changes in federal, state, or international tax laws or tax rulings could adversely affect our effective tax rate and our operating results. There can be no assurance that our effective tax rates, tax payments, or tax credits and incentives will not be adversely affected by these or other developments or changes in law.
Risks Related to Operating in Israel
We anticipate being subject to fluctuations in currency exchange rates because we expect a substantial portion of our revenues will be generated in Euros and U.S. dollars, while a significant portion of our expenses will be incurred in New Israeli Shekels (“NIS”).
We anticipate being subject to fluctuations in currency exchange rates because we expect a substantial portion of our revenues will be generated in Euros and U.S. dollars, while a significant portion of our expenses will be incurred in New Israeli Shekels (“NIS”). In 2025, approximately 39% of our revenues were denominated in U.S. dollars and approximately 61% in other currencies, primarily Euros. We expect a substantial portion of our revenues will continue to be generated in U.S. dollars and Euros, particularly as U.S. sales increase following FDA approval of CGuard Prime, while a significant portion of our expenses, principally salaries and related personnel expenses, is paid in NIS. As a result, our operating results are exposed primarily to movements in the USD/NIS and EUR/NIS exchange rates. Appreciation of the NIS against the U.S. dollar or the Euro increases the U.S. dollar cost of our shekel-denominated expenses and may adversely impact our net loss or net income (if any). Based on our 2025 expense levels, a 10% appreciation of the NIS against the U.S. dollar would have decreased our net income by approximately $1.1 million.
Foreign exchange rates may fluctuate due to many factors, including interest-rate differentials between markets, capital flows, monetary policy decisions, geopolitical events, global macroeconomic developments, and investor sentiment toward Israel and regional markets. These factors may cause the NIS to appreciate or depreciate against the U.S. dollar or the Euro independent of local inflation levels. If the NIS strengthens without a corresponding increase in our foreign-currency revenues, our U.S. dollar-measured costs will rise.
The value of the NIS relative to the Euro, the U.S. dollar, and other currencies has fluctuated significantly. For example, the shekel appreciated on average by 12.5% relative to the U.S. dollar in 2025, after depreciating by 0.4% in 2024 and by 3.1% in 2023, thereby increasing, in 2025, the U.S. dollar cost of our shekel-denominated expenses. The Euro also appreciated relative to the dollar in 2025 on average, by 11.3%, thereby increasing the U.S. dollar cost of our Euro-denominated expenses. Any significant revaluation of the NIS may materially and adversely affect our cash flows, revenues, and financial condition. Fluctuations in the NIS exchange rate, or even the appearance of instability in such exchange rate, could adversely affect our ability to operate our business.
If there are significant shifts in the political, economic and military conditions in Israel and its neighbors, it could have a material adverse effect on our business operations and ability to reach profitability.
Although we are incorporated in the State of Delaware and our headquarters are in Miami, Florida, our current manufacturing facility, certain of our key personnel and one of our offices are located in Israel. Our business is directly affected by the political, economic and military conditions in Israel and its neighbors. Since the establishment of the State of Israel in 1948, a number of armed conflicts have occurred between Israel and its neighboring countries and terrorist organizations active in the region, including Iran, Hamas (an Islamist terrorist militia and political group that controls the Gaza strip), Hezbollah (an Islamist terrorist militia and political group based in Lebanon) and other terrorist organizations active in the region. These conflicts have involved missile strikes, hostile infiltrations and terrorism against civilian targets in various parts of Israel, which have negatively affected business conditions in Israel.
In recent years, Israel has been engaged in sporadic armed conflicts with Hamas, an Islamist terrorist group that controls the Gaza Strip, with Hezbollah, an Islamist terrorist group that controls large portions of southern Lebanon, and with Iranian-backed military forces in Syria. In addition, Iran has threatened to attack Israel and may be developing nuclear weapons. Iran is also believed to have a strong influence among extremist groups in the region, such as Hamas in Gaza, Hezbollah in Lebanon, the Houthi movement in Yemen and various rebel militia groups in Syria and Iraq. On October 7, 2023, Hamas launched a series of attacks on civilian and military targets in Southern Israel and Central Israel, to which the Israel Defense Forces responded. On October 9, 2025, Israel, Hamas, the United States and other countries in the region agreed to a framework for a ceasefire in Gaza between Israel and Hamas.
In addition, both Hezbollah and the Houthi movement attacked military and civilian targets in Israel, to which Israel responded, including through increased air and ground operations in Lebanon. In addition, the Houthi movement attacked international shipping lanes in the Red Sea, to which both Israel and the United States responded. While a ceasefire was brokered between Israel and Hezbollah in November 2024, in March 2026, hostilities resumed along Israel’s northern border with Lebanon, when Hezbollah resumed its attacks as part of a broader regional escalation. In response, Israel resumed military operations against Hezbollah in Lebanon.
Further, in April 2024 and October 2024, Iran launched a series of drone and missile strikes against Israel, to which Israel responded. In addition, in response to ongoing Iranian aggression and support of proxy attacks against Israel, on June 13, 2025, Israel conducted a series of preemptive defensive air strikes in Iran targeting Iran’s nuclear program and military commanders. While a ceasefire was reached in June 2025 following 12 days of hostilities, on February 28, 2026, the United States and Israel launched coordinated military strikes against Iran, including attacks on strategic military infrastructure and leadership targets, with the stated aim of degrading Iran’s capacity to conduct or support hostile operations against them. In response, Iran has fired missiles and drones toward population centers and military installations in Israel, Europe and neighboring countries in the Gulf region, and also launched counter-strikes against U.S. forces and allied bases throughout the Gulf region. A broader regional conflict involving additional state and non-state actors remains a significant risk How long and how severe the conflicts in Gaza, Northern Israel, Lebanon, Iran or the broader region last and become is unknown at this time and any renewed or continued clash among Israel, Hamas, Hezbollah, Iran or other countries or militant groups in the region may escalate in the future into a greater regional conflict. Continued military escalation, retaliatory actions, or broader regional involvement may adversely affect economic conditions, disrupt markets, and create uncertainty that could negatively impact our business, financial condition and results of operations.
In connection with the Israeli security cabinet’s declaration of war against Hamas and possible hostilities with other organizations, several hundred thousand Israeli military reservists were drafted to perform immediate military service, including five full time employees in Israel of ours. Although many of such military reservists have since been released, including all our employees, they may be called up for additional reserve duty, depending on developments in the war in Gaza and along Israel’s other borders. Military service call ups that result in absences of personnel from us for an extended period of time may materially and adversely affect our business, prospects, financial condition and results of operations. As of the date hereof, we currently have 66 full-time employees located in Israel.
To date, our operations have not been adversely affected by this situation. Five of our full-time employees in Israel were called to reserve duty in the Israel Defense Forces, all of whom have since been released. We currently manufacture our CGuard EPS and CGuard Prime at our facility in Tel Aviv, Israel. If there were a disruption to our existing manufacturing facility or our ability to procure raw materials and ship our products, we would have no other means of manufacturing and distributing CGuard EPS or CGuard Prime until we were able to restore the manufacturing and distribution capability at our facility or develop alternative manufacturing facilities and distribution capabilities. However, the intensity and duration of the security situation in Israel have been difficult to predict, as are the economic implications on our business and operations and on Israel’s economy in general. If the war extends for a long period of time or expands to other fronts, our operations may be harmed.
Our commercial insurance does not cover losses that may occur as a result of events associated with war and terrorism. Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or that it will sufficiently cover our potential damages. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts or political instability in the region would likely negatively affect business conditions and could harm our results of operations.
The continued political instability and hostilities between Israel and its neighbors and any future armed conflict, terrorist activity or political instability in the region could adversely affect our operations in Israel and adversely affect the market price of our shares of common stock. In addition, several organizations and countries may restrict doing business with Israel and Israeli companies have been and are today subjected to economic boycotts. The interruption or curtailment of trade between Israel and its present trading partners could adversely affect our business, financial condition and results of operations.
Under applicable U.S. and Israeli law, we may not be able to enforce covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former employees. In addition, employees may be entitled to seek compensation for their inventions irrespective of their agreements with us, which in turn could affect our future profitability.
We generally enter into non-competition agreements with our employees and certain key consultants, or our employment and consulting agreements contain non-competition provisions. These agreements, to the extent they are in place and in effect, prohibit our employees and certain key consultants, if they cease working for us, from competing directly with us or working for our competitors or clients for a limited period of time. We may be unable to enforce these agreements under the laws of the jurisdictions in which our employees work and it may be difficult for us to restrict our competitors from benefitting from the expertise our former employees or consultants developed while working for us. For example, Israeli courts have required employers seeking to enforce non-compete undertakings of a former employee to demonstrate that the competitive activities of the former employee will harm one of a limited number of material interests of the employer which have been recognized by the courts, such as the secrecy of a company’s confidential commercial information or the protection of its intellectual property. If we cannot demonstrate that such interests will be harmed, we may be unable to prevent our competitors from benefiting from the expertise of our former employees or consultants and our ability to remain competitive may be diminished.
We may become subject to claims for remuneration or royalties for assigned service invention rights by our employees, which could result in litigation and adversely affect our business.
A significant portion of our intellectual property has been developed by our Israeli employees in the course of their employment for us. Under the Israeli Patent Law, 5727-1967 (the “Israeli Patent Law”), inventions conceived by an employee during the term and as part of the scope of his or her employment with a company are regarded as “service inventions,” which belong to the employer, absent a specific agreement between the employee and employer giving the employee service invention rights. The Israeli Patent Law also provides that if there is no such agreement between an employer and an employee, the Israeli Compensation and Royalties Committee (the “C&R Committee”), a body constituted under the Israeli Patent Law, shall determine whether the employee is entitled to remuneration for his inventions. The C&R Committee (decisions of which have been upheld by the Israeli Supreme Court) has held that employees may be entitled to remuneration for their service inventionsdespite having specifically waived any such rights. We generally enter into intellectual property assignment agreements with our employees pursuant to which such employees assign to us all rights to any inventions created in the scope of their employment or engagement with us. Although our employees have agreed to assign to us service invention rights and have specifically waived their right to receive any special remuneration for such assignment beyond their regular salary and benefits, we may face claims demanding remuneration in consideration for assigned inventions. As a consequence of such claims, we could be required to pay additional remuneration or royalties to our current or former employees, or be forced to litigate such claims, which could negatively affect our business.
It may be difficult for investors in the United States to enforce any judgments obtained against us or some of our directors or officers.
The majority of our assets other than cash are located outside the U.S. In addition, certain of our officers are nationals and/or residents of countries other than the U.S., and all or a substantial portion of such persons’ assets are located outside the U.S. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against us or any of our non-U.S. officers, including judgments predicated upon the civil liability provisions of the securities laws of the U.S. or any state thereof. Additionally, it may be difficult to assert U.S. securities law claims in actions originally instituted outside of the U.S. Israeli courts may refuse to hear a U.S. securities law claim because Israeli courts may not be the most appropriate forums in which to bring such a claim. Even if an Israeli court agrees to hear a claim, it may determine that the Israeli law, and not U.S. law, is applicable to the claim. Further, if U.S. law is found to be applicable, certain content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process, and certain matters of procedure would still be governed by the Israeli law. Consequently, you may be effectively prevented from pursuing remedies under U.S. federal and state securities laws against us or any of our non-U.S. directors or officers.
Risks Related to Our Common Stock, Preferred Stock and Warrants
The market prices of our common stock are subject to fluctuation and have been and may continue to be volatile, which could result in substantial losses for investors.
The market prices of our common stock have been and are likely to continue to be highly volatile and could fluctuate widely in response to various factors, many of which are beyond our control, including the following:
technological innovations or new products and services by us or our competitors;
additions or departures of key personnel;
our ability to execute our business plan;
operating results that fall below expectations;
loss of any strategic relationship;
industry developments;
economic, political and other external factors; and
period-to-period fluctuations in our financial results.
In addition, the securities markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also significantly affect the market prices of our common stock.
If we fail to maintain compliance with the Nasdaq minimum listing requirements, our common stock will be subject to delisting. Our ability to publicly or privately sell equity securities and the liquidity of our common stock could be adversely affected if our common stock delisted.
Our common stock is listed on the Nasdaq Capital Market. To maintain our listing, we are required to satisfy certain continued listing requirements, including, among other things, minimum bid price, minimum market value of publicly held shares, minimum stockholders’ equity (or other financial metrics), corporate governance requirements, and timely filing of periodic reports with the SEC.
There can be no assurance that we will be able to comply with Nasdaq’s continued listing standards in the future. If we fail to satisfy any of Nasdaq’s continued listing requirements, we may receive a deficiency notice from Nasdaq and, depending on the nature of the deficiency, may be afforded a limited period of time to regain compliance. However, certain deficiencies may not be subject to a cure period or may result in immediate delisting. If we do not regain compliance within any applicable cure period, or if Nasdaq determines that we are not eligible for a compliance period, Nasdaq may determine to delist our common stock.
Delisting from the Nasdaq Capital Market may adversely affect our ability to raise additional financing through the public or private sale of equity securities, may significantly affect the ability of investors to trade our securities and may negatively affect the value and liquidity of our common stock. Delisting also could have other negative results, including the potential loss of employee confidence, the loss of institutional investors or interest in business development opportunities.
Delaware law and our corporate charter and bylaws contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable.
Our board of directors is authorized to issue shares of preferred stock in one or more series and to fix the voting powers, preferences and other rights and limitations of the preferred stock. Accordingly, we may issue shares of preferred stock with a preference over our common stock with respect to dividends or distributions on liquidation or dissolution, or that may otherwise adversely affect the voting or other rights of the holders of common stock. Issuances of preferred stock, depending upon the rights, preferences and designations of the preferred stock, may have the effect of delaying, deterring or preventing a change of control, even if that change of control might benefit our stockholders. In addition, we are subject to Section 203 of the Delaware General Corporation Law. Section 203 generally prohibits a public Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless (i) prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; (ii) the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding (a) shares owned by persons who are directors and also officers and (b) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or (iii) on or subsequent to the date of the transaction, the business combination is approved by the board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66, 2/3%, of the outstanding voting stock which is not owned by the interested stockholder.
Section 203 could delay or prohibit mergers or other takeovers or change in control attempts with respect to us and, accordingly, may discourage attempts to acquire us even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.
We have a staggered board of directors, which could impede an attempt to acquire us or remove our management.
Our board of directors is divided into three classes, each of which serves for a staggered term of three years. This division of our board of directors could have the effect of impeding an attempt to take over our company or change or remove management, since only one class will be elected annually. Thus, only approximately one-third of the existing board of directors could be replaced at any election of directors.
As a former shell company, resales of shares of our restricted common stock in reliance on Rule 144 of the Securities Act are subject to the requirements of Rule 144(i).
We previously were a “shell company” and, as such, sales of our securities pursuant to Rule 144 under the Securities Act of 1933, as amended, cannot be made unless, among other things, at the time of a proposed sale, we are subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and have filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 as amended, as applicable, during the preceding 12 months, other than Form 8-K reports. Because, as a former shell company, the reporting requirements of Rule 144(i) will apply regardless of holding period, restrictive legends on certificates for shares of our common stock cannot be removed except in connection with an actual sale that is subject to an effective registration statement under, or an applicable exemption from the registration requirements of, the Securities Act of 1933, as amended. Because our unregistered securities cannot be sold pursuant to Rule 144 unless we continue to meet such requirements, any unregistered securities we issue will have limited liquidity unless we continue to comply with such requirements.
If securities and/or industry analysts fail to continue publishing research about our business, if they change their recommendations adversely, or if our results of operations do not meet their expectations, our stock price and trading volume could decline.
The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. In addition, it is likely that in some future period our operating results will be below the expectations of securities analysts or investors. If one or more of the analysts who cover us downgrade our stock, or if our results of operations do not meet their expectations, our stock price could decline.
Aspects of the tax treatment of the securities may be uncertain.
The tax treatment of our preferred stock and our warrants is uncertain and may vary depending upon whether you are an individual or a legal entity and whether or not you are domiciled in the United States. In the event you are a non-U.S. investor, you should consult your tax advisors as to the consequences, under the tax laws of the country where you are resident for tax purposes, of acquiring, holding and disposing of our preferred stock and our warrants.
