Business Context and Reporting Period
Picard Medical, Inc. (PMI) is a holding company that owns 100% of SynCardia Systems, LLC, a medical technology firm manufacturing the SynCardia Total Artificial Heart (TAH). The SynCardia TAH is the only FDA and Health Canada approved total artificial heart, used as a bridge to transplantation for patients with end-stage biventricular heart failure. The company completed its Initial Public Offering (IPO) on September 2, 2025, listing on the NYSE American under the symbol "PMI." This 10-K covers the fiscal year ended December 31, 2025.
Key Financial Metrics
| Metric | 2025 (in thousands) | 2024 (in thousands) |
|---|---|---|
| Total Revenue | $4,940 | $4,391 |
| Cost of Revenues | $5,144 | $4,503 |
| Gross Loss | $(204) | $(112) |
| Operating Loss | $(13,257) | $(13,712) |
| Net Loss | $(27,002) | $(21,055) |
| Cash and Cash Equivalents (Year End) | $7,451 | $96 |
| Restricted Cash | $4,000 | $0 |
| Total Debt (Senior Secured Note) | $5,448 (Fair Value) | $0 |
Note: The company reported a gross margin of -4% for 2025. Net loss increased 28% year-over-year, driven primarily by non-cash derivative losses and interest expenses associated with new debt financing.
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 13% to $4.94 million, driven by a 12% increase in product sales and a 42% increase in rental revenue. U.S. sales grew by $1.0 million, offset by declines in Europe and the rest of the world.
- Cost Structure: Cost of revenues increased 14% to $5.14 million. Product costs rose by $0.94 million, while rental service costs decreased by $0.28 million.
- Financing Activities: The company raised significant capital in 2025, including $15.2 million in net proceeds from its IPO and $13.5 million in proceeds from a new Senior Secured Note issued in December 2025. This contrasts with 2024, which relied heavily on convertible notes and related party loans.
- Debt and Liabilities: The company issued a $15.0 million Senior Secured Note in December 2025. Due to fair value accounting elections, the note is recorded at $5.4 million on the balance sheet, with significant non-cash derivative losses ($7.0 million) and financing charges ($2.3 million) impacting the income statement.
Guidance, Outlook, and Risks
Management Commentary and Outlook
Management expects to continue incurring significant operating losses for the foreseeable future as it scales operations, pursues regulatory approvals for next-generation devices (the "Emperor" fully implantable heart and "Unicorn" driver), and expands commercial adoption. The company is seeking FDA approval to expand indications for the SynCardia TAH to include "Bridge to Candidacy" (BTC) and long-term support (2+ years), with a decision expected in Q3 2026.
Going Concern Warning
The independent auditor has included an explanatory paragraph regarding the company's ability to continue as a going concern. The company has a history of significant losses and a working capital deficiency. Management's plans to fund operations depend on raising additional debt or equity financing, which may not be available on acceptable terms.
Key Risks and Contingencies
- Regulatory Uncertainty: The company's CE Mark in Europe was cancelled in 2022; it is currently pursuing recertification under the new Medical Device Regulation (MDR), with a submission expected in 2027. Delays could limit European growth.
- Supply Chain Concentration: The company relies on single-source suppliers for critical components, including valves (Medtronic license) and driver parts (Bimba/Heitek). Disruptions could halt production.
- Product Liability and Quality: The company has reported 114 instances of cannula tears (no serious adverse events reported) and is working on a design fix. Product liability claims could be material.
- Internal Controls: Management identified material weaknesses in internal controls over financial reporting as of December 31, 2025, citing a lack of segregation of duties and formal review processes.
- Legal Proceedings: A securities class action lawsuit was filed in February 2026 alleging false statements regarding the IPO.
Investor Verification Checklist
- Liquidity Runway: Verify the sufficiency of the $11.45 million in total cash (including restricted cash) against the burn rate and the mandatory liquidity covenant ($4.0 million) of the Senior Secured Note.
- Debt Covenants: Review the terms of the December 2025 Senior Secured Note, specifically the monthly partial redemption requirements and the potential for equity settlement, which could cause significant dilution.
- Regulatory Milestones: Monitor the status of the FDA Panel Track PMA supplement for indication expansion (BTC/Long-term) and the timeline for EU MDR recertification.
- Customer Concentration: Note that Customer A accounted for 43% of 2025 revenue; assess the risk of losing this key account.
- Internal Control Remediation: Track the progress of remediation efforts for the identified material weaknesses in financial reporting controls.