ICCM

Business Context and Reporting Period

Company: IceCure Medical Ltd. (ICCM)
Reporting Period: Fiscal Year Ended December 31, 2025
Business Overview: IceCure is a commercial-stage medical device company developing cryoablation systems (freezing technology) for treating tumors. Its lead product, the ProSense system, received FDA marketing authorization in October 2025 for the treatment of low-risk breast cancer in women aged 70 and above. The company is transitioning from its ProSense system to the next-generation XSense system (FDA 510(k) cleared) and developing the MSense system for larger tumors.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Total revenue increased 3% to $3.38 million, driven by a 12% increase in disposable sales ($2.05 million), partially offset by a 3% decrease in system sales.
• Margin Compression: Gross margin declined from 44% to 36% due to increased raw material and subcontractor costs, alongside the cessation of revenue from the exclusive distribution agreement in Japan.
• Expense Management: Sales and marketing expenses decreased 31% to $4.36 million, primarily due to reduced consultant fees related to the FDA De Novo process. Conversely, General and Administrative expenses rose 21% to $4.53 million, driven by share-based compensation.
• Geographic Shifts: Revenue from India dropped 71% to $120k, while China revenue surged 163% to $108k. "Other" territories (primarily Europe) saw a 32% increase.

Guidance, Outlook, and Risks

Going Concern Warning: Management and the independent auditor have raised substantial doubt about the company's ability to continue as a going concern. As of March 13, 2026, cash and cash equivalents were approximately $4.7 million, which is insufficient to fund planned operations for the next 12 months. The company expects to incur continued losses and requires substantial additional funding.

Outlook and Strategy:

• Commercialization: Focus is on commercializing the ProSense system for breast cancer following the October 2025 FDA authorization and the March 2026 update to the American Society of Breast Surgeons (ASBrS) resource guide.
• Reimbursement: The company is pursuing a permanent CPT Category I code (expected submission by June 2026) to secure broader insurance reimbursement, currently relying on a temporary CPT Category III code.
• Product Pipeline: Continued development of the XSense and MSense systems to expand indications beyond breast cancer.

Key Risks:

• Liquidity: Failure to secure additional equity or debt financing could force the curtailment of operations.
• Regulatory: The FDA requires a post-market surveillance study for the ProSense breast cancer indication; failure to enroll patients or meet timelines could jeopardize the authorization.
• Supply Chain: Certain components for the ProSense system are nearing end-of-life, creating dependency on the successful transition to the XSense system.
• Geopolitical: Operations are based in Israel; regional instability poses risks to workforce availability and supply chains.

Investor Verification Checklist

• Cash Runway: Verify the current cash balance and the timeline for the next capital raise, given the "substantial doubt" going concern qualification.
• Reimbursement Status: Confirm the status of the CPT Category I code application and any progress on insurance coverage negotiations.
• Post-Market Study: Monitor enrollment rates and progress of the FDA-mandated post-market surveillance study for ProSense.
• Supply Chain Transition: Assess the timeline and success of transitioning manufacturing from ProSense to XSense to mitigate end-of-life component risks.
• Shareholder Dilution: Review the terms of recent financing (Rights Offering, ATM facility) and potential dilution from future fundraising needs.