EDAP 20-F Report ended Dec. 31, 2024

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As filed with the Securities and Exchange Commission on March 27, 2025

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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 FORM 20-F

 ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934,

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of the event requiring this shell company report_______________________

For the transition period from ________ to _________

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000-29374

(Commission file number)

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EDAP TMS S.A.

(Exact name of registrant as specified in its charter)

France

(Jurisdiction of incorporation or organization)

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Parc d’Activites la Poudrette-Lamartine

4/6, rue du Dauphiné

69120 Vaulx-en-Velin, France

(Address of principal executive offices)

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 Blandine Confort

Legal Affairs Director

 Parc d’Activites la Poudrette-Lamartine

4/6, rue du Dauphiné,

69120 Vaulx-en-Velin, France

Tel. +33 4 72 15 31 50, E-mail : bconfort@edap-tms.com

(Name, Telephone, E-mail and Address of Company Contact Person)

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 Securities registered or to be registered pursuant to Section 12(b) of the Act:

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 Securities registered or to be registered pursuant to Section 12(g) of the Act: None

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 Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

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 Outstanding shares of each of the issuer’s classes of capital or common stock as of December 31, 2024: 37,392,086 ordinary shares

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 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes __         No X

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 If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes __        No X

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 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.  Yes X          No __

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 Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes X          No __

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

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Large accelerated filer __        Accelerated filer X         Non-accelerated filer __        Emerging growth company __

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 If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. __

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 † The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. X__

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. __       

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). __

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Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

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U.S. GAAP _X         International Financial Reporting Standards as issued by the International Accounting Standards Board __        Other __

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 If "Other" has been checked in response to the previous question indicate by check mark which financial statement item, the registrant has elected to follow. Item 17 __       Item 18 __

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 If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes __       No X

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TABLE OF CONTENTS

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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Unless the context otherwise requires, references herein to “we,” “us,” “our” or “group” are to EDAP TMS S.A. and its consolidated subsidiaries and references herein to the “Company,” “EDAP” or “EDAP TMS” are to EDAP TMS S.A.

We prepare our consolidated financial statements in conformity with United States generally accepted accounting principles (“U.S. GAAP”). In this annual report, references to “euro” or “€” are to the legal currency of the countries of the European Monetary Union, including the Republic of France, and references to “dollars,” “U.S. dollars” or “$” are to the legal currency of the United States of America. Solely for the convenience of the reader, this annual report contains translations of certain euro amounts into dollars at specified rates. These translations should not be construed as representations that the euro amounts actually represent such dollar amounts or could be converted into dollars at those rates. See Item 11, ‘‘Quantitative and Qualitative Disclosures about Market Risk’’ for a discussion of the effects of fluctuations in currency exchange rates on the Company.

The following are registered trademarks of the Company in the United States: EDAP^®, Ablatherm^®, Ablasonic^®, Ablapak^® and Focal.One^®. This annual report also makes references to trade names and trademarks of companies other than the Company.

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CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

This annual report includes certain forward-looking statements within the meaning of applicable federal securities laws, including Section 27A of the U.S. Securities Act of 1933 (the “Securities Act”) or Section 21E of the U.S. Securities Exchange Act of 1934 (the “Exchange Act”), which may be identified by words such as “believe,” “can,” “contemplate,” “could,” “plan,” “intend,” “is designed to,” “may,” “might,” “potential,” “objective,” “target,” “project,” “predict,” “forecast,” “ambition,” “aim”, “guideline,” “should,” “will,” “estimate,” “expect” and “anticipate,” or the negative of these and similar expressions, which reflect our views about future events and financial performance. Forward-looking statements involve inherent known and unknown risks and uncertainties including matters not yet known to us or not currently considered material by us. Actual events or results may differ materially from those expressed or implied in such forward-looking statements as a result of various factors that may be beyond our control. Factors that could affect future results or cause actual events or results to differ materially from those expressed or implied in forward-looking statements include, but are not limited to:

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You should also consider the information contained in Item 3, “Key Information—Risk Factors” and Item 5, “Operating and Financial Review and Prospects,” or further discussion of the risks and uncertainties that may cause such differences to occur. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all. Moreover, forward-looking statements speak only as of the date they are made. Other than required by law, we do not undertake any obligation to update them in light of new information or future developments. These forward-looking statements are based upon information, assumptions and estimates available to us as of the date of this annual report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. In light of these risks, uncertainties and assumptions, you should not place undue reliance on any forward looking statements contained herein.

You should read this annual report and the documents that we reference in this annual report and have filed as exhibits completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

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PART I

Item 1. Identity of Directors, Senior Management and Advisors

Not applicable.

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Item 2. Offer Statistics and Expected Timetable

Not applicable.

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Item 3. Key Information

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Risk Factors

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In addition to the other information contained in this annual report, the following risk factors should be carefully considered in evaluating us and our business. These statements are intended to highlight the material risk factors that may cause actual financial, business, research or operating results to differ materially from expectations disclosed in this annual report. See also factors disclosed under “Cautionary statement on forward-looking information.”

Summary of Key Risks

Our business and our industry are subject to numerous risks described in the following risk factorsand elsewhere in this annual report, Investors should carefully consider these risks before making a decision to invest in our securities.

The main risk factors relating to the Company and its business operations are grouped into the seven categories listed below. The most important risk factors have been identified and assessed considering the likelihood of occurrence and the possible negative effect on the Company, in each case also taking into account corrective actions and risk management measures that have been put in place. The occurrence of new events, whether internal or external to the Company, is therefore likely to modify this ranking in the future.

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Risks Relating to our Business, Financial Position and Capital Needs

Risks Related to our Product Candidates and the Industry in which we Operate

Risks Related to our Organization and Operations

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Risks Related to Intellectual Property Rights

Risks Relating to our Status as a Foreign Private Issuer or a French Company

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Risks Related to Ownership of our Ordinary Shares and the ADSs

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General Risk Factors

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Risks Relating to Our Business, Financial Position and Capital Needs

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We may in the future face substantial doubt about our ability to continue as a going concern as a result of our history of operating losses and our expectation of continuing negative cash flows, which could hinder our ability to access the debt and equity capital markets to help meet our cash needs.  

We have a history of operating losses and expect such losses to continue in the foreseeable future.  As of December 31, 2024, we had €29.8 million in cash and cash equivalents, a decrease of €13.6 million from December 31, 2023. We believe we have sufficient funds to support our operations for at least a period of twelve months from the date of issue of our consolidated financial statements. However, we will need to raise substantial additional financing in order to meet our cash flow needs in the subsequent period and until we achieve profitability. We may not be able to raise additional financing on acceptable terms or at all and this condition may in the future raise uncertainty regarding our ability to continue as a going concern. Management is actively exploring various alternatives, including seeking additional funding through the debt and equity capital markets, cost-cutting measures, and restructuring opportunities, but there is no assurance that these efforts will be successful or sufficient to address these liquidity concerns. If we are unable to raise capital when needed on acceptable terms, or at all, we may be forced to restructure our business or delay, reduce, or terminate our research and product development programs, future commercialization efforts or other operations. See Note 1-2 to our consolidated financial statements.

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Our future revenue and income growth depends, among other things, on implementing our business strategy, which largely depends on the success of our HIFU technology, and our capacity to scale our operations to manage and sustain our future growth.    

Our business strategy depends on the success of our HIFU technology for future revenue growth and net profit generation. We are dependent on the successful development and commercialization of other product lines, such as devices based on HIFU but not limited to the Focal One System, to generate significant additional revenues and to achieve and sustain profitability in the future. To implement our business strategy, we need (among other things) to develop new applications for our HIFU technology, to improve our products and service offerings, and to educate physicians and patients about the clinical and cost benefits of our products, all of which we believe could increase patients’ wellbeing and acceptance of our products. Our focus is to primarily expand our HIFU business in the U.S. as HIFU is FDA approved for ablation of prostate tissue and reimbursed at an acceptable level. Although we are particularly dependent on the success of our HIFU technology to grow our business through our HIFU division, other revenues, generated by our Extracorporeal ShockWave Lithotripsy (“ESWL”) division and our Distribution (“Distribution”) division directly linked to the distribution of other complementary products on behalf of third-party medical companies, contributed to our global revenue in 2024. In 2025, we will

discontinue system sales in our ESWL business, but we will continue to service our existing installed base. This will result in a decline in revenue related to ESWL in 2025 and subsequent periods. In addition, some distribution agreements with third parties expired in December 2024 and were not renewed; the termination of these commitments from such third parties will have a material adverse effect on our revenue, financial condition and results of operations. See Item 4, “Information on the Company—ESWL Division” and “Information on the Company—Distribution Division.”

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In addition, there can be no assurance that we will be able to manage our future growth efficiently or profitably, and revenue may be less than expected. If we are unable to scale our production capabilities efficiently or maintain pricing, we may fail to achieve expected operating margins, which would have a material and adverse effect on our operating results. Growth may also stress our ability to adequately manage our operations, quality of products, safety, and regulatory compliance. Failure to implement necessary internal quality controls, procedures, equipment, or processes or to hire the necessary personnel in a timely and effective manner could result in higher costs or an inability to meet market demand and could have a material adverse impact on our business, results of operations, financial condition, and prospects. Additionally, our future growth will increase the demands placed on our third-party suppliers, and there is no guarantee that our suppliers will be able to support our anticipated growth. If growth significantly changes, it can negatively impact our cash reserves, and we may be required to obtain additional financing, which may increase indebtedness or result in dilution to shareholders. Further, there can be no assurance that we would be able to obtain additional financing on acceptable terms, if at all.

Although we achieved operating income in 2020, we incurred operating losses in 2021, 2022, 2023 and 2024. We expect that our marketing, selling and research and development expenses will increase as we attempt to further develop and commercialize our HIFU devices and particularly with the planned acceleration of our U.S. HIFU expansion plan. In this respect, we may not generate a sufficient level of revenue to offset these expenses and may not be able to adjust spending in a timely manner to respond to any unanticipated decline in revenue. We cannot guarantee that we will realize sufficient revenue to achieve profitability in the future. See Item 5, “Operating and Financial Review and Prospects.”

Our operating cash flow is highly dependent on cyclical demand for our products.

Our operating cash flow has historically been subject to significant fluctuations over the course of any given fiscal year due to cyclical demand for medical devices, in particular with hospital budgets being mostly spent at year-end, and the resulting annual and quarterly fluctuations in trade and other receivables and inventories. This has in the past resulted in significant variations in working capital requirements and operating cash flows. Since, in addition to raising additional funding, we anticipate relying on cash flow from operating activities to meet our liquidity requirements, a decrease in the demand for our products, or the inability of our customers or distributors to meet their financial obligations to us, would reduce the funds available to us. In the future, our liquidity may be constrained, and our cash flows may be uncertain, negative or significantly different from period to period. Our cash flow is affected by increased expenses in clinical trials, sales efforts and other market costs related to implementing our expanded U.S. and global strategy, which require significant additional resources. However, there is no assurance that this will result in an increase in the demand for our products and services.

Our results of operations have fluctuated significantly from quarter to quarter in the past and may continue to do so in the future as we experience long and variable product sales cycles, which are long and seasonal and are partly dependent on access to sufficient financing.

Our results of operations have fluctuated in the past and may continue to fluctuate from quarter to quarter depending upon numerous factors, including, but not limited to, the timing and results of clinical trials, changes in healthcare reimbursement policies, cyclicality of demand for our products, changes in pricing policies by us or our competitors, new product announcements by us or our competitors, customer order deferrals in anticipation of new or enhanced products offered by us or our competitors, product quality problems and exchange rate fluctuations. Furthermore, because our main products have relatively high unit prices, the amount and timing of individual orders can have a substantial effect on our results of operations in any given quarter.

The sales cycle of our products is lengthy as our products are high value capital items for our customers to purchase and often require the approval of multiple levels of management or Boards of hospitals, purchasing groups and, in some cases, government authorities. In addition, some sales are subject to a public tender offer process with many approvals which could be lengthy to obtain, and, as a result, hospitals may delay their purchase orders according to their timelines and budget allocations. It is difficult to predict the exact timing for closing product sales directly linked to the length of capital expenditure cycles.

In addition, our customers may rely on the credit market to secure dedicated lease financing to purchase or lease our equipment. Due to the limited availability of lending, we may be unable to access sufficient lease financing to support these transactions. Without lease financing, we may be unable to continue the development of our revenue-per-procedure (“RPP”) model, or we may need to fund such activity out of our existing working capital. Similarly, some of our clients rely on lease financing to finance their purchases of

equipment. Limited availability of lease financing facilities may also affect their purchasing decisions and may adversely impact our equipment sales. In addition, the current macro-economic environment with elevated or increasing interest rates as compared to prior years, may make lease financing less attractive and more difficult to implement for our customers.

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Risks Related to our Product Candidates and the Industry in which we Operate

If we do not successfully optimize our sales, marketing, and potential future distribution channels or do not effectively expand and update our infrastructure, or maintain high product quality and reliability, our operating results may be negatively impacted.

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If we do not adequately predict market demand or otherwise optimize and operate our sales, marketing and potential future distribution channels successfully, it could result in excess or insufficient inventory or fulfillment capacity, increased costs, or immediate shortages in product or component supply, or harm our business in other ways. In addition, if we do not maintain adequate infrastructure to enable us to, among other things, manage our purchasing and inventory levels, it could negatively impact our cash flow and operating results.

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Moreover, our future success will depend largely on our ability to continue to hire, train, retain and motivate skilled sales representatives or distributors with significant technical and clinical knowledge about our products. New hires require training, supervision and take time to achieve full productivity. If we fail to train and supervise new hires adequately, or if we experience a high turnover in our sales force or trained professionals in the future, we cannot be certain that we will maintain or increase our sales. If we are unable to expand our sales and marketing capabilities, we may not be able to effectively commercialize our HIFU devices or our other products and service offerings in development, which would adversely affect our business, results of operations, and financial condition.

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Our success depends on the quality and reliability of our products. While we subject our devices to stringent quality specifications and processes, our products incorporate mechanical parts, electrical components and computer software, any of which may contain errors or exhibit failures, especially when devices are first introduced. Component failures, manufacturing flaws, design defects, or inadequate disclosure of product-related risks with respect to our products could result in an unsafe condition or injury to, or death of, the patient. In addition, new devices or developments may contain undetected errors or performance problems that, despite testing, are discovered only after commercial placement. Any of the foregoing would adversely affect our business, results of operations, and financial condition.

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New device developments and introductions may adversely impact our financial results.

From time to time, we may develop and introduce new devices, hardware and software, with enhanced features, including artificial intelligence (“AI”). These developments may extend a product’s capabilities, targeting new clinical applications or improving existing approaches. The success of new device introductions depends on a number of factors including, but not limited to, timely and successful research and development, receipt of regulatory clearances or approvals, pricing, competition, market and consumer acceptance, manufacturing and supply costs, and the risk that new devices may have quality or other defects.

We invest in various research and development projects to expand our product offerings. Our research and development efforts are critical to our success, and our research and development projects may not be successful. We may be unable to develop and market new products successfully, and the products we invest in and develop may not be well received by customers or meet our expectations. Our research and development investments may not generate significant operating income or contribute to our future operating results for several years, and such contributions may not meet our expectations or even cover the costs of such investments. If we fail to effectively develop new products, obtain regulatory clearances or approvals and manage new product introductions in the future, our business, financial condition, results of operations, or cash flows could be materially and adversely impacted.

We operate in a highly regulated industry and our future success depends on obtaining and maintaining government regulatory approval of our products, which we may not receive or be able to maintain or which may be delayed for a significant period of time.

Government regulation significantly impacts the development and marketing of our products, particularly in the United States, European Union and Japan. We are regulated in each of our major markets with respect to preclinical and clinical testing, manufacturing, labeling, distribution, sale, marketing, advertising and promotion of our products. To market and sell products, we are required to obtain approval or clearance from the relevant regulatory agencies, including the U.S. Food and Drug Administration (“FDA”) with respect to the United States. The process of applying for regulatory approval or clearance is often lengthy and requires the expenditure of substantial resources. Further, there can be no assurance that we will receive the required approvals or clearance for our products from

the required regulatory authorities or, if we do receive the required approvals, that we will receive them on a timely basis, on the conditions and for the indications we seek, or that we will otherwise be able to satisfy the conditions of such approval, if any.

The regulatory agencies may not act favorably or quickly in their review of our submissions, or we may encounter significant difficulties in our efforts to obtain their clearance or approval, or to maintain our existing approvals, all of which could delay or preclude the sale of new or existing products in the related territories. Our manufacturing operations must comply with regulations established by regulatory agencies in the United States, the European Union and other countries, and in particular with the Current Good Manufacturing Practices (“CGMP”) and other standards for quality assurance and manufacturing process control under applicable regulatory authorities. Such standards may change or evolve, requiring that we change or evolve our manufacturing operations. We may not always comply with all applicable standards and, as a result, would be unable to manufacture our products for commercial sale or for clinical trial supply. Our manufacturing facilities are subject to inspection by regulatory authorities at any time. If any inspection by the regulatory authorities reveals deficiencies in manufacturing, we could be required to take immediate corrective or remedial actions, suspend production or close the current and future production facilities, which would disrupt our manufacturing processes. Accordingly, failure to comply with these regulations could have a material adverse effect on our business, financial condition and results of operations.

In the European Union, the regulation of medical devices is being updated by the European Medical Device Regulation (“MDR”) imposing stricter requirements on the conformity assessment and the commercialization of our products. A transition period to conform to MDR requirement has been adopted based on MDR classification of devices with an application date of December 31, 2028, at the latest. The extension of the period during which the devices can be placed on the market is subject to certain conditions. To benefit from the new provisions, we were required to, and did, implement a Quality Management System (“QMS”) that complies with the MDR requirements. An MDR compliance action plan has been put in place in preparation of MDR enforcement within the expected timelines. We are implementing operational actions and internal audits to ensure our devices may be distributed on the European and international market and conform to MDR requirements, where applicable. However, the uncertainty of continuing healthcare changes, regulations, and our ability to maintain MDR compliance of our products may negatively affect our business.

Even if regulatory approval to market a product is granted, it may include limitations on the indicated uses for which the product may be marketed. Failure to comply with regulatory requirements can result in fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecutions. Regulatory policy may change, and additional government regulations may be established that could prevent or delay regulatory approval of our products. Any delay, failure to receive regulatory approval or the loss of previously received approvals could have a material adverse effect on our business, financial condition and results of operations. For more information on the regulation of our business, see Item 4, “Information on the Company—Government Regulation” and “Information on the Company—HIFU Division—HIFU Clinical and Regulatory Status.”

Our clinical trials related to products using HIFU technology may not be successful, and we may not be able to obtain regulatory approvals necessary for commercialization of all of our HIFU products.

Before obtaining regulatory approvals or clearance for the commercial sale of any of our devices under development, we must demonstrate through preclinical testing and clinical trials that the device is safe and effective in each intended use. Product development, including pre-clinical studies and clinical trials, is a long, expensive and uncertain process, and is subject to delays and failures at any stage. We or the relevant regulatory authorities may suspend or terminate clinical trials at any time and regulating agencies may even refuse to grant exemptions to pursue clinical trials. The results from preclinical testing and early clinical trials may not predict the results that will be obtained in large-scale clinical trials. We could suffer significant setbacks in later-stage clinical trials, even after promising results in earlier trials. Furthermore, data obtained from a trial might be insufficient to demonstrate that our products are safe, and effective. The commencement, continuation or completion of any of our clinical trials may be delayed or halted, or inadequate to support approval of an application to regulatory authorities for numerous reasons including, but not limited to:

·that regulatory authorities do not approve a clinical trial protocol or a clinical trial, or place a clinical trial on hold, discussions with regulatory authorities to improve our clinical protocols may prove difficult and lengthy; see Item 4, “Information on the Company—HIFU Division—HIFU Clinical and Regulatory Status;”

·slower than expected rates of patient recruitment and enrollment;

·inability to adequately monitor patients during or after treatment;

·failure of patients to complete the clinical trial;

·prevalence and severity of adverse events and other unforeseen safety issues;

·third-party organizations not performing data collection and analysis in a timely and accurate manner;

·governmental and regulatory delays or changes in regulatory requirements, policies or guidelines;

·that regulatory authorities conclude that our trial design is inadequate to demonstrate safety and efficacy.

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The data we collect from our preclinical studies, current clinical trials, and other clinical trials may not be sufficient to support requested regulatory approval. Additionally, certain regulatory authorities may disagree with our interpretation of the data from our preclinical studies and clinical trials, or may find the clinical trial design, conduct or results inadequate to prove safety or efficacy, and may require us to pursue additional preclinical studies or clinical trials, which would increase costs and could further delay the approval of our products. If we are unable to demonstrate the safety and/or efficacy of our products in our clinical trials, we will be unable to obtain regulatory approval to market our products.

Moreover, we may also be required to abandon previous strategies for regulatory approval or clearance, despite having made significant financial and time investments, or refocus our efforts on alternative regulatory strategies, resulting in increased costs and efforts from management, without any guarantee of success, which could materially adversely affect our business, financial condition and results of operations.

The commercial success of our products depends on whether procedures performed using those products are eligible for reimbursement approved by national health authorities and third-party payers.

Our success depends, among other things, on the extent to which reimbursement can be obtained from healthcare payers for procedures performed with our products. In the United States, we are dependent upon favorable coverage and benefit decisions by Centers for Medicare and Medicaid Services (“CMS”) for Medicare reimbursement, state Medicaid agencies, individual managed care organizations, private insurers and other payers. With the support of the American Urological Association and the American Association of Clinical Urologists, the American Medical Association (“AMA”) established a new Category 1 CPT code for the ablation of malignant prostate tissue with HIFU technology, effective January 1, 2021. In late 2022, CMS published its final rules for the calendar year 2023 for ambulatory payment classification (“APC”) procedures and physician fee schedule, which established reimbursement rates that recognize both facility or hospital payment and physician professional service payments for HIFU procedures. CMS final rule included a reimbursement level close to surgery, effective on January 1, 2023. The 2025 final rule maintained APC 6 payment level. For private insurers, policy coverage decisions supporting coverage and reimbursement related to HIFU procedures are limited given that HIFU is a new technology. With expanded third party coverage decisions, our Focal One HIFU procedure will have broader market access in the United States. However, public or private payors may decide to limit coverage or reimbursement of HIFU technologies that are available to individuals, including potentially modifying existing guidance to further limit available coverage. Changes to coverage decisions, which may be revised from time to time, could positively or negatively impact reimbursement for procedures performed using our devices and may result in a material adverse effect on our business, financial condition and results of operations. Outside the United States, and in particular in the European Union and Japan, third-party reimbursement is generally conditioned upon decisions by national health authorities, and we cannot guarantee that a definitive reimbursement will be granted. See Item 4, “Information on the Company——HIFU Division—HIFU Reimbursement Status.”

We cannot assure investors that expanded coverage decisions or additional reimbursement approvals will be obtained in the near future, if ever. If payor coverage or reimbursement for procedures related to our products is unavailable, limited in scope or amount, or if certain levels of public or private payor reimbursement or coverage policies change, it could have a material adverse effect on our business, financial condition and results of operations.

HIFU technology may not be widely adopted by the medical community and may never become a standard of care, and we may be unable to generate sufficient revenue to sustain our business.

Our success depends on the market’s confidence that our HIFU devices can provide reliable, high-quality results or treatments and we believe that physicians are likely to be particularly sensitive to any test defects and errors in our devices. Our robotic HIFU devices represent innovative therapies for the conditions that they are designed to treat. Notwithstanding any positive clinical results that our HIFU devices may have achieved or may achieve in the future in terms of safety and efficacy and any marketing approvals that we have obtained or may obtain in the future, there can be no assurance that such products will gain adoption by the medical community. Physician adoption depends, among other things, on evidence of the cost effectiveness of a therapy as compared to existing therapies and on adequate coverage policies supporting reimbursement from healthcare payers. Furthermore, acceptance by patients depends in part on physician recommendations, as well as other factors, including the degree of invasiveness, the rate and severity of complications and other side effects associated with the therapy as compared to other therapies.

If our robotic HIFU devices do not achieve an adequate level of acceptance by physicians, patients, health care payers and the medical community and never become a standard of care, we may not generate or maintain positive cash flows and we may not become profitable or be able to sustain profitability. The failure of our current HIFU devices to perform as expected would significantly impair our reputation. If we do achieve market acceptance of our products, we may not be able to sustain it or otherwise achieve it to a degree which would support the ongoing viability of our operations.

Competition in the markets in which we operate is intense and is expected to increase in the future, and there is a substantial risk our products or service offerings could become obsolete or uncompetitive.

Competition in the markets in which we operate is intense and is expected to increase in the future. In each of our main businesses, we face competition both directly from other manufacturers of medical devices that apply the same technologies that we use, as well as indirectly from existing or emerging therapies for the treatment of urological disorders.

In the markets that we target for our robotic HIFU products, competition comes from new market entrants and alternative therapies, as well as from current manufacturers of robotic medical devices. In the HIFU market, the Focal One system competes with all current treatments for localized tumors, including surgery, external beam radiotherapy, brachytherapy, irreversible electroporation and cryotherapy. See Item 4, “Information on the Company—HIFU Division— HIFU Competition.” In our ESWL division, we are also facing competition from lower priced laser systems. Item 4, “Information on the Company—ESWL Division.”

Many of our competitors have significantly greater financial, technical, research, marketing, sales, distribution and other resources than we have and may have more experience in developing, manufacturing, marketing and supporting new medical devices. In addition, our future success will depend in large part on our ability to maintain a leading position in technological innovation, and we cannot assure investors that we will be able to develop new products or enhance our current ones to compete successfully with new or existing technologies. Rapid technological development by competitors may result in our products becoming obsolete before we recover a significant portion of the research, development and commercialization expenses incurred with respect to those products.

Risks Related to our Organization and Operations

We may experience revenue disruption due to our strategic shift to focus on HIFU activities and away from legacy non-HIFU activities.

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Our new strategy is to increase investments in our core proprietary growth HIFU activities and place less emphasis on our non-HIFU distribution and ESWL business activities. As part of this strategy, certain existing distribution agreements with third-party partners have been terminated or may not be renewed. While this strategy aligns with our long-term strategic goals, it carries inherent risks, including:

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While we believe that this strategic focus will position us for stronger, sustainable growth, the execution of this transition may involve significant risks that could materially impact our financial performance and shareholder value in the short term.

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We face a significant risk of exposure to product liability claims in the event that the use of our products results in personal injury or death and our insurance coverage may be inadequate.

Our products are designed to be used safely in the treatment of severe afflictions and conditions. Despite the use of our products, patients may suffer personal injury or death, and we may, as a result, face significant product liability claims. We maintain separate product liability insurance policies for the United States and Canada and for the other markets in which we sell our products. Product liability insurance is expensive and there can be no assurance that it will continue to be available on commercially reasonable terms or at all. In addition, our insurance may not cover certain product liability claims or our liability for any claims may exceed our coverage limits. A product liability claim or series of claims brought against us with respect to uninsured liabilities or in excess of our insurance coverage, or any claim or product recall that results in significant cost to or adverse publicity against us could have a material adverse effect on our business, financial condition and results of operations. Also, if any of our products prove to be defective, we may be required to recall or redesign the product which could result in costly corrective actions and harm to our business reputation, which could materially affect our business, financial condition and results of operations.

We depend on a single site to manufacture our products, and any interruption of operations could have a material adverse effect on our business.

Most of our manufacturing currently takes place in a single facility located in Vaulx-en-Velin, near Lyon, France. Our facility is Good Manufacturing Practice (“GMP”) certified. In the event of a significant interruption in the operations of our sole facility for any reason, such as fire, cyber attack, supply disruption on a critical component, weather conditions,  or other natural disasters or potential future pandemics, or a failure to obtain or maintain required regulatory approvals, we would have no other means of manufacturing our products until we would be able to restore the manufacturing capabilities at our facility or develop alternative facilities, which could take considerable time and resources and have a material adverse effect on our business, financial condition and results of operations.

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For certain components or services, we depend on a small number of suppliers who, due to events beyond our control may fail to deliver sufficient supplies to us or may increase the cost of items supplied, which would interrupt our production processes or negatively impact our results of operations.

We purchase most of the components used in our products from a number of suppliers but rely on a small number of suppliers or even one single supplier for some key components. In addition, we rely on a small number of suppliers for certain services. If the supply of these components or services were interrupted for any reason, including geopolitical tensions or instability, global supply chain failures, weather conditions, large-scale cyber attack or infrastructure disruption, a pandemic and implied restrictions, our manufacturing and marketing of the affected products would be delayed. Certain of these key suppliers may be exposed to variations in the costs of raw materials and components, and, consequently, may suffer issues or delays in sourcing these components, which would harm their business and operations. These delays could be extensive, especially in situations where a component substitution would require regulatory approval. In addition, such suppliers could decide unilaterally to increase the price of supplied items for any reason, including higher energy, raw material or component prices, therefore causing additional charges for us and impacting our margins. For example, a major change in our current ultrasound supplier’s strategy resulted in a cost increase to our HIFU systems in 2024. This cost increase has the potential to negatively impact our margins in a short period of time. We have identified a new supplier of ultrasound components, offering a cost-effective solution, and we expect to commercialize HIFU systems based on this technology by the end of 2025. The alternative component may face regulatory approval challenges or cost constraints that could delay its readiness. We expect to continue to depend upon our suppliers for the foreseeable future, while we explore new sourcing alternatives. Failure to obtain adequate supplies of components or services in a timely manner and at an acceptable price could have a material adverse effect on our business, financial condition and results of operations.

We utilize distributors for our sales abroad, which subjects us to a number of risks that could harm our business.

We have developed strategic relationships with a number of distributors for sales and service of our devices in certain foreign countries where we are not directly represented by a subsidiary. If these relationships are terminated and not replaced, our revenues and/or ability to market or service our devices in the related territories could be adversely affected. Our distributors’ actions may affect our ability to effectively market our devices in certain foreign countries if, for example, a distributor holds the regulatory authorizations in such countries and causes, by action or inaction, the suspension of such regulatory authorizations or sanctions for non-compliance. It may be difficult, expensive, and time-consuming for us to re-establish reputation, market access or regulatory compliance in such cases. Moreover, our distributors must be in compliance with all anti-corruption laws and applicable sanctions, such as the U.S. Foreign Corrupt Practices Act (“FCPA”), sanctions imposed by the U.S. Department of the Treasury’s Office of Foreign Assets Control, the European Union, His Majesty’s Treasury, or other governmental or supranational entities, and other local laws prohibiting improper payments to governmental officials or to customers and we may not be able to trace or be kept informed of such improper payments. In addition, we may be named as a defendant in lawsuits against our distributors related to sales or service of our devices performed by these distributors. See our risk factor below: “—We face a significant risk of exposure to product liability claims in the event that the use of our products results in personal injury or death and our insurance coverage may be inadequate.”

We are a relatively small company with a limited number of products and staff. Sales fluctuations and employee turnover may adversely affect our business.

We are a relatively small company. Consequently, compared to larger companies, sales fluctuations could have a greater impact on our revenue and profitability on a quarter-to-quarter and year-to-year basis and delays in customer orders could cause our operating results to vary significantly from quarter-to-quarter and year-to-year. In addition, as a small company we have limited staff and are heavily reliant on certain key personnel to operate our business. If a key employee were to leave our company it could have a material impact on our business and the results of operations as we might not have sufficient depth in our staffing to fill the role that was previously being performed. A delay in filling the vacated position could put a strain on existing personnel or result in a failure to satisfy our contractual obligations or to effectively implement our internal controls and materially harm our business. 

The loss of key members of our executive management team could adversely affect our business.

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Our success in implementing our business strategy depends largely on the skills, experience and performance of key members of our executive management team and others in key management positions. The collective efforts of each of these people, and others collaborating with them as a team, are critical to us. As a result of the difficulty in locating qualified personnel and new management, the loss or incapacity of existing members of our executive management team could adversely affect our operations. If we were to lose one or more of these key employees, we could experience difficulties in finding qualified successors, competing effectively, developing our technologies and implementing our business strategy.

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In addition, we rely on collaborators, consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our collaborators, consultants and advisors are generally employed by employers other than us and may have commitments, or conflict of interest, or be subject to other agreements with other entities that may limit their availability to us.

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We may have difficulties in attracting and recruiting highly qualified experts in hardware, software, artificial intelligence, design and development of high technology devices.

Our devices require highly qualified individuals with a high level of expertise and experience in design, software, artificial intelligence, mechanics and electronics. We are highly dependent on our ability to attract and retain qualified personnel and engineers to develop our devices. In addition, the learning curve required to master our systems is lengthy and, if we do not find qualified experts and engineers, we may not be able to meet our development schedule and obtain market approval in due time, which in time may delay market introduction of new products. Failure to recruit and attract experts in a timely manner may have a material adverse effect on our development, business, financial condition and results of operations.

We have identified two material weaknesses in our internal control over financial reporting with respect to our U.S. subsidiary. If we fail to remediate these material weaknesses or if we experience additional material weaknesses in the future or otherwise fail to achieve an effective system of internal controls, we may not be able to report our financial results accurately or timely. In addition, the trading price of our securities may be adversely affected.

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As a publicly traded company, we are subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002. We have incurred, and expect to continue to incur, significant continuing costs, including accounting fees and staffing costs, to maintain compliance with the internal control requirements of the Sarbanes-Oxley Act of 2002. As described in Item 15, we have identified two material weaknesses with respect to internal control over financial reporting in our U.S. subsidiary, EDAP Technomed Inc, relating to: (i) an ineffective design and implementation of the subsidiary’s control over the recording of third-party vendor invoices, and (ii)  inherent IT system limitations, including that the system was not configured to sufficiently ensure data integrity, enforce segregation of duties, prevent erroneous or unauthorized changes to accounting entries made in current or previous reporting periods. Our management has concluded that, as a result, our internal control over financial reporting was not effective as of December 31, 2024. Nevertheless, we have concluded that these material weaknesses did not result in a material misstatement of the consolidated financial statements for the years ended December 31, 2024, and 2023, or require a restatement of consolidated financial statements with respect to any prior period previously reported by us.

Although we have initiated remediation actions to address these material weaknesses, as a small company, we may have insufficient personnel to allow us to segregate duties and consistently execute our internal controls.

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Furthermore, the ongoing requirements of the Sarbanes-Oxley Act may place a strain on our systems and resources. Our management is required to evaluate the effectiveness of our internal control over financial reporting as of each year-end, and we are required to disclose management’s assessment of the effectiveness of our internal control over financial reporting, including any material weakness in our internal control over financial reporting.

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Our internal control over financial reporting has been designed to provide our management and Board of Directors with reasonable assurance regarding the preparation and fair presentation of our consolidated financial statements. On an on-going basis, we are reviewing, documenting and testing our internal control procedures. To maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, and as our business develops, additional resources and management oversight may be required.

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In an effort to remediate the material weaknesses that were identified as of December 31, 2024, and to enhance our overall control environment, we hired new resources in 2024 and plan to hire additional resources in 2025. We are also working at deploying

another IT system in our U.S. subsidiary. We have hired a Global IT Leader to supervise such deployment. We believe this will allow us to remediate these material weaknesses in the near future. See Item 15, “Controls and Procedures.”

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Any failure to complete our assessment of our internal control over financial reporting, to remediate any material weaknesses that we have identified or may identify in the future, and any failure to implement new or improved controls, or difficulties encountered in their implementation, could harm our operating results, cause us to fail to meet our reporting obligations or result in material misstatements in our financial statements. Any failure to maintain adequate internal controls over financial reporting and provide accurate financial statements may subject us to litigation, render future financings more difficult or expensive, and could cause the trading price of our securities to decrease substantially. Inferior controls and procedures could cause investors to lose confidence in our reported financial information, which may give rise to securities claims and have a negative effect on the value of our securities. Any such failure could also adversely affect the results of the periodic management evaluations of our internal controls and, in the case of a failure to remediate any material weaknesses that we have identified or may identify in the future, would adversely affect the annual auditor attestation reports regarding the effectiveness of our internal control over financial reporting that are required under Section 404 of the Sarbanes-Oxley Act of 2002.

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We are exposed to risks related to cybersecurity threats and incidents.

In the conduct of our business, we collect, use, transmit and store data on information technology systems. This data includes confidential information belonging to us, our customers and other business partners, as well as personally identifiable information of individuals. We also store data related to our clinical trials on our information technology systems. We also rely in part on the reliability of certain tested third parties’ cybersecurity measures, including firewalls, virus solutions and backup solutions. Cybersecurity incidents and similar attacks vary in their form and can include the deployment of harmful malware or ransomware, denial-of-services attacks, and other attacks, which may affect business continuity and threaten the availability, confidentiality and integrity of our systems and information. Cybersecurity incidents can also include employee or personnel failures, fraud, phishing or other social engineering attempts or other methods to cause confidential information, payments, account access or access to credentials, or other data to be transmitted to an unintended recipient. Cybersecurity threat actors also may attempt to exploit vulnerabilities through in software including software commonly used by companies in cloud-based services and bundled software. Cybersecurity incidents, such as breaches of data security, disruptions of information technology systems and other cyber attacks, may result in business disruption, the misappropriation, corruption or loss of confidential information and critical data (ours or that of third parties), reputational damage, litigation with third parties, investigations or actions by regulators, diminution in the value of our investment in research and development, data privacy issues and increased cybersecurity protection and remediation costs. Like many companies, we may experience certain of these incidents given that the external cyber attack threat continues to grow in part due to a perceived increased vulnerability associated with partly remote working conditions as well as the use of AI applications, which are subject to manipulation and may result in the unwanted exfiltration of data. While we have protocols in place to protect against such threats, we may fail to identify all threats, which may have a material adverse effect on our business, financial condition or results of operations.

We devote significant resources to network security, data encryption and other measures to protect our systems and data from unauthorized access or misuse, including meeting certain information security standards that may be required by our customers, all of which increases cybersecurity protection costs. As these threats and incidents, and government and regulatory oversight of associated risks, continue to grow, we may be required to expend additional resources to enhance or expand upon the security measures we currently maintain.

There can be no assurance that our efforts or those of our third-party service providers to implement adequate security and control measures would be sufficient to protect against breakdowns, service disruption, data deterioration or loss in the event of a system malfunction, or prevent data from being stolen or corrupted in the event of a cyber incident, cyber attack, security breach, industrial espionage attacks or insider threat attacks which could result in financial, legal, business or reputational harm. Future cybersecurity breaches or incidents or further increases in cybersecurity protection costs may have a material adverse effect on our business, financial condition or results of operations. While we maintain cyber insurance coverage that is intended to address data security risks, such insurance coverage may be insufficient to cover all losses or claims that may arise and there is no guarantee that such coverage will continue to be available on commercially reasonable terms or at all.

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The expansion of social media platforms and new technologies present risks and challenges for our business and reputation.

We increasingly rely on social media and new technologies to communicate about our products and technologies. The use of these media requires specific attention. Unauthorized communications, such as press releases or posts on social media, purported to be

issued by the Company, may contain information that is false or otherwise damaging and could have an adverse impact on our stock price. Negative or inaccurate posts or comments about the Company, our business, directors or officers on any social networking website could seriously damage our reputation. In addition, our employees and partners may use social media and mobile technologies inappropriately, which may give rise to liability for the Company, or which could lead to breaches of data security, loss of trade secrets or other intellectual property or public disclosure of sensitive information, including information about our employees, clinical trials or customers. Such uses of social media, mobile technologies, or information technology more generally could have a material adverse effect on our reputation, business, financial condition and results of operations.

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Risks Related to Intellectual Property Rights

Our success largely depends on our ability to establish and protect the intellectual property rights related to our medical devices, and any dispute with respect to these rights could be costly and have an uncertain outcome and may prevent or delay our development and commercialization efforts.

Our success depends in large part on our ability to develop proprietary products and technologies and to establish and protect the related intellectual property rights, without infringing the intellectual property rights of third parties. We or our licensors may be subject to claims that former employees, collaborators or other third parties have an interest in our owned or in-licensed patents, trade secrets or other intellectual property as an inventor or co-inventor. The validity and scope of claims covered in medical technology patents involve complex legal and factual questions and, therefore, the outcome of such claims may be highly uncertain. The medical device industry has been characterized by extensive patents and other intellectual property rights litigation. We may receive letters from third parties drawing our attention to their patent rights, or patent grant contestations may be filed. Third parties also may challenge our patents before administrative bodies in the United States or abroad. Such mechanisms include re-examination, post-grant review, inter partes review, interference proceedings, derivation proceedings, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in the revocation or cancellation or amendment to our patents in such a way that they no longer cover our product candidates and existing products or provide any competitive advantage. The outcome of future such challenges is unpredictable, and the loss of patent protection could have a material adverse impact on our business, financial condition and result of operations.

If third parties, including our competitors, believe that our products or technologies infringe, misappropriate or otherwise violate their intellectual property rights, such third parties may seek to enforce against us their intellectual property rights, including patent rights, by filing against us an intellectual property-related lawsuit, including a patent infringement lawsuit. Even if we believe third-party intellectual property claims are without merit, there is no assurance that a court would find in our favor on questions of infringement, validity, enforceability, or priority. If any third parties were to assert these or any other patents against us and we are unable to successfully defend against any such assertions, we may be required, including by court order, to cease the development and commercialization of the infringing products or technology and we may be required to redesign such products and technologies so they do not infringe such patents, which may not be possible or may require substantial monetary expenditures and time. We could also be required to pay damages, which could be significant, including treble damages and attorneys’ fees if we are found to have willfully infringed such patents. We could also be required to obtain a license for such patents to continue the development and commercialization of the infringing product or technology. However, such a license may not be available on commercially reasonable terms or at all, including because certain of these patents may be held by or exclusively licensed to our competitors. Even if such a license were available, it may require substantial payments or cross-licenses under our intellectual property rights, and it may only be available on a nonexclusive basis, in which case third parties, including our competitors, could use the same licensed intellectual property to compete with us. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operation and prospects.

Our products, including our HIFU devices, may be subject to litigation involving claims of patent infringement or violation of other intellectual property rights of third parties. The defense and prosecution of intellectual property suits, patent opposition proceedings and related legal and administrative proceedings are both costly and time consuming and may result in a significant diversion of effort and resources by our technical and management personnel. In addition to being costly, drawn-out litigation to defend or prosecute intellectual property rights could cause our customers or potential customers to defer or limit their purchase or use of our products until the litigation is resolved. See Item 4, “Information on the Company—HIFU Division—HIFU Patents and Intellectual Property” and Item 4, “Information on the Company—ESWL Division—ESWL Patents and Intellectual Property.”

We own or co-own patents covering several of our technologies and have additional patent applications pending in the United States, the European Union, Japan and elsewhere. The process of seeking patent protection can be long and expensive and there can be no assurance that our patent applications will result in the issuance of patents. We also cannot assure investors that our current or future patents are or will be sufficient to provide meaningful protection or commercial advantage to us. Our patents or patent applications could

be challenged, invalidated or circumvented in the future. Failure to maintain or obtain necessary patents, licenses or other intellectual property rights from third parties on acceptable terms or the invalidation or cancellation of material patents could have a material adverse effect on our business, financial condition or results of operations. Litigation may be necessary to enforce patents issued to us or to determine the enforceability, scope and validity of the proprietary rights of others. Our competitors, many of which have substantial resources and have made substantial investments in competing technologies, may apply for and obtain patents that will interfere with our ability to make, use or sell certain products, including our HIFU devices and/or our ESWL medical equipment, either in the United States or in foreign markets.

Patents have a limited lifespan. In the United States, if all maintenance fees are timely paid, the natural expiration of a utility patent is generally 20 years from its earliest U.S. non-provisional filing date. While extensions may be available, the life of a patent, and the protection it affords, is limited, and certain of our patents may also expire and fall into the public domain, as has already occurred with certain patents in the HIFU division’s patent portfolio. See Item 4, “Information on the Company—HIFU Division—HIFU Patents and Intellectual Property.” See also — “We may encounter disruption in our Intellectual Property protection due to expiring patents and lack of updated filings.”

As is common in the life sciences and medical industry, we engage the services of consultants and independent contractors to assist us in the development of our products. We rely on trade secrets and proprietary know-how, which we seek to protect through non-disclosure agreements with employees, consultants and other parties. It is possible, however, that those non-disclosure agreements will be breached, that we will not have adequate remedies for any such breach, or that our trade secrets will become known to, or independently developed by, competitors. We also rely on copyright protection. Litigation may be necessary to protect trade secrets, know-how or copyrights owned by us. In addition, effective copyright and trade secret protection may be unavailable or limited in certain countries.

The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition and result of operations.

We may encounter disruption in our Intellectual Property protection due to expiring patents and lack of updated filings

Our intellectual property portfolio, including patents, is critical to our competitive position. Certain key global patents included in the HIFU division’s patent portfolio are set to expire in the near future, which could expose us to increased competition or the risk of similar products entering the market. Moreover, our ability to maintain a competitive edge is strengthened by our capacity to file new patent applications and keep our existing patent protection up to date. A lapse in our patent coverage or a failure to secure new patents could impact our ability to prevent competitors from copying our current HIFU technology and to maintain or enhance our market position. While we continuously evaluate opportunities for Intellectual Property protection, the failure to timely update or extend our patent coverage could significantly affect our business.

In addition, the disclosure and management of sensitive intellectual property matters, including pending or expired patents, requires careful consideration to avoid unintentionally exposing possible vulnerabilities or weaknesses in our patent portfolio. We rely on our outside Intellectual Property legal counsel and other third party service providers to assist in navigating these risks and ensure that any filings, updates, or communications related to our patents are strategically crafted and properly implemented. However, there can be no assurance that our current patent strategy will adequately mitigate these risks or that we will be able to secure new patent protections as needed.

U.S. laws relating to the patentability of certain inventions in the life sciences and medical technology industry are uncertain and rapidly changing, which may adversely impact our existing patents or our ability to obtain patents in the future.

Changes in either the patent laws or interpretation of the patent laws in the United States or in other jurisdictions could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents. For instance, under the Leahy-Smith America Invents Act (the “America Invents Act”), enacted in September 2011, the United States transitioned to a first inventor to file system in which, assuming that other requirements for patentability are met, the first inventor to file a patent application is entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention. These changes include allowing third-party submission of prior art to the United States Patent and Trademark Office (“USPTO”) during patent prosecution and additional procedures to challenge the validity of a patent through USPTO administered post-grant proceedings, including post-grant review, inter partes review, and derivation proceedings.

Various courts, including the U.S. Supreme Court, have rendered decisions that impact the scope of patentability of certain inventions or discoveries relating to life sciences and medical technology. Specifically, these decisions stand for the proposition that patent claims that recite laws of nature, natural phenomena, and abstract ideas are not themselves patentable unless those patent claims

have sufficient additional features that provide practical assurance that the processes are genuine inventive applications of those laws, phenomena, and abstract ideas. What constitutes a “sufficient” additional feature is somewhat uncertain. Furthermore, in view of these decisions, since December 2014, the USPTO has published and continues to publish revised guidelines for patent examiners to apply when examining process claims for patent eligibility.

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In addition, U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to some degree of uncertainty with regard to the Company’s ability to obtain patents in the future, this combination of events has created a degree of uncertainty with respect to the value of patents, once obtained. Depending on relevant laws enacted by the U.S. Congress, and decisions by the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that may have a material adverse effect on our ability to obtain new patents and to defend and enforce our existing patents and patents that we might obtain in the future.

Our patent portfolio may be negatively impacted by current uncertainties in the state of the law, new court rulings or changes in guidance or procedures issued by the USPTO or other similar patent offices around the world. From time to time, the U.S. Supreme Court, other federal courts, the U.S. Congress or the USPTO may change the standards of patentability, scope and validity of patents within the life sciences and medical technology and any such changes, or any similar adverse changes in the patent laws of other jurisdictions, could have a negative impact on our business, financial condition, prospects and results of operations.

We may not be able to protect or enforce our intellectual property rights throughout the world. 

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Filing, prosecuting and defending patents and trademarks on all of our current or our planned products throughout the world would be prohibitively expensive to us. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection but where enforcement is not as strong as in the U.S. or France. These products may compete with our products in jurisdictions where we do not have any issued patents, and our patent claims 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 and other intellectual property protection, particularly those relating to the healthcare sector, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our patents or other intellectual property. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business.

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Our use of “open-source” software could negatively affect our ability to sell our products and subject us to possible litigation.

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Our products incorporate so-called “open-source” software, and we may incorporate additional open-source software in the future. Open-source software is generally licensed by its authors or other third parties under open-source licenses. According to certain of these licenses, we may be subject to certain conditions, including requirements that we offer our products that incorporate the open source software for no cost, that we make available source code for modifications or derivative works we create based upon, incorporating or using the open source software and/or that we license such modifications or derivative works under the terms of the particular open source license. If an author or other third party that distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from the sale of our products that contained the open source software and required to comply with the foregoing conditions, which could disrupt the distribution and sale of our products.

Risks Related to our Status as a Foreign Private Issuer or a French Company

Our French and international operations expose us to additional costs, legal and regulatory risks, which could have a material adverse effect on our business, financial condition and results of operations.

We have significant French and international operations. We have direct distribution channels in almost fifty countries outside of France, our country of incorporation, and through our foreign subsidiaries. Compliance with complex foreign and French laws and regulations that apply to our international operations increases our cost of doing business. These regulations include, among others, U.S. laws such as FCPA and other U.S. federal laws and regulations established by the Office of Foreign Asset Control, laws such as the UK Bribery Act 2010 or other local laws, which prohibit improper payments to governmental officials or certain payments or remunerations to customers. We have adopted a Code of Ethics that requires employees to comply with applicable laws and regulations and particularly with the applicable provisions of the French law known as the Sapin II law, and the related implementing decrees, and notably the requirements of Article 8 of the law, which requires the establishment of a whistle-blowing policy.  EDAP employees can raise any issue by reporting on our hotline at alerteprofessionnelle@edap-tms.com. These numerous and sometimes conflicting laws and

regulations include, among others, data privacy requirements, labor relations laws, tax laws, anti-competition regulations, “Know Your Customer” requirements, import and trade restrictions and export requirements.

We are also subject to healthcare laws and regulations pertaining to physician payment transparency, privacy, and data protection regulations. These regulations include, but are not limited to (i) the U.S. federal Health Insurance Portability and Accountability Act (“HIPAA”) of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, which governs the conduct of certain electronic healthcare transactions and protects the security and privacy of protected health information; (ii) the U.S. federal Physician Payment Sunshine Act (the “Sunshine Act”), which requires manufacturers of medical devices for which payment is available under Medicare, Medicaid, to report annually to the CMS information related to payments or other “transfers of value” made to physicians, (iii) two main sets of laws enacted in France about transparency requirements: “The French Anti-Gift Law”,  which regulates the provision of gifts, discounts and other incentives to physicians and the “Bertrand law” which imposes disclosure obligations on companies relating to benefits and remunerations granted to, and agreements concluded with, physicians and (iv) the provisions of the French Public Health Code relating to the processing and/or hosting of health-related personal data. Any failure to comply with these regulations may have a material adverse effect on our business, financial condition and results of operations.

Furthermore, in addition to HIPAA we are subject to other data privacy and protection laws and regulations that apply to the collection, transmission, storage and use of personally identifying information, which, among other things, impose certain requirements relating to the privacy, security and transmission of personal information. The legislative and regulatory landscape for privacy and data protection continues to evolve in jurisdictions worldwide, and there has been an increasing focus on privacy and data protection issues with the potential to affect our business. There are numerous European, French, U.S. federal and U.S. state laws and regulations related to the privacy and security of personal information. For example, in the European Union, the collection and use of personal data is governed by the provisions of the General Data Protection Regulation (“GDPR”), which took effect in May 2018. GDPR significantly increases the level of data protection and imposes a greater compliance burden on companies. In particular, it treats clinical data as personal data, requiring us or our subcontractors to implement more extensive procedures in the collection and processing of clinical trial data. Furthermore, the GDPR significantly increases the level of sanctions for non-compliance. The European Union data protection authorities have the power to impose administrative fines of up to a maximum of €20 million or 4% of our consolidated revenues for the preceding fiscal year, whichever is higher. GDPR is also supplemented by the provisions of the French data protection act (Law No. 78-17 of January 6, 1978), in particular in respect of the processing of personal data in the field of healthcare.  

Given the high level of complexity of these laws, and the fact that we do business in regions where regulatory compliance is less robust, including in Russia and parts of Asia, there is a risk that we may inadvertently breach some provisions, for example, through fraudulent or negligent behavior of individual employees or business partners, our failure to comply with certain formal documentation requirements, or otherwise. See “— General Risk Factors— “Our results of operations and financial condition could be adversely affected by the adverse economic changes, political, social and geopolitical developments, financial changes, and the impact of climate change.” Our success depends, in part, on our ability to anticipate these risks and manage these challenges. We have a decentralized international sales organization, and this structure may make it more difficult for us to ensure that our international selling operations comply with our global policies and procedures.

Violations of these laws and regulations could result in fines, criminal sanctions against us, our officers or our employees, requirements to obtain export licenses, cessation of business activities in sanctioned countries and prohibitions on the conduct of our business. Violations of laws and regulations also could result in prohibitions on our ability to offer our products in one or more countries and could materially damage our reputation, our brand, our international expansion efforts, our ability to attract and retain employees, or our business, results of operations and financial condition.

We sell our products in many parts of the world and, as a result, our business is affected by fluctuations in currency exchange rates.

We are exposed to foreign currency exchange rate risk because the mix of currencies in which our costs are denominated is different from the mix of currencies in which we earn our revenue. In 2024, 59% of our total costs of sales and operating expenses were denominated in euro, while 55% of our revenue was denominated in currencies other than euro (primarily the U.S. dollar and the Japanese yen). Our operating profitability could be materially adversely affected by large fluctuations in the rate of exchange between the euro and other currencies. For instance, a decrease in the value of the U.S. dollar or the Japanese yen against the euro would have a negative effect on our revenues, which may not be offset by an equal reduction in operating expenses and would therefore negatively impact operating profitability. From time to time we enter into foreign exchange forward sale contracts to hedge against fluctuations in the exchange rates of the principal foreign currencies in which our receivables are denominated (in particular, the U.S. dollar and the Japanese yen), but there can be no assurance that such hedging activities will limit the effect of movements in exchange rates on our results of operations. As of December 31, 2024, we had no outstanding hedging instruments. In addition, since any dividends that we

may declare will be denominated in euro, exchange rate fluctuations will affect the U.S. dollar equivalent of any dividends received by holders of ADSs. For more information concerning our exchange rate exposure, see Item 11, “Quantitative and Qualitative Disclosures about Market Risk.”

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Our by-laws and French corporate law contain provisions that may delay or discourage a takeover attempt.

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Provisions contained in our bylaws and French corporate law could make it more difficult for a third party to acquire our company, even if doing so might be beneficial to its shareholders. In addition, provisions of its bylaws impose various procedural and other requirements, which could make it more difficult for shareholders to affect certain corporate actions. These provisions include the following:

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The rights of shareholders in companies subject to French corporate law differ in material respects from the rights of shareholders of corporations incorporated in the United States.

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We are a French company with limited liability. Our corporate affairs are governed by our by-laws and by the laws governing companies incorporated in France. The rights of shareholders and the responsibilities of members of our Board are in many ways different from the rights and obligations of shareholders in companies governed by the laws of U.S. jurisdictions. For example, in the performance of its duties, our Board of Directors is required by French law to consider the interests of our company, our shareholders, our employees and other stakeholders, rather than solely our shareholders and/or creditors. It is possible that some of these parties will have interests that are different from, or in addition to, the interests of our shareholders.

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French law may limit the amount of dividends we are able to distribute, and we do not intend to pay cash dividends for the foreseeable future.

We currently intend to retain our future earnings, if any, to finance the further development and expansion of our business and do not intend to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and future agreements and financing instruments, business prospects and such other factors as our Board of Directors deems relevant.

Further, under French law, the determination of whether we have been sufficiently profitable to pay dividends is made based on our statutory financial statements prepared and presented in accordance with applicable French regulations. Moreover, pursuant to French law, we must allocate 5% of our unconsolidated net profit for each year, if any, to our legal reserve fund before dividends until the amount in the legal reserve is equal to 10% of the aggregate nominal value of our issued and outstanding share capital. Therefore, we may be more restricted in our ability to declare dividends than companies not based in France. Finally, payment of such dividends may subject us to additional taxes.

We expect to lose our foreign private issuer status in 2026, which will likely result in significant additional costs and expenses.

While we currently qualify as a foreign private issuer, the determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter. We do not expect to qualify as foreign private issuer as of the next determination on June 30, 2025, which will require us to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers as of January 1, 2026, which are more detailed and extensive than the requirements for foreign private issuers and have shorter deadlines, including with respect to annual and quarterly reports. In particular, Form 10-Q requires quarterly financial statements subject to auditor review.

The regulatory and compliance obligations and costs to us under U.S. securities laws as a U.S. domestic issuer will likely be significantly more than the obligations and costs we currently incur as a foreign private issuer. Once we lose our foreign private issuer status, we will be required to file periodic reports and registration statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive in certain respects than the forms available to a foreign private issuer. We would be required under current SEC and Nasdaq Global Market (“Nasdaq”) rules to modify certain of our policies to comply with corporate governance practices associated with U.S. domestic issuers. In addition, we will lose our ability to rely upon exemptions from certain corporate governance requirements on U.S. stock exchanges that are available to foreign private issuers and exemptions from procedural requirements related to the solicitation of proxies.

Judgments of U.S. courts, including those predicated on the civil liability provisions of the federal securities laws of the United States, may not be enforceable in French courts.

An investor in the United States may find it difficult to:

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Risks Relating to Ownership of our Ordinary Shares and the ADSs

Our securities may be affected by volume fluctuations, and may fluctuate significantly in price, causing investors to lose some or all of their investment.

Our ADSs, each of which represents one ordinary share, are traded on Nasdaq. The average daily trading volume of our ADSs in 2024 was approximately 75,000, the high and low bid price of our ADSs for the last two fiscal years ended on December 31, 2024, and December 31, 2023, was $8.50 and $12.65, and $2.12 and $3.60, respectively. Our ADSs have experienced, and are likely to experience in the future, significant price and volume fluctuations, which could adversely affect the market price of our ADSs without regard to our operating performance. For example, the average daily trading volume of our ADSs in December 2024 was 235,289 as opposed to 217,979 for the same period of 2023. The price of our securities and our ADSs in particular, may fluctuate as a result of a variety of factors, including changes in our business, operations and prospects, and factors beyond our control, including regulatory considerations, results of clinical trials of our products or those of our competitors, developments in patents and other proprietary rights, general market and economic conditions and results of operations being below analysts’ or investors’ expectations. Any downward

pressure on the price of ADSs caused by the sale of ADS’s could also encourage short sales of our ADS by third parties. In a short sale, a prospective seller borrows shares from a shareholder or broker and sells the borrowed shares. The prospective seller hopes that the share price will decline, at which time the seller can purchase shares at a lower price for delivery back to the lender. The seller profits when the share price declines because it is purchasing shares at a price lower than the sale price of the borrowed shares. Such sales could place downward pressure on the price of our ADSs by increasing the number of ADSs being sold, which could further contribute to any decline in the market price of our ADSs.

These broad market and industry factors may adversely affect the market price of our ADSs, regardless of our operating performance. If investors invest in our ADSs, investors could lose some or all of their investment.

In addition, periods of volatility in the market price of a company’s securities often trigger securities class action litigation. Any additional litigation, if instituted, causes and could cause us to incur substantial costs and our management resources are and could be diverted to defending such litigation, which could adversely affect our financial condition or results of operations.

Holders of ADSs have fewer rights than shareholders and must act through the Depositary to exercise those rights.

Holders of ADSs do not have the same rights as shareholders and accordingly cannot exercise the rights of shareholders against us. The Bank of New York Mellon, as Depositary (the “Depositary”), is the registered shareholder of the deposited shares underlying the ADSs, and therefore holders of ADSs will generally have to exercise the rights attached to those shares through the Depositary. We have used and will continue to use reasonable efforts to request that the Depositary notify the holders of ADSs of upcoming votes and ask for voting instructions from them. If a holder fails to return a voting instruction card to the Depositary by the date established by it for receipt of such voting instructions, or if the Depositary receives an improperly completed or blank voting instruction card, or if the voting instructions included in the voting instruction card are illegible or unclear, then such holder will be deemed to have instructed the Depositary to vote its shares and the Depositary shall vote such shares in favor of any resolution proposed or approved by our Board of Directors and against any resolution not so proposed or approved.

If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our market or business, our ADS price and trading volume could decline. 

The trading market for our ADSs will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts who cover us downgrade our securities or publish inaccurate or unfavorable research about our business, our ADS price would likely decline. In addition, if our operating results fail to meet the expectations of our investors or forecasts of research analysts, our ADS price would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our ADSs could decrease, which might cause our ADS price and trading volume to decline. 

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We are subject to different corporate disclosure standards that may limit the information available to holders of our ADSs.

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As a foreign private issuer, we are not required to comply with the notice and disclosure requirements under the Exchange Act relating to the solicitation of proxies for shareholder meetings. Although we are subject to the periodic reporting requirements of the Exchange Act, the periodic disclosure required of foreign private issuers under the Exchange Act is more limited than the periodic disclosure required of U.S. issuers. Therefore, there may be less publicly available information about us than is regularly published by or about other public companies in the United States.

Preferential subscription rights may not be available for U.S. persons.

Under French law, shareholders have preferential rights to subscribe for cash issuances of new shares or other securities giving rights to acquire additional shares on a pro rata basis. U.S. holders of our securities may not be able to exercise preferential subscription rights for their shares unless a registration statement under the Securities Act is effective with respect to such rights or an exemption from the registration requirements imposed by the Securities Act is available. We may, from time to time, issue new shares or other securities giving rights to acquire additional shares (such as warrants) at a time when no registration statement is in effect and no Securities Act exemption is available. If so, U.S. holders of our securities will be unable to exercise their preferential rights, and their interests will be diluted. We are under no obligation to file any registration statement in connection with any issuance of new shares or other securities.

For holders of ADSs, the Depositary may make these rights or other distributions available to holders after we instruct it to do so and provide it with evidence that it is legal to do so. If we fail to do this and the Depositary determines that it is impractical to sell the rights, it may allow these rights to lapse. In that case, the holders of ADSs will receive no value for them.

General Risk Factors

Our results of operations and financial condition could be adversely affected by the adverse economic changes, political, social and  geopolitical developments, financial changes, and the impact of climate change.

Political, social and geopolitical conditions in the markets in which our products are sold have been and could continue to be difficult to predict, resulting in adverse effects on our business. The ongoing armed conflict between Russia and Ukraine, and the escalation of violence and potential further conflicts in the Middle East, as well as the global geopolitical situation, may affect regional stability and economic growth throughout the world.

It is difficult to predict the consequences and outcomes of these conflicts, which will depend on developments outside of our control, including, but not limited to the duration and severity of the conflicts, and the consequences of the ongoing and additional financial and economic sanctions imposed by governments in response. As the situation is evolving, and additional sanctions may be implemented, such new restrictions could adversely affect the global economy, prices and energy supply, financial markets, supply chains, and could adversely affect our business, financial condition, and results of operations.

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As we evaluated the impact of the consequences related to the conflict between Russia and Ukraine on our business, in 2022, we decided to definitively close our representative office in Moscow to avoid further difficulties in maintaining a direct administrative and operational activity in Russia. Net sales in Russia are not significant as they represented approximately 0.8% in 2023 and 1.0% in 2024 of our consolidated revenues.  Our sales in Russia are historically subject to significant variation and long purchase order periods.  We have an established exclusive distribution agreement with a business partner with significant experience in marketing and distributing medical equipment in Russia. This partnership will allow us to continue offering a HIFU solution to Russian patients and to maintain our existing installed base in Russia. To date, we have not experienced any material disruptions in our business with Russia, but we cannot predict outcomes that such conflict may have on our future results of operations.

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In addition, as a result of the 2024 presidential and legislative elections in the United States, changes to applicable laws and regulations that have been announced, proposed, and/or adopted, or could be made or expanded in the future, may result in new or expanded trade restrictions by the United States and/or other countries, including, but not limited to, tariffs or import taxes being applied to imported goods and services that could affect our operations and exports into the United States. Other countries may implement trade restrictions and/or retaliatory measures as well.

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Moreover, uncertain global climate change may result in certain types of more intense and more frequent natural disasters including, but not limited to hurricanes, wildfires or flooding or sustained periods of extreme weather. Such extreme disasters could imply risks to our facilities and disrupt our supply chain or our final customers’ sites and may cause us to incur additional operational costs. Such intense events may also trigger internet security threats or damage to global communication networks that would harm our global operations and our customers’ operations. Climate change may also result in new regulatory or legal obligations to address the effects of climate change on the environment or the effect of our operations and those of other companies on the environment. Such new obligations could cause increased compliance costs to meet any new regulatory or legal requirements and may adversely affect sourcing, manufacturing operations (such as eco-design), and the distribution of our products. Such natural disasters could have a material adverse impact on our business, financial condition, results of operations, or cash flows.

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We may also be unable to meet the future criteria used by rating agencies in their environmental, social and governance (“ESG”) assessments process, leading to a downgrading in our rating, when applicable. Financial investments in companies which perform well in ESG assessments are increasingly popular, and major institutional investors have made known their interest in investing in such companies. Depending on ESG assessments and on the rapidly changing views on acceptable levels of action across a range of ESG topics from investors, we may be unable to meet society’s or investors’ expectations on these matters, which may cause reputational harm, or disappoint the expectations of our stakeholders, and we may face increased compliance or other costs and demand for securities issued by us and our ability to participate in the debt and equity markets may decrease.

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Finally, in recent years, “anti-ESG” sentiment has gained momentum across the U.S., with several states and Congress having proposed or enacted “anti-ESG” policies, legislation, or initiatives or issued related legal opinions. The U.S. President recently issued an executive order opposing diversity equity and inclusion (“DEI”) initiatives in the private sector. Such anti-ESG and anti-DEI-related policies, legislation, initiatives, litigation, scrutiny and other actions could result in additional compliance obligations, our company becoming the subject of investigations and enforcement actions or otherwise suffering reputational harm.

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Global potential inflation may have a material adverse effect on our business, results of operations and financial condition.

Current geopolitical instability including the conflict in the Middle East and in Ukraine and the related sanctions, and other factors including, but not limited to, global supply chain constraints, key components sourcing issues, increase in prices and disruptions of energy supply, and labor shortages, have led to higher worldwide inflation, which is likely, in turn, to lead to an increase in costs and may cause additional changes in tax and governmental policies. We may be unable to raise the prices of our devices and services in a higher inflationary environment and keep up with the rate of inflation. Such inflationary pressures may materially impact our business. We may not be able to adjust pricing, reduce our costs or implement counter measures quickly enough to offset cost increases. Our customers (i.e., hospitals and clinics) are also experiencing financial and operational pressures directly related to this inflationary environment, which may impact their ability or willingness to spend on capital equipment and this may have an adverse impact on our business, financial condition, results of operations, or cash flows.

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We may issue additional securities that may be dilutive to our existing shareholders, in view of funding our new developments and accelerating our business expansion.

Our operations have consumed substantial amounts of cash since inception. We expect to use our cash resources to develop and further commercialize our products, develop new products, and for working capital and general corporate purposes. We will require additional capital to further develop and commercialize our products and to develop new products. In addition, our operating plans may change because of many factors that may currently be unknown to us, and we may need to seek additional funds sooner than planned.

On June 28, 2024, our shareholders renewed and extended resolutions allowing the Board of Directors to issue new shares in an aggregate maximum amount of 15 million shares in order to meet any fundraising opportunities that may be necessary to finance our further developments and to address any potential strategic opportunities for our long-term growth. As of December 31, 2024, no shares have been issued related to this resolution.

We cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. The issuance of additional ordinary shares, including any additional ordinary shares issuable pursuant to the exercise of preferential subscription rights that may not be available to all of our shareholders, would reduce the proportionate ownership and voting power of the then-existing shareholders. Moreover, the availability of additional capital, whether debt or equity from private capital sources (including banks) or the public capital markets, fluctuates as our financial condition and industry or market conditions change generally. There may be times when the private capital markets and the public debt or equity markets lack sufficient liquidity or when our securities cannot be sold at attractive prices, in which case we would not be able to access capital from these sources on favorable terms, if at all. We can give no assurance as to the terms or availability of additional capital.

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On June 28, 2024, our shareholders also adopted resolutions allowing the Board of Directors to issue 2,000,000 new shares under the form of subscription options and 600,000 free shares to motivate and reward the teams dedicated to successfully implementing our worldwide activities. These new resolutions superseded previous resolutions. Based on June 28, 2024, resolutions, a total of 106,000 subscription options were granted to certain employees in late 2024 and 493,000 subscription options were granted in the first half of 2024 based on previous resolutions, under certain conditions. As of December 31, 2024, we had 3,030,913 subscription options outstanding. No free shares were granted to employees in 2024 under June 28, 2024, resolutions. Under French law, only our employees

with an employment contract and corporate officers, such as the Chief Executive Officer and the Chairman of the Board of Directors (mandataires sociaux) may receive free shares or stock-options. Non-executive directors may not receive free shares nor stock-options.

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We may in the future be the target of securities class action or other litigation, which could be costly and time consuming to defend.

In the past, securities class action litigation has often been brought against companies following a decline in the market price of their securities. This risk is especially relevant for us because innovative life sciences and medical device companies have experienced significant stock price volatility in recent years.

Any litigation, if instituted, could cause us to incur substantial costs and our management resources may be diverted to defending such litigation, which could adversely affect our financial condition or results of operations.

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Item 4. Information on the Company

General

We develop, manufacture, promote and distribute advanced non-invasive ultrasound technologies for both diagnosis and treatment of various diseases. We have introduced the Focal One^® Robotic HIFU (high-intensity focused ultrasound) system around the world including in the U.S., Europe, Latin America, the Middle East and parts of Asia. We also currently offer customers a complete solution from diagnosis to treatment of prostate disease with the distribution of complementary products on behalf of third parties. Finally, we service systems for the treatment of urinary tract stones. Our technologies include lithotripter systems based on Extracorporeal ShockWave Lithotripsy (“ESWL”) technology and advanced surgical laser systems. Recently, we have shifted to a growth strategy aimed at developing our core proprietary HIFU activities and placing less emphasis on our non-HIFU distribution and ESWL business activities.

History and Recent Developments of the Company

Our legal name is EDAP TMS S.A., and our commercial name is Focal One^®. In 2023, we elevated the Focal One brand name to further support our growing global sales and marketing activities. This change reflects our focus on our Focal One Robotic HIFU system and enhances our visibility in targeted markets.

EDAP TMS S.A. was incorporated on December 3, 1979, as a société anonyme organized under the laws of France for a duration of 60 years from the date of incorporation. Our principal executive offices are located at Parc d’Activités la Poudrette-Lamartine, 4/6, rue du Dauphiné, 69120 Vaulx-en-Velin, France and our telephone number is +33 (0) 4 72 15 31 50. EDAP Technomed, Inc., located at 5321 Industrial Oaks Blvd, Suite 110, Austin, TX 78735, is our agent for service of process in the United States. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding the Company’s electronic filings with the SEC. Such electronic filings can be found by visiting the SEC website at http://www.sec.gov or the Company’s website at http://www.focalone.com, section “Investor Relations.”

In March 2024, our Focal One HIFU platform was granted Breakthrough Device designation by the U.S. Food and Drug Administration (“FDA”) for the treatment of deep infiltrating endometriosis. 

On October 1, 2024, we announced the first patients treated in a Phase I/II study evaluating the Company’s proprietary Focal One^® robotic HIFU technology for the treatment of benign prostatic hyperplasia (“BPH”).

On December 4, 2024, the full and final results from the HIFI study were published in the prestigious, peer-reviewed journal, European Urology. The HIFI Study, a large, prospective, multicenter, non-inferiority study, compares and evaluates HIFU versus radical prostatectomy as a first line treatment of localized prostate cancer. The HIFI study demonstrated that patients receiving HIFU treatments had better outcomes with respect to urinary continence and erectile function compared to patients receiving radical prostatectomy treatments.

 Our capital expenditures in the years ended December 31, 2024, 2023 and 2022 amounted to €4,120 thousand, €4,344 thousand and €2,378 thousand, respectively. These expenditures primarily related to acquisitions and additional considerations linked to purchased licenses, and acquisitions of laboratory equipment. Clinical research and development costs are not capitalized until marketing authorizations are obtained. We expect our capital expenditures to increase in absolute terms in the near term as we continue to advance

our research and development programs and grow our operations. We anticipate our capital expenditure in 2025 to be financed from our cash and cash equivalents on hand. Primarily, these capital expenditures will be made both in France and the United States, where our research and development facilities are currently located. Additional information regarding the principal capital expenditures and divestitures can be found in Item 5, “Operating and Financial Review and Prospects—Operating Results—Overview.”

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Business Overview & Strategy

EDAP TMS S.A. is a holding company and is responsible for providing common services to its subsidiaries, including preparation and consolidation of the Company’s financial statements, complying with the requirements of various regulatory agencies and maintaining the listing of its publicly held securities and, in conjunction with its Board of Directors, directing the overall strategy of the Company.

Our activity is currently reported through three divisions: HIFU, ESWL and Distribution. The HIFU division includes sales of Focal One, related consumables and services. The ESWL division includes revenues generated by servicing the existing installed base of EDAP’s family of lithotripters. The Distribution division includes the sale of complementary products such as ExactVu 29 MHz micro-ultrasound systems, surgical lasers and other products from third parties.

Our global strategy is to expand our HIFU activities in the U.S. and worldwide to accelerate Focal One Robotic HIFU adoption. We are also focusing on our HIFU product and clinical and commercialization efforts, with the goal of expanding clinical indications beyond the management of prostate cancer.  Going forward, we intend to focus the majority of our efforts and resources on our core proprietary HIFU activities while maintaining select distribution relationships.

We operate in Europe, the Americas, Asia and the rest of the world. Total net sales for the HIFU division (net contributions to total consolidated sales) were €23.9 million, €20.6 million and €15.6 million for 2024, 2023 and 2022, respectively. Those sales are generated in Europe, the United States and the rest of the world, excluding certain countries in Asia, such as Japan, where our HIFU systems are not approved yet. Total net sales for the ESWL division were €9.0 million, €9.9 million and €11.6 million, each for 2024, 2023 and 2022, respectively. Total net sales for the Distribution division were €31.3 million, €29.9 million and €27.9 million, each for 2024, 2023 and 2022, respectively.

See Note 29 to our consolidated financial statements for a breakdown of total sales and revenue during the past three fiscal years by operating division and Item 5, “Operating and Financial Review and Prospects.”

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HIFU Division

We are engaged in the development, manufacturing and marketing of the Focal One Robotic HIFU system for the non-invasive focal treatment of urological and other clinical indications. Our HIFU business is cyclical and generally linked to lengthy hospital decisions and investment processes. Hence, our quarterly revenues are often impacted and fluctuate according to these parameters, generally resulting in higher purchasing activity in the last quarter of the year. The HIFU division contributed €23.9 million to our consolidated net sales during the fiscal year ended December 31, 2024.

HIFU Division Business Overview

As of December 31, 2024, the HIFU division had an active installed base of 130 Focal One systems, including 65 in the U.S.

Focal One Robotic HIFU technology uses high-intensity focused ultrasound generated by high power transducers to deliver energy to targeted tissue. HIFU technology allows surgeons to ablate a well-defined area of diseased tissue, without damaging surrounding healthy structures. This non-invasive outpatient treatment option eliminates the need for surgery, blood loss, and overnight hospital stays while also minimizing side effects that impact patients’ quality of life. Urologists use Focal One Robotic HIFU to treat a subset of patients diagnosed with prostate cancer who are not candidates for radical treatment including surgery or radiation therapy. In addition, Focal One Robotic HIFU is used by urologists to treat patients who have experienced a recurrence after radiation therapy.

In addition to selling HIFU systems, the HIFU division also records revenues driven from sales of (i) disposables, (ii) equipment leases, (iii)  RPP and (iv) equipment service contracts.

In certain regions of the world, we offer a HIFU mobile treatment option, which provides access to our Focal One HIFU systems without requiring hospitals and clinics to make an up-front investment in the equipment. Instead, hospitals and clinics perform treatments using these systems and remunerate us on an RPP basis (i.e., based on the number of individual treatments provided). With this model, once the treatment is established in the medical community, a permanent installation may become more attractive, leading to the sale of the Focal One system.

The HIFU division also generates revenues from net sales of maintenance services associated with our installed Focal One HIFU systems.

HIFU Division Business Strategy

Our business strategy is to capitalize on our deep expertise in HIFU to achieve long-term growth as a leader in the development, manufacturing, marketing and distribution of non-invasive robotic HIFU systems for urology-related and other indications. We believe that non-invasive focal HIFU treatments in the management of prostate cancer provide an alternative to current more invasive therapies while reducing costs and lowering morbidity. The key elements of our strategy are:

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HIFU Products

Currently, we commercialize the Focal One Robotic HIFU system. Focal One is an image guided, robotic HIFU system dedicated to delivering focal therapy for the management of prostate cancer. Focal One combines three essential components to efficiently perform a focal treatment of localized prostate cancer: (i) high-quality ultrasound imaging along with imported patient-specific MRI imaging or biopsy information to localize tumors, (ii) high-precision, sub-millimeter accuracy HIFU treatment delivery focused on the identified target areas and (iii) the ability to provide immediate feedback on the delivery of treatment utilizing contrast-enhanced ultrasound imaging.

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HIFU Patents and Intellectual Property

As of December 31, 2024, the HIFU division’s patent portfolio contained a total of 34 granted, owned or co-owned patents consisting of eight granted patents in the United States, 10 patents in the European Union, eight patents in Japan and eight patents in China. These patents belong to 10 groups of patents covering technologies related to therapeutic ultrasound principles, systems and associated software.

Additional owned or co-owned patent applications covering certain other aspects of our HIFU technology, including one international patent application under the Patent Cooperation Treaty, two patent applications in the United States, five patent applications

in the European Union, three patent applications in Japan and three patent applications in China, are currently pending before the relevant patent offices.

Our ongoing research and development objectives are to maintain our leadership position in the treatment of prostate cancer using HIFU and to extend our HIFU technology to new clinical applications and for future development of new therapeutic ultrasound systems. These research projects are conducted in cooperation and collaboration with the Laboratory of Therapeutic Applications of Ultrasound (“LabTAU”), as part of the French National Institute for Health and Medical Research (“INSERM”). This collaboration gives rise in some cases to the filing of patent applications, followed by the grant of co-owned patents. We have entered into license agreements with INSERM related to certain patents co-owned with INSERM whereby we commit to pay an amount of royalties to INSERM based on a fixed rate of the net revenues generated from the sales of HIFU systems using co-owned patents. Under these agreements, which last for the life of each co-owned patent, we have the exclusive right to the commercial use of the co-owned patents, including the right to out-license such commercial rights. We have an option to obtain an exclusive license from INSERM relating to other patents co-owned with INSERM.

Although we believe that our HIFU patents are valid and should be enforceable against third parties and that our patent applications should, if successfully pursued, result in the issuance of additional enforceable patents, there can be no assurance that any or all of these patent applications, if issued, will provide effective protection for the HIFU division’s proprietary rights in such technology. HIFU systems, as they are currently or may in the future be designed, may also be subject to claims of infringement of patents owned by third parties, which could result in an adverse effect on our ability to market HIFU systems. See Item 3, “Risk Factors—Risks relating to Intellectual Property Rights.”

HIFU Clinical and Regulatory Status

Clinical and Regulatory Status in Europe

Based on clinical study results, we obtained a CE Marking for Focal One in June 2013, which allowed us to market Focal One in the European Union and in worldwide territories where CE Marking is required. On March 15, 2023, European regulation N°2023/607 extended the validity of our Focal One CE certificate until December 31, 2028. Ablatherm systems previously placed on the market are maintained for use according to applicable regulations. Focal One is the only HIFU system now being commercialized to potential new customers in Europe and territories covered by CE Marking.

Clinical and Regulatory Status in the United States

In November 2015, we received 510(k) clearance from the FDA to market Ablatherm Integrated Imaging HIFU in the U.S. for the ablation of prostate tissue. In October 2017, we were granted a 510(k) clearance for our Ablatherm Fusion system.

On June 7, 2018, we obtained FDA 510(k) clearance for our Focal One system based on the Ablatherm clearance and European pre-market and post-market clinical data.

Clinical and Regulatory Status in Japan

We have initiated discussions with the Japanese authorities (“PMDA”) on the process to apply to obtain Japanese approval for our Focal One system. We are initiating a clinical trial in Japan to obtain clearance for the Focal One system. The process of requesting approval to market the Focal One in Japan may be long and may never result in the approval to market the Focal One in Japan. See Item 3, “Risk Factors—Our future revenue and income growth depends, among other things, on implementing our business strategy, which largely depends on the success of our HIFU technology, and our capacity to scale our operations to manage and sustain our future growth” and “— Our clinical trials related to products using HIFU technology may not be successful, and we may not be able to obtain regulatory approvals necessary for commercialization of all of our HIFU products.”

Clinical and Regulatory Status in China

After thorough review of the regulatory processes, possible strategies to access the Chinese market and the significant associated costs, we decided to pause further activities related to registration of Focal One in China.

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Clinical and Regulatory Status in the Rest of the World

The Focal One system is cleared for distribution in Argentina, Brazil, Canada, Costa Rica, Ecuador, Hong Kong, Israel, Malaysia, Morocco, Serbia, Russia, Singapore, South Korea, Switzerland, Taiwan, Turkey, the United Arab Emirates, the United Kingdom and Uruguay.

See Item 3, “Risk Factors—We operate in a highly regulated industry and our future success depends on obtaining and maintaining government regulatory approval of our products, which we may not receive or be able to maintain or which may be delayed for a significant period of time.”

HIFU Clinical Developments

HIFU in the Management and Treatment of Prostate Cancer

In 2015, a clinical study aiming at evaluating the reimbursement of HIFU in France was initiated within the scope of “Forfait Innovation” (the “HIFI” Study) and piloted by the French Association of Urology (“AFU”). The HIFI Study compares total or sub-total HIFU vs. radical prostatectomy as a first line treatment in grade groups (“GG”) <3 localized prostate cancer or as a salvage treatment post radiation. The objectives were to compare oncological efficacy, functionality and safety outcomes. The patients’ inclusion period closed on September 30, 2019. The 3,328 patients included in the HIFI Study were followed for 30 months ahead of data analysis and results publication. During that follow-up period, we pursued patient treatments using HIFU under the specific Forfait Innovation coverage process, but these patients were not followed as part of the HIFI Study. In March 2023, the Study Coordinator presented the preliminary results of the HIFI Study at the European Association of Urology congress. Final results were presented at the 2024 Annual Meeting of the European Association of Urology in March as well as the American Urological Association in May. The full results from the HIFI study were published in the prestigious, peer-reviewed journal, European Urology in December 2024. The study shows that Focal One Robotic HIFU is non-inferior to surgery, meeting primary endpoints of non-inferiority for Salvage Treatment-free Survival after HIFU compared to radical prostatectomy at 30 months and that patients receiving HIFU had better outcomes with respect to urinary continence and erectile function compared to patients receiving radical prostatectomy. The publication includes a section titled “What does this study add?” concluding that “This nationwide trial is the first to prospectively compare HIFU and surgery for the treatment of localized prostate cancer. The results demonstrate that medium-term salvage treatment–free outcomes are comparable, with a better safety profile favoring HIFU.”

Following the completion and analysis of the HIFI Study submitted to the French National Authority for Health (“HAS”), a positive favorable opinion was issued in late 2023 to include HIFU as a procedure covered under the national universal health, Social Security system (“Sécurité Sociale”). This favorable opinion relates to HIFU as a primary treatment of intermediate risk localized prostate cancer as well as a salvage option after failed radiotherapy. Based on this positive opinion from the HAS, the French Social Security authorities can now use this recommendation for including HIFU procedures in its next cycle to determine the procedure’s reimbursement rate and the timing for when such reimbursement would go into effect.

In 2017, a clinical study addressing Focal Ablation vs Radical Prostatectomy (“FARP”), sponsored by Oslo University was initiated and aimed at comparing focal ablation and robot-assisted radical prostatectomy for treating patients with unilateral clinically significant prostate cancer. A total of 213 patients were enrolled and randomized to either arm. Patient inclusion was completed in June 2021. According to recent abstracts presented by the Principal Investigator at several major scientific meetings, the rate of treatment failure after two years post procedure in the focal ablation group was found to be non-inferior to that in the radical prostatectomy group. The functional outcomes, in particular the urinary continence rate evaluated with de novo pad use as well as the sexual function evaluated with the International Index of Erectile Function show a statistically significant superiority in favor of HIFU compared to surgery. The FARP study was completed in December 2024.

In July 2017, we, together with our academic, scientific and clinical partners, initiated a collaborative project (the “PERFUSE Project”) under the “French National Investment Program for the Future”. The overall objective of the PERFUSE Project is two-fold: (i) to set up several clinical studies to assess focal therapy using the Focal One system in view of a better understanding of focal therapy in prostate cancer management and, (ii) to prepare a change of paradigm in the treatment of prostate cancer via technical innovations such as focal therapy. The whole project was awarded funding of €8 million over five years. We, as a partner of the PERFUSE Project, are to receive approximately €1.2 million over the period as a non-refundable grant. As of December 31, 2024, we had received a non-refundable grant of €1.0 million.

As part of the PERFUSE Project, several studies were initiated and sponsored by an academic partner HCL - Edouard Herriot Hospital. In September 2018, a Phase II multi-centric study was launched to evaluate the efficacy and safety of HIFU focal therapy in

patients with intermediate-risk single-lobed prostate cancer (the “FOCALE” study). 172 patients were included in the FOCALE study over 14 centers. The last patient was included in May 2021. Inclusions are now closed, patient follow-up is on-going and the last patient follow-up visit is scheduled for October 2025. In October 2018, a Phase III, multi-centric, randomized study was initiated aiming at evaluating the efficacy of focal HIFU versus active surveillance hence reducing the need for radical treatment for low-risk prostate cancer patients (the “HIFUSA” study). As of December 31, 2024, 106 patients have been included within 14 French centers. Patient inclusion is now closed. Patient follow-up is on-going and last patient follow-up visit is scheduled for October 2026.

The majority of academic centers using the Focal One system are collecting data following an Investigational Review Board approval in order to continue building clinical evidence and long-term HIFU outcomes. These various sources of clinical data are a basis for individual sites to present abstracts at regional, national or international conferences and submit manuscripts for peer-review to renowned journals and publications. This holds the potential for the FDA, which cleared HIFU for prostate tissue ablation in 2015, to re-evaluate the technology in the future for prostate cancer indication. Likewise, prospective data collection efforts documenting HIFU data from patients in and out of the U.S. may lead to health insurance reimbursements on a wider scale.

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HIFU for Potential Treatment of BPH

As part of our exploration of the use of HIFU in other urology related indications, we are studying the use of Focal One in BPH.

In 2021, we initiated a mono-centric Phase I study to investigate the feasibility of BPH HIFU treatment with a Focal One system. A total of nine patients were treated, and the treatment safety was evaluated three months after HIFU treatment.

In 2024, we initiated a combined Phase I/II study evaluating our proprietary Focal HIFU technology for the treatment of BPH. A total of 185 patients are to be included in the study. This Company-sponsored, prospective, multicenter clinical trial is designed as a two-part study. Part 1 of the study is designed to define the optimal treatment parameters to effectively treat BPH and its related symptoms with minimal side effects. Part 2 of the study will expand patient enrollment across a larger number of treatment centers in order to validate the safety and efficacy of the parameters as defined in Part 1 of the study. As of December 31, 2024, six patients have already been treated under this protocol.

HIFU for Potential Treatment of Deep Infiltrating Rectal Endometriosis  

As part of our exploration of the use of HIFU outside of urology, we are exploring the use of Focal One in gynecology to treat deep infiltrating endometriosis.

In 2020, we initiated a Phase II multi-center clinical study in France to further investigate the use of Focal One Robotic HIFU in the treatment of certain types of deep endometriosis situated in the low rectum. The study was completed in September 2022: a total of 60 women were enrolled in the study at four major hospitals in France and assessed over a six-month follow-up period.  The intended endpoint was to evaluate the safety and efficacy of HIFU for this pathology. Data from this study have been analyzed and final results on safety and efficacy were presented in France at the Pari(s) Santé Femmes Gynecology Congress in early 2023 as well as in a plenary session at the European Society for Gynecological Endoscopy Annual Congress in October 2023 and at the American Association of Gynecology Laparoscopists meeting in November 2023.  

In 2021, we initiated a long-term follow-up study aimed at including all patients treated by HIFU for their Rectovaginal endometriosis in the Phase I and II studies. During this study, we will evaluate the quality of life and the symptom levels of the patients up to five years after their HIFU treatment. As of December 31, 2024, 111 patients have accepted to be included in the follow-up study.

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In late 2022, we received approval from the French authorities to initiate a Phase III randomized, controlled clinical trial evaluating Focal One HIFU as a potential treatment for deep infiltrating endometriosis. This study is a level 1 multi-center, double blind, randomized, controlled clinical trial. HIFU treatment was compared to a sham treatment. The study enrolled 60 patients across nine centers in France, with 30 patients randomized to each group. The primary efficacy endpoint was acute pelvic pain evolution three months post procedure. Patient inclusions were completed in January 2024. The three-month follow-up data confirmed the safety observed in prior studies. At three months post procedure, the study’s primary endpoint of reduced acute pelvic pain in the HIFU treatment arm compared to the sham treatment arm was not met. At the end of 2024, 85% of the patients from the sham treatment arm have elected to cross-over into the open-label extension arm of the study and thus received treatment with robotic HIFU as allowed per protocol. All patients from this Phase III study will be followed during five years and will be included in the Long-Term Follow-Up Study as described above.

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HIFU for Potential Treatment of Solid Organ Tumor

As previously announced, the Company supported early exploration of HIFU use to ablate localized tumors of the pancreas.

In 2024, as part of a cooperation with Centre Leon Bérard, Lyon, France, a Phase I-II study was initiated to evaluate the safety and tolerance of intraoperative HIFU treatment in pancreatic tumors, including 26 patients. One patient was treated in December 2024 and discharged without complications.

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HIFU Clinical Publications

To date, clinical results related to our Robotic HIFU systems have been published in renowned peer-reviewed journals.

Prostate cancer publications

In February 2022, Hong et al., from Seoul National University Bundang Hospital, Korea, published in the Journal of Society Urological Oncology their results on their retrospective study on 163 patients who underwent Partial Gland HIFU Ablation (“PGA”) by Focal One with a median follow up period of 17 months. The results concluded that the PGA with HIFU was safe and showed good preservation of functional outcomes as well as satisfactory oncological control.

In October 2022, De Luca et al., from San Luigi Gonzaga University Hospital, Italy published in the Minerva Urology and Nephrology journal their results on their prospective study on 100 patients with low to intermediate-risk prostate cancer that received customized HIFU ablation by Focal One with 12 months of follow up: 15 patients underwent total ablation, 50 patients hemi-ablation and 35 patients focal ablation. Control biopsy at 12 months of the HIFU-treated zone was negative in 80% for total ablation, 84% for partial and 80% for focal ablation with in-field reoccurrence being less than 10% after hemi-ablation. Patients had postoperative excellent quality of life with lower rate of irritative symptoms and negligible impact on voiding and erectile function scores. 100% of patients that received focal and partial HIFU ablation retained potency.

In December 2022, Jung G, et al., from Seoul National University Bundang Hospital, Korea, published in the journal of Prostate International their results on their propensity score-matched retrospective study on 685 patients who underwent PGA using HIFU with Focal One (137 patients) versus Robot-Assisted Radical Prostatectomy (548 patients) with a median follow-up period of 22 months. The authors confirmed that PGA HIFU preserves urinary and erectile functions, with a slight/minor loss of efficiency, which remained however very satisfactory (80% success rate efficacy). The results concluded that 5.8% underwent salvage treatment with postoperative incontinence and erectile dysfunction being more favourable in PGA compared to Robot-Assisted Radical Prostatectomy.

In July 2023, Mattlet et al, from University of Brussels, Brussels, Belgium published their results in The Prostate Journal from a retrospective analysis on 178 patients that underwent HIFU with Ablatherm (2001-2015) and Focal One (2005-2021). 12% of patients included in the study received neoadjuvant androgen deprivation therapy. Patients received customized ablation based on lesion location with 52% of patients receiving hemi-ablation. Treatment free survival and failure free survival were 89% and 98% respectively, at 60 months without Huber et al criteria. However, for patients with Huber et al. criteria, 23% of patients had treatment failure at 26 months. Therefore, the Huber et al. criteria was found accurate to predict the need for additional treatment.

In September 2023, Debard C et Al., from CHU de Pellegrin, Bordeaux, France published in the journal of Progrès en urologie their results on their retrospective and multicenter study on 137 patients with low- or intermediate-risk localized prostate cancer treated with Focal One. 70% of patients had clinical stage T2, 64% had an ISUP score of 2 or 3 on initial biopsies and 61% were treated with “targeted” ablation. According to the authors, the selection of patients treated with focal therapy is a key point for the success of the technique and the inclusion criteria that varied according to the studies. The authors conclude: “Our results are in agreement with those of the literature, seeming to indicate a lower morbidity of the focal treatment by HIFU compared to the radical treatments while offering an acceptable oncological control.”

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In October 2023, Kaufmann B et al., published in the British Journal of Urology (“BJUI”) their results on a study aiming at assessing the oncological and functional outcomes of HIFU in treating low to intermediate risk prostate cancer a 3-year prospective study was undertaken using rigid post-ablation saturation biopsies. Patients with either low (6.6%) or intermediate (93%) risk prostate cancer underwent focal ablation around the lesion(s) of interest. All patients had transperineal template saturation biopsy (>20 cores) in-conjunction with MRI guided fusion biopsy. Over half the patients underwent a follow up biopsy. The Failure-Free Survival (“PROMIS”) and Salvage-Free Survival rate at 36 months was 65% and 81% respectively. They concluded that Focal HIFU treatment for localized prostate cancer (“PCa”) shows excellent functional outcomes with half of the patients remaining cancer-free after three years. The in-field recurrence (GG2 disease or higher) rate is as follows: 18%, 18%, and 17% at six, 12, and 36 months, respectively.

Urinary and sexual function remained unchanged per the Expanded Prostate Cancer Index Composite. In their conclusions, the authors stated: “Whole-gland treatment was avoided in 81% of patients. Early follow-up biopsies are crucial to change or continue the treatment modality at the right time, while the use of MRI and PSA in detecting PCa recurrence is uncertain.”

In November 2023, Mala KS, et al., from Berlin Charité University Medicine, Germany, published in the Journal of the Clinical Medicine their results on their retrospective study on 57 patients with localized PCa using HIFU with Focal One. HIFU treatment was performed as focal, partial, or hemi ablative, depending on the prior histopathology. Out of 26 men that received biopsy, eight (15.8%) had in-field reoccurrence. The rate of post-HIFU complications was low, at 19.3%. Continence was preserved and erectile function was comparatively better than with radical prostatectomy. The study concluded that HIFU as a therapy option for nonmetastatic, significant prostate cancer is effective in the short term for carefully selected patients and shows a low risk of adverse events and side effects.

In November 2023, Rischman P. et al. published in the Progrès en Urologie, their results on salvage HIFU for local recurrence after first-line radiotherapy in 531 patients. This HIFI-2 study was developed as part of the “Forfait Innovation” program to evaluate the efficacy and safety of HIFU in the salvage treatment of localized PCa after failure of first-line radiotherapy. This is a prospective, multicenter, open-label study within the framework of the Forfait Innovation program, promoted by the AFU. Thirty months after post-radiotherapy salvage HIFU, 72% of patients were spared hormonal treatment. Pre-therapy PSA and Gleason score data suggest a better outcome (up to 85% HT-free survival at 30 months) when, in the presence of biological recurrence after radiotherapy, a recommendation is made for earlier management.

In December 2024, Ploussard G. et al. published in the peer-reviewed journal European Urology the full results of the HIFI study. HIFI is the largest, prospective, comparative, multi-center, clinical study ever conducted comparing prostate cancer treatments. The HIFI study showed that Focal One Robotic HIFU is non-inferior to surgery, meeting primary endpoint of non-inferiority for Salvage Treatment-free Survival after HIFU compared to radical prostatectomy at 30 months. The study demonstrated that patients receiving HIFU had better outcomes with respect to urinary continence and erectile function compared to patients receiving radical prostatectomy. This seven-year study (April 2015 - March 2022) enrolled a total of 3,328 patients from 46 treatment centers: 1,967 consecutive patients were treated with EDAP’s robotic HIFU technologies, where Focal One was used for 90% of the patients, and 1,361 patients underwent radical prostatectomy surgery. All patients were followed for 30 months.  

Endometriosis publications

In September 2020, Philip CA et al, from Croix Rousse Hospital, Lyon, France, published in Ultrasound Obstetric Gynecology journal, the results of the treatment of 20 patients with deep recto vaginal endometriosis using Focal One HIFU. This EDAP-sponsored study is the first one on the use of HIFU in this indication. The authors reported very promising results with low morbidity and significant efficiency on intestinal and gynecological symptoms as well as in the quality of life.

In May 2024, Dubernard G. et al, from Croix Rousse Hospital, Lyon, France, published in Human Reproduction journal, the results of a prospective multicentre cohort study. This study was conducted between 2020 and 2022 with 60 patients with symptomatic rectal endometriosis. The study demonstrated the safety of a 30% increase in the intensity of HIFU in the treatment of rectal endometriosis, with no Clavien–Dindo Grade III complications overall, and namely no rectovaginal fistulae.

Pancreas publications

In December 2021, Cilleros et al. from EDAP and LabTAU, INSERM and Centre Leon Bérard, Lyon, published in the journal Cancers positive pre-clinical results using intraoperative HIFU ablation of the pancreas in view of assessing the feasibility HIFU in the pancreas under Doppler guidance to treat the pancreatic parenchyma and tissues surrounding the superior mesenteric vessels in vivo in an animal model.  

HIFU Market Potential

Prostate cancer is currently the first (in terms of newly diagnosed cases) and second (in terms of number of deaths) as the most common form of cancer amongst men in many populations. In the United States, the American Cancer Society estimates the number of new prostate cancers to be diagnosed for 2025 to be approximately 313,780, of which approximately 70% are diagnosed with localized stage prostate cancer. Additionally, the HIFU division estimates, based on figures provided by the World Health Organization, that the worldwide incidence of localized prostate cancer is approximately 1.5 million new cases. A more effective diagnostic method for prostate cancer, the PSA test, has increased public awareness of the disease in developed countries since its introduction. PSA levels jump sharply when cancer is present. Prostate cancer is an age-related disease, and its incidence in developed countries is expected to increase as the population ages.

According to the Focused Ultrasound Foundation, HIFU has the potential to transform the treatment of a variety of serious medical conditions. All indicators point toward the evolution of this platform technology into a robust medical field, including numerous medical conditions, including cardiovascular, neurological, urological or women’s health. We decided to focus on developing HIFU for targeted medical conditions. The expansion of the use of HIFU to other areas of treatment will require a significant investment in research and development, an investment that we intend to accelerate as acceptance of HIFU as a treatment for localized prostate cancer is gaining grounds in the medical community.

BPH, another widely spread prostate condition, is potentially addressable with the same approach and Focal One platform. According to the Urologic Clinics of North America Journal, as many as 15 million men in the United States have symptoms of BPH and it is estimated that more than 400,000 surgical procedures are performed every year to treat these symptoms.

The endorectal approach currently delivered by the Focal One Robotic HIFU system, could also benefit patients with rectal endometriosis. The European Society of Human Reproduction and Embryology estimates that endometriosis affects approximately 10% of women of reproductive age. Among them, 5-12% are affected by digestive endometriosis, of which 90% suffer from infiltration of the rectum. As such, we estimate that 1% of the women of reproductive age could possibly benefit from a minimally invasive HIFU treatment.

HIFU Reimbursement Status

In the United States, following the American Medical Association’s (“AMA”) decision to establish a new Category 1 CPT code (55880) for the ablation of malignant prostate tissue with transrectal HIFU technology, CMS finalized payment rules for hospitals, facilities, and physicians that facilitates coverage and reimbursement, effective January 1, 2021. U.S. private insurers are continuing to evaluate and advance coverage and payment policies related to HIFU procedures for prostate cancer patients. We have engaged Medical Technology Partners (“MTP”) and PRIA Healthcare, formerly Argenta Advisors, two leading reimbursement consultants, to support us in reimbursement analysis and strategies.

On the hospital payment side, the 2025 final rule maintained the Urology Ambulatory Payment Classification (“APC”) 6 payment level for CPT 55880. This translates into reimbursement to a hospital performing a HIFU procedure on a Medicare patient to $9,247 per procedure as a national average, adjusted locally based on the wage index. This represents a 5.4% increase compared to 2024 and a 105% increase compared to the 2022 payment rate. The CMS will continue to update payment rates for hospitals on a yearly basis as part of the OPPS Rulemaking.

On the physician payment side, CMS first established a payment to physicians performing a HIFU procedure in the U.S. in 2021. The AMA has created a Current Procedure Terminology code and CMS has set the work Relative Value Units for a physician performing a HIFU procedure at 17.73. In the 2025 Final Rule of the Physician Fee Schedule, CMS has set the total facility Relative Value Units (“RVUs”) at 29.41. This translates to an average payment of $951 for a urologist performing a HIFU procedure on a Medicare patient in a facility setting in 2025. As a reference, a comparable established minimally invasive therapy for prostate cancer, cryotherapy, yields 23.01 total facility RVUs, which translates to $744 for the urologist under the same setting and patient conditions in 2024. A radical prostatectomy would grant the urologist 35.76 total facility RVUs and $1,157 if performed laparoscopically or robotically.

On December 30, 2024, the AMA released the addition of a new CPT Category 3 code to report the use of transrectal HIFU for the treatment of BPH. The new code, 0950T, currently described for “Ablation of benign prostate tissue, transrectal, with high intensity–focused ultrasound (HIFU), including ultrasound” will become effective on July 1, 2025.

In the European Union, there is no harmonized procedure for obtaining reimbursement and, consequently, we must seek reimbursement in each Member State. Procedures performed with our HIFU systems are not reimbursed in the European Union except in Italy, Germany, the United Kingdom (where procedures are partially reimbursed by either public healthcare systems or private insurers), Switzerland and France under certain conditions. In 2014, the French healthcare government authorities announced the reimbursement of prostate cancer treatment procedures using HIFU as part of a specific process (Forfait Innovation) to further validate breakthrough therapies and to accelerate their related reimbursement process based on clinical trials and data registries. As part of the Forfait Innovation, patients were included in the HIFI Study sponsored by the French Association of Urology.  Results and analysis of the study were reviewed by the HAS and a positive favorable opinion was issued in late 2023 to include HIFU as a procedure covered under the national universal health system. More specially, the favorable opinion relates to HIFU as a primary treatment of intermediate risk localized prostate cancer as well as a salvage option after failed radiotherapy. Based on this positive opinion from the HAS, the French Social Security authorities may now use this recommendation for including HIFU procedures in its future reviews to determine the procedure’s reimbursement rate and the timing for when such reimbursement would go into effect.

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HIFU Competition

Current therapies for prostate cancer are associated with side effects that may seriously affect a patient’s quality of life. One of the standard treatments for prostate cancer is radical prostatectomy, which involves the surgical removal of the entire prostate gland and surrounding tissue. A radical prostatectomy may require a hospital stay along with additional recovery time, usually with catheterization, and may result in loss of urinary continence and sexual function. Robotic nerve-sparing radical prostatectomy has been developed to minimize the invasiveness of this surgery; however, radical prostatectomy is still associated with the morbidity of surgery which requires cutting, ligating, dissecting and suturing of tissue leading to blood loss.  

Our Focal One Robotic HIFU competes with all current treatments for localized tumors, which include surgery, brachytherapy, radiotherapy, and cryotherapy. We believe that HIFU is a non-invasive, effective, treatment option for patients who seek to manage their cancer while minimizing side effects.

We also believe that Focal One is well positioned to address the growing demand for focal therapy of localized prostate cancer as compared to the radical treatments of surgery or radiation. “Focal” treatment (also known as “partial” or “zonal” treatment, as opposed to “radical” or “total” treatment) delivered with Focal One provides an effective and accurate ablative treatment while preserving patient quality of life.

Other companies are developing and commercializing HIFU technology for the minimally invasive ablation of tissues and/or solid organ tumors. See Item 3, “Risk Factors—Competition in the markets in which we operate is intense and is expected to increase in the future, and there is a substantial risk our products or service offerings could become obsolete or uncompetitive.”

Certain existing and potential competitors of our HIFU division may have more financial resources to invest in research and development, sales, marketing, and personnel resources than us and may have more experience manufacturing and supporting new products. We believe that an important factor in the potential future market for HIFU treatments will be the ability to make substantial investments in research and development required to advance the technology beyond the treatment of prostate cancer. These future investments are wholly dependent on the successful acceptance of the system for the treatment of prostate cancer.

Other companies developing and commercializing HIFU technology for the ablation of tissues and/or solid organ tumors include Sonablate Corporation, a U.S. company that markets the Sonablate^® system for the ablation of prostatic tissue. Profound Medical, a Canadian company, markets the Tulsa-Pro^® system for transurethral ultrasound ablation for prostate tissue. Insightec, an Israeli private company, markets the Exablate^® system to treat uterine fibroids, painful bone tumors, brain disorders and prostate tissue. Theraclion, a French company, markets HIFU systems to treat benign thyroid nodules, benign breast masses and varicose veins. Haifu, a Chinese company, is also developing HIFU products addressing various types of cancers.

HIFU Marketing and Sales

We market and sell our HIFU products through our own direct marketing and sales channels as well as through select third-party distributors and agents in several countries. Using our direct subsidiaries or representative offices network, we maintain a direct marketing and sales force in the United States, France, Germany, Switzerland, Malaysia and South Korea, which currently represent our largest HIFU markets. Additionally, we market and sell our HIFU products through our network of distribution partners in the rest of Europe, Latin America, Middle East, Asia and Southeast Asia.

Our customers are located worldwide and include academic, public, and private hospitals as well as urology clinics. No single customer represents a significant portion of our HIFU installed base.

Our marketing efforts currently include the development of marketing-related resources, activities, and training programs for urologists as well as via traditional, digital and social media programs educating patients on the availability of HIFU technology to treat localized prostate cancer.

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ESWL Division

Our ESWL activity consists of maintaining our lithotripters for the treatment of urinary tract stones. ESWL uses extracorporeal shockwaves, focused at a urinary stone within the human body to fragment it into smaller pieces. This technology allows natural elimination of stone fragments and prevents the need for more invasive options including incisions, transfusions, general anesthesia,

and the potential for related complications. We stopped manufacturing the Sonolith i-move lithotripter model in May 2024 in connection with our strategic decision to focus on our core HIFU business.

The ESWL lithotripsy division is engaged in servicing our existing installed base of Sonolith lithotripters while also selling spare parts and disposables such as electrodes for the Sonolith line, which need to be replaced approximately every ten treatments. The ESWL division contributed €9.0 million to our consolidated net sales during the fiscal year ended December 31, 2024.

The ESWL division continues to provide disposables, replacement parts and services for the current installed base of Sonolith range of lithoripters even though we have discontinued the manufacturing of these machines.

ESWL Patents and Intellectual Property

As of December 31, 2024, the ESWL division’s patent portfolio included six granted owned and/or co-owned patents consisting of one in the United States, four in the European Union and one in Japan. These patents belong to four groups of patents covering technologies relating to ESWL systems and associated software capabilities. The ESWL division’s patents cover both piezoelectric and electroconductive technologies associated with the ESWL generator, localization systems and system design.

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Distribution Division

We have been engaged, through our Distribution division, in the marketing, distribution and servicing of third-party medical devices that are complementary to the rest of our product portfolio, such as micro-ultrasound systems, lasers and other medical products from third party manufacturers. We also generate revenues from the sale of disposables, spare parts and maintenance contracts for equipment sold on behalf of third parties. The Distribution division contributed €31.3 million to our consolidated net sales during the fiscal year ended December 31, 2024.

In alignment with our new strategy, we are increasing our focus on investments in our core proprietary HIFU technology and de-emphasizing activities in our ESWL and Distribution divisions, while maintaining select distribution relationships. See Item 3, “We may experience revenue disruption due to our strategic shift to focus on HIFU activities and away from legacy non-HIFU activities.”

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We have been engaged in exclusive distribution agreements with third parties to distribute and service their products in certain territories, under specific conditions.

In May 2020, we signed an exclusive worldwide distribution agreement with Exact Imaging Inc., a Canadian company and developer of high-resolution micro-ultrasound imaging technologies. Under the terms of the agreement, we have been marketing the ExactVu^TM micro-ultrasound diagnostic systems alongside our Focal One Robotic HIFU technology. ExactVu offers advanced technology for performing biopsies and diagnosing prostate cancer. We renewed this agreement in December 2023.

In November 2024, we signed an amendment to terminate the current distribution agreement that will now end on June 30, 2025. Both parties have agreed to enter into a new agreement effective July 1, 2025, providing (a) for the Company’s non-U.S. subsidiaries to market and service the ExactVu directly to end-users and (b) for the Company’s U.S. subsidiary to continue servicing and supporting customers in the United States based on the expiration dates of existing Service Agreements.

In France, we have been distributing Lumenis® Holmium lasers marketed by Boston Scientific under an exclusive agreement for over ten years. Our distribution agreement with Boston Scientific expired on December 31, 2024, and was not renewed. A termination agreement was signed in December 2024 to transition the Lumenis Lasers activity to Boston Scientific.

In Japan, we have several ongoing distribution agreements under which we exclusively market Quanta Urology Laser Systems. Our Quanta distribution contract was renewed with an expiration date of December 2025. Our Japanese subsidiary also exclusively distributes urology products from Laborie Medical Technologies (“Laborie”), including Urodynamic equipment, Uroflow, and a range of disposable products. The distribution contract with Laborie expires in December 2025. Laborie is the world leader of Urodynamic systems and disposables, which are used by urologists and gynecologists to diagnose lower urinary tract diseases. In addition, our Japanese subsidiary distributes EOS Imaging X-ray imaging systems for the diagnosis of musculoskeletal pathologies and orthopedic surgical care. In addition, we also exclusively distribute urology accessories on behalf of Rocamed and Hugemed.

Manufacturing

Our current manufacturing operations consist of assembling medical products in our facility, which is FDA-registered and certified under international ISO 13485: 2016 standard and Medical Device Single Audit Program (“MDSAP”) program. We manufacture our own products through our operational subsidiary, EDAP TMS France.

We perform final assembly and quality control processes and maintain production standards. We purchase most of the components used in our products from several suppliers, but for some components of our products, we rely on a single source. Most of our components are secured by contract or dual sourcing manufacturing strategies. Furthermore, we conduct regular quality audits of suppliers’ manufacturing facilities. Our principal suppliers are located in France, Germany and Denmark. To date, our procurement and manufacturing strategy has not led to any material impact on our ability to deliver systems and services to our customers. Management believes that the relationships with our suppliers at the current time are satisfactory.

Suppliers provide us with some key materials and components which can expose us to the risk of a supply shortage, obsolescence or interruption if these suppliers are unable to manufacture our products in line with our quality standards or encounter other challenges. For example, a major change in our current ultrasound supplier’s strategy resulted in a cost increase to our HIFU systems. This cost increase has the potential to negatively impact our margins in a short period of time. We have identified a new supplier of ultrasound components, offering a cost-effective solution, and we expect to commercialize HIFU systems based on this technology by the end of 2025. This new technology will allow us to innovate new ultrasound-based features going forward.

From time to time, we experience challenges in obtaining some materials or components used in our systems, including electronic parts, computers, plastics, mechanical parts due to supply shortage directly linked to logistics challenges. In order to address these risks, we have put in place safety stock and have modified our order management for long lead time critical components. See Item 3. “Risk Factors— Risks Related to our Organization and Operations.”  

Quality and Design Control

The manufacturing operations of EDAP TMS France must comply with all regulations of countries where we market our products, including the GMP regulations enacted by the FDA, which establish requirements for assuring quality by controlling components, processes and document traceability and retention, among other things. EDAP TMS France’s facilities are also subject to inspections performed by the FDA. EDAP TMS France is ISO 13485: 2016 and MDSAP certified, which indicates compliance by EDAP TMS France’s manufacturing facilities with international standards for quality assurance, design and manufacturing process control. EDAP TMS France also complies with the applicable requirements that will allow it to affix the CE Marking to certain of its products. Our manufacturing site also complies with Taiwanese, Japanese, Canadian, Brazilian and South Korean regulations, as well as with the U.S. Quality System Regulation. See “—Government Regulation—Regulation in the United States” and “—Government Regulation—Regulation in the European Union.”

Organizational Structure

The following table sets forth the fully consolidated subsidiaries of the Company as of the date of this annual report:

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Property and Equipment

We have one main facility, which is in Vaulx-en-Velin, near Lyon, France. The premises comprise 4,150 square meters and were leased to us under a renewable ten-year commercial lease agreement that became effective on July 1, 2015. The lease was renewed in November 2024 under a 9-year commercial lease term, with an effective date of July 1, 2025. This contract permits termination of  

the lease at 3 or 6 years. We use this facility to manufacture our medical device systems and consumables. We believe the terms of the lease reflect current market rates. We are not aware of any environmental issues that could affect utilization of the facility.

In addition, we lease office and/or warehouse facilities in Kuala Lumpur (Malaysia), Flensburg (Germany), Wollerau (Switzerland), Austin, Texas and Los Altos, California (U.S.), Seoul (South Korea), Fukuoka, Osaka, Sapporo and Tokyo (Japan).

Government Regulation

Government regulation in our major markets, particularly the United States, the European Union and Japan, is a significant factor in the development and marketing of our products and in our ongoing research and development activities. Our products and operations are subject to regulation by the FDA and the countries where we market our products.  We must meet the requirements governing the design, manufacture, sourcing, testing, certification, packaging, installation, use, and disposal (including recycling) of our products. See Item 3, “Risk Factors— Risks Related to our Product Candidates and the Industry in which we Operate.”

Regulation in the United States

Our products are regulated in the United States by the FDA under several statutes including the Federal Food, Drug and Cosmetic Act (“FDC Act”). Pursuant to the FDC Act, the FDA regulates the preclinical and clinical testing, manufacturing, labeling, distribution, sale, marketing, advertising and promotion of medical devices in the United States. Medical devices are classified in the United States into one of three classes - Class I, II or III - based on the controls reasonably necessary to ensure their safety and effectiveness. Class I devices are those whose safety and effectiveness can be ensured through general controls, such as establishment registration, medical device listing, FDA-mandated CGMP and labeling. Most Class I devices are exempt from premarket notification (“510(k)”). Class II devices are those whose safety and effectiveness can reasonably be ensured using general controls and “special controls,” such as special labeling requirements, mandatory performance standards, and post-market surveillance. Class II medical devices typically require 510(k) submission and clearance based on a demonstration of substantial equivalence to an identified predicate device. A successful 510(k) may also require the submission of clinical data as part of the 510(k) for some Class II devices. For novel devices that present low to moderate risk but where there is no suitable predicate device to support a standard 510(k) submission, the FDA has what is known as the De Novo process. Class III devices are those that require submission of a pre-market approval (“PMA”) application by the FDA to ensure their safety and effectiveness. The PMA process is expensive and often lengthy, typically requiring several years, and may not necessarily result in approval. The manufacturer or the distributor of the device must obtain an IDE approval from the FDA before commencing human clinical trials in the United States in support of the PMA. Some newer PMA devices must also go before an advisory committee before FDA approval. Our Focal One HIFU is classified by the FDA as a Class II device.

The FDC Act also regulates quality and manufacturing procedures by requiring us to demonstrate and maintain compliance with current Quality System Regulations (“QSR”). We believe our manufacturing facilities meet the requirements of the QSR. There are also certain requirements of state, local and foreign governments that must be complied with in the manufacturing and marketing of our products. We believe that the manufacturing and quality control procedures we employ meet the requirements of these regulations.

Advertising and promotional activities in the United States are subject to regulation by the FDA and by the U.S. Federal Trade Commission.

Regulation in the European Union

In the European Union, we annually perform ISO 13485: 2016 and MDSAP (which covers the following countries Brazil, Canada, Japan, U.S.) certification audits, showing that we comply with standards for quality assurance, manufacturing and design control.

In 2017, the European Union enacted the new Medical Device Regulation (“MDR”). Manufacturers with currently approved medical devices in their portfolio had an initial transition time of three years, i.e. until May 26, 2020, to meet new MDR requirements. The transition period was extended to four years, i.e. until May 26, 2021, due to COVID-19 pandemic context. An amendment to modify the transitional provisions has been adopted. The schedule is defined based on the MDR classification of devices with an updated application date of December 31, 2028. The extension of the period during which the devices can be placed on the market is subject to certain terms and conditions. To benefit from the new provisions, the manufacturer must have implemented a QMS that complies with MDR requirements. This MDR introduces substantial changes to the way medical device manufacturers bring their devices to the European market and how they maintain compliance throughout the product’s life cycle. This MDR will replace the EU’s current Medical Device Directive (93/42/EEC) (“MDD”). We implemented a QMS compliant with MDR provisions and obtained a QMS certification according to MDR in September 2024. All provisions to ensure the extension of MDD CE marking until 2028 according to MDR transitional

clauses were implemented and confirmed by the notified body. Devices manufactured by us are currently under evaluation for CE marking under MDR or have already obtained MDR certification.

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The MDD and the MDR provide that medical devices that meet certain safety standards must bear a certification of conformity, the European Community approval “CE Marking.” Except in limited circumstances, member states of the European Union may not prohibit or restrict the sale, free movement or use for its intended purpose of a medical device bearing the CE Marking. Medical devices marketed throughout the European Union must comply with the requirement of the MDD and MDR as applicable to bear a CE Marking (subject to certain exceptions).

Pursuant to the MDD and MDR, medical devices are classified into different classes based on their invasiveness and the duration of their use. This classification serves as a basis for determining the conformity assessment procedures that apply to medical devices that are eligible to receive a CE Mark. The conformity assessment procedures for Class I devices can be carried out, generally, under the sole responsibility of the manufacturer, while for devices of other classes, the involvement of a notified body is required. The extent of the involvement of such a body in the development and manufacturing of a device varies according to the class under which it falls, with Class III devices being subject to the greatest degree of supervision. All of the devices currently marketed by us are Class I, IIa and IIb devices.

Regulation in Japan

The import and sales of medical devices in Japan is regulated by the Japanese Ministry of Health, Labor and Welfare (“MHLW”). Our Japanese subsidiary has obtained a license as the “Marketing Authorization Holder” as well as specific marketing approvals to import and market our products in Japan. Our Japanese subsidiary is also operating as a “Designated Marketing Authorization Holder” on behalf of some companies to market their products in the Japanese territory. The MHLW also administers various national health insurance programs to which each Japanese citizen is required to subscribe. These programs cover, among other things, the cost of medical devices used in operations. The MHLW establishes a list of reimbursable prices applicable to certain medical devices under national health insurance programs. Until a new device is included in this list, its costs are not covered by the programs. The Sonolith Praktis, the Sonolith Vision, the Sonolith i-sys and the Sonolith i-move are all included on the MHLW’s list for reimbursement.

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Human Capital

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Overview

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Our employees are the driving force behind our success, and we are committed to nurturing and investing in our teams. We are proud of our dedicated workforce, which is instrumental in achieving our strategic objectives. In 2024, we continued to enhance our recruitment and retention efforts, with a focus on fostering a culture of inclusion, professional development, and employee wellbeing. Through targeted learning initiatives, leadership development programs, and a competitive compensation and benefits package, we strive to provide an environment where our employees can thrive. As we look ahead, we remain committed to these efforts.  

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We have never experienced a work stoppage or interruption due to labor disputes. We believe our relations with our employees are quite good. Our global workforce consists of experienced and highly skilled employees at all levels.

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Employee Talent and Retention

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Our business and future operating results are dependent upon the continued contributions of our senior management team and key personnel. Our ability to continue to attract and retain key talent for our operations is essential for our continued success.

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Ensuring fair and equitable pay for our employee base is essential. We regularly review and benchmark our total compensation offers to ensure our pay structure is appropriate and fair to ensure our ability to compete in a competitive job market.

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Employees are encouraged to share any pay equity concerns with management, Human Resources, or confidentially through our whistleblower hotline.

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Culture

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We believe in a high-performance culture. Fostering and maintaining a strong and collaborative culture is a key component of our strategy. We also have policies that instill a commitment to ethical behavior and legal compliance. Employees are encouraged to approach their manager and/or Human Resources Representative if they believe violations of policies have occurred. Employees may also report any such violations confidentially and anonymously through our whistleblower process.

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Talent Development

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We value our employees and the strengths, passion, and commitment they bring to our success. To foster a culture of high performance, we offer comprehensive learning and development opportunities that support personal growth, professional advancement, and clinical technical expertise.

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The Executive Sales Training Program serves as an onboarding continuum, equipping new team members with the foundational knowledge and skills aligned to their role-specific core competencies. Established U.S. commercial employees participate in bi-monthly development seminars designed to reinforce existing knowledge, enhance skills, and introduce new tools and initiatives. Additionally, the U.S. commercial organization attends two national sales training meetings annually to deepen knowledge, share best practices with peers, and refine skills aligned with the commercial strategy.

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On a global scale, the Global Leaders Executive Sales Training Program prepares the Company’s global commercial leaders to train non-direct partners on the Focal One sales philosophy and process. Complementing this, the Global Partners Executive Training Program provides distributors with a condensed, focused curriculum to execute the Focal One sales process effectively.

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We also offer various additional education and development programs, including leadership development, compliance and ethical behavior training, and specialized technical skills training to ensure our team members excel in their roles to drive the Company's continued success.

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Health, Safety and Wellness

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Protecting the health, safety, and well-being of our employees around the world is a top priority. We incorporate workplace health and safety programs into each of our sites. Through our benefits offerings, we provide our employees with access to a variety of progressive, flexible, and convenient health and wellness programs. These programs are to provide our employees a peace of mind and sense of security. We continue to adapt our programs to respond to the ever-changing needs of our workforce that support employee time away from work, family care, mental health, or financial wellbeing. Ensuring a safe and healthy work environment continues to be one of our top priorities.

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Item 4A. Unresolved Staff Comments

None.

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Item 5. Operating and Financial Review and Prospects

The following discussion of our results of operations, liquidity and capital resources for the fiscal years ended December 31, 2024, and 2023 is based on, and should be read in conjunction with, our consolidated financial statements and the notes thereto included in Item 18, “Financial Statements.” The consolidated financial statements have been prepared in accordance with U.S. GAAP.

The following discussion contains certain forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those contained in such forward-looking statements. See “Cautionary Statement on Forward-Looking Information” at the beginning of this annual report.

Critical Accounting Estimates

Management has not identified any estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the registrant.

Operating Results

Overview

Our activities are organized into three divisions: HIFU, ESWL and Distribution. Recently, we have shifted to a growth strategy focused on developing our core proprietary HIFU activities and placing less emphasis on our non-HIFU distribution and ESWL business activities. We expect this new strategy to impact our accounts. See Item 3. “Risk Factors— Risks Related to our Organization and Operations.”  

Total revenues of the Company include sales of our medical devices and sales of disposables (“sales of goods”), sales of RPPs and leases, and sales of spare parts and services, all net of third-party distributor and agent commissions, as well as other revenues.

Sales of goods have historically been comprised of net sales of medical devices (HIFU devices, ESWL lithotripters and other third-parties’ devices) and net sales of disposables (mostly Focalpaks in the HIFU division, electrodes in the ESWL division and disposables from third parties’ devices sold by the Distribution division). The sale price of our medical devices is subject to variation based on a number of factors, including market competition, warranties and payment terms. Consequently, a particular sale of a medical device may, depending on its terms, result in significant fluctuations in the average unit sale price of the product for a given period, which may not be indicative of a market trend.

Sales of RPP and leases mainly include the revenues recorded in the HIFU division from the sale of Focal One treatment procedures and from leasing Focal One devices or treatment probes. We provide Focal One systems to clinics and hospitals at no charge for a limited period, rather than selling the systems. These hospitals and clinics perform treatments using the systems and usually pay us based on the number of individual treatments provided. With this business model, the hospital or clinic does not make an initial investment until the increase in patient demand justifies the purchase of a HIFU device. Consequently, we are able to make Focal One treatments available to a larger number of hospitals and clinics, which we believe should serve to create more long-term interest in the product. Compared to the sale of systems, this business model initially generates a smaller, although more predictable stream of revenue and, if successful, should lead to more purchases of Focal One systems by hospitals and clinics in the long term.

Regarding the ESWL division, and in line with our growth strategy, we have made the decision to stop selling the Sonolith i-move lithotripsy product line. Final system sales are currently scheduled to conclude in the second half of calendar year 2025. Going forward, we will continue to service our installed base of ESWL systems by providing consumable electrodes, spare parts and repair services to customers on active service agreements as well as customers purchasing electrodes, parts and services outside of standard service agreements. This will result in a decline in revenue related to ESWL in 2025 and subsequent periods.

Revenues recorded in our Distribution division include sales of complementary products such as lasers, micro-ultrasound systems and other products from third parties, including the associated disposables and maintenance contracts. Some distribution agreements with third parties expired in December 2024 and were not renewed; the termination of these commitments from such third parties will have a material adverse effect on our revenue, financial condition and result of operations.

Sales of spare parts and services include revenues arising from maintenance services furnished by us for the installed base of ESWL lithotripters, HIFU systems and complementary products from third parties.

We derive a significant portion of both net sales of medical devices and disposables and net sales of spare parts and services from our operations in Asia, through our wholly-owned subsidiaries or representative offices in Japan (Edap Technomed Co. Ltd), Malaysia (Edap Technomed Sdh Bhd) and South Korea (Edap Technomed Korea). Net sales derived from our operations in Asia represented 30% of our total consolidated net sales in 2024. Net sales of goods in Asia represented 34% of such sales in 2024 and consisted mainly of sales of urology devices and disposables. Net sales of spare parts, supplies and services in Asia represented 29% of such sales in 2024 and related primarily to ESWL lithotripters. We also derive a significant portion of net sales of medical devices and disposables from our operations in the U.S., through our wholly owned subsidiary (Edap Technomed. Inc). Net sales derived from our operations in the U.S. represented 28% of our total consolidated net sales in 2024. Net sales of goods in the U.S. represented 28% of such sales in 2024 and consisted mainly of sales of urology devices and disposables. See Note 18 of our consolidated financial statements. We sell our products in many parts of the world and, as a result, our business is affected by fluctuations in currency exchange

rates. We are exposed to foreign currency exchange rate risk because the mix of currencies in which our costs are denominated is different from the mix of currencies in which we earn revenues. In 2024, 59% of our costs of sales and research and development, selling, marketing and general and administrative expenses were denominated in euro, while 55% of our sales were denominated in currencies other than euros (primarily the U.S. Dollar and Japanese yen). Our operating profitability could be materially affected by large fluctuations in the rate of exchange between the euro and such other currencies. To minimize our exposure to exchange rate risks, we sometimes use certain financial instruments for hedging purposes. See Item 3, “Risk Factors—We sell our products in many parts of the world and, as a result, our business is affected by fluctuations in currency exchange rates” and Item 11, “Quantitative and Qualitative Disclosures About Market Risk” for a description of the impact of foreign currency fluctuations on our business and results of operations.

Reserves for slow-moving and obsolete inventory are determined based upon quarterly reviews of all inventory items. Items that are not expected to be sold or used in production, based on management’s analysis, are written down to their net realizable value, which is their fair market value or zero in the case of spare parts or disposable parts for systems that are no longer in commercial production.

Consolidated research and development expenses include all costs related to the development of new technologies and products and the enhancement of existing products, including the costs of organizing clinical trials and of obtaining patents and regulatory approvals. We do not capitalize any of our research and development expenses, except for the expenses relating to the production of machines to be used in clinical trials and that have alternative future uses as equipment or components for future research projects.

Consolidated research and development expenses, as described above, amounted to €7.7 million and €7.0 million in 2024 and 2023, respectively, representing 12.1% and 11.5% of total revenues in 2024 and 2023, respectively. This increase was mainly driven by our HIFU development programs and clinical studies. Research and development government grants and tax credits are deducted from our consolidated research and development expenses for amounts of €0.7 million and €0.6 million in 2024 and 2023, respectively. Beginning in 2025, management expects the budget for research and development expenses to increase to 15% of total revenues, which we expect will allow us to maintain our strategy to launch new clinical studies (thus strengthening our clinical credibility), to continue to focus our efforts on obtaining regulatory approvals in Japan in particular, and to build reimbursement coverage in key countries and particularly in the U.S., to continue to develop our HIFU product range and to fund projects to expand the use of HIFU beyond the treatment of prostate cancer.

Consolidated selling and marketing expenses amounted to €25.3 million in 2024 and €22.6 million in 2023. The €2.7 million or 11.9% increase in selling and marketing expenses from 2023 to 2024 was primarily a result of the implementation of the HIFU expansion plan in the U.S. Beginning in 2025, management expects selling and marketing expenses to increase in connection with the acceleration of HIFU adoption in the U.S.

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Consolidated general and administrative expenses decreased €0.6 million or 3.7% to €14.1 million in 2024, reflecting the impact of the HIFU expansion plan in the U.S., which includes the impact of share-based compensation plans for €1.7 million in 2024 and for €2.9 million in 2023 and non-recurring expenses linked to the leadership succession plan for €3.4 million in 2023, which includes the impact of share-based compensation plan for €1.3 million.  Beginning in 2025, management expects general and administrative expenses to increase in connection with the development of the U.S. activity.

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Fiscal Year Ended December 31, 2024 Compared to Fiscal Year Ended December 31, 2023

We report our segment information on a “net contribution” basis. See Note 29 to our consolidated financial statements.

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Total revenues

Our total revenues increased 6.1% from €60.4 million in 2023 to €64.1 million in 2024.

HIFU division.

The HIFU division’s total revenues increased by 15.7% from €20.6 million in 2023 to €23.8 million in 2024, reflecting growth of equipment sales and treatment-driven revenue in the U.S.

The HIFU division’s net sales of medical devices were stable with €9.7 million in 2024, with 22 Focal One units sold (including 12 in the U.S.), as compared to €9.8 million in 2023, with 21 Focal One units sold (including 15 in the U.S.). Treatment-driven revenue, which includes net sales of RPP & leases, net sales of disposables and treatments related services, increased by 31.4% to €11.9 million in 2024.

Net sales of HIFU maintenance services increased by 25.2% to €2.2 million in 2024.

ESWL division.

The ESWL division’s total revenues decreased 9.3% from €9.9 million in 2023 to €9.0 million in 2024, primarily due to the decrease in sales of equipment and maintenance services, consistent with our strategic shift to de-emphasize our ESWL division.

The ESWL division’s net sales of medical devices decreased 9.2% from €2.8 million in 2023 to €2.5 million in 2024 with 13 ESWL devices sold in 2024 compared to 16 ESWL units sold in 2023.

Net sales of ESWL-related consumables, spare parts, supplies, RPP, leasing and services decreased 8.8% from €7.1 million in 2023 to €6.5 million in 2024.

Distribution division.

The Distribution division’s total revenues increased 4.6% from €29.9 million in 2023 to €31.3 million in 2024, primarily due to the increase of consumables and maintenance revenues linked to the development of the installed base.

The Distribution division’s net sales of medical devices decreased 3.8% from €15.6 million in 2023 to €15.0 million in 2024, consistent with our strategy to de-emphasize our Distribution division.

Net sales of Distribution-related consumables, spare parts, supplies, leasing and services increased 13.7% from €14.4 million in 2023 to €16.3 million in 2024, reflecting the growth of the installed base.

Cost of sales.

Cost of sales increased 4.3% from €36.0 million in 2023 to €37.6 million in 2024 and represented 58.6% as a percentage of net sales in 2024, down from 59.6% as a percentage of net sales in 2023. This effect was primarily due to segment mix and a better absorption of our fixed costs mainly due to the growth of the HIFU revenues, which carry a lower cost of sales as a percentage of revenue.

Operating expenses.

Operating expenses increased 6.5%, or €2.9 million, from €44.2 million in 2023 to €47.1 million in 2024.

Marketing and sales expenses increased €2.7 million, or 11.9% to €25.3 million in 2024, reflecting the impact of the HIFU expansion plan in the U.S.

Research and development (“R&D”) expenses increased 11.0% to €7.7 million in 2024 from €7.0 million in 2023. R&D expenses are net of R&D grants and tax credits of €0.7 million in 2024 and €0.6 million in 2023. This increase was mainly driven by the increase in research and development activities associated with our HIFU development programs and clinical studies.

General and administrative expenses decreased €0.6 million or 3.7% to €14.1 million in 2024. This reduction reflects the impact of non-recurring expenses linked to the leadership succession plan for €3.4 million in 2023, which includes the impact of share-based compensation plan for €1.3 million. This is offset by the HIFU expansion plan in the U.S., which includes the impact of share-based compensation plans for €1.7 million in 2024 and for €2.9 million in 2023.

Operating profit (loss).

As a result of the factors discussed above, particularly the expansion of our activities in the U.S. to accelerate HIFU adoption, we recorded a consolidated operating loss of €20.5 million in 2024, as compared to a consolidated operating loss of €19.8 million in 2023.

We recorded an operating loss in the HIFU division of €17.5 million in 2024, as compared with an operating loss of €14.8 million in 2023, an operating profit in the ESWL division of €1.2 million in 2024, as compared to an operating loss of €0.2 million in 2023, and an operating loss in the Distribution division of €0.6 million in 2024, as compared to an operating loss of €0.2 million in 2023.

Interest (expense) income, net.

Net interest income was €0.6 million in 2024, compared with a net interest income of €1.1 million in 2023.

The interest income was mainly generated by short-term deposits net of interest expenses generated by long-term debt and short-term borrowings.

Foreign currency exchange gain (loss), net.

In 2024, we recorded a net foreign currency exchange gain of €1.2 million, mainly due to the variation of the Euro against the U.S. Dollar, compared to a loss of €1.8 million in 2023.

Income taxes.

Income tax expenses in the consolidated statement of operations was an expense of €0.3 million in 2024, compared to an expense of €0.6 million in 2023.

Net loss.

As a result of the above, we realized a consolidated net loss of €19.0 million in 2024 compared with a consolidated net loss of €21.2 million in 2023.

For comparison between the fiscal year ended December 31, 2023 and the fiscal year ended December 31, 2022, please refer to our annual report on Form 20-F filed with the SEC on March 28, 2024.

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Effect of Inflation

In 2023 and 2024, geopolitical instability and other factors have led to higher worldwide inflation leading to a global increase in costs. We are constantly addressing this cost increase by mitigating the impact on our margins, in particular by adjusting our prices, reducing our costs or implementing counter measures to ensure the minimum residual impact.

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Liquidity and Capital Resources

Our cash flow has historically been subject to significant fluctuations over the course of any given financial year due to cyclical demand for medical devices. Cyclical demand has historically resulted in significant annual and quarterly fluctuations in trade, other receivables and inventories, and therefore led to significant variations in working capital requirements and operating cash flows that were not necessarily indicative of changes in our business.

We have a history of operating losses and expect such losses to continue in the foreseeable future.  As of December 31, 2024, we had €29.8 million in cash and cash equivalents, a decrease of €13.6 million from December 31, 2023. We believe we have sufficient funds to support our operations for at least a period of twelve months from the date of issue of our consolidated financial statements.  However, we will need to raise substantial additional financing in order to meet our cash flow needs in the subsequent period and until we achieve profitability. We may not be able to raise additional financing on acceptable terms or at all and this condition may in the future raise uncertainty regarding our ability to continue as a going concern. Management is actively exploring various alternatives, including seeking additional funding through the debt and equity capital markets, cost-cutting measures, and restructuring opportunities, but there is no assurance that these efforts will be successful or sufficient to address these liquidity concerns. If we are unable to raise capital when needed on acceptable terms, or at all, we may be forced to restructure our business or delay, reduce, or terminate our research and product development programs, future commercialization efforts or other operations. See Note 1-2 to our consolidated financial statements.

Material Cash Requirements

The following table discloses aggregate information about material contractual obligations and periods in which payments were due as of December 31, 2024.

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The commitment amounts in the table above are associated with contracts that are enforceable and legally binding and that specify all significant terms, excluding interest on long-term debt. Future events could cause actual payments to differ from these estimates.

Long term debts represent a €4.2 million cash requirement as of December 31, 2024 and are mainly related to the two loans taken out from French banks, in the form of the loans guaranteed by the French State for a total amount of €4.0 million at inception in the context of the Covid-19 pandemic, and a new loan taken out from a French bank in December 2024, for a total amount of €2.2 million at inception, to finance the purchase of ultrasound technology. This loan will reach maturity in December 2026. The first two loans taken out in August 2020 with initial maturity in August 2021 have been extended until August 2026. The amendments provide for reimbursements to be made over four years, beginning in August 2022.

Operating and financing leases represent a €3.1 million cash requirement as of December 31, 2024, with a repayment horizon up to 2030.

Cash Flows

We anticipate that cash flow in future periods will be derived mainly from ongoing operations. However, as noted above, we will need to raise additional substantial financing to meet our future cash needs. As of the date of this annual report, we do not employ any off-balance sheet financing. An inability to raise additional financing, a decrease in the demand for our products, or the inability of

our customers to meet their financial obligations to us due to operating difficulties or adverse market conditions, would reduce the availability of funds to us to meet our cash needs.

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Our cash position as of December 31, 2024, and 2023 was €29.8 million (with no short-term treasury investments) and €43.5 million (with no short-term treasury investments), respectively. We experienced a decrease in cash and cash equivalents of €13.6 million in 2024 and a decrease of €19.7 million in 2023.

In 2024, our negative net cash flow was primarily due to net cash used in operating activities of €13.6 million and in investing activities of €4.1 million.

In 2023, our negative net cash flow was primarily due to net cash used in operating activities of €14.7 million and in investing activities of €4.3 million.

In 2024, net cash used in operating activities was €13.6 million compared with net cash used in operating activities of €14.7 million in 2023.

In 2024, net cash used in operating activities reflected principally:

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In 2023, net cash used in operating activities was €14.7 million compared with net cash used in operating activities of €3.0 million in 2022.

In 2023, net cash used in operating activities reflected principally:

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In 2024, net cash used in investing activities was €4.1 million compared with net cash used in investing activities of €4.3 million in 2023.

Net cash used in investing activities of €4.1 million in 2024 reflected mainly:

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Net cash used in investing activities of €4.3 million in 2023 reflected mainly:

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In 2024, net cash generated by financing activities was €4.6 million compared with net cash used in financing activities of €0.9 million in 2023.

Net cash generated by financing activities of €4.6 million in 2024 reflected principally the net proceeds of €0.1 million from the exercise of stock options, the net proceeds of €2.6 million from long term borrowings, the repayments of long-term borrowings and financing leases for €1.8 million and an increase of short-term borrowings of €3.7 million.

Net cash used in financing activities of €0.9 million in 2023 reflected principally the net proceeds of €0.3 million from the exercise of stock options, the repayments of long-term borrowings and financing leases for €1.8 million and an increase of short-term borrowings of €0.7 million.

Our policy is that our treasury department should maintain liquidity with the use of short-term borrowings and the minimal use of long-term borrowings. The treasury department currently adheres to this objective by using fixed-rate debt, which normally consists of long-term borrowing. Currently the short-term debt consists of account receivables factored and for which the Company is supporting the collection risk and credit lines. We maintain bank accounts for each of our subsidiaries in the local currencies of each subsidiary. The primary currencies in which we maintain balances are the euro, the U.S. dollar and the Japanese yen. To minimize our exposure to exchange rate risks, we may use certain financial instruments for hedging purposes from time to time. As of December 31, 2024, there were no outstanding hedging instruments. See Notes 13 and 14 to the consolidated financial statements for further information on our borrowings.

Recent Accounting Pronouncements

See “Note 1. Summary of Significant Accounting Policies —1.25 Recent Accounting Pronouncements” of the Notes to consolidated financial statements for a description of recent accounting pronouncements including the respective expected dates of adoption and estimated effects, if any, on our Consolidated Financial Statements.

Research and Development, Patents and Licenses

See Item 5, “Operating and Financial Review and Prospects—Operating Results—Overview” and Item 4, “Information on the Company—HIFU Division—HIFU Patents and Intellectual Property” and “Information on the Company—ESWL Division—ESWL Patents and Intellectual Property.”

The French government provides tax credits to companies for innovative research and development. This tax credit is calculated based on a percentage of eligible research and development costs and it is refundable in cash.

Off-Balance Sheet Arrangements

At December 31, 2024, we had no off-balance sheet arrangements.

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Item 6. Directors, Senior Management and Employees

Senior Management

The following table sets forth the name, age and position of each of our senior executive officers as of March 15, 2025 (the “Senior Management”). The Senior Management listed below have entered into employment agreements with us or our subsidiaries (which permit the employee to resign subject to varying notice periods). In addition, in case of a change of control of the Company, or of a termination of their employment agreement by the Company without cause, the members of Senior Management are entitled to receive severance packages totaling €1.7 million.

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Board of Directors

The following table sets forth the names and backgrounds of the members of the Board of Directors as of March 15, 2025. Since May 1, 2023, we have separated the offices of Chairman of the Board and Chief Executive Officer.

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None of the directors have service contracts with the Company or any of its subsidiaries providing for benefits upon termination of employment (except for those related to Mr. Rhodes’s current position as Chief Executive Officer, as provided under his employment agreement). Five of the six Board members are independent within the meaning of Nasdaq Marketplace Rule 5605(2). The mandate of our directors, was reduced to a period of two years at the General Meeting of Shareholders held on June 28, 2024.  The directors’ mandates will expire at the end of the ordinary general meeting of shareholders, which will approve the accounts for the financial year ended December 31, 2025, to be held in 2026.

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