F-1/A: IceCure Medical Launches $10 Million Rights Offering Amidst FDA Approval Delays and Geopolitical Headwinds

IceCure Medical Ltd. is conducting a non-transferable rights offering to raise up to $10 million, primarily to repay a bridge loan and fund operations through May 2026, while facing a delayed FDA marketing authorization for its ProSense system and ongoing geopolitical instability in Israel.

Summary

• IceCure Medical Ltd. is offering non-transferable subscription rights to purchase up to 10,000,000 Units at a price of $1.00 per Unit (or $0.9999 for Pre-Funded Warrant Units), aiming to raise up to $10,000,000 in gross proceeds.
• Each Unit consists of one Ordinary Share and one Warrant to purchase an Ordinary Share, or one Pre-Funded Warrant and one Warrant.
• The net proceeds from the offering are expected to be approximately $9.3 million after deducting estimated fees and expenses of $0.7 million.
• Proceeds will be used to repay a $2,000,000 Bridge Loan from Epoch Partner Investments Limited and for general corporate and working capital purposes.
• Epoch, which beneficially owns approximately 44.03% of outstanding Ordinary Shares, has committed to a Standby Commitment of up to $5,000,000, ensuring a minimum raise.
• The company expects the offering proceeds, combined with existing cash, to fund operations through May 31, 2026, but will require additional capital thereafter.
• The FDA has requested a post-market study for ProSense for early-stage low-risk breast cancer, expected to include a minimum of 400 patients at 25 sites, delaying the final marketing authorization decision.
• Preliminary product sales for the three and six months ended June 30, 2025, were approximately $525,000 and $1.25 million, respectively (unaudited).
• As of March 31, 2025, the company had an accumulated deficit of $109.0 million and cash and cash equivalents of $6.0 million.
• The offering is expected to increase outstanding Ordinary Shares from 58,696,960 to 68,696,960, assuming full subscription.
• New investors in the Rights Offering will experience an immediate dilution of $0.78 per Ordinary Share, representing 78% dilution in net tangible book value.
• The Subscription Rights are non-transferable, and there will be no public trading market for the Pre-Funded Warrants or Warrants.

Sentiment

Score: 4

Explanation: While the capital raise provides immediate liquidity and is partially backstopped by a significant shareholder, the substantial delay in FDA marketing authorization for the lead product due to a required post-market study is a significant negative. This, coupled with a history of losses, the need for further capital beyond the current raise, and high geopolitical risks in Israel, presents a challenging outlook. The dilution for new investors is also considerable.

Positives

• The Rights Offering is expected to raise up to $10,000,000 in gross proceeds, providing crucial capital for operations.
• Epoch Partner Investments Limited's Standby Commitment of up to $5,000,000 ensures a significant portion of the offering will be subscribed, providing financial stability.
• The company's lead product, ProSense, showed strong clinical results in the ICE3 breast cancer trial, with 100% patient and physician satisfaction and a 96.3% recurrence-free rate.
• The FDA Advisory Panel voted favorably on the benefits of ProSense outweighing the risks for early-stage low-risk invasive breast cancer, indicating a positive clinical assessment.

Negatives

• The FDA has requested a post-market study for ProSense, delaying the final marketing authorization decision for early-stage low-risk breast cancer.
• The company has a history of losses, with an accumulated deficit of $109.0 million as of March 31, 2025.
• Even with the Rights Offering, the company anticipates needing additional capital after May 31, 2026, indicating ongoing funding challenges.
• New investors in the Rights Offering will experience significant immediate dilution of 78% in net tangible book value.
• The Subscription Rights are non-transferable, and there will be no established public trading market for the Pre-Funded Warrants or Warrants, limiting liquidity for these securities.
• Shareholders holding less than six Ordinary Shares on the Record Date will not be able to participate in the Rights Offering, potentially leading to their dilution.
• Epoch's increased ownership (up to 48.43% post-offering if others don't subscribe) could lead to significant control over company matters.
• The company's operations are exposed to political, economic, and military instability in Israel, including ongoing multi-front conflicts and potential disruptions to supply chains and employee availability.
• Preliminary financial information for Q2 2025 product sales is unaudited and subject to change.

Risks

• The company will require additional capital beyond May 31, 2026, and there is no assurance that adequate financing will be available on acceptable terms or at all.
• Failure to obtain necessary financing could force delays, reductions, or elimination of commercialization efforts for the ProSense system, potentially impacting the company's ability to continue as a going concern.
• Substantial expenses of approximately $0.6 million will be incurred in connection with the Rights Offering, regardless of its success or consummation.
• The Subscription Price for the Units may not reflect the fair value of the Ordinary Shares, Pre-Funded Warrants, or Warrants, and their market prices may decline during or after the offering.
• The company reserves the right to amend or modify the terms of the Rights Offering, including the Subscription Price and Warrant Exercise Price, at its sole discretion.
• All exercises of Subscription Rights are irrevocable, meaning investors cannot change their decision even if new unfavorable information emerges.
• The company may extend, cancel, or withdraw the Rights Offering at any time prior to its expiration, potentially leaving subscribers without their purchased securities.
• Failure to promptly and properly follow subscription instructions may result in the rejection of an investor's exercise of Subscription Rights.
• Epoch's potential increase in ownership to 48.43% could give it significant control over shareholder-approved matters, potentially delaying or preventing changes in control or management.
• The company's board of directors, Subscription Agent, and Information Agent are not making any recommendation regarding participation in the Rights Offering.
• Subscription funds will not earn interest, and any refunded payments will be returned without interest or penalty.
• Personal checks used for payment may not clear in time, leading to rejection of the subscription.
• The Rights Offering is not subject to a minimum offering amount, and proceeds may be insufficient to meet all objectives.
• The non-transferable nature of the Subscription Rights means there is no market to realize their value directly.
• The Rights Offering, particularly the issuance of new shares and warrants, may cause the trading price of the Ordinary Shares to decrease.
• Shareholders holding fewer than six Ordinary Shares will be unable to participate in the Rights Offering, limiting their ability to avoid dilution.
• Shareholders with foreign addresses may experience delays in receiving offering materials, shortening their participation window.
• Significant dilution will occur for shareholders who do not fully exercise their Subscription Rights.
• Securities purchased in the Rights Offering will not be immediately resalable upon the expiration of the Subscription Period.
• The dealer-manager is not underwriting or placing the securities, and the success of the offering is not guaranteed.
• There is no established public trading market for the Pre-Funded Warrants and Warrants, limiting their liquidity.
• The market price of Ordinary Shares may be highly volatile due to various factors, including clinical trial results, regulatory approvals, competition, management changes, and general economic conditions.
• The Warrants are subject to a call feature, which may reduce their value by limiting the opportunity to benefit from further share price increases.
• The company does not intend to pay dividends, meaning investment success depends solely on share price appreciation.
• Operations in Israel are subject to political, economic, and military instability, including ongoing multi-front conflicts, which could disrupt business, supply chains, and employee availability.
• Difficulty may be encountered in enforcing U.S. judgments against the company, its directors, and management, particularly those residing in Israel, China, or Hong Kong.

Future Outlook

The company expects the net proceeds from this Rights Offering, combined with existing cash, cash equivalents, and short-term investments, to fund operating expenses and capital expenditure requirements through May 31, 2026. However, additional funding will be required thereafter. The final marketing authorization decision for the ProSense system for early-stage low-risk breast cancer is contingent upon the FDA's approval of a post-market study plan, which is expected to include a minimum of 400 patients at 25 sites. The company intends to retain future earnings to finance business expansion and does not anticipate paying cash dividends in the foreseeable future.

Management Comments

• We intend to use the net proceeds from this Rights Offering, together with our existing cash, cash equivalents and short-term investments, to repay the Loan Amount of the Bridge Loan and for general corporate and working capital purposes.
• We intend to retain our future earnings, if any, to finance the expansion of our business and do not expect to pay any cash dividends in the foreseeable future.

Industry Context

IceCure Medical operates in the medical device industry, specifically focusing on cryoablation systems for tumor treatment, a minimally invasive alternative to traditional surgery. The company's lead product, ProSense, targets various tumors, with a current focus on breast cancer. The industry is highly regulated, with significant reliance on FDA marketing authorizations for commercialization. The need for post-market studies, even after favorable advisory panel votes, is a common regulatory hurdle that can extend timelines for product launch and market penetration.

Related Party Transactions

• Epoch Partner Investments Limited (Epoch), which beneficially owns approximately 44.03% of the company's outstanding Ordinary Shares and has Mr. Li Haixiang (a director) with voting and dispositive power over its shares, is a related party.
• Epoch provided a $2,000,000 Bridge Loan to the company on May 17, 2025, which the Rights Offering proceeds are intended to repay.
• Epoch has committed to a Standby Commitment to participate in the Rights Offering, exercising its Basic Subscription Rights in full and Over-Subscription Privileges to purchase unsubscribed Units with an aggregate Subscription Price of up to $5,000,000.
• No fee will be paid to Epoch for providing the Standby Commitment.

Stakeholder Impact

• Shareholders: Face significant immediate dilution (78% for new investors) and potential dilution for existing shareholders who do not fully exercise their rights. Non-transferable rights and unlisted warrants/pre-funded warrants limit liquidity. Epoch's increased ownership could impact control.
• Employees: Operations may be disrupted by Israeli military reservist call-ups, as 10 employees were called up as of July 1, 2025 (most have returned).
• Customers: Potential for temporary delays in product shipments and deliveries due to geopolitical events affecting airspace and shipping routes.
• Creditors: The Bridge Loan from Epoch will be repaid using proceeds from the Rights Offering.

Next Steps

• The Subscription Period for the Rights Offering will commence on July 10, 2025, and end on July 28, 2025.
• The company expects to deliver the Ordinary Shares, Pre-Funded Warrants, and Warrants underlying the Units purchased in the Rights Offering on or about July 28, 2025.
• The company will conduct a post-market study for ProSense for early-stage low-risk breast cancer, expected to include a minimum of 400 patients at 25 sites, as requested by the FDA.
• The company will present its post-market study plan to the FDA for approval, after which the FDA's final marketing authorization decision is expected.
• The net proceeds from the Rights Offering will be used to repay the Bridge Loan and for general corporate and working capital purposes.
• The company will need to obtain further funding through public or private equity offerings, debt financings, or collaborations after May 31, 2026.

Key Dates

Recommendation

Keywords

Rights Offering, Cryoablation, Medical Device, ProSense, FDA Approval, Capital Raise, Warrants, Pre-Funded Warrants, Dilution, SEC Filing, ICCM, Breast Cancer Treatment, Israel, Epoch Partner Investments