F-1/A: IceCure Medical Launches $10 Million Rights Offering Amidst Geopolitical Headwinds and Lower H1 2025 Sales

IceCure Medical Ltd. has initiated a non-transferable rights offering aiming to raise up to $10 million, primarily to repay a bridge loan and for general corporate purposes, while reporting anticipated lower product sales and higher net loss for the first half of 2025 due to regional conflict.

Summary

• IceCure Medical Ltd. is conducting a non-transferable rights offering to raise up to $10,000,000 by offering up to 10,000,000 Units.
• Each Unit, priced at $1.00, consists of one Ordinary Share and one Warrant to purchase an Ordinary Share at an exercise price of $1.00, expiring in five years.
• Alternatively, investors can purchase Units at $0.9999, consisting of one Pre-Funded Warrant (exercise price $0.0001) and one Warrant.
• Shareholders will receive one Subscription Right for every Ordinary Share owned as of the record date, July 9, 2025, with each right entitling purchase of 0.1703 of a Unit.
• Shareholders must exercise at least six Subscription Rights to purchase one whole Unit, meaning holders of fewer than six Ordinary Shares cannot participate.
• The Subscription Period runs from July 10, 2025, to July 28, 2025, at 5:00 p.m. Eastern Time.
• Epoch Partner Investments Limited, currently owning approximately 44.03% of outstanding Ordinary Shares, has committed to a standby purchase of up to $5,000,000 in Units, covering its basic subscription rights in full and any unsubscribed Units.
• Net proceeds from the offering are estimated at approximately $9.3 million, intended for repayment of a $2,000,000 bridge loan from Epoch and for general corporate and working capital.
• Product sales for the three and six months ended June 30, 2025, were approximately $525,000 and $1.25 million, respectively.
• Gross profit and gross margin for the six months ended June 30, 2025, are expected to be significantly lower compared to the same period in 2024, and net loss is expected to be higher.
• The company attributes lower sales and gross profit to delayed shipments and lower sales due to the conflict between Israel and Iran, and the absence of $100,000 in revenue from a distribution agreement with Terumo in Japan recorded in H1 2024.
• The FDA 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, with final marketing authorization decision expected upon CDRH approval of the plan.
• 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 company believes existing cash, cash equivalents, short-term investments, and net proceeds from this offering will fund operations through May 31, 2026, but will require additional capital thereafter.

Sentiment

Score: 4

Explanation: While the FDA Advisory Panel vote for ProSense is a positive clinical development, the immediate financial outlook is negative due to lower sales, gross profit, and higher net loss attributed to geopolitical conflict and lost revenue. The capital raise is necessary but comes with significant dilution risks and highlights ongoing funding needs. The geopolitical risks in Israel are a substantial concern.

Positives

• FDA Advisory Panel voted favorably that the benefits of ProSense outweigh the risks for early-stage low-risk invasive breast cancer, based on comprehensive data including the ICE3 study results (96.3% recurrence-free rate and 100% patient/physician satisfaction).
• Epoch Partner Investments Limited, a significant shareholder, has committed to a standby purchase of up to $5,000,000 in the Rights Offering, ensuring a minimum capital raise.
• The Rights Offering, if fully subscribed, is expected to generate approximately $9.3 million in net proceeds, providing capital for operations and debt repayment.

Negatives

• Product sales for Q2 2025 were approximately $525,000 and for H1 2025 were $1.25 million, which are lower than anticipated.
• Gross profit and gross margin for the six months ended June 30, 2025, are expected to be significantly lower compared to the same period in 2024.
• Net loss for the six months ended June 30, 2025, is expected to be higher compared to the net loss for the six months ended June 30, 2024.
• Lower sales are attributed to delayed shipments and reduced sales due to the conflict between Israel and Iran, and the absence of $100,000 in revenue from a previous distribution agreement.
• The company will require additional capital to fund operations beyond May 31, 2026, even if the Rights Offering is fully subscribed.
• The FDA requested a post-market study for ProSense, which could delay final marketing authorization for early-stage breast cancer indication.

Risks

• The company will require additional capital to fund operations beyond May 31, 2026, and there is no assurance of obtaining sufficient funding on acceptable terms.
• Substantial expenses of approximately $0.6 million will be incurred for the Rights Offering, which may not return adequate value if the offering is unsuccessful.
• The Subscription Price of $1.00 per Unit may not be indicative of the fair value of the Ordinary Shares, Pre-Funded Warrants, or Warrants, potentially leading to losses for investors.
• The company may amend the terms of the Rights Offering, including the Subscription Price and Warrant Exercise Price, at its sole discretion prior to expiration.
• Exercises of Subscription Rights are irrevocable, even if unfavorable information emerges later.
• The company may extend, cancel, or withdraw the Rights Offering at any time, meaning participation is not assured and payments would be returned without interest or penalty.
• Failure to promptly follow subscription instructions may result in rejection of the exercise of Subscription Rights.
• If other shareholders do not exercise their Subscription Rights and Epoch performs its Standby Commitment, Epoch's ownership could increase to 48.43%, allowing it to exercise significant control over the company.
• No recommendation is being made by the board, Subscription Agent, or Information Agent regarding participation in the Rights Offering.
• Subscription funds will not earn interest, and any refunded amounts will be without interest or penalty.
• Personal checks 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 objectives, increasing risk to investors.
• The Subscription Rights are non-transferable, limiting the ability to realize value directly.
• The Rights Offering may cause the trading price of Ordinary Shares to decrease due to the offering price and potential future sales of underlying shares/warrants.
• Shareholders holding fewer than six Ordinary Shares on the Record Date cannot participate in the Rights Offering due to fractional unit limitations.
• Shareholders with foreign addresses may experience delays in receiving rights offering materials, shortening their exercise period.
• Non-exercising shareholders will experience significant dilution if other shareholders or Epoch fully exercise their rights.
• Securities purchased in the offering cannot be resold immediately upon expiration of the Subscription Period, as delivery is expected on or about July 28, 2025.
• There is no established public trading market for the Pre-Funded Warrants and Warrants, and the company does not intend to list them, limiting liquidity.
• Holders of Pre-Funded Warrants and Warrants have no shareholder rights until exercised.
• The Warrants are speculative and subject to a call feature at the company's option under certain conditions, which may reduce their value.
• The company does not intend to pay dividends, so investment success depends on share price appreciation.
• Operations in Israel are subject to political, economic, and military instability, including ongoing multi-front conflict, which has already caused delayed shipments and may disrupt operations further.
• Israeli military reservist call-ups, including employees, may disrupt operations.
• Economic boycotts against Israel and Israeli companies could adversely affect business.
• Changes to Israel's judicial system could negatively impact the business environment and ability to raise funds.
• Difficulty enforcing judgments against the company, its directors, and management due to their location outside the United States (Israel, China, Hong Kong) and differences in legal systems.

Future Outlook

The company anticipates funding operating expenses and capital expenditure requirements through May 31, 2026, with existing cash and proceeds from the Rights Offering, but will require additional financing thereafter. Final marketing authorization for ProSense for early-stage low-risk breast cancer is expected from the FDA upon approval of a post-market study plan, which is expected to include a minimum of 400 patients at 25 sites. The company expects to establish and expand its sales, marketing, and distribution infrastructure for ProSense upon receiving marketing authorization, contingent on successful financing.

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 believe that our existing cash, cash equivalents and short-term investments, together with the net proceeds of approximately $9.3 million from this Rights Offering, assuming that the Rights Offering is consummated and fully subscribed, will enable us to fund our operating expenses and capital expenditure requirements through May 31, 2026."
• "We are anticipating an establishment and expansion of our sales, marketing and distribution infrastructure to commercialize the ProSense system. These efforts are contingent on the success of obtaining financing on favorable terms."
• "We estimate that the lower revenue for the three and six months ended June 30, 2025 will not have a material effect on operating expenses, including research and development, sales and marketing, and general and administrative expenses, although such expenses may fluctuate for reasons unrelated to revenue levels."

Industry Context

The medical device industry, particularly in cryoablation for tumor treatment, is highly competitive and subject to stringent regulatory approvals. IceCure's ProSense system, with its favorable FDA Advisory Panel vote for early-stage breast cancer, positions it as a potential innovator in minimally invasive tumor ablation. However, the need for a post-market study and the ongoing capital requirements highlight the significant R&D and commercialization costs inherent in this sector. Geopolitical instability, as experienced by IceCure in Israel, can directly impact supply chains and sales, a risk factor for any company with significant international operations or manufacturing.

Comparison to Industry Standards

• The 96.3% recurrence-free rate from the ICE3 study for ProSense in early-stage low-risk breast cancer compares favorably with the current standard of care, lumpectomy, suggesting a strong clinical profile for the device.
• The 100% patient and physician satisfaction reported in the ICE3 trial indicates high user acceptance and potential for market adoption, which is a key differentiator in the medical device space.
• The company's accumulated deficit of $109.0 million as of March 31, 2025, and the need for continuous capital raises are common for commercial-stage medical device companies that require significant investment in R&D, clinical trials, and market commercialization before achieving sustained profitability.
• The reliance on a single large shareholder (Epoch, 44.03% ownership) for a significant portion of the capital raise (up to $5 million standby commitment) is not uncommon for smaller, growth-stage companies, but it does concentrate control, which can be a deviation from broader market governance standards favoring diversified ownership.

Corporate Governance

Related Party Transactions

• Epoch Partner Investments Limited, which beneficially owns approximately 44.03% of the company's outstanding Ordinary Shares and has a director (Mr. Li Haixiang) on the board with voting power over its shares, has committed to a standby purchase of up to $5,000,000 in the Rights Offering.
• The company entered into an unsecured bridge loan agreement with Epoch on May 17, 2025, for $2,000,000, which the proceeds from the Rights Offering are intended to repay. Epoch will not receive a fee for its standby commitment.

Stakeholder Impact

• **Shareholders:** Will experience immediate and substantial dilution (78% dilution in net tangible book value per Ordinary Share for new investors) if they participate, and significant percentage ownership dilution if they do not exercise their rights, especially due to Epoch's standby commitment. Those holding fewer than six shares cannot participate. The market price of shares may decrease.
• **Employees:** Operations may be disrupted by Israeli military reservist call-ups, as 10 employees were called up as of July 1, 2025, though most have returned. The company's ability to retain key executive members is a factor in its future success.
• **Customers:** Delayed shipments and deliveries due to geopolitical conflict may impact customer satisfaction and product availability.
• **Creditors:** The Rights Offering proceeds are intended to repay the $2,000,000 bridge loan to Epoch, which is positive for that specific creditor. However, the company's ongoing need for capital suggests potential future reliance on debt or equity financing.

Next Steps

• Subscription Period for the Rights Offering will commence on July 10, 2025, and end on July 28, 2025.
• The company expects to deliver Ordinary Shares, Pre-Funded Warrants, and Warrants underlying the Units purchased in the Rights Offering on or about July 28, 2025.
• The company will present its post-market study plan for ProSense (expected to include a minimum of 400 patients at 25 sites) to the FDA, with the FDA's final marketing authorization decision expected upon CDRH approval of the plan.
• The company intends to establish and expand its sales, marketing, and distribution infrastructure to commercialize the ProSense system upon receiving potential marketing authorization from the FDA.
• The company will need to obtain further funding through public or private equity offerings, debt financings, and collaborations or other sources to fund operations beyond May 31, 2026.

Key Dates

Recommendation

Keywords

Rights Offering, Cryoablation, ProSense, Medical Device, Capital Raise, SEC Filing, ICCM, Nasdaq, Warrants, Pre-Funded Warrants, Dilution, Israel-Iran Conflict, FDA Approval, Breast Cancer Treatment, Financial Results, Corporate Governance