10-K: IR-Med, Inc. Reports Financial Results for Fiscal Year 2024, Outlines Progress on PressureSafe and DiaSafe Devices

IR-Med, Inc. files its 10-K report for 2024, highlighting ongoing development of its PressureSafe and DiaSafe devices amid financial challenges and efforts to secure additional funding.

Summary

• IR-Med, Inc. has filed its annual report on Form 10-K for the fiscal year ended December 31, 2024.
• The company is focused on developing point-of-care decision support devices using infrared spectroscopy and AI analysis.
• The primary focus is on PressureSafe, a device for early assessment of pressure injuries, and DiaSafe, for early assessment of diabetic foot ulcers.
• PressureSafe received FDA listing certification as a Class I device and is planned for initial sales in the second half of 2025.
• A usability study of PressureSafe showed 92% efficacy in detecting Stage 1 pressure injuries with 92% sensitivity and 88% specificity.
• The company is developing DiaSafe with a grant from the Israeli Innovation Authority (IIA).
• The company is facing financial difficulties, with a net loss of $1.899 million in 2024 and an accumulated deficit of $16.738 million.
• There is substantial doubt about the company's ability to continue as a going concern without additional funding.
• The company is seeking additional funding through equity offerings, debt financings, and strategic alliances.
• The company terminated its distribution agreement with PI Prevention Care LLC due to a breach of contract.
• The company is involved in a legal proceeding in Israel, with the plaintiff claiming damages of approximately $2.1 million.
• The company has 3 full-time employees and 2 part-time employees as of April 4, 2025.
• The company's technology development is headquartered in Israel, which exposes it to economic and political instability risks.
• The company is subject to extensive regulations by the FDA and other regulatory bodies.
• The company is planning to seek reimbursement for product candidates as a means to expand the adoption of products and broaden our customer base.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While there are positive developments regarding the PressureSafe device and its efficacy, the company's financial situation and going concern status raise significant concerns. The legal proceeding and termination of the distribution agreement further contribute to a negative outlook.

Positives

• PressureSafe received FDA listing certification as a Class I device, which is a significant regulatory milestone.
• Usability studies for PressureSafe show promising results, with high efficacy in detecting pressure injuries.
• The company secured a grant from the IIA to develop DiaSafe, providing financial support for this project.
• The company is actively seeking additional funding to continue its operations and development efforts.
• The company has a strong intellectual property portfolio, with patents protecting its core technologies.

Negatives

• The company is facing financial difficulties, with a net loss of $1.899 million in 2024 and an accumulated deficit of $16.738 million.
• There is substantial doubt about the company's ability to continue as a going concern without additional funding.
• The company terminated its distribution agreement with PI Prevention Care LLC due to a breach of contract, which may delay commercialization efforts.
• The company is involved in a legal proceeding in Israel, with the plaintiff claiming damages of approximately $2.1 million.
• The company's technology development is headquartered in Israel, which exposes it to economic and political instability risks.
• The company had to reduce its workforce and executive compensation due to financial constraints.

Risks

• The company's ability to continue as a going concern is dependent on securing additional funding.
• Delays in obtaining regulatory approvals for its devices could impact the company's ability to generate revenue.
• Competition from other medical device companies could impact the market acceptance of the company's products.
• Economic restrictions and political instability in Israel could negatively impact the company's operations.
• The legal proceeding in Israel could result in significant financial liabilities.
• The company's reliance on third-party manufacturers and suppliers could be disrupted.
• The company's success depends on its ability to attract and retain key management and R&D personnel.
• The company's intellectual property rights may be challenged or infringed upon by competitors.
• The company may be subject to numerous and varying privacy and security laws, and its failure to comply could result in penalties and reputational damage.

Future Outlook

The company plans to continue development efforts of its products, focusing on the DiaSafe device, production of commercial units, marketing, and working capital, while seeking additional funding to support its operations.

Industry Context

The company operates in the competitive medical device market, focusing on diagnostics for pressure injuries and diabetic foot ulcers, areas with significant unmet medical needs and high healthcare costs. The company's AI-driven approach aims to improve early detection and reduce reliance on subjective assessments.

Comparison to Industry Standards

• The document mentions Bruins Biometrics Provizio SEM Scanner as a direct competitor to PressureSafe.
• Bruins product is based on electro-resistance measurement of the skins moisture, a method that is significantly different from the approach contained in the PressureSafe device, which utilizes real-time, multi bio marker, optical monitoring device combined with AI-based capabilities for assessment of PIs in different settings.

Management Changes

Legal Proceedings

• A lawsuit was filed against the Company, the Subsidiary and Mr. Aharon Klein, a Company Director and the Companys Chief Technology Officer in the Tel Aviv District Court of Israel by an individual who provided, on a part time basis, certain consulting services to the Subsidiary between October 2015 through October 2016, prior to the acquisition of the Subsidiary by the Company.
• The lawsuit alleges breach of contract by the defendants based on non-payment of amounts purportedly owed to the Plaintiff in respect of the services rendered, including the market value of the Companys common stock that the Plaintiff alleges should have been issued to him in respect of his services.
• The suit seeks declaratory judgment that the defendants breached certain agreements with the Plaintiff and claimed damages in the aggregate amount of approximately $2.1 million based on the current exchange rate between the U.S. Dollar and the Israeli NIS.

Related Party Transactions

• In 2015, the subsidiary IR. Med Ltd. received a loan from certain of the former IR-Med stockholders to fund its continuing operations.
• In 2017, the subsidiary IR. Med Ltd. received a loan from certain of the former IR-Med stockholder to fund its continuing operations.
• On March 6, 2018, certain of IR. Med Ltd.s shareholders advanced to it a convertible bridge loan in the principal amount of NIS 379,000 ($104,000).
• For the years ended December 31, 2024, and 2023, the Company paid to two directors an aggregate consideration of $170 thousand and US$161 thousand, respectively, in respect of research and development services.
• For the years ended December 31, 2024, and 2023 the Company paid to one shareholder of the Company and his relative an aggregate consideration of $5 thousand and $150 thousand, respectively in respect consulting services.
• For the years ended December 31, 2024, and 2023, the Company paid to three of the Parent Company non-employee directors an aggregate consideration of US$32 thousand and US$36 thousand, respectively ,with respect of their services.
• For the year ended December 31, 2024, the Company paid to four of its officers, salary and related expenses that totaled to $252 thousand.
• For the year ended December 31, 2023, the Company paid to four of its officers, salary and related expenses totaled to $439 thousand, respectively, in respect thereof.
• For the year ended December 31, 2024, the Company recorded a liability on amount of $82 thousand and for the year ended 2023, the Company paid a yearly amount of US$80 thousand to an entity in which two directors of the Company are stakeholders in the entity, for rent and office services.
• Effective March 26, 2025, we entered into the Note Purchase Agreement with Mr. Ran Ziskind, Mr. Yaniv Cohen, and Mr. Oded Bashan for an aggregate amount of $31,200.

Stakeholder Impact

• Shareholders face significant risk due to the company's financial difficulties and potential dilution from future equity offerings.
• Employees experienced workforce reductions and compensation adjustments due to cost-cutting measures.
• Customers may experience delays in the commercial availability of the PressureSafe device.
• Suppliers and creditors may face increased risk of non-payment due to the company's financial constraints.

Next Steps

• Complete larger scale production of the commercial version of the PressureSafe device.
• Initiate sales of PressureSafe in the second half of 2025.
• Continue development of the DiaSafe device.
• Initiate a clinical study in Israel to train the developed algorithm and test patients for DiaSafe.
• Seek additional funding through equity offerings, debt financings, and strategic alliances.

Key Dates

Keywords

PressureSafe, DiaSafe, IR-Med, medical devices, pressure injuries, diabetic foot ulcers, FDA, IIA, financial results, going concern, clinical trials, AI, infrared spectroscopy