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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

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For the fiscal year ended December 31, 2025

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OR

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

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For the transition period from                  to

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Commission File Number 000-29374

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EDAP TMS S.A.

(Exact name of registrant as specified in its charter)

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Registrant’s telephone number, including area code: +33 4 72 15 31 50

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

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

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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 ☒

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Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

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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 ☒ No ☐

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Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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If an emerging growth company, 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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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. ☐

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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. ☐

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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 whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

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The aggregate market value of the voting and non-voting common equity held by non-affiliates based on the closing price per American Depositary Share, or ADS, of the registrant’s ADSs on The Nasdaq Global Market on June 30, 2025 (the last business day of the registrant’s most recently completed second fiscal quarter) was $61,845,277.

As of March 25, 2026, the registrant had 37,481,986 ordinary shares, nominal value €0.13 per share, outstanding.

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TABLE OF CONTENTS

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CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

The statements contained in this Annual Report on Form 10-K (this “Annual Report”) discuss our future expectations, contain projections of our results of operations or financial condition, and include other forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act. Our actual results may differ materially from those expressed in forward-looking statements made or incorporated by reference into this Annual Report.

All statements other than present and historical facts and conditions, including forward-looking statements expressing our beliefs, plans, objectives, business strategy, or future events, performance or results of operations and financial position, are forward-looking statements, which involve estimates, assumptions, risks and uncertainties. Therefore, our actual results and performance may differ materially from those expressed in the forward-looking statements. Forward-looking statements often, although not always, include words or phrases such as the following: “believe,” “plan,” “intend,” “should,” “estimate,” “expect” and “anticipate” or their negative or similar expressions, which reflect our views about future events and financial performance. Forward-looking statements involve inherent 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. 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 “Risk Factors” in this Annual Report. Any forward-looking statement speaks only as of the date on which that statement is made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. We qualify all of our forward-looking statements by these cautionary statements.

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PART I

Item 1. Business.

Company Overview and Strategy

EDAP TMS S.A. (“EDAP,” the “Company,” “we,” “us,” or “our”) is a medical technology company focused on the development, manufacturing, marketing, and sale of non-invasive therapeutic ultrasound and energy-based medical devices.

Our legal name is EDAP TMS S.A., and our commercial name is Focal One®. We were founded in 1979 as a société anonyme organized under the laws of France for a duration of 60 years from the date of incorporation, unless extended by shareholder approval in accordance with French corporate law. We are headquartered in Vaulx-en-Velin, France and operate in the United States, Europe, Asia and the rest of the world. We are listed on The Nasdaq Global Market (“Nasdaq”) under the symbol “EDAP.”

Our technologies are primarily used in urology, with a current focus on the treatment of prostate cancer. We are conducting clinical development activities to support potential expanded indications in urology and women’s health.

We have realigned our business to focus exclusively on applications leveraging our proprietary High Intensity Focused Ultrasound (“HIFU”) technology, driven commercially by our flagship product, Focal One® Robotic HIFU. This realignment is intended to position Focal One HIFU as a differentiated platform that we believe may support higher-margin growth opportunities over time.

Focal One Regulatory Milestones:

Our business model includes obtaining revenue from the sale of capital equipment, as well as recurring revenue from consumables and maintenance services associated with our installed base. Going forward, we plan to pursue potential expansion of clinical indications using the Focal One platform beyond the management of prostate cancer, to include benign prostatic hyperplasia (“BPH”) and endometriosis.

We are sponsoring clinical studies at multiple sites to evaluate the potential use of Focal One in the treatment of symptoms related to BPH, expanding the use of our proprietary HIFU platform in the same medical specialty. Already completed clinical studies and initial clinical use of Focal One in the treatment of DIE suggest that HIFU also has the potential to become an alternative to surgical intervention for select patients, enabling us an important opportunity to address a significant unmet need in women’s health.

These expanded clinical indications for Focal One provide us with additional opportunities for strong, long-term growth, with the potential to bring the benefits of therapeutic HIFU to these large and underserved patient populations. We believe these expanded indications could result in Focal One’s total addressable market expansion, resulting in a stronger business case for healthcare providers and increased revenue for the company.

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Our Products

Our core product portfolio is centered on proprietary ultrasound-based technologies (i.e., HIFU), designed to provide precise, non-invasive alternatives to traditional surgical procedures.

We also market and support non-core, legacy urology product lines, including extracorporeal shock wave lithotripsy (“ESWL”) systems and related accessories and services in select markets as well as distribution of
third-party products such as laser, micro-ultrasounds, and urodynamics systems. These offerings contribute to our installed base, service revenue, and long-standing relationships with urology customers.

Focal One i Robotic HIFU

Our flagship product, the Focal One i Robotic HIFU System (the “Focal One i System”), allows urologists to ablate targeted prostate tissue while limiting exposure to nearby critical structures. Clinical studies have reported high rates of oncologic control along with urinary and sexual function preservation in patients following the procedure.

The system integrates real-time imaging, treatment planning, and precision robotics to deliver pinpoint HIFU ablative energy to the targeted area defined by the physician. The Focal One i System is designed for urologists to perform focal ablation of prostate tissue.

Figure 1 - Focal One i System

Key features of the Focal One i System include:

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The Focal One i System has received regulatory clearances and approvals in multiple jurisdictions, including the United States and Europe. In November 2025, the FDA granted the Company 510(k) clearance for the Focal One i System.

Our recent regulatory clearances and new product introduction reflect our ongoing product development efforts within our platform.

Clinical Evidence

Independent clinical studies have evaluated the use of Focal One Robotic HIFU for the treatment of localized prostate cancer.

The Landmark HIFI Study

In December 2024, Ploussard G. et al. published in the peer-reviewed journal, European Urology, the full results of the HIFI study. The HIFI study is the largest prospective, comparative, multi-center, clinical study ever conducted comparing prostate cancer treatments.

The HIFI study reported results indicating 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.

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HIFU Compared to Surgery: the FARP Randomized Controlled Trial

The final results of the Focal Ablation Versus Radical Prostatectomy (“FARP”) study, the first Randomized Controlled Trial completed comparing ultrasound energy-based focal ablation versus robotic prostatectomy were presented at the American Urological Association (“AUA”) Annual Meeting in April 2025. The study achieved its primary endpoint and demonstrated that the rate of treatment failure in the Focal Ablation (“FA”) group is non-inferior to that in the Radical Prostatectomy (“RP”) group at the final 36-month follow-up.

Summary of FARP Trial Results (AUA Congress 2025):

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Conclusion:

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At three-year follow-up, the rate of treatment failure in the FA group was found to be non-inferior to that in the RP group.

Following the completion of the study and the presentation of the final results, the full manuscript is expected to be submitted for publication in a peer-reviewed journal in 2026.

HIFU Compared to Radiation Therapy: the Multicenter CGRD Study

In October 2025, Yeh et al. published in the International Journal of Urology and Nephrology the 10-year oncological outcomes of external beam radiotherapy (“EBRT”) versus HIFU for stage II prostate cancer: a multicenter Chang Gung research database (“CGRD”) study with inverse-probability-of-treatment weighting (“IPTW”) analysis.

The study found that over a 10-year follow-up period, HIFU demonstrated non-inferior overall survival and cancer-specific survival compared to EBRT. Notably, patients treated with HIFU showed significantly improved overall survival in the stage IIa subgroup, suggesting a potential advantage of HIFU in early-stage prostate cancer management. This retrospective study evaluated data from 420 patients treated between 2005 and 2022 across Taiwan’s largest healthcare network, using IPTW analysis. HIFU also offers the benefit of a single treatment outpatient procedure for patients, compared to radiation therapy requiring 37 to 45 treatment visits.

Key Findings at 10-Year Follow-Up:

Other Prostate Cancer Publications

In October 2025, Rosta G. et al. published in the journal of Cancers, their prospective multicentre study in 51 patients with localized low- or intermediate-risk prostate cancer treated with MRI-guided focal HIFU (Focal One) across three Austrian centres (2021–2024). At 24 months, failure-free survival was 94.1%, with only 5.9% requiring salvage radiotherapy, and 84% of patients with follow-up biopsy were cancer-free.

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PSA levels fell by 69% at 3 months and remained under 3 ng/mL at 24 months.

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Treatment was well tolerated, no Clavien–Dindo grade ≥ 4 events were reported. IPSS returned to or improved beyond baseline, erectile function largely recovered by 6–12 months, and only one new case of grade 2 incontinence was observed. The study concluded that MRI-guided focal HIFU provides high two-year failure-free survival with low morbidity and preserved quality of life in carefully selected patients.

In August 2025, Olivares R. et al. reported the first clinical experience of telesurgery using high-intensity focused ultrasound (HIFU) for localized prostate cancer. A 72-year-old patient with ISUP Grade Group 2 disease was treated remotely from Cleveland, USA, while located in Abu Dhabi, UAE, over 11,412 km, with no complications and minimal blood loss. This case demonstrates the safety and feasibility of HIFU telesurgery and its potential to expand access to specialized care in remote regions.

In November 2023, Rischmann P. et al. published in the journal of Progrès en Urologie their preliminary 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 prostate cancer (“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. Following the completion of the study and the presentation of the final results, the full manuscript is expected to be submitted for publication in a peer-reviewed journal in 2026.

In November 2023, Mala KS, et al., from Berlin Charité University Medicine, Germany, published in the Journal of 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 (30.8%) had in-field recurrence. 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 October 2023, Kaufmann B et al., published in the British Journal of Urology 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 One HIFU treatment for 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 September 2023, Debard C et Al., from CHU de Pellegrin, Bordeaux, France published in the journal 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 December 2022, Jung G, et al., from Seoul National University Bundang Hospital, South Korea, published in the journal of Prostate International their results on their propensity score-matched retrospective study on 685 patients who underwent Partial Gland HIFU Ablation (“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 favorable in PGA compared to
robot-assisted radical prostatectomy.

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 February 2022, Hong et al., from Seoul National University Bundang Hospital, South Korea, published in the Journal of Society Urological Oncology their results on their retrospective study on 163 patients who underwent 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.

Endometriosis Publications

In August 2025, Dubernard G. et al. from Croix Rousse Hospital, Lyon, France, published a comparative retrospective bicentric study in Int J Gynecol Obstet. evaluating high-intensity focused ultrasound (HIFU) versus surgery for rectal endometriosis in 120 patients (60 per group). At 6 months, HIFU was associated with significantly lower complication rates (Clavien–Dindo grade 2: 3.3% vs 21.7%; grade 3: 0% vs 10%) and shorter hospitalization (1 vs 3 days). Both groups showed significant improvement in pain, bowel, and urinary symptoms, as well as in FSFI, KESS, and Wexner scores and overall health status. HIFU provided comparable symptom relief and quality-of-life outcomes to surgery while markedly reducing postoperative morbidity in patients with a single rectal lesion.

In May 2024, Dubernard G. et al, from Croix Rousse Hospital, Lyon, France, published in Human Reproduction journal, the results of a prospective multicenter 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.

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 study 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.

Research and Development

Our research and development (“R&D”) efforts are focused on expanding the capabilities, clinical applications, and technology portfolio of the Focal One i System. Our strategy is centered on three pillars: (1) advancing imaging and targeting precision, (2) integrating next-generation automation and software intelligence, and (3) expanding into new urologic and non-urologic therapeutic indications.

Advancing Image-Guided Precision and Robotic Performance

At the core of our R&D philosophy is the continual enhancement of targeting precision and procedure reproducibility. The Focal One Robotic Positioning System provides five degrees of freedom with automatic safety features, enabling controlled delivery of HIFU energy in a minimally invasive, incision-free manner.

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Our proprietary HIFUsion® software allows physicians to import and elastically fuse MRI and 3D biopsy maps directly into the intraoperative workflow, designed to assist physicians in lesion visualization and identification of surrounding anatomical structures.

R&D initiatives in this area include:

These initiatives are intended to expand procedural reproducibility and workflow standardization across clinical settings.

Next-Generation Imaging, Software Intelligence, and AI-Enabled Automation

We continue to invest in expanding the underlying imaging and software capabilities of the Focal One system. In 2025, the FDA granted 510(k) clearance for new ultrasound imaging and workflow enhancements, adding advanced real-time visualization, streamlined treatment planning, and an updated user interface. These enhancements may support the future development of AI-based features, such as automated visualization tools and treatment assessment support, subject to regulatory review and clearance where required.

We are evaluating potential applications of AI within our platform, and our R&D teams are developing architectures that can support:

These advancements are intended to expand the functionality of our Focal One i System and support long-term differentiation in a market that increasingly favors intelligent, automation-assisted surgical technologies.

Platform Evolution and Product Roadmap

We continue to develop the Focal One i platform, which incorporates next-generation imaging hardware and simplified workflows designed to reduce procedure time and increase adoption. The 2025 FDA clearance reflects regulatory authorization of specific enhancements to the Focal One i System, positioning our platform for scalability and differentiation in the evolving market for focal therapy technologies.

Our long-term roadmap includes:

Our R&D investment strategy is intended to create a durable innovation cycle that supports clinical leadership, regulatory expansion, and commercial adoption. With increasing physician demand for non-invasive, tissue-sparing prostate therapy, a rapidly growing evidence base, and expanding capabilities in precision robotics and AI, we believe our R&D strategy is focused on advancing our Focal One i System and expanding its potential clinical applications over time.

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Intellectual Property

HIFU Technology

Our intellectual property portfolio consists of a broad and expanding collection of patents, patent applications, trademarks, copyrights, trade secrets and other proprietary rights that support our HIFU technologies, systems and associated software.

As of December 31, 2025, our HIFU division held 71 granted patents and 11 pending patent applications across major jurisdictions worldwide, spanning 14 patent families covering core innovations in therapeutic ultrasound principles, system architecture and control, and the software used to plan, monitor and deliver ultrasound-based therapy. Our issued patents are scheduled to expire between 2026 and 2045, although we continually seek to expand and refresh our patent portfolio through new filings and continuation applications.

Our ongoing research and development objectives are to maintain our leadership position in the treatment of prostate cancer and to extend the HIFU technology to new applications and minimally invasive systems. These research projects are conducted in cooperation with the French National Institute for Health and Medical Research (“INSERM”) which 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 devices 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 patents or patent applications, if issued, will provide effective protection for the HIFU division’s proprietary rights in such technology. HIFU devices, 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 1A, “Risk Factors—Risks Relating to Intellectual Property Rights.”

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ESWL Technology

As of December 31, 2025, our ESWL division held 15 granted patents across major jurisdictions worldwide, spanning 4 patent families covering technologies relating to ESWL systems and associated software capabilities, including both piezoelectric and electroconductive technologies associated with ESWL generators, localization systems, and device design. Our issued patents are scheduled to expire between 2027 and 2031.

Markets and Customers

Our Market

Prostate cancer is among the most commonly diagnosed cancers in men globally and is a leading cause of cancer-related mortality. In the United States, the American Cancer Society estimates the number of new prostate cancers to be diagnosed in 2026 to be approximately 333,830, of which approximately 70% are diagnosed with localized stage prostate cancer. Additionally, we estimate, based on figures provided by the World Health Organization, that the worldwide incidence of localized prostate cancer is approximately 1.5 million new cases every year. 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 HIFU into a robust medical field, including numerous medical conditions, including cardiovascular, neurological, urological or women’s health.

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BPH, another widespread 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 is being evaluated for potential application. 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.

Our Customers

Our customers are located worldwide and include academic, public, and private hospitals as well as clinics. We primarily market to urologists who treat patients with prostate cancer and other urological conditions. As a result of our expansion to new clinical indications, we are now starting to market to gynecologists in select markets on the potential of Focal One in the treatment of DIE. No single customer represents a significant portion of our HIFU installed base.

We operate globally, with sales in the United States, Europe, Asia and other international markets.

We believe potential long-term growth may be influenced by factors including expanded clinical evidence, increased adoption of non-surgical approaches, broader reimbursement coverage, and continued penetration of the U.S. market as well as other major international territories.

Sales and Marketing

We market and sell our core Focal One i System and related 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 networks, we maintain a direct marketing and sales force in the United States, France, Germany, United Kingdom, Switzerland, Scandinavia, Malaysia and South Korea, which currently represent our largest markets. Additionally, we market and sell our products through our network of distribution partners in the rest of Europe, Latin America, Middle East, Asia and Southeast Asia.

We also market and support non-core, legacy urology product lines, including ESWL systems and related accessories and services mainly using our direct subsidiaries or representative offices network in Japan, South Korea and Malaysia.

Our sales and marketing strategy emphasizes:

Competition

We compete in markets for the treatment of localized prostate cancer and other urological and gynecological conditions, including the treatment of endometriosis in certain European markets. The treatment landscape for prostate cancer includes a range of established and emerging therapies. Current standard therapies for localized prostate cancer include radical prostatectomy (including robotic-assisted approaches), external beam radiation therapy, brachytherapy, cryotherapy, and active surveillance. Active surveillance, in which patients with low-risk or favorable intermediate-risk disease defer active treatment in favor of ongoing monitoring, has grown significantly in recent years and represents a substantial portion of newly diagnosed prostate cancer patients.

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While these therapies are widely adopted, supported by established clinical guidelines and significant physician familiarity, and in many cases reimbursed by public and private payors, they are associated with side effects that may significantly affect a patient’s quality of life. Radiation-based therapies may carry risks of bowel and bladder toxicity and may limit future treatment options. Cryotherapy has been associated with variable efficacy outcomes as well as urinary and erectile side effects. Surgical approaches, including robotic-assisted prostatectomy, while refined over time, retain the inherent morbidity associated with invasive surgery.

Focal One Robotic HIFU competes across this full spectrum of treatment modalities as a non-invasive ablative alternative. We believe that HIFU offers patients an effective option for managing localized prostate cancer while minimizing treatment-related side effects. We also believe Focal One is well positioned to address demand for focal therapy — sometimes referred to as partial or zonal treatment — which targets cancerous tissue rather than the entire gland, potentially reducing treatment-related morbidity compared to radical approaches. However, focal therapy remains a relatively nascent treatment paradigm, and we face ongoing challenges related to physician education and market adoption.

We also face head-on competition from other companies developing and commercializing HIFU technologies and other energy-based or image-guided ablation technologies. Competitors in the HIFU space include:

Additional competitors include Haifu, a Chinese company commercializing HIFU products for various oncologic applications, as well as companies developing alternative focal therapy approaches including laser ablation, irreversible electroporation, and other image-guided or energy-based technologies. New entrants or technological advances could further intensify competition across these modalities.

Competition in our markets is based on a number of factors, including clinical performance and safety outcomes, the level and quality of supporting clinical evidence, regulatory approvals and labeled indications, reimbursement coverage and payment levels, capital equipment costs and ongoing consumable costs, physician familiarity and training infrastructure, installed base and service support capabilities, and technological innovation and product features.

Certain of our existing and potential competitors have significantly greater financial, technical, marketing, and other resources than we do, and may have longer operating histories and more extensive commercial infrastructures. These competitors may be able to devote greater resources to research and development, clinical trials, regulatory submissions, marketing and sales, and pricing strategies.

We believe that future market adoption of HIFU and focal therapy will depend, in part, on continued clinical evidence development, physician training, reimbursement expansion, and technological innovation. However, there can be no assurance that HIFU-based therapies will achieve broader acceptance relative to established treatment modalities or that our products will remain competitive.

Reimbursement

Reimbursement coverage for our products is an important factor in the commercial adoption of Focal One Robotic HIFU. We have made significant progress in securing reimbursement in the United States and key European markets, and we continue to pursue expanded coverage across additional geographies and indications.

United States — Prostate Cancer

In the United States, the American Medical Association (“AMA”) established a Category I Current Procedural Terminology (“CPT”) code — CPT 55880 — for the ablation of malignant prostate tissue with transrectal HIFU technology. The Centers for Medicare & Medicaid Services (“CMS”) finalized payment rules for hospitals, facilities, and physicians effective January 1, 2021.

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Facility Reimbursement. The 2026 Hospital Outpatient Prospective Payment System (“OPPS”) final rule renewed the assignment of CPT 55880 to the Urology Ambulatory Payment Classification (“APC”) level 6, establishing a national average facility reimbursement of $9,671 per procedure for Medicare patients, adjusted locally based on the wage index. This represents a 4.6% increase compared to 2025. CMS updates hospital payment rates annually.

Physician Reimbursement. CMS established physician payment for HIFU procedures in 2021. Under the 2026 Physician Fee Schedule Final Rule, CMS set total facility Relative Value Units (“RVUs”) for CPT 55880 at 26.33, translating to a national average physician payment of $884 for a urologist performing a HIFU procedure on a Medicare patient in a facility setting. This compares favorably to alternative ablative treatments for prostate cancer under the same conditions in 2026: cryotherapy (CPT 55873) yields total facility RVUs of 20.71, translating to $692; irreversible electroporation (CPT 55877) yields 20.10 RVUs, translating to $675; and transurethral thermal ultrasound ablation (CPT 55882) yields 15.80 RVUs, translating to $530. A laparoscopic or robotic radical prostatectomy yields 32.38 RVUs and $1,087 under the same conditions.

United States — Benign Prostatic Hyperplasia (BPH)

On December 30, 2024, the AMA established a new CPT Category III code, CPT 0950T, to report the use of transrectal HIFU for the treatment of BPH, effective July 1, 2025. In the 2026 OPPS final rule, CMS assigned CPT 0950T to Urology APC level 6, establishing a national average facility reimbursement of $9,671 per procedure for Medicare patients, adjusted locally based on the wage index. We believe this reimbursement pathway for BPH represents a meaningful opportunity to expand the addressable market for Focal One in the United States.

France

In September 2025, the French Ministry of Health awarded reimbursement for HIFU procedures for the treatment of prostate cancer, with coverage effective September 1, 2025. Reimbursement specifically covers use of Focal One Robotic HIFU as a primary treatment for localized prostate cancer and as a salvage treatment option following radiotherapy. This followed a favorable opinion issued in December 2023 by the French National Authority for Health (“HAS”) to include HIFU under the national universal health system, Sécurité Sociale, based on results of the HIFI Study sponsored by the French Urology Association.

For 2026, the French national healthcare system has established bundled payment rates for HIFU in the public sector ranging from €7,762.50 for level 1 to €13,082.72 for level 4, depending on procedure complexity and patient comorbidities. In the private sector, facility payment rates range from €6,061.53 for level 1 to €8,601.91 for level 4. These rates compare favorably to radical prostatectomy reimbursement in France, with HIFU reimbursement exceeding surgical rates at the level 1 and level 2 complexity tiers in the public sector and exceeding surgical rates at all levels in the private sector.

Rest of Europe

In the rest of Europe, Focal One HIFU procedures are currently reimbursed in Italy, Germany, the United Kingdom (where procedures are partially reimbursed by public healthcare systems or private insurers), and Switzerland under certain conditions. We continue to pursue reimbursement coverage in additional European markets.

Reimbursement Risk

Reimbursement coverage and payment levels vary significantly by geography, payor, and indication, and there can be no assurance that current reimbursement levels will be maintained or that coverage will be expanded to additional markets or indications. A reduction in reimbursement rates or a failure to obtain coverage in additional markets could adversely affect adoption of our products and our results of operations. For a further discussion of reimbursement-related risks, see “Risk Factors.”

Manufacturing

Our current manufacturing operations consist of assembling medical products in our facility, which is FDA-registered and certified under the International Organization for Standardization (“ISO”) 13485:2016 standard and Medical Device Single Audit Program (“MDSAP”) program.

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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 certain components we rely on a single source. Most components are secured through contract or dual-sourcing manufacturing strategies, and we conduct regular quality audits of our suppliers’ manufacturing facilities. Our principal suppliers are located in France, Germany, Denmark, and Lithuania. Critical components supplied to us include therapeutic ultrasound transducers, imaging ultrasound systems, and integrated ultrasound system components. To date, we have not experienced material disruptions affecting our ability to deliver systems and services.

Suppliers provide us with key materials and components that can expose us to the risk of supply shortage, obsolescence, or interruption if a supplier is unable to manufacture in accordance with our quality standards or encounters other challenges. We continuously evaluate our supply chain to mitigate concentration risk, including through identification of alternative suppliers for critical components. From time to time, we also experience challenges obtaining certain materials and components, including electronic parts and mechanical components, due to global supply chain and logistics disruptions. To address these risks, we have implemented safety stock programs and modified our order management processes for long lead-time critical components. See Item 1A, “Risk Factors — Risks Related to Our Organization and Operations.”

Quality and Design Control

The manufacturing operations of EDAP TMS France are required to comply with applicable regulatory requirements in the jurisdictions in which we market our products, including the FDA’s Quality System Regulation (“QSR”), which establishes current good manufacturing practice (“GMP”) requirements for medical device manufacturers. In February 2026, the FDA’s Quality Management System Regulation (“QMSR”) became effective, replacing the QSR and aligning U.S. requirements with ISO 13485:2016 standards. EDAP TMS France’s facilities are subject to periodic inspections by the FDA and other regulatory authorities. EDAP TMS France is certified to ISO 13485:2016 and participates in the MDSAP, which involves periodic audits of its quality management system. EDAP TMS France has obtained CE Marking for certain products and maintains processes designed to comply with applicable regulatory requirements of the European Union. Our manufacturing site is also subject to regulatory requirements in Taiwan, Japan, Canada, Brazil, and South Korea.

Regulatory Matters

Government regulation in our major markets, particularly the United States, the European Union, is a significant factor in the development, manufacture and marketing of our products and in our ongoing R&D activities. Our products and operations are subject to regulation by the FDA and regulatory authorities in the countries where we market our products. We are required to comply with requirements governing the design, manufacture, sourcing, testing, certification, packaging, installation, marketing, use and disposal (including recycling) of our products.

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 current good manufacturing practices 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 submission and clearance of a 510(k) application demonstrating substantial equivalence to a legally marketed predicate device. For novel devices that present low to moderate risk but lack a suitable predicate device, the FDA may permit marketing through the De Novo classification process.

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Class III devices generally require submission and approval of a pre-market approval (“PMA”) application, a process that is expensive, time-consuming and may not result in approval. Our Focal One HIFU system is classified by the FDA as a Class II device.

The FDC Act also regulates quality and manufacturing procedures by requiring compliance with the FDA’s QMSR. Our manufacturing facilities are subject to periodic FDA inspections to determine compliance with the QMSR and other regulatory requirements.

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

Healthcare Fraud and Abuse; Transparency

Our U.S. operations are also subject to extensive healthcare fraud and abuse and transparency laws and regulations that may apply to our sales, marketing, contracting, training and educational programs, and other interactions with healthcare professionals (“HCPs”), hospitals and other customers.

These laws include, among others:

Violations of these laws may result in substantial civil, criminal and administrative penalties, including fines, damages, exclusion from participation in federal healthcare programs, reputational harm and additional compliance obligations.

Privacy, Data Protection and Information Security

We are subject to various U.S. and international laws relating to the privacy, protection and security of personal information. In the United States, these laws may include, among others, the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended, to the extent applicable, as well as state privacy and data protection laws and data breach notification requirements.

These laws may impose obligations regarding the collection, use, disclosure, storage and safeguarding of personal information and may require implementation of administrative, technical and physical safeguards, contractual protections with third parties, and notification to regulators and affected individuals in the event of certain data security incidents. Compliance with evolving privacy and data protection requirements may increase our compliance costs and require changes to our business practices and systems.

Regulation in the European Union

In the European Union, we annually perform ISO 13485:2016 and MDSAP certification audits, demonstrating compliance with applicable standards for quality assurance, manufacturing and design control.

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In 2017, the European Union enacted the Medical Device Regulation (“MDR”), which replaced the prior Medical Device Directive (“MDD”). The MDR introduces significant changes to the regulation of medical devices in the European Union, including expanded technical documentation requirements, enhanced post-market surveillance obligations and more stringent clinical evidence requirements. Transitional provisions allow certain devices previously certified under the MDD to remain on the market until December 31, 2028, subject to compliance with specified conditions. We implemented a quality management system compliant with MDR requirements and obtained MDR Quality Management System (“QMS”) certification in September 2024. Devices manufactured by us have obtained MDR certification.

Medical devices marketed in the European Union must bear the “CE Marking”, demonstrating conformity with applicable regulatory requirements. Devices are classified into different risk classes, which determine the conformity assessment procedures and the degree of involvement of a notified body. Our currently marketed devices fall within Classes I, IIa and IIb.

In addition, we are subject to the European Union’s General Data Protection Regulation (“GDPR”), which imposes comprehensive requirements regarding the processing and transfer of personal data and provides for significant administrative fines for non-compliance.

Regulation in Japan

The import and sale of medical devices in Japan are regulated by the Japanese Ministry of Health, Labour and Welfare (“MHLW”) under the Pharmaceuticals and Medical Devices Act. Our Japanese subsidiary holds the required Marketing Authorization Holder license and specific product approvals to import and market our products in Japan. The MHLW also administers national health insurance programs and establishes reimbursement prices for certain medical devices. Inclusion on the reimbursement list is required for coverage under national health insurance programs.

Trade Compliance; Export Controls and Sanctions

We operate internationally and are subject to U.S. and non-U.S. trade laws and regulations, including export controls, economic sanctions, customs laws and anti-boycott regulations. U.S. export control laws and regulations administered by the U.S. Department of Commerce, as well as economic sanctions laws administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control, may restrict the export, reexport or transfer of certain products, software, technology or services to specified countries, entities or individuals and may require export licenses in certain circumstances. Similar laws apply in the European Union and other jurisdictions in which we operate.

Violations of applicable trade laws and regulations could result in civil and criminal penalties, restrictions on our ability to export products or conduct international operations, reputational harm and increased compliance costs.

Human Capital

Overview

Our employees are an important component of our business and contribute to the execution of our strategy and operations. We seek to attract, develop, and retain a skilled workforce to support our commercial, R&D, manufacturing, and administrative activities. In 2025, we continued to focus on recruitment, retention, professional development, compliance, and employee wellbeing.

As of December 31, 2025, we employed 289 employees worldwide, with approximately 24% based in the United States and the remainder located internationally.

Only our employees located in France are represented by a labor union, and we have not experienced any work stoppages or interruptions due to labor disputes worldwide. We believe our employee relations are positive.

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Employee Talent and Retention

Our future operating results depend, in part, on our ability to attract and retain qualified employees, including members of senior management and key personnel. Competition for talent in our industry is significant, and the loss of services of key employees could adversely affect our business.

Our compensation programs are designed to be competitive and aligned with market practices. We periodically review and benchmark compensation to support our ability to attract and retain employees. Employees are encouraged to raise compensation-related concerns with management, Human Resources, or, if preferred, confidentially through our whistleblower hotline.

In addition to base compensation, our total rewards programs may include incentive compensation, equity-based awards, and employee benefits intended to support employee health, financial security, and overall wellbeing.

Culture and Ethics

We seek to promote a high-performance culture that emphasizes collaboration, accountability, and integrity. Our Code of Conduct and related policies address ethical behavior, legal compliance, and workplace standards.

Employees are encouraged to report suspected violations of Company policies or applicable laws to management or Human Resources, or confidentially and anonymously through our whistleblower reporting mechanisms. We are committed to maintaining processes intended to allow employees to raise concerns without fear of retaliation.

Talent Development and Training

We provide training and development opportunities intended to support employee effectiveness, professional growth, and compliance with applicable laws and regulations. These programs include onboarding, role-specific training, leadership development, and compliance and ethics training.

Our commercial organization participates in structured onboarding and ongoing training programs designed to reinforce core competencies, enhance skills, and align execution with commercial strategy. We also provide training programs for global commercial leaders and distribution partners to support consistent execution of our sales processes.

In addition, employees participate in specialized technical, regulatory, and quality-related training, as appropriate to their roles, to support product quality, regulatory compliance, and operational effectiveness.

Health, Safety and Wellness

Protecting the health, safety, and well-being of our employees is an important priority. We maintain workplace health and safety programs across our sites designed to comply with applicable occupational health and safety laws and regulations.

We offer employee benefit programs intended to support physical health, mental health, and overall wellbeing. These programs are periodically reviewed and adapted to address the evolving needs of our workforce, including benefits related to time away from work, family care, and financial wellbeing.

Available Information

Our investor website address is http://investor.focalone.com. We make available on our website, free of charge, our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”). The SEC maintains a website that contains reports, proxy and information statements and other information regarding our filings at www.sec.gov. Information contained on or accessible through our website is not a part of our Annual Report on Form 10-K, and the inclusion of our website address in this Annual Report on Form 10-K is an inactive textual reference only. The information found on our website is not incorporated by reference into this Annual Report on Form 10-K or any other report we file with or furnish to the SEC.

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Item 1A. Risk Factors.

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 RISK FACTORS

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 eight categories listed below. The risks described below are not the only risks facing us.

Risks Related to our Business, Financial Position and Capital Needs

Risks Related to our Indebtedness

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

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Risks Related to our Organization and Operations

Risks Related to Intellectual Property Rights

Risks Related to Our Status as a French Company

Risks Related to Ownership of our Ordinary Shares and the ADSs

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General Risk Factors

Risks Related to Our Business, Financial Position and Capital Needs

If we are unable to obtain additional financing when needed, our ability to continue as a company could be adversely affected.

We have a history of operating losses and expect such losses to continue in the foreseeable future. As of December 31, 2025, we had $20.5 million in cash and cash equivalents, a decrease of $10.5 million from December 31, 2024. We intend to draw down Tranche B of the €36.0 million credit facility agreement (the “Credit Facility”) with European Investment Bank (“EIB”) for €12.0 million in April 2026 on the basis that EDAP believes it has or is able to satisfy to all condition precedents to draw this second tranche at the date this annual report is issued (refer to Notes 1-24 and 16-1-1 to our consolidated financial statements for further discussion on the Credit Facility and the Company’s debt). With these additional proceeds, we believe we will have sufficient funds to support our operations for at least a period of twelve months from the date of issue of this annual report. We may need to seek additional capital in the future to support the expansion of our business, continued research and development activities, and potential commercialization initiatives. Provided certain operational thresholds have been satisfied, following our draw of the Tranche B borrowings, we will be permitted to make one additional draw of €13 million in Tranche C under the Credit Facility, provided we satisfy the conditions precedent. We may not be able to meet the necessary operational thresholds to draw additional amounts under the Credit Facility or raise additional financing on acceptable terms or at all. Management is 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 needs. 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.

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 expand our HIFU business in the U.S. and worldwide to accelerate Focal One HIFU adoption and to further grow our HIFU global activity. 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 ESWL division and our 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 discontinued new system sales in our ESWL business, while continuing to support and service our existing installed base.

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This strategic decision resulted in a decline in revenue related to ESWL in 2025, which we expect will continue to decline going forward. In addition, some distribution agreements with third parties expired in December 2024 and 2025 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.

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.

We incurred operating losses in each of our fiscal years since 2021. We expect that our marketing, selling and R&D expenses will increase as we attempt to further develop and commercialize our HIFU devices. 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.

Changes in U.S. trade policy, including the imposition of tariffs and the resulting consequences, may have a material adverse impact on our business and results of operations.

As a result of new administration and associated policy changes or shifting proposals by the U.S. government, there may be greater restrictions and economic disincentives on international trade. Changes in U.S. trade policy, including the potential imposition of tariffs or other trade restrictions on imported medical devices or components, could increase the cost of importing our products into the United States. Such measures could adversely affect our cost structure, pricing, demand for our products, and overall financial performance. These tariffs and other changes in U.S. trade policy have in the past and could continue to trigger retaliatory actions by affected countries, and certain foreign governments have instituted or are considering imposing retaliatory measures on certain U.S. goods. Foreign governments may also adopt other protectionist measures that could limit our ability to offer our products and services outside of the U.S. The ultimate impact of any tariffs or restrictions on international trade will depend on various factors, including if any tariffs are ultimately implemented, the timing of implementation, and the amount, scope, nature of the tariffs, and corresponding actions by foreign governments. Our U.S.-based subsidiary imports our systems from our manufacturing site in France and is currently impacted by U.S. tariffs. Therefore, increased tariffs increase the cost of our products and the components and raw materials that go into making them. These increased costs may adversely impact the gross margin that we earn on our products, which could make our products less competitive and reduce consumer demand. As such, the increase of tariffs, the adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs or trade agreements or policies has the potential to adversely impact demand for our products, our costs, our customers, our suppliers, and the United States economy, which in turn could have an adverse effect on our business, financial condition and results of operations.

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.

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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 requires 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 markets to obtain lease financing to purchase or lease our equipment. Limited availability of such financing may restrict their ability to complete these transactions and may adversely affect our equipment sales. Furthermore, prevailing macroeconomic conditions, including elevated or rising interest rates compared to prior periods, may make lease financing less attractive or more difficult to obtain, further impacting demand for our products.

Risks Related to our Indebtedness

We have incurred substantial debt, which could impair our flexibility and access to capital and adversely affect our financial position, and our business would be adversely affected if we are unable to service our debt obligations and are subject to default.

As of December 31, 2025, we had total indebtedness of $24.5 million, which consists of $6.0 million of short-term borrowings and $18.5 million long-term debt and obligations under the finance lease, which long-term debt includes those amounts outstanding under the Credit Facility. Our substantial indebtedness may:

Our ability to make payments of principal or interest on our indebtedness depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. If the assumptions underlying our cash flow guidance are incorrect, our business may not continue to generate cash flow from operations in the future sufficient to service our indebtedness and make necessary capital expenditures. If we are unable to generate cash flow sufficient to service our indebtedness and make necessary capital expenditures, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or issuing additional equity, equity-linked or debt instruments on terms that may be onerous or highly dilutive.

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If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, seek additional capital or restructure or refinance our debt. These alternative measures may not be successful and may not permit us to meet debt service obligations. In the absence of such cash flows and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. If we do not make the required payments when due, either at maturity, or at applicable installment payment dates, or if we breach the agreement or become insolvent, the lender could elect to declare all amounts outstanding, together with accrued and unpaid interest, and other payments, to be immediately due and payable. If our indebtedness is accelerated, we cannot assure you that we will have sufficient assets to repay the indebtedness. Any default under our indebtedness would have a material adverse effect on our financial condition and our ability to continue our operations.

Our ability to access future funds under the Credit Facility is subject to conditions that may not be satisfied.

Our ability to access additional liquidity under the Credit Facility is not committed beyond amounts already drawn. We intend to draw on the Tranche B borrowings, whereupon the Credit Facility will have Tranche C borrowings of €13 million undrawn. Tranche C borrowings are available only if we satisfy specified conditions precedent and ongoing requirements—such as financial or operational milestones, regulatory or project deliverables, representations and covenants, absence of default, and timing within defined availability windows. If we do not meet these conditions, EIB has no obligation to fund, and the Tranche C commitments may lapse.

Certain conditions also require corporate actions, including issuing warrants to EIB and providing subsidiary guarantees. Failure to complete these actions or remain in compliance when the Tranche C draw is requested would prevent access to that tranche. If we cannot draw when needed, we may have to seek alternative financing on unfavorable terms or delay, reduce, or eliminate planned initiatives. There can be no assurance we will satisfy the conditions for any future disbursement or that funding will be available when required.

Exercise of the warrants issued to EIB may dilute the ownership interest of our shareholders or may otherwise depress the market price of our ADSs.

Concurrent with our entrance into the Credit Facility, we entered into a warrant agreement (the “Warrant Agreement”) with EIB, which established the terms of the warrants (the “Warrants”) to be issued to EIB prior to the receipt of borrowings under each tranche of the Credit Facility. The exercise of some or all of the Warrants may dilute the ownership interests of our shareholders and any sales in the public market of our ADSs representing the ordinary shares issuable upon such exercise could adversely affect prevailing market prices of our ADSs.

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.

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.

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.

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. 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 R&D, 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 R&D projects to expand our product offerings. Our R&D efforts are critical to our success, and our R&D 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 R&D 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.

Potential issues in the adoption and use of AI in our product offerings may result in reputational harm or liability.

We are building AI into our future product offerings and we expect this element of our business to be a driver for our future growth. We envision a future in which AI operates in our new devices, hardware and software. As with many disruptive innovations, AI presents risks and challenges that could affect its adoption, and, therefore, our business. Our products and services incorporating AI may not be adopted by our users or customers. AI algorithms may be flawed and datasets may be insufficient or contain biased information. Inappropriate or controversial data practices by us or others could impair the acceptance of our AI products or solutions.

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 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 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.

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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, medical devices are regulated under the EU Medical Device Regulation (EU) 2017/745 (“MDR”), which imposes more stringent requirements on the conformity assessment, clinical evidence, post-market surveillance, and commercialization of medical devices. The MDR includes transitional provisions for certain legacy devices, with compliance deadlines that vary depending on device classification and other factors, and may extend to as late as December 31, 2028. The extension of the period during which devices may be placed on the market is subject to certain conditions.

To continue to market our products in the European Union, we have implemented a quality management system (“QMS”) and are executing an MDR compliance program designed to support compliance with applicable requirements within relevant timelines. We continue to implement operational measures and conduct internal audits to support ongoing compliance and enable distribution of our products in the European and international markets, where applicable. However, evolving regulatory requirements, increased scrutiny from notified bodies, and our ability to maintain ongoing compliance with MDR requirements may adversely affect our business, financial condition, and results of operations.

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.

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:

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.

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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 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 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 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 2026 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.

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.

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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.

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.

We recently made a strategic shift 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:

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.

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.

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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 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.

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 cyberattack 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. 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.

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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.

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.

In addition, we rely on collaborators, consultants and advisors, including scientific and clinical advisors, to assist us in formulating our R&D 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.

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

Our devices require highly qualified individuals with a high level of expertise and experience in design, software, AI, 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 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 some of our customers and 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, such as breaches of data security, disruptions of information technology systems and cyber threats, 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, diminution in the value of our investment in R&D, data privacy issues and increased cybersecurity protection and remediation costs. Like many companies, we have experienced nonmaterial cybersecurity incidents in the past and may in the future experience some of these incidents given that the external cyberattack threat continues to grow in part due to a perceived increased vulnerability associated with partly remote working conditions. While we have protocols in place to protect against such threats, we may fail to identify all threats like fraudulent payment requests that we may receive in the future and may inadvertently provide payment in connection with such requests, which may have a material adverse effect on our business, financial condition or results of operations.

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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 cyberattack, 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. In this context, we have a cyber insurance policy at a group level with coverage to mitigate some of our cyber security risks.

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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In prior periods we have identified material weaknesses in our internal control over financial reporting with respect to our U.S. subsidiary. If we experience additional material weaknesses in the future or otherwise fail to maintain 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.

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. Although we have not identified any material weaknesses in our internal control over financial reporting as of December 31, 2025 we have identified material weaknesses in prior periods, which have since been remediated.

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.

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.

Any failure to complete our assessment of our internal control over financial reporting, to remediate any material weaknesses that we 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.

Based on the remediation activities performed and the results of the testing conducted during 2025, management concluded that the previously identified material weaknesses were remediated as of December 31, 2025.

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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.

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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 results 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.

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, 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.

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.

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

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.

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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.

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.

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

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 Being 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.

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These regulations include, but are not limited to (i) HIPAA, 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 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. 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 differs from the mix of currencies in which we earn revenue. Our operating profitability could be materially adversely affected by large fluctuations in the rate of exchange between the euro and other currencies, particularly the U.S. dollar and the Japanese yen. While we periodically enter into foreign exchange forward contracts to hedge against these fluctuations, there can be no assurance that such hedging activities will limit the effect of exchange rate movements on our results of operations. Exchange rate fluctuations will also affect the U.S. dollar equivalent of any euro-denominated dividends received by holders of ADSs. For more information concerning our exchange rate exposure, see Item 7A, “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.

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:

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.

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.

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It is possible that some of these parties will have interests that are different from, or in addition to, the interests of our shareholders.

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 became a U.S. Domestic Issuer and a smaller reporting company on January 1, 2026, which will likely result in significant additional costs and expenses.

As of June 30, 2025, we no longer qualified as a foreign private issuer and, as a result, are required to comply with the reporting requirements applicable to U.S. domestic issuers beginning January 1, 2026. 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 previoulsy incurred as a foreign private issuer. We are now required to file periodic reports, including quarterly reports on Form 10-Q, 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 were required under current SEC and Nasdaq rules to modify certain of our policies to comply with corporate governance practices associated with U.S. domestic issuers. In addition, we lost 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.

​

In addition, we now qualify as a “smaller reporting company” under Rule 12b-2 of the Exchange Act and will remain a smaller reporting company until we have (i) a non-affiliate public float of at least $250 million and annual revenues of at least $100 million or (ii) a non-affiliate public float of at least $700 million, each as determined on an annual basis. As a smaller reporting company, we are not required to include a compensation discussion and analysis section and we will provide only two years of audited financial statements. We also will have other “scaled” disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies. Because we will be subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not smaller reporting companies, our shareholders could receive less information than they might expect to receive from other U.S. domestic public companies. We cannot predict if investors will find our ADSs less attractive if we elect to rely on these exemptions, or if taking advantage of these exemptions would result in less active trading or more volatility in the market price of our ADSs.

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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 Related 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 2025 was approximately 80,000, the high and low bid price of our ADSs for the last two fiscal years ended on December 31, 2025, and December 31, 2024, was $3.45 and $8.50, and $1.21 and $2.12, 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 2025 was 62,959 as opposed to 235,289 for the same period of 2024. 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 ADSs 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 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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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. Global conflicts, potential global conflicts, as well as current global geopolitical situations, may affect regional stability and economic growth throughout the world.

It is difficult to predict the consequences and outcomes of global conflicts, and potential global 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.

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 1.0% in 2024 and 0.5% in 2025 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 material disruptions that have impacted our consolidated financial results as a result of these developments.

In addition, 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.

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.

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Such natural disasters could have a material adverse impact on our business, financial condition, results of operations, or cash flows.

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

Current geopolitical instability including global conflicts, potential global conflicts, their 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.

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 may 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 27, 2025, our shareholders renewed and extended resolutions allowing the Board of Directors to issue new shares in an aggregate maximum amount of 20 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, 2025, 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.

On October 17, 2025, we requested the Tranche A borrowings under the Credit Facility and issued 2,624,421 Tranche A Warrants to EIB. Each Tranche A Warrant entitles EIB, upon exercise, to subscribe for one ordinary share. In addition, we intend to request disbursement of Tranche B borrowings under the Credit Facility, prior to which we will issue Tranche B Warrants to EIB.

On June 27, 2025, 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 (equivalent to Restricted Stock Units “RSUs”) to motivate and reward the teams dedicated to successfully implementing our worldwide activities. These new resolutions superseded previous resolutions. Based on June 27, 2025, resolutions, a total of 106,000 subscription options were granted to certain employees in late 2025 and 493,000 subscription options were granted in the first half of 2025 based on previous resolutions, under certain conditions. As of December 31, 2025, we had 4,889,380 subscription options outstanding. No free shares were granted to employees in 2025 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.

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Non-executive directors may not receive free shares nor stock-options.

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.

Item 1B. Unresolved Staff Comments.

None.

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Item 1C. Cybersecurity.

Risk Management and Strategy

We have developed and implemented a cybersecurity risk management program designed to safeguard sensitive information, protect our information systems, and ensure the integrity and continuity of our operations. Our cybersecurity program is integrated into our overall enterprise risk management processes and includes governance, risk assessment, mitigation, detection, response, and recovery procedures that are designed to be commensurate with the size and complexity of our operations.

Our cybersecurity risk management framework addresses risks relating to network security, data protection, encryption, access controls, system monitoring, and other technical and organizational measures intended to protect our systems and data from unauthorized access, disruption, or misuse. We also implement information security measures designed to meet contractual and regulatory requirements applicable to our business and, where applicable, the information security standards required by certain customers.

To protect our systems and information from cybersecurity threats, we use a combination of internal resources and external service providers, as well as commercially available security tools and technologies generally utilized by companies of our size and industry.

Our cybersecurity risk management processes include, among other things:

We evaluate the materiality of cybersecurity incidents in accordance with applicable securities law standards, taking into account quantitative and qualitative factors, including the potential impact on our business operations, financial condition, results of operations, reputation, and relationships with customers and other stakeholders.

As of the date of this Annual Report, we have not identified any risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected, or are reasonably likely to materially affect, the Company, including our business strategy, results of operations, or financial condition. However, cybersecurity threats continue to evolve, and future incidents could materially adversely affect us.

Governance

Board Oversight

Our Board of Directors oversees cybersecurity risk as part of its overall risk oversight responsibilities and has delegated primary responsibility for oversight of our cybersecurity risk management program to the Audit Committee. The Audit Committee receives periodic updates regarding our cybersecurity risk profile, significant threat developments, control enhancements, and any significant cybersecurity incidents.

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The Chair of the Audit Committee reports to the full Board of Directors regarding cybersecurity matters, including any significant incidents and related remediation efforts.

Management’s Role and Expertise

Management is responsible for assessing and managing material risks from cybersecurity threats. Oversight of our cybersecurity risk management program is led by our Vice President of Information Technology, who is responsible for the implementation and operation of our cybersecurity controls and reports regularly to senior management, including our Chief Executive Officer, Chief Financial Officer, and General Counsel. Our Vice President of Information Technology brings over 20 years of experience in information technology leadership, with expertise spanning enterprise systems, cybersecurity controls, data analytics, and IT infrastructure development.

The Company performs periodic assessments and testing of its cybersecurity controls, including through internal resources and third-party service providers. Findings are reported to senior management, and material matters are escalated to the Audit Committee as appropriate.

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Senior management provides periodic updates to the Audit Committee regarding cybersecurity risks and mitigation efforts, and material cybersecurity matters are escalated to the Board of Directors as appropriate.

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Item 2. Properties.

We maintain our principal manufacturing and administrative facility in Vaulx-en-Velin, near Lyon, France. We lease approximately 4,150 square meters of office and manufacturing space at this location pursuant to a renewable commercial lease agreement that originally became effective on July 1, 2015. The lease was renewed in November 2024 for a nine-year term effective July 1, 2025. The lease permits termination at the end of the third and sixth years of the renewed term. This facility serves as our primary site for the manufacturing of our medical device systems and related consumables, as well as certain administrative functions. We believe the terms of this lease reflect current market conditions.

In addition, we lease office and/or warehouse facilities in Kuala Lumpur, Malaysia; Flensburg, Germany; Wollerau, Switzerland; Austin, Texas and Los Altos, California, United States; Seoul, South Korea; and Fukuoka, Osaka, Sapporo and Tokyo, Japan. These facilities support our sales, service, distribution and administrative operations in their respective regions.

We believe that our existing facilities are suitable and adequate for our current operations and that appropriate additional or substitute space will be available on commercially reasonable terms as needed. We are not aware of any environmental conditions relating to our leased properties that would materially adversely affect our business or the utilization of such facilities.

Item 3. Legal Proceedings.

From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. We do not have any pending legal proceedings.

Item 4. Mine Safety Disclosures.

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Since July 31, 1997, our ADSs are traded on The Nasdaq Global Market under the symbol “EDAP.”

Stockholders

As of February 27, 2026, there were 20 participants in DTC that held our ADSs and four holders of record of our ordinary shares. The actual number of holders is greater and includes beneficial owners whose ADSs are held in street name by brokers and other nominees. The number of holders of record and DTC participants also does not include holders whose shares may be held in trust by other entities.

Unregistered Sales of Securities

On October 17, 2025, we issued 2,624,421 Tranche A Warrants to EIB in connection with the closing of Tranche A under the Finance Contract.

Issuer Purchases of Equity Securities

None.

Dividend Policy

The payment and amount of dividends depend on our earnings and financial condition and such other factors that our Board of Directors deems relevant. Dividends are subject to recommendations by the Board of Directors and a vote by the shareholders at the shareholders’ ordinary general meeting. Dividends, if any, would be paid in euro and, with respect to ADSs, would be converted at the then-prevailing exchange rate into U.S. dollars. Holders of ADSs will be entitled to receive payments in respect of dividends on the underlying shares in accordance with the deposit agreement dated as of July 31, 1997, as amended and restated as of April 7, 2008, among our company, The Bank of New York Mellon, as Depositary, and all owners and beneficial owners from time to time of ADSs issued thereunder (the “Deposit Agreement”).

No dividends have ever been paid to shareholders and we do not anticipate paying any dividends for the foreseeable future. Thereafter, any declaration of dividends on our shares as well as the amount and payment will be determined by a majority vote of the holders of our shares at an ordinary general meeting, following the recommendation of our Board of Directors. Such declaration will depend upon, among other things, future earnings, if any, the operating and financial condition of our business, our capital requirements, general business conditions and such other factors as our Board of Directors deems relevant in its recommendation to the shareholders.

Item 6. [Reserved]

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion of our consolidated financial condition and results of operations in conjunction with the financial statements and the notes thereto included elsewhere in this report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Current Report, particularly in “Risk Factors.” See “Special Note Regarding Forward-Looking Statements” for more information. This section generally discusses the results of our operations for the year ended December 31, 2025, compared to the year ended December 31, 2024. For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to Part I,

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Item 5, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 20-F for the year ended December 31, 2024, as filed with the SEC on March 27, 2025.

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.

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. This new strategy has impacted, and we expect it will continue to impact our operating results. See “Risk Factors.”

Our total revenues 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 and net sales of disposables. 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 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. In the U.S. and in certain jurisdictions, we provide Focal One system for a defined period under an operating lease with the intent to convert to a capital sale at the end of the defined period. In Europe, we provide Focal One systems to clinics and hospitals for a limited duration under an RPP model. Under this model, 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. We expect this business model to generate a smaller, although more predictable, stream of revenue.

Regarding the ESWL division, and in line with our new strategy, we have made the decision to stop selling the Sonolith i-move lithotripsy product line. Final system sales were concluded in the second half of calendar year 2025. This resulted in a decline in revenue related to ESWL in 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.

Revenues recorded in our Distribution division included sales of complementary products such as lasers, micro-ultrasound systems and other products from third parties, including the associated disposables and maintenance contracts.

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

We derive a significant portion of net sales of medical devices and disposables from our operations in the U.S. Net sales derived from our operations in the U.S. represented 40% of our total consolidated net sales in 2025 compared to 28% in 2024, primarily driven by an increase in HIFU system sales in the U.S. relative to the rest of the world. Net sales derived from our operations in the rest of the world represented 60% of our total consolidated net sales in 2025 compared to 72% in 2024. This decline was primarily driven by a strategic shift from the ESWL and Distribution businesses. See Item 8 - Financial Statements and Supplementary Data. 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”.

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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.

Fiscal Year Ended December 31, 2025 Compared to Fiscal Year Ended December 31, 2024

Noted below are Net Sales and Profit (Loss) of our divisions. See Note 29 of Item 8 - Financial Statements and Supplementary Data.

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Total revenues

Our total revenues increased 1.6% from $69.4 million in 2024 to $70.5 million in 2025.

HIFU Division

The HIFU division’s total revenues increased by 44.8% from $25.8 million in 2024 to $37.4 million in 2025, reflecting growth of equipment sales and treatment-driven revenue.

The HIFU division’s net sales of medical devices increased 72.1% with $18.1 million in 2025, with 35 Focal One units sold (including 20 in the U.S.), as compared to $10.5 million in 2024, with 22 Focal One units sold (including 12 in the U.S.). Treatment-driven revenue, which includes net sales of RPP & leases, net sales of disposables and treatments related services, increased by 24.9% to $16.1 million in 2025.

Net sales of HIFU maintenance services increased by 31.2% to $3.1 million in 2025.

As a result of this growth, the HIFU division represented an increasing share of our total revenues in 2025 compared to the prior year, consistent with our strategic focus on expanding our higher-margin HIFU business while revenues from legacy Distribution and ESWL activities continue to represent a smaller portion of total revenues over time.

ESWL Division

The ESWL division’s total revenues decreased 23.2% from $9.7 million in 2024 to $7.5 million in 2025, primarily due to the decrease in sales of equipment, consistent with our strategic shift to de-emphasize our ESWL division and the end of manufacturing of ESWL device in 2024.

The ESWL division’s net sales of medical devices decreased 71.4% from $2.7 million in 2024 to $0.8 million in 2025 with 4 ESWL devices sold in 2025 compared to 13 ESWL units sold in 2024.

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Net sales of ESWL-related consumables, spare parts, supplies, RPP, leasing and services decreased 4.3% from $7.0 million in 2024 to $6.7 million in 2025.

Distribution Division

The Distribution division’s total revenues decreased 24.1% from $33.9 million in 2024 to $25.7 million in 2025, primarily due to the termination of distribution agreements.

The Distribution division’s net sales of medical devices decreased 14.4% from $16.2 million in 2025 to $13.9 million in 2025, consistent with our strategy to de-emphasize our Distribution division.

Net sales of Distribution-related consumables, spare parts, supplies, leasing and services decreased 33.0% from $17.7 million in 2024 to $11.8 million in 2025, reflecting the termination of distribution agreements.

Cost of Sales and Gross Margin

Cost of sales decreased 0.3% from $40.7 million in 2024 to $40.5 million in 2025 and represented 57.5% as a percentage of net sales in 2025, down from 58.6% as a percentage of net sales in 2024. Gross margin increased to 42.5% during the year ended December 31, 2025, compared to 41.4% for the year ended December 31, 2024. The increase in gross margin was primarily attributable to the growth in HIFU unit sales which drives higher gross margins and favorable absorption of our fixed costs due to higher production volumes, partially offset by impact of tariffs and higher excess and obsolete inventory charges.

Operating Expenses

Operating expenses increased 7.3%, or $3.7 million, from $51.0 million in 2024 to $54.7 million in 2025.

Marketing and sales expenses were stable compared to 2024, at $27.3 million in 2025.

Research and development (“R&D”) expenses increased 15.5% to $9.7 million in 2025 from $8.4 million in 2024, primarily due to the increase in research and development activities associated with our HIFU development programs and clinical studies. R&D expenses are net of R&D grants and tax credits of $0.4 million in 2025 and $0.6 million in 2024.

General and administrative expenses increased $2.5 million or 16.3% to $17.7 million in 2025, primarily driven by the expansion in the U.S.

Financial (Expense) Income, Net

Net financial expense was $3.1 million in 2025, compared with a net financial income of $0.6 million in 2024.

The financial expense was primarily driven by the variation of the fair value of the warrants we issued to EIB of $2.6 million and the interest expense of the EIB loan of $0.3 million, each in 2025.

Foreign Currency Exchange Gain (Loss), Net

In 2025, we recorded a net foreign currency exchange loss of $1.0 million, mainly due to the variation of the U.S. Dollar against the Euro and the Japanese Yen, compared to a gain of $1.3 million in 2024.

Income Taxes

Income tax expenses in the consolidated statement of operations remained relatively flat at $0.4 million in 2025, compared to $0.3 million in 2024.

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Net Loss

As a result of the above, we recorded a consolidated net loss of $29.2 million in 2025 compared with a consolidated net loss of $20.6 million in 2024.

For comparison between the fiscal year ended December 31, 2024 and the fiscal year ended December 31, 2023, please refer to our annual report on Form 20-F filed with the SEC on March 27, 2025.

Effect of Inflation

In 2025 and 2024, geopolitical instability and other factors have led to 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.

Liquidity and Capital Resources

Our primary sources of capital from inception through December 31, 2025, have been from ongoing operations, proceeds from our public and private securities offerings and the incurrence of indebtedness.

As of December 31, 2025, our total indebtedness, comprised of short term borrowings, long term debt and obligations under finance lease, was $24.5 million, of which $8.3 million is classified as current in our Consolidated Balance Sheet. As of December 31, 2025, we had $6.9 million outstanding under our EIB Loan (as defined below) and 2,624,421 Tranche A Warrants issued to EIB. The fair value of outstanding Warrants as of December 31, 2025 was $8.1 million.

As of December 31, 2025, we had $20.5 million in cash and cash equivalents, a decrease of $10.5 million from December 31, 2024. We intend to draw Tranche B of its Credit Facility with EIB for €12 million in April 2026 on the basis that we believe that we have or are able to satisfy to all condition precedents at the date of this annual report (refer to Notes 1-24 and 16-1-1 to our consolidated financial statements for further discussion on the Credit Facility and Company’s debt). With these additional proceeds, we believe we will have sufficient funds to support our operations for at least a period of twelve months from the date of issue of this annual report.

Our primary short-term needs for capital for our planned operations, which are subject to change, include:

We have based our short-term capital needs and planned operating requirements on assumptions that may prove to be incorrect and we may use all our available capital resources sooner than we expect. We may require additional financing to fund our operations and planned growth. We may also seek additional financing opportunistically. We may seek to raise any additional capital through public or private equity offerings or debt financings, credit or loan facilities or a combination of one or more of these funding sources. Additional funds may not be available to us on acceptable terms or at all. If we fail to obtain necessary capital when needed on acceptable terms, or at all, we could be forced to delay, limit, reduce or terminate our product development programs, commercialization efforts or other operations. If we raise additional funds by issuing equity securities, our stockholders will suffer dilution and the terms of any financing may adversely affect the rights of our stockholders. In addition, as a condition to providing additional funds to us, future investors may demand, and may be granted, rights superior to those of existing stockholders. If we raise additional capital through collaborations agreements, licensing arrangements or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product or grant licenses that may not be favorable to us. Debt financing, if available, may involve restrictive covenants limiting our flexibility in conducting future business activities, and, in the event of insolvency, debt holders would be repaid before holders of our equity securities received any distribution of our corporate assets. In addition, market conditions impacting financial institutions could impact our ability to access some or all of our cash, cash equivalents and marketable securities, and we may be unable to obtain alternative funding when and as needed on acceptable terms, if at all.

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EIB Obligations

Finance Contract

On October 17, 2025 (the “Effective Date”), we entered into a €36.0 million credit facility agreement (the “Finance Contract”) with the European Investment Bank (“EIB”, and such credit facility, the “Credit Facility”). We plan to use the proceeds from the Credit Facility to further our research and development projects relating to our robotic medical technology using high-intensity focused ultrasound to treat various medical conditions such as prostate cancer and endometriosis (the “Project”).

The Credit Facility is comprised of three tranches: €11.0 million for the first tranche (“Tranche A”), €12.0 million for the second tranche (“Tranche B”), and €13.0 million for the third tranche (“Tranche C”, and collectively, the “Tranches”). Each Tranche has and will have a maturity date of five years following disbursement of borrowings. The disbursement of borrowings for each Tranche is subject to certain conditions.

On October 17, 2025, we requested the Tranche A borrowings and issued 2,624,421 Tranche A Warrants to EIB. Each Tranche A Warrant entitles EIB, upon exercise, to subscribe for one ordinary share, representing a share capital increase for the Company of a maximum nominal amount of €341,174.73, at a strike price (issue premium included) of €1.51 per ordinary share. The Tranche A €11.0 million borrowings were disbursed by EIB early November 2025. The Tranche A borrowings will mature five years from the disbursement date and interest on the Tranche A borrowings shall be payable on the maturity date of Tranche A, and shall capitalize annually by increasing the principal amount of Tranche A. Interest will accrue on Tranche A borrowing at a fixed rate of 8% per annum.

We are entitled and intend to request for disburement of Tranche B borrowings for €12.0 million in April 2026 on the basis that we believe we have or are able to satisfy to all condition precedents to draw this second tranche at the date this annual report is issued. Those conditions include, among other things:

We are entitled to, and may request, disbursement of Tranche C borrowings at any time in the 30 months following the Effective Date upon the occurrence of certain conditions, including, among other things:

Interest will accrue on Tranche A and Tranche B borrowings at a fixed rate of 8% per annum and 7% per annum, respectively, payable on an annual basis; however, such interest is permitted to be deferred, such that it is payable at the maturity date of each such Tranche. Interest will accrue on Tranche C borrowings at a fixed rate of 6% per annum, payable on an annual basis until the Tranche C maturity date.

Subject to certain terms and conditions, upon the occurrence of certain events, EIB may (i) demand immediate repayment of all or part of the outstanding borrowings, depending on the specific event, together with accrued interest, and all other accrued or outstanding amounts payable to EIB under the Finance Contract and/or cancel any undisbursed Tranches and (ii) accelerate the vesting of the Warrants and EIB’s exercisability of its put right with respect to the Warrants. The Finance Contract also includes a customary event of default.

As a condition precedent to the disbursement of Tranche A, we had to provide to EIB guarantee agreements of certain of our subsidiaries wherein such subsidiaries provided guarantees with respect to the Company’s obligations towards EIB under the Finance Contract.

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During 2026 we obtained a waiver from the EIB relating to an Event of Default triggered by a non-compliance under a separate credit facility. See Note 16-3 Debt Covenants to the consolidated financial statements.

Warrant Agreement

Concurrent with the execution of the Finance Contract, we entered into a warrant agreement (the “Warrant Agreement”) with EIB, which establishes the terms of certain warrants (the “Warrants”) to be issued by us to EIB prior to the receipt of borrowings under each Tranche. The Warrant Agreement contains certain customary representations and warranties by us and is governed by French law. As of March 17, 2026, we have issued 2,624,421 Warrants to EIB in connection with borrowings under Tranche A.

The number of Warrants to be issued in connection with our borrowings under Tranche B and Tranche C will be calculated by dividing the corresponding Tranche borrowings (€12.0 million for Tranche B and €13.0 million for Tranche C) by the euro equivalent 90-day average Nasdaq closing price of our ADSs, multiplied by an increasing factor (3 and 4.2, respectively). The exercise price for each Warrant under each Tranche is determined by taking 90 percent of the euro equivalent 90-day average Nasdaq closing price of our ADSs as of the day prior to issuance of the Warrants for the applicable Tranche, as reduced by a 10% discount.

Each Warrant shall be exercisable for one ordinary share, subject to the anti-dilution adjustments described below. The Warrants have a maturity of twenty years, and outstanding Warrants are exercisable upon the earliest to occur of (i) the maturity date of the applicable Tranche, and (ii) the occurrence of certain events (each an “Exercise Event”), including, (a) the disposal of assets, or shares of subsidiaries holding assets, related to research and development projects, (b) a change of control of our company, (c) the maturity date of the last Tranche disbursed under the Finance Contract, (d) the prepayment of any principal amount due under the Finance Contract, or (e) an event of default.

Following any Exercise Event and until expiration of the applicable Warrants, EIB may exercise a put option pursuant to which EIB may require us to repurchase all or part of such then-exercisable Warrants at the fair market value, up to a number of Warrants that would result in the put option price being no higher than €20 million in respect of all then-exercisable Warrants.

The Warrants are not transferable except to certain affiliates of EIB or, following an Exercise Event, to any third parties. We have a right of first refusal to repurchase Warrants that are offered for sale on the same terms and conditions of such offer except in case of a transfer of the Warrants to certain affiliates of EIB, promotional banks or finance agencies set up by one or more member states of the European Union or any transferees of the Credit Facility, or otherwise with our prior written approval.

The Warrant Agreement provides for anti-dilution adjustments triggered by the occurrence of certain events, including: (i) a financial transaction that includes the issuance of new instruments with or without preferential subscription rights of the shareholders (other than the issuance of Warrants in connection with our borrowings under Tranche B and Tranche C), (ii) a free distribution of shares to shareholders, a share split or reverse share split, (iii) an increase of the par value of the shares by incorporation into the share capital of reserves, profits or premiums, (iv) a distribution of reserves or premiums in cash or in kind, (v) a free distribution to our shareholders of any instrument other than our shares, (vi) a repurchase by our company of our own shares at a price higher than the market price (other than a repurchase of our own shares from EIB or its affiliates), (vii) a change in profit distribution, including through the creation of preferred shares, (viii) a reduction or redemption of our share capital, (ix) a dividend distribution, (x) the issuance of any instrument (with or without preferential subscription rights), including by way of dividend distribution or capitalization of profits or reserves (including share premium account and any capital redemption reserve), or (xi) a merger or demerger of our company with or into another entity or other similar operation as a result of which we do not survive, or a spin-off. Such anti-dilution adjustments are subject to certain carve-outs, including (y) the issuance of shares at a price higher than the applicable exercise prices of the Warrants or equity-linked securities with conversion or exercise prices higher than the applicable exercise prices of the Warrants and (z) the grant of equity incentive instruments following the date of the Warrant Agreement in an amount not to exceed 10% of the fully diluted capitalization of our company. For more information on the accounting impact of EIB debt and Warrants on the Financial Statements, see Note 1-24 and Note 16-1-1.

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Material Contractual Obligations

The following table discloses aggregate information about material contractual obligations recorded in our consolidated balance sheet as of December 31, 2025, and periods in which they were due as of that date (in thousands of dollars).

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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 future interest based on effective interest rate, in long-term debt. Future events could cause actual payments to differ from these estimate. Long term debts represent $18.0 million in obligations as of December 31, 2025. This is primarily related to: (i)  Tranche A of the Credit Facility for an amortized cost of $6.9 million (in the principal amount of €11.0 million at inception) and the Warrants issued under the Warrant Agreement for their fair value of $8.1 million; (ii) the remaining $0.7 million balances of two Covid-related loans from French banks in August 2020; and (iii) the remaining $1.3 million balance of an additional French bank loan issued in December 2024 for a total principal amount of €2.2 million at inception, to finance the purchase of ultrasound technology. See Note 16-1 to Item 8 - Financial Statements and Supplementary Data.

Operating and financing leases represent $3.7 million in obligations as of December 31, 2025. These obligations have a maturity date no later than 2031.

Cash Flows

The following table sets forth the primary sources and uses of cash for the periods presented below:

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Net Cash Used in Operating Activities

Net cash used in operating activities for the year ended December 31, 2025, was $16.4 million, consisting of net loss of $29.2 million off-set by non-cash expenses of $9.9 million and positive changes in working capital of $2.9 million. These non-cash expenses primarily consisted of $3.4 million of depreciation and amortization, $2.6 million of stock-based compensation expense, and $2.9 million related to the change in the fair value of the Tranche A Warrants. The changes in working capital are primarily comprised of a net decrease in inventory of $6.8 million and a decrease in accounts payable of $3.0 million and an increase in accounts receivable of $0.6 million.

Net cash used in operating activities for the year ended December 31, 2024, was $14.7 million, consisting of a net loss of $20.6 million, and negative changes in working capital of $2.1 million, partially offset by non-cash expenses of $8.0 million. These non-cash expenses primarily consisted of $2.8 million of depreciation and amortization, $3.6 million of stock-based compensation expense, $1.0 million in allowance for doubtful accounts and slow-moving inventory. The changes in working capital are primarily comprised of a net increase in inventory of $4.4 million and a increase in accounts payable of $1.3 million, a decrease in accounts receivable of $0.2 million and in increases un accrued expenses of $1.7 million.

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Net Cash Used in Investing Activities

Net cash used in investing activities for the year ended December 31, 2025, was $5.7 million, consisting primarily of investments of $3.7 million in capitalized assets, investment of $1.2 million in property and equipment, and investment of $0.8 million in intangible assets.

Net cash used in investing activities for the year ended December 31, 2024, was $4.5 million, consisting primarily of investments of $2.8 million in capitalized assets, investment of $1.4 million in property and equipment, and investment of $0.2 million in intangible assets.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the year ended December 31, 2025, was $8.6 million, consisting primarily of the net proceeds of $12.4 million from borrowings under the Credit Facility, repayments of long-term borrowings and financing leases for $2.9 million and a decrease of short-term borrowings of $0.9 million.

Net cash provided by financing activities for the year ended December 31, 2024, was $5.0 million, consisting of the net proceeds of $0.1 million from the exercise of stock options, the net proceeds of $2.8 million from long term borrowings, the repayments of long-term borrowings and financing leases for $1.9 million and an increase of short-term borrowings of $4.0 million.

Critical Accounting Policies

See “Note 1. Summary of Significant Accounting Policies —” of the Notes to consolidated financial statements for a description of significant accounting policies.

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.

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.

Off-Balance Sheet Arrangements

At December 31, 2025, we had no off-balance sheet arrangements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

As a Smaller Reporting Company, we are not required to provide the information under Item 7A.

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Item 8. Financial Statements and Supplementary Data.

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INDEX TO FINANCIAL STATEMENTS

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors
EDAP TMS S.A.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of EDAP TMS S.A. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, shareholders’ equity, and cash flows for the years then ended, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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Revenue recognition – Identification of distinct performance obligations in multiple-element arrangements related to sales of medical devices produced by the Company  

As discussed in Note 1-5 to the consolidated financial statements, the Company’s sale arrangements may contain multiple elements, including medical devices produced by the Company, consumables, and services such as maintenance or warranty extensions. The Company identifies goods or services within the contract that constitute distinct performance obligations.  

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We identified the identification of distinct performance obligations included in the contracts with customers for the sales of medical devices produced by the Company as a critical audit matter, because each customer contract is a specific contract, with distinct performance obligations. Challenging auditor judgment was required in evaluating the impact of the terms and conditions in contracts with multiple elements to assess the identification of distinct performance obligations.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s revenue recognition process related to the identification of distinct performance obligations included in multiple-element arrangements. For certain medical device sales, we obtained and read the executed contracts and assessed the Company’s identification of distinct performance obligations.

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We have served as the Company’s auditor since 2018.

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Lyon, March 25, 2026

KPMG S.A.

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Stéphane Gabriel Devin

Partner

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EDAP TMS S.A. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

As of December 31, 2025 and 2024

(in thousands of U.S. dollars unless otherwise noted)

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The accompanying notes are an integral part of the consolidated financial statements.

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EDAP TMS S.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

For the years ended December 31, 2025 and 2024

(in thousands of U.S. dollars except share and per share data)

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