FOCL 10-Q
Edap Tms SA (FOCL)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM
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(Mark One)
For the Quarterly Period Ended
OR
for the transition period from _________ to _________
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
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(Address of principal executive offices)(Zip Code) | |
+
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
one Ordinary Share (Ordinary Shares, nominal value €0.13 per share) |
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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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.
Large accelerated filer ☐ | Accelerated filer ☐ | |
Smaller reporting company | Emerging growth company |
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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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of May 6, 2026, the registrant had
TABLE OF CONTENTS
1
Cautionary STATEMENT ON FORWARD-LOOKING INFORMATION
The statements contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”) discuss our future expectations, contain projections of our results of operations or financial condition, and include other forward-looking statements which are made pursuant to the safe harbor provisions within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our actual results may differ materially from those expressed in forward-looking statements made or incorporated by reference into this Quarterly 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:
| ● | risks associated with our financial position, indebtedness and our ability to raise capital; |
| ● | risks associated with the current worldwide inflationary environment, uncertain worldwide economic, political and financial environment, geopolitical instability, climate change impact, pandemic and each of their related impacts on our business operations; |
| ● | the success of our High Intensity Focused Ultrasound (“HIFU”) technology; |
| ● | the uncertainty of market acceptance for our HIFU devices; |
| ● | the clinical and regulatory status of our devices in various geographical territories; |
| ● | the uncertainty in the regulatory agencies review and approval process for any of our devices and changes in their recommendations and guidance; |
| ● | the impact of government regulation, particularly relating to public healthcare systems and the commercial distribution of medical devices; |
| ● | effects of intense competition in the markets in which we operate; |
| ● | the uncertainty of reimbursement status of procedures performed with our products and their level of reimbursement; |
| ● | the market potential for our HIFU devices; |
| ● | dependence on our strategic suppliers and distribution partners; |
| ● | difficulties to attract and recruit high-level experts in software, design, and development of high technology devices such as our HIFU products; |
| ● | any event or other occurrence that would interrupt operations at our primary production facility; |
| ● | reliance on patents, licenses and key proprietary technologies; |
| ● | cybersecurity risks and incidents; |
| ● | product liability risk; |
2
| ● | risk of exchange rate fluctuations, particularly between the euro and the U.S. dollar and between the euro and the Japanese yen; |
| ● | fluctuations in results of operations due to the cyclical nature of demand for medical devices; |
| ● | risks relating to ownership of our securities; and |
| ● | risks relating to securities litigations involving class actions. |
You should also consider the information contained in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 and included in this Quarterly 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.
3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
EDAP TMS S.A. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As of March 31, 2026 and December 31, 2025
(in thousands of U.S. dollars except share and per share data)
(unaudited)
March 31, | December 31, | |||||
ASSETS | | Notes | | 2026 | | 2025 |
Current assets |
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Cash and cash equivalents |
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Current portion of trade accounts and notes receivable, net |
| 3 |
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Other receivables |
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Inventories |
| 4 |
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Other assets, current portion |
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Total current assets |
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Non-current assets |
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Property and equipment, net |
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Operating lease right-of-use assets |
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Intangible assets, net |
| 5 |
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Goodwill |
| 5 |
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Deposits and other non-current assets |
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Deferred tax assets |
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Net trade accounts and notes receivable, non-current |
| 3 |
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Total assets |
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LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
Current liabilities |
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Trade accounts and notes payable |
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Deferred revenues, current portion |
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Social security and other payroll withholdings taxes |
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Employee absences compensation |
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Income taxes payable |
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Other accrued liabilities |
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Short-term borrowings |
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Current obligations under finance leases |
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Current portion of operating lease obligations |
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Current portion of long-term debt |
| 6 |
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Total current liabilities |
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Non-current liabilities |
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Deferred revenues, non-current |
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Obligations under finance leases |
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Operating lease obligations, non-current |
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Long-term debt, non-current |
| 6 |
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Other long-term liabilities |
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Total liabilities |
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Shareholders’ equity |
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Common stock at € |
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Additional paid-in capital |
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Accumulated deficit |
| ( |
| ( | ||
Cumulative other comprehensive loss |
| ( |
| ( | ||
Treasury stock, at cost |
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| ( |
| ( |
Total shareholders’ equity |
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Total liabilities and shareholders’ equity |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
4
EDAP TMS S.A. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended March 31, 2026, and 2025
(in thousands of U.S. dollars except share and per share data)
(unaudited)
Three Months Ended March 31, | ||||||
| Note | | 2026 | | 2025 | |
Sales of goods |
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Sales of RPPs & leases |
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Sales of spare parts and services |
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Total revenues | 9 |
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Cost of goods sold |
| ( |
| ( | ||
Cost of RPPs & leases |
| ( |
| ( | ||
Cost of spare parts and services |
| ( |
| ( | ||
Total cost of sales |
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| ( |
| ( | |
Gross profit |
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Research and development expenses |
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| ( |
| ( | |
Selling and marketing expenses |
| ( |
| ( | ||
General and administrative expenses |
| ( |
| ( | ||
Loss from operations |
| ( |
| ( | ||
Financial (expense) income, net |
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| ( |
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Foreign currency exchange gain (loss), net |
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| ( | ||
Loss before taxes |
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| ( |
| ( | |
Income tax expense |
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| ( |
| ( | |
Net loss |
| ( |
| ( | ||
Earning per share - Basic and Diluted |
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| ( |
| ( | |
Average number of shares used in computation of basic & diluted loss per share |
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The accompanying notes are an integral part of the condensed consolidated financial statements.
5
EDAP TMS S.A. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
For the three months ended March 31, 2026, and 2025
(in thousands of U.S. dollars)
(unaudited)
March 31, | March 31, | |||||
| | 2026 | | 2025 | ||
Net loss |
| ( |
| ( | ||
Other comprehensive loss | ||||||
Foreign currency translation adjustments |
|
| ( | | ||
Comprehensive loss, net of tax |
| ( |
| ( |
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
EDAP TMS S.A. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
For the three months ended March 31, 2026, and 2025
(in thousands of U.S. dollars except for share amounts)
(unaudited)
Additional | Retained | Other | ||||||||||||
Number | Common | paid-in | Earnings / | comprehensive | Treasury | |||||||||
| of shares | | stock | | capital | | (Loss) | | income (loss) | | stock | | Total | |
Balance as of December 31, 2024 | | | | ( | ( | ( |
| | ||||||
Net loss | — | — | — | ( | — | — |
| ( | ||||||
Translation adjustment |
| — | — | — | — | | — |
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Stock-based compensation |
| — | — | | — | — | — |
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Balance as of March 31, 2025 |
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| ( |
| ( |
| ( |
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Balance as of December 31, 2025 | | | | ( | ( | ( |
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Net loss |
| — | — | — | ( | — | — |
| ( | |||||
Translation adjustment |
| — | — | — | — | ( | — |
| ( | |||||
Stock-based compensation |
| — | — | | — | — | — |
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Balance as of March 31, 2026 |
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| ( |
| ( |
| ( |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
7
EDAP TMS S.A. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2026, and 2025
(in thousands of U.S. dollars unless otherwise noted)
(unaudited)
March 31, | March 31, | |||
| 2026 | | 2025 | |
Cash flows from operating activities |
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Net loss |
| ( |
| ( |
Adjustments to reconcile net income (loss) to net cash generated by (used in) operating activities: |
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Depreciation and amortization |
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Share based compensation |
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Change in allowances for doubtful accounts & slow-moving inventories |
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Change in fair value on EIB Warrants and loan amortization | | — | ||
Change in long-term provisions |
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Net capital loss on disposals of assets |
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Deferred tax expense (benefit) |
| ( |
| ( |
Operating cash flow before changes in working capital |
| ( |
| ( |
Increase/Decrease in operating assets and liabilities: |
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Decrease (Increase) in trade accounts and notes and other receivables |
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Decrease (Increase) in inventories |
| ( |
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Decrease (Increase) in other assets |
| ( |
| ( |
(Decrease) Increase in trade accounts and notes payable |
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| ( |
(Decrease) Increase in accrued expenses, other current liabilities |
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| ( |
Net change in operating assets and liabilities |
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Net cash generated by (used in) operating activities |
| ( |
| ( |
Cash flows from investing activities: |
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Additions to capitalized assets produced by the Company |
| ( |
| ( |
Proceeds from sale of leased back assets |
| |
| — |
Acquisitions of property and equipment |
| ( |
| ( |
Acquisitions of intangible assets |
| ( |
| ( |
Decrease (Increase) in deposits and guarantees |
| ( |
| ( |
Net cash generated by (used in) investing activities |
| ( |
| ( |
Cash flow from financing activities: |
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Repayment of long term borrowings |
| ( |
| ( |
Repayment of obligations under financing leases |
| ( |
| ( |
Increase (decrease) in bank overdrafts and short-term borrowings |
| ( |
| ( |
Net cash generated by (used in) financing activities |
| ( |
| ( |
Net effect of exchange rate changes on cash and cash equivalents |
| ( |
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Net increase (decrease) in cash and cash equivalents |
| ( |
| ( |
Cash and cash equivalents at beginning of year |
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Cash and cash equivalents at end of year |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
8
EDAP TMS S.A. AND SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of U.S. dollars unless otherwise noted, except per share data)
NOTE 1. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The accompanying unaudited condensed consolidated financial statements of EDAP TMS S.A. and its subsidiaries (collectively, the “Company,” “we,” “us” or “our”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information, including Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
Effective January 1, 2026, the Company no longer qualified as a “Foreign Private Issuer” as defined in Rule 3b-4 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and became a U.S. domestic issuer. The Company also qualifies as a “smaller reporting company” as defined under the rules of the SEC. This Quarterly Report on Form 10-Q (this “Quarterly Report”) is the Company’s first quarterly report filed as a U.S. domestic issuer.
These unaudited condensed consolidated financial statements have been prepared on the same basis as, and should be read in conjunction with, the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 25, 2026 (the “2025 Annual Report”). In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the financial position, results of operations, and cash flows for the interim periods presented have been included. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the full fiscal year ending December 31, 2026.
The Company has a history of operating losses and expects such losses to continue in the foreseeable future. As of March 31, 2026, the Company had $
However, the Company may need to raise substantial additional financing in order to meet its cash flow needs in the subsequent period and until it achieves profitability. The Company may not be able to raise additional financing on acceptable terms or at all and this condition may in the future raise uncertainty regarding its ability to continue as a going concern. Management is actively exploring various alternatives, including seeking additional funding through the debt and equity capital markets, cost-cutting measures, and restructuring opportunities, but there is no assurance that these efforts will be successful or sufficient to address these liquidity concerns. If the Company is unable to raise capital when needed on acceptable terms, or at all, the Company may be forced to restructure its business or delay, reduce, or terminate its research and product development programs, future commercialization efforts or other operations
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Significant Accounting Policies
There have been no changes in the Company’s significant accounting policies as disclosed in Note 1 to the audited consolidated financial statements included in the 2025 Annual Report.
Recently Adopted Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances transparency by requiring additional disclosures related to income taxes. The amendments primarily require:
9
EDAP TMS S.A. AND SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of U.S. dollars unless otherwise noted, except per share data)
The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted.
There have been no recently issued accounting standards that are expected to have a material impact on our results of operations, financial condition, or cash flows.
Accounting Pronouncements Not Yet Adopted
The FASB has not issued any accounting standards updates during the first three months ended March 31, 2026. For information on accounting pronouncements issued in prior years but not yet adopted, refer to Note 1-25 to the audited consolidated financial statements included in the Company’s 2025 Annual Report.
Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption.
NOTE 3. TRADE ACCOUNTS AND NOTES RECEIVABLE, NET
Trade accounts and notes receivable consisted of the following as of March 31, 2026 and 2025:
March 31, | December 31, | |||
| 2026 | 2025 | ||
Trade accounts receivable |
| | | |
Notes receivable |
| | | |
Less: allowance for doubtful accounts |
| ( | ( | |
Total |
| | | |
Less current portion |
| ( | ( | |
Total long-term portion |
| | |
Notes receivable usually represent commercial bills of exchange with initial maturities of 90 days or less.
Bad debt expenses amount to a net cost of $
NOTE 4. INVENTORIES
March 31, | December 31, | |||
| 2026 | 2025 | ||
Components, spare parts | |
| | |
Work-in-progress | |
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Finished goods – own manufactured products | |
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Finished goods – distribution products | |
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Total gross inventories | |
| | |
Less: allowance for slow-moving inventory and net realizable value | ( |
| ( | |
Total | |
| |
The provision for slow moving inventory relates to components and spare parts. The increase in the allowance for slow moving inventory (excluding exchange rate impact), which are classified within cost of sales, amounted to $
10
EDAP TMS S.A. AND SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of U.S. dollars unless otherwise noted, except per share data)
NOTE 5. GOODWILL AND INTANGIBLE ASSETS
As discussed in Note 1-13 of the 2025 Annual Report, ASC 350 requires that goodwill not be amortized but instead be tested at least annually for impairment, or more frequently when events or change in circumstances indicate that the asset might be impaired, by comparing the carrying value to the fair value of the reporting unit to which they are assigned. The Company considers its ASC 280 operating segments—High Intensity Focused Ultrasound (“HIFU”), Lithotripsy (“ESWL”) and Distribution services (“Distribution”)—to be its reporting units for purposes of testing for impairment. Goodwill amounts to $
The Company completed the required annual impairment test in the fourth quarter of 2025. To determine the fair value of the Company’s reporting units, the Company used the discounted cash flow approach for each of the
Intangible assets consisted of the following as of March 31, 2026 and December 31, 2025:
March 31, | December 31, | |||
| 2026 | 2025 | ||
Licenses |
| |
| |
Trade name and trademark |
| |
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Patents |
| |
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Organization costs |
| |
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Total gross value |
| |
| |
Accumulated amortization for licenses |
| ( |
| ( |
Accumulated amortization for trade name and trademark |
| ( |
| ( |
Accumulated amortization for patents |
| ( |
| ( |
Accumulated amortization for organization costs |
| ( |
| ( |
Less: Total accumulated amortization |
| ( |
| ( |
Total |
| |
| |
Amortization expenses related to intangible assets amounted to $
NOTE 6. LONG TERM DEBT
The Company has the following outstanding debt as of March 31, 2026 and December 31, 2025:
EIB Credit Facility and Warrants
On October 17, 2025, EDAP entered into the Finance Contract with EIB for up to €
The Tranche A borrowings and the Tranche A Warrants are each defined as freestanding financial instruments in accordance with ASC 480-10-20. At inception, the proceeds are allocated between i) the Warrants at their initial fair value and (ii) a debt component for the residual amount. Subsequently, the Warrants are remeasured at fair value with changes in fair value reflected in earnings and the debt component is accounted for at amortized cost.
EIB – Tranche A Warrants
On October 17, 2025, the Company issued
11
EDAP TMS S.A. AND SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of U.S. dollars unless otherwise noted, except per share data)
The Warrant Agreement includes a put option: EIB may request the Company to buy back the Warrants in cash for their fair market value as determined in accordance with the valuation principles set out in the Warrant Agreement. The amount is capped at $
Puttable warrants that permit the counterparty to require the issuer to pay cash to settle the warrant or to purchase the shares obtained upon exercise of the warrants, freestanding warrants and other similar instruments on shares that are redeemable require liability classification under ASC 480.
The Tranche A Warrants were classified as a liability at inception (on October 17, 2025) and then changes in fair value are recognized in earnings in subsequent periods. The fair value of the Tranche A Warrants amounted to $
EIB Credit Facility Tranche A Warrants | March 31, 2026 | December 31, 2025 | ||
Number of Warrants outstanding | | | ||
Share price | | | ||
Volatility | ||||
Maturity (years) | ||||
Fair value | | |
EIB Credit Facility – Tranche A – Financial debt at amortized cost
Tranche A borrowings of $
The carrying value of the EIB borrowings and Warrants was as follows as of March 31, 2026 and December 31, 2025:
EIB Tranche A | March 31, 2026 | December 31, 2025 | ||
Debt component - amortized cost | | | ||
Warrants | | | ||
Total | | |
Other Loans
| March 31, | December 31, | ||
| 2026 | 2025 | ||
France term loan |
| |
| |
Including EIB loan | | | ||
Including EIB warrants | | | ||
Including other French loans | | | ||
Japanese term loan |
| |
| |
Total long term debt |
| |
| |
Less current portion |
| ( |
| ( |
Total long-term portion |
| |
| |
12
EDAP TMS S.A. AND SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of U.S. dollars unless otherwise noted, except per share data)
NOTE 7. PENSION AND OTHER BENEFIT PLANS
The Company does not have a funded benefit plan. The following is a reconciliation of pension cost components for the three months ended March 31, 2026 and 2025:
March 31, | ||||
| 2026 | | 2025 | |
Change in benefit obligations: |
| |
| |
Projected benefit obligations at beginning of year |
| |
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Service cost |
| |
| |
| |
| — | |
Exchange rate impact |
| ( |
| |
Projected benefit obligations at end of the period |
| |
| |
Unrecognized actuarial (gain) loss |
| ( |
| ( |
Unrecognized prior service cost |
| |
| |
NOTE 8. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The components of accumulated other comprehensive income (loss) net of tax, for the three months ended March 31, 2026 and 2025, were as follows:
Period Ended March 31, 2026 | ||||||
Foreign currency | Provision for | |||||
translation | retirement indemnities | |||||
adjustment | (net of tax) | Total | ||||
Beginning balance | | ( | | | | ( |
Net current-period other comprehensive income (loss) |
| ( |
| — |
| ( |
Ending balance |
| ( |
| |
| ( |
Period Ended March 31, 2025 | ||||||
Foreign currency | Provision for | |||||
translation | retirement indemnities | |||||
adjustment | (net of tax) | Total | ||||
Beginning balance | | ( | | ( | ||
Net current-period other comprehensive income (loss) |
| | — | | ||
Ending balance |
| ( | |
| ( | |
NOTE 9. TOTAL SALES
The amount of total sales derived from our operations in Asia, France, the United States and other geographical areas, were as follows for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31, | ||||
Primary geographical markets | | 2026 | | 2025 |
Asia |
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| |
France |
| |
| |
United States |
| |
| |
Others geographical areas |
| |
| |
Total Sales |
| |
| |
The amount of sales is recognized on the following timing:
Three Months Ended March 31, | ||||
Timing of revenue recognition | | 2026 | | 2025 |
Products transferred at a point in time |
| |
| |
Products and services transferred over time |
| |
| |
Total Sales |
| |
| |
13
EDAP TMS S.A. AND SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of U.S. dollars unless otherwise noted, except per share data)
NOTE 10. SHAREHOLDER’S EQUITY
During the three months ended March 31, 2026, the Company granted
NOTE 11. INCOME TAXES
For interim periods, the Company’s income tax expense or benefit is computed based on its estimated annual effective tax rate and any discrete items that impact the interim periods. For the three months ended March 31, 2026, and 2025, the Company recorded a tax expense of $
The Company has tax carryforwards in the United States and in certain states and foreign jurisdictions. We have deferred tax assets related to net operating loss and other tax carryforwards in the U.S. and in certain states and foreign jurisdictions. We recognize a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized.
NOTE 12. LOSS PER SHARE
Three Months Ended March 31, | ||||||
| 2026 | | 2025 | |||
Loss available to common shareholders | ( | ( | ||||
Weighted average number of shares for the computation of basic loss per share ("LPS") |
| |
| | ||
Basic LPS | ( | ( | ||||
Weighted average number of shares for the computation of diluted LPS |
| |
| | ||
Diluted LPS loss | ( | ( | ||||
The effects of dilutive securities, for the three months ended March 31, 2026, and 2025 were excluded from the calculation of diluted LPS as a net loss was reported in these periods.
NOTE 13. COMMITMENTS AND CONTINGENCIES
Commitments
The Company currently has commitments regarding its operating leases as described in Note 13-2 to the audited consolidated financial statements included in the Company’s 2025 Annual Report.
Contingencies
The Company currently has contingencies relating to standard warranties provided to customers for products as described in Note 1-15 and Note 12 to the audited consolidated financial statements included in the Company’s 2025 Annual Report.
NOTE 14. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosure of the estimated fair value of financial instruments was made in accordance with the requirements of ASC 820 “Disclosure about fair value of financial instruments” and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.
ASC 820 defines three levels of inputs that may be used to measure fair value and requires that the assets or liabilities carried at fair value be disclosed by the input level under which they were valued. The input levels are defined as follows:
Level 1: Quoted (unadjusted) prices in active markets for identical assets and liabilities that the reporting entity can access at the measurement date.
14
EDAP TMS S.A. AND SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of U.S. dollars unless otherwise noted, except per share data)
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
The recorded amount of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and short-term borrowings are a reasonable estimate of their fair value due to the short-term maturities of these instruments. As of March 31, 2026 and December 31, 2025, the Company did not have any other asset or liability measured at fair value, other than the Tranche A Warrants issued in connection with the Credit Facility (see note 6).
As of March 31, 2026 and December 31, 2025, the fair value of the Company’s long-term debt was not materially different from the carrying value.
NOTE 15. CONCENTRATION OF CREDIT RISK
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents and trade accounts and notes receivable from customers, primarily located in France, Japan and the United States. The Company maintains cash deposits with major banks. Management periodically assesses the financial condition of these institutions and believes that credit risk is limited.
The Company has implemented procedures to monitor the creditworthiness of its customers. The Company obtains bank guarantees for first time or infrequent unknown customers, and in certain cases obtains insurance against the risk of a payment default by the customer. The Company reviewed individual customer balances considering current and historical loss experience and general economic conditions in determining the allowance for doubtful accounts receivable of $
Actual losses may vary from the current estimates, and any adjustments are reported in earnings in the periods in which they become known.
For the three months ended March 31, 2026 and for the year ended December 31, 2025, the Company did not generate more than 10% of its revenue from a single customer.
NOTE 16. FOREIGN CURRENCY TRANSACTIONS
The Company generates a significant percentage of its revenues, and of its operating expenses, in currencies other than the Euro. The Company’s operating profitability could be materially adversely affected by large fluctuations in the rate of exchange between the Euro and such other currencies. The Company may engage in foreign exchange hedging activities when deemed necessary, but there can be no assurance that hedging activities will be offset by the impact of movements in exchange rates on the Company’s results of operations. As of March 31, 2026, there were no outstanding hedging instruments.
NOTE 17. DIVISION INFORMATION (SEGMENT REPORTING)
Our activity is organized into
The organization of our activities into
The business in which the Company operates is the development, production and distribution of non-invasive medical devices, primarily for the treatment of urological diseases. The divisions derive their revenues from this activity.
15
EDAP TMS S.A. AND SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of U.S. dollars unless otherwise noted, except per share data)
The following tables set forth the key statement of income (loss) figures by segment for the three months ended March 31, 2026 and 2025, and the key balance sheet figures by segment as of March 31, 2026 and 2025. Division operating profit or loss and division assets are determined in accordance with the same policies as those described in the summary of significant accounting policies and they are reviewed by the chief operating decision maker (the “CODM”), who is the Chief Executive Officer of the Company. The CODM uses operating income (loss) as the measure of profit or loss to allocate resources, assess performance, and monitor budgets against actual results. A reconciliation of segment operating profit or loss to consolidated net loss is as follows:
Three Months Ended March 31, | ||||
| 2026 | | 2025 | |
Operating loss |
| ( |
| ( |
Financial (expense) income, net |
| ( |
| |
Foreign currency exchange (losses) gains, net |
| |
| ( |
Income tax (expense) benefit |
| ( |
| ( |
Consolidated net loss |
| ( |
| ( |
A summary of the Company’s operations by segment is presented below for the three months ended March 31, 2026, and 2025:
Three Months Ended | | HIFU | | ESWL | | Distribution | | Reconciling | | Total |
March 31, 2026 | Division | Division | Division | Items | consolidated | |||||
Sales of goods |
| |
| |
| | — |
| | |
Sales of RPPs & leases |
| |
| |
| | — |
| | |
Sales of spare parts and services |
| |
| |
| | — |
| | |
Total sales |
| |
| |
| | — |
| | |
Total revenues |
| |
| |
| | — |
| | |
Total cost of sales |
| ( |
| ( |
| ( | — |
| ( | |
Gross profit |
| |
| |
| | — |
| | |
R&D expenses |
| ( |
| ( |
| ( | — |
| ( | |
Selling and marketing expenses |
| ( |
| ( |
| ( | — |
| ( | |
General and administrative expenses |
| ( |
| ( |
| ( |
| ( |
| ( |
Total expenses |
| ( |
| ( |
| ( |
| ( |
| ( |
Operating income (loss) from operations |
| ( |
| |
| |
| ( |
| ( |
Total Assets |
| | | | |
| | |||
Net cash generated by (used in) investing activities |
| ( | ( | ( | — |
| ( | |||
Non-current assets |
| | | | — |
| | |||
Goodwill |
| | | | — |
| |
Three Months Ended | | HIFU | | ESWL | | Distribution | | Reconciling | | Total |
March 31, 2025 | Division | Division | Division | Items | consolidated | |||||
Sales of goods |
| |
| |
| |
| — |
| |
Sales of RPPs & leases |
| |
| |
| |
| — |
| |
Sales of spare parts and services |
| |
| |
| |
| — |
| |
Total sales |
| |
| |
| |
| — |
| |
Total revenues |
| |
| |
| |
| — |
| |
Total cost of sales |
| ( |
| ( |
| ( |
| — |
| ( |
Gross profit |
| |
| |
| |
| — |
| |
R&D expenses |
| ( |
| ( |
| ( |
| — |
| ( |
Selling and marketing expenses |
| ( |
| ( |
| ( |
| — |
| ( |
General and administrative expenses |
| ( |
| ( |
| ( |
| ( |
| ( |
Total expenses |
| ( |
| ( |
| ( |
| ( |
| ( |
Operating income (loss) from operations |
| ( |
| |
| ( |
| ( |
| ( |
Total Assets |
| | | | |
| | |||
Net cash generated by (used in) investing activities |
| ( | ( | ( | — |
| ( | |||
Non-current assets |
| | | | — |
| | |||
Goodwill |
| | | | — |
| |
16
EDAP TMS S.A. AND SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of U.S. dollars unless otherwise noted, except per share data)
NOTE 18. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest and income taxes paid were as follows for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31, | ||||
| 2026 | | 2025 | |
Income taxes paid |
| |
| |
Interest paid |
| |
| |
Interest received |
| |
| |
NOTE 19— SUBSEQUENT EVENTS
On April 1, 2026, the Company requested disbursement of Tranche B borrowings of €
17
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”) and our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 25, 2026 (the “2025 Annual 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 these forward-looking statements. See the section of this Quarterly Report titled “Cautionary Statement on Forward-Looking Information.”
Overview
Our activities are organized into three divisions: High Intensity Focused Ultrasound (“HIFU”), Lithotripsy (“ESWL”) and Distribution services (“Distribution”). 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 strategy has impacted, and we expect it will continue to impact, our operating results.
In our HIFU division, revenue is generated through sales of Focal One® robotic HIFU systems and disposables, revenue-per-procedure (“RPP”) arrangements and leases, and maintenance services. In the U.S. and certain other jurisdictions, we provide Focal One systems under operating leases with the intent to convert to capital sales at the end of the defined period. In Europe, we provide Focal One systems under an RPP model, which generates a smaller but more predictable revenue stream. In our ESWL division, final Sonolith i-move system sales were concluded in the second half of 2025, and revenue going forward will consist of consumable electrodes, spare parts, and repair services for the installed base. In our Distribution division, revenue has declined as a result of the termination of certain distribution agreements, consistent with our strategic de-emphasis of non-HIFU activities.
Results of Operations
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
The following table sets forth our net sales and profit (loss), including by division, for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | ||||
(in millions of US dollars, except percentages) | 2026 | | 2025 | ||
Total revenues |
| 17.8 |
| 14.3 | |
HIFU |
| 11.6 |
| 6.5 | |
ESWL |
| 1.5 |
| 1.8 | |
Distribution |
| 4.7 |
| 5.9 | |
Total cost of sales |
| (9.7) |
| (8.3) | |
Gross profit |
| 8.1 |
| 6.0 | |
Gross profit as a percentage of total net sales |
| 45.73 | % | 42.01 | % |
Total operating expenses |
| (15.5) |
| (12.3) | |
Loss from operations |
| (7.4) |
| (6.3) | |
HIFU | (5.9) | (5.6) | |||
ESWL | 0.3 | 0.5 | |||
Distribution | 0.2 | (0.2) | |||
Net loss |
| (9.1) |
| (7.4) | |
Our total revenues increased 24.8%, from $14.3 million in the three months ended March 31, 2025 to $17.8 million in the three months ended March 31, 2026.
HIFU Division
The HIFU division’s total revenues increased by 78.3% from $6.5 million in the three months ended March 31, 2025 to $11.6 million in the three months ended March 31, 2026, reflecting growth of equipment sales and treatment-driven revenue.
The HIFU division's sales of medical devices increased 146.7% with $6.4 million in the three months ended March 31, 2026, with 11 Focal One units sold (including 5 in the United States), as compared to $2.6 million in the three months ended
18
March 31, 2025, with 6 Focal One units sold (including 2 in the United States). Treatment-driven revenue, which includes sales of revenue-per-procedure (“RPP”) & leases, sales of disposables, and treatment-related services, increased by 30.5% to $4.5 million in the three months ended March 31, 2026, as compared to $3.4 million in the same period in 2025.
Sales of HIFU maintenance services increased by 50.1% to $0.7 million in the three months ended March 31, 2026 reflecting our growing installed base, as compared to $0.5 million the same period in 2025.
As a result of this growth, the HIFU division represented an increasing share of our total revenues in the three months ended March 31, 2026 compared to the prior year period, 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 15.8%, from $1.8 million in the three months ended March 31, 2025 to $1.5 million in the three months ended March 31, 2026, primarily due to the decrease in sales of equipment, consistent with our strategic shift to de-emphasize our ESWL division.
Sales of ESWL-related consumables, spare parts, supplies, RPP, leasing, and services decreased 11.4% from $1.6 million in the three months ended March 31, 2025 to $1.4 million in the three months ended March 31, 2026.
Distribution Division
The Distribution division’s total revenues decreased 21.2%, from $5.9 million in the three months ended March 31, 2025 to $4.7 million in the three months ended March 31, 2026, consistent with our strategic shift to de-emphasize our Distribution division.
The Distribution division’s sales of medical devices decreased 44.9%, from $3.2 million in the three months ended March 31, 2025 to $1.8 million in the three months ended March 31, 2026.
Sales of Distribution-related consumables, spare parts, supplies, leasing, and services increased 6.6%, from $2.7 million in the three months ended March 31, 2025 to $2.9 million in the three months ended March 31, 2026.
Cost of Sales and Gross Margin
Cost of sales increased 16.8%, from $8.3 million in the three months ended March 31, 2025 to $9.7 million in the three months ended March 31, 2026, and represented 54% of net sales in the three months ended March 31, 2026, down from 58% of net sales in the three months ended March 31, 2025. Gross margin increased to 45.7% during the three months ended March 31, 2026, compared to 42.0% for the three months ended March 31, 2025. The increase in gross margin was primarily attributable to the growth in HIFU unit sales which have higher relative gross margins and favorable absorption of our fixed costs due to higher production volumes, partially offset by impact of tariffs.
Operating Expenses
Operating expenses increased 26%, or $3.2 million, from $12.3 million in the three months ended March 31, 2025 to $15.5 million in the three months ended March 31, 2026.
Marketing and sales expenses were $7.1 million in the three months ended March 31, 2026, compared to $6.1 million in the three months ended March 31, 2025.
Research and development (“R&D”) expenses remained flat at $2.6 million in the three months ended March 31, 2026 compared to $2.6 million the three months ended March 31, 2025.
General and administrative expenses increased $3.7 million, or 58.5%, in the three months ended March 31, 2025 to $5.8 million in the three months ended March 31, 2026, primarily driven by an increase in fees related to our transition to domestic filer status.
19
Financial (Expense) Income, Net
Net financial expense was $1,714 thousand in the three months ended March 31, 2026, compared to net financial income of $15 thousand in the three months ended March 31, 2025.
The financial expense was primarily driven by the variation of the fair value of the warrants we issued to European Investment Bank (“EIB”) of $1.3 million and the interest expense of the EIB loan of $0.4 million in the three months ended March 31, 2026.
Foreign Currency Exchange Gain (Loss), Net
In the three months ended March 31, 2026, we recorded a net foreign currency exchange gain of $142 thousand, mainly due to the variation of the U.S. dollar against the Euro, compared to a loss of $1.0 million in the three months ended March 31, 2025.
Income Taxes
Income tax expenses in the consolidated statement of operations remained relatively flat at $145 thousand in the three months ended March 31, 2026, compared to $144 thousand in the three months ended March 31, 2025.
Net Loss
As a result of the above, we recorded a consolidated net loss of $9.1 million in the three months ended March 31, 2026, compared with a consolidated net loss of $7.4 million in the three months ended March 31, 2025.
Effects of Inflation
In 2026 and 2025, geopolitical instability and other factors have continued to contribute 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, and implementing countermeasures to ensure the minimum residual impact.
Liquidity and Capital Resources
Our primary sources of capital have been from ongoing operations, proceeds from our public and private securities offerings, and the issuances of debt.
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 opportunities. 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 shareholders will suffer dilution and the terms of any financing may adversely affect the rights of our shareholders. 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 shareholders. If we raise additional capital through collaboration agreements, licensing arrangements, or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or products, 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.
20
We have a history of operating losses and expect such losses to continue in the foreseeable future. As of March 31, 2026, we had $15.0 million in cash and cash equivalents, a decrease of $5.4 million from December 31, 2025. We drew Tranche B of our credit facility (the “Credit Facility”) established pursuant to that certain finance contract (the “Finance Contract”), dated October 17, 2025, with European Investment Bank (“EIB”), in April 2026 (refer to note 19). 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 these interim condensed consolidated financial statements.
However, we may need to raise substantial additional financing in order to meet its cash flow needs in the subsequent period and until we achieve profitability. We may not be able to raise additional financing on acceptable terms or at all and this condition may in the future raise uncertainty regarding our ability to continue as a going concern. Management is actively exploring various alternatives, including seeking additional funding through the debt and equity capital markets, cost-cutting measures, and restructuring opportunities, but there is no assurance that these efforts will be successful or sufficient to address these liquidity concerns. If we are unable to raise capital when needed on acceptable terms, or at all, we may be forced to restructure our business or delay, reduce, or terminate our research and product development programs, future commercialization efforts or other operations.
Cash Flows
The following table sets forth the primary sources and uses of cash for the periods presented below:
| Three Months Ended March 31, | ||
(in thousands of U.S. dollars) | 2026 | | |
Net cash generated by/(used in) in operating activities |
| (2,972) |
|
Net cash generated by/(used in) in investing activities |
| (754) |
|
Net cash generated by/(used in) in financing activities |
| (1,372) |
|
Net effect of exchange rate changes on cash and cash equivalents |
| (341) |
|
Net increase/(decrease) in cash and cash equivalents |
| (5,440) |
|
Cash and cash equivalents at the beginning of the year |
| 20,452 |
|
Cash and cash equivalents at the end of the year |
| 15,012 |
|
Net Cash Used in Operating Activities
Net cash used in operating activities for the three months ended March 31, 2026, was $3.0 million, consisting of net loss of $9.1 million offset by non-cash expenses of $3.4 million and positive changes in working capital of $2.7 million. These non-cash expenses primarily consisted of $0.9 million of depreciation and amortization, $0.3 million of stock-based compensation expense, and $1.7 million related to the change in the fair value of the EIB warrants and loan amortizations.
Net Cash Used in Investing Activities
Net cash used in investing activities for the three months ended March 31, 2026, was $0.8 million, consisting primarily of investments of $0.4 million in capitalized assets and investment of $0.5 million in property and equipment.
Net Cash Used in Financing Activities
Net cash used in financing activities for the three months ended March 31, 2026, was $1.4 million, consisting primarily of the repayment of long-term borrowings and financing leases of $0.7 million and reduction of short-term borrowings of $0.7 million.
Contractual Obligations and Commitments
None.
Critical Accounting Policies
Our significant accounting policies are discussed in Note 1, Notes to the Condensed Consolidated Financial Statements (Unaudited) and Note 2, Summary of significant accounting policies, of the notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.
21
Critical Accounting Estimates
Management has not identified any estimates made in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) 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.
Off-Balance Sheet Arrangements
As of March 31, 2026, we had no off-balance sheet arrangements.
New Accounting Standards Not Yet Adopted
See Note 2, Summary of Significant Accounting Policies, to our unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report for more information.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not applicable. We are a “smaller reporting company,” as defined by Rule 12b-2 under the Exchange Act of 1934, as amended (the “Exchange Act”), and in Item 10(f)(1) of Regulation S-K, and are not required to provide the information under this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer, Ryan Rhodes, and Chief Financial Officer, Ken Mobeck, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2026. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2026.
Disclosure controls and procedures means controls and other procedures that are designed to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures. The Company’s disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of its disclosure control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
22
PART II - OTHER INFORMATION
Item 1. 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 are not party to any material legal proceedings, and no such proceedings are, to management’s knowledge, threatened against us.
Item 1A. Risk Factors
As of the date of this Quarterly Report, there have been no material changes to the risk factors previously disclosed in Part I, Item 1A of our 2025 Annual Report. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Director and Officer Trading Arrangements
During the three months ended March 31, 2026, no director or officer of the Company
23
Item 6. Exhibits
The following exhibits are filed, furnished, or incorporated herein by reference as part of this Quarterly Report.
Exhibit No. | | Description | | Form | | Exhibit | | Date Filed | | File No. | | Filed Herewith |
3.1 | By-laws (statuts) of EDAP TMS S.A. (English translation) as amended as of December 18, 2025 | 10-K | 3.1 | 3/25/2026 | 000-29374 | |||||||
4.1 | F-6 | 1.2 | 9/15/2011 | 333-176843 | ||||||||
4.2 | Form of American Depositary Receipt (included in Exhibit 4.1) | |||||||||||
10.1† | EDAP TMS S.A. Executive Severance Plan, effective March 24, 2026 | X | ||||||||||
31.1 | X | |||||||||||
31.2 | X | |||||||||||
32.1* | X | |||||||||||
101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document | X | ||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | X |
† Indicates management contract or compensatory plan or arrangement.
* The certifications attached as Exhibits 32.1 and 32.2 are not deemed “filed” with the U.S. Securities and Exchange Commission and are not incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report, irrespective of any general incorporation language contained in such filing.
24
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | EDAP TMS S.A. |
| ||
| ||
Dated: May 7, 2026 | /s/ Ryan Rhodes | |
| Ryan Rhodes | |
| Chief Executive Officer | |
| ||
| ||
Dated: May 7, 2026 | /s/ Ken Mobeck | |
| Ken Mobeck | |
| Chief Financial Officer |
25
Exhibit 10.1
EDAP TMS S.A.
EXECUTIVE SEVERANCE PLAN
(Effective as of March 24, 2026)
1.Purpose and Scope. The purpose of this EDAP TMS S.A. Executive Severance Plan (this “Plan”) is to set forth the compensation and benefits, if any, that are due to designated executive officers and other senior management employees of the Subsidiaries of EDAP TMS S.A., a French société anonyme (the “Company”), in the event of a termination of their employment in certain specified circumstances, all as further provided for under this Plan. This Plan applies to the executive officers and other senior management employees of the Company’s Subsidiaries who, from time to time: (a) hold the titles and/or positions set forth on Exhibit A to this Plan, as such exhibit may be updated by the Board of Directors of the Company (the “Board”) (upon recommendation of the Compensation Committee of the Board (or its successor, the “Committee”)) or, to the extent such authority can be delegated by the Board to a committee, the Committee, and (b) have executed an acknowledgement regarding such participation (the “Acknowledgement”) substantially in the form attached hereto as Exhibit B (each such person, a “Participant”). Each Participant will be designated by the Board (or Committee, if applicable) (either by name or by title/position) as a Tier 1 Participant, Tier 2 Participant or Tier 3 Participant (or otherwise) upon becoming a Participant (as applicable, the “Participation Tier”). Notwithstanding the definition of “Participant” as set forth in this Section 1 of this Plan, the Board (upon recommendation of the Committee) may, in its discretion and from time to time, determine that a Participant will no longer remain a qualifying Participant under the Plan; provided, however, that no such determination may adversely affect any Participant without the Participant’s prior written consent unless the Company provides at least four months’ written notice of such determination to such adversely affected Participant. The Plan is effective as of March 24, 2026 (the “Effective Date”).
2.Definitions. The following definitions are applicable for purposes of this Plan (including any exhibits hereto), in addition to terms defined in Section 1 above or otherwise defined in this Plan:
(a)“Accounting Firm” has the meaning specified in Section 7(a).
(b)“Accrued Obligations” means the sum of a Participant’s (i) base salary earned but unpaid (and otherwise payable) through the Date of Termination, (ii) applicable payment for unused paid time-off, if any, accrued as of the Date of Termination, and (iii) unreimbursed business expenses reimbursable under policies of the Company and its Subsidiaries then in effect; provided, however, that in the case of each of (i) and (ii), to the extent permissible under applicable law and consistent with Code Section 409A, the Company may offset such amounts against any obligations and liabilities of the Participant to the Company or any Subsidiary.
(c)“Acknowledgement” has the meaning specified in Section 1.
(d)“Affiliate” of a Person means any Person which directly or indirectly controls, is controlled by, or is under common control with such Person.
(e)“Award” shall mean any unvested and/or unearned equity or equity-based award or cash award granted to a Participant under an Incentive Plan.
(f)“Beneficiary” means a Person or entity that a Participant designates in writing to the Company to receive payments or benefits hereunder in the event of the Participant’s death. If no such Person or entity is named or there is no surviving designated Beneficiary, such Participant’s Beneficiary shall be the Participant’s estate.
(g)“Board” has the meaning specified in Section 1.
(h)“Bonus” means the annual performance-based cash Award granted to the Participant under an Incentive Plan.
(i)“Cause” means such Participant’s:
(i)insubordination or willful failure to perform the duties reasonably required of the Participant by the Company (other than by reason of Disability), which is not cured within 30 days after written notice thereof to Participant;
(ii)conviction of a felony or fraud or entering a plea of nolo contendere to a felony or fraud (or any equivalent conviction or plea under non-U.S. law);
(iii)breach of a material Company Policy or of any fiduciary duty or nondisclosure, non-solicitation, non-competition or similar obligation owed to the Company or any Subsidiary or Affiliate or of any other agreement with the Company or any of its Subsidiaries or Affiliates, which, in each case, is not cured within three days after written notice thereof to Participant;
(iv)recklessness, dishonesty, willful malfeasance, gross negligence or gross misconduct that results in material harm to the Company and its Subsidiaries or Affiliates; or
(v)engaging in dishonorable or disruptive behavior, practices or acts that harms or brings disrepute or substantial public disgrace to the Company or any of its Subsidiaries or Affiliates.
(j)“Change in Control” means (i) a merger of the Company into another corporation as a result of which the shareholders holding, together, more than 50% of the share capital and voting rights of the Company immediately before the completion of such merger will not hold, together, more than 50% of the share capital and voting rights of the surviving company or (ii) a sale or any other transfer by one or several shareholders, acting alone or in concert, of the Company to one or several third parties of a number of shares resulting in a
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transfer of more than 50% of the shares of the Company to said third parties; provided, however, that a transaction shall not constitute a Change in Control if its sole purpose is to change the jurisdiction of the Company’s incorporation (such as a re-domiciliation) or to create a holding company that will be owned in substantially the same proportions by the persons who hold the Company’s securities immediately before such transaction.
(k)“CIC Cash Severance Amount” has the meaning given in Section 6(a).
(l)“CIC Severance Factor” means, unless otherwise provided in a written agreement between a Participant and the Company or a Subsidiary as of the Date of Termination, the CIC Severance Factor multiple for the Participant applicable to a Qualifying CIC Termination (as defined in Section 6) as set forth on Exhibit A hereto.
(m)“COBRA” means the continuation coverage requirements for “group health plans” under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, including rules thereunder and successor provisions and rules thereto.
(n)“Code” means the Internal Revenue Code of 1986, as amended from time to time, and all regulations, interpretations, and administrative guidance issued thereunder (a reference to any provision of the Code shall include reference to any successor provision of the Code or successor regulations).
(o)“Code Section 409A” means Section 409A of the Code and any proposed, temporary or final regulation, or any other guidance, promulgated with respect to Code Section 409A by the U.S. Department of Treasury or the U.S. Internal Revenue Service.
(p)“Committee” has the meaning specified in Section 1.
(q)“Company” has the meaning specified in Section 1.
(r)“Company Policy” means any corporate policies of the Company and its Subsidiaries and Affiliates, and any personnel policies or related documents, each as may be in effect from time to time.
(s)“Compensation Clawback Policy” has the meaning specified in Section 8(b)(iii).
(t)“Date of Termination” means, unless otherwise agreed to by the Company, (i) if a Participant’s employment is terminated by the Company and/or its Subsidiaries for Cause, the date on which a notice of termination is given or the date set forth in such notice, (ii) if the Participant’s employment is terminated by the Participant for Good Reason, the date that is one day after the last day of any applicable cure period, (iii) if the Participant’s employment is terminated by reason of death, the date of death of the Participant, or (iv) if the Participant’s employment is terminated for any other reason, the date on which a notice of termination is given or the date set forth in such notice. Notwithstanding anything in this Plan to the contrary, unless otherwise agreed to by the Company and the Participant prior to the Date of
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Termination, the Participant shall (x) be deemed to have automatically resigned from all directorships and offices or other roles with the Company and its Subsidiaries, and their Affiliates (including joint ventures), as of the Date of Termination, and (y) agree to execute and deliver any documentation reasonably requested (or to take any other reasonably requested steps) to effect or confirm such resignations.
(u)“Delayed Benefits” has the meaning specified in Section 11(b).
(v)“Delayed Payments” has the meaning specified in Section 11(b).
(w)“Delayed Period” has the meaning specified in Section 11(b).
(x)“Director” means a member of the Board.
(y)“Disability” means (i) any permanent and total disability under any long-term disability plan or policy of the Company or its Subsidiaries or Affiliates that covers the Participant, or (ii) if there is no such long-term disability plan or policy, “total and permanent disability” within the meaning of Code Section 22(e)(3).
(z)“Effective Date” has the meaning specified in Section 1.
(aa)“Equity Awards” has the meaning specified in Section 5(d).
(bb)“Excess Parachute Payment” has the meaning specified in Section 7(b).
(cc)“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, as such law, rules and regulations may be amended from time to time.
(dd)“Excise Tax” has the meaning specified in Section 7(a).
(ee)“Forfeiture Event” has the meaning specified in Section 8(b)(i).
(ff)“Good Reason” means the occurrence of any of the following, unless mutually agreed upon by the Company and/or a Subsidiary and a Participant:
(i)a material diminution in the Participant’s title, duties, authorities or responsibilities;
(ii)a material reduction in the Participant’s base salary or target Bonus (other than in connection with a general reduction of base salaries or target bonuses applicable to all employees in similar positions not to exceed 10%);
(iii)a permanent reassignment of the Participant’s primary workplace beyond a 35-mile radius from the Participant’s then-current primary workplace; or
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(iv)a material breach by the Company of any obligation under this Plan or another material agreement between the Company or a Subsidiary and the Participant.
Notwithstanding the foregoing, none of the circumstances described above shall constitute Good Reason unless (x) the Participant provides the Company with written notice specifying in reasonable detail the circumstances alleged to constitute Good Reason within 30 days of the initial existence of such circumstances, (y) the Company fails to remedy the circumstances within the 30 days following its receipt of such notice and (z) the Participant actually terminates employment on the Date of Termination; provided, however, that a termination of the Participant’s employment by the Participant for Good Reason shall not be deemed to have occurred unless the termination occurs within 6 months after the initial existence of any of the conditions specified above.
(gg)“Incentive Plan” means each plan, policy, program or arrangement maintained by the Company pursuant to which equity or equity-based awards or performance-based cash awards may be granted to the Participants, as may be amended and/or restated from time to time.
(hh)“Non-CIC Severance Factor” means, unless otherwise provided in a written agreement specifically regarding such topic between a Participant and the Company as of the Date of Termination, the multiple set forth on Exhibit A for each Participant applicable to a termination of the Participant’s employment under Section 5 of this Plan.
(ii)“Participant” has the meaning specified in Section 1.
(jj)“Participation Tier” has the meaning specified in Section 1.
(kk)“Person” means an individual, corporation, partnership, limited liability company, association, trust, other entity, group or organization including a governmental authority.
(ll)“Plan” has the meaning specified in Section 1.
(mm)“Qualifying CIC Termination” has the meaning specified in Section 6.
(nn)“Reduced Amount” has the meaning specified in Section 7(a).
(oo)“Release” has the meaning specified in Section 8(c)(i).
(pp)“Release Period” has the meaning specified in Section 8(c)(i).
(qq)“Relevant Records” has the meaning specified in Section 12(d).
(rr)A “Section 409A Change in Control” means a “change in the ownership of the corporation,” a “change in effective control of the corporation” or a “change in the
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ownership of a substantial portion of the assets of the corporation,” within the meaning of Code Section 409A(a)(2)(A)(v).
(ss)“Severance Payments and Benefits” means, with respect to a Participant, all applicable benefits provided or payments made by the Company to or for the benefit of the Participant under this Plan.
(tt)“Subsidiary” means a corporation, company or other entity (i) more than 50% of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture, limited liability company, unincorporated association or other similar entity), but more than 50% of whose ownership or control interest representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company.
(uu)“Tier 1 Participant” means those names, titles and/or positions set forth on Exhibit A.
(vv)“Tier 2 Participant” means those names, titles and/or positions set forth on Exhibit A.
(ww)“Tier 3 Participant” means those names, titles and/or positions set forth on Exhibit A.
(xx)“Total Payments” has the meaning specified in Section 7(a).
(yy)“Voting Securities” means at any time, the then-outstanding securities entitled to vote generally in the election of members of the Board of Directors in the case of the Company or members of the board of directors or similar body in the case of another entity.
3.Termination of a Participant’s Employment for any Reason. Subject to the terms and conditions hereof, in the event of any termination of a Participant’s employment with the Company and its Subsidiaries for any reason, including, but not limited to, a termination of employment by the Company and its Subsidiaries for Cause or a termination of employment as a result of voluntary resignation by the Participant without Good Reason:
(a)The Company shall pay the Participant the Accrued Obligations, payable on the dates such amounts would have been payable under the applicable Company Policy if the Participant’s employment had not terminated, but in no event more than 60 days after the Participant’s Date of Termination, or sooner if required by applicable law.
(b)Subject to the potential application of the terms of Sections 4(a), 5(c)-(d) or 6(a)-(b) of this Plan, any outstanding Awards (including, for the avoidance of doubt, any stock options or restricted stock units) held by the Participant as of the Date of Termination shall be governed by the terms and conditions of the applicable Award agreements and Incentive Plans.
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In the event of a termination of the Participant’s employment by the Company and its Subsidiaries for Cause or a termination of the Participant’s employment as a result of voluntary resignation by the Participant without Good Reason, the Participant shall not be entitled to receive any compensation, payments or benefits except as specified in Sections 3(a)-(b).
4.Termination of a Participant’s Employment Due to Death or Disability. In addition to the payments and benefits set forth in Section 3 as described therein, in the event that the Participant’s employment with the Company and its Subsidiaries is terminated due to the Participant’s death or Disability, the Participant (or the Participant’s Beneficiary, as applicable) shall also be entitled to receive the following:
(a)The Company shall pay the Participant (or the Participant’s Beneficiary, as applicable) a pro-rated Bonus for the calendar year in which the Date of Termination occurs based on actual performance for the full applicable performance period. Such Bonus payment, if earned, shall be pro-rated based on the portion of the year worked (i.e., the number of days employed in the year during which the Date of Termination occurs, divided by 365 or 366, as applicable) and shall be payable at the same time similar Bonuses are paid to the Company’s other similarly-situated employees, but in no event later than March 15 of the calendar year following the calendar year in which the applicable performance period for such Bonus ends (provided, however, that no such payment will be made if such Bonus for such performance period has previously been paid to the Participant). For the avoidance of doubt, such pro-rata Bonus will be paid without application of negative discretion uniquely applied to the Participant.
(b)For the avoidance of doubt, in no event shall a Participant’s employment be deemed to have been terminated without Cause or for Good Reason or due to a Qualifying CIC Termination for purposes of this Plan as a result of the Participant’s death or Disability.
5.Termination of a Participant’s Employment by the Company Without Cause or by the Participant for Good Reason. In addition to the payments and benefits set forth in Section 3 as described therein, in the event a Participant’s employment with the Company and its Subsidiaries is terminated either by the Company and its Subsidiaries without Cause or by the Participant for Good Reason (and the provisions of Section 6 do not apply), the Participant shall also be entitled to receive the following:
(a)An amount equal to the product of (i) the Participant’s Non-CIC Severance Factor for the Participant’s Participation Tier, multiplied by (ii) the Participant’s annual base salary rate as of the Date of Termination (without regard to any reduction giving rise to Good Reason), which amount will be payable in equal installments over a number of years equal to the Participant’s Non-CIC Severance Factor for the Participant’s Participation Tier beginning on the Date of Termination in accordance with the Company’s normal payroll practices, but subject to the effectiveness of the applicable Release as provided in Section 8(c).
(b)For Tier 1 Participants and Tier 2 Participants, if the Participant participated in the Company’s medical plan immediately prior to the Date of Termination, an amount equal to the estimated cost of continuation coverage for the Participant and the Participant’s covered family members under the Company’s medical plan pursuant to COBRA
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for a number of months equal to the product of (i) 12, multiplied by (ii) the Non-CIC Severance Factor for the Participant’s Participation Tier. This amount will be payable in a lump sum on the next regularly administered pay period following the effectiveness of the applicable Release as provided in Section 8(c).
(c)The Company shall pay the Participant a pro-rated Bonus for the calendar year in which the Date of Termination occurs based on actual performance for the full applicable calendar year. Such Bonus payment, if earned, shall be pro-rated based on the portion of the year worked (i.e., the number of days employed in the calendar year during which the Date of Termination occurs, divided by 365 or 366, as applicable) and shall be payable at the same time similar Bonuses are paid to the Company’s other similarly-situated employees, but in no event later than March 15th of the calendar year following the calendar year in which the applicable performance period for such Bonus ends (provided, however, that no such payment will be made if such Bonus for such calendar year has previously been paid to the Participant). For the avoidance of doubt, such pro-rata Bonus will be paid without application of negative discretion uniquely applied to the Participant (and without regard to any reduction giving rise to Good Reason). In addition, if, prior to the Date of Termination, the Company has not paid any Bonus owed with respect to a calendar year that ended prior to the calendar year in which the Date of Termination occurs, the Company shall pay the Participant such unpaid Bonus for the prior calendar year at the same time similar Bonuses are paid to the Company’s other similarly-situated employees for the prior calendar year, but in no event later than 2-1/2 months following the end of such prior calendar year.
(d)To the extent (i) applicable to a Participant, (ii) permitted under applicable local law and the terms of the applicable Incentive Plans and Award agreements, and (iii) the treatment will not result in unfavorable tax consequences to the Participant, and unless the Participant is entitled to more favorable treatment under the applicable Award agreements and Incentive Plans, with respect to the Participant’s outstanding and unvested stock options, restricted stock unit awards and other equity or equity-based Awards, if any (“Equity Awards”) granted under an Incentive Plan and held by the Participant as of the Date of Termination:
(A)such Equity Awards will become immediately exercisable, vested and/or nonforfeitable on an accelerated basis as if the Participant had continued the Participant’s employment with the Company for an additional (1) 12 months in the case of Tier 1 Participants and Tier 2 Participants or (2) 6 months (in the case of Tier 3 Participants) following the Date of Termination; and
(B)such Equity Awards will otherwise remain subject to the other terms and conditions of the applicable Award agreements and Incentive Plans governing such Equity Awards.
6.Change in Control Terminations. If, within the 3-month period preceding, or 12-month period following, a Change in Control, a Participant’s employment with the Company and its Subsidiaries is terminated by the Company and its Subsidiaries without Cause or by the Participant for Good Reason (each, a “Qualifying CIC Termination”), then, in lieu of the
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amounts and benefits under Sections 5(a)-5(d) (but in addition to the Accrued Obligations under Section 3(a)), the Participant shall be entitled to:
(a)A cash payment in an amount equal to the product of (i) the Participant’s CIC Severance Factor for the Participant’s Participation Tier, multiplied by (ii) the sum of (A) the Participant’s annual base salary rate (at the higher of the rate in effect immediately prior to the Change in Control or the Date of Termination), plus (B) the Participant’s target annual Bonus for the year in which the Date of Termination occurs (at the higher of target immediately prior to the Change in Control or the Date of Termination) (such product, the “CIC Cash Severance Amount”). Such lump sum shall be paid on the 60th day following the Date of Termination, subject to the Release requirement in Section 8 and Section 11; provided, however, that if the Change in Control triggering the right to receive the CIC Cash Severance Amount is not a Section 409A Change in Control, such CIC Cash Severance Amount shall be payable in equal installments over a number of years equal to the Participant’s CIC Severance Factor for the Participant’s Participation Tier beginning on the Date of Termination in accordance with the Company’s normal payroll practices, but subject to the effectiveness of the applicable Release as provided in Section 8(c).
(b)To the extent (i) applicable to a Participant, (ii) permitted under applicable local law and the terms of the applicable Incentive Plans and Award agreements, and (iii) the treatment will not result in unfavorable tax consequences to the Participant, with respect to the Participant’s outstanding and unvested Equity Awards granted under an Incentive Plan and held by the Participant as of the Date of Termination, the Company shall cause all such Equity Awards to immediately become fully exercisable, vested and/or nonforfeitable on an accelerated basis.
(c)For Tier 1 Participants and Tier 2 Participants, if the Participant participated in the Company’s medical plan immediately prior to the Date of Termination, an amount equal to the estimated cost of continuation coverage for the Participant and the Participant’s covered family members under the Company’s medical plan pursuant to COBRA for a number of months equal to the product of (i) 12, multiplied by (ii) the CIC Severance Factor for the Participant’s Participation Tier. This amount will be payable in a lump sum within 10 business days following the effectiveness of the applicable Release.
7.Certain Reduction of Payments by the Company.
(a)Notwithstanding any provision of this Plan to the contrary, in the event that any payment or distribution by the Company to a Participant or for the Participant’s benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Plan or otherwise) (the “Total Payments”) would be subject to the excise tax imposed by Code Section 4999 (or any successor provision thereto) by reason of being considered “contingent on a change in ownership or control” of the Company within the meaning of Code Section 280G (or any successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties are incurred by the Participant with respect to such tax (such tax or taxes, together with any such interest and penalties, being hereafter collectively referred to as the “Excise Tax”), then the Total Payments shall be reduced to the minimum extent necessary so that no amount of the
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Total Payments is subject to the Excise Tax (such amount, the “Reduced Amount”); provided, however, that the Total Payments shall not be so reduced if a nationally recognized accounting firm or other tax professional selected by the Company (the “Accounting Firm”) determines that, without such reduction, the Participant would be entitled to receive and retain, on a net after-tax basis (including, without limitation, any excise taxes payable under Code Section 4999, federal, state, and local income taxes, social security and Medicare taxes and all other applicable taxes, determined by applying the highest marginal income tax rate applicable to individuals under the Code in the calendar year in which the change in ownership or control of the Company occurs, and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Participant’s residence on the effective date of such change in ownership or control of the Company, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes, taking into account the reduction in itemized deduction under Code Section 68), an amount that is greater than the amount, on a net after-tax basis (determined in the same manner), that the Participant would be entitled to retain upon receipt of the Reduced Amount.
(b)Unless the Company and the Participant otherwise agree in writing, any determination required under this Section 7 shall be made in good faith by the Accounting Firm in a timely manner and shall be binding on the parties absent manifest error. The Accounting Firm shall provide detailed supporting calculations both to the Company and the Participant. Fees and expenses of the Accounting Firm and any other advisers retained by the Company to assist the Accounting Firm shall be borne solely by the Company. The fact that the Participant’s right to payments or benefits may be reduced by reason of the limitations contained in this Section 7 will not of itself limit or otherwise affect any other rights of the Participant other than pursuant to this Plan. In the event that any payment or benefit intended to be provided under this Plan or otherwise is required to be reduced pursuant to this Section 7, the Company will reduce the Participant’s payment and/or benefits, to the extent required, in the following order (but, in each case, only the portion thereof, if any, that has been determined by the Accounting Firm to be an “Excess Parachute Payment” within the meaning of Code Section 280G): (i) any cash payments and Bonus payments; (ii) payments (including any acceleration of vesting or payments) under equity incentive awards where the full amount of such payments is treated as a parachute payment under the regulations under Code Section 280G; (iii) payments (including any acceleration of vesting or payments) under equity incentive awards where less than the full amount of such payments is treated as a parachute payment under the regulations under Code Section 280G, and (iv) any non-cash, non-equity based benefits. Within any category of payments and benefits: (A) a reduction will occur first with respect to amounts that are not nonqualified deferred compensation within the meaning of Code Section 409A and then with respect to amounts that are; and (B) the payment and/or benefit amounts (including the acceleration of vesting or payments) to be reduced, if applicable, shall be reduced in the inverse order of their originally scheduled dates of payment or vesting, as applicable. Such payments or benefits shall be reduced in a manner that maximizes the Participant’s economic position. In applying this principle, the reduction shall be made in a manner consistent with the requirements of Code Section 409A. The Company and the Participant shall furnish to the Accounting Firm such information and documents as the Accounting Firm may reasonably require in order to make a determination under this Section 7. The Company and the Participant shall cooperate with the Participant in good faith in valuing, and the Company shall retain an adviser (which
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may be the Accounting Firm) to value services to be provided by the Participant (including the Participant refraining from performing services pursuant to a covenant not to compete) before, on, or after the date of the transaction which causes the application of Code Section 280G such that Total Payments in respect of such services may be considered to be “reasonable compensation” within the meaning of the regulations under Code Section 280G.
8.Conditions to Receipt of Severance Payments and Benefits; Forfeiture and Repayment Obligations.
(a)Conditions to Receipt of Payments; Participant Obligations. The following requirements must be met by a Participant as a condition to the right to receive, continue to receive, or retain any Severance Payments and Benefits under this Plan:
(i)If requested by the Company, the Participant shall enter into a restrictive covenant agreement, in a form acceptable to the Company, providing for reasonable restrictions (if any) on certain actions by the Participant for up to a two-year period after the Date of Termination or such other time period as may be set forth in a written agreement between the Participant and the Company. Notwithstanding anything in this Plan or otherwise to the contrary, nothing in this Plan or otherwise (A) limits the Participant’s right to any monetary award offered by a government-administered whistleblower award program for providing information directly to a government agency (including the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Sarbanes-Oxley Act of 2002) or (B) prevents the Participant from providing, without prior notice to the Company, information (including documents) to governmental authorities regarding possible legal violations or otherwise testifying or participating in any investigation or proceeding by any governmental authorities regarding possible legal violations, and for purpose of clarity, no Participant is prohibited from providing information (including documents) voluntarily to the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act. The Company nonetheless asserts and does not waive its attorney-client privilege over any information appropriately protected by privilege.
(ii)The Participant shall cooperate with the Company by making himself or herself reasonably available to testify on behalf of the Company in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, and shall not otherwise fail to reasonably assist the Company in any such action, suit, or proceeding by providing information and meeting and consulting with members of management of, other representatives of, or counsel to, the Company, as reasonably requested.
(iii)The Participant shall not, during the period of employment, engage (nor shall have engaged) in willful misconduct or violation of a Company Policy that is materially detrimental to the Company or in any action or inaction that would constitute grounds for being terminated for Cause, as determined by the Board (or the Committee, as applicable) in its sole discretion.
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(b) | Forfeiture and Repayment Obligations. |
(i)If the Company determines that a Participant has failed to comply with his or her obligations, arising under either any agreement with the Company or any Company Policy, whether during his or her term of employment (and such failure would have constituted “Cause”) or subsequent to the Date of Termination (including, without limitation, the restrictive covenant agreement set forth in Section 8(a) or the Release set forth in Section 8(c)) (a “Forfeiture Event”), to the extent permitted by applicable law, the Participant will forfeit or repay, as the case may be, all Severance Payments and Benefits, whether vested or unvested, paid or unpaid, in each case, that were settled, paid or provided to the Participant under this Plan, and the Company shall have no further obligation to pay, grant, settle, make, provide or continue to make or provide any Severance Payments and Benefits to the Participant under this Plan. Any such forfeiture or repayment shall not relieve the Participant of any of his or her obligations hereunder.
(ii)For the avoidance of doubt, Severance Payments and Benefits subject to the forfeiture and repayment obligations under this Section 8 shall include any unvested Award, and any amounts paid to the Participant on settlement or vesting of an Award but shall not include (A) any earned and unpaid base salary payable through the Participant’s Date of Termination, (B) any payment for accrued paid time-off, (C) any unreimbursed business expenses reimbursable under Company policies then in effect, and (D) any amount paid by the Participant to the Company as a condition of or in connection with settlement of a forfeited Award.
(iii)Any Company Policy providing for forfeiture or recoupment of compensation, including in any Incentive Plan, shall apply by its terms and shall not be deemed limited in any way by this Section 8 or any other provision of this Plan. In particular, notwithstanding anything in this Plan to the contrary, by participating in this Plan and accepting any Severance Payments and Benefits hereunder, the Participant acknowledges and agrees that this Plan and any compensation or other benefits or amounts described herein (and any settlements thereof) are subject to the terms and conditions of the Company’s Clawback Policy (or any similar clawback policy or policies applicable to the Participant) that may be in effect from time to time, including, without limitation, to implement Section 10D of the Exchange Act, as amended, and any applicable rules or regulations promulgated thereunder (including applicable rules and regulations of any national securities exchange on which the Company’s securities may be traded) (collectively, the “Compensation Clawback Policy”), and that, to the extent the Compensation Clawback Policy, by its terms, so applies, applicable sections of this Plan and/or any related documents shall be (if necessary) deemed superseded by and subject to the terms and conditions of the Compensation Clawback Policy from and after the effective date thereof. Further, by accepting participation in this Plan, each Participant agrees (or has agreed) to fully cooperate with and assist the Company in connection with any of such Participant’s obligations to the Company pursuant to the Compensation Clawback Policy, and agrees (or has agreed) that the Company may enforce its rights under the Compensation Clawback Policy through any and all reasonable means permitted under applicable law as it deems necessary or desirable under the Compensation Clawback Policy, in each case from and after the effective dates thereof. Such cooperation and assistance shall include, but is not limited to, executing,
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completing and submitting any documentation necessary to facilitate the recovery or recoupment by the Company from such Participant of any such amounts, including from such Participant’s accounts or from any other compensation, to the extent permissible under Code Section 409A.
(iv)Otherwise, any clawback or recoupment provisions required by law, including under the Dodd‑Frank Wall Street Reform and Consumer Protection Act or any rules or regulations thereunder, shall apply to the Severance Payments and Benefits paid or payable under this Plan.
(v)Any Severance Payments and Benefits (A) subject to repayment by the Participant under this Section 8 must be repaid to the Company, in the manner and on such terms and conditions as shall be required by the Company by written notice to the Participant and (B) subject to forfeiture will be forfeited immediately upon written notice to the Participant from the Company.
(c) | Participant Obligation to Execute Release. |
(i)Notwithstanding any provision herein to the contrary, the Company will have no obligation to provide any Severance Payments and Benefits (other than the Accrued Obligations) unless (A) within 60 days, or such shorter period as designated by the Company, following the Date of Termination of the Participant’s employment, the Participant executes and delivers to the Company a waiver and release of claims in favor of the Company and each Subsidiary and Affiliate and their respective officers, directors, employees and agents in the form prepared and presented by the Company from time to time (the “Release”) and (B) any applicable revocation period for such Release has expired during the 60-day period following the Participant’s Date of Termination (such period, the “Release Period”) without the Participant revoking such execution of such Release.
(ii)Any Severance Payments and Benefits that would otherwise have been made to a Participant during the Release Period but that are conditioned upon the execution and effectiveness of the Release shall be paid or provided on the next regularly administered pay period following the effectiveness of the applicable Release; provided that if the Release Period begins in one calendar year and ends in a second calendar year, any such Severance Payments and Benefits that are subject to Code Section 409A shall instead be paid in the second calendar year, subject to the execution and effectiveness of the Release. Notwithstanding the foregoing, any Severance Payments and Benefits that are in‑kind benefits provided pursuant to this Plan shall continue in effect after the Date of Termination pending the execution and delivery of the Release, but if the Release is not executed within the Release Period or is revoked during any revocation period, such in-kind benefits shall terminate immediately and the Participant shall reimburse the Company for the full cost of providing such in-kind benefits.
(d)No Limitation of Rights. Any forfeiture or repayment under this Section 8 is in addition to, and not in lieu of, any other remedies or rights that may be available to the Company under applicable law.
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(e)Board Discretion. The Board (or the Committee, as applicable) shall have the authority, in its sole discretion, to interpret and construe the provisions of this Section 8 and to make all determinations with respect hereto, including the determination of whether a Forfeiture Event has occurred, the timing of such Forfeiture Event and the amount and form of any forfeiture or reimbursement.
9.Other Provisions Applicable to Severance Payments and Benefits.
(a)Deferrals Included in Salary and Bonus. All references in this Plan to salary and Bonus mean those amounts before reduction pursuant to any deferred compensation plan or agreement.
(b)Payments and Benefits to Beneficiary Upon Participant’s Death. In the event of the death of a Participant, all payments and benefits hereunder due to such Participant shall be paid or provided to his or her Beneficiary.
(c)Transfers of Employment. Notwithstanding anything in this Plan to the contrary, a transfer of employment from the Company to a Subsidiary or an Affiliate or vice versa shall not be considered a termination of employment for purposes of this Plan.
(d)Right of Setoff. The Company may, to the extent permitted by applicable law and consistent with Code Section 409A, deduct from and set off against any amounts the Company may owe to the Participant from time to time, including amounts payable in connection with any Severance Payments and Benefits, amounts payable in connection with any Award, owed as wages, fringe benefits, or other compensation owed to the Participant, such amounts as may be owed by the Participant to the Company, including, but not limited to, amounts owed under Section 8, although the Participant shall remain liable for any part of the Participant’s payment obligation not satisfied through such deduction and setoff. By accepting the Severance Payments and Benefits under this Plan, the Participant agrees to any deduction or setoff under this Section 9(d).
10.Other Plans and Policies; Non-Duplication of Payments or Benefits.
(a)Superseded Agreements and Rights. This Plan and the documents referred to herein constitute the entire understanding between the Company and the Participant relating to Severance Payments and Benefits to be paid or provided to the Participant by the Company, and to the extent necessary or applicable supersede and cancel all prior agreements and understandings with respect to the subject matter of this Plan (including, but not limited to, any severance provisions set forth in an employment agreement) other than (i) as expressly set forth in this Plan, (ii) as determined in writing by the Board (or the Committee, as applicable), or (iii) as expressly provided in a plan, program or arrangement of the Company which is established following the Effective Date and in which the Participant participates.
(b)Non‑Duplication of Payments and Benefits; Errors in Payment. The Participant shall not be entitled to any severance payment or benefit under this Plan which duplicates a payment or benefit received or receivable by the Participant under any employment
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or severance agreement entered into following the Effective Date, or any other plan, program or arrangement of the Company or any severance required by applicable law, regulation, sound business practices and customs. Payments made to the Participant under this Plan in error shall be returned to the Company and do not create a legally binding right to such payments.
11.Special Rules for Compliance with Code Section 409A. This Section 11 serves to help ensure compliance with applicable requirements of Code Section 409A. If the terms of this Section 11 conflict with other terms of this Plan, the terms of this Section 11 shall control.
(a)It is intended that all payments made pursuant to this Plan shall be exempt from Code Section 409A or otherwise comply with Code Section 409A and this Plan shall be interpreted and administered in a manner consistent with this intent.
(b)Notwithstanding any provisions in this Plan to the contrary, if at the time of the Participant’s separation from service within the meaning of Code Section 409A, the Participant is a “specified employee” (within the meaning of Code Section 409A and determined pursuant to policies adopted by the Company), then to the extent any payment or benefit that the Participant becomes entitled to under this Plan on account of the Participant’s “separation from service” (within the meaning of Code Section 409A) would be considered deferred compensation under Code Section 409A, amounts of such deferred compensation that would otherwise be payable pursuant to this Plan during the six-month period immediately following the Participant’s separation from service (such payments, the “Delayed Payments”; such period the “Delay Period”) and benefits that constitute deferred compensation that would otherwise be provided pursuant to this Plan during the Delay Period (the “Delayed Benefits”) will instead be paid or made available on the earlier of (i) the first business day of the seventh month following the Participant’s separation from service and (ii) the Participant’s death. If any Delayed Payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the Delay Period but for the application of this provision, and the balance of the installments shall be payable in accordance with their original schedule.
(c)Each payment made under this Plan shall be treated as a separate payment and not one of a series of payments for purposes of Code Section 409A. Further, coverages provided during one taxable year will not affect the degree to which coverages will be provided in any other taxable year.
(d)To the extent that any payment or benefit described in this Plan constitutes “non-qualified deferred compensation” under Code Section 409A, and to the extent that such payment or benefit is payable upon the Participant’s termination of employment, then such payments or benefits shall be payable only upon the Participant’s “separation from service”. The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Code Section 409A.
(e)In no event will a reimbursement under this Plan, if any, be made for any period after December 31 of the second calendar year following the Date of Termination. If any reimbursements (if any) or in-kind benefits provided by the Company pursuant to this Plan
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would constitute deferred compensation for purposes of Code Section 409A, such reimbursements or in-kind benefits will be subject to the following rules: (i) the amounts to be reimbursed, or the in-kind benefits to be provided, will be determined pursuant to the terms of this Plan and the applicable Company Policy and will be limited to the Participant’s lifetime and the lifetime of the Participant’s eligible dependents; (ii) the amounts eligible for reimbursement, or the in-kind benefits provided, during any calendar year may not affect the expenses eligible for reimbursement, or the in-kind benefits provided, in any other calendar year; (iii) any reimbursement of an eligible expense will be made on or before the last day of the calendar year following the calendar year in which the expense was incurred; and (iv) the Participant’s right to an in-kind benefit or reimbursement is not subject to liquidation or exchange for cash or another benefit.
12.Administration; Claims Procedure. Subject to Section 13(e) hereof, this Plan shall be interpreted, administered and operated by the Board, which shall have complete authority, subject to the express provisions of this Plan, to interpret this Plan (including, without limitation, by supplying omissions from, correcting deficiencies in, or resolving inconsistencies or ambiguities in, the language of this Plan), to prescribe, amend and rescind rules and regulations relating to this Plan, to make findings (including factual findings) with respect to any issue arising under this Plan, to determine the rights and status under this Plan of the Participants, Beneficiaries or other persons, to resolve questions (including factual questions) or disputes arising under this Plan, and to make all other determinations necessary or advisable for the administration of this Plan. The Board may delegate any of its duties hereunder to a subcommittee, or to such Person or Persons from time to time as it may designate. All decisions, interpretations and other actions of the Board shall be final, conclusive and binding on all parties who have an interest in this Plan. No member of the Board, nor any person acting pursuant to authority delegated by the Board, shall be liable for any action, omission, or determination relating to this Plan, and the Company shall, to the fullest extent permitted by law, indemnify and hold harmless each member of the Board and each person to whom any duty or power relating to the administration or interpretation of this Plan has been delegated, against any cost or liability arising out of any action, omission or determination relating to this Plan, unless, in either case, such action, omission, or determination was taken or made by such member or other person acting pursuant to authority delegated by the Board in bad faith and without reasonable belief that it was in the best interests of the Company. Claims for benefits under the Plan shall be processed in accordance with the procedures set forth below.
(a)For purposes of this Section 12, “Board” shall mean the Board or, to the extent permitted by applicable law, stock exchange requirements, and corporate governance documents, its delegate. The Board has the exclusive right to determine eligibility for benefits under the Plan and to deny or grant a claim, in whole or in part. All claim determinations shall be made by the Board in a uniform and nondiscriminatory manner in accordance with the Plan provisions. The Board’s decision on a claim for benefits is final and binding on all persons.
(b)Any Participant or the Participant’s authorized representative who believes the Participant may be eligible for benefits under this Plan may file a claim for benefits to which the claimant believes he or she is entitled. Claims under this Plan must be made in writing and delivered to the Board, in person or by mail, postage prepaid. When a claim has been properly
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filed, the Board shall, within 90 days after receipt of such claim, send to the claimant notice of the grant or denial, in whole or in part, of such claim unless special circumstances require an extension of time for processing the claim. In no event may the extension exceed 90 days from the end of the initial period. If such extension is necessary, the claimant will be given notice to this effect prior to the expiration of the initial 90-day period. Any notice of extension shall set forth the special circumstances requiring the extension of time and the date by which the Board expects to render its decision on the application for benefits.
(c)The Board will provide the claimant with written notice in which the claimant shall be advised as to whether the claim is granted or denied, in whole or in part. If a claim is denied, in whole or in part, the notice shall contain: (i) the specific reasons for the denial; (ii) references to pertinent Plan provisions on which the denial is based; (iii) a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary; and (iv) an explanation of the Plan’s claim review procedure, the time limits applicable under the procedures, and a statement regarding the claimant’s right to bring a civil action under Section 502(a) of the Employee Retirement Income Security Act of 1974, as amended (if applicable) following an adverse benefit determination on appeal.
(d)If a claim is denied, in whole or in part, the claimant shall have the right to request that the Board review the denial, provided that the claimant files a written request for review with the Board no later than 60 days after the date on which the claimant received written notification of the denial. The request for a review shall be in writing and shall be addressed to the Board at the Company’s principal office. The request for review shall set forth all of the grounds on which it is based, all facts in support of the request and any other matters which the claimant deems pertinent. The Board may require the claimant to submit such additional facts, documents or other material as it may deem necessary or appropriate in making its review. The claimant may submit written comments, documents, records and other information related to the benefit claim on appeal. The claimant must be provided, upon request and free of charge, reasonable access to and copies of any and all records, documents or information on which the Board based its determination (the “Relevant Records”).
(e)The Board will provide the claimant with written notification of the benefit determination on review within 60 days after a request for review is received, unless special circumstances require an extension of time for processing the review, in which case the Board shall give the claimant written notification within the initial 60-day period specifying the reasons for the extension and when such review shall be completed (provided that such review shall be completed within 120 days after the date on which the request for review was filed). If the Board denies the claim on review, in whole or in part, the notification will set forth, in a manner calculated to be understood by the claimant: (i) the specific reason or reasons for the denial; (ii) specific references to the Plan provisions on which the denial is based; (iii) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all Relevant Records; and (iv) a description of the claimant’s right to obtain information about such procedures and a statement regarding the claimant’s right to bring a civil action under Section 502(a) of the Employee Retirement Income Security Act of 1974, as amended (if applicable) following the denial on appeal.
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13.Miscellaneous.
(a)Assignment; Non‑Transferability. No right of a Participant to any payment or benefit under this Plan shall be subject to assignment, anticipation, alienation, sale, transfer, pledge, encumbrance, attachment, or garnishment by creditors of the Participant or of any Beneficiary of the Participant. The terms and conditions of this Plan shall be binding on the successors and assigns of the Company. The Company’s Subsidiaries and Affiliates are third party beneficiaries to this Plan and to the extent any violation of this Plan shall cause them direct harm, they shall have a right to enforce this Plan and any related agreements in accordance with their respective terms.
(b)Withholding. The Company shall have the right to deduct from all payments hereunder any taxes, deductions or withholdings required by law to be withheld therefrom. Notwithstanding any other provision of this Plan, the Company shall not be obligated to guarantee any particular tax result for a Participant with respect to any payment or benefit provided to the Participant hereunder, and the Participant shall be responsible for any taxes imposed on the Participant with respect to any such payment or benefit.
(c)No Right to Employment. Nothing in this Plan shall be construed as altering the Participant’s status as an employee at-will or giving any person the right to be retained in the employment of the Company or its Subsidiaries or Affiliates, nor shall it affect the right of the Company to dismiss a Participant without any liability except as provided in this Plan.
(d)Amendment and Termination. The Board may amend or terminate this Plan at any time; provided, however, that no such amendment or termination may adversely affect any Participant without such Participant’s prior written consent unless the Company provides at least four months’ advance written notice of such amendment or termination to such adversely affected Participant.
(e)Governing Law. The validity and effect of this Plan shall be governed by and construed and enforced in accordance with the laws of the State of Texas (or the State of California, for any Participant who works and resides in California), without regard to any conflict-of-law rule or principle that would give effect to the laws of another jurisdiction. Any dispute, controversy, or question of interpretation arising under, out of, in connection with, or in relation to this Plan or any amendments hereof, or any breach or default hereunder, shall be submitted to, and determined and settled by, litigation in the state or federal courts in the State of Texas (or the State of California, for any Participant who works and resides in California). The Participant and the Company hereby irrevocably submit to the exclusive jurisdiction of the state and federal courts sitting in the State of Texas (or, the State of California, for any Participant who works and resides in California). Each of the Participant and the Company hereby irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of any litigation in the State of Texas (or, the State of California, for any Participant who works and resides in California).
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(f)No Duty to Mitigate. No Participant shall be required to mitigate, by seeking employment or otherwise, the amount of any payment that the Company or its Subsidiaries becomes obligated to make under this Plan, and, except as expressly provided in this Plan, amounts or other benefits to be paid or provided to a Participant pursuant to this Plan shall not be reduced by reason of the Participant’s obtaining other employment or receiving similar payments or benefits from another employer.
(g)Participants Outside the United States. The Board may modify the terms and conditions (including through the adoption of a sub-plan to this Plan) of participation of any Participant who is then resident or primarily employed outside the United States or is subject to taxation by a non‑U.S. jurisdiction in any manner deemed by the Board to be necessary or appropriate in order that such terms and conditions shall conform to the laws, regulations, sound business practices or customs of the country in which the Participant is then resident or primarily employed.
(h)Effect of Invalidity of Provision. If any provision contained in this Plan, or any part thereof, is construed to be invalid or unenforceable, the same shall not affect the remainder of the provisions, which shall be given full effect, without regard to the invalid portions, and any court having jurisdiction shall have the power to reduce the duration, scope and/or area of such provisions and, in its reduced form, said provision shall then be enforceable.
(i)Legal Fees. In the event of a dispute by the Company, a Participant or others as to the validity or enforceability of, or liability under, any provision of this Plan, the Company shall reimburse the Participant for all reasonable legal fees and expenses incurred by the Participant if the Participant prevails on the merits in the dispute resolution process, and if the Participant does not so prevail, the Participant and the Company shall be responsible for their respective legal fees and expenses.
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EXHIBIT A
Tier Level Participation
Tier 1 Participants | Tier 2 Participants | Tier 3 Participants |
Chief Executive Officer of the Company | The following positions at the Company (and any other positions designated by the Board (or Committee, as applicable) after the Effective Date of the Plan): · Chief Financial Officer; · General Counsel; · Executive Vice President, Marketing and Product Management; and · Senior Vice President, U.S. Sales | Positions designated by senior management, subject to ratification by the Board (or Committee, as applicable) (other than the Tier 1 Participants or Tier 2 Participants) |
Severance Factors and Periods
Participation Tier | Non-CIC Severance | CIC Severance Factor |
1 | 1.0 | 2.0 |
2 | 1.0 | 1.5 |
3 | 0.5 | 1 |
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EXHIBIT B
I acknowledge and agree that: (1) I have been designated as a Participant under the EDAP TMS S.A. Executive Severance Plan (as amended or amended and restated from time to time, the “Plan”), (2) any payment, rights or benefits under the Plan are subject to all of the terms and conditions of the Plan, (3) I consent to be bound by the terms of the Plan, including, but not limited to, its clawback provisions (and consent to fully cooperate with EDAP TMS S.A. (the “Company”) in connection with any of my obligations pursuant to the Plan), and (4) this acknowledgement (“Acknowledgement”) and the Plan (together with those agreements and documents expressly referred to herein and therein, specifically for the purposes referred to herein) constitute the entire agreement between me and the Company regarding the subject matter hereof and thereof and, as a result, as of March 24, 2026, they supersede any provisions in any employment or severance agreement to which I am a party with the Company or any of its Affiliates that provides substantially comparable benefits to those provided in the Plan.
| Participant: | ||
| | ||
| | ||
| By: | | |
| Name: | | |
| Title: | | |
| Date | | |
EXHIBIT 31.1
Certification by the Principal Executive Officer pursuant to Securities Exchange Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Ryan Rhodes, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of EDAP TMS S.A.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
4. | The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the company's most recent fiscal quarter (the company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
5. | The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
Dated: May 7, 2026 | /s/ RYAN RHODES |
| Title: Chief Executive Officer (Principal Executive Officer) |
EXHIBIT 31.2
Certification by the Principal Financial Officer pursuant to Securities Exchange Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Ken Mobeck, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of EDAP TMS S.A.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
4. | The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the company's most recent fiscal quarter (the company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
5. | The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
Dated: May 7, 2026 | /s/ KEN MOBECK |
| Title: Chief Financial Officer (Principal Financial Officer) |
EXHIBIT 32.1
Certification by the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of EDAP TMS S.A. (the “Company”), does hereby certify, to such officer's knowledge, that:
The Quarterly Report on Form 10-Q for the period ended March 31, 2026 (the “Quarterly Report”) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: May 7, 2026 | /s/ RYAN RHODES |
| Ryan Rhodes |
| Chief Executive Officer (Principal Executive Officer) |
Dated: May 7, 2026 | /s/ KEN MOBECK |
| Ken Mobeck |
| Chief Financial Officer (Principal Financial Officer) |
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act has been provided to EDAP TMS S.A. and will be retained by EDAP TMS S.A. and furnished to the Securities and Exchange Commission or its staff upon request.