UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended December 31, 2024
OR
☐TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from _____________ to ___________________
Commission
file number: 001-38325
enVVeno
Medical Corporation
(Exact
name of registrant as specified in its charter)
70 Doppler, Irvine, California 92618
(Address of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code: (949)261-2900
Securities
registered pursuant to Section 12(b) of the Act:
Common Stock, $0.00001 par value NVNO The NASDAQ Stock Market LLC
Securities
registered pursuant to Section 12(g) of the Act:
None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Yes
☒ No ☐
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 ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☐
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 has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
☐ No ☒
The
aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant as of June 30, 2024 (the last
business date of the registrant’s most recently completed second fiscal quarter), based on the last sale price of the registrant’s
common stock on such date was $68.9 million.
As
of February 25, 2025, there were 17,536,000 shares of common stock outstanding.
ENVVENO
MEDICAL CORPORATION
TABLE
OF CONTENTS
PART I
ITEM 1. Business 2
ITEM 1A. Risk Factors 8
ITEM 1B. Unresolved Staff Comments 26
ITEM 1C. Cybersecurity 26
ITEM 2. Properties 26
ITEM 3. Legal Proceedings 26
ITEM 4. Mine and Safety Disclosures 26
PART II
ITEM 6. [Reserved] 27
ITEM 7A. Quantitative and Qualitative Disclosures and Market Risk 30
ITEM 8. Consolidated Financial Statements and Supplementary Data 30
ITEM 9A. Controls and Procedures 31
ITEM 9B. Other Information 31
ITEM 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 31
PART III
ITEM 10. Directors, Executive Officers and Corporate Governance 32
ITEM 11. Executive Compensation 39
ITEM 14. Principal Accounting Fees and Services 51
PART IV
ITEM 15. Exhibits and Consolidated Financial Statements Schedules 51
Signatures 54
Consolidated Financial Statements and Supplementary Data F-1
PART
I
CAUTIONARY
NOTE ON FORWARD-LOOKING STATEMENTS
This
Annual Report on Form 10-K contains, or may contain, certain “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements involve significant risks and uncertainties. Such statements
may include, without limitation, statements with respect to the Company’s plans, objectives, projections, expectations and intentions
and other statements identified by words such as “may,” “will,” “could,” “would,” “should,”
“believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,”
“potential” or similar expressions. These statements are based upon the current beliefs and expectations of the Company’s
management and do not constitute guarantees of future performance. Actual results could differ materially from those contained in the
forward-looking statements and are subject to significant risks and uncertainties, including those discussed under “Risk Factors,”
as well as those discussed elsewhere in this Form 10-K. Actual results (including, without limitation, the actual timing for and results
of the clinical trials described herein, and FDA review of the Company’s products in development) may differ significantly from
those set forth in the forward-looking statements. These forward-looking statements involve risks and uncertainties that are subject
to change based on various factors (many of which are beyond the Company’s control).
You
are further cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Form 10-K
or, in the case of documents referred to or incorporated by reference, the date of those documents.
All
subsequent written or oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in
their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly
any revisions to these forward-looking statements to reflect events or circumstances after the date of this Form 10-K or to reflect the
occurrence of unanticipated events, except as may be required under applicable U.S. securities law. If we do update one or more forward-looking
statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
Unless
the context requires otherwise, references in this Annual Report on Form 10-K to “we,” “us,” “our,”
“our company,” “NVNO”, or similar terminology refer to enVVeno Medical Corporation.
We
use our registered trademarks and trade names, such as VenoValve® TM in this Annual Report on Form 10-K. Solely for convenience,
trademarks and trade names referred to in this Form 10-K appear without the ® and TM symbols, but those references are not intended
to indicate that we will not assert, to the fullest extent under applicable law, our rights, or that the applicable owner will not assert
its rights, to these trademarks and trade names. We do not intend our use or display of other companies’ trade names or trademarks
to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
ITEM 1. Business
Overview
enVVeno
Medical Corporation is a late clinical-stage medical device company focused on the advancement of innovative bioprosthetic (tissue-based)
solutions to improve the standard of care for the treatment of venous disease. Chronic Venous Disease (CVD) is the world’s most
prevalent chronic disease, impacting approximately 70% of the adult population of the U.S. Chronic Venous Insufficiency (CVI), is a large
subset of CVD, which most often occurs when valves inside of the veins of the leg become damaged, resulting in the backwards flow of
blood (reflux), blood pooling in the lower leg, increased pressure in the veins of the leg (venous hypertension) and in severe cases,
venous ulcers that are difficult to heal. The Company is developing surgical and non-surgical replacement venous valves for patients
suffering from severe CVI of the deep venous system of the leg.
The
Company’s lead product is the VenoValve®, which is a first-in-class surgical replacement venous valve that is currently being
evaluated in a U.S. pivotal study. The Company is also developing a second product called enVVe®, which is a first-in-class, non-surgical,
transcatheter based replacement venous valve. The Company is currently conducting pre-clinical testing on enVVe. Both the VenoValve and
enVVe are designed to act as one-way valves, to help assist in propelling blood up the veins of the leg, and back to the heart and lungs.
The
VenoValve and enVVe are being developed first for approval by the U.S. Food and Drug Administration (FDA). We expect the VenoValve to
be eligible for FDA approval first, followed approximately three years later by enVVe. If approved, we expect the VenoValve and enVVe to co-exist,
with the VenoValve as a surgical replacement venous valve option and enVVe as a non-surgical replacement venous valve option, although
we cannot provide any assurance that either the VenoValve or enVVe will receive approval from the FDA (see the section entitled “Risk
Factors” in this Annual Report on Form 10-K). There are currently no devices approved as surgical or non-surgical replacement venous
valves, and there are currently no effective treatments for deep venous CVI caused by incompetent valves.
Our
team of officers and directors has been affiliated with numerous medical devices that have received FDA approval or CE marking and that
have been commercially successful. We develop and manufacture our products in connection with our clinical trials in a 14,507 sq. ft.
leased manufacturing facility in Irvine, California, which has been ISO 13485-2016 certified for the design, development and manufacturing
of tissue based implantable medical devices.
CVI
Background
Chronic
venous disease (“CVD”) is the world’s most prevalent chronic disease. CVD is clinically classified using a standardized
system known as CEAP (clinical, etiological, anatomical, and pathophysiological). The CEAP system consists of seven clinical classifications
(C0 to C6) with C4, C5 and C6 being the most severe categories of CVD.
Chronic
Venous Insufficiency (“CVI”) is a large subset of CVD and is generally used to describe patients with C4 to C6 CVD. CVI is
a debilitating condition that affects the venous system of the leg causing pain, swelling, edema, skin changes, and ulcerations.
The
human leg contains three vein systems: the deep vein system, the superficial vein system, and the perforator vein system which connects
the deep system to the superficial system. The deep venous system is located below the muscle and facia in the center portion of the
leg and is responsible for approximately 90% of the blood flow. In order for blood to return to the heart from the foot, ankle, and lower
leg, the calf muscle serves as a pump and pushes the blood up the veins of the leg against gravity and through a series of one-way valves.
Each valve is supposed to open as blood passes through, and then close as blood progresses up the veins of the leg to the next valve.
CVI occurs when the one-way valves in the veins of the leg fail and become incompetent. When the valves fail, gravity causes the blood
to flow backwards and in the wrong direction (reflux). As blood pools in the lower leg, pressure inside the veins increases (venous hypertension).
Reflux, and the resulting venous hypertension, causes the leg to swell, resulting in debilitating pain, and in the most severe cases,
venous ulcers.
Severe
CVI sufferers experience a significantly reduced quality of life. Daily activities such as preparing meals, housework, and personal hygiene
(washing and bathing) become difficult due to reduced mobility. For many severe CVI sufferers, intense pain, which frequently occurs
at night, prevents them from getting adequate sleep. Severe CVI sufferers are known to miss approximately 40% more workdays than the
average worker. A high percentage of venous ulcer patients also experience severe itching, leg swelling, and an odorous discharge. Wound
dressing changes, which occur several times a week, can be extremely painful. Venous ulcers from deep venous CVI are very difficult to
heal, and a significant percentage of venous ulcers remain unhealed for more than a year. Even if healed, recurrence rates for venous
ulcers are known to be high (20% to 40%) within the first year and as high as 60% after five years. Patients with severe CVI often become
housebound and experience social isolation due to difficulty with ambulation. As a result, studies have shown that patients with active
venous ulcers experience higher rates of anxiety and depression, with reported rates of anxiety of up to 30% and depression up to 40%.
Rates of depression caused by venous ulcers among the elderly are even higher, with 48% of elderly venous ulcer patients having severe
depressive symptoms.
Prevalence
is generally defined as the portion of the population that has a given condition. Estimates indicate that the prevalence of people in
the U.S. with severe, deep venous CVI (C4 to C6 disease) with reflux to be approximately 20 million. Incidence is generally defined as
the number of new cases of an ailment that develop in a given time period. We estimate that approximately 3.5 million new patients with
severe deep venous CVI are diagnosed each year in the U.S. including patients that develop venous leg ulcers (C6 patients). The average
patient seeking treatment of a venous ulcer spends as much as $30,000 a year on wound care, and the total direct medical costs from venous
ulcer sufferers in the U.S. has been estimated to exceed $3 billion a year.
VenoValve
The
VenoValve is a replacement venous valve developed at enVVeno Medical to be surgically implanted in the deep venous system of the leg
to treat severe CVI caused by valvular incompetence. By lowering pressure (venous hypertension) within the deep venous system of the
leg, the VenoValve has the potential to reduce or eliminate the symptoms of severe deep venous CVI, including the potential to heal recurring
venous leg ulcers. The VenoValve is implanted into the femoral vein of the patient in an open surgical procedure via a 5-to-6-inch incision
in the upper thigh. As our planned initial entrant to the replacement venous valve market, we estimate that approximately 2.5 million
people each year with severe deep venous CVI in the U.S. would be candidates for the VenoValve. The VenoValve has been granted Breakthrough
Device designation by the FDA.
VenoValve
Clinical Status
In
March of 2021 we received IDE approval from the FDA to begin the VenoValve pivotal study. An investigational device exemption or IDE
from the FDA is required before a medical device company can proceed with a pivotal trial for a Class III medical device. This
approval allowed us to proceed with our U.S. pivotal study for the VenoValve which is called the SAVVE® (Surgical Anti-reflux
Venous Valve Endoprosthesis) a prospective, non-blinded, single arm, multi-center clinical study. The seventy-five patient SAVVE study reached full enrollment on September 1, 2023.
Efficacy
endpoints for the SAVVE pivotal study include rVCSS scores, which are used to provide evidence of clinically meaningful benefit, as well
as reflux time measurements, VAS pain scores, quality of life measurements, ulcer healing (for CEAP class C6 patients), and intra-operative
and one-year vein patency and valve functionality. Safety endpoints include device related events and procedure related events including
mortality, pulmonary embolism, ipsilateral deep vein thrombosis, infection and bleeding.
In November 2024, one year preliminary
efficacy and safety data from the SAVVE was presented at the 51th Annual VEITH Symposium, the largest vascular conference in the world.
The data indicated that eighty-five percent (85%) of the patients enrolled in SAVVE experienced a clinical meaningful benefit from the
VenoValve, defined as a three (3) or more point improvement in revised Venous Clinical Severity Score (rVCSS), at one year, compared to
baseline. The average rVCSS improvement in the clinically meaningful responder cohort was 7.91 points. Patients in the SAVVE study also
experienced a seventy-five percent (75%) median reduction in pain and improvements in quality-of-life indicators. For patients with venous
ulcers (CEAP C6 patients), ulcer area was reduced a median average of eighty-seven percent (87%). Over the course of the one (1) year
period, there was one (1) death (unrelated to the VenoValve), zero (0) pulmonary embolisms, twelve (12) target vein thromboses, ten (10)
surgical pocket hematomas, four (4) other bleeds, and seven (7) deep wound infections. Ninety four percent (94%) of the patients that
experienced a material safety event also went on to experience a clinically meaningful benefit from the VenoValve. Also, the reported
target vein patency rates at thirty (30) days and one (1) year were ninety one percent (91%) and ninety seven percent (97%), respectively.
On
November 19, 2024, the Company submitted the final module of its PMA application for review by the FDA. The VenoValve is designated
as a breakthrough product and, as a result, its PMA application is subject to priority review. This may serve to shorten the PMA
review process. Regardless, it is difficult to predict precisely how long the PMA process will
take, and the Company’s best estimate is to expect an FDA decision during the second half of 2025.
enVVe
On
September 21, 2022, we announced the development of a non-surgical transcatheter based replacement venous valve called enVVe®, for
the treatment of CVI of the deep veins of the leg. Initial preliminary bench testing and pre-clinical testing for enVVe have been successfully
completed.
On
December 16, 2024, we announced the successful completion of the final wave of implants for the six-month pre-clinical GLP study for enVVe. The first wave of implants, for
the long-term subjects, was successfully completed in October, and the final wave for the shorter-term subjects was completed in December.
The GLP study is a prerequisite to seeking IDE approval from the FDA to begin the enVVe U.S. pivotal study. The Company expects to file
for IDE approval for the enVVe pivotal study in mid-2025.
Government
Regulation
Our
product candidates and our operations are subject to extensive regulation by the FDA, and other federal and state authorities in the
United States, as well as comparable authorities in foreign jurisdictions. Our product candidates are subject to regulation as medical
devices in the United States under the Federal Food, Drug, and Cosmetic Act (“FDCA”), as implemented and enforced by the
FDA. The FDA regulates the development, design, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging,
storage, installation, distribution, servicing, recordkeeping, premarket clearance or approval, adverse event reporting, advertising,
promotion, marketing, and import and export of medical devices to ensure that medical devices distributed domestically are safe and effective
for their intended uses and otherwise meet the requirements of the FDCA.
PMA
Approval Pathway
Class
III devices such as the VenoValve and enVVe generally require pre-market approval (PMA) before they can be marketed in the U.S. The
PMA review and approval process is more demanding than the 510(k) premarket notification process. In a PMA, the manufacturer must
demonstrate that the device is safe and effective, and the PMA must be supported by extensive data, including data from preclinical
studies and human clinical trials. The PMA also must contain a full description of the device and its components, a full description
of the methods, facilities and controls used for manufacturing, and proposed labeling. Following receipt of a PMA, the FDA
determines whether the application is sufficiently complete to permit a substantive review. If the FDA accepts the application for
review, it has 180 days under the FDCA to complete its review of a PMA, although in practice, the FDA’s review often takes
significantly longer, and can take several years. With the recent reduction in workforce that has taken place within the federal
government, including at the FDA, we may experience longer review periods from the FDA for any applicable regulatory approvals. An
advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations to
the FDA as to the approvability of the device. The FDA may or may not accept the panel’s recommendation. In addition, the FDA
generally will conduct a pre-approval inspection of the applicant or its third-party manufacturers’ manufacturing facility or
facilities to ensure compliance with the QSR. The FDA will generally approve the new device for commercial distribution if it
determines that the data and information in the PMA constitute valid scientific evidence and that there is reasonable assurance that
the device is safe and effective for its intended use(s).
The
FDA may approve a PMA with post-approval conditions intended to ensure the safety and effectiveness of the device, including, among other
things, restrictions on labeling, promotion, sale and distribution, and collection of long-term follow-up data from patients in the clinical
study that supported PMA approval, or requirements to conduct additional clinical studies post-approval. The FDA may condition PMA approval
on some form of post-market surveillance when deemed necessary to protect the public health or to provide additional safety and efficacy
data for the device in a larger population or for a longer period of use. In such cases, the manufacturer might be required to follow
certain patient groups for a number of years and to make periodic reports to the FDA on the clinical status of those patients. Failure
to comply with the conditions of approval can result in material adverse enforcement action, including withdrawal of the PMA approval.
Certain changes to an approved device, such as changes in manufacturing facilities, methods or quality control procedures, or changes
in the design performance specifications, which affect the safety or effectiveness of the device, require submission of a PMA supplement.
PMA supplements often require submission of the same type of information as a PMA, except that the supplement is limited to information
needed to support any changes from the device covered by the original PMA and may not require as much clinical data or the convening
of an advisory panel. Certain other changes to an approved device require the submission of a new PMA, such as when the design change
causes a different intended use, mode of operation and technical basis of operation, or when the design change is so significant that
a new generation of the device will be developed, and the data that were submitted with the original PMA are not applicable for the change
in demonstrating a reasonable assurance of safety and effectiveness. Both the VenoValve and enVVe will require the approval of a PMA.
Clinical
Trials in Support of PMA
Clinical
trials are almost always required to support a PMA submission. All clinical investigations of devices to determine safety and effectiveness
must be conducted in accordance with the IDE regulations, which govern investigational
device labeling, prohibit promotion of the investigational device and specify an array of recordkeeping, reporting and monitoring responsibilities
of study sponsors and study investigators. If the device presents a “significant risk,” to human health, as defined by the
FDA, the FDA requires the device sponsor to submit an IDE application to the FDA, which must become effective prior to commencing human
clinical trials. A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of a patient
and either is implanted, used in supporting or sustaining human life, substantially important in diagnosing, curing, mitigating or treating
disease or otherwise preventing impairment of human health, or otherwise presents a potential for serious risk to a subject. The VenoValve
required IDE applications prior to human testing in the United States, and we believe any future products such as the enVVe will also
require IDE applications before human testing in the United States.
An
IDE application must be supported by appropriate data, such as animal and laboratory test results, showing that it is safe to test the
device in humans and that the testing protocol is scientifically sound. The IDE will automatically become effective 30 days after receipt
by the FDA unless the FDA notifies the company that the investigation may not begin. If the FDA determines that there are deficiencies
or other concerns with an IDE for which it requires modification, the FDA may permit a clinical trial to proceed under a conditional
approval.
In
addition to IDE approval, a human study must be approved by, and conducted under the oversight of, an Institutional Review Board, or
IRB, for each clinical site. The IRB is responsible for the initial and continuing review of the study, and may pose additional requirements
for the conduct of the study. If an IDE application is approved by the FDA and one or more IRBs, human clinical trials may begin at a
specific number of investigational sites with a specific number of patients, as approved by the FDA. Acceptance of an IDE application
for review does not guarantee that the FDA will allow the IDE to become effective and, if it does become effective, the FDA may or may
not determine that the data derived from the trials support the safety and effectiveness of the device or warrant the continuation of
clinical trials. An IDE supplement must be submitted to, and approved by, the FDA before a sponsor or investigator may make a change
to the investigational plan that may affect its scientific soundness, study plan or the rights, safety or welfare of human subjects.
During a study, the sponsor is required to comply with the applicable FDA requirements, including, for example, trial monitoring, selecting
clinical investigators and providing them with the investigational plan, ensuring IRB review, adverse event reporting, record keeping
and prohibitions on the promotion of investigational devices or on making safety or effectiveness claims for them. The clinical investigators
in the clinical study are also subject to FDA’s regulations and must obtain patient informed consent, rigorously follow the investigational
plan and study protocol, control the disposition of the investigational device and comply with all reporting and recordkeeping requirements.
Additionally, after a trial begins, we, the FDA or the IRB could suspend or terminate a clinical trial at any time for various reasons,
including a belief that the risks to study subjects outweigh the anticipated benefits.
Post-market
Regulation
After
a device is cleared or approved for marketing, numerous and pervasive regulatory requirements continue to apply. These include: establishing
registration and device listing with the FDA; QSR requirements, which require manufacturers, including third-party manufacturers, to
follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and
manufacturing process; labeling regulations and FDA prohibitions against the promotion of investigational products, or “off-label”
uses of cleared or approved products; requirements related to promotional activities; clearance or approval of product modifications
that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared
devices; medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused
or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely
to cause or contribute to a death or serious injury, if the malfunction were to recur; correction, removal and recall reporting regulations,
which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to
health posed by the device or to remedy a violation of the FDCA; and post-market surveillance activities and regulations.
Regulation
Outside of the U.S.
Each
country or territory outside of the U.S. has its own rules and regulations with respect to the manufacture, marketing and sale of medical
devices, including, but not limited to the European Medicines Agency in the European Union. For example, in December of 2018, we received
regulatory approval from Instituto Nacional de Vigilancia de Medicamentos y Alimentos, the Colombian equivalent of the U.S. Food and
Drug Administration, for our first-in-human study for the VenoValve in Colombia. At this time, other than the first-in-human trial in
Colombia, we have not determined which countries outside of the U.S., if any, we will seek approval for our product candidates.
Our
Competitive Strengths
We
believe we will offer the venous disease treatment market a compelling value proposition with the launch of our product candidates, if
approved, for the following reasons:
Intellectual
Property
We
possess an extensive proprietary processing and manufacturing methodology specifically applicable to the design, processing, manufacturing
and sterilization of biologic devices. This includes FDA compliant quality control and assurance programs, proprietary tissue processing
technologies demonstrated to eliminate recipient immune responses, trusted relationship with abattoir suppliers, and a combination of
tissue preservation and gamma irradiation that enhances device functions and guarantees sterility. We have filed numerous patent applications
for the VenoValve with the U.S. Patent and Trademark Office (USPTO) and throughout the world. We currently have thirty-nine (39) patents
granted from agencies around the world including eight (8) from the USPTO.
Employees
As
of February 25, 2025, we had thirty-seven (37) full-time employees. None of our employees are represented by a collective bargaining
agreement, and we have never experienced any work stoppage. We believe we have good relations with our employees.
Corporate
Information
We
were incorporated in Delaware on December 22, 1999. Our principal executive offices are located at 70 Doppler, Irvine, California, 92618,
and our telephone number is (949) 261-2900. Our corporate website address is www.envveno.com. The information contained on or accessible
through our website is not a part of this Annual Report, and the inclusion of our website address in this Annual Report is an inactive
textual reference only.
ITEM 1A. Risk Factors
Investing
in our securities involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together
with all of the other information contained in this Annual Report, before deciding to invest in our securities. If any of the following
risks materialize, our business, financial condition, results of operation and prospects will likely be materially and adversely affected.
In that event, the market price of our common stock could decline, and you could lose all or part of your investment.
Summary
The
risk factors described below are a summary of the principal risk factors associated with an investment in us. These are not the only
risks we face. You should carefully consider these risk factors and the other reports and documents filed by us with the SEC.
● Changes in external competitive market factors;
● Uncertainties in generating sustained revenue or achieving profitability;
● Unanticipated working capital or other cash requirements;
● Our ability to obtain and maintain intellectual property protection;
Risks
Related to Our Business and Strategy
We
have incurred losses since our inception, expect to incur losses in the future and may never achieve or sustain profitability.
We
have historically incurred losses and expect to continue incurring losses going forward. Our losses have resulted primarily from our
research programs and the development of our product candidates as well as from costs related to general and administrative expenses
relating to our operations. Currently, we are not generating revenue from operations, and we expect to incur losses for the
foreseeable future as we seek to obtain regulatory approval for our product candidates. Additionally, we expect that our general and
administrative expenses will increase due to the additional operational costs associated with our clinical studies, as well as the
anticipated expansion of our operations to commercialize our products if we receive FDA approval. We do not expect to generate significant revenue until we are able to commercialize one or more of our product candidates after
receiving FDA approval, or if any of our product candidates are
licensed or sold, if ever. We may never generate significant revenue or become profitable. Even if we do achieve profitability, we
may be unable to sustain or increase profitability on a quarterly or annual basis. Our failure to achieve and subsequently sustain
profitability could harm our business, financial condition, results of operations and cash flows.
We
currently depend entirely on the successful and timely regulatory approval and commercialization of our current product candidates, and
any future product candidates, which may not receive regulatory approval or, if any of our product candidates do receive regulatory approval,
we may not be able to successfully commercialize them.
We
currently have two product candidates, the VenoValve and the enVVe, and our business presently depends entirely on our success with these
product candidates. In order for our product candidates to succeed they need to be approved by regulatory authorities, which may never
happen. Our product candidates are based on technologies that have not been used previously in the manner we propose. Market acceptance
of our product candidates will largely depend on our ability to demonstrate their relative safety, efficacy, cost-effectiveness and ease
of use. We may not be able to successfully develop and commercialize our product candidates. If we fail to do so, we will not be able
to generate substantial revenues, if any.
We
are subject to rigorous and extensive regulation by the FDA in the United States and by comparable agencies in other jurisdictions, including
the European Medicines Agency, or EMA, in the European Union, or EU. Our product candidates are currently in development, and we have
not received FDA approval for them. Our product candidates may not be marketed in the United States until they have been approved by
the FDA and may not be marketed in other jurisdictions until they have received approval from the appropriate foreign regulatory agencies.
Each product candidate requires significant research, development, preclinical testing and extensive clinical investigation before submission
of any regulatory application for marketing approval.
Obtaining
regulatory approval requires substantial time, effort and financial resources, and we may not be able to obtain approval of any of our
product candidates on a timely basis, or at all. The number, size, design and focus of preclinical and clinical trials that will be required
for approval by the FDA, the EMA or any other foreign regulatory agency varies depending on the device, the disease or condition that
the product candidates are designed to address and the regulations applicable to particular products. Preclinical and clinical data can
be interpreted in different ways, which could delay, limit or preclude regulatory approval. The FDA, the EMA and other foreign regulatory
agencies can delay, limit or deny approval of a product for many reasons, including, but not limited to:
● a product candidate may not be shown to be safe or effective;
● we may not be able to enroll enough patients to complete our product studies;
● a product candidate may fail to comply with regulatory requirements; and/or
If
our product candidates are not approved at all or quickly enough to provide net revenues to defray our operating expenses, our business,
financial condition, operating results and prospects could be harmed.
If
we are unable to successfully raise additional capital, our future clinical trials and product development could be limited and our long-term
viability may be threatened.
We
have experienced negative operating cash flows since our inception and have funded our operations primarily from proceeds received from
sales of our capital stock, and the issuance of convertible and non-convertible notes. We will need to seek additional funds in the future
through equity or debt financings, or strategic alliances with third parties, either alone or in combination with equity financings,
to complete our product development initiatives. These financings could result in substantial dilution to the holders of our common stock
or require contractual or other restrictions on our operations or on alternatives that may be available to us. If we raise additional
funds by issuing debt securities, these debt securities could impose significant restrictions on our operations. Any such required financing
may not be available in amounts or on terms acceptable to us, and the failure to procure such required financing could have a material
and adverse effect on our business, financial condition and results of operations, or threaten our ability to continue as a going concern.
Our
present and future capital requirements will be significant and will depend on many factors, including:
● the costs, timing and outcome of regulatory review of our product candidates;
● the effect of competing technological and market developments;
● market acceptance of our product candidates;
● the ability to achieve revenue growth and improve gross margins;
We
may not be able to acquire additional funds on acceptable terms, or at all. If we are unable to raise adequate funds, we may have to
liquidate some or all of our assets or delay, reduce the scope of or eliminate some or all of our development programs.
If
we do not have, or are not able to obtain, sufficient funds, we may be required to delay development or commercialization of our product
candidates. We also may have to reduce the resources devoted to our product candidates or cease operations. Any of these factors could
harm our operating results.
We
may never be able to generate sufficient revenue from the commercialization of our product candidates to achieve and maintain profitability.
Our
ability to operate profitably in the future will depend upon, among other items, our ability to (i) fully develop product candidates,
(ii) scale up our business and operational structure, (iii) obtain regulatory approval of product candidates from the FDA and foreign
regulators, (iv) market and sell product candidates, (v) successfully gain market acceptance of our product candidates by doctors and
patients, and (vi) obtain sufficient and on-time supply of components from our third-party suppliers. If our product candidates are never
successfully commercialized, we may never receive a return on our investments in product development, regulatory compliance, manufacturing,
and quality assurance, which may cause us to fail to generate revenue and gain economies of scale from such investments.
We
only utilize a few suppliers for porcine tissue for our product candidates and the loss of a supplier could have an adverse impact on
our business.
We
rely on two domestic third-party vendors to supply porcine tissue for our product candidates. Our ability to supply our current and future
product candidates commercially, if approved, depends, in part, on our ability to obtain this porcine tissue in accordance with our specifications
and with regulatory requirements and in sufficient quantities to meet demand. Our ability to obtain porcine tissue may be affected by
matters outside our control, including that these suppliers may cancel our arrangements on short notice or have disruptions to their
operations.
If
we are required to establish additional or replacement suppliers for the porcine tissue, it may not be accomplished timely and our operations
could be disrupted. Even if we are able to find replacement suppliers, the replacement suppliers may need to be qualified and may require
additional regulatory authority approval, which could result in further delay. In the event of a supply disruption, our product inventories
may be insufficient to supply our customers and the development of any future product candidates would be delayed, limited or prevented,
which could have an adverse impact on our business.
We
depend upon third-party suppliers for certain components of our product candidates, making us vulnerable to supply problems and price
fluctuations, which could harm our business.
We
rely on a number of third-party suppliers to provide certain components of our product candidates. We do not have long-term supply agreements
with most of our suppliers, and, in many cases, we purchase goods on a purchase order basis. Our suppliers may encounter problems for
a variety of reasons, including unanticipated demand from larger customers, failure to follow specific protocols and procedures, failure
to comply with applicable regulations, equipment malfunction, quality or yield problems and environmental factors, any of which could
delay or impede their ability to meet our demand. Our reliance on these third-party suppliers also subjects us to other risks that could
harm our business, including:
In
addition, there are a limited number of suppliers and third-party manufacturers that operate under the FDA’s Quality System Regulation,
or QSR, requirements, maintain certifications from the International Organization for Standardization that are recognized as harmonized
standards in the European Economic Area, or EEA, and that have the necessary expertise and capacity to supply components for our product
candidates. As a result, it may be difficult for us to locate manufacturers for our anticipated future needs, and our anticipated growth
may strain the ability of our current suppliers to deliver products, materials and components to us. If we are unable to arrange for
third-party manufacturing of components for our product candidates, or to do so on commercially reasonable terms, we may not be able
to complete development of, market and sell our current or new product candidates. Further, any supply interruption from our suppliers
or failure to obtain additional suppliers for any of the components used in our product candidates would limit our ability to manufacture
our product candidates. Failure to meet these commitments could result in legal action by our customers, loss of customers or harm to
our ability to attract new customers, any of which could have a material and adverse effect on our business, financial condition, results
of operations and growth.
If
we successfully develop product candidates, we will have to demonstrate the efficacy and financial viability of our products to doctors,
hospitals, insurance companies, and other stakeholders.
There
are multiple stakeholders that determine the success of a medical device, including doctors, hospitals, medical insurance companies,
and others. Educating these stakeholders on the benefits of product candidates will require a significant commitment by a marketing team
and sales organization. Surgeons and hospitals may be slow to change their practices because of familiarity with existing devices and/or
treatments, perceived risks arising from the use of new devices, lack of experience using new devices, lack of clinical data supporting
the benefits of such devices or the cost of new devices. There may never be widespread adoption of our product candidates by surgeons
and hospitals. In addition, medical insurance companies would need to understand the costs and benefits of our product candidates compared
to the existing standards of care, if they are to provide reimbursement for the cost of our product candidates and the procedures to
implant our product candidates. We may have difficulty and may never achieve the market acceptance that we need from doctors, hospitals,
medical insurance companies and others that are necessary for a successful product.
We
may be unable to convince hospital facilities to approve the use of our product candidates.
In
the United States, in order for surgeons to use our product candidates, the hospital facilities where these surgeons treat patients
will typically require that the product candidates receive approval from the facility’s value analysis committee (VAC). VACs
typically review the comparative effectiveness and cost of medical devices used in the facility. The makeup and evaluation processes
for VACs vary considerably, and it can be a lengthy, costly and time-consuming effort to obtain approval by the relevant VAC. For
example, even if we have an agreement with a hospital system for the purchase of a product, in most cases, they must obtain VAC
approval by each hospital within the system to sell at that particular hospital. Additionally, hospitals typically require separate
VAC approval for each specialty in which a product is used, which may result in multiple VAC approval processes within the same
hospital even if such product has already been approved for use by a different specialty group. VAC approval is often needed for
each different product to be used by the surgeons in that specialty. In addition, hospital facilities and group purchasing
organizations, or GPOs, which manage purchasing for multiple facilities, may also require us to enter into a purchasing agreement
and satisfy numerous elements of their administrative procurement process, which can also be a lengthy, costly and time-consuming
effort. If we do not receive access to hospital facilities in a timely manner, or at all, via these VAC and purchasing contract
processes, or otherwise, or if we are unable to secure contracts on commercially reasonable terms in a timely manner, or at all, our
costs may increase, our sales may decrease and our operating results may be harmed.
We
face significant competition and our business prospects will depend on our ability to develop and commercialize our current product candidates
and may also depend on our ability to develop additional product candidates.
The
medical device industry is highly competitive and subject to rapid change and technological advancements. New technologies, techniques
or products could emerge that might make our products obsolete or offer better combinations of price and performance than the products that we plan to offer. Therefore, it is important to our business that we continue to develop and enhance our product candidate
offerings and potentially introduce new product candidates.
Developing
new product candidates is expensive and time-consuming. Even if we are successful in developing additional product candidates, the success
of any new product candidates or enhancements to existing product candidates will depend on several factors, including our ability to:
● properly identify and anticipate surgeon and patient needs;
● develop an effective and dedicated sales and marketing team;
● avoid infringing upon the intellectual property rights of others;
● provide adequate training to potential users of our product candidates; and
If
we are unsuccessful in developing and commercializing additional devices in other areas, our ability to realize our revenue may be impaired.
Existing
markets for surgical devices are characterized by rapid technological change and innovation. It is critical to our success that we anticipate
changes in technology and customer requirements and physician, hospital and healthcare provider practices. It is also important that
we successfully introduce new, enhanced and competitive product candidates to meet our prospective customers’ needs on a timely
and cost-effective basis. At the same time, however, we must carefully manage our introduction of new product candidates. If potential
customers believe that such product candidates will offer enhanced features or be sold for a more attractive price, they may delay purchases
until such product candidates are available. We may also continue to offer older products as we transition to new product candidates,
and we may not have sufficient experience managing transitions. If we do not successfully innovate and introduce new technology into
our anticipated product lines or successfully manage the transitions of our technology to new product offerings, our revenue, results
of operations and business could be adversely impacted.
Our
competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, industry
standards, distribution reach or customer requirements. We anticipate that we will face strong competition in the future as current or
future competitors develop new or improved product candidates and as new companies enter the market with novel technologies.
If
we are unable to produce an adequate supply of our product candidates for use in our current and planned clinical trials or for commercialization
because of our limited manufacturing resources or our facility is damaged or becomes inoperable, our regulatory, development and commercialization
efforts may be delayed.
Our
manufacturing resources for our product candidates are limited. We currently manufacture our product candidates for our research and
development and clinical trial purposes at our manufacturing facility in Irvine, California. If our existing manufacturing facility experiences
a disruption, we would have no other means of manufacturing our product candidates until we are able to restore the manufacturing capability
at our current facility or develop alternative manufacturing facilities. Any damage to or destruction of our facilities or our equipment,
prolonged power outage or contamination at our facilities would significantly impair our ability to produce our product candidates and
prepare our product candidates for clinical trials.
Additionally,
to produce our product candidates in the quantities that we anticipate will be required for commercialization, we will have to increase
or “scale up” our production process over the current level of production. We may encounter difficulties in scaling up our
production, including issues involving yields, controlling and anticipating costs, quality control and assurance, supply and shortages
of qualified personnel. If our scaled-up production process is not efficient or results in a product that does not meet quality or other
standards, we may be unable to meet market demand and our revenues, business and financial prospects would be adversely affected. Further,
third parties with whom we may develop relationships may not have the ability to produce the quantities of the materials we may require
for clinical trials or commercial sales or may be unable to do so at prices that allow us to price our products competitively.
Our
facility and equipment would be costly to replace and could require substantial lead time to repair or replace. The facility may be harmed
or rendered inoperable by natural or man-made disasters, including earthquakes, flooding, fire, vandalism and power outages, which may
render it difficult to operate our business for some period of time. While we have taken precautions to safeguard our facilities, any
inability to operate our business during such periods could lead to the loss of customers or harm to our reputation. We also possess
insurance for damage to our property and the disruption of our business, but this insurance may not be sufficient to cover all of our
potential losses and this insurance may not continue to be available to us on acceptable terms, or at all.
We
currently have no sales and limited marketing infrastructure and we may not be able to build a sales and marketing infrastructure sufficient
for us to commercialize our current product candidate or future product candidates, if approved, and may be unable to do so or may never
generate sufficient revenue to achieve or sustain profitability.
In
order to commercialize products that are approved by regulatory agencies, we will have to increase our expenditures to undertake development
or commercialization activities. If we are unable to successfully execute commercialization activities, we may have to curtail the development