We are a commercial-stage medical technology company that develops advanced imaging and artificial intelligence (“AI”) technologies that are deployed in our capsule endoscopy solutions to identify abnormalities of the gastrointestinal (“GI”) tract for diagnostic and screening purposes. We developed our first capsule endoscope system, currently comprising the CapsoCam Plus single-usecapsule and the CapsoCloud and CapsoView software, to panoramically visualize the small-bowel mucosa to investigate abnormalities such as obscure GI bleeding and Crohn’s disease. The capsule acquires and stores video images in onboard memory while moving through the GI tract, and the software component allows healthcare providers to view the video retrieved from the capsule—either by streaming it from the cloud, where it is securely stored, to anywhere, at their convenience, using our CapsoCloud software, or downloading it from the capsule themselves and reviewing it in our CapsoView software. The CapsoCam is a wire-free capsule endoscopy solution, eliminating patient-worn data recorders and providing clinicians a zero-capex, maintenance-free, flexible, and scalable workflow. The CapsoCam Plus is classified as a Class II device and has received FDA marketing authorization through the 510(k)-clearance process. We are (i) in the process of updating CapsoCam Plus to add our self-developed AI assisted reading technology and (ii) targeting related FDA 510(k) and EU submissions in the second half of 2025 and clearance of the updated capsule by the end of 2025, with commercialization shortly thereafter. Our AI assisted reading tools detect and highlight suspected abnormalities for a clinician, reducing their time to review the video and making capsule endoscopy more financially attractive to their practice. Our 510(k) submission and FDA review thereof may be delayed and we may not receive 510(k) clearance from the FDA on a timely basis or at all. We began sales of our small-bowel capsule system to our provider customers (i.e., primarily gastroenterologists practicing in clinics and/or hospitals) both internationally (in 2012) and in the U.S. (in 2017) through our global sales and marketing team. In the U.S., we sell to customers directly. Internationally, we sell both directly and through qualified exclusive distributors in specified regions. Our largest international markets (based on shipping destination) are France, Germany, and Canada. In 2023, we established a direct sales team in Germany to better serve our customers and strengthen our market presence in this key market. We plan to (i) further grow our existing sales and marketing team to increase small-bowel-related sales and (ii) leverage our existing sales and marketing team to sell future product additions to our GI-tract capsule endoscopy solution. Our revenue has increased in each year since we began U.S. direct sales in 2020. Our revenues for the years ended December 31, 2023 and 2024 totaled approximately $9.8 million and $11.8 million, respectively, representing a year-over-year growth of approximately 21%. Our revenues for the three months ended March 31, 2024 and 2025 totaled approximately $2.5 million and $2.8 million, respectively, representing a year-over-year growth of approximately 12%. The primary driver for our revenue growth was an increase in the number of CapsoCam Plus capsules sold: an increase of 19% from 2023 to 2024 and 11% from the three month period ended March 31, 2024 to the three month period ended March 31, 2025, with an increase in unit sales of 26% in the U.S. and 4% internationally from 2023 to 2024 and 10% in the U.S. and 13% internationally from the three month period ended March 31, 2024 to the three month period ended March 31, 2025. In 2023 and 2024, international sales accounted for 26% and 23% of total revenue. In the three-month periods ended March 31, 2024 and 2025, international sales accounted for 23% of total revenue. As of March 31, 2025, our small bowel capsule has been used in more than 135,000 patients worldwide and for 2024 our customer retention rate was approximately 90%. All of our revenues to date have been, and in the near-term will continue to be, generated from CapsoCam Plus related sales for the small bowel; and our ability to grow our small-bowel-related revenue is subject to our ability to successfully and timely execute related elements of our revenue growth strategy, including being able to compete effectively against our competitors (including those with an existing FDA-cleared product and that have established a market presence). To expand beyond small-bowel-related sales, we are developing our next pipeline capsule endoscope product, CapsoCam Colon. Our CapsoCam Colon capsule (i) leverages CapsoCam Plus’s existing capsule design with its panoramic view and (ii) incorporates both our self-developed AI to automatically detect polyps in the video and our polyp-size measurement tool enabled by a 3D sensor in the capsule (polyp size being highly correlated with a polyp’s risk of becoming cancer). Based on our current regulatory development plan, we are targeting CapsoCam Colon revenues beginning, in the U.S., in the second half of 2026 after receiving FDA 510(k) clearance, and in the EU, in early 2027 after receiving a CE Mark, of our second generation of CapsoCam Colon system, designed with a larger field of view and better image quality to improve accuracy, and which would be classified as a Class II device. We recently submitted our 510(k) for the first generation of our CapsoCam Colon. FDA review of our 510(k) submissions may be delayed and we may not receive 510(k) clearances from the FDA on a timely basis or at all. Longer term, we believe our CapsoCam family of products, incorporating our panoramic imaging solution, can be adapted to address new GI medical indications. Potential new medical indications include esophageal medical conditions (such as esophageal varices and Barrett’s esophagus) and pancreatic cancer. We plan to commence feasibility studies of CapsoCam’s accuracy in (i) screening esophageal varices (i.e. enlarged blood veins in the esophagus) in cirrhotic patients with portal hypertension in the second half of 2025 and (ii) detecting abnormalities indicative of cancerous and precancerous pancreatic neoplasia (abnormal cell growth) in the first half of 2026, in each case, subject to timely availability of sufficient funding and liquidity and/or potential adjustment of our clinical development priorities. Our ability to pursue our growth strategies is subject to our ability to timely and successfully meet our cash and liquidity needs (through this offering, cash generated from operations and the issuance of additional equity securities or borrowings). These efforts may be adversely impacted by our history of operating losses, accumulated deficit, and substantial doubt about our ability to continue as a going concern qualification as stated in the footnotes to our financial statements. We were incorporated under the laws of the State of Delaware on August 1, 2005, under the name “Capso Vision, Inc.” and changed our name to CapsoVision, Inc. on May 31, 2016. Our principal executive office is located in Saratoga, CA.
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