Israeli MedTech Firm ART Medical Files for Court Protection Over $15M Debt
Israeli medical device startup ART Medical has sought court protection after accumulating $15 million in debt, following an FDA rejection that halted its funding.
The Israeli medical device company ART Medical has filed for a stay of proceedings and the appointment of a temporary trustee at the Central District Court after accumulating debts of approximately $15 million. Founded in 2008, the firm developed an advanced digital platform utilizing smart feeding tubes, sensors, and algorithms to manage nutrition and prevent severe complications like ventilator-associated pneumonia in intensive care units.
The severe financial distress stems from a major regulatory setback in October 2026, when the U.S. Food and Drug Administration (FDA) rejected the company's De Novo classification request for marketing its products in the United States. Following the decision, investors withdrew financial backing, leaving the company without cash flow. ART Medical has raised roughly $100 million since inception, including grants from the Bill & Melinda Gates Foundation's Grand Challenges program, Advanced Medical Technologies LLC, and the Israel Innovation Authority.
Debts and Employee Wages
The court filing indicates that the company owes about 1 million NIS to local suppliers and $600,000 to foreign vendors. Furthermore, October 2026 salaries totaling approximately 870,000 NIS and 460,000 NIS in social benefits remain unpaid, alongside an estimated $1.4 million in severance liabilities. The firm also carries a $10.6 million debt for principal and interest to Avanos Medical Inc., which provided a $9 million convertible loan in the summer of 2024 secured by all company intellectual property.
ART Medical employs 53 people at its offices and manufacturing facility in Netanya. The temporary trustee will seek to stabilize operations, secure assets, and explore a sale of the business as a going concern while notifying hospitals and distributors regarding patient safety and continuity of care.
