What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-03-08 compared with 2020-03-10 · 619 added, 496 removed, 813 unchanged (58% of the section changed)

9 unchanged sentences

Our CGuard EPS received CE mark approval in the European Union in March

2013, and we launched its release on a limited basis in October 2014.

In January 2015, a new version of CGuard, with a rapid exchange

delivery system, received CE mark approval in Europe and in September 2015, we announced the full market launch of CGuard EPS

Subsequently, we launched CGuard EPS in Russia and certain countries in Latin America and Asia, including India.

expect to receive approval to launch CGuard EPS in Brazil, and we are seeking strategic partners for potential launch of CGuard

EPS in Japan and China.

April 2017, we had a pre-investigational device exemption (“IDE”) submission meeting with the U.S.

Food and Drug Administration

(“FDA”) regarding CGuard EPS where we presented materials that we believed would support a formal IDE submission seeking

approval to conduct a human clinical trial in the United States which included our draft synopsis for the clinical trial design.

The FDA agreed to our pre-clinical test plan and clinical trial design.

On July 26, 2019, we submitted an IDE application for

In connection with such application, on August 23, 2019, we received a request for additional information from the

FDA in support of our application.

We continue to work closely with the FDA to address FDA’s information and testing requests

in support of our pending IDE application, as the initiation of clinical testing in the U.S.

is our current highest priority.

Following resolution of all comments from the FDA, we plan to re-submit the IDE application, as IDE approval by the FDA would

be a critical step toward the commencement of a human clinical trial using CGuard EPS in the United States.

2013 and was fully launched in Europe in September 2015.

Subsequently, we launched CGuard EPS in Russia and certain countries

in Latin America and Asia, including India.

In September 2020, we launched CGuard EPS in Brazil after receiving regulatory approval

in July 2020 and, as discussed below, on February 3, 2021 we executed a distribution agreement with Chinese partners for the purpose

of expanding our presence in China.

Currently, we are seeking strategic partners for a potential launch of CGuard EPS in Japan.

September 8, 2020, we received approval from the U.S.

Food and Drug Administration (“FDA”) of our Investigation Device

Exemption (“IDE”), thereby allowing us to proceed with a pivotal study of our CGuard™

Carotid Stent System,

CARENET-III, for prevention of stroke in patients in the United States.

CARENET-lll is a prospective, multicenter, single-arm,

pivotal study to evaluate the safety and efficacy of the CGuard™

Carotid Stent System when used to treat symptomatic and

asymptomatic carotid artery stenosis in patients undergoing carotid artery stenting.

The trial will enroll approximately 315 subjects

in a maximum of 40 study sites located in the United States.

Additional sites in Europe may also participate in the study, contributing

a maximum of ~50% of the total enrollees.

The primary endpoint of the study will be the composite of the following:

of the following major adverse events:

death (all- cause mortality), all stroke, and myocardial infarction (DSMI) through 30-days

post-index procedure, based on the clinical events committee (CEC) adjudication or ipsilateral stroke from 31-365 day follow-up,

based on Clinical Events Committee (CEC) adjudication.

Additionally,

we intend to continue to evaluate potential product enhancements and manufacturing enhancements for CGuard EPS that

are expected to reduce cost of goods and/or provide the best-in-class performing delivery system.

In furtherance of

our strategy focusing on establishing CGuard EPS as a viable alternative to vascular surgery, we are exploring adding a

procedural protection device to our portfolio incorporating the principal of reverse flow of the carotid artery as an

adjunctive alternative to femoral access.

We cannot give any assurance that we will receive sufficient (or any) proceeds from

future financings or the timing of such financings, if ever for potential product enhancements and manufacturing

enhancements.

In addition, such additional financings may be costly or difficult to complete.

Even if we receive sufficient

proceeds from future financings, there is no assurance that we will be able to timely apply for CE mark approval following

our receipt of such proceeds.

We believe these improvements may allow us to reduce cost of goods and increase penetration in

our existing geographies and better position us for entry into new markets.

consider the addressable market for our CGuard EPS consists of individuals with diagnosed, symptomatic high-grade carotid artery

stenosis (HGCS, ≥70% occlusion) for whom an intervention is preferable to medical (drug) therapy.

This group includes not only

carotid artery stenting patients but also individuals undergoing carotid endarterectomy, as the two approaches compete for the

same patient population.

Assuming full penetration of the intervention caseload by CGuard EPS, we estimate that the addressable

market for CGuard EPS was approximately $1.0 billion in 2017.

Health Research International 2017 Results of Update

Report on Global Carotid Stenting Procedures and Markets by Major Geography and Addressable Markets ).

we intend to continue to invest in current and future potential product and manufacturing enhancements for CGuard EPS that are

expected to reduce cost of goods and/or provide the best-in-class performing delivery system.

In furtherance of our strategy that

focuses on establishing CGuard EPS as a viable alternative to vascular surgery, we are exploring adding new delivery systems and

accessory solutions for procedural protection to our portfolio.

consider the addressable market for our CGuard EPS to be individuals with diagnosed, symptomatic high-grade carotid artery stenosis

(HGCS, ≥70% occlusion) for whom intervention is preferable to medical (drug) therapy.

This group includes not only carotid

artery stenting patients but also individuals undergoing carotid endarterectomy, as the two approaches compete for the same patient

Assuming full penetration of the intervention caseload by CGuard EPS, we estimate that the addressable market for

CGuard EPS was approximately $1.0 billion in 2017 (source:

Health Research International 2017 Results of Update Report on Global

Carotid Stenting Procedures and Markets by Major Geography and Addressable Markets).

MGuard™

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decided to curtail further development of this product in order to focus on the development of a drug-eluting stent product, MGuard

Due to limited resources, though, our efforts have been limited to testing drug-eluting stents manufactured by potential

Due to limited resources, however, our efforts have been limited to testing drug-eluting stents manufactured by potential

partners for compatibility with MicroNet and seeking to incorporate MicroNet onto a drug-eluting stent manufactured by a potential

8 unchanged sentences

were organized in the State of Delaware on February 29, 2008.

April 8, 2019, we closed an underwritten public offering of 486,957 shares of our common stock at a price to the public of $5.00

We received net proceeds of approximately $2.0 million from the offering, after deducting underwriter discounts and

commissions and offering expenses payable by us.

As a result of such offering, the conversion price for each of our Series B Preferred

Stock and Series C Preferred was reduced to $5.00 per share.

In connection with this public offering, on April 12, 2019, the underwriter

partially exercised its over-allotment option and purchased an additional 12,393 shares of our common stock at a price to the

public of $5.00 per share.

We received net proceeds of approximately $47,000 from the exercise of the over-allotment option.

September 24, 2019, we closed an underwritten public offering of (i) 539,000 common units, with each common unit being comprised

of one share of our common stock and one Series E Warrant to purchase one share of common stock and (ii) 2,238,777 pre-funded

units, with each pre-funded unit being comprised of one pre-funded warrant to purchase one share of common stock and one Series

In connection with this public offering, the underwriter partially exercised its over-allotment option and purchased

an additional 194,444 Series E Warrants to purchase 194,444 shares of common stock.

The offering price to the public was $1.80

per common unit and $1.79 per pre-funded unit.

The net proceeds to the us from the offering of common units and pre-funded units

and the exercise of the underwriter’s option to purchase 194,444 additional Series E Warrants to purchase an aggregate of

194,444 shares of common stock was approximately $4.2 million, excluding the proceeds, if any, from the exercise of the Series

E Warrants and the pre-funded warrants sold in the offering, and after deducting underwriting discounts and commissions and payment

of other estimated expenses associated with the offering that were payable by us.

American Notification

Stockholder’s

August 7, 2019, we received notification from the NYSE American that we do not meet continued listing standards of the NYSE American

as set forth in Part 10 of the NYSE American Company Guide (the “Company Guide”).

Specifically, we are not in compliance

with Section 1003(a)(iii) of the Company Guide because we reported stockholders’

equity of less than $6 million as of June

30, 2019, and net losses in our five most recent fiscal years ended December 31, 2018.

As a result, we became subject to the procedures

and requirements of Section 1009 of the Company Guide.

October 11, 2019, NYSE American accepted our plan to regain compliance with Section 1003(a)(iii) of the Company Guide by August

We are subject to periodic review during the period covered by the compliance plan.

Failure to make progress consistent

with the plan or to regain compliance with the continued listing standards by the end of the plan period could result in our common

stock being delisted from the NYSE American.

Trading Price

January 7, 2019, we received notification from the NYSE American that we are not in compliance with the NYSE American continued

listing standards because our shares of common stock had been selling for a low price per share for a substantial period of time.

Pursuant to Section 1003(f)(v) of the NYSE American Company Guide (the “Company Guide”), the NYSE American staff determined

that our continued listing was predicated on us effecting a reverse stock split of our common stock or otherwise demonstrating

sustained price improvement within a reasonable period of time, which the staff determined to be until July 7, 2019.

the NYSE American advised us that its policy is to immediately suspend trading in shares of, and commence delisting procedures

with respect to, a listed company if the market price of its shares falls below $0.06 per share at any time during the trading

as of 5:00 p.m.

Eastern Time on March 29, 2019, we amended our amended and restated certificate of incorporation in order to effectuate

a 1-for-50 reverse stock split of our outstanding shares of common stock.

July 8, 2019, we received notice from NYSE American that we have resolved the continued listing deficiency with respect to low

selling price pursuant to Section 1003(f)(v) of the Company Guide.

We are subject to NYSE Regulation’s normal continued

listing monitoring.

However, in accordance with Section 1009(h) of the Company Guide, if we are again determined to be below any

of the continued listing standards within 12 months of July 8, 2019, NYSE American will examine the relationship between the two

incidents of noncompliance and re-evaluate our method of financial recovery from the first incident.

NYSE Regulation will then

take the appropriate action, which depending on the circumstances, may include truncating the compliance procedures described

in Section 1009 of the Company Guide or immediately initiating delisting proceedings.

If in the future we fall below the continued

listing criterion of a minimum average share price of $0.20 over a 30-day trading period, our common stock will be subject to

immediate review by NYSE American.

There can be no assurance that the market price of our common stock will remain above the levels

viewed as abnormally low for a substantial period of time.

February 8, 2021, we closed an underwritten public offering of 29,032,258 units, with each such unit being comprised of one share

of our common stock, par value $0.0001 per share, and one Series G Warrant to purchase one-half of one share of common stock (the

“February 2021 Offering”).

The offering price to the public was $0.62 per unit.

The Series G Warrants were immediately

exercisable at a price of $0.682 per share, subject to adjustment in certain circumstances, and expire five years from the date

We also granted the underwriter of the offering an option to purchase an additional 4,354,838 shares of common stock

and Series G Warrants to purchase 2,177,419 shares of common stock, which the underwriter exercised in full.

, In connection with

the offering we granted to the underwriter a compensation warrant to purchase up to 1,669,355 shares of common stock with an exercise

price of $0.682 per share and which are exercisable for five years from February 3, 2021.

Our net proceeds from the offering,

after giving effect to the exercise of the underwriter’s over-allotment option, were approximately $18.9 million, after

deducting underwriting discounts and commissions and payment of other expenses associated with the offering, but excluding the

proceeds, if any, from the exercise of Series G Warrants sold in the offering.

June 5, 2020, we closed an underwritten public offering of (i) 7,635,800 Units, with each Unit being comprised of one share of

our common stock, par value $0.0001 per share, and one Series F warrant to purchase one share of common stock, and (ii) 14,586,400

Pre-Funded Units, with each Pre-Funded Unit being comprised of one Pre-Funded Warrant to purchase one share of common stock and

one Series F Warrant.

In connection with this public offering, the underwriter exercised the option practically in full, for 3,333,300

shares of common stock and 3,333,300 Series F Warrants.

The offering price to the public was $0.45 per Unit and $0.449 per Pre-Funded

Our net proceeds from the offering and the exercise of the underwriter’s over-allotment option were approximately

$10.7 million, after deducting underwriting discounts and commissions and payment of other estimated expenses associated with

the offering, but excluding the proceeds, if any, from the exercise of Series F Warrants and the Pre-Funded Warrants sold in the

and Purchase Agreement with Chinese Partners

February 3, 2021, we entered into a Distribution Agreement with three China-based partners, pursuant to which the Chinese partners

will be responsible for conducting the necessary registration trials for commercial approval of our products in China, followed

by an eight-year exclusive distribution right to sell our products in China with the term of the agreement continuing on a year-to-year

basis unless terminated.

Under the Distribution Agreement, the China-based partners will be subject to minimum purchase obligations.

The Distribution Agreement may be terminated for cause upon failure to meet minimum purchase obligations, failure to obtain regulatory

approvals or for other material breaches.

addition, and on the same day, we entered into an investment transaction with QIDI, which included (i) an SPA, pursuant to which

QIDI agreed to invest $900,000 in exchange for shares of our common stock at a purchase price of $0.6708 per share, and (ii) an

IRA, whereby QIDI was provided certain customary registration rights, including a commitment by us to file a registration statement

with the SEC on Form S-1 or Form S-3 and have such registration statement become effective not later than 150 days following the

closing of the transactions under the SPA.

transactions closed on February 5, 2021.

Amendment to the InspireMD, Inc.

2013 Long-Term Incentive Plan

as of August 31, 2020, our stockholders approved the Sixth Amendment to the Plan and, accordingly, increased the number of shares

of common stock available for issuance pursuant to awards under such Plan by 6,500,000 shares, to a total of 7,178,395 shares

of common stock.

Compliance with New York Stock Exchange

August 7, 2019, we received a notification from the NYSE American that we did not meet the continued listing standards of the

NYSE American as set forth in Part 10 of the Company Guide.

Specifically, we were not in compliance with Section 1003(a)(iii)

of the Company Guide because we reported stockholders’

equity of less than $6 million as of September 30, 2019, and net

losses in our five most recent fiscal years ended December 31, 2018.

As a result, we became subject to the procedures and requirements

of Section 1009 of the Company Guide.

On October 11, 2019, the NYSE American accepted our plan to regain compliance with Section

1003(a)(iii) of the Company Guide by August 7, 2020.

August 7, 2020, following our submission to the NYSE American of our plan for regaining compliance, the NYSE American approved

such plan and, accordingly and as of such date, we are compliant with all of the NYSE American LLC continued listing standards

set forth in Part 10 of the NYSE American Company Guide.

In particular, we regained compliance with the continued listing requirement

under NYSE American Company Guide Section 1003(a)(iii).

The return to compliance was achieved as a result of our recently-consummated

public offering, in which we raised approximately $10.7 million of net proceeds from the sale of units and pre-funded units.

Approval of IDE

September 8, 2020, we received approval from the FDA of our IDE, thereby allowing us to proceed with a pivotal study of our CGuard™

Carotid Stent System, CARENET-III, for prevention of stroke in patients in the United States.

July 28, 2020, we entered into a Sales Agreement with A.G.P.

pursuant to which we may offer and sell, from time to time, at our

option, through or to A.G.P., up to an aggregate of approximately $9,300,000 of shares of common stock (the “ATM Facility”).

Any shares to be offered and sold under the Sales Agreement will be issued and sold pursuant to the Company’s Registration

Statement on Form S-3 (File No.

333-223130), filed with the SEC on February 21, 2018 and the prospectus supplement thereto filed

with the SEC on July 28, 2020, by methods deemed to be an “at the market offering”

as defined in Rule 415(a)(4) promulgated

under the Securities Act of 1933, as amended, or if specified by us, by any other method permitted by law.

On January 11, 2021,

we increased the aggregate amount of our shares of common stock that may be sold under the Sales Agreement from $9,300,000 to

$10,382,954, and, as a result, utilized and sold the maximum amount allowable under the ATM Facility, which resulted in an aggregate

amount of $10,381,958.

Clearance for CGuard™

MicroNet ®

July 23, 2020, we announced that we obtained registration from the Brazilian registration authority, Agéncia Nacional de

Vigiláncia Sanitária (ANVISA), for our CGuard MicroNet covered stent, clearing it for sale and distribution in Brazil.

Trial Results for CGuard EPS

June 10, 2020, we reported the publication of the results of our PARADIGM trial in the EuroIntervention journal.

trial, 101 unselected consecutive real-life patients were treated with our CGuard MicroNET covered stent for carotid stenosis

and were monitored for postprocedural neurologic events for a period of 12 months.

The results displayed sustained protection

against any such neurologic events.

At 30 days, only one adverse event occurred (a minor transient stroke with no other strokes,

myocardial infarctions, or deaths).

Furthermore, those study results showed that no strokes occurred between 30 days and twelve

June 25, 2020, we reported the results from an investigator-initiated SIBERIA randomized clinical trial of our CGuard EPS, which

evaluated 30-day silent brain infarcts associated with the use of the Acculink™

conventional open-cell nitinol stent vs.

our CGuard Micronet-covered stent.

Those results displayed that CGuard had a statistically significant (greater than three-fold)

reduction in the procedure-generated mean cerebral lesion volume relative to Acculink.

At 30 days, there were zero new cerebral

lessons in the CGuard arm, compared to six in the Acculink arm, also statistically significant.

September 3, 2020 we reported the award for Best ESC Congress Poster for the presentation of updated data from the large, long-term

PARADIGM-EXTEND study of the CGuard™

Embolic Prevention System (EPS), as part of the European Society of Cardiology 2020

Carotid Update e-presentation at the European Society of Cardiology (ESC) Congress 2020.

PARADIGM/EXTEND is an investigator-driven

on-going study performed with CGuard Carotid stent for primary and secondary stroke prevention in a large, consecutive all-comers

population, with 5 years (60 months) follow-up.

The results for 480 patients of the expected total of 550 that completed the 30-day

follow-up were presented were no peri-procedural major strokes or death.

The total death/stroke /myocardial incidence at 30 days

was 1.04% (5/480) due to two minor strokes, one myocardial infarction and two stent-unrelated deaths.

In the study, 354/480 patients

completed the 12-month follow-up with only 1 patient experiencing in-stent restenosis, 0.28% (1/354).

At the 12-month follow-up

there were no other device-related adverse clinical events.

Finally, 46/480 patients completed the 60-month follow-up period with

one more case of in-stent restenosis and no additional cases of device-related stroke.

Gary Roubin, M.D.

to our Board of Directors

October 12, 2020, our board of directors, or the Board, appointed Dr.

Roubin as a Class I member of the Board, effective

as of that date, with a term expiring at the Company’s 2021 annual meeting of stockholders.

Roubin is an internationally

renowned interventional cardiologist recognized for his pioneering work in carotid stenting and embolic and protection devices.

He is also acknowledged for the development of coronary stenting and the first FDA-approved coronary stent.

In connection with

his appointment, Dr.

Roubin was granted options to purchase 79,650 shares of common stock and 238,950 shares of restricted stock.

Shortly after his appointment as a director, and on October 16, 2020, Dr.

Roubin invested $100,000 in the Company in exchange

for 222,223 units consisting of (i) one share of common stock and (ii) one warrant to purchase our common stock with an exercise

price of $0.495.

For additional biographical information about Dr.

Roubin, please see “Management”

an effort to contain and mitigate the spread of COVID-19, which the World Health Organization, or WHO, declared to be a pandemic

on March 12, 2020, many countries have imposed unprecedented restrictions on travel, quarantines and other public health safety

As of the beginning of the second quarter of 2020, we began to experience a significant COVID-19 related impact on our

financial condition and results of operations, which we primarily attribute to the postponement of CGuard EPS procedures (non-emergency

procedures), as hospitals shifted resources to patients affected by COVID-19.

To our knowledge, most European countries in which

we operate are slowly reinstating elective procedures, but we do not know when the hospitals will resume to normal pre-pandemic

levels with such procedures in light of recent increases in COVID-19 cases in the territories we sell into.

We anticipate that

the continuation of the pandemic and related restrictions and safety measures would likely result in continued fluctuations in

sales of our products for the upcoming periods.

For more discussion on our risks related to COVID-19, please see risk factors

included under “Item 1A.

Risk Factors”

response to significant market volatility and uncertainties relating to COVID-19, the fees and salaries of our Board, management

and most of our employees were reduced in order to alleviate corporate operating expenses.

April 1, 2020, the Board approved a 50% decrease in the annual cash compensation for non-employee directors from an aggregate

amount of $154,000 to $77,000.

April 21, 2020, Marvin Slosman, our President, Chief Executive Officer and Director, signed a waiver reducing his monthly base

salary from $33,333 to $16,666 for the period beginning April 1, 2020 and ending on such date as Mr.

Slosman was to determine,

and Craig Shore, our Chief Financial Officer, Chief Administrative Officer, Secretary and Treasurer, signed a waiver reducing

his monthly base salary from NIS 80,125 to NIS 40,063 for the period beginning April 1, 2020 and ending on such date as Mr.

was to determine.

April 1, 2020, we reduced the annual salaries of most of our employees by 20% to 30% until further notice.

on a determination made by each of Mr.

Slosman and Mr.

Shore on June 10, 2020, following the closing of our underwritten public

offering in June 2020, as described above, each of Mr.

Slosman’s and Mr.

Shore’s monthly base salaries were reinstated

to $33,333 and NIS 80,125, respectively, effective as of June 1, 2020.

Each of the salaries for the remaining officers, directors

and employees was similarly reinstated by no later than June 30, 2020.

a result of the reduction of those fees and salaries during the second quarter of 2020, our operating expenses were reduced by

approximately $235,000 in the second quarter of 2020.

from Former Underwriter

terms of our engagement of the underwriter for our September 2019 financing contained a purported 12 month right of first refusal

in favor of such underwriter with respect to future financings.

Due to, among other things, difficulties in the relationship with

that prior underwriter and our need to raise additional funds to finance our ongoing operations, we engaged A.G.P./Alliance Global

Partners in May 2020 as underwriter for our June 2020 public offering, and again in July 2020 for an ATM Facility.

July 28, 2020, we entered into a settlement agreement and release with that prior underwriter, under which it provided us a final,

unconditional release from any further obligations arising out of or related to the engagement agreements, underwriting agreements

and placement agency agreements which we had been party to with it and with respect to any services which it had provided to us.

We, in turn, provided the prior underwriter a final, unconditional release from any further obligations arising out of or related

to the prior agreements and services.

consideration for the final release provided to us, we paid to the prior underwriter $400,000 in cash and reduced, to $0.495,

the exercise price per share of warrants to purchase 274,029 shares of our common stock that had been issued by us to the prior

underwriter in various offerings that took place between March 2018 and September 2019.

That reduced exercise price represents

the exercise price for the Series F Warrants that we issued in our June 2020 public offering.

The warrants that were repriced

had existing exercise prices per share ranging from $187.50 to $2.25 and a weighted average exercise price per share of $7.32.

All other terms of those warrants remained unchanged.

The related increase in expenses of $400,000 was recorded during the three

months ended June 30, 2020 to “General and Administrative expense”

within the Consolidated Statements of Operations.

arteries are located on each side of the neck and provide the primary blood supply to the brain.

40 unchanged sentences

market for aneurysm flow modulating devices is still in the embryonic stage with windows of opportunities for early entrance.

current global market for the aneurysm flow modulating devices is estimated at $550 million, and the current market value of the

flow diversion market segment is estimated to be $125 million.

The neurovascular market includes over-the-wire, flow-guided microcatheters,

guiding catheters, coil and liquid embolics, neurovascular stents and flow diversion stents.

According to iData Research, the

market is expected to be driven by the conversion from surgical procedures to endovascular techniques in the treatment of aneurysms

and arteriovenous malformations.

neurovascular market includes over-the-wire, flow-guided microcatheters, guiding catheters, coil and liquid embolics, neurovascular

stents and flow diversion stents.

According to iData Research, the market is expected to be driven by the conversion from surgical

procedures to endovascular techniques in the treatment of aneurysms and arteriovenous malformations.

vascular diseases (“PVD”) are caused by the formation of atherosclerotic plaques in arteries, which carry blood to

4 unchanged sentences

includes diseases outside of the heart and brain, but most times refers to the leg and foot.

global market for PVDs was valued at about $5.34 billion in 2018 and is projected to grow to $6.22 billion by 2022 (Global Peripheral

Vascular Devices and Equipment Markets, 2014-2022 Research and Markets) with growth being driven primarily by increases in the

number of patients with peripheral artery disease.

Stents and balloons hold the majority of the share in the peripheral vascular

devices market.

Peripheral stents are more often used in combination with balloon angioplasty to open the veins, so that blood

can flow through the blocked veins in the body.

stents are more often used in combination with balloon angioplasty to open the veins, so that blood can flow through the blocked

veins in the body.

growing prevalence of PVD is expected to cause increased demand for treatment options.

57 unchanged sentences

countries in Latin America and Asia, including India.

We expect to receive approval to launch CGuard EPS in Brazil, and we are

seeking strategic partners for potential launch of CGuard EPS in Japan and China.

April 2017, we had a pre-investigational device exemption (“IDE”) submission meeting with the U.S.

Food and Drug Administration

(“FDA”) regarding CGuard EPS where we presented materials that we believed would support a formal IDE submission seeking

approval to conduct a human clinical trial in the United States which included our draft synopsis for the clinical trial design.

In September, 2020, we launched CGuard EPS in Brazil after receiving regulatory

approval in July 2020, and we are seeking strategic partners for a potential launch of CGuard EPS in Japan and China.

April 2017, we had a pre-IDE submission meeting with the FDA regarding CGuard EPS where we presented materials that we believed

would support a formal IDE submission seeking approval to conduct a human clinical trial in the United States which included our

draft synopsis for the clinical trial design.

The FDA agreed to our pre-clinical test plan and clinical trial design.

On July 26, 2019, we submitted an IDE application for

In connection with such application, on August 23, 2019, we received a request for additional information from the

FDA in support of our application.

We continue to work closely with the FDA to address FDA’s information and testing requests

in support of our pending IDE application, as the initiation of clinical testing in the U.S.

is our current highest priority.

Following resolution of all comments from the FDA, we plan to re-submit the IDE application , as IDE approval by the FDA would

be a critical step toward the commencement of a human clinical trial using CGuard EPS in the United States..

26, 2019, we submitted an IDE application for CGuard EPS.

In connection with such application, on August 23, 2019, we received

a request for additional information from the FDA in support of our application.

On September 8, 2020, we received IDE approval

for CGuard™

Carotid Stent System, CARENET-III.

Additionally,

68 unchanged sentences

deaths, which were not device or procedure-related resulting in a MACCE rate of 10.7% at one year.

30 days (n=30)

6 months (n=28)

12 months (n=28)

MACCE (MI, stroke, death)

154 unchanged sentences

The IRONGUARD 2 Study”

was a physician initiated prospective multi-center registry that enrolled 729 patients from

is a physician initiated prospective multi-center registry enrolling 733 patients from 20

medical centers in Italy, from January 2017 to June 2019.

The objective of the study is to evaluate periprocedural, 30 day,

and 12-month outcomes in a prospective series of patients submitted to protected carotid artery stenting with the CGuard Embolic

Prevention System.

In November 2019, 24-hour, 30-day and 12-month results were published in the Journal of Vascular Surgery.

study concluded that the real-world large multicenter, multispecialty analysis suggests that the use of the CGuard EPS in routine

clinical practice is associated with no major periprocedural and 30-day neurologic complications.

The objective of the study is to evaluate periprocedural (24 hours),

post-procedural (up to 30 days), and 12-month outcomes in a largest, prospective, multicenter series of patients submitted for

protected carotid artery stenting with the CGuard Embolic Prevention System.

The 24-hour, 30-day and 12-month preliminary results

(data available on 726 patients out of the 733 treated) were presented at the Leipzig Interventional Course (LINC) in January

The study’s preliminary results from the IRONGUAURD 2 study suggested in a real-world evaluation of carotid artery

stenting, Cguard EPS can be safely used for treatment of extracranial carotid artery stenosis, allowing a low rate of post procedural

adverse events by 12 months.

findings from the study are as follows:

procedural success in implanting CGuard EPS;

from hemorrhagic stroke (patient was admitted for immediate treatment of CAS due to stroke), 2 minor strokes, 6 TIAs and one

nonfatal AMI at 24 hours;

minor stroke, 2 TIAs and one nonfatal AMI between 24 hours and 30 days;

neurologic events and 7 deaths (2 fatal AMISs, 4 neoplasms and 1 suicide) between 30 days and 1 year.

death from hemorrhagic stroke (patient was admitted for immediate treatment of CAS due to stroke), 2 minor strokes, 6 TIAs

and one nonfatal AMI at 24 hours;

minor stroke, 2 TIAs, three AMIs, no deaths and no stent thrombosis/occlusions between 24 hours and 30 days;

minor stroke, 4 TIAs, 2 AMIs and 8 deaths (the 2 mentioned AMIs, 4 malignancies, 1 suicide and 1 undefined complication in

Guillain-Barré

Syndrome) between 30 days and 1 year.

SIBERIA Trial for Carotid Artery Stenosis:

A Randomized Controlled Trial of Conventional Versus Micronet™-Covered Stent

Use in Percutaneous Neuroprotected Carotid Artery Revascularization:

Peri-procedural and 30-day Diffusion-Weighted Magnetic Resonance

Imaging and Clinical Outcomes

SIBERIA Trial for Carotid Artery Stenosis:

A Randomized Controlled Trial of Conventional Versus Micronet™-Covered Stent

Use in Percutaneous Neuroprotected Carotid Artery Revascularization:

Peri-procedural and 30-day Diffusion-Weighted Magnetic Resonance

Imaging and Clinical Outcomes”

was an investigator-initiated randomized clinical trial, single-center study, which evaluated

one hundred patients who qualified for carotid revascularization with high risk for surgery and were randomized 1:1 to either

CGuard EPS or Acculink TM .

The primary endpoints were incidence and volume of new cerebral embolic post-procedural lesions

(24-48 hours) as determined by diffusion weighted magnetic resonance imaging (DW-MRI).

The principal secondary endpoints included

incidence of periprocedural or postprocedural stroke, myocardial infarction and death at 30 days.

The results of the study were

presented in a late-breaking session at the EuroPCR in June 2020.

The conclusion of the study was that the CGuard™

Micronet™-covered

stent use in consecutive unselected patients subjected to neuroprotected carotid artery stenting was associated with a greater

than three-fold reduction in the procedure-generated mean cerebral lesion volume, and with zero post-procedural cerebral embolisms

findings from the study are as follows:

Procedure (24-48 hours), the CGuard™

arm was observed to have a 78% reduction in the average volume of new cerebral

lesions (157 mm3 vs.

700 mm3), a statistically significant improvement (p=0.007;

30 days, DW-MRI showed zero new cerebral lessons in the CGuard™

arm versus six in the Acculink™

arm (p=0.03);

30 days, there were zero strokes, myocardia infarctions or deaths in the CGuard arm and three events the Acculink™

(two strokes and one myocardial infarction).

Clinical Trials for MGuard Bare-Metal Coronary Products

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summarized in greater detail below.

the MASTER II trial, which we initially initiated as part of our efforts to seek approval of our MGuard Prime EPS by the U.S.

Food and Drug Administration, was discontinued at our election in its current form in light of market conditions moving toward

the use of drug-eluting stents over bare-metal stents.

Analysis of the patients already enrolled in the MASTER II trial prior

to its suspension, however, reconfirmed the MASTER I safety results due to a continued low mortality rate.

the MASTER II trial, which we initially initiated as part of our efforts to seek approval of our MGuard Prime EPS by the FDA,

was discontinued at our election in its current form in light of market conditions moving toward the use of drug-eluting stents

over bare-metal stents.

Analysis of the patients already enrolled in the MASTER II trial prior to its suspension, however, reconfirmed

the MASTER I safety results due to a continued low mortality rate.

the second calendar quarter of 2011, we began the MASTER I trial, a prospective, randomized study in Europe, South America and

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the adoption of CGuard EPS .

We are seeking to expand the population of CGuard EPS

patients in those countries in which CGuard EPS is commercially available.

In particular,

our focus is on establishing CGuard EPS as a viable alternative (in appropriate cases)

to conventional carotid stents and vascular surgery within the applicable medical communities.

We intend to accomplish this goal by continuing to publish and present our clinical data,

support investigator-initiated clinical registries and exploring addition of a procedural

protection device to our portfolio incorporating the principal of reverse flow of the

carotid artery as an adjuctive alternative to femoral access.

We have partnered and will

continue to seek out partnerships with organizations focused on the treatment of stroke.

We are seeking to expand the population of CGuard EPS patients in those countries in which

CGuard EPS is commercially available.

In particular, our focus is on establishing CGuard EPS as a viable alternative (in appropriate

cases) to conventional carotid stents and vascular surgery within the applicable medical communities.

We intend to accomplish

this goal by continuing to publish and present our clinical data, support investigator-initiated clinical registries and exploring

addition of a procedural protection device to our portfolio incorporating the principal of reverse flow of the carotid artery

as an adjuctive alternative to femoral access.

We have partnered and will continue to seek out partnerships with organizations

focused on the treatment of stroke.

We will also continue to engage advisory boards and to develop a network of key opinion

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that are based on our MicroNet technology.

to protect and expand our portfolio of patents.

Our MicroNet technology and the use of patents to protect it are critical

to our success.

We own numerous patents for our MicroNet technology.

Nineteen patent applications and patents are pending

or in force (fifteen of which are issued patents) in the United States, some of which have corresponding patent applications

and/or issued patents in Canada, China, Europe, Israel, India, and South Africa.

We believe these patents and patent applications

collectively cover all of our existing products and may be useful for protecting our future technological developments.

intend to aggressively continue patenting new technology, and to actively pursue any infringement covered by any of our patents.

We believe that our patents, and patent applications once allowed, are important for maintaining the competitive differentiation

of our products and maximizing our return on research and development investments.

development and successfully commercialize MGuard DES.

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products, if we resume development of our coronary products, we plan to evaluate opportunities to further develop MGuard DES.

expansion and pipeline development We will continue to invest in advancing our portfolio with new delivery system alternatives

to facilitate the use of CGuard by all physicians.

Our delivery systems will enable all endovascular access points including

accessory devices for Arterial Venous (AV) shunting .

markets in which we compete are highly competitive, subject to change and impacted by new product introductions and other activities

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we intend to complete the required clinical studies to obtain reimbursement approval in countries where it makes economic sense

have nineteen pending patent applications, three of which are pending in the United States, many of which cover aspects of our

CGuard and MGuard technology.

Some of the corresponding patent applications outside the U.S.

are filed in Canada, China, Europe,

Israel, India and South Africa.

We hold an aggregate total of over 75 patents and pending applications including fifteen issued

These patent rights are directed to cover various patent families, including the following seven (7) patent families:

Base Title of Patent Family

Country Pending

Country/Patent No.

Bifurcated Stent Assemblies

Israel 198,188

have 52 issued patents, including 14 patents issued in the U.S., and seven pending patent applications, four of which are pending

in the United States.

Many of these patents and applications cover aspects of our CGuard and MGuard technology.

Patents outside

have been filed in Canada, China, Europe, Israel, India, Japan, Australia, and South Africa.

The patents and applications

fall into a number of patent families, as listed below:

Title of Patent Family

and Patent No.)

Stent Assemblies

China ZL200780046676.2

Deformable Tip for Stent Delivery and Methods of Use

US 10,258,491

RU 2018128017

In Vivo Filter Assembly

Tip for Stent Delivery and Methods of Use

Israel 260,945

Knitted Stent Jackets

Canada 2,666,728

Visualization

of blood flow in a venous/arterial shunting system

Vivo Filter Assembly

Stent Jackets

Canada 2,887,189

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Israel 198,190

EP 07827229.1

(Germany, France, & UK)

US 10,137,015

Optimized Stent Jacket

Canada 2,670,724

China ZL201210454357.8

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US 10,406,008

EP 07827415.6

(10 EP countries)

Stent Apparatuses for Treatment Via Body Lumens and Methods of Use

South Africa 2007/10751

(validated in 9 countries:

BE, CH, DE, FR, UK, IT, IE, LX, NL)

Apparatuses for Treatment Via Body Lumens and Methods of Use

Africa 2007/10751

Canada 2,609,687

Canada 2,843,097

(BE, CH, DE, FR, GB, IE, IT, and NL)

(CH, DE, FR, GB, IE, IT)

US 10,058,440

US 10,070,977

Stent Thermoforming Apparatus and Methods

Thermoforming Apparatus and Methods

US 10,376,393

lay terms, these patent applications generally cover three aspects of our products:

the mesh sleeve with and

without a drug, the

product and the delivery mechanism of the stent.

We also believe that one or more additional pending patent applications, upon

issuance, will cover our existing products.

We also believe that the patent applications we have filed, in particular those covering

the use of a knitted micron-level mesh sleeve over a stent for various indications, if issued as patents with claims substantially

in their present form, would likely create a significant barrier for another company seeking to use similar technology.

Australia 2015326517

Canada 2962713

or using a self-adjusting stent assembly and kits including the same

patents and patent applications listed above cover various aspects of our products, specifically focusing on the mesh sleeve covering

our stents, as well as methods for production and delivery mechanisms of the stents.

We believe that our patents, in particular

those covering the use of a knitted micron-level mesh sleeve over a stent for various indications, as well as our pending patent

applications (if issued as patents with claims substantially in their present form), create a significant barrier against other

companies seeking to use similar technology.

We believe these patents and patent applications collectively cover all our existing

products and may be useful in protecting our future technological developments.

We intend to aggressively continue patenting new

technologies and to actively pursue any infringement of our key patents.

also rely on trade secret protection to protect our interests in proprietary know-how and/or for processes for which patents are

difficult to obtain or enforce.

As part of this, we rely on non-disclosure and confidentiality agreements with employees, consultants

and other parties to protect, in part, trade secrets and other proprietary technology.

use the InspireMD ®

, MGuard ®

, CGuard ®

, and MGuard Prime ®

in connection with our products.

We have registered these trademarks in the European Union.

The trademarks are renewable indefinitely,

so long as we make the appropriate filings when required.

We also have registrations for Carenet ®

, NGuard ®

PVGuard ®

and the MNP Micronet Protection Logo in the European Union and a supplemental registration for Micronet ®

in the United States.

We have also applied to register the names CGuard™

InspireMD™, SmartFit™, PVGuard TM ,

NGuard TM , and MGuard Prime™

as trademarks in the United States.

We also use and may have common law rights to

various trademarks, trade names, and service marks.

As part of our trade secret policy, we rely on non-disclosure and confidentiality agreements with

employees, consultants and other parties to protect trade secrets and other proprietary technology.

have registered or applied to register the following trademarks, which we use in connection with our products:

InspireMD ®

(US, European Union, and UK)

(European Union, and UK)

(US, European Union, and UK)

US, European Union)

(US, European Union, and UK)

Micronet®

Micronet Protection logo )European Union and UK)

)European Union and UK)

SmartFit™

trademarks are renewable indefinitely, so long as we continue using the marks and make the appropriate filings when required.

We also use and may have common-law rights to various trademarks, trade names, and service marks.

manufacture and sale of our products are subject to regulation by numerous governmental authorities, principally the European

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As a result, the processes and time periods required to obtain foreign marketing

approval may be longer or shorter than those necessary to obtain U.S.

Food and Drug Administration market authorization.

differences may affect the timeliness of international market introduction of our products.

For the European Union nations, medical

devices must obtain a CE mark before they may be placed on the market.

In order to obtain and maintain the CE mark, we must comply

with the Medical Device Directive 93/42/EEC (“MDD”) by presenting comprehensive technical files for our products demonstrating

safety and efficacy of the product to be placed on the market and passing initial and annual quality management system audit as

per ISO 13485 standard by an European Notified Body.

We have obtained ISO 13485 quality system certification and the products

we currently distribute into the European Union display the required CE mark.

In order to maintain certification, we are required

to pass an annual surveillance audit conducted by Notified Body auditors.

The European Union replaced the MDD with the new European

Medical Devices Regulation, or MDR (MDR 2017/745).

The MDR will apply after a transitional period of three years ending on May

26, 2020, which is expected to change several aspects of the existing regulatory framework in Europe.

Manufacturers have the duration

of the transition period to update their technical documentation and processes to meet the new requirements in order to obtain

After May 26, 2020, medical devices can still be placed on the market under the provision of the MDD until May 27,

provided the CE Mark was issued prior to this date and the manufacturer continues to comply with this directive.

27, 2024, all medical devices entering the EU will need to have a CE Mark under the MDR, even if they have been on the market

previously under the MDD.

In our case, CGuard and MGuard can continue to be marketed under the MDD until November 12, 2022.

Specifically,

the EU MDR will require changes in the clinical evidence required for medical devices, post-market clinical follow-up evidence,

annual reporting of safety information for Class III products, Unique Device Identification (“UDI”) for all products,

submission of core data elements to a European UDI database prior to placement of a device on the market, and multiple other labeling

Approvals for certain of our currently-marketed products could be curtailed or withdrawn as a result of the implementation

and recertification process of the EU MDR and acquiring approvals for new products could be more challenging, time consuming and

approval may be longer or shorter than those necessary to obtain FDA market authorization.

These differences may affect the timeliness

of international market introduction of our products.

For the European Union nations, medical devices must obtain a CE mark before

they may be placed on the market.

In order to obtain and maintain the CE mark, we must comply with the Medical Device Directive

93/42/EEC (“MDD”) by presenting comprehensive technical files for our products demonstrating safety and efficacy of

the product to be placed on the market and passing initial and annual quality management system audit as per ISO 13485 standard

by an European Notified Body.

We have obtained ISO 13485 quality system certification and the products we currently distribute

into the European Union display the required CE mark.

In order to maintain certification, we are required to pass an annual surveillance

audit conducted by Notified Body auditors.

The European Union replaced the MDD with the new European Medical Devices Regulation,

or MDR (MDR 2017/745).

The MDR will apply after a transitional period of three years ending on May 26, 2020, which is expected

to change several aspects of the existing regulatory framework in Europe.

Manufacturers have the duration of the transition period

to update their technical documentation and processes to meet the new requirements in order to obtain a CE Mark.

After May 26,

2020, medical devices can still be placed on the market under the provision of the MDD until May 27, 2024;

provided the CE Mark

was issued prior to this date and the manufacturer continues to comply with this directive.

By May 27, 2024, all medical devices

entering the EU will need to have a CE Mark under the MDR, even if they have been on the market previously under the MDD.

case, CGuard and MGuard can continue to be marketed under the MDD until November 12, 2022.

Specifically, the EU MDR will require

changes in the clinical evidence required for medical devices, post-market clinical follow-up evidence, annual reporting of safety

information for Class III products, Unique Device Identification (“UDI”) for all products, submission of core data

elements to a European UDI database prior to placement of a device on the market, and multiple other labeling changes.

for certain of our currently-marketed products could be curtailed or withdrawn as a result of the implementation and recertification

process of the EU MDR and acquiring approvals for new products could be more challenging, time consuming and costly.

noted below, we have or had regulatory approval and made sales of CGuard EPS, MGuard Prime EPS or both products either through

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and Sales of MGuard Prime EPS and CGuard EPS on a Country-by-Country Basis

Prime EPS Approval

Prime EPS Sales

(Netherlands)

Liechtenstein

approval expired and per management decision it was decided not to renew it.

have made sales to distributors in this country, but based upon information from such distributors, we believe that the product

has not been sold to customers in this country.

is a non-regulated market, the health system in Chile only relies on CE mark or FDA certificates.

approval expired and per management decision it was decided not to renew it.

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Prime EPS in South Africa since 2015

Food and Drug Administration Government Regulation of Medical Devices for Human Subjects

of our activities are subject to regulatory oversight by the U.S.

Food and Drug Administration under provisions of the Federal

Food, Drug, and Cosmetic Act and regulations thereunder, including regulations governing the development, marketing, labeling,

promotion, manufacturing, and export of medical devices.

Food and Drug Administration Approval/Clearance Requirements

the United States, Class II or III medical devices must be cleared or approved by the U.S.

Food and Drug Administration prior

to commercialization.

Unless an exemption applies, each medical device that we market or wish to market in the United States must

receive 510(k) clearance or premarket approval.

Government Regulation of Medical Devices for Human Subjects

of our activities are subject to regulatory oversight by the FDA under provisions of the Federal Food, Drug, and Cosmetic Act

and regulations thereunder, including regulations governing the development, marketing, labeling, promotion, manufacturing, and

export of medical devices.

Approval/Clearance Requirements

the United States, Class II or III medical devices must be cleared or approved by the FDA prior to commercialization.

exemption applies, each medical device that we market or wish to market in the United States must receive 510(k) clearance or

premarket approval.

Medical devices that receive 510(k) clearance are “cleared”

Food and Drug Administration to market, distribute, and sell in the United States.

Medical devices that obtain a premarket

approval by the U.S.

Food and Drug Administration are “approved”

to market, distribute, and sell in the United States.

We anticipate filing a premarket approval application in the future and do not anticipate filing a 510(k) premarket notification.

Even though we do not anticipate filing a 510(k), we cannot be certain that the U.S.

Food and Drug Administration will find it

more appropriate for us to file a 510(k) premarket notification instead of a premarket approval application.

Further, we cannot

be sure that we will ever obtain premarket approval.

Descriptions of the premarket approval and 510(k) clearance processes are

provided below.

I devices are those for which safety and effectiveness can be assured by adherence to the U.S.

Food and Drug Administration’s

general regulatory controls for medical devices, or the General Controls, which include compliance with the applicable portions

Food and Drug Administration’s quality system regulations, facility registration and product listing, reporting

of adverse medical events, and appropriate, truthful and non-misleading labeling, advertising, and promotional materials.

Class I devices also require premarket clearance by the U.S.

Food and Drug Administration through the 510(k) process described

II devices are subject to the U.S.

Food and Drug Administration’s General Controls, and any other special controls as

deemed necessary by the U.S.

Food and Drug Administration to ensure the safety and effectiveness of the device.

Premarket review

and clearance by the U.S.

Food and Drug Administration for Class II devices is accomplished through the 510(k) process.

to the Medical Device User Fee and Modernization Act of 2002 (MDUFMA), as of October 2002, unless a specific exemption applies,

510(k) submissions are subject to user fees.

Certain Class II devices are exempt from this premarket review process.

Food and Drug Administration has recently indicated that it intends to modernize the 510(k) process and has issued new guidance

documents that may change the way that devices are cleared by the U.S.

Food and Drug Administration.

by the FDA to market, distribute,

and sell in the United States.

Medical devices that obtain a premarket approval by the FDA are “approved”

distribute, and sell in the United States.

We anticipate filing a premarket approval application in the future and do not anticipate

filing a 510(k) premarket notification.

Even though we do not anticipate filing a 510(k), we cannot be certain that the FDA will

find it more appropriate for us to file a 510(k) premarket notification instead of a premarket approval application.

we cannot be sure that we will ever obtain premarket approval.

Descriptions of the premarket approval and 510(k) clearance processes

are provided below.

I devices are those for which safety and effectiveness can be assured by adherence to the FDA’s general regulatory controls

for medical devices, or the General Controls, which include compliance with the applicable portions of the FDA’s quality

system regulations, facility registration and product listing, reporting of adverse medical events, and appropriate, truthful

and non-misleading labeling, advertising, and promotional materials.

Some Class I devices also require premarket clearance by

the FDA through the 510(k) process described below.

II devices are subject to the FDA’s General Controls, and any other special controls as deemed necessary by the FDA

to ensure the safety and effectiveness of the device.

Premarket review and clearance by the FDA for Class II devices is accomplished

through the 510(k) process.

Pursuant to the Medical Device User Fee and Modernization Act of 2002 (MDUFMA), as of October 2002,

unless a specific exemption applies, 510(k) submissions are subject to user fees.

Certain Class II devices are exempt from this

premarket review process.

The FDA has recently indicated that it intends to modernize the 510(k) process and has issued new guidance

documents that may change the way that devices are cleared by the FDA.

III includes devices with the greatest risk.

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considerably more time and resources.

Food and Drug Administration decides whether a device line must undergo either the 510(k) clearance or premarket approval

based on statutory criteria that utilize a risk-based classification system.

Premarket approval is the U.S.

Food and Drug Administration

process of scientific and regulatory review to evaluate the safety and effectiveness of Class III medical devices and, in many

cases, Class II medical devices.

Class III devices are those that support or sustain human life, are of substantial importance

in preventing impairment of human health, or which present a potential, unreasonable risk of illness or injury.

and Drug Administration uses these criteria to decide whether a premarket approval or a 510(k) is appropriate, including the level

of risk that the agency perceives is associated with the device and a determination by the agency of whether the product is a

type of device that is similar to devices that are already legally marketed.

Devices deemed to pose relatively less risk are placed

in either Class I or II.

In many cases, the U.S.

Food and Drug Administration requires the manufacturer to submit a 510(k) requesting

clearance (also referred to as a premarket notification), unless an exemption applies.

The 510(k) must demonstrate that the manufacturer’s

proposed device is “substantially equivalent”

in intended use and in safety and effectiveness to a legally marketed

predicate device.

FDA decides whether a device line must undergo either the 510(k) clearance or premarket approval based on statutory criteria that

utilize a risk-based classification system.

Premarket approval is the FDA process of scientific and regulatory review to evaluate

the safety and effectiveness of Class III medical devices and, in many cases, Class II medical devices.

Class III devices are

those that support or sustain human life, are of substantial importance in preventing impairment of human health, or which present

a potential, unreasonable risk of illness or injury.

The FDA uses these criteria to decide whether a premarket approval or a 510(k)

is appropriate, including the level of risk that the agency perceives is associated with the device and a determination by the

agency of whether the product is a type of device that is similar to devices that are already legally marketed.

Devices deemed

to pose relatively less risk are placed in either Class I or II.

In many cases, the FDA requires the manufacturer to submit a

510(k) requesting clearance (also referred to as a premarket notification), unless an exemption applies.

The 510(k) must demonstrate

that the manufacturer’s proposed device is “substantially equivalent”

in intended use and in safety and effectiveness

to a legally marketed predicate device.

A “predicate device”

is a pre-existing medical device to which equivalence can be drawn, that is

either in Class I, Class II, or is a Class III device that was in commercial distribution before May 28, 1976, for which the U.S.

Food and Drug Administration has not yet called for submission of a premarket approval application.

is a pre-existing medical device to which equivalence

can be drawn, that is either in Class I, Class II, or is a Class III device that was in commercial distribution before May 28,

1976, for which the FDA has not yet called for submission of a premarket approval application.

expect that unless an exemption applies, each medical device that we market or wish to market in the United States must receive

1 unchanged sentence

Medical devices that receive 510(k) clearance are “cleared”

and Drug Administration to market, distribute, and sell in the United States.

Medical devices that obtain a premarket approval

Food and Drug Administration are “approved”

by the FDA to

market, distribute, and sell in the United States.

Medical devices that obtain a premarket approval by the FDA are “approved”

to market, distribute, and sell in the United States.

We anticipate

that each device that we wish to commercialize will be considered a Class III device by the U.S.

Food and Drug Administration

and therefore we anticipate filing a premarket approval application in the future and do not anticipate filing a 510(k) premarket

notification.

Even though we do not anticipate filing a 510(k), we cannot be certain that the U.S.

Food and Drug Administration

will find it more appropriate for us to file a 510(k) premarket notification instead of a premarket approval application or that

applications of our technology may not be considered Class II devices.

Further, we cannot be sure that we will ever obtain a premarket

We anticipate that each device that we wish to commercialize will be considered

a Class III device by the FDA and therefore we anticipate filing a premarket approval application in the future and do not anticipate

filing a 510(k) premarket notification.

Even though we do not anticipate filing a 510(k), we cannot be certain that the FDA will

find it more appropriate for us to file a 510(k) premarket notification instead of a premarket approval application or that applications

of our technology may not be considered Class II devices.

Further, we cannot be sure that we will ever obtain a premarket approval.

Descriptions of the premarket approval and 510(k) clearance processes are provided below.

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A premarket approval application must be supported by extensive data including, but not limited to, analytical, preclinical,

clinical trials, manufacturing, statutory preapproval inspections, and labeling to demonstrate to the U.S.

Food and Drug Administration’s

satisfaction the safety and effectiveness of the device for its intended use.

Before a premarket approval application is submitted,

a manufacturer must apply for an IDE.

clinical trials, manufacturing, statutory preapproval inspections, and labeling to demonstrate to the FDA’s satisfaction

the safety and effectiveness of the device for its intended use.

Before a premarket approval application is submitted, a manufacturer

must apply for an IDE.

If the device presents a “significant risk,”

as defined by the U.S.

Drug Administration, to human health, the U.S.

Food and Drug Administration requires the device sponsor to file an IDE application

with the U.S.

Food and Drug Administration and obtain IDE approval prior to initiation of enrollment of human subjects for clinical

The IDE provides the manufacturer with a legal pathway to perform clinical trials on human subjects where without the

IDE, only approved medical devices may be used on human subjects.

as defined by the FDA, to human health, the FDA

requires the device sponsor to file an IDE application with the FDA and obtain IDE approval prior to initiation of enrollment

of human subjects for clinical trials.

The IDE provides the manufacturer with a legal pathway to perform clinical trials on human

subjects where without the IDE, only approved medical devices may be used on human subjects.

IDE application must be supported by appropriate data, such as analytical, animal and laboratory testing results, manufacturing

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IDE requirements.

clinical trial may be suspended by either the U.S.

Food and Drug Administration or the IRB at any time for various reasons, including

a belief that the risks to the study participants outweigh the benefits of participation in the study.

Even if a study is completed,

clinical testing results may not demonstrate the safety and efficacy of the device, or they may be equivocal or otherwise insufficient

to obtain approval of the product being tested.

After the clinical trials have been completed, if at all, and the clinical trial

data and results are collected and organized, a manufacturer may complete a premarket approval application.

a premarket approval application is sufficiently complete, the U.S.

Food and Drug Administration will accept the application and

begin an in-depth review of the submitted information.

By statute, the U.S.

Food and Drug Administration has 180 days to review

the “accepted application,”

although, generally, review of the application can take between one and three years, but

it may take significantly longer.

During this review period, the U.S.

Food and Drug Administration may request additional information

or clarification of information already provided.

Also, during the review period, an advisory panel of experts from outside the

Food and Drug Administration may be convened to review and evaluate the application and provide recommendations to the U.S.

Food and Drug Administration as to the approvability of the device.

The preapproval inspections conducted by the U.S.

Drug Administration include an evaluation of the manufacturing facility to ensure compliance with the Quality Systems Regulations,

as well as inspections of the clinical trial sites by the Bioresearch Monitoring group to evaluate compliance with good clinical

practice and human subject protections.

New premarket approval applications or premarket approval supplements are required for

modifications that affect the safety or effectiveness of the device, including, for example, certain types of modifications to

the device’s indication for use, manufacturing process, labeling and design.

Significant changes to an approved premarket

approval require a 180-day supplement, whereas less substantive changes may utilize a 30-day notice, or a 135-day supplement.

Premarket approval supplements often require submission of the same type of information as a premarket approval application, except

that the supplement is limited to information needed to support any changes from the device covered by the original premarket

approval application, and it may not require as extensive clinical data or the convening of an advisory panel.

510(k) Clearance

do not currently market, distribute, or sell any products that have market clearance by the U.S.

Food and Drug Administration

under its 510(k) process.

If, in the future, we develop products where 510(k) clearance is required, we would be required to submit

a 510(k) demonstrating that such proposed devices are substantially equivalent to a respective previously cleared 510(k) device

or a device that was in commercial distribution before May 28, 1976, for which the U.S.

Food and Drug Administration has not yet

called for the submission of 510(k).

Food and Drug Administration’s 510(k) clearance pathway usually takes from three

to twelve months but could take longer.

In some cases, the U.S.

Food and Drug Administration may require additional information,

clinical trial may be suspended by either the FDA or the IRB at any time for various reasons, including a belief that the risks

to the study participants outweigh the benefits of participation in the study.

Even if a study is completed, clinical testing

results may not demonstrate the safety and efficacy of the device, or they may be equivocal or otherwise insufficient to obtain

approval of the product being tested.

After the clinical trials have been completed, if at all, and the clinical trial data and

results are collected and organized, a manufacturer may complete a premarket approval application.

a premarket approval application is sufficiently complete, the FDA will accept the application and begin an in-depth review of

the submitted information.

By statute, the FDA has 180 days to review the “accepted application,”

although, generally,

review of the application can take between one and three years, but it may take significantly longer.

During this review period,

the FDA may request additional information or clarification of information already provided.

Also, during the review period, 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 preapproval inspections conducted by the FDA include an evaluation of the

manufacturing facility to ensure compliance with the Quality Systems Regulations, as well as inspections of the clinical trial

sites by the Bioresearch Monitoring group to evaluate compliance with good clinical practice and human subject protections.

premarket approval applications or premarket approval supplements are required for modifications that affect the safety or effectiveness

of the device, including, for example, certain types of modifications to the device’s indication for use, manufacturing

process, labeling and design.

Significant changes to an approved premarket approval require a 180-day supplement, whereas less

substantive changes may utilize a 30-day notice, or a 135-day supplement.

Premarket approval supplements often require submission

of the same type of information as a premarket approval application, except that the supplement is limited to information needed

to support any changes from the device covered by the original premarket approval application, and it may not require as extensive

clinical data or the convening of an advisory panel.

Clearance Pathway

do not currently market, distribute, or sell any products that have market clearance by the FDA under its 510(k) process.

in the future, we develop products where 510(k) clearance is required, we would be required to submit a 510(k) demonstrating that

such proposed devices are substantially equivalent to a respective previously cleared 510(k) device or a device that was in commercial

distribution before May 28, 1976, for which the FDA has not yet called for the submission of 510(k).

The FDA’s 510(k) clearance

pathway usually takes from three to twelve months but could take longer.

In some cases, the FDA may require additional information,

including clinical data, to make a determination regarding substantial equivalence.

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premarket approval.

Food and Drug Administration requires each device manufacturer to determine whether the proposed

change requires submission of a new 510(k) or a premarket approval, but the U.S.

Food and Drug Administration can review any such

decision and can disagree with a manufacturer’s determination.

Food and Drug Administration disagrees with a

manufacturer’s determination, the U.S.

Food and Drug Administration can require the manufacturer to cease marketing and/or

The FDA requires each device manufacturer to determine whether the proposed change requires submission of

a new 510(k) or a premarket approval, but the FDA can review any such decision and can disagree with a manufacturer’s determination.

If the FDA disagrees with a manufacturer’s determination, the FDA can require the manufacturer to cease marketing and/or

recall the modified device until 510(k) clearance or premarket approval of the modified device is obtained.

and Continuing U.S.

Food and Drug Administration Regulation

and Continuing FDA Regulation

host of regulatory requirements apply to our approved devices, including the quality system regulation (which requires manufacturers

to follow elaborate design, testing, control, documentation and other quality assurance procedures), the Medical Device Reporting

regulations (which require that manufacturers report to the U.S.

Food and Drug Administration specified types of adverse events

involving their products), labeling regulations, and the U.S.

Food and Drug Administration’s general prohibition against

promoting products for unapproved or “off-label”

Class II devices also can have special controls such as performance

standards, post-market surveillance, patient registries, and U.S.

Food and Drug Administration guidelines that do not apply to

Class I devices.

regulations (which require that manufacturers report to the FDA specified types of adverse events involving their products), labeling

regulations, and the FDA’s general prohibition against promoting products for unapproved or “off-label”

Class II devices also can have special controls such as performance standards, post-market surveillance, patient registries, and

FDA guidelines that do not apply to Class I devices.

noncomprehensive list of the regulatory requirements that apply to our approved products classified as medical devices include:

listing and establishment registration, which helps facilitate U.S.

Food and Drug Administration inspections and other regulatory

listing and establishment registration, which helps facilitate FDA inspections and other regulatory action;

Systems Regulations, which requires manufacturers, including third-party manufacturers, to follow stringent design, testing,

control, documentation and other quality assurance procedures during all aspects of the development and manufacturing process;

regulations and U.S.

Food and Drug Administration prohibitions against the promotion of products for uncleared, unapproved

or off-label use or indication;

regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-label use or indication;

of product modifications that could significantly affect safety or efficacy or that would constitute a major change in intended

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of product modifications that affect the safety or effectiveness of one of our cleared devices;

device reporting regulations, which require that manufacturers comply with U.S.

Food and Drug Administration requirements

to report if their device may have caused or contributed to a death or serious injury, or has malfunctioned in a way that

would likely cause or contribute to a death or serious injury if the malfunction of the device or a similar device were to

device reporting regulations, which require that manufacturers comply with FDA requirements to report if their device may

have caused or contributed to a death or serious injury, or has malfunctioned in a way that would likely cause or contribute

to a death or serious injury if the malfunction of the device or a similar device were to recur;

post-approval

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data for the device;

Food and Drug Administration’s recall authority, whereby it can ask, or under certain conditions order, device

manufacturers to recall from the market a product that is in violation of governing laws and regulations;

FDA’s recall authority, whereby it can ask, or under certain conditions order, device manufacturers to recall from the

market a product that is in violation of governing laws and regulations;

pertaining to voluntary recalls;

of corrections or removals.

do not currently have a registered establishment with the U.S.

Food and Drug Administration.

If we are approved or cleared to

manufacture, prepare, or process a device in the United States, we and any third-party manufacturers that we may use must will

be required to register our establishments with the U.S.

Food and Drug Administration.

As such, we and our manufacturing facilities

will be subject to U.S.

Food and Drug Administration inspections for compliance with the U.S.

Food and Drug Administration’s

do not currently have a registered establishment with the FDA.

If we are approved or cleared to manufacture, prepare, or process

a device in the United States, we and any third-party manufacturers that we may use must will be required to register our establishments

with the FDA.

As such, we and our manufacturing facilities will be subject to FDA inspections for compliance with the FDA’s

Quality System Regulation.

Additionally, some of our subcontractors may also be subject to U.S.

Food and Drug Administration announced

and unannounced inspections for compliance with the U.S.

Food and Drug Administration’s Quality System Regulation.

regulations will require that we manufacture our products and maintain our documents in a prescribed manner with respect to design,

manufacturing, testing and quality control activities.

As a medical device manufacturer, we will further be required to comply

Food and Drug Administration requirements regarding the reporting of adverse events associated with the use of our medical

devices, as well as product malfunctions that would likely cause or contribute to death or serious injury if the malfunction were

Food and Drug Administration regulations also govern product labeling and prohibit a manufacturer from marketing

a medical device for unapproved applications.

CGuard EPS is classified as a Class III medical device by the U.S.

Food and Drug Administration.

Class III medical devices are

generally the highest risk devices and are therefore subject to the highest level of regulatory control by the U.S.

Food and Drug

Administration, since the U.S.

Food and Drug Administration process of premarket approval involves scientific and regulatory review

to evaluate the safety and effectiveness of Class III medical devices for the purpose(s) intended.

Food and Drug Administration

will either approve or deny a premarket approval application and we cannot market a device unless or until the U.S.

Food and Drug

Administration approves a premarket approval application.

Additionally, some of our subcontractors may also be subject to FDA announced and unannounced inspections

for compliance with the FDA’s Quality System Regulation.

These regulations will require that we manufacture our products

and maintain our documents in a prescribed manner with respect to design, manufacturing, testing and quality control activities.

As a medical device manufacturer, we will further be required to comply with FDA requirements regarding the reporting of adverse

events associated with the use of our medical devices, as well as product malfunctions that would likely cause or contribute to

death or serious injury if the malfunction were to recur.

FDA regulations also govern product labeling and prohibit a manufacturer

from marketing a medical device for unapproved applications.

CGuard EPS is classified as a Class III medical device by the FDA.

Class III medical devices are generally the highest risk devices

and are therefore subject to the highest level of regulatory control by the FDA, since the FDA process of premarket approval involves

scientific and regulatory review to evaluate the safety and effectiveness of Class III medical devices for the purpose(s) intended.

The FDA will either approve or deny a premarket approval application and we cannot market a device unless or until the FDA approves

a premarket approval application.

expect the approval process in the U.S.

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The approval process may result

in limitations on the indicated uses of the medical devices for which we are able to obtain approval (since the U.S.

Drug Administration can take action against a company that promotes off-label uses) and will also require increased post-market

surveillance.

in limitations on the indicated uses of the medical devices for which we are able to obtain approval (since the FDA can take action

against a company that promotes off-label uses) and will also require increased post-market surveillance.

Healthcare Laws and Regulations

addition to the U.S.

Food and Drug Administration regulations, there are a variety of other healthcare laws and regulations to

which we may be subject if any of our products are marketed, sold, distributed, and/or utilized in the United States.

note are federal and state fraud and abuse laws, which prohibit the payment or receipt of kickbacks, bribes or other remuneration,

including the offer or solicitation of such payment, intended to induce or reward the purchase, recommendation or generation of

business involving healthcare products any item or service payable by a health-care program.

Other provisions of federal and state

laws prohibit presenting, or causing to be presented, to third party payors (including, government program, such as Medicare and

Medicaid) for reimbursement, claims that are false or fraudulent, or which are for items or services that were not provided as

In addition, other healthcare laws and regulations may apply, such as transparency and reporting requirements, and privacy

and security requirements.

Violations of these laws can lead to civil and criminal penalties, including exclusion from participation

in federal and state healthcare programs, any of which could have a material adverse effect on our business.

These laws are potentially

applicable to manufacturers of products regulated by the U.S.

Food and Drug Administration as medical devices, such as us, and

hospitals, physicians and other institutional or individual providers that may refer or purchase such products.

The healthcare

laws that may be applicable to our business or operations include, but are not limited to:

addition to the FDA regulations, there are a variety of other healthcare laws and regulations to which we may be subject if any

of our products are marketed, sold, distributed, and/or utilized in the United States.

Of specific note are federal and state

fraud and abuse laws, which prohibit the payment or receipt of kickbacks, bribes or other remuneration, including the offer or

solicitation of such payment, intended to induce or reward the purchase, recommendation or generation of business involving healthcare

products any item or service payable by a health-care program.

Other provisions of federal and state laws prohibit presenting,

or causing to be presented, to third party payors (including, government program, such as Medicare and Medicaid) for reimbursement,

claims that are false or fraudulent, or which are for items or services that were not provided as claimed.

In addition, other

healthcare laws and regulations may apply, such as transparency and reporting requirements, and privacy and security requirements.

Violations of these laws can lead to civil and criminal penalties, including exclusion from participation in federal and state

healthcare programs, any of which could have a material adverse effect on our business.

These laws are potentially applicable

to manufacturers of products regulated by the FDA as medical devices, such as us, and hospitals, physicians and other institutional

or individual providers that may refer or purchase such products.

The healthcare laws that may be applicable to our business or

operations include, but are not limited to:

federal Anti-Kickback Statute, which prohibits the offer, payment, solicitation or receipt of any form of remuneration in

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control systems of our key suppliers in order to insure that their products meet our predetermined specifications.

of March 9, 2020, we had 48 full-time employees.

Except for three of our employees in Europe, our employees are not party

to any collective bargaining agreements.

We do not expect the collective bargaining agreements to which our employees are party

to have a material effect on our business or results of operations.

We consider our relations with our employees to be good.

headquarters are located in Tel Aviv, Israel, where we lease a 1,000 square meter office and manufacturing facility that has the

capacity to manufacture and assemble 1,200 stents per month, based upon the production schedule of one shift per day.

that our current facility is sufficient to meet anticipated future demand by adding additional shifts to our current production

time to time, we may be involved in litigation that arises through the normal course of business.

July 10, 2019, Bosti Trading Ltd., a former distributor in Russia (“Bosti”), filed suit with the Tel Aviv-Jaffa District

Court in Israel, or the Complaint, against InspireMD Ltd., claiming damages for alleged breaches by InspireMD Ltd.

under the Distribution

Agreement, dated May 26, 2011, between Bosti and InspireMD Ltd., in connection with the voluntary field corrective action of our

MGuard Prime EPS we initiated in 2014.

Bosti claimed that Bosti and its Russian subsidiary returned 1,830 units of MGuard Prime

EPS to InspireMD Ltd.

upon initiation of the voluntary filed action, and, since the Russian Ministry of Health prohibited distribution

of MGuard Prime EPS on August 28, 2014, and did not approve distribution MGuard Prime EPS until September 20, 2016, Bosti was

entitled to recover from InspireMD Ltd.

€1,830,000 (which is approximately $2 million), the amount Bosti was due to receive

from its Russian subsidiary, or alternatively, €1,024,000 (which is approximately $1.1 million), the amount Bosti paid to

InspireMD Ltd., for the MGuard Prime EPS returned to InspireMD Ltd.

On January 31, 2020, InspireMD Ltd.

filed with court its letter

of defense in which it contested this matter vigorously.

On January 21, 2021, we executed a Mediation Agreement with Bosti and

InspireMD Ltd., pursuant to which Bosti agreed to release the Company from all claims stated in the Complaint in exchange for

a payment of $580,000, which we paid on January 25, 2021.

of the date of this filing, we are not aware of any other material legal proceedings to which we or any of our subsidiaries is

a party or to which any of our property is subject, nor are we aware of any such threatened or pending litigation or any such

proceedings known to be contemplated by governmental authorities.

are not aware of any material proceedings in which any of our directors, officers or affiliates or any registered or beneficial

stockholder of more than 5% of our common stock, or any associate of any of the foregoing, is a party adverse to or has a material

interest adverse to, us or any of our subsidiaries.

Capital Management

of December 31, 2020, we had 48 employees 45 full-time and 3 part-time, consisting of two in executive management, five in research

and development, four in quality assurance and compliance, five in finance and accounting, 18 in operations/production, 11 in

sales, marketing and clinical, and three in all other miscellaneous roles, including business development, information technology

services, and administration.

Except for four of our employees in Europe, our employees are not party to any collective bargaining

We do not expect the collective bargaining agreements to which our employees are party to have a material effect on

our business or results of operations.

We also employ two independent contractors in Poland.

believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel.

In particular, we depend on the skills, experience and performance of our senior management and research personnel.

for qualified personnel with other medical device, biotechnology, pharmaceutical and healthcare companies, as well as universities

and non-profit research institutions.

provide competitive compensation and benefits programs to help meet the needs of our employees.

In addition to salaries, these

programs (which vary by country/region and employment classification) include incentive compensation plan, pension, healthcare

and insurance benefits, paid time off, family leave, and on-site services, among others.

We also use targeted equity-based grants

with vesting conditions to facilitate retention of personnel, particularly for our key employees.

success of our business is fundamentally connected to the well-being of our people.

Accordingly, we are committed to the health

and safety of our employees.

In response to the COVID-19 pandemic, we implemented significant changes that we determined were

in the best interest of our employees, as well as the communities in which we operate, and which comply with government regulations.

This includes having employees work from home, while implementing additional safety measures for employees continuing critical

on-site work.

consider our relations with our employees to be good.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business