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Item 1A. Risk Factors

2021-03-08 compared with 2020-03-10 · 616 added, 645 removed, 735 unchanged (63% of the section changed)

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described below include forward-looking statements and our actual results may differ from those discussed in these forward-looking

business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors”

immediately following this prospectus summary.

These risks include, among others, the following:

COVID-19 pandemic has caused interruptions or delays of our business plan and may have a significant adverse effect on our

have a history of net losses and may experience future losses;

will need to raise additional capital to meet our business requirements in the future, and such capital raising may be costly

or difficult to obtain and could dilute our stockholders’

ownership interests;

may become subject to claims by much larger and better capitalized competitors enforcing their intellectual property rights

against us or seeking to invalidate our intellectual property or our rights thereto;

are inherent limitations in all control systems, and misstatements due to error or fraud may occur and not be detected;

trials necessary to support a pre-market approval application will be lengthy and expensive and will require the enrollment

of a large number of patients, and suitable patients may be difficult to identify and recruit.

Any such delay or failure of

clinical trials could prevent us from commercializing our stent products, which would materially and adversely affect our

results of operations and the value of our business;

products may in the future be subject to product notifications, recalls, or voluntary market withdrawals that could harm our

reputation, business and financial results;

clinical trials for CGuard EPS in the United States require meeting a number of regulatory requirements and must be conducted

in compliance with the FDA’s IDE regulations.

Failure to maintain compliance with IDE regulations could have a material

adverse effect on our business;

necessary to pursue FDA premarket approval, pre-clinical and clinical trials are inherently lengthy and expensive and subject

to any number of regulatory and/or clinical difficulties that can cause further delays, additional costs, and/or rejection

by the FDA, and any such delay, added cost, or failure in connection with any future clinical trials could prevent us from

commercializing our MicroNet products in the United States, which would materially and adversely affect our results of operations

and the value of our business;

may be subject, directly or indirectly, to applicable U.S.

federal and state anti-kickback, false claims laws, physician payment

transparency laws, fraud and abuse laws or similar healthcare and security laws and regulations, which could expose us to

criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings;

may be exposed to product liability claims and insurance may not be sufficient to cover these claims;

if one or more of our products are approved by the FDA, we may fail to obtain an adequate level of reimbursement for our products

by third party payors, such that there may be no commercially viable markets for our products or the markets may be much smaller

than expected;

the United States and European Union, our business could be significantly and adversely affected by healthcare reform initiatives

and/or other legislation or judicial interpretations of existing or future healthcare laws and/or regulations;

we are unable to obtain and maintain intellectual property protection covering our products, others may be able to make, use

or sell our products, which would adversely affect our revenue;

are an international business, and we are exposed to various global and local risks that could have a material adverse effect

on our financial condition and results of operations venue;

market prices of our common stock and our publicly traded warrants are subject to fluctuation and have been and may continue

to be volatile, which could result in substantial losses for investors;

common stock could be delisted from the NYSE American if we fail to meet the NYSE American’s stockholders’

continued listing standards.

Our ability to publicly or privately sell equity securities and the liquidity of our common stock

could be adversely affected if we are delisted from the NYSE American;

low trading price could lead the NYSE American to take actions toward delisting our common stock, including immediately suspending

trading in our common stock;

or availability for sale of a substantial number of shares of our common stock may cause the price of our publicly traded

securities to decline;

anticipate being subject to fluctuations in currency exchange rates because we expect a substantial portion of our revenues

will be generated in Euros and U.S.

dollars, while a significant portion of our expenses will be incurred in New Israeli Shekels;

there are significant shifts in the political, economic and military conditions in Israel and its neighbors, it could have

a material adverse effect on our business relationships and profitability;

may be difficult for investors in the United States to enforce any judgments obtained against us or some of our directors

Related to Our Business

COVID-19 pandemic has caused interruptions or delays of our business plan and may have a significant adverse effect on our business.

an effort to contain and mitigate the spread of COVID-19, a strain of coronavirus 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 measures.

At this point, the extent to which COVID-19 may impact our business cannot be estimated;

however, procedures with CGuard EPS, which are generally scheduled or non-emergency procedures, have mostly been postponed as

hospitals shift resources to patients affected by COVID-19, and it is highly plausible that this trend will continue.

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.

component parts of our delivery system are sourced from countries that have been impacted by COVID-19, and the continued pandemic

and spreading of COVID-19 may adversely impact our suppliers and in turn our manufacture of CGuard EPS.

Although the manufacturing

of our products in Israel has not been materially impacted by COVID-19 as of February 2021, we cannot guarantee that we will continue

to manufacture at full capacity in the event that pandemic persists and further restrictions are imposed.

extent to which COVID-19 will impact our results will depend on future developments, which are highly uncertain and cannot be

predicted, including new information which may emerge concerning the severity of the coronavirus.

The actions to contain COVID-19

or treat its impact, the efficacy and scale of the various vaccines currently deployed across the world, among others.

COVID-19 has had indeterminable adverse effects on general commercial activity and the world economy, and our business and results

of operations could be adversely affected to the extent that COVID-19 or any other epidemic continues to harm the global economy

have a history of net losses and may experience future losses.

have yet to establish any history of profitable operations.

We reported a net loss of $10 million for the fiscal year ended December

31, 2019, and had a net loss of approximately $7.2 million during the fiscal year ended December 31, 2018.

We reported a net loss of $10.5 million for the fiscal year ended

December 31, 2020, and had a net loss of approximately $10 million during the fiscal year ended December 31, 2019.

As of December

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There can be no assurance that we will be able to achieve sufficient revenues throughout the year or be profitable in the future.

report of our independent registered public accounting firm contains an explanatory paragraph as to our ability to continue as

a going concern, which could prevent us from obtaining new financing on reasonable terms or at all.

we have had recurring losses and negative cash flows from operating activities, substantial doubt exists regarding our ability

to remain as a going concern at the same level at which we are currently performing.

Accordingly, the report of Kesselman &

Kesselman, our independent registered public accounting firm, with respect to our financial statements for the year ended December

31, 2019, includes an explanatory paragraph as to our potential inability to continue as a going concern.

The doubts regarding

our potential ability to continue as a going concern may adversely affect our ability to obtain new financing on reasonable terms

will need to raise additional capital to meet our business requirements in the future, and such capital raising may be costly

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ownership interests.

materially curtailing our operations, we estimate that we have sufficient capital to fund operations until the end of May 2020.

As such, in order for us to pursue our business objectives, we will need to raise additional capital, which additional capital

may not be available on reasonable terms or at all.

For instance, we will need to raise additional funds to accomplish the following:

our efforts to ultimately seek the U.S.

Food and Drug Administration approval for commercial sales of CGuard EPS in the United

order for us to pursue our business objectives without materially curtailing our operations, we will need to raise additional

capital, which additional capital may not be available on reasonable terms or at all.

For instance, we will need to raise additional

funds to accomplish the following:

our efforts to ultimately seek the FDA approval for commercial sales of CGuard EPS in the United States;

of our current and future products, including CGuard EPS enhancements;

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the holders of any of our securities then outstanding.

any additional debt or equity financing that we may need may not be available on terms favorable to us, or at all.

The respective

certificate of designation for our Series B Preferred Stock and Series C Preferred Stock contains a full ratchet anti-dilution

price protection to be triggered upon issuance of equity or equity-linked securities at an effective common stock purchase price

of less than the conversion price in effect.

Risk Factors—Risks Related to Our Common Stock, Preferred Stock

and Warrants—The respective certificate of designation for the Series B Preferred Stock and the Series C Preferred Stock

contains anti-dilution provisions that may result in the reduction of the conversion price in the future.

This feature may result

in an indeterminate number of shares of common stock being issued upon conversion of the Series B Preferred Stock or the Series

C Preferred Stock.

Sales of these shares will dilute the interests of other security holders and may depress the price of our

common stock .”

Such obligations may make any additional financing difficult to obtain or unavailable to us while any

shares of our Series B Preferred Stock or Series C Preferred Stock are outstanding.

If we are unable to obtain additional financing

on a timely basis, we may have to curtail our development activities and growth plans and/or be forced to sell assets, perhaps

on unfavorable terms, which would have a material adverse effect on our business, financial condition and results of operations,

and ultimately could be forced to discontinue our operations and liquidate, in which event it is unlikely that stockholders would

receive any distribution on their shares.

Further, we may not be able to continue operating if we do not generate sufficient revenues

from operations needed to stay in business.

addition, we may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees,

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adversely impact our financial condition.

If we do not have a sufficient number of available shares for any Series B Preferred

Stock or Series C Preferred Stock conversions or upon conversion of Series B Preferred Stock or Series C Preferred Stock, we will

be required to increase our authorized shares, which may not be possible and will be time consuming and expensive.

operate in an intensely competitive and rapidly changing business environment, and there is a substantial risk our products could

become obsolete or uncompetitive.

medical device market is highly competitive.

We compete with many medical device companies globally in connection with our current

products and products under development.

We face intense competition from numerous pharmaceutical and biotechnology companies

in the therapeutics area, as well as competition from academic institutions, government agencies and research institutions.

Laboratories, Boston Scientific Corporation, Medtronic, Inc., and Johnson and Johnson, Gore Medical and Terumo Medical Corporation

produce a polytetrafluoroethylene mesh-covered stent and a double layer metal stent, respectively.

Most of our current and potential

competitors, including but not limited to those listed above, have, and will continue to have, substantially greater financial,

technological, research and development, regulatory and clinical, manufacturing, marketing and sales, distribution and personnel

resources than we do.

There can be no assurance that we will have sufficient resources to successfully commercialize our products,

if and when they are approved for sale.

The worldwide market for stent products is characterized by intensive development efforts

and rapidly advancing technology.

Our future success will depend largely upon our ability to anticipate and keep pace with those

developments and advances.

Current or future competitors could develop alternative technologies, products or materials that are

more effective, easier to use or more economical than what we or any potential licensee develop.

If our technologies or products

become obsolete or uncompetitive, our related product sales and licensing revenue would decrease.

This would have a material adverse

effect on our business, financial condition and results of operations.

may become subject to claims by much larger and better capitalized competitors enforcing their intellectual property rights against

us or seeking to invalidate our intellectual property or our rights thereto.

on the prolific litigation that has occurred in the stent industry and the fact that we may pose a competitive threat to some

large and well-capitalized companies that own or control patents relating to stents and their use, manufacture and delivery, we

believe that it is possible that one or more third parties will assert a patent infringement claim against the manufacture, use

or sale of our stents based on one or more of these patents.

These companies also own patents relating to the use of drugs to

treat restenosis, stent architecture, catheters to deliver stents, and stent manufacturing and coating processes and compositions,

as well as general delivery mechanism patents like rapid exchange, which might be alleged to cover one or more of our products.

In addition, it is possible that a lawsuit of which we are not aware asserting patent infringement, misappropriation of intellectual

property, or related claims may have already been filed against us.

As the number of competitors in the stent market grows and

as the geographies in which we commercially market grow in number and scope, the possibility of patent infringement by us, and/or

a patent infringement or misappropriation claim against us, increases.

competitors have maintained their positions in the market by, among other things, establishing intellectual property rights relating

to their products and enforcing these rights aggressively against their competitors and new entrants into the market.

major companies in the field of stents and related markets, including Boston Scientific Corporation, C.R.

Bard, Inc., W.L.

& Associates, Inc.

and Medtronic, Inc., have been repeatedly involved in patent litigation relating to stents since at least

The field of stents and related markets have experienced rapid technological change and obsolescence in the past, and our

competitors have strong incentives to stop or delay the introduction of new products and technologies.

We may pose a competitive

threat to many of the companies in these markets.

Accordingly, these companies will have a strong incentive to take steps, through

patent litigation or otherwise, to prevent us from distributing our products.

Such litigation or claims would divert attention

and resources away from the development and/or commercialization of our products and could result in an adverse court judgment

that would make it impossible or impractical to sell our products in one or more territories.

we fail to maintain or establish satisfactory agreements or arrangements with suppliers or if we experience an interruption of

the supply of materials from suppliers, we may not be able to obtain materials that are necessary to develop our products.

depend on outside suppliers for certain raw materials.

These raw materials or components may not always be available at our standards

or on acceptable terms, if at all, and we may be unable to locate alternative suppliers or produce necessary materials or components

of the components of our products are currently provided by only one vendor, or a single-source supplier.

For CGuard EPS and MGuard

Prime EPS, we depend on MeKo Laserstrahl-Materialbearbeitung for the laser cutting of the stent, Natec Medical Ltd.

for the supply

of catheters, and Biogeneral Inc.

for the fiber.

We may have difficulty obtaining similar components from other suppliers that

are acceptable to the FDA or foreign regulatory authorities if it becomes necessary.

we have to switch to a replacement supplier, we will face additional regulatory delays and the interruption of the manufacture

and delivery of our stents for an extended period of time, which would delay completion of our clinical trials or commercialization

of our products.

In addition, we will be required to obtain prior regulatory approval from the FDA or foreign regulatory authorities

to use different suppliers or components that may not be as safe or as effective.

As a result, regulatory approval of our products

may not be received on a timely basis or at all.

addition, we rely on a third-party vendor to perform the sterilization process.

A third-party vendor’s failure to properly

sterilize a component may cause delays or disruptions in our manufacturing process.

During the fiscal year ended December 31,

2019, our third-party sterilizer’s equipment failures resulted in significant interruption in sterilized product supply

for the majority of the first quarter.

As a result of this interruption in the delivery of sterilized products and our limited

inventory levels on hand prior to this interruption, we were unable to fulfill a significant portion of the orders received during

the fiscal year ended December 31, 2019.

are subject to financial reporting and other requirements that place significant demands on our resources.

are subject to reporting and other obligations under the Securities Exchange Act of 1934, as amended, including the requirements

of Section 404 of the Sarbanes-Oxley Act of 2002.

Section 404 requires us to conduct an annual management assessment of the effectiveness

of our internal controls over financial reporting.

These reporting and other obligations place significant demands on our management,

administrative, operational, internal audit and accounting resources.

Any failure to maintain effective internal controls could

have a material adverse effect on our business, operating results and stock price.

Moreover, effective internal control is necessary

for us to provide reliable financial reports and prevent fraud.

If we cannot provide reliable financial reports or prevent fraud,

we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business

and reputation with investors may be harmed.

are inherent limitations in all control systems, and misstatements due to error or fraud may occur and not be detected.

ongoing internal control provisions of Section 404 of the Sarbanes-Oxley Act of 2002 require us to identify material weaknesses

in internal control over financial reporting, which is a process to provide reasonable assurance regarding the reliability of

financial reporting for external purposes in accordance with accounting principles generally accepted in the United States.

management, including our chief executive officer and chief financial officer, does not expect that our internal controls and

disclosure controls will prevent all errors and all fraud.

A control system, no matter how well conceived and operated, can provide

only reasonable, not absolute, assurance that the objectives of the control system are met.

In addition, the design of a control

system must reflect the fact that there are resource constraints and the benefit of controls must be relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all

control issues and instances of fraud, if any, in our company have been detected.

These inherent limitations include the realities

that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes.

Further, controls

can be circumvented by individual acts of some persons, by collusion of two or more persons, or by management override of the

The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events,

and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Over time, a control may be inadequate because of changes in conditions, such as growth of the company or increased transaction

volume, or the degree of compliance with the policies or procedures may deteriorate.

Because of inherent limitations in a cost-effective

control system, misstatements due to error or fraud may occur and not be detected.

addition, discovery and disclosure of a material weakness, by definition, could have a material adverse impact on our financial

Such an occurrence could discourage certain customers or suppliers from doing business with us and adversely affect

how our stock trades.

This could in turn negatively affect our ability to access equity markets for capital.

Related to our Products, Clinical Trials and Regulatory Matters

trials necessary to support a pre-market approval application will be lengthy and expensive and will require the enrollment of

a large number of patients, and suitable patients may be difficult to identify and recruit.

Any such delay or failure of clinical

trials could prevent us from commercializing our stent products, which would materially and adversely affect our results of operations

and the value of our business.

trials necessary to support a pre-market approval application to the FDA for our CGuard EPS stent will be expensive and will require

the enrollment of a large number of patients, and suitable patients may be difficult to identify and recruit, which may cause

a delay in the development and commercialization of our product candidates.

Patient enrollment in clinical trials and the ability

to successfully complete patient follow-up depends on many factors, including the size of the patient population, the nature of

the trial protocol, the proximity of patients to clinical sites, the eligibility criteria for the clinical trial and patient compliance.

For example, patients may be discouraged from enrolling in our clinical trials if the trial protocol requires them to undergo

extensive post-treatment procedures or follow-up to assess the safety and efficacy of our products, or they may be persuaded to

participate in contemporaneous clinical trials of competitive products.

In addition, patients participating in our clinical trials

may die before completion of the trial or suffer adverse medical events unrelated to or related to our products.

Delays in patient

enrollment or failure of patients to continue to participate in a clinical trial may cause an increase in costs and delays or

result in the failure of the clinical trial.

addition, the length of time required to complete clinical trials for pharmaceutical and medical device products varies substantially

according to the degree of regulation and the type, complexity, novelty and intended use of a product, and can continue for several

years and cost millions of dollars.

The commencement and completion of clinical trials for our products under development may

be delayed by many factors, including governmental or regulatory delays and changes in regulatory requirements, policy and guidelines

or our inability or the inability of any potential licensee to manufacture or obtain from third parties materials sufficient for

use in preclinical studies and clinical trials.

products may in the future be subject to product notifications, recalls, or voluntary market withdrawals that could harm our reputation,

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from these products, our results of operations and the value of our business and securities would be materially and adversely

we are unable to obtain and maintain intellectual property protection covering our products, others may be able to make, use or

sell our products, which would adversely affect our revenue.

ability to protect our products from unauthorized or infringing use by third parties depends substantially on our ability to obtain

and maintain valid and enforceable patents.

Similarly, the ability to protect our trademark rights might be important to prevent

third party counterfeiters from selling poor quality goods using our designated trademarks/trade names.

Due to evolving legal

standards relating to the patentability, validity and enforceability of patents covering medical devices and pharmaceutical inventions

and the scope of claims made under these patents, our ability to enforce patents is uncertain and involves complex legal and factual

Accordingly, rights under any of our pending patent applications and patents may not provide us with commercially meaningful

protection for our products or may not afford a commercial advantage against our competitors or their competitive products or

In addition, patents may not be issued from any pending or future patent applications owned by or licensed to us, and

moreover, patents that may be issued to us now or in the future may not be valid or enforceable.

Further, even if valid and enforceable,

our patents may not be sufficiently broad to prevent others from marketing products like ours, despite our patent rights.

validity of our patent claims depends, in part, on whether prior art references exist that describe or render obvious our inventions

as of the filing date of our patent applications.

We may not have identified all prior art, such as U.S.

and foreign patents or

published applications or published scientific literature, that could adversely affect the patentability of our pending patent

applications.

For example, some material references may be in a foreign language and may not be uncovered during examination of

our patent applications.

Additionally, patent applications in the United States are maintained in confidence for up to 18 months

after their filing.

In some cases, however, patent applications remain confidential in the U.S.

Patent and Trademark Office for

the entire time prior to issuance as a U.S.

Patent applications filed in countries outside the U.S.

are not typically

published until at least 18 months from their first filing date.

Similarly, publication of discoveries in the scientific or patent

literature often lags behind actual discoveries.

Therefore, we cannot be certain that we were the first to invent, or the first

to file patent applications relating to, our stent technologies.

In the event that a third party has also filed a U.S.

application covering our stents or a similar invention, we may have to participate in an adversarial proceeding, known as an interference,

declared by the U.S.

Patent and Trademark Office to determine priority of invention in the United States.

It is possible that

we may be unsuccessful in the interference, resulting in a loss of some portion or all of our position in the United States.

addition, statutory differences in patentable subject matter depending on the jurisdiction may limit the protection we obtain

on certain of the technologies we develop.

The laws of some foreign jurisdictions do not offer the same protection to, or may

make it more difficult to effect the enforcement of, proprietary rights as in the United States, risk that may be exacerbated

if we move our manufacturing to certain countries in Asia.

If we encounter such difficulties or are otherwise precluded from effectively

protecting our intellectual property rights in any foreign jurisdictions, our business prospects could be substantially harmed.

may initiate litigation to enforce our patent rights on any patents issued on pending patent applications, which may prompt adversaries

in such litigation to challenge the validity, scope, ownership, or enforceability of our patents.

Third parties can sometimes

bring challenges against a patent holder to resolve these issues, as well.

If a court decides that any such patents are not valid,

not enforceable, not wholly owned by us, or are of a limited scope, we may not have the right to stop others from using our inventions.

Also, even if our patent rights are determined by a court to be valid and enforceable, they may not be sufficiently broad to prevent

others from marketing products similar to ours or designing around our patents, despite our patent rights, nor do they provide

us with freedom to operate unimpeded by the patent and other intellectual property rights of others that may cover our products.

We may be forced into litigation to uphold the validity of the claims in our patent portfolio, as well as our ownership rights

to such intellectual property, and litigation is often an uncertain and costly process.

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

difficult to obtain or enforce.

We may not be able to protect our trade secrets adequately.

In addition, we rely on non-disclosure

and confidentiality agreements with employees, consultants and other parties to protect, in part, trade secrets and other proprietary

These agreements may be breached and we may not have adequate remedies for any breach.

Moreover, others may independently

develop equivalent proprietary information, and third parties may otherwise gain access to our trade secrets and proprietary knowledge.

Any disclosure of confidential data into the public domain or to third parties could allow competitors to learn our trade secrets

and use the information in competition against us.

our manufacturing facilities are unable to provide an adequate supply of products, our growth could be limited and our business

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of operations.

we may conduct clinical trials for CGuard EPS in the United States, we must obtain the U.S.

Food and Drug Administration’s

approval of our IDE application and meet a number of other regulatory requirements, and, if we obtain IDE approval and meet all

other applicable requirements, all clinical trials must be conducted in compliance with the U.S.

Food and Drug Administration’s

IDE regulations.

Failure to complete the applicable prerequisites before beginning clinical trials and/or to maintain compliance

with IDE regulations thereafter could have a material adverse effect on our business.

clinical trials for CGuard EPS in the United States require meeting a number of regulatory requirements and must be conducted

in compliance with the FDA’s IDE regulations.

Failure to maintain compliance with IDE regulations could have a material

adverse effect on our business.

trials involve use of a medical device candidate (or drug, biological, or other product candidate, as applicable) on human subjects

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that all research subjects provide informed consent for their participation in the clinical study.

Food and Drug Administration

classifies medical device candidates into “significant risk”

The FDA classifies medical

device candidates into “significant risk”

and “non-significant risk”

risk devices present a potential for serious risk to the health, safety, or welfare of a subject.

Examples may include implants,

devices that support or sustain human life, and devices that are substantially important in diagnosing, curing, mitigating, or

treating disease or in preventing impairment to human health.

If a medical device candidate presents a significant risk, an IDE

application must be submitted and approved prior to commencing any human clinical trials in the United States in connection with

Food and Drug Administration may approve, conditionally approve, or deny an IDE or it may require further

information and, thus, delay approval.

applications may be denied for a number of reasons.

For example, commonly cited deficiencies in U.S.

Food and Drug Administration

disapproval letters include, but are not limited to, the following:

report of prior investigations due to:

rationale and/or description of lab or animal studies;

scientific justification for the number of animals selected in report of animal studies;

to identify relevant information in literature research summary;

of adverse information in reports of prior publications;

investigational plan due to:

to clearly develop or define study objectives;

description of the protocol;

to identify all risks;

to develop proper monitoring procedures;

informed consent documents;

characterization or description of the device and its operation due to inadequate or omitted:

Design/engineering

drawing of device;

for device design;

and performance specifications;

of materials (including biocompatibility information);

EPS is a significant risk device under the U.S.

Food and Drug Administration’s definition.

Accordingly, to conduct clinical

trials with human subjects in the U.S., we must obtain IDE approval from the U.S.

Food and Drug Administration.

On July 26, 2019,

we submitted an original IDE application for CGuard EPS.

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

a request for additional information from the U.S.

Food and Drug Administration in support of our application.

We intend to continue

to work closely with the U.S.

Food and Drug Administration to resolve these additional requests.

Following resolution of all comments

from the U.S.

Food and Drug Administration, we plan to re-submit the IDE application.

There is no guarantee that we will obtain

IDE approval from the U.S.

Food and Drug Administration for CGuard EPS or any other current or future product candidate we may

addition to IDE approval, we must apply for and obtain IRB approval of the proposed CGuard EPS clinical study in connection with

each clinical site before commencing any study activities.

A written protocol with predefined end points, an appropriate sample

size, and pre-determined patient inclusion and exclusion criteria, is also required before we may initiate or conduct the CGuard

If we obtain IDE approval, IRB approval, and meet all of the other applicable requirements that must be met before

beginning clinical trials in the United States, we will, then, be able to lawfully initiate the clinical investigation of the

safety and effectiveness of CGuard EPS in the United States.

the CGuard EPS clinical trial, if applicable, and any others that we may conduct in the future, must be conducted in accordance

with the U.S.

Food and Drug Administration’s IDE regulations, which, among other things, establish requirements for investigational

device labeling, prohibit pre-approval promotion of a device candidate, and specify recordkeeping, reporting, and monitoring responsibilities

of study sponsors and study investigators.

may not be able to obtain U.S.

Food and Drug Administration and/or IRB approval to undertake clinical trials in the United States

for CGuard EPS or any new devices we intend to market in the United States in the future.

If we do obtain such approvals, we may

not be able to conduct studies which comply with the IDE and other regulations governing clinical investigations or the data from

any such trials may not support clearance or approval of the investigational device.

Failure to obtain such approvals or to comply

with such regulations could have a material adverse effect on our business, financial condition and results of operations.

Significant risk devices

present a potential for serious risk to the health, safety, or welfare of a subject.

Examples may include implants, devices that

support or sustain human life, and devices that are substantially important in diagnosing, curing, mitigating, or treating disease

or in preventing impairment to human health.

If a medical device candidate presents a significant risk, an IDE application must

be submitted and approved prior to commencing any human clinical trials in the United States in connection with such device.

FDA may approve, conditionally approve, or deny an IDE or it may require further information and, thus, delay approval.

8, 2020, we received IDE approval for CGuard™

Carotid Stent System, CARENET-III.

addition to our recent IDE approval for CGuard™

Carotid Stent System, CARENET-III, we must apply for and obtain IRB approval

of the proposed CGuard EPS clinical study in connection with each clinical site before commencing any study activities.

protocol with predefined end points, an appropriate sample size, and pre-determined patient inclusion and exclusion criteria,

is also required before we may initiate or conduct the CGuard EPS trial.

If we obtain IDE approval, IRB approval, and meet all

of the other applicable requirements that must be met before beginning clinical trials in the United States, we will, then, be

able to lawfully initiate the clinical investigation of the safety and effectiveness of CGuard EPS in the United States.

the CGuard EPS clinical trial and any others that we may conduct in the future, must be conducted in accordance with the FDA’s

IDE regulations, which, among other things, establish requirements for investigational device labeling, prohibit pre-approval

promotion of a device candidate, and specify recordkeeping, reporting, and monitoring responsibilities of study sponsors and study

investigators.

may not be able to obtain IRB approval to undertake clinical trials in the United States for CGuard EPS or any new devices we

intend to market in the United States in the future.

If we do obtain such approvals, we may not be able to conduct studies which

comply with the IDE and other regulations governing clinical investigations or the data from any such trials may not support clearance

or approval of the investigational device.

Failure to obtain such approvals or to comply with such regulations could have a material

adverse effect on our business, financial condition and results of operations.

certainty that clinical trials will meet desired endpoints, produce meaningful or useful data, and be free of unexpected adverse

effects, or that the U.S.

Food and Drug Administration will accept the validity of foreign clinical study data, as applicable,

cannot be guaranteed, and such uncertainty could preclude or delay regulatory approvals and commercialization, resulting in significant

financial costs and reduced revenue.

Moreover, the timing of the commencement, continuation, and completion of any future clinical

trial may be subject to significant delays attributable to various causes, including, but not limited to, scheduling conflicts

with participating clinicians and clinical institutions, difficulties in identifying and enrolling patients who meet trial eligibility

criteria, failure of patients to complete the clinical trial, delay in or failure to meet regulatory and/or IRB requirements to

conduct a clinical trial at a one or more prospective sites, and shortages of supply in the investigational device.

necessary to pursue U.S.

Food and Drug Administration premarket approval, pre-clinical and clinical trials are inherently lengthy

and expensive and subject to any number of regulatory and/or clinical difficulties that can cause further delays, additional costs,

and/or rejection by the U.S.

Food and Drug Administration, and any such delay, added cost, or failure in connection with any future

clinical trials could prevent us from commercializing our MicroNet products in the United States, which would materially and adversely

affect our results of operations and the value of our business.

effects, or that the FDA will accept the validity of foreign clinical study data, as applicable, cannot be guaranteed, and such

uncertainty could preclude or delay regulatory approvals and commercialization, resulting in significant financial costs and reduced

Moreover, the timing of the commencement, continuation, and completion of any future clinical trial may be subject to

significant delays attributable to various causes, including, but not limited to, scheduling conflicts with participating clinicians

and clinical institutions, difficulties in identifying and enrolling patients who meet trial eligibility criteria, failure of

patients to complete the clinical trial, delay in or failure to meet regulatory and/or IRB requirements to conduct a clinical

trial at a one or more prospective sites, and shortages of supply in the investigational device.

necessary to pursue FDA’s premarket approval, pre-clinical and clinical trials are inherently lengthy and expensive and

subject to any number of regulatory and/or clinical difficulties that can cause further delays, additional costs, and/or rejection

by the FDA, and any such delay, added cost, or failure in connection with any future clinical trials could prevent us from commercializing

our MicroNet products in the United States, which would materially and adversely affect our results of operations and the value

of our business.

part of the regulatory process, we must conduct clinical trials for each product candidate to demonstrate safety and efficacy

to the satisfaction of the regulatory authorities, including, if we seek in the future to sell our products in the United States,

Food and Drug Administration.

Clinical trials are subject to rigorous regulatory requirements and are expensive and time-consuming

to design and implement.

They require the enrollment of a large number of patients, and suitable patients may be difficult to

identify and recruit, which may cause a delay in the development and commercialization of our product candidates.

In some trials,

a greater number of patients and a longer follow-up period may be required.

Patient enrollment in clinical trials and the ability

to successfully complete patient follow-up depends on many factors, including the size of the patient population, the nature of

the trial protocol, the proximity of patients to clinical sites, the eligibility criteria for the clinical trial and patient compliance.

For example, patients may be discouraged from enrolling in our clinical trials if the trial protocol requires them to undergo

extensive post-treatment procedures or follow-up to assess the safety and efficacy of our products, or they may be persuaded to

participate in contemporaneous clinical trials of competitive products.

In addition, patients participating in our clinical trials

may die before completion of the trial or suffer adverse medical events unrelated to or related to our products.

Delays in patient

enrollment or failure of patients to continue to participate in a clinical trial may cause an increase in costs and delays or

result in the failure of the clinical trial.

Clinical trials are subject to rigorous regulatory requirements and are expensive and time-consuming to design and implement.

They require the enrollment of a large number of patients, and suitable patients may be difficult to identify and recruit, which

may cause a delay in the development and commercialization of our product candidates.

In some trials, a greater number of patients

and a longer follow-up period may be required.

Patient enrollment in clinical trials and the ability to successfully complete

patient follow-up depends on many factors, including the size of the patient population, the nature of the trial protocol, the

proximity of patients to clinical sites, the eligibility criteria for the clinical trial and patient compliance.

patients may be discouraged from enrolling in our clinical trials if the trial protocol requires them to undergo extensive post-treatment

procedures or follow-up to assess the safety and efficacy of our products, or they may be persuaded to participate in contemporaneous

clinical trials of competitive products.

In addition, patients participating in our clinical trials may die before completion

of the trial or suffer adverse medical events unrelated to or related to our products.

Delays in patient enrollment or failure

of patients to continue to participate in a clinical trial may cause an increase in costs and delays or result in the failure

of the clinical trial.

addition, the length of time required to complete clinical trials for pharmaceutical and medical device products varies substantially

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the imposition of civil penalties or criminal prosecution.

Food and Drug Administration also requires that our sales and marketing efforts, as well as promotions, be consistent with

various laws and regulations.

Approved medical device promotions must be consistent with and not contrary to labeling, balanced,

truthful and not false or misleading, adequately substantiated (when required), and include adequate directions for use.

to the requirements applicable to approved products, we may also be subject to enforcement action in connection with any promotion

of an investigational new device.

A sponsor or investigator, or any person acting on behalf of a sponsor or investigator, may

not represent in a promotional context that an investigational new device is safe or effective for the purposes for which it is

under investigation or otherwise promote the device.

Food and Drug Administration investigates our marketing and promotional materials or other communications and finds that

any of our investigational devices, or future commercial products, if any, are being marketed or promoted in violation of the

applicable regulatory restrictions, we could be subject to the enforcement actions listed above, among others.

Any enforcement

action (or related lawsuit, which could follow such action) brought against us in connection with alleged violations of applicable

device promotion requirements, or prohibitions, could harm our business and our reputation, as well as the reputation of any devices

that may be approved for marketing in the U.S.

FDA also requires that our sales and marketing efforts, as well as promotions, be consistent with various laws and regulations.

Approved medical device promotions must be consistent with and not contrary to labeling, balanced, truthful and not false or misleading,

adequately substantiated (when required), and include adequate directions for use.

In addition to the requirements applicable

to approved products, we may also be subject to enforcement action in connection with any promotion of an investigational new

A sponsor or investigator, or any person acting on behalf of a sponsor or investigator, may not represent in a promotional

context that an investigational new device is safe or effective for the purposes for which it is under investigation or otherwise

promote the device.

the FDA investigates our marketing and promotional materials or other communications and finds that any of our investigational

devices, or future commercial products, if any, are being marketed or promoted in violation of the applicable regulatory restrictions,

we could be subject to the enforcement actions listed above, among others.

Any enforcement action (or related lawsuit, which could

follow such action) brought against us in connection with alleged violations of applicable device promotion requirements, or prohibitions,

could harm our business and our reputation, as well as the reputation of any devices that may be approved for marketing in the

in the future.

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regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability.

to obtain regulatory approval in foreign jurisdictions will prevent us from marketing our products in such jurisdictions.

market our products in international markets.

In order to market our products in other foreign jurisdictions, we must obtain separate

regulatory approvals from the appropriate governing body in each applicable country.

The approval processes vary among countries

and can involve additional testing, and the time required to obtain approval may differ from that required to obtain CE mark or

FDA approval.

Foreign regulatory approval processes may include all of the risks associated with obtaining CE mark or FDA approval

in addition to other risks.

We may not obtain foreign regulatory approvals on a timely basis, if at all.

CE mark approval or any

future FDA approval does not ensure approval by regulatory authorities in other countries.

We may not be able to file for regulatory

approvals and may not receive necessary approvals to commercialize our products in certain markets.

are, or may be, subject to federal, state and foreign healthcare laws and regulations and implementation of or changes to such

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to operate our business and our results of operations.

to obtain regulatory approval in foreign jurisdictions will prevent us from marketing our products in such jurisdictions.

market our products in international markets.

In order to market our products in other foreign jurisdictions, we must obtain separate

regulatory approvals from the appropriate governing body in each applicable country.

The approval processes vary among countries

and can involve additional testing, and the time required to obtain approval may differ from that required to obtain CE mark or

Food and Drug Administration approval.

Foreign regulatory approval processes may include all of the risks associated with

obtaining CE mark or U.S.

Food and Drug Administration approval in addition to other risks.

We may not obtain foreign regulatory

approvals on a timely basis, if at all.

CE mark approval or any future U.S.

Food and Drug Administration approval does not ensure

approval by regulatory authorities in other countries.

We may not be able to file for regulatory approvals and may not receive

necessary approvals to commercialize our products in certain markets.