What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-03-07 compared with 2021-03-08 · 20 added, 425 removed, 2 unchanged (100% of the section changed)

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

common stock has been quoted on the NYSE American since April 11, 2013 under the symbol “NSPR.”

The last reported

sales price of our common stock on the NYSE American on March 5, 2021, was $0.73 per share.

As of March 8, 2021, there

were approximately 267 holders of record of our common stock.

plan to effect a reverse split of our common stock, or the Planned Reverse Split, and, accordingly, share amounts, per share data,

share prices, exercise prices or conversion rates in this annual report on Form 10-K are subject to change following the effectiveness

of the Planned Reverse Split.

The Planned Reverse Split will not change the authorized number of shares or the par value of our

common stock.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

May 10, 2021, our shares that previously traded on the NYSE American were approved for listing on the Nasdaq Capital Market (“Nasdaq”)

and such shares began trading on Nasdaq on May 21, 2021.

Our common stock is quoted on Nasdaq Capital Market under the symbol “NSPR”.

The last reported sales price of our common stock on the Nasdaq on March 4, 2022, was $2.62 per share.

May 27, 2021, our warrants that previously traded on the NYSE American were approved for listing on Nasdaq, and such warrants began trading

on June 8, 2021.

On July 7, 2021, our Series A warrants which previously traded under symbol “NSPRW” expired.

of March 4, 2022, we had 267 stockholders of record of our common stock.

This figure includes an indeterminate number of stockholders

who hold their shares in “street name.”

the past, we have not declared or paid cash dividends on our common stock.

We do not intend to pay cash dividends in the future;

rather, we intend to retain future earnings, if any, to fund the operation and expansion of our business and for general corporate

holders of Series C Preferred Stock are not entitled to receive any dividends, unless and until specifically declared by our board

of directors.

However, holders of our Series C Preferred Stock are entitled to receive dividends on shares of Series C Preferred

Stock equal (on an as-if-converted-to-common-stock basis, and without giving effect for such purposes to the 4.99% or 9.99% beneficial

ownership limitation, as applicable) to and in the same form as dividends actually paid on shares of the common stock when such

dividends are specifically declared by our board of directors.

We are not obligated to redeem or repurchase any shares of Series

C Preferred Stock.

Shares of Series C Preferred Stock are not otherwise entitled to any redemption rights, or mandatory sinking

fund or analogous fund provision.

Selected Financial Data.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

following discussion and analysis of our financial condition and results of operations should be read in conjunction with the

accompanying consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.

are a medical device company focusing on the development and commercialization of our proprietary MicroNet™

stent platform

technology for the treatment of complex vascular and coronary disease.

A stent is an expandable “scaffold-like”

usually constructed of a metallic material, that is inserted into an artery to expand the inside passage and improve blood flow.

Our MicroNet, a micron mesh sleeve, is wrapped over a stent to provide embolic protection in stenting procedures.

CGuard™

carotid embolic prevention system (“CGuard EPS”) combines MicroNet and a self-expandable nitinol stent

in a single device for use in carotid artery applications.

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

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 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:

incidence of the following major adverse events:

(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 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™

embolic protection system (“MGuard Prime EPS”) is marketed for use in patients with acute

coronary syndromes, notably acute myocardial infarction (heart attack) and saphenous vein graft coronary interventions (bypass

MGuard Prime EPS combines MicroNet with a bare-metal cobalt-chromium based stent.

MGuard Prime EPS received CE mark

approval in the European Union in October 2010 for improving luminal diameter and providing embolic protection.

However, as a

result of a shift in industry preferences away from bare-metal stents in favor of drug-eluting (drug-coated) stents, in 2014 we

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, 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

The FDA has clarified that the primary mode of action for drug-eluting cardiovascular stents, which are regulated as

combination products, is that of the device component and has assigned the FDA Center for Devices and Radiological Health (CDRH)

primary responsibility for premarket review and regulation, providing some clarity about what to expect regarding the regulatory

framework related to the development of MGuard DES™.

also intend to develop a pipeline of other products and additional applications by leveraging our MicroNet technology to new applications

to improve peripheral vascular and neurovascular procedures, such as the treatment of the superficial femoral artery disease,

vascular disease below the knee and neurovascular stenting to seal aneurysms in the brain.

none of our products may be sold or marketed in the United States.

Accounting Policies

prepared our consolidated financial statements in accordance with U.S.

Generally Accepted Accounting Principles (“U.S.

GAAP”).

GAAP represents a comprehensive set of accounting and disclosure rules and requirements, and applying these rules and requirements

requires management judgments and estimates including, in certain circumstances, choices between acceptable U.S.

GAAP alternatives.

The following is a discussion of our most critical accounting policies, judgments and uncertainties that are inherent in our application

preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates using assumptions that

affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the

financial statements and the reported amounts of sales and expenses during the reporting periods.

Actual results could differ

from those estimates.

applicable to these consolidated financial statements, the most significant estimates and assumptions relate to inventory valuations,

assessing the likelihood of exercise of options to extend the lease term and legal contingencies.

Concentration

of credit risk and allowance for doubtful accounts

instruments that may potentially subject us to a concentration of credit risk consist of cash and cash equivalents, which are

deposited in major financially sound institutions in the United States, Israel and Germany, and trade accounts receivable.

trade accounts receivable is derived from revenues earned from customers from various countries.

We perform ongoing credit evaluations

of our customers’

financial condition and, generally, require no collateral from customers.

We also have a credit insurance

policy for some customers.

We maintain an allowance for doubtful accounts receivable based upon the expected ability to collect

the accounts receivable.

We review our allowance for doubtful accounts quarterly by assessing individual accounts receivable and

all other balances based on historical collection experience and an economic risk assessment.

If we determine that a specific

customer is unable to meet its financial obligations to us, we provide an allowance for credit losses to reduce the receivable

to the amount management reasonably believes will be collected, which is netted against “Accounts receivable —

Trade”.

are stated at the lower of cost (cost is determined on a “first-in, first-out”

basis) or net realizable value.

inventories generally have a limited shelf life and are subject to impairment as they approach their expiration dates.

evaluate the carrying value of our inventories and when, based on such evaluation, factors indicate that impairment has occurred,

we impair the inventories’

carrying value.

February 2016, the FASB established ASC Topic 842, Leases (Topic 842), by issuing ASU No.

2016-02, which requires lessees to recognize

leases on-balance sheet and disclose key information about leasing arrangements.

The new standard establishes a right-of-use (ROU)

model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet.

Leases will be classified as finance

or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations.

We adopted the new standard on January 1, 2019 using the modified retrospective transition method and we did not restate comparative

The new standard provides a number of optional practical expedients in transition.

We have elected the ‘package

of practical expedients’, which permit it not to reassess under the new standard its prior conclusions about lease identification,

lease classification and initial direct costs for leases entered into prior to adoption of Topic 842.

Additionally,

we did not separate lease and non-lease components for all of our leases.

We elected the short-term lease recognition exemption

for all leases that qualify.

This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities,

and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition.

Instead, we will continue to recognize the lease payments for those leases in profit or loss on a straight-line basis over the

new standard had a material effect on our financial statements.

The most significant effects of adoption relate to (1) the recognition

of new operating lease ROU assets and operating lease liabilities on its balance sheet for real estate operating;

and (2) providing

significant new disclosures about its leasing activities.

adoption, we recognized additional operating lease liabilities, of approximately $1.2 million based on the present value of the

remaining lease payments under current leasing standards for existing operating leases.

We also recognized corresponding ROU assets

of approximately $1.2 million.

Lease terms may include options to extend or terminate the lease when we are reasonably certain

that the option will be exercised.

Lease expense is recognized on a straight-line basis over the lease term.

Our leases may include

variable payments based on measures that include changes in price index which are expensed as incurred and presented as operating

expense on the condensed consolidated statements of operations in the same line item as expense arising from fixed lease payments.

contract with a customer exists only when:

1) the parties to the contract have approved it and are committed to perform their

respective obligations, 2) we can identify each party’s rights regarding the distinct goods or services to be transferred

(“Performance Obligations”), 3) we can determine the transaction price for the goods or services to be transferred,

4) the contract has commercial substance and 5) it is probable that we will collect the consideration to which it will be entitled

in exchange for the goods or services that will be transferred to the customer.

Revenues are recorded in the amount of consideration

to which we expect to be entitled in exchange for Performance Obligations upon transfer of control to the customer, excluding

from sales of goods, including sales to distributors, is recognized when the customer obtains control of the product, once we

have a present right to payment, legal title, and risk and rewards of ownership are obtained by the customer.

This occurs when

products are shipped.

recognize the incremental costs of obtaining contracts as an expense since the amortization period of the assets that we otherwise

would have recognized is one year or less.

The costs are recorded under selling and marketing expenses.

recognize revenue net of value added tax (VAT).

and development costs

and development costs are charged to the statement of operations as incurred.

option awards are classified as equity awards and accounted for using the grant-date fair value method.

The fair value of share-based

awards is estimated using the Black-Scholes valuation model and expensed over the requisite service period, net of estimated forfeitures.

We elected to account for forfeitures as they occur.

elected to recognize compensation expenses for awards with only service conditions that have graded vesting schedules using the

accelerated multiple option approach.

value measurement

measure fair value and disclose fair value measurements for financial assets and liabilities.

Fair value is based on the price

that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants

at the measurement date.

accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair

value into three broad levels, which are described below:

Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities.

value hierarchy gives the highest priority to Level 1 inputs.

Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

Unobservable inputs are used when little or no market data is available.

The fair value hierarchy gives the lowest priority

to Level 3 inputs.

determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable

inputs to the extent possible and consider counterparty credit risk in our assessment of fair value.

of Operations

months ended December 31, 2020 compared to the twelve months ended December 31, 2019

For the twelve months ended December 31, 2020, revenue decreased by $1,236,000, or 33.2%, to $2,485,000, from $3,721,000 during

the twelve months ended December 31, 2019.

Revenues were negatively impacted by 15.6% due to a settlement of litigation with a

former distributor in 2014 (see Part I, Item 3.

“Legal Proceedings”) under which we agreed to pay them $580,000.

US GAAP we were required to charge that amount against revenues.

In addition, there was a 15.3% decrease in sales volume of CGuard

EPS from $3,265,000 during the twelve months ended December 31, 2019, to $2,764,000 during the twelve months ended December 31,

2020, mainly due to the postponement of procedures with CGuard EPS, which are generally scheduled or nonemergency procedures,

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

There was a 34.0% decrease in sales volume of MGuard Prime EPS

from $456,000 during the twelve months ended December 31, 2019, to $301,000 during the twelve months ended December 31, 2020,

mainly due to the postponement of procedures with MGuard Prime EPS, which are generally scheduled or nonemergency procedures,

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

respect to regions, the decrease in revenue was primarily attributable to a decrease of $985,000 in revenue from sales made in

Europe (driven by $580,000 decrease of the settlement with a former distributor and $329,000 decrease of CGuard EPS and $76,000

decrease of MGuard Prime EPS for the reasons discussed in the paragraph above), a decrease of $131,000 in revenue of CGuard from

sales made in Asia due to the same COVID-19-related factor, as well as a decrease of $79,000 in revenue from sales made in Latin

America (primarily driven by a $68,000 decrease of MGuard Prime EPS sales due to the same COVID-19-related factor).

For the twelve months ended December 31, 2020, gross profit (revenue less cost of revenues) decreased by 89.0%, or

$673,000, to $83,000, compared to a $756,000 for the same period in 2019.

This decrease in gross profit resulted from the impact

of the $580,000 settlement with our former distributor in 2014 as well as $198,000 decrease in revenues less the related material

and labor costs (as mentioned above).

This decrease was partially offset by a decrease of $69,000 in expenses related to upgrades

made to our production facilities during the year ended December 31, 2019, which did not reoccur during the year ended December

31, 2020 and a decrease of $36,000 in miscellaneous expenses during the year ended December 31, 2020.

Gross margin (gross profits

as a percentage of revenue) decreased to 3.3% during the year ended December 31, 2020 from 20.3% during the year ended December

31, 2019, driven mainly by a negative effect on gross margin of 18.3% due to the settlement with our former distributor offset

by a 1.3% gross margin increase due to the upgrades made to our production facilities and miscellaneous expenses as mentioned

and Development Expenses .

For the twelve months ended December 31, 2020, research and development expenses decreased by 24.4%,

or $721,000, to $2,233,000, from $2,954,000 during the twelve months ended December 31, 2020.

This decrease resulted primarily

a decrease of $861,000 in clinical expenses associated with CGuard EPS, mainly related to the IDE approval process, of which

an approval from the FDA was received on September 8, 2020, a decrease of $354,000 due to settlement expenses that were paid to

a former service provider pursuant to a settlement agreement during the year ended December 31, 2019, which did not reoccur during

the year ended December 31, 2020, and a decrease of $136,000 in quality assurance and regulatory expenses related to the development

of various projects during the year ended December 31, 2019, which were significantly reduced during the year ended December 31,

These decreases were partially offset by an increase of $531,000 in development expenses related to the CGuard EPS new delivery

system and accessory solutions and an increase of $99,000 in miscellaneous expenses.

and Marketing Expenses .

For the twelve months ended December 31, 2020, selling and marketing expenses decreased by 12.2%,

or $293,000, to $2,103,000, from $2,396,000 during the twelve months ended December 31, 2020.

This decrease resulted primarily

a decrease in travel expenses of $268,000 in light of restrictions imposed by governments worldwide in order to mitigate

the spread of COVID-19 during year ended December 31, 2020, a decrease of $129,000 in promotional expenses, primarily related

to having already built our social media infrastructure in 2019, and a decrease of $88,000 in miscellaneous expenses.

These decreases

were partially offset by an increase of $192,000 in compensation expenses.

and Administrative Expenses .

For the twelve months ended December 31, 2020, general and administrative expenses increased

by 17.3%, or $905,000, to $6,127,000, from $5,222,000 during the twelve months ended December 31, 2020.

This increase resulted

primarily from an increase of $400,000 due to expenses for the settlement agreement with the underwriter of our prior offerings

paid during the year ended December 31, 2020, an increase in our Directors’

and Officers’

Liability Insurance expenses

of $249,000 partially due to recent economic effects on the insurance industry caused by the COVID-19 pandemic, an increase in

regulatory expenses of $177,000 required for new regulatory standards and an increase of $79,000 in miscellaneous expenses.

For the twelve months ended December 31, 2020, financial expenses decreased by 20.0%, or $40,000, to $160,000, from

$200,000 during the year ended December 31, 2020.

The decrease in financial expenses primarily resulted from a decrease of $66,000

in financial expenses related to changes in exchange rates, offset, in part, by an increase of $26,000 in miscellaneous expenses.

Expenses (Income).

For the twelve months ended December 31, 2020, tax expenses decreased by $20,000 compared to the twelve

months ended December 31, 2019.

Our net loss increased by $504,000, or 5.0%, to $10,544,000, for the twelve months ended December 31, 2020, from $10,040,000

during the twelve months ended December 31, 2019.

The increase in net loss resulted primarily from a decrease of $673,000 in gross

profit, offset, in part, by a decrease of $109,000 in operating expenses, a decrease of $40,000 in financial expenses and a decrease

of $20,000 in tax expenses.

and Capital Resources

of the date of issuance of the consolidated financial statements, we have the ability to fund our planned operations for at least

the next 12 months.

However, we expect to continue incurring losses and negative cash flows from operations until our products

(primarily CGuard™

EPS) reach commercial profitability.

Therefore, in order to fund our operations until such time that

we can generate substantial revenues, we may need to raise additional funds.

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 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.

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

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

in connection with 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

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.

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 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 of issuance.

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, the date of effectiveness of the registration statement filed in connection

with the offering.

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 estimated

expenses associated with the offering, but excluding the proceeds, if any, from the exercise of Series G Warrants sold in the

February 3, 2021, we entered into a Distribution Agreement with three China-based partners 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.

The transaction closed on February 5, 2021.

months ended December 31, 2020 compared to the twelve months ended December 31, 2019

At December 31, 2020, we had cash and cash equivalents of $12,645,000, as compared to $5,514,000 as of December 31, 2019.

historically met our cash needs through a combination of issuing new shares, borrowing activities and product sales.

requirements are generally for research and development, marketing and sales activities, finance and administrative cost, capital

expenditures and general working capital.

the twelve months ended December 31, 2020, net cash used in our operating activities decreased by $729,000 to $9,081,000, from

$9,810,000 during the same period in 2019.

The primary reason for the decrease in cash used in our operating activities was a

decrease of $1,293,000 in payments for third party related expenses and for professional services (primarily due to production

related payments and payments related to IDE application process), offset, in part, by an increase of $408,000 in salary and bonus

payments from $5,690,000 in the twelve months ended December 31, 2019 to $6,098,000 during the same period in 2020 and a decrease

of $156,000 in payments received from customers to $3,447,000 during the twelve months ended December 31, 2020, from $3,603,000

during the same period in 2019.

used by our investing activities was $187,000 during the twelve months ended December 31, 2020 compared to $387,000 during the

twelve months ended December 31, 2019.

The primary reasons for the decrease in cash used by our investing activities was a decrease

of $218,000 in net payments made for purchase of property, plant and equipment to $66,000 during the twelve months ended December

31, 2020, from $284,000 during the same period in 2019, offset, in part, by an increase of $18,000 in cash deposited to employee

funds, to $121,000 during the twelve months ended December 31, 2020, from $103,000 during the same period in 2019.

provided by financing activities for the twelve months December 31, 2020 was $16,395,000, compared to $6,335,000 during the same

period in 2019.

The principal sources of the cash provided by financing activities during the twelve months ended December 31,

2020 were our June 2020 public offering of common stock, pre-funded warrants and warrants, the subsequent exercise of the pre-funded

warrants sold in the offering, as well as exercise of warrants F and Unit Purchase Options, that resulted in approximately $12,169,000

of aggregate net proceeds, and funds received from our ATM Facility that resulted in approximately $ 4,126,000 of aggregate net

The principal source of the cash provided by financing activities during the twelve months ended December 31, 2019,

was the funds received from our December 2019 public offering of common stock, pre-funded warrants and warrants, as well as the

subsequent exercise of the pre-funded warrants sold in the offering, that resulted in approximately $4,289,000 of aggregate net

proceeds, and funds received from our April 2019 public offering of common stock that resulted in approximately $2,046,000 of

aggregate net proceeds.

of December 31, 2020, our current assets exceeded our current liabilities by a multiple of 4.1.

Current assets increased by $7,529,000

during the period and current liabilities increased by $590,000 during the period.

As a result, our working capital increased

by $6,939,000 to $11,634,000 as of December 31, 2020.

Balance Sheet Arrangements

have no off-balance sheet transactions, arrangements, obligations (including contingent obligations), or other relationships with

unconsolidated entities or other persons that have, or may have, a material effect on our financial condition, changes in financial

condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Accounting Pronouncements

June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial

This guidance replaces the current incurred loss impairment methodology.

Under the new guidance, on initial recognition

and at each reporting period, an entity is required to recognize an allowance that reflects its current estimate of credit losses

expected to be incurred over the life of the financial instrument based on historical experience, current conditions and reasonable

and supportable forecasts.

In November 2019, the FASB issued ASU No.

2019-10, Financial Instruments - Credit Losses (Topic 326),

Derivatives and Hedging (Topic 815), and Leases (Topic 842):

Effective Dates (“ASU 2019-10”).

The purpose of this

amendment is to create a two tier rollout of major updates, staggering the effective dates between larger public companies and

all other entities.

This granted certain classes of companies, including Smaller Reporting Companies (“SRCs”), additional

time to implement major FASB standards, including ASU 2016-13.

Larger public companies will have an effective date for fiscal

years beginning after December 15, 2019, including interim periods within those fiscal years.

All other entities are permitted

to defer adoption of ASU 2016-13, and its related amendments, until the earlier of fiscal periods beginning after December 15,

Under the current SEC definitions, we meet the definition of an SRC as of the ASU 2019-10 issuance date and is adopting

the deferral period for ASU 2016-13.

The guidance requires a modified retrospective transition approach through a cumulative-effect

adjustment to retained earnings as of the beginning of the period of adoption.

We are currently evaluating the impact of the adoption

of ASU 2016-13 on its consolidated financial statements, but does not believe the adoption of this standard will have a material

impact on its consolidated financial statements.

That May Affect Future Operations

believe that our future operating results will continue to be subject to quarterly variations based upon a wide variety of factors,

including the cyclical nature of the ordering patterns of our distributors, timing of regulatory approvals, the implementation

of various phases of our clinical trials and manufacturing efficiencies due to the learning curve of utilizing new materials and

Our operating results could also be impacted by a weakening of the Euro and strengthening of the NIS, both against

Lastly, other economic conditions we cannot foresee may affect customer demand, such as individual country reimbursement

policies pertaining to our products.

Quantitative and Qualitative Disclosures About Market Risk.

we intend to retain future earnings, if any, to fund the operation and expansion of our business and for general corporate purposes.

holders of Series C Preferred Stock are not entitled to receive any dividends, unless and until specifically declared by our board of

However, holders of our Series C Preferred Stock are entitled to receive dividends on shares of Series C Preferred Stock equal

(on an as-if-converted-to-common-stock basis, and without giving effect for such purposes to the 4.99% or 9.99% beneficial ownership

limitation, as applicable) to and in the same form as dividends actually paid on shares of the common stock when such dividends are specifically

declared by our board of directors.

We are not obligated to redeem or repurchase any shares of Series C Preferred Stock.

Shares of Series

C Preferred Stock are not otherwise entitled to any redemption rights, or mandatory sinking fund or analogous fund provision.

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 5. Market for Registrant’s Common Equity