What changed in this filing

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Item 9A. Controls and Procedures

2022-03-07 compared with 2021-03-08 · 1354 added, 1456 removed, 568 unchanged (83% of the section changed)

Controls and Procedures.

Management’s

Conclusions Regarding Effectiveness of Disclosure Controls and Procedures

conducted an evaluation of the effectiveness of our “disclosure controls and procedures”, as defined by Rules 13a-15(e)

and 15d-15(e) of the Securities Exchange Act of 1934, as amended, as of December 31, 2020, the end of the period covered by this

Annual Report on Form 10-K.

The disclosure controls and procedures evaluation was done under the supervision and with the participation

of management, including our chief executive officer and chief financial officer.

There are inherent limitations to the effectiveness

of any system of disclosure controls and procedures.

Accordingly, even effective disclosure controls and procedures can only provide

reasonable assurance of achieving their control objectives.

Based upon this evaluation, our chief executive officer and chief

financial officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level

as of December 31, 2020.

Management’s

conducted an evaluation of the effectiveness of our “disclosure controls and procedures”, as defined by Rules 13a-15(e) and

15d-15(e) of the Securities Exchange Act of 1934, as amended, as of December 31, 2021, the end of the period covered by this Annual Report

on Form 10-K.

The disclosure controls and procedures evaluation was done under the supervision and with the participation of management,

including our chief executive officer and chief financial officer.

There are inherent limitations to the effectiveness of any system

of disclosure controls and procedures.

Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance

of achieving their control objectives.

Based upon this evaluation, our chief executive officer and chief financial officer have concluded

that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2021.

Report on Internal Control Over Financial Reporting

is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f)

and 15d-15(f) under the Securities Exchange Act of 1934, as amended.

Our internal control over financial reporting is designed

to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial

statements for external reporting purposes in accordance with generally accepted accounting principles.

is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and

15d-15(f) under the Securities Exchange Act of 1934, as amended.

Our internal control over financial reporting is designed to provide

reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements for

external reporting purposes in accordance with generally accepted accounting principles.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections

of any evaluation of effectiveness of internal control over financial reporting to future periods are subject to the risk that

controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures

may deteriorate over time.

including our chief executive officer and our chief financial officer, assessed the effectiveness of our internal control over

financial reporting as of December 31, 2020.

In making this assessment, management used the criteria set forth by the Committee

of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework 2013 .

assessment and those criteria, management has concluded that we maintained effective internal control over financial reporting

as of December 31, 2020.

Also, projections of

any evaluation of effectiveness of internal control over financial reporting to future periods are subject to the risk that controls

may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate

including our chief executive officer and our chief financial officer, assessed the effectiveness of our internal control over financial

reporting as of December 31, 2021.

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations

of the Treadway Commission in Internal Control—Integrated Framework 2013 .

Based on its assessment and those criteria, management

has concluded that we maintained effective internal control over financial reporting as of December 31, 2021.

in Internal Control over Financial Reporting

have been no changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2020 that have

materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

have been no changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2021 that have materially

affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Directors, Executive Officers and Corporate Governance.

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of our compensation committee

directors hold office until the earlier of their death, resignation or removal by stockholders or until their successors have

been qualified.

directors hold office until the earlier of their death, resignation or removal by stockholders or until their successors have been qualified.

Our directors are divided into three classes.

Paul Stuka and Gary Roubin are our Class 1 directors, with their

terms of office to expire at our 2021 annual meeting of stockholders.

Paul Stuka and Gary Roubin are our Class 1 directors, with their terms of office to expire

at our 2024 annual meeting of stockholders.

Michael Berman and Campbell Rogers, M.D.

are our Class 2

directors, with their terms of office to expire at our 2022 annual meeting of stockholders.

are our Class 2 directors, with their terms of office

to expire at our 2022 annual meeting of stockholders.

Marvin Slosman and Thomas J.

are our Class 3 directors, with their terms of office to expire at our 2023 annual meeting of stockholders.

At each annual meeting

of stockholders, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire

at the third succeeding annual meeting of stockholders after their election, with each director to hold office until his or her

successor shall have been duly elected and qualified.

officers hold office until the earlier of their death, resignation or removal by our board of directors or until their successors

have been selected.

Kester are our Class 3 directors, with their terms

of office to expire at our 2023 annual meeting of stockholders.

At each annual meeting of stockholders, directors elected to succeed

those directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders

after their election, with each director to hold office until his or her successor shall have been duly elected and qualified.

officers hold office until the earlier of their death, resignation or removal by our board of directors or until their successors have

been selected.

They serve at the pleasure of our board of directors.

Slosman has served as our president, chief executive officer and director since January 1, 2020.

Slosman has served as

chief operating officer for MEDCURA Inc.

Slosman has served as chief

operating officer for MEDCURA Inc.

from May 2019 to December 2019.

From September 2017 to September 2019, Mr.

Slosman served

as a Business Consultant, overseeing international commercial strategy and market development, at Integra Life Sciences, a leading

innovator in orthopedic extremity surgery, neurosurgery, and reconstructive and general surgery.

Slosman served as a Business

Consultant, overseeing international commercial strategy and market development, at Integra Life Sciences, a leading innovator in orthopedic

extremity surgery, neurosurgery, and reconstructive and general surgery.

From 2010 to 2014 Mr.

served as President of Itamar Medical, Inc., a medical technology company focused on cardiovascular and sleep diagnostics.

Slosman also served as chief executive officer of Ovalum Vascular Ltd.

Slosman served as President of Itamar

Medical, Inc., a medical technology company focused on cardiovascular and sleep diagnostics.

Slosman also served as chief executive

officer of Ovalum Vascular Ltd.

from 2008 to 2010.

Slosman’s qualifications to

serve on the board of directors of the Company include his significant experience in senior management positions of leading medical

device companies.

Shore has served as our chief financial officer, secretary and treasurer since March 31, 2011 and as our chief administrative

officer since May 3, 2013.

Slosman’s qualifications to serve on the board of directors of the Company

include his significant experience in senior management positions of leading medical device companies.

Shore has served as our chief financial officer, secretary and treasurer since March 31, 2011 and as our chief administrative officer

since May 3, 2013.

In addition, from November 10, 2010 through March 31, 2011, Mr.

Shore served as InspireMD Ltd.’s

vice president of business development.

Shore has over 30 years of experience in financial management in the United States,

Europe and Israel for companies such as Pfizer Pharmaceuticals, Bristol Myers Squibb and General Electric.

His experience includes

raising capital both in the private and public markets.

Shore served as InspireMD Ltd.’s vice president

of business development.

Shore has vast experience in financial management in the United States, Europe and Israel for companies

such as Pfizer Pharmaceuticals, Bristol Myers Squibb and General Electric.

His experience includes raising capital both in the private

and public markets.

Shore graduated with honors and received a B.Sc.

in Finance from Pennsylvania

State University and an M.B.A.

in Finance from Pennsylvania State University and an M.B.A.

from George Washington University.

Berman has served as our director since February 7, 2013.

Berman is a medical device entrepreneur who works with high-potential

development and early-stage commercial companies.

From 2005 to 2012, when the company was sold to Boston Scientific, Mr.

was a co-founder and the chairman of BridgePoint Medical, Inc., which developed technology to treat coronary and peripheral vascular

chronic total occlusions.

Berman is a medical device entrepreneur who has worked with high-potential

development and early-stage commercial companies since 2014.

From 2005 to 2012, Mr.

Berman was a co-founder and the chairman of BridgePoint

Medical, Inc., which developed technology to treat coronary and peripheral vascular chronic total occlusions and which was sold to Boston

Berman was also a member of the board of Lutonix, Inc.

from 2007 until 2011, when the company was

from 2007 until 2011, when the company was sold to C.R.

From 2011 to 2019, Mr.

Berman served as a co-founder and director of Rebiotix Inc., a company developing

an innovative treatment for C Diff colitis.

Berman served as a co-founder and director of Rebiotix Inc., a company developing an innovative treatment

for C Diff colitis.

Rebiotix was sold to Ferring Pharmaceuticals in 2018.

From 2014 till 2018 Mr.

served as a director Mazor Robotics, a company pioneering Spinal Robotic Surgery.

Berman has served (i) since 2011 as an advisor

to, and since 2012 as a director of, Cardiosonic, Inc., a company developing a system for hypertension reduction via renal denervation,

(ii) since 2005 as a director of PharmaCentra, LLC, which creates customizable marketing programs that help pharmaceutical companies

communicate with physicians and patients, (iii) since 2018 as a Director of STMedical, a medical device company that has developed

a temporary stent for the treatment of chronic sinusitis, (iv) since 2019 as a director of CardiacSense Inc, a medical device

company that has developed a smart watch vital sign monitor, (v) since 2017 as a Director of Owlytics Healthcare, (vi) since 2013

as a Director of ClearCut Inc., a medical device company that has developed an MRI system for tumor margin assessment, (vii) since

2013 as a director of PulmOne Ltd., a medical device company developing an innovative Pulmonary Function Testing system, (viii)

since 2014 as a director of SoniVie, a medical device company, (ix) since 2014 as a venture partner at RiverVest Ventures and

(x) since 2017 as a Director of Truleaf Medical.

Berman brings to the board his extensive executive and entrepreneurial experiences

in the field of medical devices and vascular intervention, which should assist in strengthening and advancing our strategic focus.

Berman served as a director of Mazor

Robotics, a company pioneering Spinal Robotic Surgery.

Berman has served (i) since 2011 as an advisor to, and since 2012 as a director

of, Cardiosonic, Inc., a company developing a system for hypertension reduction via renal denervation, (ii) since 2005 as a director

of PharmaCentra, LLC, which creates customizable marketing programs that help pharmaceutical companies communicate with physicians and

patients, (iii) since 2018 as a Director of STMedical, a medical device company that has developed a temporary stent for the treatment

of chronic sinusitis, (iv) since 2019 as a director of CardiacSense Inc, a medical device company that has developed a smart watch vital

sign monitor, (v) since 2017 as a Director of Owlytics Healthcare, (vi) since 2013 as a Director of ClearCut Inc., a medical device company

that has developed an MRI system for tumor margin assessment, (vii) since 2013 as a director of PulmOne Ltd., a medical device company

developing an innovative Pulmonary Function Testing system, (viii) since 2019 as a director of QArt, a medical device company, (ix) since

2014 as a venture partner at RiverVest Ventures and (x) since 2017 as a Director of Truleaf Medical.

Berman brings to the board his

extensive executive and entrepreneurial experiences in the field of medical devices and vascular intervention, which should assist in

strengthening and advancing our strategic focus.

has served as a director since September 3, 2013.

Rogers is the executive vice president and chief medical

officer of HeartFlow, Inc., a cardiovascular diagnostics company, since March 2012.

Prior to joining HeartFlow, Inc., he was the

chief scientific officer and global head of research and development at Cordis Corporation (currently part of Cardinal Health,

Inc.), Johnson & Johnson, where he was responsible for leading investments and research in cardiovascular devices.

that, he was associate professor of medicine at Harvard Medical School and the Harvard-M.I.T.

Division of Health Sciences and

Technology and director of the cardiac catheterization and experimental cardiovascular interventional laboratories at Brigham

and Women’s Hospital.

He served as principal investigator for numerous interventional cardiology device, diagnostic, and

pharmacology trials, is the author of numerous journal articles, chapters, and books in the area of coronary artery and other

cardiovascular diseases and was the recipient of research grant awards from the National Institute of Health and the American

Heart Association.

Rogers is the executive vice president and chief medical officer

of HeartFlow, Inc., a cardiovascular diagnostics company, since March 2012.

Prior to joining HeartFlow, Inc., he was the chief scientific

officer and global head of research and development at Cordis Corporation (currently part of Cardinal Health, Inc.), Johnson & Johnson,

where he was responsible for leading investments and research in cardiovascular devices.

Prior to that, he was associate professor of

medicine at Harvard Medical School and the Harvard-M.I.T.

Division of Health Sciences and Technology and director of the cardiac catheterization

and experimental cardiovascular interventional laboratories at Brigham and Women’s Hospital.

He served as principal investigator

for numerous interventional cardiology device, diagnostic, and pharmacology trials, is the author of numerous journal articles, chapters,

and books in the area of coronary artery and other cardiovascular diseases and was the recipient of research grant awards from the National

Institute of Health and the American Heart Association.

He received his A.B.

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from Harvard Medical School.

Rogers’

qualifications

to serve on the board include his significant experience in cardiovascular devices, as well as his familiarity with the operations

of medical device companies.

Rogers’ qualifications to serve on the board include his significant experience in cardiovascular devices, as well as his familiarity

with the operations of medical device companies.

Stuka has served as a director since August 8, 2011 and has served as our chairman since June 2, 2017.

Stuka has served

as the managing member of Osiris Partners, LLC, an investment fund, since 2000.

Stuka has served as the

managing member of Osiris Partners, LLC, an investment fund, since 2000.

Prior to forming Osiris Partners, LLC, Mr.

with 40 years of experience in the investment industry, was a managing director of Longwood Partners, managing small cap institutional

Stuka, with 35 years

of experience in the investment industry, was a managing director of Longwood Partners, managing small cap institutional accounts.

Stuka joined State Street Research and Management as manager of its Market Neutral and Mid Cap Growth Funds.

From 1986 to 1994, Mr.

From 1986 to 1994,

Stuka served as the general partner of Stuka Associates, where he managed a U.S.-based investment partnership.

Stuka began his career in 1980 as an analyst at Fidelity Management and Research.

Stuka began his

career in 1980 as an analyst at Fidelity Management and Research.

As an analyst, Mr.

Stuka followed a wide

array of industries including healthcare, energy, transportation, and lodging and gaming.

Early in his career he became the assistant

portfolio manager for three Fidelity Funds, including the Select Healthcare Fund which was recognized as the top performing fund

in the United States for the five-year period ending December 31, 1985.

Stuka has been serving as a director of Caliber Imaging

& Diagnostics, Inc.

(formerly Lucid, Inc.) since June 2013.

Stuka’s qualifications to serve on the board include

his significant strategic and business insight from his years of experience investing in the healthcare industry.

Stuka followed a wide array of industries including

healthcare, energy, transportation, and lodging and gaming.

Early in his career he became the assistant portfolio manager for three Fidelity

Funds, including the Select Healthcare Fund which was recognized as the top performing fund in the United States for the five-year period

ending December 31, 1985.

Stuka has been serving as a director of Caliber Imaging & Diagnostics, Inc.

(formerly Lucid, Inc.)

since June 2013.

Stuka’s qualifications to serve on the board include his significant strategic and business insight from his

years of experience investing in the healthcare industry.

Kester has served as a director since September 6, 2016.

Kester has been serving as the chief financial officer of

Kester Search Group, Inc., a private executive search firm specializing in sales force placement for medical, dental and diagnostic

device companies, since October 2014.

Kester has been serving as the chief financial officer of Kester

Search Group, LLC Inc., a private executive search firm specializing in sales force placement for medical, dental and diagnostic device

companies, since October 2014.

From 2004 to 2010, Mr.

Kester served as a director of Orthofix International, NV (NASDAQ:

OFIX), a global medical device company.

Kester’s experience includes 28 years at KPMG LLP, including 18 years as an

audit partner, advising public and private companies in connection with annual audit and financings.

Kester’s qualifications

to serve on the board include his significant strategic and business insight from his years of experience auditing global companies

and serving on the boards of several public and not-for-profit organizations.

OFIX), a global

medical device company.

Kester’s experience includes 28 years at KPMG LLP, including 18 years as an audit partner, advising

public and private companies in connection with annual audit and financings.

Kester’s qualifications to serve on the board

include his significant strategic and business insight from his years of experience auditing global companies and serving on the boards

of several public and not-for-profit organizations.

Kester received his B.S.

in mechanical engineering

from Cornell University and an M.B.A.

in mechanical engineering from Cornell University and

from Harvard University.

has served as a director since October 13, 2020.

Roubin cofounded Essential Medical Inc., which has had success

in bringing a large bore vascular closure device to world markets and was recently acquired by Teleflex Inc.

Roubin cofounded Essential Medical Inc.

in 2010, which has had

success in bringing a large bore vascular closure device to world markets and was recently acquired by Teleflex Inc.

From 2002 to 2003,

Roubin served as Chief Medical Officer of the Medicines Company during the release of its Angiomax product.

From 2003 to 2012,

From 2003 to 2012, Dr.

Roubin served as Department Chairman and Chief of Service of the Lenox Hill Hospital Cardiac and Vascular program in New York.

From 1989 to 1997, he served as Chief of Interventional Cardiology at the University of Alabama at Birmingham, to which he joined

in 1989 as Professor of Medicine and Radiology and Director of the Cardiac Catheterization Laboratories and Interventional Cardiology

Section at the University Hospital.

Roubin played a pivotal role in the success of Mednova Inc., which was acquired

by Abbott Vascular, resulting in the introduction and marketing in the U.S.

of the top selling carotid embolic protection system

(NAV6) and stent system (XACT).

In 1987, he developed and placed the world’s first balloon expandable coronary stent.

Roubin joined Andreas Gruentzig at Emory University to continue his post-doctoral research.

He is also acknowledged

for the development of coronary stenting and the first FDA-approved coronary stent.

to 1997, he served as Chief of Interventional Cardiology at the University of Alabama at Birmingham, to which he joined in 1989 as Professor

of Medicine and Radiology and Director of the Cardiac Catheterization Laboratories and Interventional Cardiology Section at the University

Roubin played a pivotal role in the success of Mednova Inc., which was acquired by Abbott Vascular, resulting

in the introduction and marketing in the U.S.

of the top selling carotid embolic protection system (NAV6) and stent system (XACT).

1987, he developed and placed the world’s first balloon expandable coronary stent.

Roubin joined Andreas Gruentzig

at Emory University to continue his post-doctoral research.

He is also acknowledged for the development of coronary stenting and the

first FDA-approved coronary stent.

Roubin received his M.D.

from the University

of Queensland medical school and his Ph.D.

from Sydney University.

from the University of Queensland medical school and his Ph.D.

Roubin is qualified to serve on the board given that he 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.

Arnold has served as our director since May 10, 2021.

Arnold is the Founder and CEO of SPRIG Consulting, a strategic marketing

consulting firm with over a decade of success in the medical space.

Prior to founding SPRIG, Ms.

Arnold held sales and marketing management

roles with Guidant Corporation (acquired by Abbott Laboratories and Boston Scientific) and Kensey Nash Corporation (acquired by Spectranetics

Corporation / Royal Philips).

Additionally, Ms.

Arnold is an adjunct faculty member at the Kellogg School of Management at Northwestern

University where she teaches a course specific to medical product commercialization and financing.

Arnold received a bachelor of

arts in environmental science from the University of Vermont and a master’s degree from the Kellogg School of Management at Northwestern

Slosman and Mr.

Shore are parties to certain agreements related to their service as executive officers and directors described

under “Executive Compensation –

Agreements with Executive Officers.”

Shore are parties to certain agreements related to their service as executive officers and directors described under

“Executive Compensation – Agreements with Executive Officers.”

Diversity Matrix

table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.

Diversity Matrix (As of March 7, 2022)

Number of Directors

Not Disclose Gender

Gender Identity

Demographic Background

American or Black

Native or Native American

Hawaiian or Pacific Islander

or More Races or Ethnicities

Not Disclose Demographic Background

Relationships

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each of which has the composition and responsibilities described below.

Committee .&emsp;Our audit committee is currently comprised of Messrs.

Berman, Stuka and Kester, each of whom our board has

determined to be financially literate and qualify as an independent director under Section 803(B)(2) of the NYSE American rules.

Kester is the chairman of our audit committee and qualifies as a financial expert, as defined in Item 407(d)(5)(ii) of Regulation

The audit committee’s duties are to recommend to our board of directors the engagement of independent auditors to audit

our financial statements and to review our accounting and auditing principles.

Our audit committee is currently comprised of Messrs.

Berman, Stuka and Kester, each of whom our board has determined

to be financially literate and qualify as an independent director as defined in the Nasdaq Listing Rules and Rule 10A-3 promulgated under

the Exchange Act.

Kester is the chairman of our audit committee and qualifies as a financial expert, as defined in Item 407(d)(5)(ii)

of Regulation S-K.

The audit committee’s duties are to recommend to our board of directors the engagement of independent auditors

to audit our financial statements and to review our accounting and auditing principles.

The audit committee will review the scope, timing

and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent public

accountants, including their recommendations to improve the system of accounting and internal controls.

The audit committee operates

under a formal charter adopted by the board of directors that governs its duties and conduct.

Copies of the charter can be obtained

free of charge from the Company’s web site, www.inspiremd.com, by contacting the Company.

and Corporate Governance Committee .&emsp;

and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent public accountants,

including their recommendations to improve the system of accounting and internal controls.

The audit committee operates under a formal

charter adopted by the board of directors that governs its duties and conduct.

Copies of the charter can be obtained free of charge from

the Company’s web site, www.inspiremd.com, by contacting the Company.

and Corporate Governance Committee .

Our nominating and corporate governance committee is currently comprised of Messrs.

Berman and Stuka, each of whom qualify as an independent director under Section 803(A) of the NYSE American rules.

is the chairman of our nominating and corporate governance committee.

The nominating and corporate governance committee identifies

and recommends to our board of directors individuals qualified to be director nominees.

In addition, the nominating and corporate

governance committee recommends to our board of directors the members and chairman of each board committee who will periodically

Stuka, each of whom qualify as an independent director under as defined in the Nasdaq Listing Rules and Rule 10A-3 promulgated under

the Exchange Act.

Berman is the chairman of our nominating and corporate governance committee.

The nominating and corporate governance

committee identifies and recommends to our board of directors individuals qualified to be director nominees.

In addition, the nominating

and corporate governance committee recommends to our board of directors the members and chairman of each board committee who will periodically

review and assess our code of business conduct and ethics and our corporate governance guidelines.

The nominating and corporate

governance committee also makes recommendations for changes to our code of business conduct and ethics and our corporate governance

guidelines to our board of directors, reviews any other matters related to our corporate governance and oversees the evaluation

of our board of directors and our management.

The nominating and corporate governance committee operates under a formal charter

adopted by the board of directors that governs its duties and conduct.

Copies of the charter can be obtained free of charge from

the Company’s web site, www.inspiremd.com, by contacting the Company.

Committee .&emsp;

The nominating and corporate governance

committee also makes recommendations for changes to our code of business conduct and ethics and our corporate governance guidelines to

our board of directors, reviews any other matters related to our corporate governance and oversees the evaluation of our board of directors

and our management.

The nominating and corporate governance committee operates under a formal charter adopted by the board of directors

that governs its duties and conduct.

Copies of the charter can be obtained free of charge from the Company’s web site, www.inspiremd.com,

by contacting the Company.

Our compensation committee is currently comprised of Messrs.

Stuka and Kester, each of whom qualify as an

independent director under Sections 803(A) and 805(c)(1) of the NYSE American rules.

Stuka is the chairman of our compensation

The compensation committee reviews and approves our salary and benefits policies, including compensation of executive

officers and directors.

Stuka and Kester, each of whom qualify as an independent

director under as defined in the Nasdaq Listing Rules and Rule 10A-3 promulgated under the Exchange Act.

Stuka is the chairman of

our compensation committee.

The compensation committee reviews and approves our salary and benefits policies, including compensation

of executive officers and directors.

The compensation committee also administers our stock option plans and recommends and approves grants

of stock options under such plans.

The compensation committee operates under a formal charter adopted by the board of directors

that governs its duties and conduct.

Copies of the charter can be obtained free of charge from the Company’s web site, www.inspiremd.com,

The compensation committee operates under a formal charter adopted by the board of directors that

governs its duties and conduct.

Copies of the charter can be obtained free of charge from the Company’s web site, www.inspiremd.com,

by contacting the Company.

have adopted a code of ethics and business conduct that applies to our officers, directors and employees, including our principal

executive officer, principal financial officer and principal accounting officer, which is posted on our website at www.inspiremd.com .

We intend to disclose future amendments to certain provisions of the code of ethics, or waivers of such provisions granted to

executive officers and directors, on this website within four business days following the date of such amendment or waiver.

have adopted a code of ethics and business conduct that applies to our officers, directors and employees, including our principal executive

officer, principal financial officer and principal accounting officer, which is posted on our website at www.inspiremd.com .

intend to disclose future amendments to certain provisions of the code of ethics, or waivers of such provisions granted to executive

officers and directors, on this website within four business days following the date of such amendment or waiver.

Executive Compensation.

Compensation Table

table below sets forth the compensation earned by our named executive officers for the twelve-month period ended December 31,

2020 and 2019.

Name and Principal Position

Marvin Slosman

President and Chief Executive Officer

table below sets forth the compensation earned by our named executive officers for the twelve-month period ended December 31, 2021 and

and Principal Position

and Chief Executive Officer

164,257 (4)(6)

Financial Officer, Secretary and Treasurer

265,004 (3)(6)

Chief Financial Officer, Secretary and Treasurer

138,692 (4)(6)

awards of stock, the aggregate grant date fair value is computed in accordance with FASB ASC Topic 718.

Fair value is based

on the Black-Scholes option pricing model using the fair value of the underlying shares at the measurement date.

Fair value is based on the

Black-Scholes option pricing model using the fair value of the underlying shares at the measurement date.

April 19, 2021, our Compensation Committee approved, effective as of July 1, 2021, an increase

to the base salary of Mr.

Slosman such that the annual salary will increase to $420,000 from

April 21, 2020, Mr.

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measures, whereby Mr.

Slosman’s monthly base salary was reduced from $33,333 to $16,666 and Mr.

Shore’s monthly

base salary was reduced from NIS 80,125 to NIS 40,063.

On June 10, 2020, following the closing of our underwritten public

offering in June 2020, 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.

bonus awards for the 2020 calendar year were approved by the compensation committee in January 2021.

Slosman’s other compensation for 2020 consisted of benefits related to health insurance.

Slosman’s monthly base salary was reduced from $33,333 to $16,666 and Mr.

Shore’s monthly base

salary was reduced from NIS 80,125 to NIS 40,063.

On June 10, 2020, following the closing of our underwritten public offering in

June 2020, 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.

On August 14, 2020, we entered into the fourth amendment which included an increase to Mr.

monthly base salary to NIS 86,000, effective August 1, 2020.

bonus awards for the 2020 calendar year were approved by the compensation committee in January 2021.Cash bonus awards for the 2021

calendar year were approved by the compensation committee in January 2022.

Slosman’s other compensation for the twelve months ended December 31, 2021 and 2020 consisted of benefits related to health

amounts received in non-U.S.

currency have been converted into U.S.

dollars using the average exchange rate for the applicable

period, except for bonus amounts which have been converted into U.S.

dollars using 3.215 NIS per dollar which was the exchange

rate as of December 31, 2020.

The average exchange rate for the twelve month period ended December 31, 2020 and 2019 were

3.437 NIS per dollar and 3.564 NIS per dollar, respectively.

Shore’s other compensation consisted solely of benefits in the twelve months ended December 31, 2020 and 2019.

of the periods reported, Mr.

Shore’s benefits included our contributions to his severance, pension, vocational studies

and disability funds, an annual recreation payment, a company car or car allowance and cell phone, and a daily food allowance.

shares of common stock issuable upon the exercise of Restricted Stock Units outside our 2013 Long-Term Incentive Plan.

dollars using the average exchange rate for the applicable period,

except for bonus amounts which have been converted into U.S.

dollars using 3.110 NIS per dollar which was the exchange rate as of

December 31, 2021.

The average exchange rate for the twelve month period ended December 31, 2021 and 2020 were 3.229 NIS per dollar

and 3.437 NIS per dollar, respectively.

Shore’s other compensation consisted solely of benefits in the twelve months ended December 31, 2021 and 2020.

In each of the

periods reported, Mr.

Shore’s benefits included our contributions to his severance, pension, vocational studies and disability

funds, an annual recreation payment, a company car or car allowance and cell phone, and a daily food allowance.

with Executive Officers

December 9, 2019, we entered into an Employment Agreement with Marvin Slosman, which was subsequently amended on December 31,

2019 (as amended, the “Slosman Employment Agreement”), pursuant to which Mr.

Slosman was appointed as our new chief

executive officer and president.

Slosman’s term of employment commenced on January 1, 2020, which will remain in effect

for three years (the “Initial Employment Term”), unless earlier terminated, and to be automatically renewed for successive

one-year terms after the Initial Employment Term.

Slosman was also appointed as a Class 3 director, effective January 1, 2020,

with a term expiring on the 2020 annual meeting of our stockholders.

December 9, 2019, we entered into an Employment Agreement with Marvin Slosman, which was subsequently amended on December 31, 2019 (as

amended, the “Slosman Employment Agreement”), pursuant to which Mr.

Slosman was appointed as our new chief executive officer

and president.

Slosman’s term of employment commenced on January 1, 2020, was to remain in effect for three years (the “Initial

Employment Term”), unless earlier terminated, and was to be automatically renewed for successive one-year terms after the Initial

Employment Term.

Slosman was also appointed as a Class 3 director, effective January 1, 2020, with a term expiring on the 2020 annual

meeting of our stockholders.

On November 8, 2021, we entered into an amendment to the employment agreement of our chief executive officer,

Marvin Slosman, originally dated December 9, 2019, pursuant to which we agreed to remove the definitive term of his employment such that

his employment agreement shall expire if and when terminated by either party pursuant to the terms thereof.

consideration for his services as chief executive officer, Mr.

Slosman will be entitled to receive (i) an annual base salary of $400,000,

$400,000, less applicable payroll deductions and tax (“Base Salary”), which will be reviewed by the Board on an annual

basis for increase;

(ii) reimbursement of up to $50,000 for any reasonable and customary, documented out-of-pocket relocation

expenses actually incurred by Mr.

Slosman in 2019 or 2020 calendar years, in connection with his relocation to Europe;

performance bonuses in an amount up to 50% percent of the Base Salary, as may be in effect from time to time, for each calendar

year during his employment with us based on the extent to which performance criteria/financial results for the applicable year

have been met;

less applicable payroll deductions and tax (“Base Salary”), which will be reviewed by the Board on an annual basis for increase,

On April 19, 2021, our Compensation Committee approved, effective as of July 1, 2021, an increase to the base salary of Mr.

that the annual salary will increase to $420,000 from $400,000;

(ii) reimbursement of up to $50,000 for any reasonable and customary,

documented out-of-pocket relocation expenses actually incurred by Mr.

Slosman in 2019 or 2020 calendar years, in connection with his

relocation to Europe;

(iii) annual performance bonuses in an amount up to 50% percent of the Base Salary, as may be in effect from time

to time, for each calendar year during his employment with us based on the extent to which performance criteria/financial results for

the applicable year have been met;

and (iv) equity awards as of the date of the Slosman Employment Agreement that represent, in the aggregate,

of the Company’s issued and outstanding common stock determined on a fully diluted basis as of the date of grant (the “Equity

Awards”), with 75% of the Equity Awards being granted as restricted stock units and with the remaining 25% of the Equity

Awards being granted as stock options, all of which Equity Awards shall be outside of the 2013 Long-Term Incentive Plan and subject

to terms and conditions of the award agreements entered by Mr.

5% of the Company’s issued and outstanding common stock determined on a fully diluted basis as of the date of grant (the “Equity

Awards”), with 75% of the Equity Awards being granted as restricted stock units and with the remaining 25% of the Equity Awards

being granted as stock options, all of which Equity Awards shall be outside of the 2013 Long-Term Incentive Plan and subject to terms

and conditions of the award agreements entered by Mr.

In addition, on or before December 31, 2020, Mr.

shall become eligible to receive an additional grant of equity awards under the 2013 Long-Term Incentive Plan and the applicable

award agreements up to 5% (including the Equity Awards) of the Company’s actual outstanding shares of Common Stock on the

date of grant, provided that the actual amount of the grant shall be based on the achievement of certain performance/financial

criteria as established by the Board after consultation with Mr.

Slosman shall become

eligible to receive an additional grant of equity awards under the 2013 Long-Term Incentive Plan and the applicable award agreements

up to 5% (including the Equity Awards) of the Company’s actual outstanding shares of Common Stock on the date of grant, provided

that the actual amount of the grant shall be based on the achievement of certain performance/financial criteria as established by the

Board after consultation with Mr.

Slosman, in its reasonable discretion.

For the purposes of the

equity award calculation, “fully diluted basis”

is defined as the sum of the total shares of common stock then outstanding,

the shares of common stock issuable upon the conversion of our then outstanding shares of Series B Convertible Preferred Stock

and Series C Convertible Preferred Stock and the shares of common stock issuable upon the exercise of our then outstanding pre-funded

On January 2, 2020, pursuant to the Slosman Employment Agreement, we granted Mr.

Slosman restricted stock units for 182,381

shares and a stock option to purchase 60,794 shares of common stock at $1.10 per share.

For the purposes of the equity award calculation, “fully

diluted basis” is defined as the sum of the total shares of common stock then outstanding, the shares of common stock issuable

upon the conversion of our then outstanding shares of Series B Convertible Preferred Stock and Series C Convertible Preferred Stock and

the shares of common stock issuable upon the exercise of our then outstanding pre-funded warrant.

On January 2, 2020, pursuant to the

Slosman Employment Agreement, we granted Mr.

Slosman restricted stock units for 182,381 shares and a stock option to purchase 60,794

shares of common stock at $1.10 per share.

January 2022, the Compensation Committee approved a reimbursement of up to $50,000 for any reasonable and customary, documented out-of-pocket

relocation expenses actually incurred by Mr.

Slosman in the 2022 calendar years, in connection with his relocation to Europe, as well

as $62,500 in expenses on an annual basis for expenses relating to commuting expenses, health coverage and corporate and visa status

the event Mr.

1 unchanged sentence

the date of termination without any obligation to pay Mr.

Slosman any additional compensation other than the accrued obligations

and without triggering a termination of Mr.

Slosman’s employment without cause.

In the event the Slosman Employment Agreement

expires, or we terminate Mr.

Slosman’s employment for cause or Mr.

Slosman voluntarily resigns without good reason, we shall

have no further liability or obligation to Mr.

Slosman under the Slosman Employment Agreement.

Notwithstanding the foregoing,

in the event that this the Slosman Employment Agreement expires as a result of our decision not to renew the Slosman Employment

Agreement, we shall, subject to the execution and timely return by Mr.

Slosman any additional compensation other than the accrued obligations and

without triggering a termination of Mr.

Slosman’s employment without cause.

In the event we terminate Mr.

Slosman’s employment

for cause or Mr.

Slosman voluntarily resigns without good reason, we shall have no further liability or obligation to Mr.

Slosman under

the Slosman Employment Agreement.

Notwithstanding the foregoing, in the event that this the Slosman Employment Agreement terminates,

we shall, subject to the execution and timely return by Mr.

Slosman of a release of claims, pay Mr.

Slosman cash payments

totaling $100,000 in the aggregate, payable in equal installments on our regular pay dates that occur during the period commencing

on 60th day following his employment termination date and ending on the last day of the Restricted Period (as defined below);

provided, however, that if, at any time within the period commencing on the date that is 3 months prior to the expiration of the

Initial Employment Term or the then current renewal term, as applicable, and ending on the date that is 3 months following the

expiration of the Slosman Employment Agreement, we and a third party execute a definitive, written, and binding agreement (a “Sale

Agreement”) to enter into certain transactions described therein that, if consummated, would constitute a change in control

in us, then Mr.

Slosman’s termination shall be deemed a termination by us without cause or for good reason, as of the date

such Sale Agreement is executed, provided further that any amounts payable to Mr.

Slosman pursuant to such termination shall be

reduced by any amounts previously paid to him upon expiration of the Slosman Employment Agreement, termination by us for cause

or voluntary resignation by Mr.

Slosman cash payments totaling $100,000

in the aggregate, payable in equal installments on our regular pay dates that occur during the period commencing on 60th day following

his employment termination date and ending on the last day of the Restricted Period (as defined below);

provided, however, that if, at

any time within the period commencing on the date that is 3 months prior to the termination of his employment agreement , we and a third

party execute a definitive, written, and binding agreement (a “Sale Agreement”) to enter into certain transactions described

therein that, if consummated, would constitute a change in control in us, then Mr.

Slosman’s termination shall be deemed a termination

by us without cause or for good reason, as of the date such Sale Agreement is executed, provided further that any amounts payable to

Slosman pursuant to such termination shall be reduced by any amounts previously paid to him upon expiration of the Slosman Employment

Agreement, termination by us for cause or voluntary resignation by Mr.

Slosman without good reason.

Slosman’s employment is terminated (i) by us without cause or (ii) by Mr.

Slosman for good reason, then we must pay

Slosman, (a) a severance pay in an amount equal to twelve months of his then-current base salary, (b) his entire performance

bonus for any calendar year for which Mr.

Slosman has already worked the entire year but the bonus has yet to be paid, (c) a pro-rated

performance bonus in an amount equal to the target annual performance bonus to which Mr.

Slosman may have been entitled for the

year in which the termination occurs that he would have received had his employment not been terminated during such year.

50% of all unvested stock options, shares of restricted stock, restricted stock units, stock appreciation rights, or similar stock-based

rights granted to Mr.

Slosman shall vest and, if applicable, be immediately exercisable and any risk of forfeiture included in

such restricted or other stock grants previously made to Mr.

Slosman’s employment is terminated (i) by us without cause or (ii) by Mr.

Slosman for good reason, then we must pay Mr.

(a) a severance pay in an amount equal to twelve months of his then-current base salary, (b) his entire performance bonus for any calendar

year for which Mr.

Slosman has already worked the entire year but the bonus has yet to be paid, (c) a pro-rated performance bonus in

an amount equal to the target annual performance bonus to which Mr.

Slosman may have been entitled for the year in which the termination

occurs that he would have received had his employment not been terminated during such year.

In addition, 50% of all unvested stock options,

shares of restricted stock, restricted stock units, stock appreciation rights, or similar stock-based rights granted to Mr.

Slosman shall

vest and, if applicable, be immediately exercisable and any risk of forfeiture included in such restricted or other stock grants previously

Slosman shall immediately lapse, and Mr.

Slosman may exercise any

outstanding stock options or stock appreciation rights until the earlier of (x) the last date on which such stock options or stock

appreciation rights could have been exercised pursuant to the terms of the applicable award agreement, irrespective of Mr.

Slosman’s

termination of employment;

and (y) the date that is two years following his employment termination date.

Slosman may exercise any outstanding stock options or stock appreciation rights

until the earlier of (x) the last date on which such stock options or stock appreciation rights could have been exercised pursuant to

the terms of the applicable award agreement, irrespective of Mr.

Slosman’s termination of employment;

and (y) the date that is

two years following his employment termination date.

have been a party to an employment agreement with Craig Shore since November 28, 2010.

On May 5, 2014, we entered into an amended

and restated employment agreement with Mr.

On May 5, 2014, we entered into an amended and

restated employment agreement with Mr.

Shore, which was amended on January 5, 2015, July 25, 2016, and on March 25, 2019.

The employment agreement, as amended, has an initial term that ends on December 31, 2020, and will automatically renew for additional

one-year periods on January 1st thereafter unless either party gives the other party written notice of its election not to extend

such employment at least six months prior to the next January 1st renewal date.

If a change in control occurs when less than two

full years remain in the initial term or during any renewal term, the employment agreement will automatically be extended for

two years from the change in control date and will terminate on the second anniversary of the change in control date.

the terms of the employment agreement, as amended by the third amendment to the amended and restated employment agreement, dated

March 25, 2019, Mr.

The employment

agreement, as amended, had an initial term that originally was to end on December 31, 2020, and was to automatically renew for additional

one-year periods on January 1st thereafter unless either party gave the other party written notice of its election not to extend such

employment at least six months prior to the next January 1st renewal date.

As discussed more fully below, we subsequently amended Mr.

Shore’s employment agreement to remove that certain definitive term of his employment such that his employment agreement shall

expire if and when terminated by either party pursuant to the terms thereof.

the terms of the employment agreement, as amended by the third amendment to the amended and restated employment agreement, dated March

25, 2019, Mr.

Shore is entitled to an annual base salary of at least $250,000.

Such amount may be reduced only as part of

an overall cost reduction program that affects all of our senior executives and does not disproportionately affect Mr.

so long as such reduction does not reduce the base salary to a rate that is less than 90% of the amount set forth above (or 90%

of the amount to which it has been increased).

The base salary will be reviewed annually by our chief executive officer for increase

(but not decrease, except as permitted as part of an overall cost reduction program) as part of our annual compensation review.

Shore is also eligible to receive an annual bonus in an amount equal to 60% of his then-annual salary upon the achievement

of reasonable target objectives and performance goals, to be determined by the board of directors in consultation with Mr.

Shore is eligible to receive the percentage of his annual bonus corresponding to the percentage of his achievement of such

target objectives and performance goals.

The annual bonus will be reviewed annually by our chief executive officer for increase

in the amount of the percentage of his then-base salary (but not decrease), as well as the criteria and the goals, as part of

our annual compensation review.

Such amount may be reduced only as part of an overall

cost reduction program that affects all of our senior executives and does not disproportionately affect Mr.

Shore, so long as such reduction

does not reduce the base salary to a rate that is less than 90% of the amount set forth above (or 90% of the amount to which it has been

The base salary will be reviewed annually by our chief executive officer for increase (but not decrease, except as permitted

as part of an overall cost reduction program) as part of our annual compensation review.

Shore is also eligible to receive an annual

bonus in an amount equal to 60% of his then-annual salary upon the achievement of reasonable target objectives and performance goals,

to be determined by the board of directors in consultation with Mr.

Shore is eligible to receive the percentage of his annual

bonus corresponding to the percentage of his achievement of such target objectives and performance goals.

The annual bonus will be reviewed

annually by our chief executive officer for increase in the amount of the percentage of his then-base salary (but not decrease), as well

as the criteria and the goals, as part of our annual compensation review.

In addition, Mr.

Shore is eligible to receive such additional bonus or incentive compensation

as the board may establish from time to time in its sole discretion.

Shore will also be considered for grants of equity awards

each year as part of the board’s annual compensation review, which will be made at the sole discretion of the board of directors.

Each grant will, with respect to any awards that are options, have an exercise price equal to the fair market value of our common

stock as of the date of grant, and will be subject to a three-year vesting period subject to Mr.

Shore’s continued service

with us, with one-third of each additional grant vesting equally on the first, second, and third anniversary of the date of grant

Shore is eligible to receive such additional

bonus or incentive compensation as the board may establish from time to time in its sole discretion.

Shore will also be considered

for grants of equity awards each year as part of the board’s annual compensation review, which will be made at the sole discretion

of the board of directors.

Each grant will, with respect to any awards that are options, have an exercise price equal to the fair market

value of our common stock as of the date of grant, and will be subject to a three-year vesting period subject to Mr.

Shore’s continued

service with us, with one-third of each additional grant vesting equally on the first, second, and third anniversary of the date of grant

for such awards.

during the term of the employment agreement, Mr.

Shore’s employment is terminated upon his death or disability, by us without

cause (as such term is defined in Mr.

Shore’s employment agreement), or upon his resignation for “good reason”

(as such term is defined in Mr.

Shore’s employment agreement), Mr.

Shore will be entitled to receive, in addition to any

amounts he is entitled to receive under the manager’s insurance policy:

(i) any unpaid base salary and accrued unpaid vacation

or earned incentive compensation and the pro rata amount of any bonus plan incentive compensation for the fiscal year of such

termination (based on the number of business days he was actually employed by us during the fiscal year of such termination and

based on the percentage of the goals that he actually achieved under the bonus plan) that he would have received had his employment

not been terminated;

(ii) a one-time lump sum severance payment equal to 100% of his base salary, provided that he executes a

release relating to employment matters and the circumstances surrounding his termination in favor of us, our subsidiaries and

our officers, directors and related parties and agents, in a form reasonably acceptable to us at the time of such termination;

(iii) vesting of all unvested stock options, stock appreciation rights or similar stock-based rights granted to him and immediate

lapse of any risk of forfeiture included in restricted or other stock grants previously made to Mr.

(iv) an extension of

the exercise period of all vested stock options granted to Mr.

Shore until the earlier of (a) two years from the date of termination

or (b) the latest date that each stock option would otherwise expire by its original terms;

Shore’s employment is terminated upon his death or disability, by us without cause (as such term is defined in Mr.

employment agreement), or upon his resignation for “good reason” (as such term is defined in Mr.

Shore’s employment

agreement), Mr.

Shore will be entitled to receive, in addition to any amounts he is entitled to receive under the manager’s insurance

(i) any unpaid base salary and accrued unpaid vacation or earned incentive compensation and the pro rata amount of any bonus

plan incentive compensation for the fiscal year of such termination (based on the number of business days he was actually employed by

us during the fiscal year of such termination and based on the percentage of the goals that he actually achieved under the bonus plan)

that he would have received had his employment not been terminated;

(ii) a one-time lump sum severance payment equal to 100% of his base

salary, provided that he executes a release relating to employment matters and the circumstances surrounding his termination in favor

of us, our subsidiaries and our officers, directors and related parties and agents, in a form reasonably acceptable to us at the time

of such termination;

(iii) vesting of all unvested stock options, stock appreciation rights or similar stock-based rights granted to

him and immediate lapse of any risk of forfeiture included in restricted or other stock grants previously made to Mr.

extension of the exercise period of all vested stock options granted to Mr.

Shore until the earlier of (a) two years from the date of

termination or (b) the latest date that each stock option would otherwise expire by its original terms;

(v) to the fullest extent permitted

by our then-current benefit plans, continuation of health, dental, vision and life insurance coverage for the lesser of 12 months

after termination or until Mr.

by our then-current benefit plans, continuation of health, dental, vision and life insurance coverage for the lesser of 12 months after

termination or until Mr.

Shore obtains coverage from a new employer;

and (vi) reimbursement of up to $30,000 for executive

outplacement services, subject to certain restrictions.

The severance payment described in (ii) of the foregoing sentence upon

Shore’s death or disability will be reduced by any payments received by Mr.

Shore pursuant to any of our employee welfare

benefit plans providing for payments in the event of death or disability.

If, during or after the term of his employment agreement,

Shore’s employment is terminated by us for cause or by Mr.

Shore voluntarily, Mr.

Shore will only be entitled to unpaid

amounts owed to him (e.g., base salary, accrued vacation and earned incentive compensation through the date of such termination)

and whatever rights, if any, are available to him pursuant to our stock-based compensation plan or any award documents related

to any stock-based compensation.

Shore may terminate his employment for good reason by delivering a notice of termination to us 30 days in advance of the date

of termination;

and (vi) reimbursement of up to $30,000 for executive outplacement

services, subject to certain restrictions.

The severance payment described in (ii) of the foregoing sentence upon Mr.

Shore’s death

or disability will be reduced by any payments received by Mr.

Shore pursuant to any of our employee welfare benefit plans providing for

payments in the event of death or disability.

Shore’s employment is terminated by us for cause or by Mr.

Shore voluntarily,

Shore will only be entitled to unpaid amounts owed to him (e.g., base salary, accrued vacation and earned incentive compensation

through the date of such termination) and whatever rights, if any, are available to him pursuant to our stock-based compensation plan

or any award documents related to any stock-based compensation.

Shore may terminate his employment for good reason by delivering a notice of termination to us 30 days in advance of the date of termination;

provided, however, that Mr.

Shore agreed to not terminate his employment for good reason until he has given us

at least 30 days’

notice from which to cure the circumstances set forth in the notice of termination constituting good reason,

and if such circumstances are not cured by the 30th day, Mr.

Shore’s employment shall terminate on such date.

Shore agreed to not terminate his employment for good reason until he has given us at least 30 days’

notice from which to cure the circumstances set forth in the notice of termination constituting good reason, and if such circumstances

are not cured by the 30th day, Mr.

Shore’s employment shall terminate on such date.

to terms contained in Mr.

Shore’s stock option and restricted stock award agreements, in the event of a change of control

of our company, the stock options and restricted stock granted to Mr.

Shore that were unvested will vest immediately upon such

change of control, in the case of stock options, if such stock options are not assumed or substituted by the surviving company.

Shore’s stock option and restricted stock award agreements, in the event of a change of control of our

company, the stock options and restricted stock granted to Mr.

Shore that were unvested will vest immediately upon such change of control,

in the case of stock options, if such stock options are not assumed or substituted by the surviving company.

we terminate Mr.

Shore’s employment without cause, Mr.

Shore will be entitled, under Israeli law, to severance payments

equal to his last month’s salary multiplied by the number of years Mr.

Shore’s employment without cause, Mr.

Shore will be entitled, under Israeli law, to severance payments equal to

his last month’s salary multiplied by the number of years Mr.

Shore has been employed with us.

In order to finance

this obligation, we make monthly contributions equal to 8.33% of Mr.

Shore’s salary to a severance payment fund.

amount accumulated in Mr.

Shore’s severance payment fund as of December 31, 2020 was $206,000, as adjusted for conversion

from New Israeli Shekels to U.S.

In order to finance this obligation,

we make monthly contributions equal to 8.33% of Mr.

Shore’s salary to a severance payment fund.

The total amount accumulated in

Shore’s severance payment fund as of December 31, 2020 was $206,000, as adjusted for conversion from New Israeli Shekels to

However, if Mr.

Shore’s employment is terminated without cause, on account of

a disability or upon his death, as of December 31, 2020, Mr.

Shore would have been entitled to receive $270,000 in severance under

Israeli law, thereby requiring us to pay Mr.

Shore’s employment is terminated without cause, on account of a disability or upon his death, as

of December 31, 2020, Mr.

Shore would have been entitled to receive $270,000 in severance under Israeli law, thereby requiring us to

Shore $64,000, in addition to releasing the $206,000 in Mr.

Shore’s severance

payment fund.

On the other hand, pursuant to his employment agreement, Mr.

Shore is entitled to the total amount contributed to

and accumulated in his severance payment fund in the event of the termination of his employment as a result of his voluntary resignation.

Shore’s severance payment fund.

On the other hand, pursuant

to his employment agreement, Mr.

Shore is entitled to the total amount contributed to and accumulated in his severance payment fund in

the event of the termination of his employment as a result of his voluntary resignation.

In addition, Mr.

Shore would be entitled to receive his full severance payment under Israeli law, including the total amount contributed

to and accumulated in his severance payment fund, if he retires from our company at or after age 67.

Shore would be entitled to

receive his full severance payment under Israeli law, including the total amount contributed to and accumulated in his severance payment

fund, if he retires from our company at or after age 67.

are entitled to terminate Mr.

Shore’s employment immediately at any time for “cause”

(as such term is defined

in the agreement and the Israeli Severance Payment Act 1963), upon which, after meeting certain requirements under the applicable

law and recent Israeli Labor court requirements, we believe we will have no further obligation to compensate Mr.

Shore’s employment immediately at any time for “cause” (as such term is defined in the

agreement and the Israeli Severance Payment Act 1963), upon which, after meeting certain requirements under the applicable law and recent

Israeli Labor court requirements, we believe we will have no further obligation to compensate Mr.

upon termination of Mr.

Shore’s employment for any reason, we will compensate him for all unused or previously uncompensated

vacation days accrued.

employment agreement also contains certain standard noncompetition, non-solicitation, confidentiality, and assignment of inventions

requirements for Mr.

Shore is also entitled to participate in or receive benefits under our social insurance and benefits plans, including but not

limited to our manager’s insurance policy and education fund, which are customary benefits provided to executive employees

A management insurance policy is a combination of severance savings (in accordance with Israeli law), defined contribution

tax-qualified pension savings and disability pension payments.

An education fund is a savings fund of pre-tax contributions to

be used after a specified period of time for advanced educational training and other permitted purposes, as set forth in the by-laws

of the education fund.

We will make periodic contributions to these insurance and social benefits plans based on certain percentages

Shore’s base salary, including (i) 7.5% to the education fund and (ii) 15.83% to the manager’s insurance policy,

of which 8.33% will be allocated to severance pay, 5.5% to pension fund payments and up to 2.5% to disability pension payments.

Shore’s employment for any reason, we will compensate him for all unused or previously uncompensated vacation

days accrued.

employment agreement also contains certain standard noncompetition, non-solicitation, confidentiality, and assignment of inventions requirements

Shore is also entitled to participate in or receive benefits under our social insurance and benefits plans, including but not limited

to our manager’s insurance policy and education fund, which are customary benefits provided to executive employees in Israel.

management insurance policy is a combination of severance savings (in accordance with Israeli law), defined contribution tax-qualified

pension savings and disability pension payments.

An education fund is a savings fund of pre-tax contributions to be used after a specified

period of time for advanced educational training and other permitted purposes, as set forth in the by-laws of the education fund.

will make periodic contributions to these insurance and social benefits plans based on certain percentages of Mr.

salary, including (i) 7.5% to the education fund and (ii) 15.83% to the manager’s insurance policy, of which 8.33% will be allocated

to severance pay, 5.5% to pension fund payments and up to 2.5% to disability pension payments.

Upon the termination of Mr.

Shore’s employment for any reason other than for cause, Mr.

Shore will be entitled to receive

the total amount contributed to and accumulated in his manager insurance policy fund.

employment for any reason other than for cause, Mr.

Shore will be entitled to receive the total amount contributed to and accumulated

in his manager insurance policy fund.

August 14, 2020, we entered into the fourth amendment to that certain Amended and Restated Employment Agreement dated as of May 5, 2014,

5, 2014, as amended on January 5, 2015, July 25, 2016, and on March 25, 2019, in order to, among other things, (i) amend the term

Shore’s employment, so that the initial term of Mr.

Shore employment will end on July 31, 2022, which will automatically

be renewed for additional one-year periods on August 1, 2022 and on each August 1 thereafter;

as amended on January 5, 2015, July 25, 2016, and on March 25, 2019, in order to, among other things, (i) amend the term of Mr.

employment, so that the initial term of Mr.

Shore employment will end on July 31, 2022, which will automatically be renewed for additional

one-year periods on August 1, 2022 and on each August 1 thereafter;

(ii) increase Mr.

Shore’s

monthly base salary to NIS 86,000;

Shore’s monthly base salary to NIS 86,000;

and (iii) amend certain terms related to termination of Mr.

Shore’s employment without

Cause (as defined therein)

Shore’s employment without Cause (as defined therein).

November 4, 2021, we entered into the Fifth Amendment to that certain Amended and Restated Employment Agreement with our chief financial

officer, chief administrative officer, secretary and treasurer, Craig Shore, dated May 5, 2014, as amended on January 5, 2015, July 25,

2016, March 25, 2019 and on August 14, 2020, pursuant to which we agreed to remove that certain definitive term of his employment such

that his employment agreement shall expire if and when terminated by either party pursuant to the terms thereof.

January 17, 2022, we entered into the Sixth Amendment to that certain Amended and Restated Employment Agreement with our chief financial

officer, chief administrative officer, secretary and treasurer, Craig Shore, dated May 5, 2014, as amended on January 5, 2015, July 25,

2016, March 25, 2019, August 14, 2020 and on November 4, 2021, pursuant to which we agreed to increase Mr.

Shore’s monthly base

salary to no less than NIS 89,440 effective January 1, 2022, per month (NIS 1,073,280 on an annualized basis).

of Control Agreements

to our forms of our restricted stock award agreement, stock option agreement, or restricted stock unit award agreement pursuant to our

2021 Equity Incentive Plan, in the event of a change of control, any unvested awards shall become immediately vested.

do not currently have any plans providing for the payment of retirement benefits to our officers or directors, other than as described

under “Agreements with Executive Officers”

do not currently have any change-of-control or severance agreements with any of our executive officers or directors, other than

as described under “Agreements with Executive Officers”

In the event of the termination of employment of the

named executive officers, any and all unexercised stock options shall expire and no longer be exercisable after a specified time

following the date of the termination, other than as described under “Agreements with Executive Officers”

above and under “Agreements with Executive Officers” above.

do not currently have any change-of-control or severance agreements with any of our executive officers or directors, other than as described

under “Agreements with Executive Officers” above.

In the event of the termination of employment of the named executive officers,

any and all unexercised stock options shall expire and no longer be exercisable after a specified time following the date of the termination,

other than as described under “Agreements with Executive Officers” above.

Equity Awards at December 31, 2021

9 unchanged sentences

Marvin Slosman(1)

1,175,287 (5)

Slosman was appointed as chief executive officer effective as of January 1, 2020

options vest annually, with one-third vesting on each of January 2, 2021, January 2, 2022 and January 2, 2023.

RSU’s vest annually, with one-third vesting on each of January 2, 2021, January 2, 2022 and January 2, 2023.

options vest annually, with one-third vesting on each of August 31, 2021, August 31, 2022 and August 31, 2023.

RSU’s vest annually, with one-third vesting on each of August 31, 2021, August 31, 2022 and August 31, 2023.

restricted shares vest annually, with one-half vesting on each of February 4, 2021 and February 4, 2022.

Restricted Stock vest annually, with one-third vesting on each of August 31, 2021, August 31, 2022 and August 31, 2023.

options vest annually, with one-half vesting on each of January 2, 2022 and January 2, 2023.

restricted stock units (RSUs) vest annually, with one-half vesting on each of January 2,

2022 and January 2, 2023.

case of the holders termination of services for any reason other than by the Company for cause, the Company shall convert the vested

RSUs into the number of whole shares of Common Stock equal to the number of vested RSUs and shall deliver them to the holder.

options vest annually, with one-half vesting on each of August 31, 2022 and August 31, 2023.

RSUs vest annually, with one-half vesting on each of August 31, 2022 and August 31, 2023.

options vest annually, with one-third vesting on each of April 19, 2022, April 19, 2023 and April 19, 2024.

options vest annually, with one-third vesting on each of October 13, 2022, October 13, 2023 and October 13, 2024.

RSUs vest annually, with one-third vesting on each of October 13, 2022, October 13, 2023 and October 13, 2024.

shares of restricted stock vest annually, with vesting on February 4, 2022.

shares of restricted stock vest annually, with one-half vesting on each of August 31, 2022 and August 31, 2023.

options vest annually, with one-third vesting on each of November 10, 2022, November 10, 2023 and November 10, 2024.

shares of restricted stock vest annually, with one-third vesting on each of November 10, 2022, November 10, 2023 and November 10,

Exercises and Stock Vested

2 unchanged sentences

March 28, 2011, our board of directors and stockholders adopted and approved the InspireMD, Inc.

2011 UMBRELLA Option Plan, which

was subsequently amended on October 31, 2011 and December 21, 2012.

2011 UMBRELLA Option Plan, which was

subsequently amended on October 31, 2011 and December 21, 2012.

Under the InspireMD, Inc.

2011 UMBRELLA Option Plan, we have

reserved 11 shares of our common stock as awards to the employees, consultants, and service providers to InspireMD, Inc.

subsidiaries and affiliates worldwide.

InspireMD, Inc.

2011 UMBRELLA Option Plan currently consists of three components, the primary plan document that governs all awards

granted under the InspireMD, Inc.

2011 UMBRELLA Option Plan, and two appendices:

(i) Appendix A, designated for the purpose of

grants of stock options and restricted stock awards to Israeli employees, consultants, officers and other service providers and

other non-U.S.

employees, consultants, and service providers, and (ii) Appendix B, which is the 2011 U.S.

Equity Incentive Plan,

designated for the purpose of grants of stock options and restricted stock awards to U.S.

employees, consultants, and service

providers who are subject to the U.S.

On December 21, 2012, the stockholders approved the awarding of “incentive

stock options”

pursuant to the U.S.

portion of the plan.

purpose of the InspireMD, Inc.

2011 UMBRELLA Option Plan is to provide an incentive to attract and retain employees, officers,

consultants, directors, and service providers whose services are considered valuable, to encourage a sense of proprietorship and

to stimulate an active interest of such persons in our development and financial success.

2011 UMBRELLA Option Plan, we have reserved

13 shares of our common stock as awards to the employees, consultants, and service providers to InspireMD, Inc.

and its subsidiaries

and affiliates worldwide.

The InspireMD, Inc.

2011 UMBRELLA Option

Plan is administered by our compensation committee.

Unless terminated earlier by the board of directors, the InspireMD, Inc.

UMBRELLA Option Plan will expire on March 27, 2021.

2011 UMBRELLA Option Plan is administered by our compensation committee.

The InspireMD,

2011 UMBRELLA Option Plan has expired on March 27, 2021.

We have no shares of common stock available for future issuance under our

2 unchanged sentences

December 16, 2013, our stockholders approved the InspireMD, Inc.

2013 Long-Term Incentive Plan, which was adopted by our board

of directors on October 25, 2013.

2013 Long-Term Incentive Plan, which was adopted by our board of directors

on October 25, 2013.

purpose of the InspireMD, Inc.

2013 Long-Term Incentive Plan is to provide an incentive to attract and retain employees, officers,

consultants, directors, and service providers whose services are considered valuable, to encourage a sense of proprietorship and

to stimulate an active interest of such persons in our development and financial success.

The InspireMD, Inc.

2013 Long-Term Incentive

Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock,

restricted stock units, performance awards, dividend equivalent rights, and other awards, which may be granted singly, in combination,

or in tandem.

2013 Long-Term Incentive Plan is to provide an incentive to attract and retain employees, officers, consultants,

directors, and service providers whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active

interest of such persons in our development and financial success.

The InspireMD, Inc.

2013 Long-Term Incentive Plan provides for the

granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units,

performance awards, dividend equivalent rights, and other awards, which may be granted singly, in combination, or in tandem.

The InspireMD,

2013 Long-Term Incentive Plan is administered by our compensation committee.

InspireMD, Inc.

2013 Long-Term Incentive Plan is intended to serve as an “umbrella”

plan for us and our subsidiaries

2013 Long-Term Incentive Plan is intended to serve as an “umbrella” plan for us and our subsidiaries worldwide.

Therefore, if so required, appendices may be added to the InspireMD, Inc.

2013 Long-Term Incentive Plan in order to

accommodate local regulations that do not correspond to the scope of the InspireMD, Inc.

2013 Long-Term Incentive Plan in order to accommodate local

regulations that do not correspond to the scope of the InspireMD, Inc.

2013 Long-Term Incentive Plan.

as Appendix A to the InspireMD, Inc.

Attached as Appendix A to the InspireMD,

2013 Long-Term Incentive Plan is the InspireMD, Inc.

2013 Employee Stock Incentive Plan,

for the purpose of making grants of stock options, restricted stock, and other stock incentive awards pursuant to Sections 102

and 3(i) of the Israeli Income Tax Ordinance (New Version), 1961 to Israeli employees and officers and any other service providers

or control holders of us who are subject to Israeli Income Tax.

the InspireMD, Inc.

2013 Long-Term Incentive Plan was adopted, a total of 11 shares of common stock were reserved for awards under

2013 Employee Stock Incentive Plan, for the purpose of making grants of stock

options, restricted stock, and other stock incentive awards pursuant to Sections 102 and 3(i) of the Israeli Income Tax Ordinance (New

Version), 1961 to Israeli employees and officers and any other service providers or control holders of us who are subject to Israeli

the InspireMD, Inc.

2013 Long-Term Incentive Plan was adopted, a total of 11 shares of common stock were reserved for awards under the

InspireMD, Inc.

2013 Long-Term Incentive Plan.

September 9, 2015, our stockholders approved an amendment to the InspireMD, Inc.

2013 Long-Term Incentive Plan to increase the

number of shares of common stock available for issuance pursuant to awards under the InspireMD, Inc.

2013 Long-Term Incentive

Plan by 11 shares of common stock, to a total of 22 shares of common stock.

2013 Long-Term Incentive Plan to increase the number

of shares of common stock available for issuance pursuant to awards under the InspireMD, Inc.

2013 Long-Term Incentive Plan by 11 shares

of common stock, to a total of 22 shares of common stock.

May 24, 2016, our stockholders approved the second amendment to the InspireMD, Inc.

2013 Long-Term Incentive Plan to increase

the number of shares of common stock available for issuance pursuant to awards under the InspireMD, Inc.

2013 Long-Term Incentive

Plan by 229 shares of common stock, to a total of 251 shares of common stock.

2013 Long-Term Incentive Plan to increase the number

of shares of common stock available for issuance pursuant to awards under the InspireMD, Inc.

2013 Long-Term Incentive Plan by 229 shares

of common stock, to a total of 251 shares of common stock.

September 28, 2016, our stockholders approved the third amendment to the InspireMD, Inc.

2013 Long-Term Incentive Plan to increase

the number of shares of common stock available for issuance pursuant to awards under the InspireMD, Inc.

2013 Long-Term Incentive

Plan by 144 shares of common stock, to a total of 395 shares of common stock.

2013 Long-Term Incentive Plan to increase the

number of shares of common stock available for issuance pursuant to awards under the InspireMD, Inc.

2013 Long-Term Incentive Plan by

144 shares of common stock, to a total of 395 shares of common stock.

October 24, 2018, our stockholders approved the fourth amendment to the InspireMD, Inc.

1 unchanged sentence

the number of shares of common stock available for issuance pursuant to awards under such InspireMD, Inc.

2013 Long-Term Incentive

Plan by 178,000 shares, to a total of 178,395 shares of common stock, and (ii) remove the cap on the number of shares of common

stock with respect to which stock options or stock appreciation rights may be granted to certain executive officers of the Company

during any calendar year.

2013 Long-Term Incentive Plan

by 178,000 shares, to a total of 178,395 shares of common stock, and (ii) remove the cap on the number of shares of common stock with

respect to which stock options or stock appreciation rights may be granted to certain executive officers of the Company during any calendar

March 21, 2019, our stockholders approved the fifth amendment to the InspireMD, Inc.

2013 Long-Term Incentive Plan to increase

the total number of shares of common stock issuable under the InspireMD, Inc.

2013 Long-Term Incentive Plan by 500,000 shares

to a total of 678,395 shares of common stock

2013 Long-Term Incentive Plan to increase the total

number of shares of common stock issuable under the InspireMD, Inc.

2013 Long-Term Incentive Plan by 500,000 shares to a total of 678,395

shares of common stock

August 31, 2020, our stockholders approved the sixth amendment to the InspireMD, Inc.

2013 Long-Term Incentive Plan to increase

the total number of shares of common stock issuable under the InspireMD, Inc.

2013 Long-Term Incentive Plan by 6,500,000 shares

to a total of 7,178,395 shares of common stock.

of December 31, 2020, we had 2,306,956 shares of common stock available for future issuance under our 2013 Long-Term Incentive

2013 Long-Term Incentive Plan to increase the total

number of shares of common stock issuable under the InspireMD, Inc.

2013 Long-Term Incentive Plan by 6,500,000 shares to a total of 7,178,395

shares of common stock.

of December 31, 2021, we had 65,496 shares of common stock available for future issuance under our 2013 Long-Term Incentive Plan.

of March 4, 2022, we had 65,496 shares of common stock available for future issuance under our 2013 Long-Term Incentive Plan.

Equity Incentive Plan

September 30, 2021, at our 2021 annual meeting of stockholders, our stockholders approved our 2021

Equity Incentive Plan.

purpose of the InspireMD, Inc.

2021 Equity Incentive Plan is to provide an incentive to

attract and retain employees, officers, consultants, directors, and service providers whose services are considered valuable, to encourage

a sense of proprietorship and to stimulate an active interest of such persons in our development and financial success.

The InspireMD,

2021 Equity Incentive Plan provides for the granting of incentive stock options, nonqualified

stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, and

other awards, which may be granted singly, in combination, or in tandem.

The InspireMD, Inc.

Equity Incentive Pla n is administered by our compensation committee.

of December 31, 2021, we had 803,004 shares of common stock available for future issuance under our 2021

Equity Incentive Pla n.

of March 4, 2022, we had 728,980 shares of common stock available for future issuance under our 2021

Equity Incentive Pla n.

following table shows information concerning our directors during the twelve months ended December 31, 2021.

or Paid in Cash

Michael Berman

Campbell Rogers, M.D.

Thomas Kester

Gary Roubin, M.D.

Earned or Paid in Cash ($)

Other Compensation ($)

the 2021 calendar year, our board approved the following compensation for our independent directors:

(i) a $40,000 stipend, payable

quarterly to the chairman of the board;

(i) a $40,000 stipend, payable quarterly

to the chairman of the board;

(ii) a $25,000 stipend, payable quarterly to the other directors;

(iii) annual committee

chair compensation of $12,000 for the chairman of the audit committee, $8,000 for the chairman of the compensation committee and

$5,000 for the chairmen of the nominating and corporate governance committee and the research and development committee;

annual committee membership compensation of $4,000 for members of the audit committee and the compensation committee and $2,000

for members of the nominating and corporate governance committee and the research and development committee for members of the

nominating and corporate governance committee and the research and development committee.

Notwithstanding the foregoing, effective

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, and on July 1, 2020, the Board reinstated the original annual cash compensation for non-employee

Directors’

and Officers’

Liability Insurance

currently have directors’

and officers’

liability insurance insuring our directors and officers against liability

for acts or omissions in their capacities as directors or officers, subject to certain exclusions.

Such insurance also insures

us against losses which we may incur in indemnifying our officers and directors.

In addition, we have entered into indemnification

agreements with key officers and directors and such persons shall also have indemnification rights under applicable laws, and

our certificate of incorporation and bylaws.

(iii) annual committee chair compensation

of $12,000 for the chairman of the audit committee, $8,000 for the chairman of the compensation committee and $5,000 for the chairmen

of the nominating and corporate governance committee and the research and development committee;

and (iv) annual committee membership

compensation of $4,000 for members of the audit committee and the compensation committee and $2,000 for members of the nominating and

corporate governance committee and the research and development committee.

Effective October 13, 2021, the Board approved an increase

in the annual compensation for the chairman of the board to $48,000, and for all other directors to $30,000.

and Officers’ Liability Insurance

currently have directors’ and officers’ liability insurance insuring our directors and officers against liability for acts

or omissions in their capacities as directors or officers, subject to certain exclusions.

Such insurance also insures us against losses

which we may incur in indemnifying our officers and directors.

In addition, we have entered into indemnification agreements with key

officers and directors and such persons shall also have indemnification rights under applicable laws, and our certificate of incorporation

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

4 unchanged sentences

of our directors and executive officers as a group.

percentages of common stock beneficially owned are reported on the basis of regulations of the Securities and Exchange Commission

(the “SEC”) governing the determination of beneficial ownership of securities.

Under the rules of the SEC, a person

is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or

to direct the voting of the security, or investment power, which includes the power to dispose of or to direct the disposition

of the security.

as indicated in the footnotes to this table, each beneficial owner named in the table below has sole voting and sole investment

power with respect to all shares beneficially owned and each person’s address is c/o InspireMD, Inc., 4 Menorat Hamaor St.,

Tel Aviv, Israel 6744832.

percentages of common stock beneficially owned are reported on the basis of regulations of the Securities and Exchange Commission (the

“SEC”) governing the determination of beneficial ownership of securities.

Under the rules of the SEC, a person is deemed

to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or to direct the voting

of the security, or investment power, which includes the power to dispose of or to direct the disposition of the security.

as indicated in the footnotes to this table, each beneficial owner named in the table below has sole voting and sole investment power

with respect to all shares beneficially owned and each person’s address is c/o InspireMD, Inc., 4 Menorat Hamaor St., Tel Aviv,

Israel 6744832.

As of March 4, 2022, we had 8,322,439 shares outstanding

Name of Beneficial Owner

Armistice Capital, LLC

9,677,415 (2)

FiveT Capital AG

7,258,050 (3)

Officers and Directors

Marvin Slosman

1,499,251 (5)

Michael Berman

Campbell Rogers, M.D.

Thomas Kester

Gary Roubin, M.D.

1,046,291 (10)

All directors and executive officers as a group (7 persons)

of Beneficial Owner

of Shares Beneficially Owned (1)

Beneficially Owned (1)

and Directors

directors and executive officers as a group (8 persons)

ownership of less than one percent.

of common stock beneficially owned and the respective percentages of beneficial ownership of common stock assumes the exercise

of all options, warrants and other securities convertible into common stock beneficially owned by such person or entity currently

exercisable or exercisable within 60 days of March 8, 2021.

Shares issuable pursuant to the exercise of stock options and

warrants exercisable within 60 days are deemed outstanding and held by the holder of such options or warrants for computing

the percentage of outstanding common stock beneficially owned by such person, but are not deemed outstanding for computing

the percentage of outstanding common stock beneficially owned by any other person.

of (i) 6,451,610 shares of common stock purchased in connection with the February 2021 Offering, and (ii) warrants to purchase

3,225,805 shares of common stock, at an exercise price of $0.682 per share, purchased in the February 2021 Offering.

not aware whether this stockholder has sold any of the foregoing securities it purchased in the February 2021

of (i) 4,838,700 shares of common stock purchased in the February 2021 Offering, and (ii) warrants to purchase 2,419,350 shares

of common stock, at an exercise price of $0.682 per share, purchased in the February 2021 Offering.

We are not aware whether

this stockholder has sold any of the foregoing securities it purchased in the February 2021 Offering.

of (i) 95,870 shares of common stock, (ii) 60,794 Restricted Stock Units granted outside the plan that are currently exercisable

or exercisable within 60 days of March 8, 2021, (iii) options to purchase 20,264 shares of common stock that are currently

exercisable or exercisable within 60 days of March 8, 2021, and (iv) 75,710 warrants to purchase shares of common stock that

are currently exercisable.

of (i) 4,021 shares of common stock, (ii) options to purchase 11 shares of common stock that are currently exercisable or

exercisable within 60 days of March 8, 2021, (iii) 680,828 shares of restricted stock granted under the Israeli Appendix of

the InspireMD, Inc.

2013 Long-Term Incentive Plan and (iv) 814,391 shares of restricted stock granted to employees under the

Israeli Appendix of the InspireMD, Inc.

2013 Long-Term Incentive Plan held in trust, and with respect to which Mr.

granted a proxy with the right to vote such shares at his discretion.

of (i) 80,642 shares of common stock, (ii) 40,320 warrants to purchase shares of common stock that are currently exercisable,

and (iii) options to purchase 14 shares of common stock that are currently exercisable or exercisable within 60 days of March

Excludes 160,633 shares of common stock and restricted stock granted under the Israeli Appendix of InspireMD, Inc.

2013 Long-Term Incentive Plan held in trust, with respect to which the trustee has a proxy with the right to vote such shares

at his discretion.

of (i) 1,736 shares of common stock, (ii) 158,899 shares of restricted stock granted under the InspireMD, Inc.

2013 Long-Term

Incentive Plan, (iii) options to purchase 14 shares of common stock that are currently exercisable or exercisable within 60

days of March 8, 2021, and (iv) one warrant to purchase a share of common stock that is currently exercisable or exercisable

of common stock beneficially owned and the respective percentages of beneficial ownership of common stock assumes the exercise of

all options, warrants and other securities convertible into common stock beneficially owned by such person or entity currently exercisable

or exercisable within 60 days of March 4, 2022.

Shares issuable pursuant to the exercise of stock options and warrants exercisable

within 60 days are deemed outstanding and held by the holder of such options or warrants for computing the percentage of outstanding

common stock beneficially owned by such person but are not deemed outstanding for computing the percentage of outstanding common

stock beneficially owned by any other person.

of (i) 6,392 shares of common stock, (ii) 8,106 Restricted Stock Units granted outside the plan that are currently exercisable or

exercisable within 60 days of March 4, 2022, (iii) 26,117 Restricted Stock Units granted under the 2021 Equity Incentive Plan, (iv)

options to purchase 24,742 shares of common stock that are currently exercisable or exercisable within 60 days of March 4, 2022,

and (v) 5,048 warrants to purchase shares of common stock that are currently exercisable.

of (i) 15,491 shares of common stock, (ii) options to purchase 7,252 shares of common stock that are currently exercisable or exercisable

within 60 days of March 4, 2022, (iii) 30,170 shares of restricted stock granted under the Israeli Appendix of the InspireMD, Inc.

2013 Long-Term Incentive Plan, (iv) 72,978 shares of restricted stock granted under the 2021 Equity Incentive Plan, and (v) 202,452

shares of restricted stock granted to employees under the Israeli Appendix of the InspireMD, Inc.

2013 Long-Term Incentive Plan held

in trust, and with respect to which Mr.

Shore was granted a proxy with the right to vote such shares at his discretion.

of (i) 5,378 shares of common stock, (ii) warrants to purchase 2,688 shares of common stock that are currently exercisable or exercisable

within 60 days of March 4, 2022, (iii) options to purchase 1,176 shares of common stock that are currently exercisable or exercisable

within 60 days of March 4, 2022.

Stuka is the principal and managing member of Osiris Investment Partners, L.P., and, as such, has beneficial ownership of

(A) (i) 264 shares of common stock, (ii) warrants to purchase 6 shares of common stock that are currently exercisable or exercisable

within 60 days of March 8, 2021 in addition to (B) personally holding (i) options to purchase 15 shares of common stock that

are currently exercisable or exercisable within 60 days of March 8, 2021, (ii) 240,250 shares of restricted stock granted

under the InspireMD, Inc.

2013 Long-Term Incentive Plan, (iii) warrants to purchase 7 shares of common stock that are currently

exercisable or exercisable within 60 days of March 8, 2021, and (iv) 3,092 shares of common stock.

Excludes 10,710 shares of restricted stock granted under the Israeli Appendix of InspireMD, Inc.

2013 Long-Term Incentive Plan and 17,248 shares of restricted stock granted under the 2021 Equity Incentive Plan held in trust, with

respect to which the trustee has a proxy with the right to vote such shares at his discretion.

of (i) 3,688 shares of common stock, (ii) 7,024 shares of restricted stock granted under the InspireMD, Inc.

2013 Long-Term Incentive

Plan, (iii) 17,248 Restricted Stock Units granted under the 2021 Equity Incentive Plan, (iv) options to purchase 1,176 shares of

common stock that are currently exercisable or exercisable within 60 days of March 4, 2022.

Stuka is the principal and managing member of Osiris Investment Partners, L.P., and, as such, has beneficial ownership of (A) 28

shares of common stock (B) personally holding (i) options to purchase 1,775 shares of common stock that are currently exercisable

or exercisable within 60 days of March 4, 2022, (ii) 10,620 shares of restricted stock granted under the InspireMD, Inc.

2013 Long-Term

Incentive Plan, (iii) 60,480 warrants to purchase shares of common stock that are currently exercisable and (iv) options to

purchase 8 shares of common stock that are currently exercisable or exercisable within 60 days of March 8, 2021.

Incentive Plan, (iii) 26,079 shares of restricted stock granted under the 2021 Equity Incentive Plan, (iv) 79,110 shares of common

of (i) 15,083 shares of common stock, (ii) 7,024 shares of restricted stock granted under the InspireMD, Inc.

2013 Long-Term

Incentive Plan, and (iii) 343,188 warrants to purchase shares of common stock that are currently exercisable.

2013 Long-Term Incentive

Plan, (iii) 17,248 shares of restricted stock granted under the 2021 Equity Incentive Plan, (iv) 4,032 warrants to purchase shares

of common stock that are currently exercisable and (v) options to purchase 1,173 shares of common stock that are currently exercisable

or exercisable within 60 days of March 4, 2022.

of (i) 100,826 shares of common stock, (ii) 10,620 shares of restricted stock granted under the InspireMD, Inc.

2013 Long-Term Incentive

Plan, (iii) 17,248 shares of restricted stock granted under the 2021 Equity Incentive Plan, and (iv) 22,880 warrants to purchase

shares of common stock that are currently exercisable and (v) options to purchase 3,437 shares of common stock that are currently

exercisable or exercisable within 60 days of March 4, 2022.

of (i) 10,536 shares of restricted stock granted under the InspireMD, Inc.

2013 Long-Term Incentive Plan, (ii) 17,248 shares of restricted

stock granted under the 2021 Equity Incentive Plan.

Compensation Plan Information

following table provides certain information as of December 31, 2020, with respect to our equity compensation plans under which

our equity securities are authorized for issuance:

Plan Category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

Equity compensation

following table provides certain information as of December 31, 2021, with respect to our equity compensation plans under which our equity

securities are authorized for issuance:

of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average

exercise price of outstanding options, warrants and rights

of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

plans approved by

security holders

Equity compensation

plans not approved

1 unchanged sentence

of awards made to individuals outside the InspireMD, Inc.

2011 UMBRELLA Option Plan and 2013 Long Term Incentive Plan, as

described below:

issued to former director:

In November 2011, we issued options to purchase an aggregate of 3 shares of common stock to Dr.

Barer, then chairman of our board of directors who resigned from the board of directors effective as of June 2, 2017.

exercise price of these options is $3,412,500 per share and the options may be exercised at any time prior to the tenth anniversary

of the grant date, pursuant to the nonqualified stock option agreement, as amended on June 2, 2017.

2011 UMBRELLA Option Plan, 2013 Long Term Incentive Plan and 2021 Equity

Incentive Plan, as described below:

January, 2020, we issued to Mr.

Marvin Slosman, our Chief Executive Officer, President and Director, 12,159 shares of restricted

stock and 60,794 shares of common stock, as inducement awards outside the Company’s 2013 Long-Term Incentive Plan.

October 6, 2020, we issued to Mr.

Patrick Jamnik, our Vice President of Business Development and Strategic Initiatives, options

to purchase 54,307 shares of our common stock, as inducement awards outside the Company’s 2013 Long-Term Incentive Plan.

stock and 4,053 shares of common stock, as inducement awards outside the Company’s 2013 Long-Term Incentive Plan.

November 3, 2020, we issued to Mr.

Andrea Tommasoli, our Senior Vice President of Global Sales and Marketing, options to purchase

90,511 shares of our common stock, as inducement awards outside the Company’s 2013 Long-Term Incentive Plan.]

6,035 shares of our common stock, as inducement awards outside the Company’s 2013 Long-Term Incentive Plan.]

Certain Relationships and Related Transactions, and Director Independence.

accordance with our audit committee charter, the audit committee is required to approve all related party transactions.

the audit committee will review any proposed transaction that has been identified as a related party transaction under Item 404

of Regulation S-K.

A related party includes (i) a director, director nominee or executive officer of us, (ii) a security holder

known to be an owner of more than 5% of our voting securities, (iii) an immediate family member of the foregoing or (iv) a corporation

or other entity in which any of the foregoing persons is an executive, principal or similar control person or in which such person

has a 5% or greater beneficial ownership interest.

were no related party transactions that are required to be disclosed pursuant to Regulation S-K promulgated under the Securities

Act of 1933, as amended.

In general, the

audit committee will review any proposed transaction that has been identified as a related party transaction under Item 404 of Regulation

A related party includes (i) a director, director nominee or executive officer of us, (ii) a security holder known to be an owner

of more than 5% of our voting securities, (iii) an immediate family member of the foregoing or (iv) a corporation or other entity in

which any of the foregoing persons is an executive, principal or similar control person or in which such person has a 5% or greater beneficial

ownership interest.

were no related party transactions that are required to be disclosed pursuant to Regulation S-K promulgated under the Securities Act

of 1933, as amended.

board of directors has determined that Dr.

Rogers and Messrs.

Stuka, Berman and Kester, satisfy the requirement for independence

set out in Section 803 of the NYSE American rules and that each of these directors has no material relationship with us (other

than being a director and/or a stockholder).

In making its independence determinations, the board of directors sought to identify

and analyze all of the facts and circumstances relating to any relationship between a director, his immediate family or affiliates

and our company and our affiliates and did not rely on categorical standards other than those contained in the NYSE American rule

referenced above.

Rogers and Dr.

Roubin, Messrs.

Stuka, Berman and Kester, and Ms.

Arnold satisfy the requirement

for independence set out in Nasdaq Listing Rules and Rule 10A-3 promulgated under the Exchange Act.

In making its independence determinations,

the board of directors sought to identify and analyze all of the facts and circumstances relating to any relationship between a director,

his or her immediate family or affiliates and our company and our affiliates and did not rely on categorical standards other than those

contained in the rules referenced above.

Principal Accountant Fees and Services.

fees billed for professional services provided to us by Kesselman & Kesselman, Certified Public Accountants (“Kesselman”),

a member of PricewaterhouseCoopers International Limited, for the years ended December 31, 2021 and 2020 are described below.

– related fees

billed us audit fees in the aggregate amount of $176,000 and $160,000 for the years ended December 31, 2021 and 2020, respectively.

These fees relate to the audit of our annual financial statements and the review of our interim quarterly financial statements.

fees relate to the audit of our annual financial statements and the review of our interim quarterly financial statements.

Audit-Related

billed us audit-related fees in the aggregate amount of $49,900 and $53,900 for the year ended December 31, 2021 and 2020, respectively.

The fees for the year ended December 31, 2020 mostly related to registration statement on Form S-1 filed with the SEC in June

2020 and to our prospectus supplements filed with the Securities and Exchange Commission in July 2020.

fees for the year ended December 31, 2019 mostly related to our prospectus supplements filed with the Securities and Exchange

Commission in April 2019 and to our registration statement on Form S-1 filed with the Securities and Exchange Commission in August

and September of 2019.

The fees for the year ended December 31, 2021 mostly related to registration statement on Form S-1 filed with the SEC in February 2021

and to registration statement on Form S-3 filed with the SEC in April 2021.

fees for the year ended December 31, 2020 mostly related to registration statement on Form S-1 filed with the SEC in June 2020 and to

our prospectus supplements filed with the Securities and Exchange Commission in July 2020.

billed us tax fees in the aggregate amount of $38,675 and $39,209 for the year ended December 31, 2021 and 2020, respectively.

These fees relate to professional services rendered for tax compliance, tax advice and tax planning.

fees relate to professional services rendered for tax compliance, tax advice and tax planning.

did not bill us for any other fees for the year ended December 31, 2021 and 2020.

audit committee pre-approves all auditing services, internal control-related services and permitted non-audit services (including

the fees and terms thereof) to be performed for us by our independent auditor, except for de minimis non-audit services that are

approved by the audit committee prior to the completion of the audit.

The audit committee may form and delegate authority to subcommittees

consisting of one or more members when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit

services, provided that decisions of such subcommittee to grant pre-approvals is presented to the full audit committee at its

next scheduled meeting.

The Audit Committee pre-approved all of the fees set forth above.

audit committee pre-approves all auditing services, internal control-related services and permitted non-audit services (including the

fees and terms thereof) to be performed for us by our independent auditor, except for de minimis non-audit services that are approved

by the audit committee prior to the completion of the audit.

The audit committee may form and delegate authority to subcommittees consisting

of one or more members when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit services, provided

that decisions of such subcommittee to grant pre-approvals is presented to the full audit committee at its next scheduled meeting.

Audit Committee pre-approved all of the fees set forth above.

Exhibits and Financial Statement Schedules.

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Consolidated Balance Sheets as of December 31, 2021 and 2020

Consolidated Statements of Operations for the Years Ended December 31, 2020 and 2019

Statements of Operations for the Years Ended December 31, 2021 and 2020

Consolidated Statements of Changes in Equity for the Years Ended December 31, 2021 and 2020

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Form 10-K Summary

to Exhibits [Subject to additional analysis/review]

Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2015)

Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to Current Report on Form 8-K filed with the Securities and Exchange Commission on April 1, 2011)

Certificate of Designation, Preferences and Rights of Series A Preferred Stock (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed with the Securities and Exchange Commission on October 25, 2013)

Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to Current Report on Form 8-K filed with the Securities and Exchange Commission on June 29, 2021).

Certificate of Amendment to Amended and Restated Certificate of Incorporation of InspireMD, Inc.

(incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on May 25, 2016)

Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (incorporated by reference to Exhibit 3.5 to the Quarterly Report on Form 10-Q filed on August 9, 2016)

Certificate of Amendment to Amended and Restated Certificate of Incorporation of InspireMD, Inc.

2 unchanged sentences

Certificate of Amendment to Certificate of Designation of Preferences, Rights and Limitation of Series C Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on November 29, 2017)

Certificate of Designation of Preferences, Rights and Limitation of Series D Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on December 4, 2017)

Certificate of Amendment to Certificate of Designation of Preferences, Rights and Limitation of Series B Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on December 12, 2017)

Certificate of Amendment to Amended and Restated Certificate of Incorporation of InspireMD, Inc.

2 unchanged sentences

Certificate of Amendment to Certificate of Designation of Preferences, Rights and Limitation of Series D Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on April 3, 2018)

Certificate of Amendment to Amended and Restated Certificate of Incorporation of InspireMD, Inc., dated March 27, 2019 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on March 28, 2019)

Certificate of Amendment to Amended and Restated Certificate of Incorporation of InspireMD, Inc., dated April 14, 2021 (incorporated by reference to Exhibit 3.1 to Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 10, 2021)

Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to Amendment No.

3 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 5, 2013)

Rights Agreement dated as of October 22, 2013 between InspireMD, Inc.

and Action Stock transfer Corporation, as Rights Agent, including exhibits thereto (incorporated by reference to an exhibit to the Registration Statement on Form 8-A filed with Securities and Exchange Commission on October 25, 2013)

Form of Series B Warrant Agent Agreement and Form of Series B Warrant (incorporated by reference to Exhibit 4.3 to Amendment No.3 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 6, 2017)

Description of Securities (incorporated by reference to Exhibit 4.4 to our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 10, 2020)

Amended and Restated 2011 Umbrella Option Plan (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed with the Securities and Exchange Commission on November 4, 2011)

Form of Stock Option Award Agreement (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed with the Securities and Exchange Commission on April 6, 2011)

Description of Securities

Employment Agreement, by and between InspireMD Ltd.

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2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.11 to Registration Statement on Form S-8 filed with the Securities and Exchange Commission on June 5, 2014)

Employment Agreement, dated July 14, 2014, by and between InspireMD, Inc.

(incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed with the Securities and Exchange Commission on July 18, 2014)

Amendment to Employment Agreement, dated January 5, 2015, by and between InspireMD, Inc.

Barry, PhD (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed with the Securities and Exchange Commission on January 6, 2015)

First Amendment to Amended and Restated Employment Agreement, dated January 5, 2015, by and between InspireMD, Inc.

and Craig Shore (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K filed with the Securities and Exchange Commission on January 6, 2015)

Amendment Number Two to Employment Agreement, dated February 22, 2015, by and between InspireMD, Inc.

Barry, PhD (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed with the Securities and Exchange Commission on February 25, 2015)

First Amendment to the InspireMD, Inc.

2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on September 9, 2015)

Third Amendment to Employment Agreement, dated March 28, 2016, by and between InspireMD, Inc.

Barry, PhD (incorporated by reference to Exhibit 10.66 to the Annual Report on Form 10-K filed on March 28, 2016)

Form of $25,812.50 Underwritten Warrant (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed with the Securities and Exchange Commission on March 16, 2016)

Form of $32,265.63 Underwriter Warrant (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K filed with the Securities and Exchange Commission on March 16, 2016)

Form of $25,812.50 Private Placement Warrant (incorporated by reference to Exhibit 10.5 to Current Report on Form 8-K filed with the Securities and Exchange Commission on March 16, 2016)

Form of $32,265.63 Placement Agent Warrant (incorporated by reference to Exhibit 10.7 to Current Report on Form 8-K filed with the Securities and Exchange Commission on March 16, 2016)

Second Amendment to the InspireMD, Inc.

2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 25, 2016)

Fourth Amendment to Employment Agreement, dated June 6, 2016, by and between InspireMD, Inc.

and James Barry, Ph.D.

(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 7, 2016)

Warrant Agreement, dated June 13, 2016, by and between InspireMD, Inc.

and Hercules Capital, Inc.

(incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed on June 14, 2016)

Placement Agent Unit Purchase Option, dated June 7, 2016, issued to Dawson James Securities, Inc.

(incorporated by reference to Exhibit 10.12 to the Quarterly Report on Form 10-Q filed on August 9, 2016)

Warrant Agent Agreement and Form of Warrant, dated as of July 7, 2016, between InspireMD, Inc.

and Action Stock Transfer Corporation, as Warrant Agent (incorporated by reference to an exhibit to the Registration Statement on Form 8-A filed with Securities and Exchange Commission on July 26, 2016)

Second Amendment to Amended and Restated Employment Agreement, dated July 25, 2016, by and between InspireMD, Inc.

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2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on September 29, 2016)

Offer Letter, between InspireMD, Inc.

Director Offer Letter, between InspireMD, Inc.

and Thomas J.

Kester, dated September 6, 2016

Fifth Amendment to Employment Agreement, dated September 5, 2017, by and between InspireMD, Inc.

and James Barry, Ph.D.

(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on September 7, 2017)

Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on November 29, 2017)

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2, filed with the SEC on June 26, 2018 (File No.

Form of Series D Warrant (incorporated by reference to Exhibit A to Exhibit 4.3 to the Company’s Registration Statement on Form S-1, Amendment No.

2, filed with the SEC on June 26, 2018 (File No.

Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-1, Amendment No.

Form of Series D Warrant (incorporated by reference to Exhibit A to Exhibit 4.3 to the Company’s Registration Statement on Form S-1, Amendment No.

2, filed with the SEC on June 26, 2018 (File No.

Form of Underwriter Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-1, Amendment No.

2, filed with the SEC on June 26, 2018 (File No.

1 unchanged sentence

2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on October 26, 2018)

Amended and Restated Employment Agreement, dated February 4, 2019, by and between InspireMD, Inc.

(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on February 6, 2019)

Fifth Amendment to the InspireMD, Inc.

3 unchanged sentences

Form of Underwriter Warrant, dated April 8, 2019 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on April 8, 2019)

Form of Series E Warrant (incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-1, Amendment No.

1, filed with the SEC on September 13, 2019 (File No.

333-233432)).

Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-1, Amendment No.

Form of Series E Warrant (incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-1, Amendment No.

1, filed with the SEC on September 13, 2019 (File No.

333-233432)).

Form of Underwriter Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-1, Amendment No.

1, filed with the SEC on September 13, 2019 (File No.

333-233432)).

General Release and Severance Agreement, dated December 9, 2019, by and between the Company and James J.

(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 10, 2019)

Employment Agreement, dated December 9, 2019, by and between the Company and Marvin Slosman (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on December 10, 2019).

First Amendment to General Release and Severance Agreement, dated December 31, 2019, by and between the Company and James J.

(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on January 6, 2020).

First Amendment to Employment Agreement, dated December 31, 2019, by and between the Company and Marvin Slosman (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on January 6, 2020).

1 unchanged sentence

Restricted Stock Unit Award agreement, by and between the Company and Marvin Slosman (incorporated by reference to Exhibit 10.61 to the Annual Report on Form 10-K filed on March 10, 2020)

Form of Series F Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-1, Amendment No.

1, filed with the SEC on June 1, 2020 (File No.

333-238247)).

Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-1, Amendment No.

1, filed with the SEC on June 1, 2020 (File No.

Form of Underwriter Warrant (incorporated by reference to Exhibit 1.1 to the Company’s Registration Statement on Form S-1, Amendment No.

1, filed with the SEC on June 1, 2020 (File No.

Sales Agreement, dated July 28, 2020 (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K, filed with the SEC on July 28, 2020)

Form of Series G Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-1, Amendment No.

1, filed with the SEC on February 3, 2021 (File No.

Form of Underwriter Warrant (incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-1, Amendment No.

1, filed with the SEC on February 3, 2021 (File No.

Sixth Amendment to the InspireMD, Inc.

2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on August 31, 2020)

Seventh Amendment to the InspireMD, Inc.

2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on August 9, 2021)

First Amendment to Employment Agreement, dated November 8, 2021, by and between InspireMD, Inc.

and Marvin Slosman (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on November 8, 2021).

Fifth Amendment to Employment Agreement, dated November 4, 2021, by and between InspireMD, Inc.

and Craig Shore (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed on November 8, 2021).

Sixth Amendment to Employment Agreement, dated January 17, 2022, by and between InspireMD, Inc.

and Craig Shore.

2021 Equity Compensation Plan (Incorporated by reference to Annex A to the registrant’s Proxy Statement on Schedule 14A filed with the Commission on August 12, 2021).

Form of Nonqualified Stock Option Agreement for U.S.

employees under the 2021 Equity Incentive Plan

Form of Nonqualified Stock Option Agreement for European employees under the 2021 Equity Incentive Plan

Form of Nonqualified Stock Option Agreement for consultants under the 2021 Equity Incentive Plan

Form of Nonqualified Stock Option Agreement for Israeli employees under the 2021 Equity Incentive Plan

Form of Nonqualified Stock Option Agreement for U.S.

directors under the 2021 Equity Incentive Plan

Form of Restricted Stock Award Agreement for U.S.

employees under the 2021 Equity Incentive Plan

Form of Restricted Stock Award Agreement for U.S.

directors under the 2021 Equity Incentive Plan

Form of Restricted Stock Award Agreement for Israeli employees under the 2021 Equity Incentive Plan

Form of Restricted Stock Award Agreement for European employees under the 2021 Equity Incentive Plan

Form of Restricted Stock Unit Award Agreement under the 2021 Equity Incentive Plan

List of Subsidiaries (incorporated by reference to Exhibit 21.1 to Current Report on Form 8-K filed with the Securities and Exchange Commission on April 6, 2011)

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Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

following materials from the Company’s Annual Report on Form 10-K for the twelve months ended December 31, 2019, formatted

in XBRL (eXtensible Business Reporting Language), (i) Consolidated Balance Sheets, (ii)Consolidated Statements of Income,

(iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statement

of Stockholders’

Equity (Capital Deficiency) and (vi) Notes to Consolidated Financial Statements

following materials from the Company’s Annual Report on Form 10-K for the twelve months ended December 31, 2021, formatted

in inline XBRL (eXtensible Business Reporting Language), (i) Consolidated Balance Sheets, (ii)Consolidated Statements of Income,

(iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statement of

Stockholders’ Equity (Capital Deficiency) and (vi) Notes to Consolidated Financial Statements

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Page Interactive Data File (embedded within the Inline XBRL document)

Filed herewith.

Management contract or compensatory plan or arrangement.

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report

to be signed on its behalf by the undersigned, thereunto duly authorized.

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized.

March 7, 2022

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and Chief Executive Officer

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf

of the registrant and in the capacities and on the dates indicated.

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the

registrant and in the capacities and on the dates indicated.

Marvin Slosman

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Campbell Rogers, M.D.

Kathryn Arnold

INSPIREMD, INC.

FINANCIAL STATEMENTS

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OF AND FOR THE YEAR ENDED DECEMBER 31, 2021

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB name:

Kesselman & Kesselman C.P.A.s and PCAOB ID:

FINANCIAL STATEMENTS:

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have audited the accompanying consolidated balance sheets of InspireMD, Inc.

and its subsidiaries (the “Company”) as

of December 31, 2020 and 2019, and the related consolidated statements of operations, changes in equity and cash flows for the

years then ended , including the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the

Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended in conformity

with accounting principles generally accepted in the United States of America.

in Accounting Principle

discussed in Note 2(g) to the consolidated financial statements, the Company changed the manner in which it accounts for leases

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an

opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered

with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to

the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and

Exchange Commission and the PCAOB.

and its subsidiaries (the “Company”)

as of December 31, 2021 and 2020, and the related consolidated statements of operations, changes in equity and cash flows for the years

then ended, including the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion,

the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December

31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles

generally accepted in the United States of America.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance

with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB.

Those standards

require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements

are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to

perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Those standards require

that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material

misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal

control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial

reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial

Accordingly, we express no such opinion.

1 unchanged sentence

due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis,

evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the

accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the

consolidated financial statements.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Audit Matters

audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated

or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the

consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

We determined

there are no critical audit matters.

audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required

to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial

statements and (ii) involved our especially challenging, subjective, or complex judgments.

We determined there are no critical audit

Kesselman&Kesselman

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member of PricewaterhouseCoopers International Limited

have served as the Company’s auditor since 2010.

BALANCE SHEETS

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Cash and cash equivalents

Short-term bank deposits

Accounts receivable:

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500,000 shares authorized at December 31, 2021 and 2020;

17,303 shares issued and outstanding at December 31, 2020 and 2019, respectively

0 and 17,303 shares issued and outstanding at December 31, 2021 and 2020, respectively

Preferred C shares, par value $ 0.0001 per share;

1 unchanged sentence

1,718 and 2,343 shares issued and outstanding at December 31, 2021 and 2020, respectively

Preferred stock, value

Additional paid-in capital

1 unchanged sentence

Total liabilities and equity

* Represents an amount

accompanying notes are an integral part of the consolidated financial statements.

2 unchanged sentences

Year Ended December 31,

REVENUES (2020 - net of settlement payment of $580, see note 6)

REVENUES (2020 - net of settlement payment of $ 580 , see note 6 a)

COST OF REVENUES

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Additional paid-in

BALANCE as of December 31, 2018

Issuance of common shares, warrants, pre-funded warrants and exercise of pre-funded warrants, net of $1,177 issuance costs

BALANCE as of January 1, 2020

$ ( 157,632 )

Exercise of pre-funded warrants

Settlement of restricted stock units in shares of common stock

Issuance of common shares, including at the market offering net of $ 1,110 issuance costs

Exercise of Warrants F

Exercise of Warrants G

Exercise of Warrants G, shares

Exercise of Unit Purchase Option

Conversion of Series B Convertible Preferred Stock to common shares

Conversion of Series B Convertible Preferred Stock to common shares, shares

Conversion of Series C Convertible Preferred Stock to common shares

Share-based compensation related to restricted stock, restricted stock units and stock options award, net of forfeitures of 3,717 shares

Round up of shares due to reverse stock split effectuated on April 26, 2021

Round up of shares due to reverse stock split effectuated on

April 26, 2021, shares

BALANCE as of December 31, 2020

Represents an amount less than $1

$ ( 168,176 )

* Represents an amount

STATEMENTS OF CHANGES IN EQUITY

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BALANCE as of December 31, 2020

Exercise of pre-funded warrants

Settlement of restricted stock units in shares of common stock

$ ( 168,176 )

Issuance of common shares, including at the market offering net of $ 2,024 issuance costs

Issuance of common shares, including at the market offering net

of issuance costs

Exercise of Warrants F

Exercise of Unit Purchase Option

Exercise of Warrants G

Conversion of Series B Convertible Preferred Stock to common shares

Conversion of Series C Convertible Preferred Stock to common shares

Share-based compensation related to restricted stock, restricted stock units and stock options award, net of forfeitures of 20,822 shares

Share-based compensation related to restricted stock, restricted

stock units and stock options award, net of forfeitures

Round up of shares due to reverse stock split effectuated on April 26, 2021

BALANCE as of December 31, 2021

Represents an amount less than $1

* Represents an amount

STATEMENTS OF CASH FLOWS

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Depreciation and amortization

Loss from sale of property, plant and equipment

Loss (gain) from sale of property, plant and equipment

Change in liability for employees rights upon retirement

Non cash financial expense (income)

Net change in operating lease assets and liabilities

Other financial expense (income)

Change in operating right of use asset and operating leasing liability

Noncash interest income on short-term deposits

Share-based compensation expenses

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Decrease (increase) in other receivables

Increase in inventory

Decrease in trade payables

Increase in other payables

Decrease (increase) in inventory

Increase (decrease) in trade payables

Increase (decrease) in other payables

Net cash used in operating activities

2 unchanged sentences

Proceeds from sale of property, plant and equipment

Amounts withdrawn in respect of employee rights upon retirement, net

Investment in short-term bank deposits

Withdrawal from short-term bank deposits

Amounts funded in respect of employee rights upon retirement, net

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of shares and warrants and exercise of Pre-Funded

Warrants and unit purchase option, net of $1,110 and $1,177 issuance costs, respectively

Proceeds from issuance of shares and warrants and exercise of Pre-Funded Warrants and unit purchase option, net of $ 2,024 and $ 1,110 issuance costs, respectively

Net cash provided by financing activities

9 unchanged sentences

1 - DESCRIPTION OF BUSINESS

Inc., a Delaware corporation (the “Company”), together with its subsidiaries, is a medical device company focusing

on the development and commercialization of its proprietary MicroNet™

stent platform technology for the treatment of

complex vascular and coronary disease.

MicroNet, a micron mesh sleeve, is wrapped over a stent to provide embolic protection

in stenting procedures.

Company’s carotid product (CGuard™

EPS) combines MicroNet and a self-expandable nitinol stent in a single device

InspireMD, Inc., a Delaware corporation (the “Company”), together with its subsidiaries, is a medical device company

focusing on the development and commercialization of its proprietary MicroNet™ stent platform technology for the treatment of complex

vascular and coronary disease.

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

The Company’s carotid product (CGuard™ EPS) combines MicroNet and a self-expandable nitinol stent in a single device

to treat carotid artery disease.

Company’s coronary product combining MicroNet and a bare-metal stent (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 surgery).

Company markets its products through distributors in international markets, mainly in Europe.

of the date of issuance of the consolidated financial statements, the Company has the ability to fund its planned operations

for at least the next 12 months.

However, the Company expects to continue incurring losses and negative cash flows from operations

until its products (primarily CGuard™

EPS) reach commercial profitability.

Therefore, in order to fund the Company’s

operations until such time that the Company can generate substantial revenues, the Company may need to raise additional funds.

the year ended December 31, 2020, in an effort to contain and mitigate the spread of

COVID-19, many countries have imposed unprecedented restrictions on travel, quarantines

and other public health safety measures.

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 the best of our knowledge, most European countries in which

we operate are 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 a

continued fluctuations in sales of our products for the upcoming periods.

Company’s coronary product combining MicroNet and a bare-metal stent (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

As a result of declining sales of the MGuard Prime EPS, we intend to phase out future sales of our MGuard Prime EPS in 2022.

The Company markets its products through distributors in international markets, mainly in Europe.

of the date of issuance of the consolidated financial statements, the Company has the ability to fund its planned operations for at least

the next 12 months.

However, the Company expects to continue incurring losses and negative cash flows from operations until its products

(primarily CGuard™ EPS) reach commercial profitability.

Therefore, in order to fund the Company’s operations until such time

that the Company can generate substantial revenues, the Company may need to raise additional funds.

COVID-19 Pandemic

COVID-19 global pandemic has led governments and authorities around the globe to take various precautionary measures in order to limit

the spread of COVID-19, including government-imposed quarantines, lockdowns, and other public health safety measures.

We experienced

a significant COVID-19 related impact on our financial condition and results of operations, primarily during the year ended December

31, 2020, which we primarily attribute to the postponement of CGuard EPS procedures (non-emergency procedures), as hospitals have shifted

resources to patients affected by COVID-19.

To the best of our knowledge, the European countries in which we operate reinstated non-emergency

However, new COVID-19 variants, and potentially increasing infection rates make the current COVID-related environment highly

volatile and uncertain and we anticipate that the continuation of the pandemic and related restrictions and safety measures will likely

result in continued fluctuations in sales of our products and potentially enrollments in our studies as well as potential disruptions

to our supply chain for the upcoming periods.

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

2 - SIGNIFICANT ACCOUNTING POLICIES

preparation of financial statements in conformity with U.S.

Use of estimates

The 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 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

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.

currency of the primary economic environment in which the operations of the Company and its subsidiaries are conducted is

dollar (“$”

or “dollar”).

Accordingly, the functional currency of the Company and its subsidiaries

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

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

Functional currency

The currency of the primary economic environment in which the operations of the Company and its subsidiaries are conducted is the

dollar (“$” or “dollar”).

Accordingly, the functional currency of the Company and its subsidiaries is the

dollar figures are determined as follows:

transactions and balances originally denominated in dollars are presented in their

original amounts.

Balances in foreign currencies are translated into dollars using historical and current exchange rates for

non-monetary and monetary balances, respectively.

The resulting translation gains or losses are recorded as financial income

or expense, as appropriate.

For transactions reflected in the statements of operations in foreign currencies, the exchange

rates at transaction dates are used.

Depreciation and changes in inventories and other changes deriving from non-monetary

items are based on historical exchange rates.

of consolidation

transactions and balances originally denominated in dollars are presented in their original

Balances in foreign currencies are translated into dollars using historical and current exchange rates for non-monetary and

monetary balances, respectively.

The resulting translation gains or losses are recorded as financial income or expense, as appropriate.

For transactions reflected in the statements of operations in foreign currencies, the exchange rates at transaction dates are used.

and changes in inventories and other changes deriving from non-monetary items are based on historical exchange rates.

Principles of consolidation

consolidated financial statements include the accounts of the Company and of its subsidiaries.

Intercompany transactions and

balances have been eliminated upon consolidation.

and cash equivalents

Company considers all highly liquid investments, which include short-term bank deposits (up to three months from date of deposit),

that are not restricted as to withdrawal or use, to be cash equivalents.

Intercompany transactions and balances

have been eliminated upon consolidation.

Cash and cash equivalents

Company considers all highly liquid investments, which include short-term bank deposits (up to three months from date of deposit), that

are not restricted as to withdrawal or use, to be cash equivalents.

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

2 - SIGNIFICANT ACCOUNTING POLICIES (continued):

Concentration

of credit risk and allowance for doubtful accounts

instruments that may potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents,

which are deposited in major financially sound institutions in the U.S, Israel and Germany, and trade accounts receivable.

The Company’s trade accounts receivable is derived from revenues earned from customers from various countries.

performs ongoing credit evaluations of its customers’

financial condition and, requires no collateral from its customers.

The Company also has a credit insurance policy for some of its customers.

The Company maintains an allowance for doubtful

accounts receivable based upon the expected ability to collect the accounts receivable.

The Company reviews its 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 the Company determines that a specific customer is unable to meet its financial

obligations to the Company, the Company provides 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”.

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

basis) or net realizable value.

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

The Company regularly evaluates the carrying value of its inventory and when, based on such evaluation, factors indicate that impairment has occurred, the Company impairs the inventories’

carrying value.

The fair value of the Company’s financial instruments

approximates their carrying values.”

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.

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 periods.

The new standard provides a number of optional practical expedients in

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,

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

The Company elected the short-term lease

recognition exemption for all leases that qualify.

This means, for those leases that qualify, the Company 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 lease term.

new standard had a material effect on the Company’s 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 leases;

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.

The Company also recognized

corresponding ROU assets of approximately $1.2 million.

Lease terms may include options to extend or terminate the lease when

the Company is reasonably certain that the extension option will be exercised or termination option will not be exercised.

For Operating 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.

new standard also provides practical expedients for an entity’s ongoing accounting.

plant and equipment

Short-term bank deposits

deposits with original maturities of more than three months but less than one year are presented as part of short-term bank deposits.

Deposits are presented at their cost which approximates market values including accrued interest.

Interest on deposits is recorded as

financial income.

Concentration of credit risk and allowance for doubtful accounts

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

deposited in major financially sound institutions in the U.S, Israel and Germany, and trade accounts receivable.

The Company’s

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

The Company performs ongoing credit

evaluations of its customers’ financial condition and, requires no collateral from its customers.

The Company also has a credit

insurance policy for some of its customers.

The Company maintains an allowance for doubtful accounts receivable based upon the expected

ability to collect the accounts receivable.

The Company reviews its 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 the Company

determines that a specific customer is unable to meet its financial obligations to the Company, the Company provides 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.

The Company’s

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

The Company regularly

evaluates the carrying value of its inventory and when, based on such evaluation, factors indicate that impairment has occurred, the

Company impairs the inventories’ carrying value.

leases are included in operating lease right-of-use (“ROU”) assets, Accounts payable and accruals - Other, and operating

lease liabilities.

ROU assets represent Company’s right to use an underlying asset for the lease term and lease liabilities represent

obligation to make lease payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at the lease commencement

date based on the present value of lease payments over the lease term.

In determining the present value of lease payments, the Company

uses the incremental borrowing rate based on the information available at the lease commencement date as the rate implicit in the lease

is not readily determinable.

The determination of the incremental borrowing rate requires management judgment based on information available

at lease commencement.

The lease terms may include periods covered by options to extend the lease when it is reasonably certain that

the Company will exercise such options, and periods covered by options to terminate the lease when it is reasonably certain that the

Company will not exercise such options.

Operating lease cost is recognized on a straight-line basis over the lease term.

Lease agreements

that include lease and non-lease components are accounted for as a single lease component.

The Company elected the short-term lease recognition

exemption for leases with a lease term of 12 months or less.

Property, plant and equipment

plant and equipment are stated at cost, net of accumulated depreciation and amortization.

Depreciation is calculated using

the straight-line method over the estimated useful lives of the related assets:

over three years for computers and other electronic

equipment, and seven to fifteen years for office furniture and equipment and machinery and equipment (mainly seven years).

Leasehold improvements are amortized on a straight-line basis over the term of the lease, which is shorter than the estimated

life of the improvements.

in value of long-lived assets

Company tests long-lived intangible and tangible assets for impairment whenever events or circumstances present an indication

of impairment.

If the sum of expected future cash flows (undiscounted and without interest charges) of the long-lived assets

is less than the carrying amount of such assets, an impairment would be recognized, and the assets would be written down to

their estimated fair values, based on expected future discounted cash flows.

Depreciation is calculated using the straight-line

method over the estimated useful lives of the related assets:

over three years for computers and other electronic equipment, and seven

to fifteen years for office furniture and equipment and machinery and equipment (mainly seven years ).

Leasehold improvements are amortized

on a straight-line basis over the term of the lease, which is shorter than the estimated life of the improvements.

Impairment in value of long-lived assets

Company tests long-lived intangible and tangible assets for impairment whenever events or circumstances present an indication of impairment.

If the sum of expected future cash flows (undiscounted and without interest charges) of the long-lived assets is less than the carrying

amount of such assets, an impairment would be recognized, and the assets would be written down to their estimated fair values, based

on expected future discounted cash flows.

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

2 - SIGNIFICANT ACCOUNTING POLICIES (continued):

contract with a customer exists only when:

Revenue recognition

A 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) the Company can identify each party’s rights regarding the distinct goods or services to

be transferred (“Performance Obligations”), 3) the Company 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 the Company 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 the Company expects to be entitled in exchange for Performance

Obligations upon transfer of control to the customer, excluding sales taxes.

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

the Company has a present right to payment and the customer has legal title, and risk and rewards of ownership are

obtained by the customer.

This occurs when products are shipped.

Company recognizes the incremental costs of obtaining contracts as an expense since the amortization period of the assets

that the Company otherwise would have recognized is one year or less.

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

(“Performance Obligations”), 3) the Company 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 the Company 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 the Company expects 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 the Company

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

occurs when products are shipped.

Company recognizes the incremental costs of obtaining contracts as an expense since the amortization period of the assets that the Company

otherwise would have recognized is one year or less.

The costs are recorded under selling and marketing expenses.

Disaggregated revenue is disclosed in Note 10.

Disaggregated revenue

is disclosed in Note 10.

Company recognizes revenue net of value added tax (VAT).

and development costs

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

Company has equity incentive plans under which the Company grants equity awards, including stock options, restricted stock

and restricted stock units (“RSUs”).

Employee equity awards are classified as equity awards and accounted for

using the grant-date fair value method.

The Company determines compensation expense associated with Restricted Stock and RSUs

based on the fair value of our common stock on the date of grant.

The fair value of option awards is estimated using the Black-Scholes

valuation model and expensed over the requisite service period.

Research and development costs

and development costs, including the costs of our US based clinical trial costs of approximately $ 2,037,000 , are charged to the

statement of operations as incurred.

Share-based compensation

The Company has equity incentive plans under which the Company grants equity awards, including stock options, restricted stock

and restricted stock units (“RSUs”).

Employee equity awards are classified as equity awards and accounted for using the grant-date

fair value method.

The Company determines compensation expense associated with Restricted Stock and RSUs based on the fair value of our

common stock on the date of grant.

The fair value of option awards is estimated using the Black-Scholes valuation model and expensed

over the requisite service period.

The Company elected to account for forfeitures as they occur.

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

using the accelerated multiple option approach.

tax positions

Company follows a two-step approach to recognizing and measuring uncertain tax positions.

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

accelerated multiple option approach.

Uncertain tax positions

The Company follows a two-step approach to recognizing and measuring uncertain tax positions.

The first step is to evaluate the

tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not

that the position will be sustained on audit.

If under the first step a tax provision is assessed to be more likely than not

of being sustained on audit, the second step is performed, under which the tax benefit is measured as the largest amount that

is more than 50% likely to be realized upon ultimate settlement.

Such liabilities are classified as long-term, unless the

liability is expected to be resolved within twelve months from the balance sheet date.

The Company’s policy is to include

interest related to unrecognized tax benefits within “Financial expenses - net”.

taxes are determined utilizing the “asset and liability”

method based on the estimated future tax effects of differences

tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position

will be sustained on audit.

If under the first step a tax provision is assessed to be more likely than not of being sustained on audit,

the second step is performed, under which the tax benefit is measured as the largest amount that is more than 50% likely to be realized

upon ultimate settlement.

Such liabilities are classified as long-term, unless the liability is expected to be resolved within twelve

months from the balance sheet date.

The Company’s policy is to include interest related to unrecognized tax benefits within “Financial

expenses - net”.

Deferred income taxes

taxes are determined utilizing the “asset and liability” method based on the estimated future tax effects of differences

between the financial accounting and tax bases of assets and liabilities under the applicable tax laws, and on tax rates anticipated

to be in effect when the deferred taxes are expected to be paid or realized.

The Company assesses realization of deferred

income tax assets and, based on all available evidence, concludes whether it is more likely than not that the net deferred

income tax assets will be realized.

A valuation allowance is provided for the amount of deferred income tax assets not considered

to be realizable.

The Company assesses realization of deferred income tax

assets and, based on all available evidence, concludes whether it is more likely than not that the net deferred income tax assets will

A valuation allowance is provided for the amount of deferred income tax assets not considered to be realizable.

Company may incur an additional tax liability in the event of intercompany dividend distributions by its subsidiaries.

additional tax liability in respect of these foreign subsidiaries has not been provided for in these financial statements

as it is the Company’s policy to permanently reinvest the subsidiaries’

earnings and to consider distributing

dividends only in connection with a specific tax opportunity that may arise.

that would apply in the event of disposal of investments in a foreign subsidiary have not been taken into account in computing

the deferred taxes, as it is the Company’s intention to hold, and not to realize, these investments.

Such additional

tax liability in respect of these foreign subsidiaries has not been provided for in these financial statements as it is the Company’s

policy to permanently reinvest the subsidiaries’ earnings and to consider distributing dividends only in connection with a specific

tax opportunity that may arise.

that would apply in the event of disposal of investments in a foreign subsidiary have not been taken into account in computing the deferred

taxes, as it is the Company’s intention to hold, and not to realize, these investments.

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

1 unchanged sentence

related to advertising and promotion of products are charged to sales and marketing expense as incurred.

Advertising expenses

were approximately $163,000 and $262,000 for the years ended December 31, 2020 and 2019, respectively.

loss per share

and diluted net loss per share is computed by dividing the net loss for the period attributable

to common stock by the weighted average number of shares of common stock outstanding

during the period, including 922,720 and 151,884 weighted average shares of common stock

issuable to holders of Series B Convertible Preferred Stock for the years

ended December 31, 2020 and 2019, respectively, (since they are convertible based on

passage of time) and 72,493 weighted average shares of common stock issuable to holders

of unexercised Pre-Funded Warrants for the year ended December 31, 2019.

total number of shares of common stock related to outstanding options, warrants, restricted stock, restricted stock units,

Series C Convertible Preferred Stock and placement agent units excluded from the calculations of diluted loss per share

were 32,493,268 and 4,707,230 for the years ended December 31, 2020 and 2019, respectively.

Advertising expenses were approximately

$ 290,000 and $ 163,000 for the years ended December 31, 2021 and 2020, respectively.

Net loss per share

and diluted net loss per share is computed by dividing the net loss for the period attributable to common stock by the weighted average

number of shares of common stock outstanding during the period, including 11,696 and 61,515 weighted average shares of common stock issuable

to holders of Series B Convertible Preferred Stock for the years ended December 31, 2021 and 2020, respectively.

The total number

of shares of common stock related to outstanding options, warrants, restricted stock, restricted stock units, Series C Convertible Preferred

Stock and placement agent units excluded from the calculations of diluted loss per share were 2,840,179 and 2,166,218 for the years ended

December 31, 2021 and 2020, respectively.

Segment reporting

Company has one operating and reportable segment.

value measurement

Fair value measurement

Company measures fair value and discloses 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:

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.

fair value hierarchy gives the highest priority to Level 1 inputs.

The fair 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, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize

the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.

The fair value hierarchy gives the lowest priority to Level

determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of

unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.

has no financial instruments measured carried at fair value in each reporting period.

The fair value of the Company’s financial

instruments approximates their carrying values.

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

2 - SIGNIFICANT ACCOUNTING POLICIES (continued):

accounting pronouncements effective in future periods

Issued accounting pronouncements effective in future periods

Instruments - Credit Losses

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

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

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, 2022.

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.

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

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, 2022.

Under the current SEC definitions, the Company meets the definition of an SRC 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.

The Company is 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.

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.

The Company is 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.

In November 2021, the FASB issued ASU 2021-10 “Government Assistance (Topic

832)”, which requires annual disclosures that increase the transparency of transactions involving government grants, including

(1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on

an entity’s financial statements.

The amendments in this update are effective for financial statements issued for annual periods

beginning after December 15, 2021.

However, it is not expected to have a material impact on the consolidated financial results of

operations, financial position or cash flows.

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

1 unchanged sentence

of assets, grouped by major classifications, is as follows:

OF PROPERTY PLANT AND EQUIPMENT

in thousands)

Computer equipment

Office furniture and equipment

Machinery and equipment

Leasehold improvements

Less - accumulated depreciation and amortization

Net carrying amount

furniture and equipment

and equipment

plant and equipment, gross

- accumulated depreciation and amortization

carrying amount

and amortization expenses totaled approximately $ 161,000 and $ 151,000 for the years ended December 31, 2021 and 2020, respectively.

4 - LIABILITY FOR EMPLOYEES RIGHT UPON RETIREMENT

labor law generally requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain

other circumstances.

to section 14 of the Israeli Severance Compensation Act, 1963, some of the Company’s employees are entitled to have monthly

deposits, at a rate of 8.33% of their monthly salary, made in their name with insurance companies.

Payments in accordance with

section 14 relieve the Company from any future severance payments to these employees.

labor law generally requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain other

circumstances.

to section 14 of the Israeli Severance Compensation Act, 1963, some of the Company’s employees are entitled to have monthly deposits,

at a rate of 8.33 % of their monthly salary, made in their name with insurance companies.

Payments in accordance with section 14 relieve

the Company from any future severance payments to these employees.

severance pay liability of the Company for the rest of its Israeli employees, which reflects the undiscounted amount of the liability,

2 unchanged sentences

policies and by regular deposits with recognized severance payment funds.

The Company may only withdraw funds previously deposited

for savings in connection with the payment of severance.

The severance pay expenses were approximately $276,000 and $197,000

for the years ended December 31, 2020 and 2019, respectively.

The Company may only withdraw funds previously deposited for

savings in connection with the payment of severance.

The severance pay expenses were approximately $ 265,000 and $ 276,000 for the years

ended December 31, 2021 and 2020, respectively.

contribution plan expenses were approximately $ 415,000 and $ 339,000 for the years ended December 31, 2021 and 2020, respectively.

Company expects contribution plan expenses in 2021 to be approximately $346,000.

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

5 – LEASE AGREEMENTS

Company’s Israeli subsidiary has a lease agreement for a facility in Israel, which expires on December 31, 2020 with

an option to extend the agreement for two additional years until December 31, 2022 under the terms stipulated in the agreement.

The company exercised the Option Period as estimated.

In addition, the Company amended the agreement mentioned above which

include a new option period for two additional years until December 31, 2024 under the terms stipulated in the agreement,

1) The Company’s Israeli subsidiary has a lease agreement for a facility in Israel, which expires on December 31, 2022 with an option to extend the agreement for two additional years until December 31, 2024 under the terms stipulated in the agreement.

The Option Period was taken in consideration when calculating the operating lease right of use assets and liabilities.

In addition, the Company entered into another amendment to the lease agreement for a lease of additional space in the facility,

the additional space amendment was taken in consideration when calculating the operating lease right of use assets and

Company leases its motor vehicles under operating lease agreements.

lease cost for the year ended December 31, 2020 was comprised of the following:

Twelve months ended

Operating lease expense

Short-term lease expense

In addition, the Company entered in June 2021 into another amendment to the lease agreement for a lease of additional space in the facility.

This amendment was added to the ROU and the Lease liability.

The Company leases its motor vehicles under operating lease agreements.

Operating lease cost for the years ended December 31, 2021 and 2020 was $ 476,000 and $ 370,000 respectively.

information related to leases are as follows:

Operating lease right-of-use assets

Current Operating lease liabilities

Non-current operating lease liabilities

Operating cash flows from operating leases (cash paid in thousands)

Weighted Average Remaining Lease Term

Weighted Average Discount Rate

SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES

lease right-of-use assets

Operating lease liabilities

operating lease liabilities

cash flows from operating leases (cash paid in thousands)

Average Remaining Lease Term

Average Discount Rate

of lease liabilities are as follows:

SCHEDULE OF MATURITIES OF LEASE LIABILITIES

in thousands)

Total lease payments

Less imputed interest

lease payments

imputed interest

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

6 - COMMITMENTS AND CONTINGENT LIABILITIES :

In July 2016,

a service provider filed a suit seeking damages from the Company’s subsidiary amounting to $1,967,822.

The Company’s

subsidiary and the plaintiff have entered into a confidential settlement agreement in the amount of $600,000, and on April 24,

2019, the parties filed a stipulation of dismissal, dismissing all claims in this action.

On April 25, 2019, the court denied as

moot all pending motions.

The related increase in provision of $354,000 was recorded to “Research and development expense”

within the Consolidated Statements of Operations for the year months ended December 31, 2019.

July 2019, a former distributor filed a suit seeking damages from the Company’s subsidiary for pre-paid goods subject to

the voluntary field action (from April 2014) amounting to €1,830,000 (which is approximately $2.0 million), or alternatively

€1,024,000 (which is approximately $1.1 million).

In January 2021, we executed a Mediation Agreement with the former

distributor, pursuant to which the former distributor agreed to release the Company from all claims stated in the Complaint in

exchange for a payment of $580,000.

Accordingly, the amount of $580,000 was recorded as a debit to revenue.

July 28, 2020, we entered into a settlement agreement and release with the 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.

In July 2019, a former distributor filed a suit seeking damages from the Company’s subsidiary for pre-paid goods subject to the voluntary field action (from April 2014) amounting to € 1,830,000 (which is approximately $ 2.0 million), or alternatively € 1,024,000 (which is approximately $ 1.1 million).

In January 2021, we executed a Mediation Agreement with the former distributor, pursuant to which the former distributor agreed to release the Company from all claims stated in the Complaint in exchange for a payment of $ 580,000 .

Accordingly, the amount of $ 580,000 was recorded as a debit to revenue in the year ended December 31, 2020.

On July 28, 2020, we entered into a settlement agreement and release with the 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 $ 7.43 ,

the exercise price per share of warrants to purchase 18,277

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.

had existing exercise prices per share ranging from $ 2,812.5

and a weighted average exercise price per

share of $ 109.8 .

All other terms of those warrants will remain unchanged.

The related increase in expenses of $400,000 was recorded to “General

and Administrative expense”

within the Consolidated Statements of Operations.

July 2020, a former senior employee of InspireMD GmbH filed a statement of claim at the Munich Labor Court, seeking confirmation

of the court that the notice of termination is not effective.

The related increase in expenses of $ 400,000

was recorded to “General and Administrative

expense” within the Consolidated Statements of Operations.

In July 2020, a former senior employee of InspireMD GmbH filed a statement of claim at the Munich Labor Court, seeking confirmation of the court that the notice of termination is not effective.

On November 10, 2020, we entered into a settlement agreement.

consideration for the final release, we paid the former senior employee 25,000 Eur (approximately $30,000) which was recorded

to “Selling and marketing expense”

within the Consolidated Statements of Operations.

Company’s common stock are listed on the NYSE American.

March 27, 2019, the Company filed with the Secretary of State of Delaware a Certificate of Amendment to the Company’s Amended

and Restated Certificate of Incorporation to effect a one-for-fifty reverse stock split of its common stock, par value $0.0001

per share, effective as of March 29, 2019, which decreased the number of issued and outstanding shares of common stock and restricted

stock as of December 31, 2018 from 38.4 million shares to 769 thousand shares.

As consideration for the final release, we paid the former senior employee 25,000 Eur (approximately $ 30,000 ) which was recorded to “Selling and marketing expense” within the Consolidated Statements of Operations.

Distribution Agreement with Chinese Partner

February 3, 2021, the Company entered into a distribution agreement (the “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 the Company’s products in China, followed by an eight-year exclusive distribution right to sell the Company’s

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, the agreement stipulates that if the Distributor fails to obtain the Regulatory Approvals by the time stipulated in the agreement

due to the failure of the clinical trials, and this Agreement was terminated as a result of such failure to obtain Regulatory Approvals,

InspireMD shall reimburse Distributor in an amount which is 50 % of Distributor’s direct out of pocket costs to 3rd parties for

conducting the clinical trials, which reimbursement will not exceed USD 1,000,000 .

The financial statements include a liability, based

on 50 % of the Distributor costs incurred up to December 31, 2021.

The liability for the year ended December 31, 2021 is immaterial.

Note 7 for details regarding an investment transaction with one of the Chinese parties to the Distribution Agreement.

Share capital

Company’s 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 under the symbol, “NSPR.” The Company’s warrants that previously

traded on the NYSE American were approved for listing on Nasdaq, and such warrants began trading on Nasdaq on June 8, 2021.

April 19, 2021, the Company filed with the Secretary of State of Delaware a Certificate of Amendment to the Company’s Amended and

Restated Certificate of Incorporation to effect a one-for-fifteen reverse stock split of its common stock , par value $ 0.0001 per share,

effective as of April 26, 2021.

related share and per share data have been retroactively applied to the financial statements and their related notes for all periods

1 unchanged sentence

7 – EQUITY (continued):

April 8, 2019, the Company closed an underwritten public offering of 486,957 shares of the Company’s common stock at the

offering price to the public of $5.00 per share.

The Company received net proceeds of approximately $2 million from the offering,

after deducting underwriter discounts and commissions and other fees and expenses payable by the Company.

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.

The Company received net proceeds of approximately

$47,000 from the exercise of the over-allotment option.

connection with the offering, the Company issued to the underwriter warrants to purchase up to 34,955 shares of common stock,

or 7% of the shares sold in the offering, including the shares issued pursuant to the over-allotment option (the “April

2019 Underwriter Warrants”).

The April 2019 Underwriter Warrants are exercisable at any time and from time to time, in whole

or in part, following the date of issuance and ending on April 4, 2024, at an exercise price of $6.25 per share (125% of the offering

price to the public per share).

execution of the underwriting agreement, the respective conversion price of the outstanding shares of Series B Convertible Preferred

Stock and Series C Convertible Preferred Stock was reduced to $5.00 pursuant to the anti-dilution adjustment provisions of the

Series B Convertible Preferred Stock and of the Series C Convertible Preferred Stock, and the number of shares of common stock

issuable upon conversion of the Series B Convertible Preferred Stock and the Series C Convertible Preferred Stock had increased

aggregate of 133,233 additional shares of common stock issuable upon conversion of the Series B Convertible Preferred Stock,

including the payment of the cumulative dividends accrued thereunder in common stock, based on 17,303 shares of Series B Convertible

Preferred Stock outstanding as of April 4, 2019.

aggregate of 50,708 additional shares of common stock issuable upon conversion of the Series C Convertible Preferred Stock,

based on 59,423 shares of Series C Convertible Preferred Stock outstanding as of April 4, 2019.

September 19, 2019, the Company entered into an underwriting agreement relating to an

underwritten public offering (the “September 2019 Offering”) of (i) 539,000

common units (“2019 Common Units”), with each 2019 Common Unit being comprised

of one share of the Company’s common stock and one Series E warrant (collectively,

the “Series E Warrants”) to purchase one share of common stock and (ii) 2,238,777

pre-funded units (“2019 Pre-Funded Units”), with each 2019 Pre-Funded Unit

being comprised of one pre-funded warrant (collectively, the “2019 Pre-Funded Warrants”)

to purchase one share of common stock and one Series E Warrant, which closed on September

The offering price to the public was $1.80 per 2019 Common Unit and $1.79 per

2019 Pre-Funded Unit.

In connection with this public offering, on September 24, 2019,

the underwriter partially exercised its over-allotment option and purchased an additional

Series E Warrants to purchase 194,444 shares of common stock at a purchase price of $0.01

per Series E Warrant.

Series E Warrants included in the 2019 Common Units and the 2019 Pre-Funded Units are immediately exercisable at a price

of $1.80 per share of common stock, subject to adjustment in certain circumstances, and expire five years from the date

2019 Pre-Funded Warrant contained in a 2019 Pre-Funded Unit is exercisable for one share

of our common stock at an exercise price of $0.01 per share.

The 2019 Pre-Funded Warrants

are immediately exercisable and may be exercised at any time until all of the 2019 Pre-Funded

Warrants are exercised in full.

connection with the offering, the Company issued to the underwriter warrants to purchase up to 194,444 shares of common

stock, or 7% of the shares sold in the offering, including the number of shares of common stock issuable upon exercise

of the 2019 Pre-Funded Warrants sold in the offering (the “September 2019 Underwriter Warrants”).

The September

2019 Underwriter Warrants are exercisable at any time and from time to time, in whole or in part, following the date of

issuance and ending on September 19, 2024, at an exercise price of $2.25 per share (125% of the offering price to the

public per 2019 Common Unit).

to the full ratchet anti-dilution adjustment provisions in the respective certificate of designation for the Company’s

Series B Convertible Preferred Stock and Series C Preferred Stock, the conversion price of the outstanding shares of the

Series B Convertible Preferred Stock and the Series C Preferred Stock was reduced to $1.80 per share, effective as of

the date of the underwriting agreement entered for the September 2019 Offering, and the number of shares of common stock

issuable upon conversion of the Series B Preferred Stock and the Series C Preferred Stock had increased as follows:

aggregate of 355,288 additional shares of common stock upon conversion of the Series B Preferred Stock and as payment of the

dividends thereunder in common stock, based on 17,303 shares of Series B Preferred Stock outstanding as of September 19, 2019.

aggregate of 84,253 additional shares of common stock upon conversion of the Series C Preferred Stock, based on 37,025 shares

of Series C Preferred Stock outstanding as of September 19, 2019.

June 5, 2020, the Company closed an underwritten public offering of (i) 509,053 units (“Units”), with each Unit being comprised

of one share of the Company’s common stock, par value $ 0.0001 per share, and one Series F warrant (a “Series F Warrant”)

to purchase one share of common stock, and (ii) 972,427 pre-funded units (the “Pre-Funded Units”), with each Pre-Funded Unit

being comprised of one pre-funded warrant (a “Pre-Funded Warrant”) to purchase one share of common stock and one Series F

In connection with this public offering, the underwriter exercised its over-allotment option in full and purchased an additional

222,220 shares of common stock and 222,220 Series F Warrants.

The offering price to the public was $ 6.75 per Unit and $ 6.735 per Pre-Funded

The net proceeds to the Company 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 offering.

The pre-funded

warrants exercisable at a price of $ 0.015 per share of common stock.

Series F Warrants included in the Common Units and the Pre-Funded Units are immediately exercisable at a price of $ 7.425 per share of

common stock, subject to adjustment in certain circumstances, and expire June 2, 2025.

The shares of common stock, or Pre-Funded Warrants

in the case of the Pre-Funded Units, and the Series F Warrants were offered together, but the securities contained in the Common Units

and the Pre-Funded Units were issued separately.

the year ended December 31, 2020, 191,107 Series F Warrants were converted into 191,107 shares of common stock.

The net proceeds to the

Company from exercise of the Series F Warrants were approximately $ 1.4 million.

to the full ratchet anti-dilution adjustment provisions in the respective certificate of designation for the Company’s Series B

Convertible Preferred Stock and Series C Preferred Stock, the conversion price of the outstanding shares of the Series B Convertible

Preferred Stock and the Series C Preferred Stock was reduced to $ 6.75 per share, effective as of the date of the underwriting agreement

entered for the June 2020 Offering, and the number of shares of common stock issuable upon conversion of the Series B Preferred Stock

and the Series C Preferred Stock had increased as follows:

● An aggregate of 111,028 additional shares of common stock upon conversion of the Series B Preferred Stock and as payment of

the dividends thereunder in common stock, based on 17,303 shares of Series B Preferred Stock outstanding as of June 2, 2020.

An aggregate of 18,886 additional shares of common stock upon conversion of the Series C Preferred Stock, based on 26,558 shares of Series

C Preferred Stock outstanding as of June 2, 2020.

the purpose of calculating basic net loss per share, the additional shares of common stock that are issuable upon exercise of the Pre-funded

Warrants have been included since the shares are issuable for a negligible consideration, as determined by the Company according to ASC

260-10-45-13, and have no vesting or other contingencies associated with them.

The Company has also concluded that the series F warrants

are classified as equity, since the warrants meet all criteria for equity classification.

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

7 – EQUITY (continued):

Company received gross proceeds of $5.0 million from the offering, before deducting underwriter

discounts and commissions and other fees and expenses payable by the Company.

June 5, 2020, the Company closed an underwritten public offering of (i) 7,635,800 units (“Units”), with each

Unit being comprised of one share of the Company’s common stock, par value $0.0001 per share, and one Series F warrant

(a “Series F Warrant”) to purchase one share of common stock, and (ii) 14,586,400 pre-funded units (the “Pre-Funded

Units”), with each Pre-Funded Unit being comprised of one pre-funded warrant (a “Pre-Funded Warrant”)

to purchase one share of common stock and one Series F Warrant.

In connection with this public offering, the underwriter

exercised its over-allotment option in full and purchased an additional 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 Unit.

The net proceeds

to the Company 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 offering.

The pre-funded warrants exercisable at a price of $0.001 per share of common stock.

Series F Warrants included in the Common Units and the Pre-Funded Units are immediately exercisable at a price of $0.495

per share of common stock, subject to adjustment in certain circumstances, and expire June 2, 2025.

The shares of common

stock, or Pre-Funded Warrants in the case of the Pre-Funded Units, and the Series F Warrants were offered together, but

the securities contained in the Common Units and the Pre-Funded Units were issued separately.

the year ended December 31, 2020, 2,866,600 Series F Warrants were converted into 2,866,600 shares of common stock.

net proceeds to the Company from exercise of the Series F Warrants were approximately $1.4 million.

to the full ratchet anti-dilution adjustment provisions in the respective certificate of designation for the Company’s Series

B Convertible Preferred Stock and Series C Preferred Stock, the conversion price of the outstanding shares of the Series B Convertible

Preferred Stock and the Series C Preferred Stock was reduced to $0.45 per share, effective as of the date of the underwriting

agreement entered for the June 2020 Offering, and the number of shares of common stock issuable upon conversion of the Series

B Preferred Stock and the Series C Preferred Stock had increased as follows:

An aggregate of 1,665,414 additional shares of common stock upon conversion of the Series B Preferred Stock and as payment

of the dividends thereunder in common stock, based on 17,303 shares of Series B Preferred Stock outstanding as of June

An aggregate of 283,285 additional shares of common stock upon conversion of the Series C Preferred Stock, based on 26,558

shares of Series C Preferred Stock outstanding as of June 2, 2020.

the purpose of calculating basic net loss per share, the additional shares of common stock that are issuable upon exercise

of the Pre-funded Warrants have been included since the shares are issuable for a negligible consideration, as determined

by the Company according to ASC 260-10-45-13, and have no vesting or other contingencies associated with them.

has also concluded that the series F warrants are classified as equity, since the warrants meet all criteria for equity

classification.

the year ended December 31, 2020, the Company issued a total of 14,586,400 shares of common stock in connection with the

exercise of all outstanding Pre-Funded Warrants issued in June 2020.

In addition, the Company issued a total of 270,000

shares of its common stock in connection with the exercise of 270,000 Pre-Funded Warrants issued in September 2019.

of December 31, 2020, there are no outstanding Pre-Funded Warrants.

the year ended December 31, 2019, the Company issued a total of 2,000,811 shares of its common stock in connection with

the exercise of an aggregate of 2,000,811 Pre-Funded Warrants and 2019 Pre-Funded Warrants.

The Company received aggregate

cash proceeds equal to approximately $35,705 in connection with such exercises.

the year ended December 31, 2020, the Company sold 12,917,448 shares of its common stock pursuant to its at-the-market (ATM) issuance

sales agreement with A.G.P./Alliance Global Partners.

the year ended December 31, 2020, the Company issued a total of 972,427 shares of common stock in connection with the exercise of all

outstanding Pre-Funded Warrants issued in June 2020.

In addition, the Company issued a total of 18,000 shares of its common stock in

connection with the exercise of 18,000 Pre-Funded Warrants issued in September 2019.

As of December 31, 2020, there are no outstanding

Pre-Funded Warrants.

February 8, 2021, the Company closed an underwritten public offering (the “Offering”) of 1,935,484 units (“Units”),

with each Unit being comprised of one share of the Company’s common stock, par value $ 0.0001 per share, and one Series G warrant

(the “Series G Warrants”) to purchase one-half of one share of Common Stock.

In connection with this public offering, the

underwriter exercised its over-allotment option in full and purchased an additional 290,322 shares of common stock and 145,161 Series

The offering price to the public was $ 9.30 per Unit.

The Series G Warrants are immediately exercisable at a price of $ 10.23

per and expire five years from the date of issuance.

Company granted the underwriter compensation warrants to purchase up to 111,290 shares of Common Stock.

The underwriter warrants have

an exercise price of $ 10.23 per share and are exercisable immediately and for five years from the date of effectiveness of the registration

statement in connection with the Offering.

net proceeds to the Company 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.

February 3, 2021, the Company entered into a Distribution Agreement with three China-based partners, See Note 6b.

for details about the

Distribution Agreement.

addition, and on the same day, the Company entered into an investment transaction with one of the Chinese parties to the Distribution

Agreement, which included (i) a Securities Purchase Agreement (the “SPA”), pursuant to which investor agreed to invest $ 900,000

in exchange for 89,445 shares of the Company’s common stock at a purchase price of $ 10.062 per share.

the year ended December 31, 2021, Series F and Series G warrants to purchase shares of common stock were exercised by investors at an

exercise price of $ 7.425 and $ 10.23 per share, resulting in the issuance of 1,225,412 shares of common stock for proceeds of approximately

$ 9,469,000 .

the year ended December 31, 2020, the Company sold 861,163 shares of its common stock pursuant to its at-the-market (ATM) issuance sales

agreement with A.G.P./Alliance Global Partners.

These sales resulted in net proceeds to the Company of approximately $ 4,447,000 .

to the full ratchet anti-dilution adjustment provisions in the respective certificate of designation for the Company’s Series

B Convertible Preferred Stock and Series C Preferred Stock, the conversion price of the outstanding shares of the Series B Convertible

Preferred Stock and the Series C Preferred Stock was reduced to $0.321 per share, triggered by the ATM Facility, effective as

of December 14, 2020 , and the number of shares of common stock issuable upon conversion of the Series B Preferred Stock and the

Series C Preferred Stock had increased as follows:

aggregate of 892,371 additional shares of common stock upon conversion of the Series B Preferred Stock and as payment of the

dividends thereunder in common stock, based on 17,303 shares of Series B Preferred Stock outstanding as of December 14, 2020.

aggregate of 13,392 additional shares of common stock upon conversion of the Series C Preferred Stock, based on 2,343 shares

of Series C Preferred Stock outstanding as of December 14, 2020.

of December 31, 2020, the Number of Preferred shares the amount each class is convertible into is below:

of Preferred Stock

of underlying Common stock

B Convertible Preferred Stock*

C Convertible Preferred Stock

See “Note 11 - Subsequent events”

regarding conversion of all remaining Series B Convertible Preferred Stock into

common stock.

On July 7, 2016, we issued 442,424 shares of Series B Preferred Stock in a public offering.

Our Series B Preferred Stock has a

stated value of $33.00 which currently converted into 3,112,923 reflecting a conversion price equal to $ 0.321.

The holders of

Series B Preferred Stock are entitled to receive as cumulative dividends at the rate per share of 15% per annum of the stated

value for five years, payable in cash or common stock, at the Company’s discretion, but excluding effect of future conversion

price adjustment, if any.

On March 14, 2017, we issued 1,069,822 shares of Series C Preferred Stock in a public offering.

Our Series C Preferred Stock has

a stated value of $6.40 which currently converted into 46,714 reflecting a conversion price equal to $ 0.321.

the year ended December 31, 2021, the Company sold 818,523 shares of its common stock pursuant to its at-the-market (ATM) issuance sales

agreement with a sales agent.

These sales resulted aggregate net proceeds to the Company of approximately $ 5,453,000 .

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

7 – EQUITY (continued):

to the full ratchet anti-dilution adjustment provisions in the respective certificate of designation for the Company’s Series B

Convertible Preferred Stock and Series C Preferred Stock, the conversion price of the outstanding shares of the Series B Convertible

Preferred Stock and the Series C Preferred Stock was reduced to $ 4.815 per share, triggered by the ATM Facility, effective as of December

14, 2020, and the number of shares of common stock issuable upon conversion of the Series B Preferred Stock and the Series C Preferred

Stock had increased as follows:

aggregate of 59,491 additional shares of common stock upon conversion of the Series B Preferred Stock and as payment of the dividends

thereunder in common stock, based on 17,303 shares of Series B Preferred Stock outstanding as of December 14, 2020.

aggregate of 893 additional shares of common stock upon conversion of the Series C Preferred Stock, based on 2,343 shares of Series

C Preferred Stock outstanding as of December 14, 2020.

July 7, 2016, we issued 442,424 shares of Series B Preferred Stock in a public offering.

Our Series B Preferred Stock has a stated value

of $ 495.00 which currently converted into 207,528 reflecting a conversion price equal to $ 4.815 .

The holders of Series B Preferred Stock

are entitled to receive as cumulative dividends at the rate per share of 15 % per annum of the stated value for five years, payable in

cash or common stock, at the Company’s discretion, but excluding effect of future conversion price adjustment, if any.

March 14, 2017, we issued 1,069,822 shares of Series C Preferred Stock in a public offering.

Our Series C Preferred Stock has a stated

value of $ 96 which currently converted into 3,114 reflecting a conversion price equal to $ 4.815 .

the year ended December 31, 2021, 625 shares of Series C Convertible Preferred Stock were converted into 831 shares of common stock.

As of December 31, 2021, there were 1,718 shares of Series C Preferred Stock outstanding, convertible into an aggregate of 2,284 shares

of our common stock.

the year ended December 31, 2021, all the remaining 17,303 shares of Series B Convertible Preferred Stock were converted into 207,528

shares of common stock.

of December 31, 2021, the Company has outstanding warrants to purchase an aggregate of 1,793,983 shares of common stock as follows:

SCHEDULE OF ISSUANCE OF WARRANTS TO PURCHASE COMMON STOCK

exercise price

Series A Warrants

Series B Warrants

Series D Warrants

Series E Warrants

Series F Warrants

Underwriter Warrants

Other warrants

Total Warrants

of December 31, 2021, the Company has 155,000,000 authorized shares of capital stock, par value $ 0.0001 per share, of which 150,000,000

are shares of common stock and 5,000,000 are shares of “blank check”

preferred stock.

the event of our liquidation, dissolution, or winding up, holders of Series B Convertible Preferred Stock and Series C Convertible

Preferred Stock are entitled to receive the amount of cash, securities or other property to which such holder would be entitled

to receive with respect to such shares of Preferred Stock if such shares had been converted to common stock immediately prior

to such event.

are shares of common stock and 5,000,000 are shares of “blank check” preferred stock.

the event of our liquidation, dissolution, or winding up, holders of Series C Convertible Preferred Stock are entitled to receive the

amount of cash, securities or other property to which such holder would be entitled to receive with respect to such shares of Preferred

Stock if such shares had been converted to common stock immediately prior to such event.

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

7 – EQUITY (continued):

to the current Section 102 of the Israeli Tax Ordinance, which came into effect on January 1, 2003, options may be granted

through a trustee (i.e., Approved 102 Options) or not through a trustee (i.e., Unapproved 102 Options).

As a result of an

election made by the Company under Section 102 of the Income Tax Ordinance, the Company will not be allowed to claim as an

expense for tax purposes in Israel the amounts credited to the employee as capital gains to the grantees, although it will

generally be entitled to do so in respect of the salary income component (if any) of such awards when the related tax is paid

by the employee.

the year ended December 31, 2020, the Company granted stock options to the CEO, employees and directors to purchase a total

of 1,379,856 shares of the Company’s common stock.

The options have exercise prices ranging from $0.33-$1.10 per share,

respectively, which were the fair market value of the company’s common stock on the date of each respective grant.

of December 31, 2020, the fair value of the above options, using the Black-Scholes pricing models, was approximately $509,000.

The options are subject to a three-year vesting period with one-third of such awards vesting each year.

the years ended December 31, 2020 and 2019, the Company granted to the then CEO, employees and directors 2,781,920 and 70,582

restricted stock, respectively.

Share-Based Compensation

1) Pursuant to the current Section 102 of the Israeli Tax Ordinance, which came into effect on January 1, 2003, options may be granted through a trustee (i.e., Approved 102 Options) or not through a trustee (i.e., Unapproved 102 Options).

As a result of an election made by the Company under Section 102 of the Income Tax Ordinance, the Company will not be allowed to claim as an expense for tax purposes in Israel the amounts credited to the employee as capital gains to the grantees, although it will generally be entitled to do so in respect of the salary income component (if any) of such awards when the related tax is paid by the employee.

During the years ended December 31, 2021 and 2020, the Company granted stock options to the CEO, employees, consultants and directors

to purchase a total of 225,225

respectively, shares of the Company’s common

The options have exercise prices ranging from $ 3.89 -$ 10.05

and $ 4.95 -$ 16.50

per share, respectively, which were the fair

market value of the company’s common stock on the date of each respective grant.

The fair value of the above options, using the

Black-Scholes pricing models, was approximately $ 1,026,000

and $ 509,000 ,

respectively.

The options are subject to a three -year

vesting period with one-third of such awards vesting each year.

3) During the years ended December 31, 2021 and 2020, the Company granted to the employees and directors 419,943 and 185,461 restricted stock, respectively.

The fair value of these restricted stock was approximately $ 1,781,981 and $ 1,051,604 , respectively.

The restricted stock are subject to a three -year vesting period, with one-third of such awards vesting each year.

the years ended December 31, 2020 and 2019, the Company granted CEO and former CEO 1,357,668 and 165,000 Restricted Stock

Units, respectively.

During the years ended December 31, 2021 and 2020, the Company granted to the CEO 146,567 and 90,511 Restricted Stock Units, respectively.

The fair value of these restricted stock units was approximately $ 603,856 and $ 658,981 , respectively.

The restricted stock units granted during the years ended December 31, 2020 are subject to a three-year vesting period, with

one-third of such awards vesting each year.

The restricted stock units granted during the year ended December 31, 2019 were

fully vested upon grant.

following table summarizes information about stock options granted to employees:

Year ended December 31

Number of options

exercise price

Number of options

exercise price

Outstanding - beginning of period

Outstanding -end of period

Exercisable at the end of the period

The restricted stock units granted

during the years ended December 31, 2021 and 2020, are subject to a three -year vesting period, with one-third of such awards vesting

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

7 – EQUITY (continued):

following table summarizes information about stock options granted to non-employees:

Year ended December 31

Number of options

Weighted average exercise price

Number of options

Weighted average exercise price

Outstanding - beginning of period

Outstanding - end of period

Exercisable at the end of the period

following table summarizes information about restricted stock granted to employees:

Year ended December 31

Number of restricted stock

Outstanding - beginning of period

Reverse Split Adjustments

Outstanding - end of period

following table summarizes information about Restricted Stock Unit granted to employees:

Year ended December 31

Number of restricted stock

Outstanding - beginning of period

Outstanding - end of period

following table provides additional information about all options outstanding and exercisable:

Outstanding as of December 31, 2020

Options outstanding

Weighted average remaining contractual life (years)

$175 and above

The following table summarizes information about stock options granted to employees:

SCHEDULE OF STOCK OPTIONS GRANTED

ended December 31

- beginning of period

Outstanding-end

at the end of the period

The following table summarizes information about stock options granted to non-employees:

ended December 31

average exercise price

- beginning of period

- end of period

at the end of the period

The following table summarizes information about restricted stock granted to employees:

SCHEDULE OF RESTRICTED STOCK GRANTED TO EMPLOYEES

ended December 31

of restricted stock

- beginning of period

Split Adjustments

- end of period

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

7 – EQUITY (continued):

The following table summarizes information about Restricted Stock Units granted to employees:

SCHEDULE OF RESTRICTED STOCK UNIT GRANTED TO EMPLOYEES

ended December 31

of restricted stock units

- beginning of period

- end of period

The following table provides additional information about all options outstanding and exercisable:

SCHEDULE OF ADDITIONAL INFORMATION ABOUT ALL OPTIONS OUTSTANDING AND EXERCISABLE

as of December 31, 2021

average remaining contractual life (years)

$ 3.89 - 4.12

$ 4.95 - 10.05

weighted average of the remaining contractual life of total vested and exercisable options as of December 31, 2021 was 8.65 years.

aggregate intrinsic value of the total exercisable options as of December 31, 2021 was approximately $ 0.4 .

weighted average fair value of options granted was $ 4.56 for the year ended December 31, 2021.

The weighted average fair value of options

granted was estimated using the Black-Scholes option-pricing model.

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

7 – EQUITY (continued):

weighted average fair value of options granted was $0.37 for the year ended December 31, 2020.

The weighted average fair value

of options granted was estimated using the Black-Scholes option-pricing model.

following table sets forth the assumptions that were used in determining the fair value of options granted to employees for

the year December 31, 2020:

Year ended December 31

Expected life

5.5-6.5 years

Risk-free interest rates

following table sets forth the assumptions that were used in determining the fair value of options granted to employees for the year

December 31, 2021:

SCHEDULE OF FAIR VALUE OF OPTIONS GRANTED TO EMPLOYEES

ended December 31

of restricted stock

interest rates

129.11 %- 136.78

Dividend yield

124.53 %- 136.66

Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.

Accordingly, as to ordinary course options granted, the expected term was determined using the simplified method, which takes

into consideration the option’s contractual life and the vesting periods (for non-employees, the expected term is equal

to the option’s contractual life).

as to ordinary course options granted, the expected term was determined using the simplified method, which takes into consideration the

option’s contractual life and the vesting periods (for non-employees, the expected term is equal to the option’s contractual

annual risk-free rates are based on the yield rates of zero coupon non-index linked U.S.

Federal Reserve treasury bonds as both

the exercise price and the share price are in dollar terms.

The Company’s expected volatility is derived from its historical

of December 31, 2020, the total unrecognized compensation cost on employee and non-employee stock options and restricted stock,

related to unvested stock-based compensation, amounted to approximately $1.7 million.

Federal Reserve treasury bonds as both the exercise

price and the share price are in dollar terms.

The Company’s expected volatility is derived from its historical data.

of December 31, 2021, the total unrecognized compensation cost on employee and non-employee stock options, restricted stock and restricted

stock units, related to unvested stock-based compensation, amounted to approximately $ 3.4 million.

This cost is expected to be recognized

3 unchanged sentences

following table summarizes the allocation of total share-based compensation expense in the consolidated statements of operations:

Year ended December 31

SCHEDULE OF ALLOCATION OF TOTAL SHARE-BASED COMPENSATION EXPENSE

ended December 31

in thousands)

Cost of revenues

Research and development

Sales and marketing

General and administrative

and development

and marketing

and administrative

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

8 – RELATED PARTIES TRANSACTIONS

May 10, 2021, the board of directors of the Company appointed a new member.

During the twelve months ended December 31, 2021, a consulting

company whose founder and CEO is our new board member provided certain marketing services in the amount of $ 33,775 .

9 - TAXES ON INCOME :

laws applicable to the Company and its subsidiaries

Tax laws applicable to the Company and its subsidiaries

in the United States

2 unchanged sentences

State tax may also apply.

corporate tax rate was 23% in 2020 and will be 23% thereafter.

Ltd is taxed under Israeli tax laws.

Accordingly, the applicable corporate tax rate in 2021 is 23 %.

GmbH is taxed according to the tax laws in Germany.

Accordingly, the applicable tax rates are corporate tax rate of 15.825% and

trade tax rate of 17.15%.

benefits under the Law for the Encouragement of Capital Investments, 1959 (the “Law”):

has been granted a “Beneficiary Enterprises”

status under the Investment Law including Amendment No.

which became effective in April 2005.

The tax benefits derived from any such Beneficiary Enterprise relate only to taxable profits

attributable to the specific program of investment to which the status was granted.

Accordingly, the applicable tax rates are corporate tax rate of 15.825 % and trade

tax rate of 17.15 %.

Tax benefits under the Law for the Encouragement of Capital Investments, 1959 (the “Law”):

has been granted a “Beneficiary Enterprises” status under the Investment Law including Amendment No.

60 thereof, which

became effective in April 2005.

The tax benefits derived from any such Beneficiary Enterprise relate only to taxable profits attributable

to the specific program of investment to which the status was granted.

main benefit, to which InspireMD Ltd.

is entitled, conditional upon the fulfilling of certain conditions stipulated by the above

law, is a two-year exemption and five to eight years of a reduced tax rate of 10% to 23% from tax on income derived from beneficiary

activities in facilities in Israel.

The two-year exemption starts only when the Company starts to pay taxes after using all tax

offsetting losses.

The tax benefit period is twelve years from the year of election, which means that after a year of election,

the two-year exemption and eight years of reduced tax rate can only be used within the next twelve years.

The Company elected

the year 2011 as a year of election.

is entitled, conditional upon the fulfilling of certain conditions stipulated by the above law,

is a two-year exemption and five to eight years of a reduced tax rate of 10 % to 23 % from tax on income derived from beneficiary activities

in facilities in Israel.

The two-year exemption starts only when the Company starts to pay taxes after using all tax offsetting losses.

The tax benefit period is twelve years from the year of election, which means that after a year of election, the two-year exemption and

eight years of reduced tax rate can only be used within the next twelve years.

The Company elected the year 2011 as a year of election.

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

9 - TAXES ON INCOME (continued):

the event of a distribution of tax-exempt income attributable to “Beneficiary Enterprises”

as a cash dividend, the

Company will be required to pay tax at a rate of 10% to 23% on the amount distributed, subject to certain conditions.

dividends originating from income attributable to the “Beneficiary Enterprises”

will be subject to a 20% withholding

the event of a distribution of tax-exempt income attributable to “Beneficiary Enterprises” as a cash dividend, the Company

will be required to pay tax at a rate of 10% to 23% on the amount distributed, subject to certain conditions.

In addition, dividends

originating from income attributable to the “Beneficiary Enterprises” will be subject to a 20 % withholding tax.

InspireMD Ltd.

derive income from sources other than the “Beneficiary Enterprises”

during the period of benefits,

such income shall be taxable at the regular corporate tax rate.

for entitlement to the benefits

derive income from sources other than the “Beneficiary Enterprises” during the period of benefits, such income

shall be taxable at the regular corporate tax rate.

Conditions for entitlement to the benefits

entitlement to the above benefits is conditional upon InspireMD Ltd.

fulfilling the conditions stipulated by the law, regulations

published thereunder and the instruments of approval for the specific investments in approved assets.

In the event of failure

to comply with these conditions, the benefits may be cancelled, and InspireMD Ltd.

may be required to refund the amount of the

benefits, in whole or in part, with the addition of interest and linkage.

Company opted not to apply for Preferred Enterprise status (as defined in the Amendment of the Law for the Encouragement of Capital

Investments, 1959).

forward tax losses

of December 31, 2020, the Company had a net carry forward tax loss of approximately $44 million, of which approximately $35 million

(arising before January 1, 2018), expires until 2037, and approximately $9 million, which does not expire, but is limited to offset

80% of the net income in the year it is utilized.

fulfilling the conditions stipulated by the law, regulations published

thereunder and the instruments of approval for the specific investments in approved assets.

In the event of failure to comply with these

conditions, the benefits may be cancelled, and InspireMD Ltd.

may be required to refund the amount of the benefits, in whole or in part,

with the addition of interest and linkage.

Company opted not to apply for Preferred Enterprise status (as defined in the Amendment of the Law for the Encouragement of Capital Investments,

Carry forward tax losses

of December 31, 2021, the Company had a net carry forward tax loss of approximately $ 47 million, of which approximately $ 35 million (arising

before January 1, 2018), expires until 2037 , and approximately $ 12 million, which does not expire, but is limited to offset 80 % of the

net income in the year it is utilized.

tax laws, for net operating losses (NOLs) arising after December 31, 2017, the Tax Cuts and Jobs Act enacted on December 22,

22, 2017 (the “2017 Act”) limits a taxpayer’s ability to utilize NOL carryforwards to 80% of taxable income.

2017 (the “2017 Act”) limits a taxpayer’s ability to utilize NOL carryforwards to 80% of taxable income.

addition, NOLs arising after 2017 can be carried forward indefinitely, but carryback is generally prohibited.

NOLs generated in

tax years beginning before January 1, 2018, will not be subject to the foregoing taxable income limitation and will continue to

have a two-year carryback and twenty-year carryforward period.

NOLs generated in tax years

beginning before January 1, 2018, will not be subject to the foregoing taxable income limitation and will continue to have a two-year

carryback and twenty-year carryforward period.

to COVID-19 CARES act of the U.S.

Treasury, the business tax provision temporarily removes the current law taxable income 80%

limitation to allow an NOL to fully offset income in tax years 2018, 2019 and 2020.

The provision also allows an NOL from

tax years beginning in 2018, 2019, or 2020 to be carried back for five years.

Treasury, the business tax provision temporarily removes the current law taxable income 80 % limitation

to allow an NOL to fully offset income in tax years 2018, 2019 and 2020.

The provision also allows an NOL from tax years beginning in

2018, 2019, or 2020 to be carried back for five years .

of December 31, 2021, InspireMD Ltd., an Israeli subsidiary, had a net carry forward tax loss of approximately $ 109 million.

Israeli tax laws, the carry forward tax losses can be utilized indefinitely.

before income taxes

Under Israeli

tax laws, the carry forward tax losses can be utilized indefinitely.

Loss before income taxes

components of loss before income taxes are as follows:

Year ended December 31

SCHEDULE OF COMPONENTS OF LOSS BEFORE INCOME TAXES

ended December 31

in thousands)

Loss before taxes on income:

InspireMD, Inc.

before taxes on income:

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

9 - TAXES ON INCOME (continued):

taxes on income

main reconciling items between the statutory tax rate of the Company and the effective tax rate are the change in subsidiary tax

rates and the change in valuation allowance in respect of tax benefits from carried forward tax losses due to uncertainty of the

realization of such tax benefits and changes in tax rates following the 2017 Act.

Current taxes on income

main reconciling item between the statutory tax rate of the Company and the effective tax rate is the change in valuation allowance in

respect of tax benefits from carried forward tax losses due to uncertainty of the realization of such tax benefits.

changes in the valuation allowance for the year ended December 31, 2021 and 2020 were as follows:

Year ended December 31

SCHEDULE OF CHANGES IN VALUATION ALLOWANCE

ended December 31

in thousands)

Balance at the beginning of the year

Changes during the year:

Losses during the year (including foreign exchange rate effect)

Balance at the end of the year

for Uncertain Tax position

is a reconciliation of the total amounts of the Company’s uncertain tax positions during the year ended December 31, 2020

and 2019 were as follows:

Year ended December 31,

at the beginning of the year

during the year:

during the year (including foreign exchange rate effect)

at the end of the year

Accounting for Uncertain Tax position

is a reconciliation of the total amounts of the Company’s uncertain tax positions during the year ended December 31, 2021 and 2020

were as follows:

SCHEDULE OF RECONCILIATION OF UNCERTAIN TAX POSITIONS

ended December 31,

in thousands)

Balance at beginning of period

Increase in uncertain tax positions because of tax positions taken during the year

Balance at end of period

at beginning of period

in uncertain tax positions because of tax positions taken during the year

at end of period

summary of open tax years by major jurisdiction is presented below:

United Kingdom

SCHEDULE OF OPEN TAX YEARS BY MAJOR JURISDICTION

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

9 - TAXES ON INCOME (continued):

Deferred income tax:

SCHEDULE OF DEFERRED INCOME TAX

in thousands)

Allowance for bonus

Provision for vacation and recreation pay

Operating lease right of use assets

Operating lease liabilities

Share-based compensation

Carry forward tax losses

Accrued severance pay, net

Less-valuation allowance

for vacation and recreation pay

lease right of use assets

lease liabilities

forward tax losses

severance pay, net

tax assets noncurrent

Less-valuation

10 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION :

OF INVENTORIES

in thousands)

Finished goods

Work in process

Raw materials and supplies

materials and supplies

Total inventory

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

10 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (continued):

payable and accruals-other:

Accounts payable and accruals-other:

OF ACCOUNTS PAYABLE AND ACCRUALS - OTHER

($ in thousands)

4 unchanged sentences

Current Operating lease liabilities

Accounts Payable and Accruals - Other

11 – DISAGGREGATED REVENUE AND ENTITY WIDE DISCLOSURES :

1 unchanged sentence

The following is a summary of revenues:

Year ended December 31,

SCHEDULE OF REVENUES ATTRIBUTED TO GEOGRAPHIC AREAS

ended December 31,

in thousands)

Other (2020 - net of settlement payment of $580, see note 6)

Year ended December 31,

(2020 - net of settlement payment of $ 580 , see note 6 a)

SCHEDULE OF REVENUES ATTRIBUTED TO GEOGRAPHIC AREAS BY PRODUCT

ended December 31,

in thousands)

CGuard™

MGuard Prime™

EPS (2020 - net of settlement payment of $580, see note 6)

Prime™ EPS (2020 - net of settlement payment of $ 580 , see note 6 a)

principal customers (2020 - before of settlement payment of $ 580 see note 6):

Year ended December 31,

OF REVENUES ATTRIBUTED TO GEOGRAPHIC AREAS BY PRINCIPAL CUSTOMERS

ended December 31,

tangible long lived assets are located in Israel.

12 - SUBSEQUENT EVENTS :

Subsequent to December 31, 2020 the Company had several stock transactions

as follows (U.S.

dollars in thousands, except share data):

BALANCE as of December 31, 2020

Issuance of shares to Chinese distributor

February 2021 public offering

Series F and Series G warrants exercise

Conversion of Series B Convertible Preferred Stock to common shares

On February 3, 2021, the Company 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 the Company’s

products in China, followed by an eight-year exclusive distribution right to sell the Company’s 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, the Company entered into an investment transaction with one of the Chinese parties to the Distribution

Agreement, , which included (i) a Securities Purchase Agreement, or the SPA, pursuant to which investor agreed to invest $900,000

in exchange for shares of the Company’s common stock at a purchase price of $0.6708 per share.

Subsequent to year-end, the Company sold an aggregate of 12,277,844

shares of common stock for aggregate gross proceeds of $5,659,000 under the ATM Sales Agreement.

In addition, in January 2021 we

received $323,000 for shares of common stock sold on December 2020 and recorded to "Receivable for sale of Shares"

current assets of the Consolidated Balance Sheet as of December 31, 2020.

On February 3, 2021, the Company entered into an underwriting agreement with A.G.P./Alliance Global Partners, relating to an underwritten

public offering (the “Offering”) of 29,032,258 units (“Units”), with each Unit being comprised of one

share of the Company’s 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 are 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.

closed on February 8, 2021.

Company granted the Underwriter a 45-day option to purchase up to an additional 4,354,838 Units consisting of 4,354,838 shares

of Common Stock and Series G Warrants to purchase 2,177,419 shares of common stock in the Offering, which the Underwriter exercised

in full on February 4, 2021.

Company granted the Underwriter a compensation warrant to purchase up to 1,669,355 shares of Common Stock.

The Underwriter Warrants

have an exercise price of $0.682 per share and are exercisable immediately and for five years from the date of effectiveness of

the registration statement in connection with the Offering.

net proceeds to the Company 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 Offering.

to year-end, Series F and Series G warrants

to purchase shares of common stock were exercised by investors at an exercise price of $0.495 and $0.682 per share, resulting in

the issuance of 18,381,177 shares of common stock for proceeds of approximately $9,469,000.

On February 3, 2021, 17,303 shares of Series B Convertible Preferred Stock were converted into 3,112,923 shares of common stock.

2022, Russia launched a military invasion into Ukraine.

The Company derived approximately 8.2% of total sales in Russia in 2021.

The Company may have impact on future sales and collection but currently the Company is still unable to estimate any specific impact

to its business, financial condition or results of operations.

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 9A. Controls and Procedures