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Item 1A. Risk Factors

2023-03-30 compared with 2022-03-07 · 454 added, 389 removed, 953 unchanged (47% of the section changed)

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These risks include, among others, the following:

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

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

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

difficult to obtain and could dilute our stockholders’ ownership interests;

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

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

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

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

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

Any such delay or failure of clinical trials

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

the value of our business;

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

business and financial results;

history of recurring losses and negative cash flows from operating activities, significant future commitments and the uncertainty regarding

the adequacy of our liquidity to pursue our complete business objectives, and substantial doubt regarding our ability to continue as

a going concern;

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

to obtain and could dilute our stockholders’ ownership interests;

failure to satisfy regulatory requirements of the

new European Medical Device Regulation may prevent us from marketing CGuard EPS in countries requiring the CE mark.

we may become subject to claims by much larger and better capitalized competitors

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

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

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effect on our business;

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

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

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

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

and the value of our business;

clinical trials necessary to support a pre-market

approval application will be lengthy and expensive and will require the enrollment of a large number of patients, and suitable patients

may be difficult to identify and recruit.

Any such delay or failure of clinical trials could prevent us from commercializing our stent

products, which would materially and adversely affect our results of operations and the value of our business;

the results of our clinical trials may be insufficient

to obtain regulatory approval for our product candidates;

our products may in the future be subject to product notifications, recalls,

or voluntary market withdrawals that could harm our reputation, business and financial results;

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

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our financial condition and results of operations venue;

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

volatile, which could result in substantial losses for investors;

common stock could be delisted from the Nasdaq Stock Market if we fail to meet its continued listing requirements, including requirements

with respect to the market value of publicly-held-shares, market value of listed shares, minimum bid price per share, and minimum

stockholder’s equity, among others, and requirements relating to board and committee independence;

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

our business, operating results and growth rates may

be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect to financial

institutions and associated liquidity risk;

there are inherent limitations in all control systems, and misstatements

due to error or fraud may occur and not be detected;

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

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

Related to Our Business

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

have been impacted by the COVID-19 pandemic, and we cannot predict the future impacts the COVID-19 pandemic, including the emergence

of new strains such as the Omicron or Delta variant, may have on its business, results of operations and financial condition.

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, some European countries in which we operate reinstated non-emergency procedures.

In particular, in November 2021, the Government of Israel announced that non-Israeli residents or citizens, except for non-nationals

whose lives are based in Israel, are not allowed to enter Israel, 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, enrollments in our studies as

well as potential disruptions to our supply chain, for the upcoming periods.

this uncertain time, we are committed to the health and safety of our employees.

In response to the COVID-19 pandemic, we follow government

regulations which may include at certain periods having employees work from home, while implementing additional safety measures for employees

continuing critical on-site work.

mandates related to COVID-19 or other infectious diseases may impact, our personnel and personnel at third-party manufacturing facilities

in Israel and other countries, and the availability or cost of materials, which would disrupt our supply chain and/or reduce our margins.

Although the manufacturing of our products in Israel has not been materially impacted by COVID-19 as of February 2022, we cannot guarantee

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

we anticipate that the COVID-19 pandemic may impact clinical and regulatory matters.

COVID-19 is delaying enrollment in clinical trials

across the medical device industry and may affect any new trials we decide to pursue.

COVID-19 may cause disruptions that could have

a material adverse impact on our FDA clinical trial plans and timelines, including:

in receiving authorizations from local regulatory authorities, ethics committees and institutional

review boards to initiate planned clinical trials;

or difficulties in enrolling patients in our clinical trials;

or difficulties in clinical site initiation, including difficulties in recruiting clinical

site investigators and clinical site staff;

in clinical sites receiving the supplies and materials needed to conduct our clinical trials,

including interruptions in global shipping that may affect the transport of clinical trial

in local regulations as part of a response to the COVID-19 pandemic which may require us

to change the ways in which our clinical trials are conducted, which may result in unexpected

costs, or to discontinue the clinical trials altogether;

of healthcare resources away from the conduct of clinical trials, including the diversion

of hospitals serving as our clinical trial sites and hospital staff supporting the conduct

of our clinical trials;

of healthcare resources away from the conduct of clinical trials, including the diversion

of hospitals serving as our clinical trial sites and hospital staff supporting the conduct

of our clinical trials;

of key clinical trial activities, such as clinical trial site monitoring, due to limitations

on travel imposed or recommended by federal or state governments, employers and others, or

interruption of clinical trial subject visits and study procedures, the occurrence of which

could affect the integrity of clinical trial data;

that participants enrolled in our clinical trials will acquire COVID-19 while the clinical

trial is ongoing, which could impact the results of the clinical trial, including by increasing

the number of observed adverse events;

in necessary interactions with local regulators, ethics committees and other third parties

and contractors due to limitations in employee resources or forced furlough of government

in employee resources that would otherwise be focused on the conduct of our clinical trials,

including because of sickness of employees or their families or the desire of employees to

avoid contact with large groups of people;

of the FDA to accept data from clinical trials in affected geographies.

of these occurrences may significantly harm our business, financial condition and prospects.

In addition, many of the factors that cause,

or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the delay or denial of regulatory

approvals or clearances of our product.

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

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

The actions to contain COVID-19 or treat its impact,

the efficacy and scale of the various vaccines currently deployed across the world, among others.

Moreover, COVID-19 has had indeterminable

adverse effects on general commercial activity and the world economy, and our business and results of operations could be adversely affected

to the extent that COVID-19 or any other epidemic continues to harm the global economy generally.

inflation could adversely affect our business, financial condition, results of operations or cash flows.

and some of the measures taken by or that may be taken by the governments in countries where we operate in an attempt to curb inflation

may have negative effects on the economies of those countries generally.

If the United States or other countries where we operate experience

substantial inflation in the future, our business may be adversely affected.

This could have a material adverse impact on our business,

financial condition, results of operations or cash flows.

the market prices of our common stock and our publicly

traded warrants are subject to fluctuation and have been and may continue to be volatile, which could result in substantial losses for

our common stock could be delisted from the Nasdaq Stock Market if we fail

to meet its continued listing requirements, including requirements with respect to the market value of publicly-held-shares, market value

of listed shares, minimum bid price per share, and minimum stockholder’s equity, among others, and requirements relating to board

and committee independence.

Related to Our Financial Condition

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

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

has concluded that there is substantial doubt about our ability to continue as a going concern, and the report of our independent registered

public accounting firm contains an explanatory paragraph as to our ability to continue as a going concern, which could prevent us from

obtaining new financing on reasonable terms or at all.

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

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

Accordingly, the report of Kesselman & Kesselman, our

independent registered public accounting firm, with respect to our financial statements for the year ended December 31, 2022, includes

an explanatory paragraph as to our potential inability to continue as a going concern.

The doubts regarding our potential ability to

continue as a going concern may adversely affect our ability to obtain new financing on reasonable terms or at all.

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

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expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely impact our financial

Related to Commercialization of Our Products

we derive most of our revenue from the sale of CGuard EPS in CE marked countries, our ability to generate significant revenues and achieve

profitability depends, among other things, on our ability to receive FDA approval of CGuard EPS and other products we may develop, such

as CGuard Prime™ and SwitchGuard™.

If we fail to obtain FDA approval for CGuard EPS or any other products we may develop,

our results of operations and the value of our business would be materially and adversely affected.

derive most of our revenue from sales of our CGuard EPS in CE marked countries and certain other select jurisdictions.

We have not received

approvals in the United States and other jurisdictions and there can be no assurance that we will be able to receive regulatory approvals

to commence marketing and sales for our CGuard EPS and other products we may develop, such as CGuard Prime™ and SwitchGuard™

in the United States or in such other jurisdictions.

Our ability to generate significant revenues and achieve profitability depends on

our ability to successfully obtain required regulatory approvals in the U.S.

as well as to demonstrate sufficient clinical evidence and

manufacture commercial quantities of our CGuard EPS or any other products we may develop at an acceptable cost.

In addition, there may

be insufficient demand for CGuard EPS or any other products we develop, such as CGuard Prime™ and SwitchGuard™.

to generate sufficient revenues from these products, our results of operations and the value of our business and securities would be

materially and adversely affected.

future success of our business cannot be determined at this time, and we do not anticipate generating significant revenues from product

sales for the foreseeable future.

In addition, we have no experience in commercializing our CGuard EPS on a mass scale and face a number

of challenges with respect to our commercialization efforts, including, among others, that:

may not have adequate financial or other resources to demonstrate adequate clinical results,

attain required regulatory approvals and licensures, and begin the commercialization efforts

for our CGuard EPS in our target markets;

may fail to obtain or maintain required regulatory approvals and licensures for our CGuard

EPS in our target markets or may face adverse regulatory or legal actions relating to our

products even if regulatory approval is obtained;

may not demonstrate adequate clinical safety and clinical effectiveness results from our

CGuard EPS, to support regulatory body approval or market acceptance and adoption;

may not be able to scale up the manufacture of our CGuard EPS to commercial quantities at

an adequate quality or at an acceptable cost;

may not be able to establish adequate sales, marketing and distribution channels;

professionals and patients may not accept our CGuard EPS;

technological may reduce the demand for our CGuard EPS;

alliances between existing market participants and the entrance of new market participants

may interfere with our market penetration efforts;

and private third-party payors may not agree to provide coding, coverage and payment adequate

to reimburse healthcare providers and patients for any or all of the purchase price of CGuard

EPS, which may adversely affect healthcare providers’ and patients’ willingness

to purchase our C-Scan system;

● uncertainty

as to market demand may result in inefficient pricing of our CGuard EPS;

may not be able to adequately protect our intellectual property or may face third-party claims

of intellectual property infringement;

are dependent upon the results of ongoing clinical studies relating to our CGuard EPS and

the products of our competitors.

we are unable to meet any one or more of these challenges successfully, our ability to effectively commercialize our CGuard EPS system

could be limited, which in turn could have a material adverse effect on our business, financial condition and results of operations.

we are nearing completion of enrollment in our C-Guardian trial of CGuard EPS study, the outcome of the study is inherently uncertain.

September 8, 2020, we received approval from the FDA of our IDE for C-Guardian trial of CGuard EPS and we expect to complete enrollment

in the second quarter of 2023.

Clinical failure can occur at any stage of clinical development.

Our clinical trials have been conducted

under differing protocols, while using specific inclusion criteria and we cannot assure you that its actual clinical performances will

be satisfactory to support proposed indications and regulatory approvals and clinical acceptance and adoption, or that its use will not

result in unanticipated complications.

Furthermore, the results of our clinical trials are subject to human analyses and interpretation

of the data accumulated, which could be affected by various errors due to, among others, lack of sufficient clinical experience with

CGuard EPS, assumptions used in the statistical analysis of results, and interpretation errors in the analysis of the clinical trials

Failure can occur at any time during the clinical trial process.

If CGuard EPS does not function as expected over time, we may

not achieve regulatory clearances, and may not be widely adopted by healthcare providers and patients.

may not widely adopt our products unless they determine, based on experience, long-term clinical data and published peer reviewed journal

articles, among other standard-of-care considerations, that the use of our stents provides a safe and effective alternative to other

existing treatments for coronary artery disease and carotid artery disease.

believe that physicians will not widely adopt our products unless they determine, based on experience, long-term clinical data, published

peer reviewed journal articles and payor coverage policies, among other factors, that the use of our products provide a safe and effective

alternative to other existing treatments for the conditions we are seeking to address.

we fail to demonstrate safety and efficacy that is at least comparable to existing and future therapies available on the market, our

ability to successfully market our products will be significantly limited.

Even if the data collected from clinical studies or clinical

experience indicate positive results, each physician’s actual experience with our products will vary.

Clinical trials conducted

with our products may involve procedures performed by physicians who are technically proficient and are high-volume stent users of such

Consequently, both short-term and long-term results reported in these clinical trials may be significantly more favorable than

typical results of practicing physicians, which could negatively affect rates of adoptions of our products.

We also believe that published

peer-reviewed journal articles and recommendations and support by influential physicians regarding our products will be important for

market acceptance and adoption, and we cannot assure you that we will receive these recommendations and support, or that supportive articles

will be published.

to satisfy regulatory requirements of the new European Medical Device Regulation may prevent us from marketing CGuard EPS in countries

requiring the CE mark.

the European Union nations, medical devices must obtain a CE mark before they may be placed on the market.

In order to obtain and

maintain the CE mark, we must comply with EU law on medical devices, which, until May 26, 2021 was governed by the MDD, by

presenting comprehensive technical files for our products demonstrating safety and efficacy of the product to be placed on the

market and passing initial and annual quality management system audit as per ISO 13485 standard by a European Notified Body.

obtained ISO 13485 quality system certification and CGuard EPS that we currently distribute into the European Union, displays the

required CE mark.

In order to maintain certification, we are required to pass an annual surveillance audit conducted by Notified

Body auditors.

The European Union replaced the MDD with the new MDR regulations.

The MDR entered into force after a transitional

period of three years and a one year extension of that transition period due to the COVID-19 pandemic on May 26, 2021 and which

changes several aspects of the regulatory framework in the European Union.

Manufacturers had the duration of the transition period

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

In our specific

case, our CE mark for CGuard EPS under the MDD expired on November 12, 2022, and we are in the final stages of technical

documentation review by the Notified Body auditor to meet the MDR requirements for recertification.

In the meantime, on February 14,

2023, we received a derogation per Article 97 paragraph 1 of Regulation 2017/745 from the Agency for Medicines and Health Products

(FAMHP) allowing us to continue marketing CGuard EPS in the EU until August 15, 2023, subject to certain procedural requirements.

Subsequently, on March 20, 2023 Regulation

(EU) 2023/607 was published allowing us to continue marketing CGuard EPS in EU countries under the MDD directive until December 31,

As a result of the foregoing, we may market and sell CGuard EPS in the EU and certain other jurisdictions subject to certain procedural requirements while our MDR CE

recertification is pending.

We continue to expedite the review process for recertification under the MDR however no assurance can be

provided as to the length of time it will take to obtain recertification.

If we are unable to obtain recertification in the future

then this could have a material adverse effect on our business, financial condition, results of operations or cash flows.

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

currently manufacture our CGuard EPS at our facility in Tel Aviv, Israel.

If there were a disruption to our existing manufacturing facility,

we would have no other means of manufacturing our CGuard EPS stents until we were able to restore the manufacturing capability at our

facility or develop alternative manufacturing facilities.

If we were unable to produce sufficient quantities of our CGuard EPS stents

to meet market demand or for use in our current and planned clinical trials, or if our manufacturing process yields substandard stents,

our development and commercialization efforts would be delayed.

manufacture our CGuard EPS in quantities to meet anticipated market demand if we were to receive FDA approval, we will need to increase

manufacturing capacity, which will involve significant challenges.

In addition, the development of U.S.

commercial-scale, regulation-compliant

manufacturing capabilities will require us to invest substantial additional funds and hire and retain the technical personnel who have

the necessary manufacturing experience.

We may not successfully complete any required increase to existing manufacturing processes in

a timely manner, or at all.

Additionally,

any damage to or destruction of our Tel Aviv facility or its equipment, prolonged power outage or contamination at our facility would

significantly impair our ability to produce CGuard EPS stents.

the production of our stents must occur in a highly controlled, clean environment to minimize particles and other yield and quality-limiting

contaminants.

In spite of stringent quality controls, weaknesses in process control or minute impurities in materials may cause a substantial

percentage of defective products in a lot.

If we are unable to maintain stringent quality controls, or if contamination problems arise,

our clinical development and commercialization efforts could be delayed, which would harm our business and results of operations.

EPS is a complex medical device that requires training for qualified personal.

EPS is a complex medical device that requires training for qualified personal, including physicians.

Although our distributors will be

required to ensure that CGuard EPS is prescribed only by trained clinicians, the potential for misuse of CGuard EPS still exists due

to its complexity.

Such misuse could result in adverse medical consequences for patients that could damage our reputation, subject us

to costly product liability litigation and otherwise have a material adverse effect on our business, financial condition and results

of operations.

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

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Abbott Laboratories, Boston Scientific

Corporation, Medtronic, Inc., and Cardinal Health, Gore Medical and Terumo Medical Corporation produce a polytetrafluoroethylene mesh-covered

stent and a double layer metal stent, respectively.

Most of our current and potential competitors, including but not limited to those

listed above, have, and will continue to have, substantially greater financial, technological, research and development, regulatory and

clinical, manufacturing, marketing and sales, distribution and personnel resources than we do.

There can be no assurance that we will

have sufficient resources to successfully commercialize our products, if and when they are approved for sale.

The worldwide market for

stent products is characterized by intensive development efforts and rapidly advancing technology.

Our future success will depend largely

upon our ability to anticipate and keep pace with those developments and advances.

Current or future competitors could develop alternative

technologies, products or materials that are more effective, easier to use or more economical than what we or any potential licensee

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

Corporation, Covidien Ltd.

(currently part of Medtronic, Inc.), Cordis Corporation and Terumo Medical Corporation produce a polytetrafluoroethylene

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

Most of our current and potential competitors, including but not limited

to those listed above, have, and will continue to have, substantially greater financial, technological, research and development, regulatory

and clinical, manufacturing, marketing and sales, distribution and personnel resources than we do.

There can be no assurance that we

will have sufficient resources to successfully commercialize our products, if and when they are approved for sale.

The worldwide market

for stent products is characterized by intensive development efforts and rapidly advancing technology.

For example, during the second

quarter of 2022 we ceased sales of our MGuard Prime EPS following a phase out period due to a shift in industry preferences.

success will depend largely upon our ability to anticipate and keep pace with those developments and advances.

Current or future competitors

could develop alternative technologies, products or materials that are more effective, easier to use or more economical than what we

or any potential licensee develop.

If our technologies or products become obsolete or uncompetitive, our related product sales and licensing

revenue would decrease.

This would have a material adverse effect on our business, financial condition and results of operations.

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

For CGuard EPS and MGuard Prime

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

for the supply of catheters,

and Biogeneral Inc.

for the fiber.

We may have difficulty obtaining similar components from other suppliers that are acceptable to the

FDA or foreign regulatory authorities if it becomes necessary.

We may have difficulty obtaining

similar components from other suppliers that are acceptable to the FDA or foreign regulatory authorities if it becomes necessary.

the last year our mesh supplier informed us that it will not be able to supply the polymer fiber in the future due to issues with raw

materials, therefore we purchased inventory which should be sufficient to support our production needs in the next 2.5 years.

currently in the process of finding and qualifying another supplier or other material source which could take up to a year.

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

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

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

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

404 of the Sarbanes-Oxley Act of 2002.

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

internal controls over financial reporting.

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

operational, internal audit and accounting resources.

Any failure to maintain effective internal controls could have a material adverse

effect on our business, operating results and stock price.

Moreover, effective internal control is necessary for us to provide reliable

financial reports and prevent fraud.

If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our

business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be

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

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

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

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

Our management, including our

chief executive officer and chief financial officer, does not expect that our internal controls and disclosure controls will prevent

all errors and all fraud.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance

that the objectives of the control system are met.

In addition, the design of a control system must reflect the fact that there are resource

constraints, and the benefit of controls must be relative to their costs.

Because of the inherent limitations in all control systems,

no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, in our company have

been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can

occur because of simple errors or mistakes.

Further, controls can be circumvented by individual acts of some persons, by collusion of

two or more persons, or by management override of the controls.

The design of any system of controls is also based in part upon certain

assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated

goals under all potential future conditions.

Over time, a control may be inadequate because of changes in conditions, such as growth

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

of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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

Such an occurrence could discourage certain customers or suppliers from doing business with us and adversely affect how our stock trades.

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

Related to our Products, Clinical Trials and Regulatory Matters

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

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

Any such delay or failure of clinical trials could

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

of our business.

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

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

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

Patient enrollment in clinical trials and the ability

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

COVID-19 pandemic has caused interruptions or delays of our business plan and if there is a renewed outbreak it may have a significant

adverse effect on our business.

the past, we have been impacted by the COVID-19 pandemic which has caused interruptions or delays of our business plan.

In particular,

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

shifted resources to patients affected by COVID-19.

If there is a renewed outbreak of COVID-19 it may result in restrictions and safety

measures that could cause fluctuations in sales of our products, ability to manufacture, as well as potential disruptions to our supply

addition, if there is a renewed outbreak of COVID-19, this may cause disruptions that could have a material adverse impact on our FDA

clinical trial plans and timelines, including:

in receiving authorizations from local regulatory authorities, ethics committees and institutional review boards to initiate planned

clinical trials;

or difficulties in enrolling patients in our clinical trials;

or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;

in clinical sites receiving the supplies and materials needed to conduct our clinical trials, including interruptions in global shipping

that may affect the transport of clinical trial materials;

in local regulations as part of a response to the COVID-19 pandemic which may require us to change the ways in which our clinical trials

are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether;

of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial

sites and hospital staff supporting the conduct of our clinical trials;

of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial

sites and hospital staff supporting the conduct of our clinical trials;

of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal

or state governments, employers and others, or interruption of clinical trial subject visits and study procedures, the occurrence of

which could affect the integrity of clinical trial data;

that participants enrolled in our clinical trials will acquire COVID-19 while the clinical trial is ongoing, which could impact the results

of the clinical trial, including by increasing the number of observed adverse events;

in necessary interactions with local regulators, ethics committees and other third parties and contractors due to limitations in employee

resources or forced furlough of government employees;

in employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees

or their families or the desire of employees to avoid contact with large groups of people;

of the FDA to accept data from clinical trials in affected geographies.

of these occurrences may significantly harm our business, financial condition and prospects.

In addition, many of the factors that cause,

or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the delay or denial of regulatory

approvals or clearances of our product.

extent to which any future outbreak of COVID-19 will impact our results will depend on future developments, which are highly uncertain

and cannot be predicted, including new information which may emerge concerning the severity of the virus.

inflation could adversely affect our business, financial condition, results of operations or cash flows.

and some of the measures taken by or that may be taken by the governments in countries where we operate in an attempt to curb inflation

may have negative effects on the economies of those countries generally.

If the United States or other countries where we operate experience

substantial inflation in the future, our business may be adversely affected.

This could have a material adverse impact on our business,

financial condition, results of operations or cash flows.

Related to our Clinical Trials and Regulatory Matters

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

with the FDA’s IDE regulations.

Failure to maintain compliance with IDE regulations could have a material adverse effect on our

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

the supervision of qualified investigators in accordance with current Good Clinical Practices, including the requirement that all research

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

The FDA classifies medical device candidates into “significant

risk” and “non-significant risk” devices.

Significant risk devices present a potential for serious risk to the health,

safety, or welfare of a subject.

Examples may include implants, devices that support or sustain human life, and devices that are substantially

important in diagnosing, curing, mitigating, or treating disease or in preventing impairment to human health.

If a medical device candidate

presents a significant risk, an IDE application must be submitted and approved prior to commencing any human clinical trials in the United

States in connection with such device.

The FDA may approve, conditionally approve, or deny an IDE or it may require further information

and, thus, delay approval.

On September 8, 2020, we received IDE approval for CGuard™ Carotid Stent System, CARENET-III.

addition to our IDE approval, we must apply for and obtain IRB approval in connection with each clinical site before commencing any study

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

criteria, is also required before we may initiate or conduct the trial.

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

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

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

may not be able to obtain IRB approval to undertake clinical trials in the United States for any products we intend to market in the

United States in the future.

If we do obtain such approvals, we may not be able to conduct studies which comply with the IDE and other

regulations governing clinical investigations or the data from any such trials may not support clearance or approval of the investigational

Failure to obtain such approvals or to comply with such regulations could have a material adverse effect on our business, financial

condition and results of operations.

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

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

preclude or delay regulatory approvals and commercialization, resulting in significant financial costs and reduced revenue.

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

to various causes, including, but not limited to, scheduling conflicts with participating clinicians and clinical institutions, difficulties

in identifying and enrolling patients who meet trial eligibility criteria, failure of patients to complete the clinical trial, delay

in or failure to meet regulatory and/or IRB requirements to conduct a clinical trial at a one or more prospective sites, and shortages

of supply in the investigational device.

trials necessary to support a pre-market approval application are lengthy and expensive and require the enrollment of a large number

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

Any such delay or failure of clinical trials could prevent

us from commercializing our stent products, which would materially and adversely affect our results of operations and the value of our

trials necessary to support a pre-market approval application to the FDA for our products, including CGuard EPS stent are expensive and

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

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

Patient enrollment in clinical trials and the ability to

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

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

46 unchanged sentences

regulatory approval has been obtained for medical device products, the product and the manufacturer are subject to continual review,

including the review of adverse experiences and clinical results that are reported after our products are made available to patients,

including the review of adverse events and clinical results that are reported after our products are made available to patients,

and there can be no assurance that such approval will not be withdrawn or restricted.

24 unchanged sentences

and financial results.

expect to derive our revenue from sales of our CGuard EPS stent product and other products we may develop, such as CGuard EPS with enhancements.

If we fail to generate revenue from these sources, our results of operations and the value of our business would be materially and adversely

expect our revenue to be generated from sales of our CGuard EPS stent products and other products we may develop.

Future sales of CGuard

EPS will be subject to the receipt of regulatory approvals and commercial and market uncertainties that may be outside our control.

addition, there may be insufficient demand for other products we are seeking to develop, such as CGuard EPS with enhancements.

fail to generate expected revenues from these products, our results of operations and the value of our business and securities would

be materially and adversely affected.

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

currently manufacture our CGuard EPS and MGuard Prime EPS products at our facility in Tel Aviv, Israel.

If there were a disruption to

our existing manufacturing facility, we would have no other means of manufacturing our CGuard EPS or MGuard Prime EPS stents until we

were able to restore the manufacturing capability at our facility or develop alternative manufacturing facilities.

If we were unable

to produce sufficient quantities of our CGuard EPS or MGuard Prime EPS stents to meet market demand or for use in our current and planned

clinical trials, or if our manufacturing process yields substandard stents, our development and commercialization efforts would be delayed.

Additionally,

any damage to or destruction of our Tel Aviv facility or its equipment, prolonged power outage or contamination at our facility would

significantly impair our ability to produce either CGuard EPS or MGuard Prime EPS stents.

the production of our stents must occur in a highly controlled, clean environment to minimize particles and other yield and quality-limiting

contaminants.

In spite of stringent quality controls, weaknesses in process control or minute impurities in materials may cause a substantial

percentage of defective products in a lot.

If we are unable to maintain stringent quality controls, or if contamination problems arise,

our clinical development and commercialization efforts could be delayed, which would harm our business and results of operations.

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

with the FDA’s IDE regulations.

Failure to maintain compliance with IDE regulations could have a material adverse effect on our

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

the supervision of qualified investigators in accordance with current Good Clinical Practices, including the requirement that all research

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

The FDA classifies medical device candidates into “significant

risk” and “non-significant risk” devices.

Significant risk devices present a potential for serious risk to the health,

safety, or welfare of a subject.

Examples may include implants, devices that support or sustain human life, and devices that are substantially

important in diagnosing, curing, mitigating, or treating disease or in preventing impairment to human health.

If a medical device candidate

presents a significant risk, an IDE application must be submitted and approved prior to commencing any human clinical trials in the United

States in connection with such device.

The FDA may approve, conditionally approve, or deny an IDE or it may require further information

and, thus, delay approval.

On September 8, 2020, we received IDE approval for CGuard™ Carotid Stent System, CARENET-III.

addition to our recent IDE approval for CGuard™ Carotid Stent System, CARENET-III, we must apply for and obtain IRB approval of

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

A written protocol

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

before we may initiate or conduct the CGuard EPS trial.

If we obtain IDE approval, IRB approval, and meet all of the other applicable

requirements that must be met before beginning clinical trials in the United States, we will, then, be able to lawfully initiate the

clinical investigation of the safety and effectiveness of CGuard EPS in the United States.

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

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

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

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

to market in the United States in the future.

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

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

of the investigational device.

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

on our business, financial condition and results of operations.

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

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

preclude or delay regulatory approvals and commercialization, resulting in significant financial costs and reduced revenue.

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

to various causes, including, but not limited to, scheduling conflicts with participating clinicians and clinical institutions, difficulties

in identifying and enrolling patients who meet trial eligibility criteria, failure of patients to complete the clinical trial, delay

in or failure to meet regulatory and/or IRB requirements to conduct a clinical trial at a one or more prospective sites, and shortages

of supply in the investigational device.

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

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

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

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

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

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

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

They require the

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

the development and commercialization of our product candidates.

In some trials, a greater number of patients and a longer follow-up

period may be required.

Patient enrollment in clinical trials and the ability to successfully complete patient follow-up depends on many

factors, including the size of the patient population, the nature of the trial protocol, the proximity of patients to clinical sites,

the eligibility criteria for the clinical trial and patient compliance.

For example, patients may be discouraged from enrolling in our

clinical trials if the trial protocol requires them to undergo extensive post-treatment procedures or follow-up to assess the safety

and efficacy of our products, or they may be persuaded to participate in contemporaneous clinical trials of competitive products.

addition, patients participating in our clinical trials may die before completion of the trial or suffer adverse medical events unrelated

to or related to our products.

Delays in patient enrollment or failure of patients to continue to participate in a clinical trial may

cause an increase in costs and delays or result in the failure of the clinical trial.

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

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

and cost millions of dollars.

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

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

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

in preclinical studies and clinical trials.

In addition, market demand may change for products being tested due to the length of time

needed to complete requisite clinical trials.