What changed in this filing

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Item 9A. Controls and Procedures

2023-03-30 compared with 2022-03-07 · 817 added, 817 removed, 1105 unchanged (60% of the section changed)

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Financial Officer, Chief Administrative Officer, Secretary and Treasurer

Operating Officer

Manager of North America and VP of Global Marketing

Berman (1)(2)

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Our directors are divided into three classes.

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

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

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.

Marvin Slosman and Thomas J.

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.

Michael Berman is our Class 2 director, with his term of office expiring at our 2025 annual

meeting of stockholders.

Marvin Slosman, Thomas J.

Kester and Kathryn Arnold are our Class 3 directors, with their terms of expiring

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

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from George Washington University.

Tommasoli has served as our Chief Operating Officer since March 19, 2023.

Tommasoli’s appointment as Chief Operating

Officer, he served as our Senior Vice President of Global Sales and Marketing since November 2020 bringing over two decades of life sciences

industry experience to the Company.

Prior to joining the Company, Mr.

Tommasoli held commercial leadership positions at Integra LifeSciences,

a medical device manufacturing company that manufactures products for skin regeneration, neurosurgery, reconstructive and general surgery,

from 2011 to 2020, serving as the Senior Director of Indirect Markets from January 2017 to October 2020, as Director of Sales for Specialty

Surgical Solutions Europe from June 2014 to December 2016 and as Director of Sales for Neurosurgery EMEA from July 2011 to June 2014.

Prior to joining Integra, Mr.

Tommasoli was a Managing Partner at Alticare, an independent company focusing on start-ups and growth companies

in the medtech business from 2009 to 2011 and was the Director of St.

Jude Medical Neuromodulation division in France from 2007 to 2009.

Tommasoli has vast experience in commercializing innovative medical technology solutions that improve and advance standard of care.

Tommasoli received his B.A.

in nuclear engineering from Bologna University, Italy and his M.B.A.

from HEC Paris, France.

Gleason has served as our general manager of North America and vice president of global marketing since March 1, 2023.

Prior to joining

Gleason served as served as vice president of sales, vascular interventions at Surmodics from 2021.

Before that, from 2019 to

2021, he served as senior director, US marketing at Edwards Life Sciences (NYSE:

EW), a developer of artificial heart valve and hemodynamic

monitoring technologies, and, before that, from 2017 to 2019 as, chief commercial officer at Nuvaira, Inc., a privately held developer

of COPD therapies that preserve patient lung health.

Earlier in his career, Mr.

Gleason held sales and marketing leadership roles at

Cordis, a Cardinal Health company (NYSE:

CAH) from 2015 to 2016, Trivascular Technologies (part of Endologix) from 2012 to 2015, and

Abbott Vascular (NYSE:

ABT) from 2007 to 2010, where he launched the second FDA approved carotid stent system.

Gleason received a

Bachelor of Science, Engineering Science and Mechanics from Virginia Polytechnic Institute and State University and a Master of Business

Administration from the University of Maryland Smith School of Business.

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

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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.

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.

from Harvard College and his M.D.

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.

Mazor was sold to Medtronic in 2018.

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.

(x) since 2017 as a Director of Truleaf

Medical and (xi) since 2022 as a Director of Kedma Solar Ltd.

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

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

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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.

From 2013 to 2022 Mr.

Stuka served as a director of Caliber Imaging & Diagnostics, Inc.

(formerly Lucid,

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.

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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.

From 2004 till 2019 Mr.

Kester served as a director of Conestee Foundation Inc, a not for profit organization

that developed a 400 acre Nature Preserve in the center of Greenville County, SC .

Kester has served (i) since 2003 as a director

of Upstate forever, a not for profit in Greenville, SC focused on protecting special places in the 10 county upstate region of South

Carolina and promoting sustainable development, (ii) since 2021 as a director of South Carolina Environmental Law Project, a not for

profit law firm representing clients on environmental issues.

Kester’s experience includes 28 years from 1974 until 2002 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

in mechanical engineering from Cornell University and an M.B.A.

from Harvard University.

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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.”

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

table below provides certain information regarding the diversity of our board of directors as of the date set forth below.

Board Diversity Matrix (As of March 28, 2023)

Total Number of Directors

Did 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

African American or Black

Alaskan Native or Native American

Hispanic or Latinx

Native Hawaiian or Pacific Islander

Two or More Races or Ethnicities

Did Not Disclose Demographic Background

Relationships

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Our compensation committee is currently comprised of Messrs.

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,

by contacting the Company.

Stuka and Kester and Ms.

Arnold, 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.

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, 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

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table below sets forth the compensation earned by our named executive officers for the twelve-month period ended December 31, 2022 and

and Principal Position

and Chief Executive Officer

Name and Principal Position

Marvin Slosman

President and Chief Executive Officer

164,698 (4)(6)

Financial Officer, Secretary and Treasurer

Chief Financial Officer, Secretary and Treasurer

164,257 (4)(6)

Andrea Tommasoli (8)

226,837 (9)(10)

71,193 (4)(10)(11)

Chief Operating Officer

46,572 (4)(10)(11)

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

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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.

Slosman and Mr.

Shore each signed waivers in connection with the COVID-19 pandemic and certain cost-reduction

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.

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

as of July 1, 2021, Mr.

Slosman’s annual base salary was increased to $420,000.

as of July 1, 2022, Mr.

Slosman’s annual base salary was increased to $445,000.

bonus awards for the 2021 calendar year were approved by the compensation committee in January 2022.

Cash bonus awards for the 2022

calendar year were approved by the compensation committee in January 2023.

Slosman’s other compensation for the twelve months ended December 31, 2022 and 2021 consisted of benefits related to health

as of January 1, 2022, Mr.

Shore’s annualized base salary was increased to NIS 1,073,280.

Compensation amounts received in

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 3.519 NIS per dollar which was the exchange rate as of December 31, 2022.

The average exchange rate for the twelve month period ended December 31, 2022 and 2021 were 3.359 NIS per dollar and 3.229 NIS per

dollar, respectively.

Shore’s other compensation consisted solely of benefits in the twelve months ended

December 31, 2022 and 2021.

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, cell phone and a daily food allowance.

Tommasoli was appointed Chief Operating Officer in March 2023.

Amounts presented are during Mr.

Tommasoli’s tenure as Senior

Vice President of Global Sales and Marketing.

as of January 1, 2022, Mr.

Tommasoli’ s annualized base salary was increased to Euro 215,256.

amounts received in non-U.S.

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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

dollars using 1.073 Euro per dollar which was the exchange rate as of

December 31, 2022.

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, 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.

The average exchange rate for the twelve-month period ended December 31, 2022 and 2021 were 1.054 Euro per dollar

and 1.183 Euro per dollar, respectively.

consists of a cash bonus of $14,546 and sales commissions of $56,647 with respect to 2022 and a cash bonus of $21,599 and sales commissions

of $24,973 with respect to 2021.

Tommasoli’s other compensation consisted solely of benefits in the twelve months ended

December 31, 2022 and 2021.

In each of the periods reported, Mr.

Tommasoli’ s benefits

included our contributions to car allowance, retirement benefits, health insurance, provident

fund and other insurances typical in France (excluding social security charges for illness,

family allowance and retirement).

with Named Executive Officers

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

8, 2021 and January 5, 2023 (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.

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.

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.

consideration for his services as chief executive officer, Mr.

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

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,

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.

Slosman will be entitled to receive (i) an annual base salary, which as

of July 1, 2022 was increased to $445,000, 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;

annual performance bonuses in an amount up to 60% 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

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

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 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

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 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

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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

Slosman cash payments totalling $100,000

in the aggregate, payable in equal instalments 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);

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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, 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.

Shore, which was amended on January 5, 2015, July 25, 2016, March 25, 2019, August 14, 2020, November

4, 2021, January 17, 2022 and January 15, 2023 (as amended, the “Shore Employment Agreement”).

The Shore Employment Agreement

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.

We subsequently amended the Shore 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 Shore Employment Agreement, Mr.

Shore is entitled to an annual base salary, which as of January 1, 2023 was increased

to no less than NIS 93,912 per month (NIS 1,126,944 on an annualized basis).

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

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for such awards.

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.

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

Agreement), or upon his resignation for “good reason” (as such term is defined in the Shore Employment Agreement), Mr.

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

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;

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;

(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.

Shore obtains coverage from a new employer;

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

services, subject to certain restrictions.

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’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 the Shore Employment Agreement 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;

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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.

to the Shore 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

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.

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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,

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;

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

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).

have been a party to an employment agreement with Mr.

Andrea Tommasoli since November 2, 2020 (the “Tommasoli Agreement”).

Tommasoli served as the Company’s Senior Vice President of Global Sales and Marketing since November 2020 until his promotion

to Chief Operating Officer, effective as of March 19, 2023.

Following his promotion Mr.

Tommasoli receives an annual base salary of 240,000

Euros (approximately $260,000) and is entitled to a yearly gross bonus of 35% of his base salary, which will be based on the Board’s

assessment of Mr.

Tommasoli’s individual performance and the overall performance of the Company.

Tommasoli’s remuneration

is subject to deduction of the employee’s share of social contributions, and CSG and CRDS.

The Tommasoli Agreement was entered

into for an indefinite period, and it may be terminated at any time by either the Company or Mr.

Tommasoli with a six months’ notice

however, no notice period applies in case of serious or gross misconduct.

The Tommasoli Agreement further provides for standard

benefits, such as reimbursement of business expenses, professional vehicle expenses and participation in the Company’s employee

benefit plans and programs.

The Tommasoli Agreement also contains certain standard confidentiality requirements.

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

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.

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 named executive officers or directors, other

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

do not currently have any change-of-control or severance agreements with any of our named 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”

Equity Awards at December 31, 2022

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Option Awards

Number of securities underlying unexercised options (#) exercisable

Number of securities underlying unexercised options (#) unexercisable

unexercisable

Option exercise price ($)

Option expiration date

Number of shares of stock that have not vested (#)

Market value of shares of stock that have not vested ($)

Marvin Slosman

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

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,

Andrea Tommasoli

options vest annually, with one vesting remaining on January 2, 2023.

restricted stock units (RSUs) vest annually, with one vesting remaining on January 2, 2023.In 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 vesting remaining on August 31, 2023.

RSUs vest annually, with one vesting remaining on August 31, 2023.

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

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

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

shares of restricted stock vest annually, with one vesting remaining on August 31, 2023.

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

shares of restricted stock vest annually, with one-half vesting on each of November 10, 2023, and November 10, 2024.

These options vest annually, with one vesting remaining on November 2,

These shares of restricted stock vest annually, with

one vesting remaining November 2, 2023.

These shares of restricted stock vest annually, with one-half vesting on each of October 3, 2023, and October 3,

Exercises and Stock Vested

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Equity Incentive Plan

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

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.

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, 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.

Earned or Paid in Cash ($)

Other Compensation ($)

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.

2021 Equity Incentive Plan is administered by our compensation committee.

of December 31, 2022, we had 739,826 shares of common stock available for future issuance under our 2021 Equity Incentive Plan.

of March 28, 2023, we had 700,039 shares of common stock available for future issuance under our 2021 Equity Incentive Plan.

following table provides certain information concerning the compensation for services rendered in all capacities by each non-employee

director serving on our board during the year ended December 31, 2022, other than Mr.

Slosman, our Chief Executive Officer, who did not

receive additional compensation for his services as director and whose compensation is set forth in the Summary Compensation Table found

elsewhere in this Item 11.

Fees Earned or Paid in Cash ($)

Stock Awards ($)

Option Awards ($)

All Other Compensation ($)

Michael Berman

Campbell Rogers, M.D.(1)

Thomas Kester

Gary Roubin, M.D.

Kathryn Arnold

Rogers’ term as a director ended on August 31, 2022

the 2022 calendar year, our board approved the following compensation for our independent directors:

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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.

on January 1, 2023, directors may elect to receive all or a portion of their cash retainer amount in shares of our common stock under

the 2021 Equity Incentive Plan.

If a director makes that election, a stock award under the 2021 Plan will be paid quarterly on the first

day of each quarter (“Grant Dates”) and will become fully vested on the Grant Dates.

The stock award will be determined by

dividing (x) the product of the cash retainer amount and percentage of the cash retainer amount elected to be taken in shares by (y)

the “Fair Market Value” (as defined in the 2021 Equity Incentive Plan of a share on the Grant Dates.

If a director’s

service on the board terminates for any reasons prior to a Grant Date, he/she will receive a pro rata portion of shares or cash based

on the number of days served on the board during the relevant quarter.

and Officers’ Liability Insurance

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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.

percentages of common stock beneficially owned are reported on the basis of regulations of the 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

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As of March 28, 2023, we had 8,326,648 shares outstanding.

of Beneficial Owner

of Shares Beneficially Owned (1)

Beneficially Owned (1)

and Directors

directors and executive officers as a group (8 persons)

Name of Beneficial Owner

Number of Shares Beneficially Owned (1)

Percentage Beneficially Owned (1)

Officers and Directors

Marvin Slosman

Michael Berman

Thomas Kester

Gary Roubin, M.D.

Kathryn Arnold

Shane Gleason

Andrea Tommasoli

All directors and executive officers as a group (9 persons)

ownership of less than one percent.

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exercisable within 60 days of March 30, 2023, (iii) 52,235 Restricted Stock Units granted under the 2013 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.

48,856 Restricted Stock Units granted under the 2021 Equity Incentive Plan, (v) options to purchase 64,417 shares of common stock

that are currently exercisable or exercisable within 60 days of March 30, 2023, and (vi) 5,048 warrants to purchase shares of common

stock that are currently exercisable.

of (i) 54,902 shares of common stock, (ii) options to purchase 22,612 shares of common stock that are currently exercisable or exercisable

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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.

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.

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 30, 2023, and (iii) options to purchase 4,263 shares of common stock that are currently

exercisable or exercisable within 60 days of March 30, 2023.

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.

Stuka is the principal and managing member of Osiris Investment Partners, L.P., and, as such, has beneficial ownership of (A) 73,534

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.

shares of common stock (B) personally holding (i) options to purchase 6,443 shares of common stock that are currently exercisable or

exercisable within 60 days of March 30, 2023, (ii) 5,310 shares of restricted stock granted under the InspireMD, Inc.

2013 Long-Term

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

Incentive Plan, (iii) 17,386 shares of restricted stock granted under the 2021 Equity Incentive Plan, and (iv) 19,607 shares of

common stock.

of (i) 19,077 shares of common stock, (ii) 8,780 shares of restricted stock granted under the InspireMD, Inc.

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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

Plan, (ii) 11,499 shares of restricted stock granted under the 2021 Equity Incentive Plan, and (iii) 22,880 warrants to purchase

shares of common stock that are currently exercisable and (iv) options to purchase 8,790 shares of common stock that are currently

exercisable or exercisable within 60 days of March 28, 2023.

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.

of (i) 9,261 shares of common stock, (ii) 7,024 shares of restricted stock granted under the InspireMD, Inc.

2013 Long-Term Incentive

Plan, (iii) 11,499 shares of restricted stock granted under the 2021 Equity Incentive Plan, and (iv) options to purchase 4,258 shares

of common stock that are currently exercisable or exercisable within 60 days of March 28, 2023.

of (i) 31,825 shares of common stock, (ii) 6,034 shares of restricted stock granted under the InspireMD, Inc.

2013 Long-Term

Incentive Plan, (iii) 39,513 shares of restricted stock granted under the 2021 Equity Incentive Plan, and (iv) options to purchase

10,609 shares of common stock that are currently exercisable or exercisable within 60 days of March 28, 2023.

Compensation Plan Information

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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

plans not approved

by security holders

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 plans approved by security holders

Equity compensation plans not approved by security holders

of awards made to individuals outside the InspireMD, Inc.

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board of directors has determined that Dr.

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.

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.

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a member of PricewaterhouseCoopers International Limited, for the years ended December 31, 2022 and 2021 are described below.

– related fees

Audit Fees (1)

Audit – related fees

All other fees

billed us audit fees in the aggregate amount of $188,000 and $176,000 for the years ended December 31, 2022 and 2021, respectively.

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billed us audit-related fees in the aggregate amount of $25,900 and $49,900 for the year ended December 31, 2022 and 2021, respectively.

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.

The fees for the year ended December 31, 2022 mostly related to registration statement on Form S-3 filed with the SEC in June 2022.

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.

billed us tax fees in the aggregate amount of $40,282 and $38,675 for the year ended December 31, 2022 and 2021, respectively.

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Consolidated Balance Sheets as of December 31, 2022 and 2021

Statements of Operations for the Years Ended December 31, 2021 and 2020

Consolidated Statements of Operations for the Years Ended December 31, 2022 and 2021

Consolidated Statements of Changes in Equity for the Years Ended December 31, 2022 and 2021

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Description of Securities

Employment Agreement, by and between InspireMD Ltd.

and Craig Shore, dated as of November 28, 2010 (incorporated by reference to Exhibit 10.21 to Current Report on Form 8-K filed with the Securities and Exchange Commission on April 6, 2011)

Form of Indemnity Agreement between InspireMD, Inc.

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Kester, dated September 6, 2016

Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on November 29, 2017)

Amendment to Securities Purchase Agreement, dated February 21, 2018 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on February 21, 2018)

Waiver Agreement, dated February 26, 2018 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on February 26, 2018)

Form of Underwriter Warrant, dated March 1, 2018 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on March 1, 2018)

Waiver Agreement, dated March 28, 2018 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on March 29, 2018)

Form of Underwriter Warrant, dated April 2, 2018 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on April 3, 2018)

Letter Agreement, dated June 28, 2018, by and between InspireMD, Inc.

and Sabby Healthcare Master Fund, Ltd.

(incorporated by reference to Exhibit 10.67 to the Registration Statement on Form S-1, Amendment No.

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.

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Sixth Amendment to Employment Agreement, dated January 17, 2022, by and between InspireMD, Inc.

and Craig Shore.

and Craig Shore (incorporated by reference to Exhibit 10.51 to the Annual Report on Form 10-K filed on March 7, 2022)

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

employees under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.53 to the Annual Report on Form 10-K filed on March 7, 2022)

Form of Nonqualified Stock Option Agreement for European employees under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.54 to the Annual Report on Form 10-K filed on March 7, 2022)

Form of Nonqualified Stock Option Agreement for consultants under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.55 to the Annual Report on Form 10-K filed on March 7, 2022)

Form of Nonqualified Stock Option Agreement for Israeli employees under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.56 to the Annual Report on Form 10-K filed on March 7, 2022)

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

directors under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.57 to the Annual Report on Form 10-K filed on March 7, 2022)

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)

Consent of Kesselman & Kesselman, Certified Public Accountants

Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

Certification of Chief Executive Officer Pursuant to Section 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Certification of Chief Financial Officer Pursuant to Section 18 U.S.C.

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, 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

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employees under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.58 to the Annual Report on Form 10-K filed on March 7, 2022)

of Restricted Stock Award Agreement for U.S.

directors under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit

10.59 to the Annual Report on Form 10-K filed on March 7, 2022)

of Restricted Stock Award Agreement for Israeli employees under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit

10.60 to the Annual Report on Form 10-K filed on March 7, 2022)

of Restricted Stock Award Agreement for European employees under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit

10.61 to the Annual Report on Form 10-K filed on March 7, 2022)

of Restricted Stock Unit Award Agreement under the 2021 Equity Incentive Plan (incorporated

by reference to Exhibit 10.62 to the Annual Report on Form 10-K filed on March 7, 2022)

Agreement by and between InspireMD, Inc.

and A.G.P./Alliance Global Partners, dated June 3, 2022 (incorporated by reference to Exhibit

1.2 of the Registration Statement on Form S-3 as filed on June 3, 2022).

Amendment to Employment Agreement, dated January 5, 2023, by and between InspireMD, Inc.

and Marvin Slosman

Amendment to Employment Agreement, dated January 18, 2023, by and between InspireMD, Inc.

and Craig Shore

Agreement, dated November 2, 2020, by and between the Company and Andrea Tommasoli

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)

of Kesselman & Kesselman, Certified Public Accountants

Certification

of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

Certification

of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

Certification

of Chief Executive Officer Pursuant to Section 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act

Certification

of Chief Financial Officer Pursuant to Section 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act

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Management contract or compensatory plan or arrangement.

Portions of this exhibit (indicated by asterisks) have been omitted under rules of the U.S.

Securities and Exchange Commission permitting

the confidential treatment of select information.

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

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executive officer)

Financial Officer, Chief Administrative Officer,

Secretary and Treasurer

Financial Officer, Chief Administrative Officer, Secretary and Treasurer

financial and accounting officer)

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Michael Berman

Campbell Rogers, M.D.

Kathryn Arnold

INSPIREMD, INC.

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, 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.

and its subsidiaries (the “Company”) as of December

31, 2022 and 2021, 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, 2022 and 2021,

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.

Doubt About the Company’s Ability to Continue as a Going Concern

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 1b to the consolidated financial statements, the Company has suffered recurring losses from operations and cash outflows from

operating activities that raise substantial doubt about its ability to continue as a going concern.

Management’s plans in regard

to these matters are also described in Note 1b.

The consolidated financial statements do not include any adjustments that might result

from the outcome of this uncertainty.

consolidated financial statements are the responsibility of the Company’s management.

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dollars in thousands)

and cash equivalents

bank deposits

CURRENT ASSETS

Cash and cash equivalents

Short-term bank deposits

Accounts receivable:

Prepaid expenses

Receivable for sale of Shares

TOTAL CURRENT ASSETS

plant and equipment, net

lease right of use assets

in respect of employee rights upon retirement

NON-CURRENT ASSETS

Property, plant and equipment, net

Operating lease right of use assets

Fund in respect of employee rights upon retirement

TOTAL NON-CURRENT ASSETS

LIABILITIES AND EQUITY

payable and accruals:

CURRENT LIABILITIES

Accounts payable and accruals:

TOTAL CURRENT LIABILITIES

lease liabilities

for employee rights upon retirement

LONG-TERM LIABILITIES

Operating lease liabilities

Liability for employee rights upon retirement

TOTAL LONG-TERM LIABILITIES

COMMITMENTS AND CONTINGENT LIABILITIES (Note 6)

TOTAL LIABILITIES

Common stock, par value $ 0.0001 per share;

150,000,000 shares authorized at December 31, 2021 and 2020;

8,296,256 and 3,284,322 shares issued and outstanding at December 31, 2021 and 2020, respectively

Preferred B shares, par value $ 0.0001 per share;

AND CONTINGENT LIABILITIES (Note 6)

stock, par value $ 0.0001 per share;

150,000,000 shares authorized at December 31, 2022 and 2021;

0 and 17,303 shares issued and outstanding at December 31, 2021 and 2020, respectively

Preferred C shares, par value $ 0.0001 per share;

8,330,918 and 8,296,256 shares issued

and outstanding at December 31, 2022 and 2021, respectively

C shares, par value $ 0.0001 per share;

1,172,000 shares authorized at December 31, 2022 and 2021;

1,718 and 2,343 shares issued and outstanding at December 31, 2021 and 2020, respectively

Preferred stock, value

Additional paid-in capital

Accumulated deficit

Total liabilities and equity

1,718 shares issued and outstanding

at December 31, 2022 and 2021;

paid-in capital

liabilities and equity

* Represents an amount

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dollars in thousands, except per share data)

Year Ended December 31,

REVENUES (2020 - net of settlement payment of $ 580 , see note 6 a)

COST OF REVENUES

Ended December 31,

and development

and marketing

and administrative

operating expenses

Research and development

Selling and marketing

General and administrative

Total operating expenses

LOSS FROM OPERATIONS

FINANCIAL EXPENSES

LOSS BEFORE TAX EXPENSES

NET LOSS PER SHARE - basic and diluted

WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES USED IN COMPUTING NET LOSS PER SHARE - basic and diluted

FROM OPERATIONS

INCOME (EXPENSES), net:

BEFORE TAX EXPENSES

LOSS PER SHARE - basic and diluted

AVERAGE NUMBER OF ORDINARY SHARES USED IN COMPUTING NET LOSS PER SHARE - basic and diluted

accompanying notes are an integral part of the consolidated financial statements.

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Preferred Stock

Additional paid-in

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

as of January 1, 2021

$ ( 168,176 )

of common shares, including at the market offering net of $ 2,024 issuance costs

of Warrants F

of Warrants G

of Series B Convertible Preferred Stock to common shares

of Series C Convertible Preferred Stock to common shares

compensation related to restricted stock, restricted stock units and stock options award, net of forfeitures of 20,822 shares

up of shares due to reverse stock split effectuated on April 26, 2021

as of December 31, 2021

* Represents an amount

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Preferred Stock

Additional paid-in

BALANCE as of December 31, 2020

$ ( 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 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

as of December 31, 2021

compensation related to restricted stock, restricted stock units and stock options award, net of forfeitures of 10,832 shares

compensation related to restricted stock, restricted stock units and stock options award, net of forfeitures of shares

as of December 31, 2022

* Represents an amount

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dollars in thousands)

Year ended December 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

Adjustments required to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Loss (gain) from sale of property, plant and equipment

Change in liability for employees rights upon retirement

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

Gains on amounts funded in respect of employee rights upon retirement, net

Changes in operating asset and liability items:

ended December 31,

FLOWS FROM OPERATING ACTIVITIES:

required to reconcile net loss to net cash used in operating activities:

and amortization

from sale of property, plant and equipment

in liability for employees rights upon retirement

financial expense

in operating right of use asset and operating leasing liability

in interest receivable on short term deposits

compensation expenses

(gain) on amounts funded in respect of employee rights upon retirement, net

in operating asset and liability items:

(Increase) in prepaid expenses

Decrease (increase) in trade receivables

Decrease (increase) in other receivables

Decrease (increase) in inventory

Increase (decrease) in trade payables

Increase (decrease) in other payables

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property, plant and equipment

Proceeds from sale of property, plant and equipment

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 $ 2,024 and $ 1,110 issuance costs, respectively

Net cash provided by financing activities

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

BALANCE OF CASH AND CASH EQUIVALENTS AT END OF YEAR

SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:

Acquisition of right-of-use assets by means of lease liabilities

Receivable for Shares

(increase) in trade receivables

in other receivables

(increase) in inventory

(decrease) in trade payables

(decrease) in other payables

cash used in operating activities

FLOWS FROM INVESTING ACTIVITIES:

of property, plant and equipment

in short-term bank deposits

from short-term bank deposits

funded in respect of employee rights upon retirement

cash provided by (used in) investing activities

FLOWS FROM FINANCING ACTIVITIES:

costs of At The Market offering

from issuance of shares and warrants and exercise of Pre-Funded Warrants and unit purchase option, net of $ 2,024 issuance costs

cash provided by (used in) financing activities

OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

IN CASH AND CASH EQUIVALENTS

OF CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

OF CASH AND CASH EQUIVALENTS AT END OF YEAR

NON-CASH INVESTING AND FINANCING ACTIVITIES:

of right-of-use assets by means of lease liabilities

accompanying notes are an integral part of the consolidated financial statements.

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1 - DESCRIPTION OF BUSINESS

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.

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

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.

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 MGuard™ Prime™ embolic protection system (“MGuard Prime EPS”) was marketed for use in patients

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

or bypass surgery.

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

MGuard Prime EPS received CE

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

Over the past

years, there has been a shift in industry preferences away from bare-metal stents, such as MGuard Prime EPS in ST-Elevation Myocardial

Infarction (“STEMI”) patients.

As a result of declining sales of the MGuard Prime EPS, which the Company believes is

largely driven by the predominant industry preferences favoring drug-eluting, or drug-coated, stents, during the second quarter of

2022, the Company ceased sales of the Company’s MGuard Prime EPS following a phase out period.

Company markets its products through distributors in international markets, mainly in Europe.

Company has an accumulated deficit as of December 31, 2022, as well as a history of net losses and negative operating cash flows

in recent years.

The Company expects to continue incurring losses and negative cash flows from operations until its product, CGuard™

EPS, reaches commercial profitability.

As a result of these expected losses and negative cash flows from operations, along with the

Company’s current cash position, the Company has sufficient resources to fund operations until the end of September 2023.

there is substantial doubt about the Company’s ability to continue as a going concern.

These financial statements have been

prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the

outcome of this uncertainty.

plans include the continued commercialization of the Company’s product and raising capital through the sale of additional equity

securities, debt or capital inflows from strategic partnerships.

There are no assurances however, that the Company will be successful

in obtaining the level of financing needed for its operations.

If the Company is unsuccessful in commercializing its products and

raising capital, it may need to reduce activities, curtail or cease operations.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

DESCRIPTION OF BUSINESS (continued):

to satisfy regulatory requirements of the new European Medical Device Regulation could prevent

the Company 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, the Company must comply with EU law on medical devices, which, until May 26, 2021 was governed by the Medical

Device Directive 93/42/EEC (“MDD”), by presenting comprehensive technical files for its 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.

The Company has obtained ISO 13485 quality system certification and CGuard

EPS that the Company currently distributes into the European Union, displays the required CE mark.

In order to maintain certification,

the Company is required to pass an annual surveillance audit conducted by Notified Body auditors.

European Union replaced the MDD with the new European Medical Device Regulation, or MDR (MDR 2017/745).

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 the Company’s specific case, the

Company’s’ CE mark for CGuard EPS under the MDD expired on November 12, 2022 and it is in the final stages of technical

documentation review by the Notified Body auditor to meet the Medical Device Regulation (“MDR”) (MDR 2017/745)

requirements (which replaced the MDD) for recertification.

In the meantime, on February 14, 2023, the Company received a derogation

per Article 97 paragraph 1 of Regulation 2017/745 from the Agency for Medicines and Health Products (FAMHP) allowing it to continue

marketing CGuard EPS in the European Union 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, 2027.

This allows the Company to market and sell CGuard EPS in the EU and certain other jurisdictions

subject to certain procedural requirements while the Company’s MDR CE recertification is pending.

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

1 - DESCRIPTION OF BUSINESS (continued):

Related to the Geopolitical and Military Tensions Between Russia and Ukraine in Europe

February 2022, Russia launched a military invasion into Ukraine.

The Company derived approximately 9.9% of total sales in Russia

and Belarus in 2021 while during 2022 the Company’s sales to Russia and Belarus were 12.1%.

The escalation of geopolitical

instability in Russia and Ukraine as well as currency fluctuations in the Russian Ruble could negatively impact the Company’s

operations, sales, and future growth prospects in that region.

a result of the crisis in Ukraine, the United States and the EU have implemented sanctions against certain Russian individuals and

entities and have made it more difficult for us to collect on outstanding accounts receivable from customers in this region.

Company’s global operations expose the Company to risks that could adversely affect the Company’s business, financial condition,

results of operations, cash flows or the market price of the Company’s securities, including the potential for increased tensions

between the United States and Russia resulting from the current situation involving Russia and Ukraine, tariffs, economic sanctions

and import-export restrictions imposed by either nation, and retaliatory actions by the other nation, as well as the potential negative

impact on the Company’s business and sales in Russia, and Belarus.

Current geopolitical instability in Russia and Ukraine and

related sanctions by the U.S.

government against certain companies and individuals may hinder the Company’s ability to conduct

business with potential or existing customers and vendors in these countries.

government has imposed sanctions through several executive orders restricting U.S.

companies from conducting business with specified

Russian individuals and companies.

While the Company believes that the executive orders currently do not preclude the Company from

conducting business with the Company’s current customers or vendors in Russia, and Belarus, the sanctions imposed by the U.S.

government may be expanded in the future to restrict the Company from engaging with them.

If the Company is unable to conduct business

with new or existing customers or vendors or pursue business opportunities in Russia, or Belarus, the Company’s business, including

revenue, profitability and cash flows, and operations could be adversely affected.

The Company cannot provide assurance that current

sanctions or potential future changes in sanctions will not have a material impact on the Company’s operations in Russia, and

Belarus or on the Company’s financial results.

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

2 - SIGNIFICANT ACCOUNTING POLICIES

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.

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 revenues and expenses during the reporting periods.

Actual results could differ from those estimates.

2 unchanged sentences

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

currency of the primary economic environment in which the operations of the Company and its subsidiaries are conducted is the U.S.

(“$” or “dollar”).

Accordingly, the functional currency of the Company and its subsidiaries is the U.S.

dollar figures are determined as follows:

15 unchanged sentences

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.

Bank deposits with original maturities of more than three months but less than one year are presented as part of short-term bank

Deposits are presented at their cost which approximates market values including accrued interest.

Interest on deposits is recorded as

financial income.

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

instruments that may potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents and short-term

bank deposits, 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.

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”.

5 unchanged sentences

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 leases are included in operating lease right-of-use (“ROU”) assets.

Short-term balances regarding lease liabilities are included in accounts payable and accruals - Other and long-term balances regarding lease liabilities are included in 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.

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

1 unchanged sentence

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 ).

method over the estimated useful lives of the

related assets:

years for computers and other electronic equipment,

years for office furniture and equipment and machinery

and equipment (mainly seven

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.

Impairment in

value of long-lived assets

Company tests long-lived tangible assets for impairment whenever events or circumstances present an indication of impairment.

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)

1 unchanged sentence

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

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.

occurs when products are shipped.

this occurs when products are shipped.

In few cases when products are directly sold to medical centers on consignment basis, revenue

is recognized when the product is consumed.

Company recognizes the incremental costs of obtaining contracts as an expense since the amortization period of the assets that the Company

5 unchanged sentences

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.

and development costs, including the costs of the Company’s US based clinical trial costs of approximately $ 4,468,000 and $ 2,037,000 for the years

ended December 31, 2022 and 2021, respectively, and 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.

Company has equity incentive plans under which the Company grants equity awards, including stock options, restricted stock and restricted

stock units (“RSUs”) to employees and service providers.

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.

The Company elected to recognize compensation expenses for awards to employees 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”.

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 position 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

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

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

Deferred 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.

16 unchanged sentences

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.

of shares of common stock related to outstanding options, warrants, restricted stock, RSUs and Series C Convertible

Preferred Stock excluded from the calculations of diluted loss per share were 2,741,355 and 2,840,179 for the years ended December 31,

2022 and 2021, respectively.

Segment reporting

22 unchanged sentences

Instruments - Credit Losses

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

In 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.

November 2019, the FASB issued ASU No.

2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815),

and Leases (Topic 842):

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

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.

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.

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 had 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 does not believe the adoption of this standard will have a material impact on its consolidated financial statements.

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

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circumstances.

to section 14 of the Israeli Severance Compensation Act, 1963, some of the Company’s employees are entitled to have monthly deposits,

to section 14 of the Israeli Severance Compensation Act, 1963, most 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.

1 unchanged sentence

the Company from any future severance payments to these employees.

The severance pay expenses for such employees were approximately $ 241,000

and $ 199,000 for the years ended December 31, 2022 and 2021, respectively.

severance pay liability of the Company for the rest of its Israeli employees, which reflects the undiscounted amount of the liability,

4 unchanged sentences

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.

The severance pay expenses for such employees were approximately $ 68,000 and $ 103,000

for the years ended December 31, 2022 and 2021, respectively.

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

5 – LEASE AGREEMENTS

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 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.

Company’s Israeli subsidiary had a lease agreement for a facility in Israel, which expired on December 31, 2022 with an option

to extend the agreement for two additional years until December 31, 2024.

On May 25, 2022 the Company amended the agreement mentioned

above and extended it until December 31, 2026 as well as leasing of additional space in the facility, the additional space amendment

was taken in consideration when calculating the operating lease right of use assets and liabilities.

lease cost for the years ended December 31, 2022 and 2021 was $ 442,000 and $ 476,000 respectively.

information related to leases are as follows:

13 unchanged sentences

6 - COMMITMENTS AND CONTINGENT LIABILITIES :

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 $ 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.

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.

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

Agreement with Chinese Partner

February 3, 2021, the Company entered into a distribution agreement (the “Distribution Agreement”) with three China-based

12 unchanged sentences

on 50 % of the Distributor costs incurred up to December 31, 2022.

The liability for the year ended December 31, 2021 is immaterial.

The liability at December 31, 2022.

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.

and such shares began trading on Nasdaq on May 21, 2021 under the symbol, “NSPR.”

April 19, 2021, the Company filed with the Secretary of State of Delaware a Certificate of Amendment to the Company’s Amended and

1 unchanged sentence

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

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

7 – EQUITY (continued):

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):

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.

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 G Warrants.

The offering price to the

public was $ 9.30

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.

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.

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.

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

Agreement, which included a securities purchase agreement 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

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, 2021, the Company sold 818,523 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 .

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 .

July 7, 2016, the Company issued 442,424 shares of Series B Preferred Stock in a public offering.

During 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.

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

March 14, 2017, the Company issued 1,069,822

shares of Series C Preferred Stock in a public

the year ended December 31, 2021, an amount of 625

shares of Series C Convertible Preferred Stock were converted into 831

shares of common stock.

As of December 31, 2021 and 2022, there were 1,718

shares of Series C Preferred Stock outstanding with a total stated value of $10,997 which convertible into an aggregate of 2,284

shares of our common stock reflecting a conversion price equal to $ 4.815.

of December 31, 2022, the Company has outstanding warrants to purchase an aggregate of 1,793,815 shares of common stock as follows:

3 unchanged sentences

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):

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 ,

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 years ended December 31, 2022 and 2021, the Company granted stock options to the CEO, employees, consultants and directors to

purchase a total of 154,508 and 225,225 , respectively, shares of the Company’s common stock.

The options have exercise prices

ranging from $ 2.61 -$ 2.97 and $ 3.89 -$ 10.05 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

$ 360,356 and $ 1,026,000 , respectively.

Of the 154,508 options granted during the year ended December 31, 2022, 109,839 options are

subject to a three -year vesting period, with one-third of such awards vesting each year and 44,669 options with performance conditions,

mainly related to clinical activities.

the years ended December 31, 2022 and 2021, the Company granted to the employees and directors 45,494 and 419,943 restricted stock,

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 $ 109,886 and $ 1,781,981 , respectively.

The restricted stock are subject to a three -year vesting period, with one-third of such awards vesting each year.

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, 2021 and 2020, are subject to a three -year vesting period, with one-third of such awards vesting

The restricted stock

are subject to a three-year vesting period, with one-third of such awards vesting each year.

the year ended December 31, 2021, the Company granted to the CEO 146,567 RSUs.

The fair value of these restricted

stock units was approximately $ 603,856 .

The RSUs granted during the year ended December 31, 2021, are subject to

a three -year vesting period, with one-third of such awards vesting each year.

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

7 – EQUITY (continued):

The following table summarizes information about stock options granted to employees:

SCHEDULE OF STOCK OPTIONS GRANTED

following table summarizes information about stock options granted to employees:

ended December 31

- beginning of period

Outstanding-end

end of period

at the end of the period

The following table summarizes information about stock options granted to non-employees:

following table summarizes information about stock options granted to non-employees:

ended December 31

4 unchanged sentences

at the end of the period

The following table summarizes information about restricted stock granted to employees:

following table summarizes information about restricted stock granted to employees:

SCHEDULE OF RESTRICTED STOCK GRANTED TO EMPLOYEES

6 unchanged sentences

7 – EQUITY (continued):

The following table summarizes information about Restricted Stock Units granted to employees:

following table summarizes information about RSUs 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:

following table provides additional information about all options outstanding and exercisable:

SCHEDULE OF ADDITIONAL INFORMATION ABOUT ALL OPTIONS OUTSTANDING AND EXERCISABLE

3 unchanged sentences

$ 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, 2022 was 8.41 years.

3 unchanged sentences

granted was estimated using the Black-Scholes option-pricing model.

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

7 – EQUITY (continued):

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:

December 31, 2022 and 2021:

SCHEDULE OF FAIR VALUE OF OPTIONS GRANTED TO EMPLOYEES

ended December 31

of restricted stock

interest rates

1 unchanged sentence

0.59 %- 1.40 %

127.43 %- 130.93 %

129.11 %- 136.78 %

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

7 – EQUITY (continued):

Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.

5 unchanged sentences

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.

of December 31, 2022, the total unrecognized compensation cost on employee and non-employee stock options, restricted stock and RSUs, related to unvested stock-based compensation, amounted to approximately $ 1.30 million.

This cost is expected to be recognized

12 unchanged sentences

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 .

During the twelve months ended December 31, 2022 and 2021,

a consulting company whose founder and CEO is our new board member provided certain marketing services in the amount of $ 9,645 and $ 33,775 ,

respectively.

9 - TAXES ON INCOME :

Tax laws applicable to the Company and its subsidiaries

laws applicable to the Company and its subsidiaries

in the United States

7 unchanged sentences

tax rate of 17.15 %.

Tax benefits under the Law for the Encouragement of Capital Investments, 1959 (the “Law”):

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.

11 unchanged sentences

The Company elected the year 2011 as a year of election

and accordingly 2022 is the last year that would have entitled the Company tax benefits under this law.

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

7 unchanged sentences

shall be taxable at the regular corporate tax rate.

Conditions for entitlement to the benefits

for entitlement to the benefits

entitlement to the above benefits is conditional upon InspireMD Ltd.

6 unchanged sentences

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

forward tax losses

of December 31, 2022, the Company had a net carry forward tax loss of approximately $ 51 million, of which approximately $ 35 million (arising

7 unchanged sentences

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 .

of December 31, 2022, InspireMD Ltd., an Israeli subsidiary, had a net carry forward tax loss of approximately $ 107 million.

1 unchanged sentence

tax laws, the carry forward tax losses can be utilized indefinitely.

Loss before income taxes

Israeli subsidiary is taxed in the New Israeli Shekel (“NIS”), which is different from its functional currency (U.S.

The change in the Israeli subsidiary NOL’s for tax purposes is partly resulted by such rate differences.

before income taxes

components of loss before income taxes are as follows:

5 unchanged sentences

9 - TAXES ON INCOME (continued):

Current taxes on income

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

8 unchanged sentences

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:

for Uncertain Tax position

following is a reconciliation of the total amounts of the Company’s uncertain tax positions during the year ended December 31,

2022 and 2021 were as follows:

SCHEDULE OF RECONCILIATION OF UNCERTAIN TAX POSITIONS

3 unchanged sentences

in uncertain tax positions because of tax positions taken during the year

at end of period

Balance at end of

summary of open tax years by major jurisdiction is presented below:

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9 - TAXES ON INCOME (continued):

Deferred income tax:

SCHEDULE OF DEFERRED INCOME TAX

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materials and supplies

Total inventory

TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

10 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (continued):

Accounts payable and accruals-other:

OF ACCOUNTS PAYABLE AND ACCRUALS - OTHER

payable and accruals-other:

in thousands)

Employees and employee institutions

Accrued vacation and recreation pay

Accrued expenses

Accrual for settlement payment (see note 6)

Current Operating lease liabilities

Accounts Payable and Accruals - Other

and employee institutions

vacation and recreation pay

trial accrual

Operating lease liabilities

Payable and Accruals - Other

11 – DISAGGREGATED REVENUE AND ENTITY WIDE DISCLOSURES :

4 unchanged sentences

in thousands)

(2020 - net of settlement payment of $ 580 , see note 6 a)

SCHEDULE OF REVENUES ATTRIBUTED TO GEOGRAPHIC AREAS BY PRODUCT

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in thousands)

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):

principal customers:

OF REVENUES ATTRIBUTED TO GEOGRAPHIC AREAS BY PRINCIPAL CUSTOMERS

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12 - SUBSEQUENT EVENTS :

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.

to Receive Shares of Common Stock in lieu of Cash Compensation

on January 1, 2023, non-employee directors may elect to receive all or a portion of their cash retainer amount in shares of the Company’s

common stock under the 2021 Equity Incentive Plan.

If a director makes that election, a stock award under the 2021 Equity Incentive Plan

will be paid quarterly on the first day of each quarter (“Grant Dates”) and will become fully vested on the Grant Dates.

The stock award will be determined by dividing (x) the product of the cash retainer amount and percentage of the cash retainer amount

elected to be taken in shares by (y) the “Fair Market Value” (as defined in the 2021 Equity Incentive Plan) of a share on

the Grant Dates.

If a director’s service on the board terminates for any reasons prior to a Grant Date, he/she will receive a pro

rata portion of shares or cash based on the number of days served on the board during the relevant quarter.

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