What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-05-15 compared with 2022-11-07 · 195 added, 274 removed, 105 unchanged (82% of the section changed)

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Quarterly Report on Form 10-Q contains “forward-looking statements,” which include information relating to future events,

future financial performance, strategies, expectations, competitive environment and regulation.

Words such as “may,” “will,”

“should,” “could,” “would,” “predicts,” “potential,” “continue,”

“expects,” “anticipates,” “future,” “intends,” “plans,” “believes,”

“estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements.

Forward-looking

statements should not be read as a guarantee of future performance or results and may not be accurate indications of when such performance

or results will be achieved.

Forward-looking statements are based on information we have when those statements are made or our management’s

good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance

or results to differ materially from those expressed in or suggested by the forward-looking statements.

Important factors that could

cause such differences include, but are not limited to:

future financial performance, strategies, expectations, competitive environment and regulation, including revenue growth.

as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,”

“continue,” “expects,” “anticipates,” “future,” “intends,” “plans,”

“believes,” “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking

Forward-looking statements should not be read as a guarantee of future performance or results and may not be accurate indications

of when such performance or results will be achieved.

Forward-looking statements are based on information we have when those statements

are made or our management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties

that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.

Important factors that could cause such differences include, but are not limited to:

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

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to obtain and could dilute out stockholders’ ownership interests;

impact of the COVID-19 pandemic on our manufacturing, sales, business plan and the global economy;

inability to secure and maintain regulatory approvals for the sale of our products;

clinical trial results or lengthy product delays in key markets;

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ability to generate revenues from our products and obtain and maintain regulatory approvals for our products;

ability to successfully obtain, maintain and adequately protect our intellectual property rights;

ability to adequately protect our intellectual property rights;

dependence on a single manufacturing facility and our ability to comply with stringent manufacturing quality standards;

ability to increase production as necessary;

risk that the data collected from our current and planned clinical trials may not be sufficient to demonstrate that our technology

is an attractive alternative to other procedures and products;

acceptance of our products;

inability to secure and maintain regulatory approvals for the sale of our products;

competition in our industry, with competitors having greater financial, technological, research and development, regulatory and clinical,

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escalation of hostilities in Israel, which could impair our ability to manufacture our products;

or retirement of key executives and research scientists.

or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated

liquidity risk.

foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or

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statement to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated

information in this Quarterly Report on Form 10-Q relating to shares or price per share reflects the 1-for-15 reverse stock split effected

by us on April 26, 2021.

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

for the treatment of complex vascular and coronary disease.

A stent is an expandable “scaffold-like” device, usually constructed

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

MicroNet, a micron mesh

sleeve, is wrapped over a stent to provide embolic protection in stenting procedures.

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

single device for use in carotid artery applications.

Our CGuard EPS received CE mark approval in the European Union in March 2013 and

was fully launched in Europe in September 2015.

Subsequently, we launched CGuard EPS in Russia and certain countries in Latin America

and Asia, including India.

In September 2020, we launched CGuard EPS in Brazil after receiving regulatory approval in July 2020 and on

February 3, 2021, we executed a distribution agreement with Chinese partners for the purpose of expanding our presence in China.

we are seeking strategic partners for a potential launch of CGuard EPS in Japan and other Asian countries.

Our CE mark for CGuard EPS

expires on November 12, 2022 and while we continue to seek to expedite the review process for recertification under the new European

Medical Device Regulation, we do not expect to receive recertification by November 12, 2022 (see Part II – Item 1A.

“Failure to satisfy regulatory requirements of the new European Medical Device Regulation by November 12, 2022 will prevent us

from marketing CGuard EPS in countries requiring the CE mark).

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

the treatment of carotid artery disease and other vascular disease.

A stent is an expandable “scaffold-like” device, usually

constructed of a metallic material, that is inserted into the lumen of the artery to create patency and revascularization of blood flow.

MicroNet, a micron mesh sleeve, is attached over a stent to provide embolic protection both during and after stenting procedures.

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

stent in a single device for use in carotid artery revascularization.

Our CGuard EPS originally received CE mark approval under Medical

Device Directive 93/42/EEC (“MDD”) in the European Union (“EU”) in March 2013 and was fully launched in Europe

in September 2015.

Subsequently, we launched CGuard EPS in over 30 countries and on February 3, 2021, we executed a distribution agreement

with Chinese partners for the purpose of expanding our presence in the Asian markets.

Currently, we are seeking strategic partners for

a potential launch of CGuard EPS in Japan and other Asian countries.

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

the Notified Body auditor to meet the Medical Device Regulation (“MDR”) (MDR 2017/745) requirements (which replaced the MDD)

for recertification.

In the meantime, on February 14, 2023, we received a derogation per Article 97 paragraph 1 of Regulation 2017/745

from the Agency for Medicines and Health Products (FAMHP) allowing us to continue marketing CGuard EPS in the EU until August 15, 2023

subject to certain procedural requirements.

Subsequently, on March 20, 2023, Regulation (EU) 2023/607 was published allowing us to continue

marketing CGuard EPS in EU countries under the MDD directive until December 31, 2027.

As a result of the foregoing, we may market and

sell CGuard EPS in the EU and certain other jurisdictions subject to certain procedural requirements while our MDR CE recertification

We continue to expedite the review process for recertification under the MDR.

September 8, 2020, we received approval from the U.S.

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C-Guardians is a prospective, multicenter, single-arm, pivotal study to evaluate

the safety and efficacy of the CGuard™ Carotid Stent System when used to treat symptomatic and asymptomatic carotid artery stenosis

the safety and efficacy of the CGuard™ Carotid Sten System when used to treat symptomatic and asymptomatic carotid artery stenosis

in patients undergoing carotid artery stenting.

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day follow-up, based on Clinical Events Committee (CEC) adjudication.

The composite index will be compared to a performance goal based

on the observed rate of the two components of the primary endpoint from previous pivotal stent trials which are considered industry standard.

The performance goal will be considered met if the upper bound of the two-sided 95% confidence interval calculated from the observed

primary endpoint rate is < 11.6% and the p-value is less than 0.025.

July 23, 2021, we announced the initiation of enrollment and successful completion of the first cases of our C-Guardian trial of CGuard

The first patients, who were under the care of principal investigator, Chris Metzger, M.D., system chair of clinical research at

Ballard Health System in Eastern Tennessee, were successfully implanted with the CGuard EPS stent device.

These are the first of 315

patients who are expected to be enrolled in the trial and receive CGuard EPS in the treatment of carotid artery stenosis in symptomatic

and asymptomatic patients undergoing carotid artery stenting.

We are currently continuing with the enrollment phase.

In April 2022, we

completed our first European recruitment.

There are 315 patients who are expected to be enrolled in the trial and receive CGuard EPS in the treatment of carotid artery stenosis

in symptomatic and asymptomatic patients undergoing carotid artery stenting.

We are currently continuing with the enrolment phase at

approximately 20 trial sites and expect it to be completed approximately at the end of the second quarter of 2023.

Additionally,

we intend to continue to invest in current and future potential product and manufacturing enhancements for CGuard EPS that are expected

to reduce cost of goods and/or provide the best-in-class performing delivery system, CGuard Prime.

In furtherance of our strategy that

focuses on establishing CGuard EPS as a viable alternative to vascular surgery, we are exploring adding new delivery systems and accessory

solutions for procedural protection to our portfolio such as SwitchGuard.

consider the current addressable market for our CGuard EPS to be individuals with diagnosed, symptomatic high-grade carotid artery stenosis

we intend to continue to invest in current and future potential new indications, products and manufacturing enhancements for CGuard EPS

that are expected to reduce cost of goods and/or provide the best-in-class performing delivery systems, such as CGuard Prime™for

transfemoral access.

In furtherance of our strategy that focuses on establishing CGuard EPS as a viable alternative to vascular surgery,

we are developing a new transcarotid artery revascularization (TCAR) delivery system, SwitchGuard™, for transcarotid access and

neuro protection.

In addition, we intend to explore new indications for CGuard EPS to leverage the advantages of stent design and mesh

protection, well suited in labels such as acute stroke with tandem lesions.

consider our current addressable market for our CGuard EPS to be individuals with diagnosed, symptomatic high-grade carotid artery stenosis

(HGCS, ≥70% occlusion) for whom intervention is preferable to medical (drug) therapy.

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Assuming full penetration of the intervention caseload by CGuard EPS, we estimate that the addressable market for CGuard EPS will be

approximately $666 million in 2022 (source:

approximately $1.3 billion in 2023 (source:

Health Research International Personal Medical Systems, Inc.

September 13, 2021 Results of

Update Report on Global Carotid Stenting Procedures and Markets by Major Geography and Addressable Markets).

According to this same report,

assuming full penetration of the caseload for all individuals diagnosed with high-grade carotid artery stenosis, we estimate that the

total available market for CGuard EPS in 2022 will be approximately $5 billion.

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.

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”)

As a result of declining sales of the MGuard Prime EPS, which we believe this is largely driven by the predominant industry

preferences favoring drug-eluting, or drug-coated, stents, during the second quarter of 2022 we ceased sales of our MGuard Prime EPS

following a phase out period.

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

procedures such as the treatment of the superficial femoral artery disease and vascular disease below the knee as well as neurovascular

procedures, such as the treatment of acute stroke.

none of our products may be sold or marketed in the United States, but we do derive revenues from the use of our products in the currently

ongoing trials.

Update Report on Global Carotid Stenting Procedures and Markets by Major Geography and Addressable Markets and internal estimates).

to this same report, and internal estimates, assuming full penetration of the caseload for all individuals diagnosed with high-grade

carotid artery stenosis, we estimate that the total available market for CGuard EPS in 2022 will be approximately $9.3 billion.

is to offer a comprehensive set of delivery solutions (TCAR and Transfemoral) in order to deliver best in class results through patient

outcomes by way of stent performance with CGuard EPS.

were organized in the State of Delaware on February 29, 2008.

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.

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.

February 2022, Russia launched a military invasion into Ukraine.

We derived approximately 10.5% of total sales in Russia, Ukraine and

Belarus in 2021 while during the nine and three months ended September 30, 2022 our sales to Russia, Ukraine and Belarus were 12.1% and

22.2% respectively.

The escalation of geopolitical instability in Russia and Ukraine as well as currency fluctuations in the Russian

Ruble could negatively impact our operations, sales, and future growth prospects in that region.

As a result of the crisis in Ukraine

both 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.

Our global operations expose us to risks that could

adversely affect our business, financial condition, results of operations, cash flows or the market price of our 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 our business and sales in Russia, Ukraine and Belarus.

Current geopolitical instability in Russia

and Ukraine and related sanctions by the U.S.

government against certain companies and individuals may hinder our 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 and Ukrainian individuals and companies.

While we believe that the executive orders currently do not preclude us from conducting business with our current customers or vendors

in Russia, Ukraine and Belarus, the sanctions imposed by the U.S.

government may be expanded in the future to restrict us from engaging

If we are unable to conduct business with new or existing customers or vendors or pursue business opportunities in Russia,

Ukraine or Belarus, our business, including revenue, profitability and cash flows, and operations could be adversely affected.

provide assurance that current sanctions or potential future changes in sanctions will not have a material impact on our operations in

Russia, Ukraine and Belarus or on our financial results.

Recent Developments

Private Placement

May 12, 2023, we entered into a securities purchase agreement (the “Purchase Agreement”) pursuant to which we agreed to sell

and issue in a private placement (the “Private Placement Offering) an aggregate of 10,266,270 shares (the “Private Placement

Shares”) of our common stock, pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 15,561,894 shares of

common stock and warrants to purchase up to an aggregate of 51,656,328 shares of common stock, consisting of Series H warrants to purchase

up to 12,914,086 shares of common stock (the “Series H Warrants”), Series I warrants to purchase up to 12,914,078 shares of

common stock (the “Series I Warrants”), Series J warrants to purchase up to 12,914,086 shares of Common Stock (the “Series

J Warrants”) and Series K warrants to purchase up to 12,914,086 shares of common stock (the “Series K Warrants” and

together with the Series H Warrants, Series I Warrants and Series J Warrants, the “Warrants”), at an offering price of $1.6327

per Private Placement Share and associated Warrants and an offering price of $1.6326 per Pre-Funded Warrant and associated Warrants.

Pre-Funded Warrants will be immediately exercisable at an exercise price of $0.0001 per share and will not expire until exercised in full.

The Warrants will be immediately exercisable upon issuance at an exercise price of $1.3827 per share, subject to adjustment as set forth

The Warrants have a term of the earlier of (i) five years from the date of issuance and (ii) (A) in the case of the Series H

Warrants, 20 trading days following the Company’s public release of primary and secondary end points related to one year follow

up study results from the Company’s C-Guardians pivotal trial, (B) in the case of the Series I Warrants, 20 trading days following

the Company’s announcement of receipt of Premarket Approval from the Food and Drug Administration (“FDA”) for the CGuard

Prime Carotid Stent System (135 cm), (C) in the case of the Series J Warrants, 20 trading days following the Company’s announcement

of receipt of FDA approval for the SwitchGuard and CGuard Prime 80 and (D) in the case on the Series K Warrants, 20 trading days following

the end of the fourth fiscal quarter after the fiscal quarter in which the first commercial sales of the CGuard Carotid Stent System in

the United States begins.

The Warrants may be exercised on a cashless basis if there is no effective registration statement registering

the shares underlying the warrants.

connection with the Purchase Agreement, we entered into a registration rights agreement (the “Registration Rights Agreement”).

Pursuant to the Registration Rights Agreement, we are required to file a resale registration statement (the “Registration Statement”)

with the SEC to register for resale the Private Placement Shares and the shares of common stock issuable upon exercise of the Pre-Funded

Warrants and Warrants, within 20 days of the signing date of the Purchase Agreement (the “Signing Date”), and to have such

Registration Statement declared effective within 45 days after the Signing Date in the event the Registration Statement is not reviewed

by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by the SEC.

We will be obligated to pay

certain liquidated damages if we fail to file the Registration Statement when required, fails to cause the Registration Statement to be

declared effective by the SEC when required, of if we fail to maintain the effectiveness of the Registration Statement.

gross proceeds to us in respect of the Private Placement Offering are expected to be approximately $42.2 million, before deducting fees

payable to the placement agent and other offering expenses.

If the Warrants are exercised in cash in full this would result in an additional

$71.4 million of proceeds.

agreed to pay LifeSci Capital LLC, a placement fee equal to 5.6% of the aggregate gross proceeds from the closing of the Private Placement

Offering and a non-accountable expense allowance of $25,000.

In addition, we have agreed to pay Piper Sandler & Co.

a financial advisory

fee of $1.5 million and AGP/Alliance Global Partners a financial advisory fee of $250,000.

Private Placement Offering is expected to close on or about May 15, 2023, subject to satisfaction of customary closing conditions.

Accounting Policies

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of Operations

months ended September 30, 2022, compared to the three months ended September 30, 2021

For the three months ended September 30, 2022, revenue increased by $360,000, or 33.6%, to $1,431,000, from $1,071,000 during the three

months ended September 30, 2021.

This increase was predominantly driven by a 38.8% increase in sales of CGuard EPS from $1,031,000 during

the three months ended September 30, 2021, to $1,431,000 during the three months ended September 30, 2022.

This sales increase was due

to growth in existing markets and sales in the United States related to stents used in our C-Guardians FDA study as enrollment accelerated.

respect to geographical regions, the increase in revenue was primarily attributable to a $270,000 increase in Europe, a $79,000 increase

in Latin America, and a $4,000 decrease in other geographies.

This growth was mainly due to growth in existing markets.

there was a $14,000 increase in revenue from North America due to sales in the United States related to stents used in our C-Guardians

CE mark for CGuard EPS expires on November 12, 2022 and while we continue to seek to expedite the review process for recertification

under the new European Medical Device Regulation, we do not expect to receive recertification by November 12, 2022.

If our CE mark lapses,

then we will not be able to promote and sell CGuard EPS into countries requiring the CE mark.

If the duration of the lapsed CE mark continues

for a prolonged period, then we expect our revenues to decrease significantly until such time that we obtain recertification.

For the three months ended September 30, 2022, gross profit (revenue less cost of revenues) increased by $274,000, or 297.8%,

to $366,000, from $92,000 during the three months ended September 30, 2021.

This increase in gross profit resulted from a $95,000 increase

in revenues (as mentioned above), less the associated related material and labor costs, a decrease in write-offs of $64,000, due to components

supply issues in 2021, a $64,000 decrease in new employee training costs, and a decrease of $51,000 in miscellaneous expenses during

the three months ended September 30, 2021.

Gross margin (gross profits as a percentage of revenue) increased to 25.6% during the three

months ended September 30, 2022 from 8.6% during the three months ended September 30, 2021, driven by the factors mentioned above.

months ended March 31, 2023, compared to the three months ended March 31, 2022

For the three months ended March 31, 2023, revenue increased by $56,000, or 4.7%, to $1,239,000, from $1,183,000 during the three months

ended March 31, 2022.

This increase was predominantly driven by a 6.7% increase in sales of CGuard EPS from $1,161,000 during the three

months ended March 31, 2022, to $1,239,000 during the three months ended March 31, 2023.

During the second half of the quarter, our CE

mark was reinstated under the MDD directive allowing us to resume sales and shipments to the EU countries and we spent the remainder

of the quarter shipping product in order to reduce the backlog of orders that accumulated over the past few months.

We believe the quarter

over quarter increase in revenue is not representative of the real market demand for CGuard EPS, due to our inability to ship product

for the first half of the quarter.

We continue to expedite the review process for recertification under the MDR.

respect to geographical regions, the increase in revenue was primarily attributable to a $177,000 increase in Europe, for reasons mentioned

in the paragraph above, and a $13,000 increase from the Middle East.

This increase was offset by a $87,000 decrease in Latin America

and $52,000 decrease in revenue from other regions such as Australia and Asia due to the timing of shipments to our distributers.

For the three months ended March 31, 2023, gross profit (revenue less cost of revenues) increased by $251,000, or 205.6%,

to $373,000, from $122,000 during the three months ended March 31, 2022.

This increase in gross profit resulted from a decrease in write-offs

of $184,000 and a $71,000 increase in revenues (as mentioned above), less the associated related material and labor.

Gross margin (gross

profits as a percentage of revenue) increased to 30.1% during the three months ended March 31, 2023 from 10.3% during the three months

ended March 31, 2022, driven by the factors mentioned above.

and Development Expenses .

For the three months ended September 30, 2022, research and development expenses increased by $566,000,

or 37.9%, to $2,061,000, from $1,495,000 during the three months ended September 30, 2021.

This increase resulted primarily from an increase

of $455,000 in expenses related to the acceleration of enrollment in the C-Guardians FDA study as the number of patients enrolling increased,

an increase in share-based compensation-related expenses to employees and consultants of $78,000 and an increase of $33,000 in miscellaneous

and Marketing Expenses .

For the three months ended September 30, 2022, selling and marketing expenses increased by $43,000, or 5.4%,

to $845,000, from $802,000 during the three months ended September 30, 2021.

This increase resulted primarily from an increase in share-based

compensation expenses of $61,000 due to the expense recognition of grants made during the fourth quarter of 2021 offset, in part, by

a decrease of $18,000 in miscellaneous expenses

and Administrative Expenses .

For the three months ended September 30, 2022, general and administrative expenses increased by $244,000,

or 13.4%, to $2,070,000, from $1,826,000 during the three months ended September 30, 2021.

For the three months ended March 31, 2023, research and development expenses increased by $163,000, or

9.7%, to $1,843,000, from $1,680,000 during the three months ended March 31, 2022.

This increase resulted primarily from an increase

in share-based compensation-related expenses of $211,000, mainly due to the expense recognition of grants made during the fourth quarter

of 2021 and an increase of $33,000 in miscellaneous expenses.

Income (Expenses) .

For the three months ended September 30, 2022, financial income increased by $121,000, to $81,000 of financial

income, from $40,000 of financial expenses during the three months ended September 30, 2021.

The increase in financial income primarily

resulted from a $67,000 increase in interest income from short-term bank deposits and an

increase of $52,000 in financial income related to changes in exchange rates.

For the three months ended September 30, 2022, there was no change in our tax expenses as compared to the three months

ended September 30, 2021.

Our net loss increased by $458,000, or 11.3%, to $4,529,000, for the three months ended September 30, 2022, from $4,071,000

during the three months ended September 30, 2021.

The increase in net loss resulted primarily from an increase of $853,000 in operating

expenses partially offset by an increase of $274,000 in gross profit and an increase of $121,000 in financial income.

months ended September 30, 2022 compared to the nine months ended September 30, 2021

For the nine months ended September 30, 2022, revenue increased by $1,030,000, or 33.1%, to $4,145,000, from $3,115,000 during the nine

months ended September 30, 2021.

This increase was predominantly driven by a 35.7% increase in sales of CGuard EPS from $3,018,000 during

the nine months ended September 30, 2021, to $4,097,000 during the nine months ended September 30, 2021.

This sales increase was mainly

due to growth in existing and new markets and sales in the United States related to stents used in our C-Guardians FDA study as enrollment

respect to geographical regions, the increase in revenue was primarily attributable to a $559,000 increase in Europe, a $224,000 increase

in Latin America, a $84,000 increase in Asia and a $29,000 increase in other geographies.

This growth was mainly due to growth in existing

and new markets.

In addition, there was a $133,000 increase in revenue from North America due to sales in the United States related to

stents used in our C-Guardians FDA study which occurred in the nine months ended September 30, 2022, but not in the corresponding period

CE mark for CGuard EPS expires on November 12, 2022 and while we continue to seek to expedite the review process for recertification

under the new European Medical Device Regulation, we do not expect to receive recertification by November 12, 2022.

If our CE mark lapses,

then we will not be able to promote and sell CGuard EPS into countries requiring the CE mark.

If the duration of the lapsed CE mark continues

for a prolonged period, then we expect our revenues to decrease significantly until such time that we obtain recertification.

For the nine months ended September 30, 2022, gross profit (revenue less cost of revenues) increased by 99.8%, or $459,000,

to $919,000, compared to a $460,000 for the same period in 2021.

This increase in gross profit resulted from a $318,000 increase in revenues

(as mentioned above) less the associated related material and labor costs and a decrease of $141,000 in miscellaneous expenses.

margin (gross profits as a percentage of revenue) increased to 22.2% during the nine months ended September 30, 2022 from 14.8% during

the nine months ended September 30, 2021, driven by the reasons mentioned above.

and Development Expenses .

For the nine months ended September 30, 2022, research and development expenses increased by 60.0%, or

$2,173,000, to $5,797,000, from $3,624,000 during the nine months ended September 30, 2021.

This increase resulted primarily from an

increase of $2,102,000 in expenses related to the enrollment inthe C-Guardians FDA study which commenced in the second half of 2021 and

an increase of $71,000 in miscellaneous expenses.

of $170,000 in expenses related to the CGuard Prime regulatory and approval process and an increase of $88,000 in miscellaneous expenses

offset, in part, by a decrease of $95,000 in expenses related to the C-Guardians FDA study.

and Marketing Expenses .

For the nine months ended September 30, 2022, selling and marketing expenses increased by 20.1%, or $431,000,

to $2,577,000, from $2,146,000 during the nine months ended September 30, 2021.

This increase resulted primarily from an increase in

tradeshows and travel expenses of $210,000 in light of resumed marketing activities following the lifting of restrictions related to

COVID-19, an increase in share-based compensation expenses of $175,000 due to the expense recognition of grants made during the fourth

quarter of 2021 and an increase in salary expenses of $59,000.

For the three months ended March 31, 2023, selling and marketing expenses increased by $42,000, or 5.6%,

to $788,000, from $746,000 during the three months ended March 31, 2022.

This increase resulted primarily from an increase in compensation

expenses of $49,000 offset, in part, by a decrease of $7,000 in miscellaneous expenses.

and Administrative Expenses .

For the nine months ended September 30, 2022, general and administrative expenses increased by 15.5%,

or $847,000, to $6,322,000, from $5,475,000 during the nine months ended September 30, 2021.

This increase resulted primarily from an

increase in share-based compensation-related expenses of $575,000, mainly due to the expense recognition of grants made during the fourth

quarter of 2021, an increase in patent related expenses of $148,000, an increase in travel expenses of $116,000 in light of resumed activities

following governments lifting restrictions related to COVID-19, an increase in directors’ and officers’ liability insurance

expenses of $107,000, due to increased premiums caused by recent trends in the overall insurance industry and an increase of $98,000

in miscellaneous expenses offset, in part, by a decrease in shareholder related expenses of $197,000 mainly due to a special shareholders

meeting (which occurred in 2021, but not in 2022) and also due to higher costs of our annual stockholder meeting in 2021 compared to

our annual stockholder meeting in 2022.

For the nine months ended September 30, 2022, financial income increased by $167,000, to $131,000 of financial income, from

$36,000 of financial expense during the nine months ended September 30, 2021.

The increase in financial income primarily resulted from

a $141,000 increase in interest income from short-term bank deposits and an increase of

$33,000 in financial income related to changes in exchange rates.

For the nine months ended September 30, 2022, there was no material change in our tax expenses as compared to the nine

months ended September 30, 2021.

Our net loss increased by $2,825,000, or 26.1%, to $13,646,000, for the nine months ended September 30, 2022, from $10,821,000

during the nine months ended September 30, 2021.

The increase in net loss resulted primarily from an increase of $3,451,000 in operating

expenses, offset by an increase of $459,000 in gross profit.

For the three months ended March 31, 2023, general and administrative expenses decreased by $59,000,

or 2.7%, to $2,123,000, from $2,182,000 during the three months ended March 31, 2022.

This decrease resulted primarily from a decrease

in share-based compensation-related expenses of $310,000 as no new grants were made from the fourth quarter of 2021 through March 31,

2023 offset, in part, by an increase in regulatory expenses of $171,000 related to MDR registration process and an increase of $80,000

in miscellaneous expenses.

For the three months ended March 31, 2023, financial income increased by $120,000, to $125,000, from $5,000 during the three

months ended March 31, 2022.

The increase in financial income primarily resulted from a $88,000

increase in interest income from short-term bank deposits .

For the three months ended March 31, 2023, there was no change in our tax expenses as compared to the three months ended

March 31, 2022.

Our net loss decreased by $225,000, or 5.0%, to $4,256,000, for the three months ended March 31, 2023, from $4,481,000 during

the three months ended March 31, 2022.

The decrease in net loss resulted primarily from an increase of $251,000 in gross profit and an

increase of $120,000 in financial income partially offset by an increase of $146,000 in operating expenses.

and Capital Resources

had an accumulated deficit as of September 30, 2022, of $197 million, as well as a net loss of $13,646,000 and negative operating cash

flows for the nine months ended September 30, 2022.

We expect to continue incurring losses and negative cash flows from operations until

our product, CGuard EPS, reach commercial profitability.

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

along with our current cash position, we believe we only have sufficient resources to fund operations through the end of September 2023.

Therefore, there is substantial doubt about our ability to continue as a going concern.

had an accumulated deficit as of March 31, 2023 of $206 million, as well as a net loss of $4,256,000 and negative operating cash flows.

We expect to continue incurring losses and negative cash flows from operations until our product, CGuard EPS, reaches commercial profitability.

As a result of these expected losses and negative cash flows from operations, along with our current cash position, we believe we have

sufficient resources to fund operations until the end of September 2023.

Therefore, there is substantial doubt about our ability to continue

as a going concern.

plans include continued commercialization of our products and raising capital through sale of additional equity securities, debt or capital

4 unchanged sentences

curtail or cease operations.

June 3, 2022, we entered into a Sales Agreement with A.G.P./Alliance Global Partners, as sales agent (“A.G.P.”), pursuant

to which we may offer and sell from time to time, at our option, through or to A.G.P., up to an aggregate of approximately $8,313,000

of shares of our common stock.

The issuance and sale of shares by us under the program will be made pursuant to our effective “shelf”

registration statement on Form S-3 (Registration Statement No.

333-265409) filed with the SEC on June 3, 2022, and declared

effective on June 14, 2022.

No shares have been sold under the program.

months ended September 30, 2022 compared to the nine months ended September 30, 2021

At September 30, 2022, we had cash and cash equivalents of $3,934,000 as compared to $12,004,000 as of December 31, 2021.

We have historically

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

Our cash requirements are generally

for research and development, marketing and sales activities, finance and administrative costs, capital expenditures and general working

the nine months ended September 30, 2022, net cash used in our operating activities increased by $2,038,000, or 19.8%, to $12,347,000,

from $10,309,000 during the same period in 2021.

The primary reason for the increase in cash used in our operating activities was an

increase of $2,785,000 in payments for third party related expenses and for professional services and an increase of $827,000 in compensation

costs paid during the three months ended September 30, 2022 from $5,868,000 in the three months ended September 30, 2021 to $6,695,000

during the same period in 2022, offset by an increase of $1,574,000 in payments received from customers, to $4,135,000 during the three

months ended September 30, 2022 from $2,561,000 during the same period in 2021.

provided by our investing activities increased by $28,853,000 or 118.75%, to $4,555,000 during the nine months ended September 30, 2022,

compared to cash used of $24,298,000 during the nine months ended September 30, 2021.

The primary reasons for the increase in cash provided

by our investing activities is a withdrawal of $5,000,000 of short-term deposits.

used by financing activities for the nine months ended September 30, 2022 was $140,000, the cash used by financing activities during

the nine months ended September 30, 2022 were due to issuance costs associated with a shelf registration statement on Form S-3 filed

with the SEC on June 3, 2022.

Cash provided by financing activities for the nine months ended September 30, 2021 was $35,034,000, the

principal sources of which were our February 2021 public offering of common stock and warrants, exercise of Series F and Series G warrants,

proceeds from an at-the-market offering as well as proceeds from the issuance of shares to Chinese distributor that resulted in approximately

$35,034,000 of aggregate net proceeds.

of September 30, 2022, our current assets exceeded our current liabilities by a multiple of 6.2, Current assets decreased by $12,402,000

during the period and current liabilities decreased by $386,000 during the period.

On May 12, 2023, we entered into

a securities purchase agreement for the issuance and sale of our securities in a private placement.

Aggregate gross proceeds to us in

respect of the private placement is expected to be approximately $42.2 million, before deducting fees payable to the placement agent and

other offering expenses payable us and before exercising any warrants.

The offering is expected to close on or about May 15, 2023, subject

to the satisfaction of customary closing conditions.

months ended March 31, 2023 compared to the three months ended March 31, 2022

At March 31, 2023, we had cash and cash equivalents of $4,228,000 and short-term bank deposits of $8,657,000 as compared to $4,632,000

and short-term bank deposits of $13,171,000 as of December 31, 2022.

We have historically met our cash needs through a combination of

issuing new shares, borrowing activities and product sales.

Our cash requirements are generally for research and development, marketing

and sales activities, finance and administrative costs, capital expenditures and general working capital.

the three months ended March 31, 2023, net cash used in our operating activities increased by $697,000, or 16.9%, to $4,831,000, from

$4,134,000 during the same period in 2022.

The primary reason for the increase in cash used in our operating activities was an increase

of $449,000 in compensation costs paid during the three months ended March 31, 2023 from $2,679,000 in the three months ended March 31,

2022 to $3,128,000 during the same period in 2023 and a decrease of $366,000 in payments received from customers, to $925,000 during

the three months ended March 31, 2023 from $1,291,000 during the same period in 2022 ,offset in part by a decrease of $118,000 in payments

for third party related expenses and for professional services

provided in our investing activities was $4,449,000 during the three months ended March 31, 2023, compared to cash used of $65,000 during

the three months ended March 31, 2022.

The primary reasons for the increase in cash provided by our investing activities is a withdrawal

of short-term deposits, net of investments of $4,500,000 of short-term deposits, offset by a decrease of $12,000 in payments made for

purchase of property, plant and equipment to $25,000 during the three months ended March 31, 2023.

was no cash provided by financing activities for the three months ended March 31, 2023 and for the three months ended March 31, 2022.

of March 31, 2023, our current assets exceeded our current liabilities by a multiple of 3.8.

Current assets decreased by $4,623,000 during

the period and current liabilities decreased by $687,000 during the period.

As a result, our working capital decreased by $3,936,000

to $20,731,000 as of September 30, 2022.

to $12,320,000 as of March 31, 2023.

Balance Sheet Arrangements

5 unchanged sentences

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

of our clinical trials and manufacturing efficiencies due to the learning curve of utilizing new materials and equipment, the impact

of the COVID-19 pandemic and the ongoing conflict in the Ukraine.

Our operating results could also be impacted by a weakening of the

Euro and strengthening of the NIS, both against the U.S.

Lastly, other economic conditions we cannot foresee may affect customer

demand, such as individual country reimbursement policies pertaining to our products.

of our clinical trials and manufacturing efficiencies due to the learning curve of utilizing new materials and equipment.

Our operating

results could also be impacted by a weakening of the Euro and strengthening of the NIS, both against the U.S.

Lastly, other economic

conditions we cannot foresee may affect customer demand, such as individual country reimbursement policies pertaining to our products.

Obligations and Commitments

as set forth below, during the three months ended September 30, 2022, there were no material changes to our contractual obligations and

the three months ended March 31, 2023, there were no material changes to our contractual obligations and commitments.

Quantitative and Qualitative Disclosures About Market Risk.

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-Q

Item 2. Management’s Discussion and Analysis