What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-06 compared with 2023-08-07 · 178 added, 159 removed, 213 unchanged (61% of the section changed)

16 unchanged sentences

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

our history of recurring

losses and negative cash flows from operating activities, significant future commitments and the uncertainty regarding the adequacy

of our liquidity to pursue our complete business objectives;

our need to raise additional

capital to meet our business requirements in the future and such capital raising may be costly or difficult to obtain and could dilute

out stockholders’ ownership interests;

an inability to secure

and maintain regulatory approvals for the sale of our products;

negative clinical trial

results or lengthy product delays in key markets;

our ability to maintain

compliance with the Nasdaq Capital Market listing standards;

our ability to generate

revenues from our products and obtain and maintain regulatory approvals for our products;

our ability to adequately

protect our intellectual property rights;

our dependence on a single

manufacturing facility and our ability to comply with stringent manufacturing quality standards;

the 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;

intense competition in

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

marketing and sales, distribution and personnel resources than we do;

entry of new competitors

and products and potential technological obsolescence of our products;

inability to carry out

research, development and commercialization plans;

loss of a key customer

technical problems with

our research and products and potential product liability claims;

product malfunctions;

price increases for supplies

and components;

adverse economic conditions;

insufficient or inadequate

reimbursement by governmental and other third-party payers for our products;

adverse federal, state

and local government regulation in the United States, Europe, Israel and other foreign jurisdictions;

the fact that we conduct

business in multiple foreign jurisdictions, exposing us to foreign currency exchange rate fluctuations, logistical and communications

challenges, burdens and costs of compliance with foreign laws and political and economic volatility in certain jurisdictions;

the escalation of hostilities

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

current or future unfavorable economic and market conditions

and adverse developments with respect to financial institutions and associated liquidity risk.

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

regarding the adequacy of our liquidity to pursue our complete business objectives;

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

to obtain and could dilute out stockholders’ ownership interests;

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

clinical trial results or lengthy product delays in key markets;

ability to maintain compliance with the Nasdaq Capital Market listing standards;

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

ability to adequately protect our intellectual property rights;

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

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;

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

manufacturing, marketing and sales, distribution and personnel resources than we do;

of new competitors and products and potential technological obsolescence of our products;

to carry out research, development and commercialization plans;

of a key customer or supplier;

problems with our research and products and potential product liability claims;

malfunctions;

increases for supplies and components;

economic conditions;

or inadequate reimbursement by governmental and other third-party payers for our products;

federal, state and local government regulation in the United States, Europe, Israel and other foreign jurisdictions;

fact that we conduct business in multiple foreign jurisdictions, exposing us to foreign currency exchange rate fluctuations, logistical

and communications challenges, burdens and costs of compliance with foreign laws and political and economic volatility in certain

jurisdictions;

political and economic instability in the Middle East that could harm our business, including due to the current war between Israel

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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Partners a financial advisory fee of $250,000 and lead investor counsel expenses of $125,000.

Results from the U.S.

Investigational Device Exemption (IDE) clinical trial

November 1, 2023, the Company released 30-day results from the C-GUARDIANS U.S.

Investigational Device Exemption (IDE) clinical trial.

From July 2021 to June 2023, 316 patients were prospectively enrolled in a single-arm carotid artery stenting study performed at 24 sites

in the United States and the European Union.

The primary endpoint in the clinical trial was a composite of:

(1) incidence of major adverse

events including death (all-cause mortality), any stroke, or myocardial infarction (“DSMI”) through 30-days post index procedure,

or (2) ipsilateral stroke from day 31 to day 365 post-procedure.

Stenting with the C-Guard carotid stent system in patients with carotid

artery stenosis and at high risk for carotid endarterectomy had a DSMI rate of 0.95%, measured from the date of the procedure through

30 days follow-up post-procedure.

Developments Potentially Affecting Our Business.

October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian

and military targets.

Hamas also launched extensive rocket attacks on the Israeli population and industrial centers located along Israel’s

border with the Gaza Strip and in other areas within the State of Israel.

These attacks resulted in thousands of deaths and injuries,

and Hamas additionally kidnapped many Israeli civilians and soldiers.

Following the attack, Israel’s security cabinet declared

war against Hamas and commenced a military campaign against Hamas and other terrorist organizations in parallel to their continued rocket

and terror attacks.

We cannot currently predict the intensity or duration of Israel’s war against Hamas, nor can we predict how

this war will ultimately affect our business and operations or Israel’s economy in general.

Accounting Policies

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consider all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents.

As of June 30, 2023, cash and cash equivalents consisted of cash, short-term deposits (up to three months from the date of deposit) and

money market funds.

As of September 30, 2023, cash and cash equivalents consisted of cash, short-term deposits (up to three months from the date of deposit)

and money market funds.

As of December 31, 2022, this balance consisted solely of cash.

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of Operations

months ended June 30, 2023, compared to the three months ended June 30, 2022

For the three months ended June 30, 2023, revenue increased by $118,000, or 7.7%, to $1,649,000, from $1,531,000 during the three months

ended June 30, 2022.

This increase was predominantly driven by a 9.6% increase in sales of CGuard EPS from $1,505,000 during the three

months ended June 30, 2022, to $1,649,000 during the three months ended June 30, 2023.

This sales increase was mainly due to growth in

existing markets.

respect to geographical regions, the increase in revenue was primarily attributable to a $63,000 increase in Asia, a $53,000 increase

in Latin America and a $13,000 increase in other geographies, for reasons mentioned in the paragraph above.

increase was offset by a $11,000 decrease in Europe.

For the three months ended June 30, 2023, gross profit (revenue less cost of revenues) increased by $60,000, or 14.0%, to

$491,000, from $431,000 during the three months ended June 30, 2022.

This increase in gross profit resulted from a $90,000 increase in

revenues (as mentioned above), less the associated related material and labor offset by $30,000 in miscellaneous expenses.

Gross margin (gross profits as a percentage of revenue) increased to 29.8% during the three months ended June 30, 2023, from 28.1% during

the three months ended June 30, 2022, driven by the factors mentioned above.

months ended September 30, 2023, compared to the three months ended September 30, 2022

For the three months ended September 30, 2023, revenue increased by $125,000, or 8.7%, to $1,556,000, from $1,431,000 during the three

months ended September 30, 2022.

This increase was predominantly driven by growth in existing markets.

respect to geographical regions, the increase in revenue was primarily attributable to a $84,000 increase in Europe, a $52,000 increase

in Asia and a $30,000 increase in other geographies, for reasons mentioned in the paragraph above.

This increase was offset by a $41,000

decrease in the United States as we completed in June 2023 the enrollment of all patients in our C-Guardians IDE clinical trial and accordingly

there were no further enrollments in the three months ended September 30, 2023.

For the three months ended September 30, 2023, gross profit (revenue less cost of revenues) increased by $72,000, or 19.7%,

to $438,000, from $366,000 during the three months ended September 30, 2022.

This increase in gross profit resulted from a $85,000 increase

in revenues less the associated related material and labor offset by $13,000 in miscellaneous expenses.

Gross margin (gross profits as

a percentage of revenue) increased to 28.1% during the three months ended September 30, 2023, from 25.6% during the three months ended

September 30, 2022, driven by the factors mentioned above.

and Development Expenses .

For the three months ended June 30, 2023, research and development expenses decreased by $63,000, or 3.1%,

to $1,993,000, from $2,056,000 during the three months ended June 30, 2022.

This decrease resulted primarily from a decrease of $261,000

in expenses related to the C-Guardians FDA study, offset, in part, by an increase of $132,000 in compensation expenses, and an increase

of $66,000 in miscellaneous expenses.

For the three months ended September 30, 2023, research and development expenses increased by $49,000,

or 2.4%, to $2,110,000, from $2,061,000 during the three months ended September 30, 2022.

This increase resulted primarily from an increase

of $178,000 in expenses related to the SwitchGuard regulatory and approval process, an increase in compensation expenses of $145,000,

mainly due to an increase of share-based compensation-related expenses due to the expense recognition of grants made during the second

quarter of 2023 and an increase of $107,000 in miscellaneous expenses.

These increases were partially offset by a $381,000 decrease in

expenses related to the C-Guardians FDA study.

The enrollment of all patients in our IDE clinical trial was completed in June 2023, resulting

in no enrollment expenses for the three months ended September 30, 2023.

and Marketing Expenses .

For the three months ended June 30, 2023, selling and marketing expenses decreased by $94,000, or 9.5%, to

$892,000, from $986,000 during the three months ended June 30, 2022.

This decrease resulted primarily from a decrease in compensation

expenses of $104,000 offset, in part, by an increase of $10,000 in miscellaneous expenses.

For the three months ended September 30, 2023, selling and marketing expenses increased by $31,000, or 3.7%,

to $876,000, from $845,000 during the three months ended September 30, 2022.

This increase resulted from an increase of $31,000 in miscellaneous

and Administrative Expenses .

For the three months ended June 30, 2023, general and administrative expenses increased by $851,000,

or 41.1%, to $2,921,000, from $2,070,000 during the three months ended June 30, 2022.

For the three months ended September 30, 2023, general and administrative expenses increased by $1,021,000,

or 49.3%, to $3,091,000, from $2,070,000 during the three months ended September 30, 2022.

This increase resulted primarily from an increase

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due to the expense recognition of grants made during the second quarter of 2023 and an increase in salary expenses and related accruals

of $208,000 mainly due to hiring of a General Manager of North America and VP of Global Marketing, an increase of legal expenses

of $219,000 and an increase of $175,000 in miscellaneous expenses.

For the three months ended June 30, 2023, financial income increased by $193,000, to $238,000, from $45,000 during the three

months ended June 30, 2022.

The increase in financial income primarily resulted from a $211,000

increase in interest income from investment in marketable securities, money market funds and short-term bank deposits .

For the three months ended June 30, 2023, there was no change in our tax expenses as compared to the three months ended

June 30, 2022.

Our net loss increased by $441,000, or 9.5%, to $5,077,000, for the three months ended June 30, 2023, from $4,636,000 during

the three months ended June 30, 2022.

The increase in net loss resulted primarily from an increase of $694,000 in operating expenses

partially offset by an increase of $193,000 in financial income and an increase of $60,000 in gross profit.

months ended June 30, 2023, compared to the six months ended June 30, 2022

For the six months ended June 30, 2023, revenue increased by $174,000, or 6.4%, to $2,888,000, from $2,714,000 during the six months

ended June 30, 2022.

This increase was predominantly driven by a 8.3% increase in sales volume of CGuard EPS from $2,666,000 during the

six months ended June 30, 2022, to $2,888,000 during the six months ended June 30, 2023.

This sales increase was mainly due to growth

in existing markets.

of $186,000 mainly due to hiring of a General Manager of North America and VP of Global Marketing (who was subsequently promoted to the

Company’s Chief Commercial Officer in the third quarter of 2023) and an increase of $80,000 in miscellaneous expenses.

For the three months ended September 30, 2023, financial income increased by $380,000, to $461,000, from $81,000 during the

three months ended September 30, 2022.

The increase in financial income primarily resulted from a $412,000 increase in interest income

from investment in marketable securities, money market funds and short-term bank deposits.

For the three months ended September 30, 2023, there was no change in our tax expenses as compared to the three months

ended September 30, 2022.

Our net loss increased by $649,000, or 14.3%, to $5,178,000, for the three months ended September 30, 2023, from $4,529,000

during the three months ended September 30, 2022.

The increase in net loss resulted primarily from an increase of $1,101,000 in operating

expenses partially offset by an increase of $380,000 in financial income and an increase of $72,000 in gross profit.

months ended September 30, 2023, compared to the Nine months ended September 30, 2022

For the nine months ended September 30, 2023, revenue increased by $299,000, or 7.2%, to $4,444,000, from $4,145,000 during the Nine

months ended September 30, 2022.

This increase was predominantly driven by a 8.5% increase in sales volume of CGuard EPS from $4,097,000

during the nine months ended September 30, 2022, to $4,444,000 during the nine months ended September 30, 2023.

This sales increase was

mainly due to growth in existing markets.

respect to geographical regions, the increase in revenue was primarily attributable to a $251,000 increase in Europe, a $90,000 increase

in Asia and a $3,000 increase in other geographies.

This increase in sales of was partially offset by a $34,000 decrease in Latin

This growth was mainly due to reason mentioned in the paragraph above.

For the six months ended June 30, 2023, gross profit (revenue less cost of revenues) increased by 56.2%, or $311,000, to

$864,000, compared to a $553,000 for the same period in 2022.

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

$181,000 and a $161,000 increase in revenues (as mentioned above) less the associated related material and labor costs.

This increase

was partially offset by an increase of $31,000 in miscellaneous expenses.

Gross margin (gross profits as a percentage of revenue) increased

to 29.9% during the six months ended June 30, 2023, from 20.4% during the six months ended June 30, 2022, driven by the reasons mentioned

and a $4,000 increase in the Middle East.

This increase in sales of was partially offset by a $46,000 decrease in other geographies

mainly driven by 41,000 decrease in the United States as we completed in June 2023 the enrollment of all patients in our C-Guardians

IDE clinical trial and accordingly there were no further enrollments in the three months ended September 30, 2023.

For the nine months ended September 30, 2023, gross profit (revenue less cost of revenues) increased by 41.7%, or $383,000,

to $1,302,000, compared to a $919,000 for the same period in 2022.

This increase in gross profit resulted from a $246,000 increase in

revenues less the associated related material and labor costs and a decrease in write-offs of $199,000.

This increase was partially offset

by an increase of $62,000 in miscellaneous expenses.

Gross margin (gross profits as a percentage of revenue) increased to 29.3% during

the nine months ended September 30, 2023, from 22.2% during the Nine months ended September 30, 2022, driven by the reasons mentioned

and Development Expenses .

Research and Development Expenses .

For the six months ended June 30, 2023, research and

development expenses increased by 2.7%, or $100,000, to $3,836,000, from $3,736,000 during the six months ended June 30, 2022.

increase resulted primarily from an increase of $158,000 in expenses related to the CGuard Prime regulatory and approval process,

increase in compensation expenses of $169,000 and an increase of $129,000 in miscellaneous expenses offset, in part, by a decrease

of $356,000 in expenses related to the C-Guardians FDA study.

For the nine months ended September 30, 2023, research and development

expenses increased by 2.6%, or $149,000, to $5,946,000, from $5,797,000 during the nine months ended September 30, 2022.

This increase

resulted primarily from an increase of compensation expenses of $314,000, an increase of $187,000 in expenses related to the SwitchGuard

regulatory and approval process, an increase of $130,000 in expenses related to the CGuard Prime regulatory and approval process and

an increase of $261,000 in miscellaneous expenses offset, in part, by a decrease of $743,000 in expenses related to the C-Guardians FDA

and Marketing Expenses .

For the six months ended June 30, 2023, selling and marketing expenses decreased by 3.0%, or $52,000, to

$1,680,000, from $1,732,000 during the six months ended June 30, 2022.

This decrease resulted primarily from a decrease of approximately

$64,000 of share-based compensation-related expenses, offset, in part, by an increase of $12,000 in miscellaneous expenses.

For the nine months ended September 30, 2023, selling and marketing expenses decreased by 0.8%, or $21,000,

to $2,556,000, from $2,577,000 during the nine months ended September 30, 2022.

This decrease resulted from a decrease of $21,000 in

miscellaneous expenses.

and Administrative Expenses .

For the six months ended June 30, 2023, general and administrative expenses increased by 18.6%, or $792,000,

to $5,044,000, from $4,252,000 during the six months ended June 30, 2022.

This increase resulted primarily from an increase in salary

expenses of $276,000, an increase in legal expenses of $261,000, an increase in regulatory expenses of $193,000 related to MDR registration

process and an increase of $62,000 in miscellaneous expenses.

For the six months ended June 30, 2023, financial income increased by $313,000, to $363,000 of financial income, from $50,000

of financial income during the six months ended June 30, 2022.

The increase in financial income primarily resulted from a $299,000 increase

in interest income from investment in marketable securities, money market funds and short-term

bank deposits .

For the six months ended June 30, 2023, there was no change in our tax expenses as compared to the six months ended June

Our net loss increased by $216,000, or 2.4%, to $9,333,000, for the six months ended June 30, 2023, from $9,117,000 during

the six months ended June 30, 2022.

The increase in net loss resulted primarily from an increase of $840,000 in operating expenses, offset

by an increase of $313,000 in financial income and increase of $311,000 in gross profit.

For the nine months ended September 30, 2023, general and administrative expenses increased by 28.7%,

or $1,813,000, to $8,135,000, from $6,322,000 during the nine months ended September 30, 2022.

This increase resulted primarily from

an increase in compensation expenses of $1,148,000, mainly due to an increase of approximately $702,000 of share-based compensation-related

expenses due to the expense recognition of grants made during the second quarter of 2023 and an increase in salary expenses and related

accruals of $446,000 mainly due to hiring of a General Manager of North America and VP of Global Marketing (who was subsequently promoted

to the Company’s Chief Commercial Officer in the third quarter of 2023), an increase in legal expenses of $254,000, an increase

in regulatory expenses of $215,000 related to MDR registration process and an increase of $196,000 in miscellaneous expenses.

For the nine months ended September 30, 2023, financial income increased by $693,000, to $824,000 of financial income, from

$131,000 of financial income during the nine months ended September 30, 2022.

The increase in financial income primarily resulted from

a $689,000 increase in interest income from investment in marketable securities, money market funds and short-term bank deposits.

For the nine months ended September 30, 2023, there was no change in our tax expenses as compared to the nine months ended

September 30, 2022.

Our net loss increased by $865,000, or 6.3%, to $14,511,000, for the nine months ended September 30, 2023, from $13,646,000

during the nine months ended September 30, 2022.

The increase in net loss resulted primarily from an increase of $1,941,000 in operating

expenses, offset by an increase of $693,000 in financial income and increase of $383,000 in gross profit.

and Capital Resources

of June 30, 2023, we have the ability to fund our planned operations for at least the next 12 months from issuance date of the financial

of September 30, 2023, we have the ability to fund our planned operations for at least the next 12 months from issuance date of the financial

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

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are exercised in cash in full this would result in an additional $71.4 million of gross proceeds.

months ended June 30, 2023 compared to the six months ended June 30, 2022

At June 30, 2023, we had cash and cash equivalents of $11,545,000 short-term bank deposits of $6,631,000 and marketable securities of

$28,817,000 as compared to cash and cash equivalents of $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.

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

and general working capital.

the six months ended June 30, 2023, net cash used in our operating activities increased by $913,000, or 12.6%, to $8,156,000, from $7,243,000

during the same period in 2022.

The primary reason for the increase in cash used in our operating activities was an increase of $687,000

in compensation costs paid during the six months ended June 30, 2023 from $4,625,000 in the six months ended June 30, 2022 to $5,312,000

during the same period in 2023 and a decrease of $235,000 in payments received from customers, to $2,472,000 during the six months ended

June 30, 2023 from $2,707,000 during the same period in 2022, offset in part by a decrease of $9,000 in payments for third party related

expenses and for professional services.

used in our investing activities was $22,442,000 during the six months ended June 30, 2023, compared to cash provided of $1,801,000 during

the six months ended June 30, 2022.

The primary reasons for the increase in cash used by our investing activities is an investment in

marketable securities of $28,838,000, offset by an increase in withdrawal from short-term bank deposits, net of investment in short-term

deposits, of $4,500,00, and a decrease of $82,000 in payments made for purchase of property, plant and equipment to $70,000 during the

three months ended June 30, 2023.

provided by financing activities for the six months June 30, 2023, was $37,534,000.

The principal source of the cash provided by financing

activities during the six months ended June 30, 2023 were the proceeds from the Private Placement Offering in May 2023 that resulted

in approximately $37,534,000 of aggregate net proceeds.

Cash used by financing activities for the six months ended June 30, 2022 was

$37,000 and the cash used by financing activities during the six months ended June 30, 2022 were due to issuance cost associated with

a shelf registration statement on Form S-3 filed with the SEC on June 3, 2022.

of June 30, 2023, our current assets exceeded our current liabilities by a multiple of 10.5.

months ended September 30, 2023 compared to the Nine months ended September 30, 2022

At September 30, 2023, we had cash and cash equivalents of $13,839,000 and marketable securities of $29,159,000 as compared to cash and

cash equivalents of $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 nine months ended September 30, 2023, net cash used in our operating activities decreased by $148,000, or 1.2%, to $12,199,000,

from $12,347,000 during the same period in 2022.

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

increase of $613,000 in interest income received from money market funds and short-term bank deposits, an increase of $298,000 in

payments received from customers, to $4,433,000 during the nine months ended September 30, 2023 from $4,135,000 during the same

period in 2022, offset in part by an increase of $637,000 in compensation costs paid during the nine months ended September 30, 2023

from $6,695,000 in the nine months ended June 30, 2022 to $7,332,000 during the same period in 2023 and an increase of $127,000 in

payments for third party related expenses and for professional services.

used in our investing activities was $16,056,000 during the nine months ended September 30, 2023, compared to cash provided of $4,555,000

during the nine months ended September 30, 2022.

The primary reason for the increase in cash used by our investing activities is an investment

in marketable securities of $28,838,000, offset by an increase in withdrawal from short-term bank deposits, net of investment in short-term

deposits, of $8,000,000, and a decrease of $212,000 in payments made for purchase of property, plant and equipment during the nine months

ended September 30, 2023.

provided by financing activities for the nine months September 30, 2023, was $37,534,000.

The principal source of the cash provided by

financing activities during the nine months ended September 30, 2023 were the proceeds from the Private Placement Offering in May 2023

that resulted in approximately $37,534,000 of aggregate net proceeds.

Cash 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.

of September 30, 2023, our current assets exceeded our current liabilities by a multiple of 10.0.

Current assets increased by $25,402,000

1 unchanged sentence

As a result, our working capital increased by $25,782,000

to $45,691,000 as of June 30, 2023.

to $42,038,000 as of September 30, 2023.

Balance Sheet Arrangements

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Obligations and Commitments

the three months ended June 30, 2023, there were no material changes to our contractual obligations and commitments.

the three months ended September 30, 2023, there were no material changes to our contractual obligations and commitments.

Adopted and Issued Accounting Pronouncements

2 unchanged sentences

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