What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-03-05 compared with 2023-03-30 · 236 added, 213 removed, 133 unchanged (77% of the section changed)

2 unchanged sentences

consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.

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 originally 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.

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

Our CE mark for CGuard EPS under

the MDD expired on November 12, 2022, and we are in the final stages of technical documentation review by the Notified Body auditor to

meet the MDR requirements for recertification.

In the meantime, on February 14, 2023, we received a derogation per Article 97 paragraph

1 of Regulation 2017/745 from the Agency for Medicines and Health Products (FAMHP) allowing us to continue marketing CGuard EPS in the

EU until August 15, 2023, subject to certain procedural requirements.

Subsequently, on March 20, 2023, Regulation (EU) 2023/607 was published

allowing us to continue marketing CGuard EPS in EU countries under the MDD directive until December 31, 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 is pending.

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

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

Food and Drug Administration (“FDA”) of our Investigation Device Exemption

(“IDE”), thereby allowing us to proceed with a pivotal study of our CGuard™ Carotid Stent System, C-Guardians, for

prevention of stroke in patients in the United States.

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

in patients undergoing carotid artery stenting.

The trial was designed to enroll approximately 315 subjects in a maximum of 40 study

sites located in the United States and Europe.

Study sites in Europe may contribute a maximum of approximately 50% of the total enrollees.

The primary endpoint of the study will be the composite of incidence of death (all-cause mortality), all stroke, and myocardial infarction

(DSMI) through 30-days post-index procedure, based on the clinical events committee (CEC) adjudication and ipsilateral stroke from 31-365

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.

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

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

This group includes not only carotid artery

stenting patients but also individuals undergoing carotid endarterectomy, as the two approaches compete for the same patient population.

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:

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.

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

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 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 the MDD in the EU in March 2013 and was fully launched in Europe in September

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.

In January 2024, we received CE mark recertification under the

EU’s Medical Device Regulation regulatory framework.

Currently, we are seeking strategic partners for a potential launch of CGuard

EPS in Japan and other Asian countries.

September 8, 2020, we received approval from the FDA of our IDE, thereby allowing us to proceed with a pivotal study of our CGuard™

Carotid Stent System, C-GUARDIANS, for prevention of stroke in patients in the United States.

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 in patients undergoing CAS.

The study, which completed enrollment in June 2023, enrolled 316

patients across 24 trial sites in the U.S.

and Europe and from April 2023 included deployment of the CGuard stent using CGuard

Prime, our next generation CAS stent platform.

primary endpoint is a composite of:

(1) incidence of major adverse events including Death (all-cause mortality), any Stroke, and Myocardial

Infarction (DSMI) through 30-days post index procedure, or (2) ipsilateral stroke from day 31 to day 365 post-procedure.

All events are

adjudicated by an independent clinical events committee.

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.

November 2023, we announced positive 30-day follow up results from the C-GUARDIANS trial in which 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.

We anticipate reporting primary endpoint results from the

C-GUARDIANS trial in mid 2024 that may support the submission of a PMA application in the third quarter of 2024 with a view to

potential FDA approval of the CGuard Prime stent system in the first half of 2025.

continue to invest in current and future potential new indications, products and manufacturing enhancements for CGuard that are

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

In furtherance

of our strategy that focuses on establishing the CGuard Carotid Stent System as a viable alternative to vascular surgery, we are

developing a new transcarotid artery revascularization (TCAR) delivery system, SwitchGuard NPS, for transcarotid access and neuro

In addition, we intend to explore new indications for CGuard 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 Carotid Stent System and SwitchGuard NPS to be both symptomatic and

asymptomatic individuals with diagnosed high-grade carotid artery stenosis ) for whom intervention is preferable to medical (drug)

This group includes not only carotid artery stenting patients but also individuals undergoing carotid endarterectomy, as

the two approaches compete for the same patient population.

Assuming full penetration of the intervention caseload by CGuard Carotid Stent System, we

estimate that the addressable market for CGuard Carotid Stent System and SwitchGuard NPS is approximately $1.3 billion (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 and internal estimates).

According to this same report and internal estimates,

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

available market for CGuard Carotid Stent System and SwitchGuard NPS to be approximately $9.3 billion, which may grow over time if expanded treatment

options such as CGuard Carotid Stent System and SwitchGuard NPS lead to increased patient screening for carotid artery disease.

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 12,914,078 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 12,914,078 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

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

set forth therein.

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.

Warrants may be exercised on a cashless basis if there is no effective registration statement registering the shares underlying the Warrants.

Under the terms of the Pre-Funded Warrants and Warrants, certain of the selling stockholders may not exercise the Pre-Funded Warrants

or Warrants to the extent such exercise would cause such selling stockholder, together with its affiliates and attribution parties, to

beneficially own a number of shares of common stock which would exceed 4.99% or 9.99% of our then outstanding common stock following

such exercise, excluding for purposes of such determination common stock issuable upon exercise of the Pre-Funded Warrants or Warrants

which have not been exercised.

The Warrants may be exercised into pre-funded warrants if the selling stockholder is unable to exercise

the Warrant due to the foregoing beneficial ownership limitation or at the selling shareholder’s election.

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

Pursuant to the Registration Rights Agreement, we were 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 were 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.

The Registration Statement

was subsequently filed on May 23, 2023 and declared effective on June 1, 2023.

We paid LifeSci Capital LLC, a placement fee equal to

5.6% of the aggregate gross proceeds from the closing of the Private Placement Offering, or approximately $2.4 million, and legal expenses

In addition, we paid Piper Sandler & Co.

a financial advisory fee of $1.5 million, AGP/Alliance Global Partners a financial

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

Accounting Policies

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and assessing the likelihood of exercise of options to extend the lease term.

securities consist of debt securities.

We elected the fair value option to measure and recognize our investments in debt securities in

accordance with ASC 825, Financial Instruments as we manage our portfolio and evaluates the performance on a fair value basis.

in fair value, realized gains and losses on sales of marketable securities, are reflected in the statements of operation as finance expense

(income), net.

Concentration

of credit risk and allowance for doubtful accounts

instruments that may potentially subject us to a concentration of credit risk consist of cash and cash equivalents, which are deposited

in major financially sound institutions in the United States, Israel and Germany, and trade accounts receivable.

Our trade accounts receivable

is derived from revenues earned from customers from various countries.

We perform ongoing credit evaluations of our customers’

financial condition and, generally, require no collateral from customers.

We also have a credit insurance policy for some customers.

We maintain an allowance for doubtful accounts receivable based upon the expected ability to collect the accounts receivable.

our 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 we determine that a specific customer is unable to meet its financial obligations

to us, we provide 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”.

instruments that may potentially subject us 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 and

other receivables.

Our trade accounts receivable is derived from revenues earned from customers from various countries.

We perform ongoing

credit evaluations of our customers’ financial condition and, requires no collateral from our customers.

We also have a credit

insurance policy for some of our customers.

We maintain the allowance for estimated losses resulting from the inability of our customers

to make required payments.

The allowance represents the current estimate of lifetime expected credit losses over the remaining duration

of existing accounts receivable considering current market conditions and supportable forecasts when appropriate.

The estimate is a result

of our ongoing evaluation of collectability, customer creditworthiness, historical levels of credit losses, and future expectations.

The allowance for expected credit losses was immaterial during the periods presented.

are stated at the lower of cost (cost is determined on a “first-in, first-out” basis) or net realizable value.

24 unchanged sentences

leases with a lease term of 12 months or less.

Our 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.

amendment period added approximately $835,000 to the leasing liability.

contract with a customer exists only when:

19 unchanged sentences

multiple option approach.

attribution for nonemployee awards is in the same manner as if we had paid cash for the goods or services.

addition, certain of our share-based awards to service providers are performance based, i.e., the vesting of these awards depends upon

achieving certain goals.

We recognize compensation expenses for awards with performance conditions when we conclude that it is probable

that the performance condition will be achieved.

of Operations

months ended December 31, 2023 compared to the twelve months ended December 31, 2022

For the twelve months ended December 31, 2022, revenue increased by $676,000, or 15%, to $5,171,000, from $4,495,000 during the twelve

months ended December 31, 2021.

For the twelve months ended December 31, 2023, revenue increased by $1,034,000, or 20.0%, to $6,205,000, from $5,171,000 during the

twelve months ended December 31, 2022.

This increase was predominantly driven by a 21.1% increase in sales volume of CGuard EPS, from

$5,123,000 during the twelve months ended December 31, 2022, to $6,205,000 during the twelve months ended December 31, 2023.

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 enrolment accelerated.

respect to regions, the increase in revenue was primarily attributable to a $269,000 increase in Latin America, a $112,000 increase in

Asia, a $94,000 increase in Europe and a $50,000 increase in other geographies.

This growth was mainly due to growth in existing and

In addition, there was a $151,000 increase in revenue from North America due to sales in the United States related to stents

used in our C-Guardians FDA study.

increase was mainly due to growth in existing and new markets.

respect to regions, the increase in revenue was primarily attributable to a $1,036,000 increase in Europe, a $76,000 increase in Asia

and $24,000 increase in Latin America.

This growth was mainly due to growth in existing and new markets.

This increase was offset by

a $92,000 decline in revenue in the U.S.

as less stents were used in our C-GUARDIANS FDA study as trial enrollment ended in June 2023

as well as a $10,000 decline in other markets.

For the twelve months ended December 31, 2023, gross profit (revenue less cost of revenues) increased by 61.8%, or $690,000,

1 unchanged sentence

This increase in gross profit resulted from a $484,000

increase in revenues (as mentioned above) less the associated related material and labor costs and a decrease of $177,000 in miscellaneous

Gross margin (gross profits as a percentage of revenue) increased to 21.6% during the twelve months ended December 31, 2022

from 16.8% during the twelve months ended December 31, 2021, driven by the reasons mentioned above.

increase in revenues less the associated related material and labor costs, a decrease in write-offs of $179,000 and a decrease of $27,000

in miscellaneous expenses.

Gross margin (gross profits as a percentage of revenue) increased to 29.1% during the twelve months ended

December 31, 2023, from 21.6% during the twelve months ended December 31, 2022, driven by the reasons mentioned above.

and Development Expenses .

1 unchanged sentence

$171,000, to $7,981,000, from $7,810,000 during the twelve months ended December 31, 2022.

This increase resulted primarily from an

increase of $2,431,000 in expenses related to the enrollment in the C-Guardians FDA study which commenced in the second half of 2021

and an increase of $221,000 in miscellaneous expenses.

This increase resulted primarily from an increase

of compensation expenses to employees and consultants of $638,000 mainly due to an increase of approximately $341,000 of share-based

compensation-related expenses due to the expense recognition of grants made during the second quarter of 2023, an increase of $165,000

in expenses related to the SwitchGuard regulatory and approval process, and an increase of $513,000 in miscellaneous expenses offset,

in part, by a decrease of $1,145,000 in expenses related to the C-GUARDIANS FDA study as we completed enrollment in June 2023.

and Marketing Expenses .

1 unchanged sentence

to $3,865,000, from $3,664,000 during the twelve months ended December 31, 2022.

This increase resulted primarily from an increase in

salary expenses of $297,000, an increase in tradeshows and travel expenses of $288,000 in light of resumed marketing activities following

the lifting of restrictions related to COVID-19, and an increase in share-based compensation expenses of $157,000 due to the expense

recognition of grants made during the fourth quarter of 2021.

This increase resulted primarily from an increase of

compensation expenses of $151,000 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 $50,000 in miscellaneous expenses.

and Administrative Expenses .

1 unchanged sentence

or $2,748,000, to $11,104,000, from $8,356,000 during the twelve months ended December 31, 2022.

This increase resulted primarily from an

increase in share-based compensation-related expenses of $372,000, mainly due to the expense recognition of grants made during the fourth

quarter of 2021, an increase in regulatory expenses of $214,000 related to the implementation of the new European Medical Device Regulation,

an increase in patent related expenses of $155,000, an increase in travel expenses of $139,000 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 $154,000 in miscellaneous

expenses offset, in part, by a decrease in shareholder related expenses of $190,000 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.

This increase resulted primarily from

an increase in compensation expenses of $2,177,000, mainly due to an increase of approximately $1,585,000 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 $592,000 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 $292,000 and an increase

of $279,000 in miscellaneous expenses.

Income (Expenses) .

For the twelve months ended December 31, 2022, financial income increased by $407,000, to $250,000 of financial

income, from $157,000 of financial expense during the twelve months ended December 31, 2021.

The increase in financial income primarily

resulted from a $229,000 increase in interest income from short-term bank deposits and an increase of $181,000 in financial income related

to changes in exchange rates.

For the twelve months ended December 31, 2022, tax decreased by $17,000 compared to the twelve months ended December 31,

For the twelve months ended December 31, 2023, financial income increased by $1,042,000, to $1,292,000 from $250,000

during the twelve months ended December 31, 2022.

The increase in financial income primarily resulted from a $1,152,000 increase in interest

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

For the twelve months ended December 31, 2023, tax increased by $37,000 compared to the twelve months ended December 31,

Our expenses for income taxes reflect primarily the tax liability due to potential tax exposure.

2 unchanged sentences

The increase in net loss resulted primarily from an increase of $3,120,000 in operating

expenses partially offset by an increase of $407,000 in financial income and an increase of $363,000 in gross profit.

expenses, offset by an increase of $1,042,000 in financial income and increase of $690,000 in gross profit.

and Capital Resources

had an accumulated deficit as of December 31, 2022 of $201 million, as well as a net loss of $18,491,000 and negative operating cash

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 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.

July 28, 2020, we entered into a Sales Agreement with A.G.P.

in connection with the ATM Facility.

Any shares to be offered and sold under

the Sales Agreement will be issued and sold pursuant to the Company’s Registration Statement on Form S-3 (File No.

filed with the Securities and Exchange Commission (“SEC”) on February 21, 2018 and the prospectus supplement thereto filed

with the SEC on July 28, 2020, by methods deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated

under the Securities Act of 1933, as amended, or if specified by us, by any other method permitted by law.

On January 11, 2021, we increased

the aggregate amount of our shares of common stock that may be sold under the Sales Agreement from $9,300,000 to $10,382,954, and, as

a result, utilized and sold the maximum amount allowable under the ATM Facility, which resulted in an aggregate amount of $10,381,958.

February 8, 2021, we closed an underwritten public offering of 1,935,484 units, with each such unit being comprised of one share of our

common stock, par value $0.0001 per share, and one Series G Warrant to purchase one-half of one share of common stock.

The offering price

to the public was $9.30 per unit.

The Series G Warrants were immediately exercisable at a price of $10.23 per share, subject to adjustment

in certain circumstances, and expire five years from the date of issuance.

We also granted the underwriter of the offering an option

to purchase an additional 290,322 shares of common stock and Series G Warrants to purchase 145,161 shares of common stock, which the

underwriter exercised in full.

In connection with the offering, we granted to the underwriter a compensation warrant to purchase up to

111,290 shares of common stock with an exercise price of $10.23 per share and which are exercisable for five years from February 3, 2021,

the date of effectiveness of the registration statement filed in connection with the offering.

Our net proceeds from the offering, after

giving effect to the exercise of the underwriter’s over-allotment option, were approximately $18.9 million, after deducting underwriting

discounts and commissions and payment of other estimated expenses associated with the offering, but excluding the proceeds, if any, from

the exercise of Series G Warrants sold in the offering.

February 3, 2021, we entered into a Distribution Agreement with three China-based partners and on the same day, we entered into an investment

transaction with QIDI, which included (i) an SPA, pursuant to which QIDI agreed to invest $900,000 in exchange for shares of our common

stock at a purchase price of $10.062 per share, and (ii) an IRA, whereby QIDI was provided certain customary registration rights, including

a commitment by us to file a registration statement with the SEC on Form S-1 or Form S-3 and have such registration statement become

effective not later than 150 days following the closing of the transactions under the SPA.

The transaction closed on February 5, 2021.

of the date of issuance of the consolidated financial statements, we have the ability to fund our planned operations for at least the

next 12 months.

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

CGuard reaches commercial profitability.

Therefore, in order to fund our operations until such time that we can generate substantial

revenues, we may need to raise additional funds.

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

inflows from strategic partnerships.

There are no assurances, however, that we will be successful in obtaining the level of financing

needed for our operations.

If we are unsuccessful in commercializing our products or raising capital, we may need to reduce activities,

curtail or cease operations.

May 2023, we closed a Private Placement Offering that resulted in aggregate gross proceeds of approximately $42.2 million, before deducting

fees payable to the placement agent and other offering expenses payable by the Company.

If the Warrants from the Private Placement Offering

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

There can be no assurance that we will

achieve any of the milestones set forth in the Warrants or that the Warrants will be exercised in cash in full.

months ended December 31, 2023 compared to the twelve months ended December 31, 2022

At December 31, 2022, we had cash and cash equivalents of $4,632,000 and Short-term bank deposits of $13,171,000 as compared to $12,004,000

At December 31, 2023, we had cash and cash equivalents of $9,640,000 and marketable securities of $29,383,000 as compared to $4,632,000

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

6 unchanged sentences

The primary reason for the increase in cash used in our operating activities was an increase of $731,000

in payments for third party related expenses and for professional services (primarily due to payments related to our ongoing FDA trial,

and production related payments), an increase of $802,000 in salary and bonus payments from $7,756,000 in the twelve months ended December

31, 2021 to $8,558,000 during the same period in 2022 offset, in part, by an increase of $1,618,000 in payments received from customers

to $5,333,000 during the twelve months ended December 31, 2022, from $3,715,000 during the same period in 2021.

provided by our investing activities was $8,441,000 during the twelve months ended December 31, 2022, compared to cash used of $22,457,000

during the twelve months ended December 31, 2021.

The primary reasons for the increase in cash provided by our investing activities was

withdrawal of short-term deposits, net of investments of $9,000,000 during the twelve months ended December 31,2022 , compared to investment

in short-term deposits, net of withdrawals of $22,000,000 during the twelve months ended December 31,2021, and due to a decrease in employee

funds to $86,000 during the twelve months ended December 31, 2022, compared to employee funds of $113,000 during the same period in 2021,

offset, in part, by an increase of $129,000 in net payments made for purchase of property, plant and equipment to $473,000 during the

twelve months ended December 31, 2022, from $344,000 during the same period in 2021.

Used by financing activities for the twelve months December 31, 2022, was $140,000, compared to cash provided of $35,034,000 during the

same period in 2021.

The principal sources of the cash used by financing activities during the twelve months ended December 31, 2022

were due to issuance costs associated with a shelf registration statement on Form S-3 filed with the SEC on June 3, 2022.

The principal

sources of the cash provided by financing activities during the twelve months ended December 31, 2021 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.

in payments for third party related expenses and for professional services, an increase of $937,000 in salary and bonus payments from

$8,558,000 in the twelve months ended December 31, 2022 to $9,495,000 during the same period in 2022, offset, in part, by an increase

of $137,000 in payments received from customers to $5,470,000 during the twelve months ended December 31, 2023, from $5,333,000 during

the same period in 2022 and an increase of $697,000 in interest income received from marketable securities, money market funds and short-term

bank deposits

used by our investing activities was $16,092,000 during the twelve months ended December 31, 2023, compared to cash provided by our investing

activities of $8,441,000 during the twelve months ended December 31, 2022.

The primary reason for the increase in cash used by our investing

activities is an investment in marketable securities, net of withdrawal of $28,644,000, offset by an increase in withdrawal from short-term

bank deposits, net of investment in short-term deposits, of $4,000,000, and a decrease of $92,000 in payments made for purchase of property,

plant and equipment during the twelve months ended December 31, 2023.

provided by financing activities for the twelve months December 31, 2023, was $37,534,000.

The principal source of the cash provided

by financing activities during the twelve months ended December 31, 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 twelve months ended

December, 2022 was $140,000, the cash used by financing activities during the twelve months ended December, 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 December 31, 2023, our current assets exceeded our current liabilities by a multiple of 7.3.

Current assets decreased by $15,768,000

Current assets increased by $22,833,000

during the period and current liabilities increased by $950,000 during the period.

As a result, our working capital decreased by $16,491,000

As a result, our working capital increased by $21,883,000

to $38,139,000 as of December 31, 2023.

lease payments represent our commitment for future rent made under non-cancelable lease for our offices in Israel.

The total future payments

for our operating lease obligation at December 31, 2023 were approximately $1,815,000 and are due in the next twelve months.

For additional

details regarding our lease, see Note 7_ to our consolidated financial statements included in this Annual Report on Form 10-K.

Balance Sheet Arrangements

22 unchanged sentences

as of the beginning of the period of adoption.

We do not believe the adoption of this standard will have a material impact on our consolidated

financial statements.

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.

We adopted the provisions of this update as of January 1, 2023 with no material impact

on our consolidated financial statements.

November 2023, the FASB issued ASU 2023-07 “Segment Reporting:

Improvements to Reportable Segment Disclosures”.

guidance expands public entities ‘segment disclosures primarily by requiring disclosure of significant segment expenses that

are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an

amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or

loss and assets.

Public entities with a single reportable segment are required to provide the new disclosures and all the

disclosures required under ASC 280.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim

periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The amendments are required to be

applied retrospectively to all prior periods presented in an entity’s financial statements.

We are currently evaluating this

guidance to determine the impact it may have on our consolidated financial statements related disclosures.

In December 2023, the

FASB issued ASU 2023-09 “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures”.

This guidance is intended to

enhance the transparency and decision-usefulness of income tax disclosures.

The amendments in ASU 2023-09 address investor requests

for enhanced income tax information primarily through changes to disclosure regarding rate reconciliation and income taxes paid both

and in foreign jurisdictions.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 on a

prospective basis, with the option to apply the standard retrospectively.

Early adoption is permitted.

We are currently evaluating

this guidance to determine the impact it may have on our consolidated financial statements related disclosures.

That May Affect Future Operations

8 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-K

Item 7. Management’s Discussion and Analysis