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Item 1. Financial Statements

2024-05-13 compared with 2023-11-06 · 175 added, 407 removed, 163 unchanged (78% of the section changed)

1 unchanged sentence

CONSOLIDATED FINANCIAL STATEMENTS

OF AND FOR THE QUARTER ENDED SEPTEMBER 30, 2023

CONSOLIDATED FINANCIAL STATEMENTS:

Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Operations

Condensed Consolidated Statements of Changes in Equity

Condensed Consolidated Statements of Cash Flows

Notes to the Condensed Consolidated Financial Statements

OF AND FOR THE QUARTER ENDED MARCH 31, 2024

CONSOLIDATED FINANCIAL

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Changes in Equity

Consolidated Statements of Cash Flows

Notes to the Consolidated Financial Statements

CONSOLIDATED BALANCE SHEETS

dollars in thousands)

September 30,

CURRENT ASSETS:

Cash and cash equivalents

Short-term bank deposits

Marketable securities

9 unchanged sentences

dollars in thousands other than share and per share data)

September 30,

LIABILITIES AND EQUITY

9 unchanged sentences

Common stock, par value $ 0.0001 per share;

150,000,000 shares authorized at September 30, 2023 and December 31, 2022;

21,400,163 and 8,330,918 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

150,000,000 shares authorized at March 31, 2024 and December 31, 2023;

23,412,385 and 21,841,215 shares issued and outstanding at March 31, 2024 and December 2023, respectively

Preferred C shares, par value $ 0.0001 per share;

1,172,000 shares authorized at September

30, 2023 and December 31, 2022;

1,718 shares issued and outstanding at September 30, 2023 and December 31 2022, respectively

1,172,000 shares authorized at March 31, 2024 and December 31, 2023;

1,718 shares issued and outstanding at March 31, 2024 and December 31 2023, respectively

Additional paid-in capital

1 unchanged sentence

Total liabilities and equity

* Represents an amount

less than $1 thousand

Represents an amount less

than $1 thousand

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

1 unchanged sentence

dollars in thousands, except per share data)

Three months ended

September 30,

Nine months ended

September 30,

3 Months Ended March 31,

COST OF REVENUES

7 unchanged sentences

NET LOSS PER SHARE - basic and diluted

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

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

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

2 unchanged sentences

Preferred Stock

Additional paid-in

BALANCE AT January 1, 2023

Share-based compensation related to restricted stock, restricted stock units and stock options award, net of forfeitures of 4,270 shares

BALANCE AT September 30, 2022

* Represents an amount

less than $1 thousand

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

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

dollars in thousands, except share data)

Preferred Stock

Additional paid-in

BALANCE AT July 1, 2022

Share-based compensation related to restricted stock, restricted stock units and stock options award, net of forfeitures of 1,581 shares

BALANCE AT September 30, 2022

* Represents an amount

less than $1 thousand

BALANCE AT March 31, 2023

Represents an amount less

than $1 thousand

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

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

STATEMENTS OF CHANGES IN EQUITY

dollars in thousands, except share data)

Preferred Stock

Additional paid-in

BALANCE AT January 1, 2024

Issuance of common shares, pre-funded warrants and warrants, net of $ 4,635 issuance costs

Share-based compensation related to stock, restricted stock, restricted stock units and stock options award, net of forfeitures of 75,090 shares

BALANCE AT September 30, 2023

* Represents an amount

less than $1 thousand

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

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

dollars in thousands, except share data)

Preferred Stock

Additional paid-in

BALANCE AT July 1, 2023

Share-based compensation related to stock, restricted stock, restricted stock units and stock options award, net of forfeitures of 9,749 shares

Share-based compensation related to stock, restricted stock,

restricted stock units and stock options award, net of forfeitures

BALANCE AT September 30, 2023

* Represents an amount

less than $1 thousand

Share-based compensation related to stock,

restricted stock, restricted stock units and stock options award, net of forfeitures

BALANCE AT March 31, 2024

Represents an amount less

than $1 thousand

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

1 unchanged sentence

dollars in thousands)

Nine months ended

Three months ended

CASH FLOWS FROM OPERATING ACTIVITIES:

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

Gain from sale of property, plant and equipment

Loss on amounts funded in respect of employee rights upon retirement

Changes in fair value of marketable securities

Change in fair value of markable securities, net of interest received

Change in liability for employees rights upon retirement

Other financial expenses

Change in operating right of use asset and leasing liability

Change in operating right of use asset and operating leasing liability

Share-based compensation expenses

Decrease (increase) in interest receivable on short term deposits

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

Decrease in interest receivable on short term deposits

Changes in operating asset and liability items:

Decrease (increase) in prepaid expenses

Decrease in prepaid expenses

Decrease (Increase) in trade receivables

Increase in other receivables

Decrease (Increase) in other receivables

Increase in inventory

Decrease in trade payables

Increase (decrease) in other payables

Decrease in other payables

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Investment in short-term bank deposits

Purchase of property, plant and equipment

Proceeds from sale of property, plant and equipment

Investments in marketable securities

Investment in short-term bank deposits

Withdrawal from short-term bank deposits

Investments in marketable securities

Proceeds from matured marketable securities

Amounts funded in respect of employee rights upon retirement

1 unchanged sentence

CASH FLOWS FROM FINANCING ACTIVITIES:

Issuance costs of At The Market offering

Proceeds from issuance of shares and warrants net of $ 4,635 issuance costs,

Net cash provided by (used in) financing activities

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

DECREASE IN CASH AND CASH EQUIVALENTS

BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD

BALANCE OF CASH AND CASH EQUIVALENTS AT END OF THE PERIOD

SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:

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

Non-cash lease incentive

Decrease in right-of-use assets and lease liabilities due to shortening lease term

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

TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 - DESCRIPTION OF BUSINESS

Inc., a Delaware corporation (the “Company”), together with its subsidiaries, is a medical device company focusing on

the development and commercialization of its proprietary MicroNet™ stent platform technology for the treatment of complex vascular

and coronary disease.

InspireMD, Inc., a Delaware

corporation (the “Company”), together with its subsidiaries, is a medical device company focusing on the development

and commercialization of its proprietary MicroNet™ stent platform technology for the treatment of complex vascular and coronary

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

Company’s carotid product (CGuard™ EPS) combines MicroNet and a self-expandable nitinol stent in a single device to treat

carotid artery disease.

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

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

or bypass surgery.

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

MGuard Prime EPS received CE

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

Over the past

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

Infarction (“STEMI”) patients.

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

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

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

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

of the date of issuance of these consolidated financial statements, the Company has the ability to fund its planned operations for

at least the next 12 months.

However, the Company expects to continue incurring losses and negative cash flows from operations until

its product, CGuard™ EPS, reaches commercial profitability.

Therefore, in order to fund the Company’s operations until

such time that the Company can generate substantial revenues, the Company may need to raise additional funds.

to satisfy regulatory requirements of the new European Medical Device Regulation could prevent the Company from marketing CGuard

EPS in countries requiring the CE Mark.

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

order to obtain and maintain the CE mark, the Company must comply with EU law on medical devices, which, until May 26, 2021 was governed

by the Medical Device Directive 93/42/EEC (“MDD”), by presenting comprehensive technical files for the Company’s

products demonstrating safety and efficacy of the product to be placed on the market and passing initial and annual quality management

system audit as per ISO 13485 standard by a European Notified Body.

The Company has obtained ISO 13485 quality system certification

and CGuard EPS that the Company currently distribute into the European Union, displays the required CE mark.

In order to maintain

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

The European Union

replaced the MDD with the new European Medical Device Regulation (MDR 2017/745) (“MDR”) regulations.

The MDR entered

into force after a transitional period of three years and a one year extension of that transition period due to the COVID-19 pandemic

on May 26, 2021 and which changes several aspects of the regulatory framework in the EU.

Manufacturers had the duration of the transition

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

In the Company’s

specific case, the Company’s CE mark for CGuard EPS under the MDD expired on November 12, 2022, and the Company is 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, the Company received a derogation per Article 97 paragraph 1 of Regulation 2017/745 from the Agency for Medicines

and Health Products (FAMHP) allowing the Company 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 the Company to continue

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

As a result of the foregoing, the Company may

market and sell CGuard EPS in the EU and certain other jurisdictions subject to certain procedural requirements while the Company’s

MDR CE recertification is pending.

Risks Related to Our Operations in Israel including the recent attack by Hamas and other terrorist organizations from the Gaza Strip

and Israel’s war against them.

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.

The Company cannot currently predict the intensity or duration of Israel’s

war against Hamas, nor can predict how this war will ultimately affect the Company’s business and operations or Israel’s

economy in general.

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

February 2022, Russia launched a military invasion into Ukraine.

The Company derived approximately

12.1 % of total sales in Russia and Belarus in 2022 while during the nine and three months

ended September 30, 2023, the Company’s sales to Russia and Belarus were 13.1 % and

19.6 % ,respectively, compared to 11.9 % and 21.5 % in the nine and three months ended September

30, 2022, respectively.

The escalation of geopolitical instability in Russia and Ukraine

as well as currency fluctuations in the Russian Ruble could negatively impact the Company’s

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

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

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

The Company cannot provide assurance that current sanctions or potential future changes in sanctions will not have a material

impact on the Company’s operations in Russia and Belarus or on the Company’s financial results.

The Company’s carotid

product (CGuard™ EPS) combines MicroNet and a self-expandable nitinol stent in a single device to treat carotid artery disease.

The Company markets its

product through distributors in international markets, mainly in Europe.

As of the date of issuance

of these consolidated financial statements, the Company has the ability to fund its planned operations for at least the next 12 months.

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

EPS, reaches commercial profitability.

Therefore, in order to fund the Company’s operations until such time that the Company

can generate substantial revenues, the Company may need to raise additional funds.

Related to the Company’s Operations in Israel including the recent attack by Hamas and other terrorist organizations from the Gaza Strip and

Israel’s war against them.

October 2023, Israel was attacked by a terrorist organization and entered a state of war.

As of the date of these consolidated financial

statements, the war in Israel is ongoing and continues to evolve.

The Company operations, including its production facility, are located

Currently, such activities in Israel remain largely unaffected.

During the three months ended March 31, 2024, the impact

of this war on the Company’s results of operations and financial condition was immaterial, but such impact may increase, which

could be material, as a result of the continuation, escalation or expansion of such war.

2 - BASIS OF PRESENTATION

accompanying unaudited consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements.

for the year ended December 31, 2022.

In the opinion of the Company, all adjustments considered necessary for a fair statement of the

results of the interim periods reported herein have been included (consisting only of normal recurring adjustments).

These consolidated

financial statements and notes thereto are unaudited and should be read in conjunction with the Company’s audited financial statements

for the year ended December 31, 2022, as found in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange

Commission on March 30, 2023.

The results of operations for the three and nine months ended September 30, 2023, are not necessarily indicative

of results that could be expected for the entire fiscal year.

and Cash Equivalents

Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to

be cash equivalents.

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.

securities consist of debt securities.

The Company elected the fair value option to measure and recognize its investments in debt securities

in accordance with ASC 825, Financial Instruments as the Company manages its portfolio and evaluates the performance on a fair value

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

as finance expense (income), net.

3 - NEW ACCOUNTING PRONOUNCEMENT

adopted accounting pronouncement

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

This guidance replaces the incurred loss impairment methodology.

Under the new guidance, on initial recognition and

at each reporting period, an entity is required to recognize an allowance that reflects its current estimate of credit losses expected

to be incurred over the life of the financial instrument based on historical experience, current conditions and reasonable and supportable

In November 2019, the FASB issued ASU No.

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

Hedging (Topic 815), and Leases (Topic 842):

Effective Dates (“ASU 2019-10”).

The purpose of this amendment is to create

a two-tier rollout of major updates, staggering the effective dates between larger public companies and all other entities.

granted certain classes of companies, including Smaller Reporting Companies (“SRCs”), additional time to implement major

FASB standards, including ASU 2016-13.

Larger public companies had an effective date for fiscal years beginning after December 15,

2019, including interim periods within those fiscal years.

All other entities are permitted to defer adoption of ASU 2016-13, and

its related amendments, until the earlier of fiscal periods beginning after December 15, 2022.

Under the current SEC definitions,

the Company met the definition of an SRC and adopted the deferral period for ASU 2016-13.

The guidance requires a modified retrospective

transition approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption.

Company adopted the provisions of this update as of January 1, 2023 with no material impact on its consolidated financial statements.

In the opinion of the Company, the financial statements reflect all adjustments, which include only normal recurring adjustments, necessary

for a fair statement of its financial position as of March 31, 2024 and its results of operations, changes in equity and cash flows for

the three months ended March 31, 2024 and 2023.

These consolidated financial statements and notes thereto are unaudited and should be

read in conjunction with the Company’s audited financial statements for the year ended December 31, 2023, as found in the Company’s

Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 5, 2024.

The results of operations for the three

months ended March 31, 2024 are not necessarily indicative of results that could be expected for the entire fiscal year.

3 - RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS

adopted accounting pronouncements

In August 2020, the Financial Accounting Standards Board (“FASB”)

issued Accounting Standards Update (“ASU”) 2020-06 “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging –

Contracts in Entity’s Own Equity (Subtopic 815 – 40).” This guidance simplifies the accounting for certain financial

instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s

This ASU is effective for the Company for fiscal years beginning after December 15, 2023, and interim periods within

those fiscal years.

The Company adopted the provisions of this update as of January 1, 2024 with no material impact on its consolidated

financial statements.

issued accounting pronouncement, not yet adopted

August 2020, the FASB issued ASU 2020-06 “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives

and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40).” This guidance simplifies the accounting

for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts

on an entity’s own equity.

This ASU is effective for the Company for fiscal years beginning after December 15, 2023, and interim

periods within those fiscal years.

The Company is currently evaluating the impact of the adoption of ASU 2020-06 on the Company’s

consolidated financial statements.

In November 2023, the FASB

issued ASU 2023-07 “Segment Reporting:

Improvements to Reportable Segment Disclosures”.

This 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.

entities with a single reportable segment are required to provide the new disclosures and all the disclosures required under Accounting Standards Codification (“ASC”)

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.

The Company is currently evaluating this guidance to determine the impact it

may have on its 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 in the U.S.

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.

The Company is currently evaluating this guidance

to determine the impact it may have on its consolidated financial statements disclosures.

4 – FAIR VALUE MEASUREMENTS

13 unchanged sentences

OF FINANCIAL ASSETS SUBJECT TO FAIR VALUE MEASUREMENTS

of September 30, 2023

government bonds

As of March 31, 2024

($ in thousands)

Cash equivalents-

Money market funds

Marketable securities-

U.S government bonds

As of December 31, 2023

($ in thousands)

Cash equivalents-

Money market funds

Cash equivalents

Marketable securities-

U.S government bonds

Marketable securities

Company’s debt securities are classified within Level 2 because it uses quoted market prices or alternative pricing sources and

models utilizing market observable inputs to determine their fair value.

cost of marketable securities as of September 30, 2023 is $ 28,838 thousands.

cost of marketable securities as of March 31, 2024 is $ 23,878 thousand.

Fair value of financial instruments

carrying amounts of financial instruments included in working capital approximate their fair value due to the relatively short-term maturities

of such instruments.

As of March 31, 2024, and

December 31, 2023, allowance for expected credit loss was immaterial.

5 - MARKETABLE SECURITIES

1 unchanged sentence

OF MARKETABLE SECURITIES

September 30,

($ in thousands)

1 unchanged sentence

Marketable securities

following table summarizes the fair value of the Company’s marketable securities classified by maturity as of September 30, 2023,

and December 31, 2022:

following table summarizes the fair value of the Company’s marketable securities classified by maturity as of March 31, 2024, and

December 31, 2023:

OF FAIR VALUE OF MARKETABLE SECURITIES CLASSIFIED BY MATURITY

September 30,

($ in thousands)

1 unchanged sentence

Amounts maturing after one year through two years

table below sets forth a summary of the changes in the fair value of the Company’s marketable securities for the nine months period

ended September 30, 2023:

table below sets forth a summary of the changes in the fair value of the Company’s marketable securities for the three month period

ended March 31, 2024:

OF CHANGES IN FAIR VALUE OF MARKETABLE SECURITIES

Nine months ended

September 30,

Three months ended

($ in thousands)

Balance at beginning of the period

Sale or maturity

Interest Received

Changes in fair value during the period

Balance at end of the period

Balance at end of the

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

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 the Company’s 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 12,914,078 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.

The Private Placement Offering closed on May 16, 2023.

gross proceeds to the Company in respect of the Private Placement Offering were $ 42.2 million, before deducting fees payable to the placement

agent and other offering expenses payable by the Company which amounted to approximately $ 4.6 million.

If the Warrants are exercised

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

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

The Warrants are immediately exercisable upon issuance at an exercise price of $ 1.3827 per share.

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

(PMA) from the Food and Drug Administration, or 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 transcarotid system

and CGuard Prime 80 cm 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 begin.

The Warrants may

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

of September 30, 2023, there are 15,561,894 outstanding Pre-Funded Warrants.

to the full ratchet anti-dilution adjustment provisions in the respective certificate of designation for the Company’s Series C

Preferred Stock, the conversion price of the outstanding shares of the Series C Preferred Stock was reduced to $ 1.3827 per share, effective

as of the date of the securities purchase agreement entered for the Offering, and the number of shares of common stock issuable upon

conversion of the Series Series C Preferred Stock increased by 5,668 additional shares of common stock upon conversion of the Series

C Preferred Stock, based on 1,718 shares of Series C Preferred Stock outstanding as of May 16, 2023.

of September 30, 2023, there were 1,718 shares of Series C Preferred Stock outstanding, convertible into an aggregate of 7,952 shares

of the company’s common stock.

of September 30, 2023, the Company has outstanding warrants to purchase an aggregate of 53,396,008

shares of common stock as follows:

of March 31, 2024, there were 1,718

shares of Series C preferred stock outstanding, convertible into an aggregate of 7,952

shares of the Company’s common stock, with a total stated value of $ 10,997 .

As of March 31, 2024, there

are 15,254,623 outstanding pre-funded warrants.

As of March 31, 2024, the

Company has outstanding warrants to purchase an aggregate of 53,396,008 shares of common stock as follows:

SCHEDULE OF ISSUANCE OF WARRANTS TO PURCHASE COMMON STOCK

Number of underlying

Series E Warrants

7 unchanged sentences

Total Warrants

of September 30, 2023, the Company had 155,000,000 authorized shares of capital stock, par value $ 0.0001 per share, of which 150,000,000

of March 31, 2024, the Company had 155,000,000 authorized shares of capital stock, par value $ 0.0001 per share, of which 150,000,000

are shares of common stock and 5,000,000 are shares of “blank check” preferred stock.

the nine months ended September 30, 2023, the Company granted 2,774,600 restricted shares

of the Company’s common stock to employees and directors.

The shares are subject to

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

the three months ended March 31, 2024, the Company granted 1,634,403 restricted shares of the Company’s common stock to employees

and directors.

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

The shares to directors are subject to a one-year vesting period.

fair value of the above restricted shares was approximately $ 5.07 million.

the nine months ended September 30, 2023, the Company granted 1,045,150 restricted share

units of the Company’s common stock to the chief executive officer.

The shares are

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

fair value of the above restricted share units was approximately $ 1,839 thousand.

January 6, 2023, the Company granted to a consultant options to purchase a total of 50,000

the three months ended March 31, 2024, the Company granted 563,499 restricted share units of the Company’s common stock to

the chief executive officer.

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

fair value of the above restricted share units was approximately $ 1.77 million

the three months ended March 31, 2024, the Company granted to employees and directors options to purchase a total of 715,614

shares of the Company’s common stock.

The options have an exercise price of $ 1.15 per

share, which was the fair market value of the Company’s common stock on the date of

45,000 options are subject to a three-year vesting period (of which 20,000 options

are vesting in the first year, 15,000 options are vesting in the second year and 10,000 options

are vesting in the third year) and 5,000 options with performance conditions related to marketing

The options have an exercise prices ranging from $ 2.71 -$ 3.14

per share, which was the fair market value of the Company’s common stock on the respective dates of the grant.

The options to

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

The options to directors are

subject to a one-year vesting period.

calculating the fair value of the above options, the Company used the following assumptions:

dividend yield of 0 % and expected term of

5.125 - 6.5 years;

dividend yield of 0 % and expected term

of 5.5 - 6.5 years;

expected volatility ranging from 96.40 %- 119.38 %;

and risk-free interest rate ranging from 3.93 %- 4.10 %.

fair value of the above options, using the Black-Scholes option-pricing model, was approximately $ 50,658 .

May 17, 2023, the Company granted to employees and directors options to purchase a total of 1,011,930 shares of the Company’s common

The options have an exercise prices of $ 1.76 per share, which was the fair market value of the Company’s common stock on

the date of the grant.

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

calculating the fair value of the above options the Company used the following assumptions:

dividend yield of 0 % and expected term of

5.5 - 6.5 years;

expected volatility of 116.76 %- 123.30 %;

and risk-free interest rate of 3.58 %.

fair value of the above options, using the Black-Scholes option-pricing model, was approximately $ 1.85 million.

May 17, 2023, the Company granted to consultants options to purchase a total of 575,000 shares of the Company’s common stock.

options have an exercise price of $ 1.76 per share, which was the fair market value of the Company’s common stock on the date of

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

calculating the fair value of the above options the Company used the following assumptions:

dividend yield of 0 % and expected term of

5.5 - 6.5 years;

expected volatility of 116.76 %- 123.30 %;

and risk-free interest rate of 3.58 %.

fair value of the above options, using the Black-Scholes option-pricing model, was approximately $ 885 thousand.

August 28, 2023 and September 10, 2023the Company granted to employees options to purchase a total of 38,740 shares of the Company’s

common stock.

The options have an exercise prices of $ 3.37 -$ 3.57 per share, which was the fair market value of the Company’s common

stock on the date of the grant.

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

calculating the fair value of the above options the Company used the following assumptions:

dividend yield of 0 % and expected term of

5.5 - 6.5 years;

expected volatility of 114.25 %- 123.07 %;

and risk-free interest rate of 4.34 %- 4.39 %.

fair value of the above options, using the Black-Scholes option-pricing model, was approximately $ 120,000 thousand.

Election to Receive

Shares of Common Stock in lieu of Cash Compensation

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

common stock under the 2021 Equity Incentive Plan.

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

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

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

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

on the Issuance Dates.

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

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

April 1, 2023, the Company issued 29,746 shares of common stock to non-employee directors who elected to receive all or a portion of

their cash retainer amount for the three months ended March 31, 2023 in shares of the Company’s common stock under the 2021 Equity

Incentive Plan.

July 1, 2023, the Company issued 12,648 shares of common stock to non-employee directors who elected to receive all or a portion of their

cash retainer amount for the three months ended June 30, 2023 in shares of the Company’s common stock under the 2021 Equity Incentive

of September 30, 2023, there was an accrual for $ 55,000 for director’s fees for the three months ended September 30, 2023.

of this an amount of $ 22,875 will be paid in cash and $ 32,125 will be issued in shares of the Company’s common stock under the

2021 Equity Incentive Plan and accordingly On October 1, 2023 the company issued 9,735 shares.

7 – RELATED PARTIES TRANSACTIONS

the nine and three months ended September 30, 2022, a consulting company whose founder and

CEO is a member of the company’s board of directors, provided certain marketing services

in the amount of $ 9,276 and $ 500 , respectively.

During the nine and three months ended September

30, 2023, no marketing services were provided.

September 15, 2023, the board approved the company’s entry into a consultancy agreement

with a member of the immediate family of the CEO for certain administrative projects in connection

with the Company’s expansion to the U.S.

until a full-time Company employee is retained

in such capacity.

Pursuant to the Consultancy Agreement, the Company will pay a fixed hourly

fee of $ 50 for a maximum of 20 hours per week and customary expenses.

The Company may terminate

this Agreement for any reason or no reason, at any time, upon 30 days prior written notice

to consultant.

expenses for the nine and three-month periods ended September 30, 2023, were $ 4,000 .

During the three months ended March 31, 2024, a member of the immediate family of the CEO provided certain administrative services

in connection with the Company’s expansion to the U.S.

in the amount of $ 15 thousand.

8 - NET LOSS PER SHARE :

2 unchanged sentences

The calculation of diluted net loss

per share excludes potential share issuances of common stock upon the exercise of share options, warrants, and unvested restricted stocks,

unvested restricted stock units and Series C preferred stock as the effect is anti-dilutive.

the purpose of calculating basic net loss per share, the additional shares of common stock that are issuable upon exercise of the Pre-funded

Warrants have been included since the shares are issuable for a negligible consideration, as determined by the Company according to ASC

260-10-45-13, and have no vesting or other contingencies associated with them.

For the nine and three-month periods ended September 30,

2023, we had weighted average Pre-funded Warrants of 7,866,452 and 15,561,894 , respectively, which were used in the computations of net

loss per share for the nine and three-month periods.

total number of shares of common stock related to outstanding options, warrants, unvested restricted stock, unvested restricted stock

units and Series C Preferred Stock excluded from the calculations of diluted loss per share were 75,315,352 for the nine and three-month

periods ended September 30, 2023.

This amount includes 3,073,821 of unvested restricted stock included

in the number of issued and outstanding shares as of September 30, 2023.

total number of shares of common stock related to outstanding options, warrants, unvested restricted stock, unvested restricted stock

units and Series C Preferred Stock excluded from the calculations of diluted loss per share were 2,932,284 for the nine and three month

periods ended September 30, 2022.

This amount includes 497,767 of unvested restricted stock included

in the number of issued and outstanding shares as of September 30, 2022.

9 – LEASE AGREEMENTS

Company’s Israeli subsidiary has a lease agreement for a facility in Israel, which

expires on December 31, 2026.

On August 24, 2023, the Company amended the lease agreement

mentioned above, leasing additional space in the facility and shortened the lease term of

another space in the building.

he balances of right of use assets and lease liabilities increased

due to the newly leased space and decreased due to the lease that was shortened.

lease cost for the nine and three-month periods ended September 30, 2023 were $ 337,000 and

$ 112,000 respectively

information related to leases are as follows:

SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES

($ in thousands)

Operating lease right-of-use assets

Current operating lease liabilities

Non-current operating lease liabilities

Weighted Average Remaining Lease Term

Weighted Average Discount Rate

Nine months ended

September 30,

Twelve months ended

Operating cash flows from operating leases (cash paid in thousands)

of lease liabilities are as follows:

SCHEDULE OF MATURITIES OF LEASE LIABILITIES

($ in thousands)

Total lease payments

Less imputed interest

10 - FINANCIAL INSTRUMENTS :

value of financial instruments

carrying amounts of financial instruments approximate their fair value either because these amounts are presented at fair value or due

to the relatively short-term maturities of such instruments.

of September 30, 2023, and December 31, 2022, allowance for expected credit loss was immaterial.

per share excludes the effect of potential dilution of share options, warrants, and unvested restricted stocks, unvested restricted stock

units and Series C preferred stock as the effect is anti-dilutive.

the purpose of calculating basic net loss per share, the additional shares of common stock that are issuable upon exercise of the

pre-funded warrants have been included since the shares are issuable for a negligible consideration, as determined by the Company

according to ASC 260-10-45-13, and have no vesting or other contingencies associated with them.

For the three month period ended

March 31, 2024, the Company had weighted average pre-funded warrants to purchase 15,254,623

share of common stock, which was used in the computation of net loss per share for the quarter.

total number of shares of common stock related to outstanding options, warrants, unvested restricted stock, unvested restricted

stock units and Series C preferred stock, which were excluded from the calculations of diluted loss per share were 62,556,668

and 2,773,675

for the three month period ended March 31, 2024 and 2023.

This amount includes 4,611,500

of unvested restricted stock included in the number of issued and outstanding shares as of March 31, 2024 and 2023.

9 - INVENTORY :

OF INVENTORIES

September 30,

($ in thousands)

4 unchanged sentences

OF ACCOUNTS PAYABLE AND ACCRUALS - OTHER

September 30,

($ in thousands)

11 unchanged sentences

Three months ended

September 30,

Nine months ended

September 30,

($ in thousands)

SCHEDULE OF REVENUES ATTRIBUTED TO GEOGRAPHIC AREAS BY PRODUCT

Three months ended

September 30,

Nine months ended

September 30,

($ in thousands)

principal customers:

SCHEDULE OF REVENUES ATTRIBUTED TO GEOGRAPHIC AREAS BY PRINCIPAL CUSTOMERS

OF REVENUES ATTRIBUTED TO GEOGRAPHIC AREAS BY PRINCIPAL CUSTOMERS

Three months ended

September 30,

Nine months ended

September 30,

tangible long lived assets are located in Israel.

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 1. Financial Statements