What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-05 compared with 2024-05-13 · 164 added, 85 removed, 190 unchanged (57% of the section changed)

81 unchanged sentences

our next generation CAS stent platform.

primary endpoint is a composite of:

primary endpoint was 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

All events were

adjudicated by an independent clinical events committee.

The composite index will be compared to a performance goal based on the observed

The composite index was 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.

goal was 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 CGuard Carotid Stent

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with a view to potential FDA approval of the CGuard Prime stent system in the first half of 2025.

May 28, 2024, we announced positive one-year follow up results from the C-GUARDIANS trial in which stenting with the CGuard Carotid Stent

System in patients with carotid artery stenosis and at high risk for carotid endarterectomy had a 30-day DSMI and Ipsilateral stroke

between 31 and 365 days rate of 1.95% measured from procedure to 1-year follow-up.

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

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

Year Results from the U.S.

Investigational Device Exemption (IDE) clinical trial

May 28, 2024, we announced positive one-year follow up results from the C-GUARDIANS trial of the CGuard™ Carotid Stent Systemin

which stenting with the CGuard Carotid Stent System in patients with carotid artery stenosis and at high risk for carotid endarterectomy

had a 30-day DSMI and Ipsilateral stroke between 31 and 365 days rate of 1.95%, measured from procedure to 1-year follow-up.

of Series H Warrant

the announcement of the one year follow up study results from the Company’s C-GUARDIANS trial, Series H warrants to purchase 12,914,086

shares of common stock were exercised in full into 292,996 of shares of common stock and pre-funded warrants to purchase 12,621,090 shares

of common stock.

The net proceeds to the Company from the exercise of the Series H Warrants were $16.9 million after deducting placement

The Series H warrants, each exercisable at $1.3827 per common share and $1.3826 per pre-funded warrant, were issued as part

of the private placement financing that the Company consummated on May 15, 2023.

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

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will join the hostilities.

In addition, Iran recently launched a direct attack on Israel involving

hundreds of drones and missiles and has threatened to continue to attack Israel and is widely believed to be developing nuclear weapons.

Iran is also believed to have a strong influence among extremist groups in the region, such as Hamas in Gaza, Hezbollah in Lebanon, the

Houthi movement in Yemen and various rebel militia groups in Syria and Iraq.

Such clashes may escalate in the future into a greater

regional conflict.

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.

In addition, Iran recently launched a direct attack on Israel involving hundreds of drones and missiles and

has threatened to continue to attack Israel and is widely believed to be developing nuclear weapons.

Iran is also believed to have a

strong influence among extremist groups in the region, such as Hamas in Gaza, Hezbollah in Lebanon, the Houthi movement in Yemen and

various rebel militia groups in Syria and Iraq.

Such clashes may escalate in the future into a greater regional conflict.

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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of Operations

months ended March 31, 2024, compared to the three months ended March 31, 2023

For the three months ended March 31, 2024, revenue increased by $272,000, or 22.0%, to $1,511,000, from $1,239,000 during the three months

ended March 31, 2023.

This increase was predominantly driven by growth in existing markets.

respect to geographical regions, the increase in revenue was primarily attributable to a $169,000 increase in Europe, a $115,000 increase

in Latin America, $50,000 increase in Asia and a $10,000 increase in other geographies, for reasons mentioned in the paragraph above.

This increase was offset by a $59,000 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 March 31, 2024 and a $13,000

decrease in other territories.

For the three months ended March 31, 2024, gross profit (revenue less cost of revenues) decreased by $81,000, or 21.6%, to

$292,000, from $373,000 during the three months ended March 31, 2023.

months ended June 30, 2024, compared to the three months ended June 30, 2023

For the three months ended June 30, 2024, revenue increased by $90,000, or 5.4%, to $1,739,000, from $1,649,000 during the three months

ended June 30, 2023.

This increase was predominantly driven by growth in existing and new markets, partially offset by a reduction in

clinical trial revenue driven by the conclusion of C-GUARDIANS enrollment in June 2023.

respect to geographical regions, the increase in revenue was primarily attributable to a $303,000 increase in Europe for reasons mentioned

in the paragraph above.

This increase was offset by a $87,000 decrease in Latin America a $80,000 decrease in Asia due to timing of shipment

of orders, and a $45,000 decrease in the United States as we completed in June 2023 the enrollment of all patients in our C-Guardians

IDE clinical trial.

For the three months ended June 30, 2024, gross profit (revenue less cost of revenues) decreased by $160,000, or 32.6%, to

$331,000, from $491,000 during the three months ended June 30, 2023.

This decrease in gross profit resulted from a $237,000 increase

in training costs for new hires to build capacity for anticipated increased volume requirements, offset by $4,000 in miscellaneous expenses.

Gross margin (gross profits as a percentage of revenue) decreased to 19.4% during the three months ended March 31, 2024, from 30.1% during

the three months ended March 31, 2023, driven by the factors mentioned above.

in material and labor costs mainly due to higher sales volume as well as compensation expense for new and current employees, additional

space to build capacity for anticipated increased volume requirements and additional training expenses offset by an increase of the revenues

of $90,000 (see above), and an increase $13,000 in miscellaneous expense.

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

to 19.0% during the three months ended June 30, 2024, from 29.8% during the three months ended June 30, 2023, driven by the factors mentioned

and Development Expenses .

For the three months ended March 31, 2024, research and development expenses increased by $782,000, or

42.4%, to $2,625,000, from $1,843,000 during the three months ended March 31, 2023.

For the three months ended June 30, 2024, research and development expenses increased by $1,408,000, or

70.6%, to $3,401,000, from $1,993,000 during the three months ended June 30, 2023.

This increase resulted primarily from an increase

in compensation expenses of $741,000, 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 the first quarter of 2024 and due to the hiring of the Executive Vice President

and General Manager of North America in connection with our expansion plans in the United States, an increase of $159,000 related to

an early feasibility study of CGuard Prime for the treatment of acute stroke patients with tandem lesions and an increase of $56,000

in miscellaneous expenses.

of grants made to employees and consultants since the second quarter of 2023 and due to the hiring of the Executive Vice President and

General Manager of North America in connection with our expansion plans in the United States, an increase of $427,000 of SwitchGuard

NPS development and regulatory approval process, an increase of $82,000 related to the establishment of operations in the United States,

an increase of $77,000 related to an early feasibility study of CGuard Prime for the treatment of acute stroke patients with tandem lesions

and an increase of $81,000 in miscellaneous expenses.

and Marketing Expenses .

For the three months ended March 31, 2024, selling and marketing expenses increased by $449,000, or 57.0%,

to $1,237,000, from $788,000 during the three months ended March 31, 2023.

For the three months ended June 30, 2024, selling and marketing expenses increased by $553,000, or 62.0%,

to $1,445,000, from $892,000 during the three months ended June 30, 2023.

This increase resulted primarily from an increase in compensation

expenses of $381,000, 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 the first quarter of 2024 and an increase of $68,000 in miscellaneous expenses.

expenses of $469,000 and an increase of $84,000 in miscellaneous expenses.

and Administrative Expenses .

For the three months ended March 31, 2024, general and administrative expenses increased by $1,721,000,

or 81.1%, to $3,844,000, from $2,123,000 during the three months ended March 31, 2023.

For the three months ended June 30, 2024, general and administrative expenses increased by $824,000,

or 28.2%, to $3,745,000, from $2,921,000 during the three months ended June 30, 2023.

This increase resulted primarily from an increase

in compensation expenses of $993,000, 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 the first quarter of 2024, and an increase of $39,000 in miscellaneous expenses.

For the three months ended March 31, 2024, financial income increased by $257,000 or 205.6%, to $382,000, from $125,000 during

the three months ended March 31, 2023.

of grants made during the second quarter of 2023 and the first quarter of 2024, offset by a decrease of $92,000 in legal expenses and

a $77,000 in miscellaneous expenses.

For the three months ended June 30, 2024, financial income increased by $113,000 or 47.5%, to $351,000, from $238,000 during

the three months ended June 30, 2023.

The increase in financial income primarily resulted from a $123,000 increase in interest income

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

For the three months ended March 31, 2024, there was no change in our tax expenses as compared to the three months ended

March 31, 2023.

Our net loss increased by $2,776,000, or 65.2%, to $7,032,000, for the three months ended March 31, 2024, from $4,256,000 during

the three months ended March 31, 2023.

For the three months ended June 30, 2024, there was no material change in our tax expenses as compared to the three months

ended June 30, 2023.

Our net loss increased by $2,832,000, or 55.8%, to $7,909,000, for the three months ended June 30, 2024, from $5,077,000 during

the three months ended June 30, 2023.

The increase in net loss resulted primarily from an increase of $2,785,000 in operating expenses.

and a decrease of $81,000 in gross profit, partially offset by an increase of $257,000 in financial income.

months ended June 30, 2024, compared to the six months ended June 30, 2023

For the six months ended June 30, 2024, revenue increased by $362,000, or 12.5%, to $3,250,000, from $2,888,000 during the six months

ended June 30, 2023.

This sales increase was mainly due to growth in existing and new markets, partially offset by a reduction in clinical

trial revenue driven by the conclusion of C-GUARDIANS enrollment in June 2023.

respect to geographical regions, the increase in revenue was primarily attributable to a $472,000 increase in Europe, a $28,000 increase

in Latin America and a $8,000 increase in other territories for reasons mentioned above.

This increase was offset by a $104,000 decrease

in the United States as we completed in June 2023 the enrollment of all patients in our C-Guardians IDE clinical trial, a $30,000 decrease

in Asia and a $12,000 decrease in other territories.

For the six months ended June 30, 2024, gross profit (revenue less cost of revenues) decreased by 27.9%, or $241,000, to

$623,000, compared to a $864,000 for the same period in 2023.

This decrease in gross profit resulted from a $585,000 increase in material

and labor costs mainly due to higher sales volume as well as compensation expense for new and current employees, additional space to

build capacity for anticipated increased volume requirements and additional training expenses offset by an increase of the revenues of

$362,000 (see above), and an increase $18,000 in miscellaneous expense.

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

to 19.2% during the three months ended June 30, 2024, from 29.9% during the three months ended June 30, 2023, driven by the factors mentioned

and Development Expenses .

Research and Development Expenses .

For the six months ended June 30, 2024, research and development

expenses increased by 57.1%, or $2,190,000 to $6,026,000, from $3,836,000 during the six months ended June 30, 2023.

This increase resulted

primarily from an increase in compensation expenses of $1,364,000, mainly due to an increase of share-based compensation-related expenses

due to the expense recognition of grants made to employees and consultants since the second quarter of 2023 and due to the hiring of

the Executive Vice President and General Manager of North America in connection with our expansion plans in the United States, an increase

of $501,000 of SwitchGuard NPS development and regulatory approval process, an increase of $235,000 related to an early feasibility study

of CGuard Prime for the treatment of acute stroke patients with tandem lesions, an increase of $99,000 related to the establishment of

operations in the United States, offset by a decrease of $9,000 in miscellaneous expenses.

and Marketing Expenses .

For the six months ended June 30, 2024, selling and marketing expenses increased by 59.6%, or $1,002,000,

to $2,682,000, from $1,680,000 during the six months ended June 30, 2023.

This increase resulted primarily from an increase in compensation

expenses of $850,000 and an increase of $152,000 in miscellaneous expenses.

and Administrative Expenses .

For the six months ended June 30, 2024, general and administrative expenses increased by 50.5%, or $2,545,000,

to $7,589,000, from $5,044,000 during the six months ended June 30, 2023.

This increase resulted primarily from an increase in compensation

expenses of $2,674,000, 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 the first quarter of 2024, offset by a decrease of $129,000 in miscellaneous expenses.

For the six months ended June 30, 2024, financial income increased by $370,000, to $733,000 of financial income, from $363,000

of financial income during the six months ended June 30, 2023.

The increase in financial income primarily resulted from a $387,000 increase

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

For the six months ended June 30, 2024, there was no material change in our tax expenses as compared to the six months

ended June 30, 2023.

Our net loss increased by $5,608,000, or 60.1%, to $14,941,000, for the six months ended June 30, 2024, from $9,333,000 during

the six months ended June 30, 2023.

The increase in net loss resulted primarily from an increase of $5,737,000 in operating expenses

and decrease of $241,000 in gross profit, offset by an increase of $370,000 in financial income.

and Capital Resources

of March 31, 2024, we have the ability to fund our planned operations for at least the next 12 months from issuance date of the financial

of June 30, 2024, 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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curtail or cease operations.

May 2023, we closed a private placement offering of 10,266,270 shares (the “Private Placement

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

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

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

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

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

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

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

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 us.

If the Warrants issued in the private placement offering are exercised in cash in full this would result

in an additional $71.4 million of gross proceeds.

months ended March 31, 2024 compared to the Three months ended March 31, 2023

At March 31, 2024, we had cash and cash equivalents of $9,389,000 and marketable securities of $24,561,000 as compared to cash and cash

equivalents of $9,640,000 and short-term bank deposits of $29,383,000 as of December 31, 2023.

We have historically met our cash needs

through a combination of issuing new shares, borrowing activities and product sales.

Our cash requirements are generally for research

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

the three months ended March 31, 2024, net cash used in our operating activities increased by $233,000, or 4.8%, to $5,064,000, from

May 2023, we closed a private placement offering of 10,266,270 shares (the “Private Placement Shares”) of our common stock,

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

up to an aggregate of 51,656,328 shares of common stock, consisting of Series H warrants to purchase up to 12,914,086 shares of common

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

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

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

Series I Warrants and Series J Warrants, the “Warrants”), at an offering price of $1.6327 per Private Placement Share and

associated Warrants and an offering price of $1.6326 per Pre-Funded Warrant and associated Warrants 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

If the Warrants issued in the private placement offering are exercised in cash in full this would result in an additional $71.4 million

of gross proceeds.

June 2024, Series H warrants to purchase 12,914,086 shares of common stock were exercised in full into 292,996 of shares of common stock

and pre-funded warrants to purchase 12,621,090 shares of common stock.

The net proceeds to the Company from the exercise of the Series

H Warrants were $16.9 million after deducting placement agent fees.

months ended June 30, 2024 compared to the Six months ended June 30, 2023

At June 30, 2024, we had cash and cash equivalents of $28,385,000 and marketable securities of $18,778,000 as compared to cash and cash

equivalents of $9,640,000 and marketable securities of $29,383,000 as of December 31, 2023.

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 six months ended June 30, 2024, net cash used in our operating activities increased by $1,262,000, or 15.5%, to $9,418,000, from

$8,156,000 during the same period in 2023.

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of $1,757,000 in payments for third party related expenses and for professional services, an increase of $874,000 in compensation costs

paid during the three months ended March 31, 2023, from $3,128,000 in the three months ended March 31, 2023 to $3,675,000 during the

same period in 2024, offset in part by an increase of $1,185,000 in payments received from customers, and an increase of $46,000 in interest

income received from money market funds and marketable securities.

provided in our investing activities was $4,817,000 during the three months ended March 31, 2024, compared to cash provided of $4,449,000

during the three months ended March 31, 2023.

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

of marketable securities of $5,040,000, net of investment in marketable securities in the three months ended March 31, 2024, compared

to a withdrawal of short-term bank deposits of $4,500,000, net of investment in short-term bank deposits in the three months ended March

31, 2023, offset by an increase of $170,000 in payments made for purchase of property, plant and equipment during the three months ended

March 31, 2024.

was no cash provided by financing activities for the three months ended March 31, 2024 and for the three months ended March 31, 2023.

of March 31, 2024, our current assets exceeded our current liabilities by a multiple of 7.9.

Current assets decreased by $5,648,000 during

the period and current liabilities decreased by $1,143,000 during the period.

As a result, our working capital decreased by $4,505,000

to $33,634,000 as of March 31, 2024.

paid during the six months ended June 30, 2024, from $5,312,000 in the six months ended June 30, 2023 to $6,186,000, offset in part by

an increase of $1,254,000 in payments received from customers, and an increase of $115,000 in interest income received from money market

funds and marketable securities.

provided in our investing activities was $10,323,000 during the Six months ended June 30, 2024, compared to cash used of $22,442,000

during the Six months ended June 30, 2023.

The primary reason for the increase in cash provided by our investing activities is proceeds

from matured marketable securities of $11,040,000, net of investment in marketable securities in the Six months ended June 30, 2024,

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

in short-term deposits, of $6,500,000 in the Six months ended June 30, 2023 and by an increase of $600,000 in payments made for purchase

of property, plant and equipment during the Six months ended June 30, 2024.

provided by financing activities for the six months June 30, 2024, was $17,854,000.

The source of the cash provided by financing activities

during the six months ended June 30, 2024, were the proceeds from exercise of Series H warrants.

Cash provided by financing activities

for the six months June 30, 2023, was $37,534,000.

The 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.

of June 30, 2024, our current assets exceeded our current liabilities by a multiple of 7.4.

Current assets increased by $7,684,000 during

the period and current liabilities increased by $945,000 during the period.

As a result, our working capital increased by $6,739,000

to $44,878,000 as of June 30, 2024.

Balance Sheet Arrangements

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Obligations and Commitments

the three months ended March 31, 2024, there were no material changes to our contractual obligations and commitments since the year ended

the six months ended June 30, 2024, there were no material changes to our contractual obligations and commitments since the year ended

December 31, 2023.

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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