InspireMD, Inc. 10-Q

Item 1. Financial Statements INSPIREMD, INC. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE QUARTER ENDED JUNE 30, 2024 TABLE OF CONTENTS Page CONDENSED CONSOLIDATED FINANCIAL STATEMENTS: Condensed Consolidated Balance Sheets F-2 - F-3 Condensed Consolidated Statements of Operations F-4 Condensed Consolidated Statements of Changes in Equity F-5 - F-8 Condensed Consolidated Statements of Cash Flows F-9 Notes to the Condensed Consolidated Financial Statements F-10 - F-16 F- 1 INSPIREMD, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (U.S. dollars in thousands) June 30, December 31, 2024 2023 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 28,385 $ 9,640 Marketable securities 18,778 29,383 Accounts receivable: Trade, net 1,307 1,804 Other 450 648 Prepaid expenses 717 578 Inventory 2,206 2,106 TOTAL CURRENT ASSETS 51,843 44,159 NON-CURRENT ASSETS: Property, plant and equipment, net 1,595 1,060 Operating lease right of use assets 1,257 1,473 Funds in respect of employee rights upon retirement 964 951 TOTAL NON-CURRENT ASSETS 3,816 3,484 TOTAL ASSETS $ 55,659 $ 47,643 F- 2 INSPIREMD, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (U.S. dollars in thousands other than share and per share data) June 30, December 31, 2024 2023 LIABILITIES AND EQUITY CURRENT LIABILITIES: Accounts payable and accruals: Trade 927 939 Other 6,038 5,081 TOTAL CURRENT LIABILITIES 6,965 6,020 LONG-TERM LIABILITIES- Operating lease liabilities 786 1,038 Liability for employees’ rights upon retirement 1,145 1,084 TOTAL LONG-TERM LIABILITIES 1,931 2,122 COMMITMENTS AND CONTINGENT LIABILITIES - - TOTAL LIABILITIES 8,896 8,142 EQUITY: Common stock, par value $ 0.0001 per share; 150,000,000 shares authorized at June 30, 2024 and December 31, 2023; 25,196,479 and 21,841,215 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively 3 2 Preferred C shares, par value $ 0.0001 per share; 1,172,000 shares authorized at June 30, 2024 and December 31, 2023; 1,718 shares issued and outstanding at June 30, 2024 and December 31 2023 - * - * Additional paid-in capital 283,202 261,000 Accumulated deficit ( 236,442 ) ( 221,501 ) Total equity 46,763 39,501 Total liabilities and equity $ 55,659 $ 47,643 * Represents an amount less than $1 thousand The accompanying notes are an integral part of the consolidated financial statements. F- 3 INSPIREMD, INC. (Unaudited) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. dollars in thousands, except per share data) 2024 2023 2024 2023 Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 REVENUES $ 1,739 $ 1,649 $ 3,250 $ 2,888 COST OF REVENUES 1,408 1,158 2,627 2,024 GROSS PROFIT 331 491 623 864 OPERATING EXPENSES: Research and development 3,401 1,993 6,026 3,836 Selling and marketing 1,445 892 2,682 1,680 General and administrative 3,745 2,921 7,589 5,044 Total operating expenses 8,591 5,806 16,297 10,560 LOSS FROM OPERATIONS ( 8,260 ) ( 5,315 ) ( 15,674 ) ( 9,696 ) FINANCIAL INCOME, net: 351 238 733 363 NET LOSS $ ( 7,909 ) $ ( 5,077 ) $ ( 14,941 ) $ ( 9,333 ) NET LOSS PER SHARE - basic and diluted $ ( 0.22 ) $ ( 0.24 ) $ ( 0.43 ) $ ( 0.64 ) WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING NET LOSS PER SHARE - basic and diluted 35,877,926 21,074,187 35,060,451 14,619,622 The accompanying notes are an integral part of the consolidated financial statements. F- 4 INSPIREMD, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) (U.S. dollars in thousands, except share data) Shares Amount Shares Amount capital deficit equity Common stock Series C Convertible Preferred Stock Additional paid-in Accumulated Total Shares Amount Shares Amount capital deficit equity BALANCE AT January 1, 2023 8,330,918 1 1,718 - * 218,977 ( 201,585 ) 17,393 Net loss - ( 9,333 ) ( 9,333 ) Issuance of common shares, pre-funded warrants and warrants, net of $ 4,635 issuance costs 10,266,270 1 - 37,533 - 37,534 Share-based compensation related to restricted stock, restricted stock units and stock options award, net of forfeitures of 4,270 shares 2,595,016 - * - 1,219 - 1,219 BALANCE AT June 30, 2023 21,192,204 2 1,718 - * 257,729 ( 210,918 ) 46,813 * Represents an amount less than $1 thousand The accompanying notes are an integral part of the consolidated financial statements. F- 5 INSPIREMD, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) (U.S. dollars in thousands, except share data) Common stock Series C Convertible Preferred Stock Additional paid-in Accumulated Total Shares Amount Shares Amount capital deficit equity BALANCE AT April 1, 2023 8,326,648 1 1,718 - * 219,266 ( 205,841 ) 13,426 Net loss - ( 5,077 ) ( 5,077 ) Issuance of common shares, pre-funded warrants and warrants, net of $ 4,635 issuance costs 10,266,270 1 - - 37,533 - 37,534 Issuance of common shares, pre-funded warrants and warrants, net of issuance costs 10,266,270 1 - - 37,533 - 37,534 Share-based compensation related to stock, restricted stock, restricted stock units and stock options award 2,599,286 - * - - 930 - 930 BALANCE AT June 30, 2023 21,192,204 2 1,718 - * 257,729 ( 210,918 ) 46,813 * Represents an amount less than $1 thousand The accompanying notes are an integral part of the consolidated financial statements. F- 6 INSPIREMD, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) (U.S. dollars in thousands, except share data) Common stock Series C Convertible Preferred Stock Additional paid-in Accumulated Total Shares Amount Shares Amount capital deficit equity BALANCE AT January 1, 2024 21,841,215 2 1,718 - * 261,000 ( 221,501 ) 39,501 Net loss - ( 14,941 ) ( 14,941 ) Exercise of pre-funded warrants 1,528,390 - * - - - - - * Exercise of Warrants Series H to 12,621,090 pre-funded warrants and 292,996 common stock, net of $ 1,000 issuance costs 292,996 1 - - 16,853 - 16,854 Share-based compensation related to stock, restricted stock, restricted stock units and stock options award, net of forfeitures of 112,382 shares 1,533,878 - * - - 5,349 - 5,349 BALANCE AT June 30, 2024 25,196,479 3 1,718 - * 283,202 ( 236,442 ) 46,763 * Represents an amount less than $1 thousand The accompanying notes are an integral part of the consolidated financial statements. F- 7 INSPIREMD, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) (U.S. dollars in thousands, except share data) Common stock Series C Convertible Preferred Stock Additional paid-in Accumulated Total Shares Amount Shares Amount capital deficit equity BALANCE AT April 1, 2024 23,412,385 2 1,718 - * 263,618 ( 228,533 ) 35,087 Balance 23,412,385 2 1,718 - * 263,618 ( 228,533 ) 35,087 Net loss - ( 7,909 ) ( 7,909 ) Exercise of pre-funded warrants 1,528,390 - * - - - - - * Exercise of Warrants Series H to 12,621,090 pre-funded warrants and 292,996 common stock, net of $ 1,000 issuance costs 292,996 1 - - 16,853 - 16,854 Exercise of Warrants Series H to pre-funded warrants and common stock, net of issuance costs 292,996 1 - - 16,853 - 16,854 Share-based compensation related to stock, restricted stock, restricted stock units and stock options award, net of forfeitures of 37,292 shares ( 37,292 ) - * - - 2,731 - 2,731 Share-based compensation related to stock, restricted stock, restricted stock units and stock options award, net of forfeitures ( 37,292 ) - * - - 2,731 - 2,731 BALANCE AT June 30, 2024 25,196,479 3 1,718 - * 283,202 ( 236,442 ) 46,763 Balance 25,196,479 3 1,718 - * 283,202 ( 236,442 ) 46,763 * Represents an amount less than $1 thousand The accompanying notes are an integral part of the consolidated financial statements. F- 8 INSPIREMD, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (U.S. dollars in thousands) 2024 2023 Six months ended June 30 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 14,941 ) $ ( 9,333 ) Adjustments required to reconcile net loss to net cash used in operating activities: Depreciation 135 113 Gain from sale of property, plant and equipment - ( 8 ) Loss on amounts funded in respect of employee rights upon retirement 34 42 Changes in fair value of marketable securities, net of interest received ( 435 ) 21 Change in liability for employees’ rights upon retirement 61 31 Other financial expenses 14 23 Change in operating right of use asset and leasing liability ( 55 ) ( 60 ) Share-based compensation expenses 5,349 1,219 Decrease in interest receivable on short term deposits - 40 Changes in operating asset and liability items: Decrease (increase) in prepaid expenses ( 139 ) 599 Decrease (increase) in trade receivables 497 ( 436 ) Decrease (increase) in other receivables 198 ( 99 ) Increase in inventory ( 100 ) ( 68 ) Increase (decrease) in trade payables ( 12 ) 109 Decrease in other payables ( 24 ) ( 349 ) Net cash used in operating activities ( 9,418 ) ( 8,156 ) CASH FLOWS FROM INVESTING ACTIVITIES: Investment in short-term bank deposits - ( 5,500 ) Purchase of property, plant and equipment ( 670 ) ( 70 ) Proceeds from sale of property, plant and equipment - 9 Investments in marketable securities ( 1,960 ) ( 28,838 ) Proceeds from matured marketable securities 13,000 - Withdrawal from short-term bank deposits - 12,000 Amounts funded in respect of employee rights upon retirement ( 47 ) ( 43 ) Net cash provided by (used in) investing activities 10,323 ( 22,442 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of warrants 17,854 Proceeds from issuance of shares and warrants, net 37,534 Net cash provided by financing activities 17,854 37,534 EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS ( 14 ) ( 23 ) INCREASE IN CASH AND CASH EQUIVALENTS 18,745 6,913 BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD 9,640 4,632 BALANCE OF CASH AND CASH EQUIVALENTS AT END OF THE PERIOD $ 28,385 $ 11,545 SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: Issuance Costs not yet paid 1,000 - The accompanying notes are an integral part of the consolidated financial statements. F- 9 INSPIREMD, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - DESCRIPTION OF BUSINESS a. General 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 disease. MicroNet, a micron mesh sleeve, is wrapped over a stent to provide embolic protection in stenting procedures. 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 products through distributors in international markets, mainly in Europe. As of the date of issuance of the condensed 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. b. War against Hamas In October 2023, Israel was attacked by a terrorist organization and entered a state of war. In addition, since the commencement of these events, there have been continued hostilities along Israel’s northern border with Lebanon (with the Hezbollah terror organization) and southern border (with the Houthi movement in Yemen) 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 in Israel. Currently, such activities in Israel remain largely unaffected. During the six months ended June 30, 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. NOTE 2 - BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements for the year ended December 31, 2023. 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 condensed 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 and six months ended June 30, 2024, are not necessarily indicative of results that could be expected for the entire fiscal year. F- 10 NOTE 3 - RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS Recently 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 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 adopted the provisions of this update as of January 1, 2024 with no material impact on its condensed consolidated financial statements. Recently issued accounting pronouncement, not yet adopted 1) 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. Public entities with a single reportable segment are required to provide the new disclosures and all the disclosures required under Accounting Standards Codification (“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. The Company is currently evaluating this guidance to determine the impact it may have on its condensed consolidated financial statements related disclosures. 2) 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 condensed consolidated financial statements disclosures. NOTE 4 – FAIR VALUE MEASUREMENTS Fair value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. F- 11 The Company’s financial assets subject to fair value measurements on a recurring basis and the level of inputs used in such measurements were as follows: SCHEDULE OF FINANCIAL ASSETS SUBJECT TO FAIR VALUE MEASUREMENTS Total Level 1 Level 2 Level 3 As of June 30, 2024 Total Level 1 Level 2 Level 3 Assets: Cash equivalents- Money market funds $ 20,340 $ 20,340 $ - $ - Marketable securities- U.S government bonds $ 18,778 $ - $ 18,778 $ - Total Level 1 Level 2 Level 3 As of December 31, 2023 ($ in thousands) Total Level 1 Level 2 Level 3 Assets: Cash equivalents- Money market funds $ 7,094 $ 7,094 $ - $ - Cash equivalents $ 7,094 $ 7,094 $ - $ - Marketable securities- U.S government bonds $ 29,383 $ - $ 29,383 $ - Marketable securities $ 29,383 $ - $ 29,383 $ - The 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. The cost of marketable securities as of June 30, 2024, is $ 18,137 thousand. The cost of marketable securities as of December 31, 2023 is $ 28,727 thousand. F- 12 NOTE 5 - MARKETABLE SECURITIES The following table sets forth the Company’s marketable securities for the indicated periods: SCHEDULE OF MARKETABLE SECURITIES June 30, December 31, 2024 2023 ($ in thousands) U.S government bonds $ 18,778 $ 29,383 Marketable securities $ 18,778 $ 29,383 The following table summarizes the fair value of the Company’s marketable securities classified by maturity as of June 30, 2024, and December 31, 2023: SCHEDULE OF FAIR VALUE OF MARKETABLE SECURITIES CLASSIFIED BY MATURITY June 30, December 31, 2024 2023 ($ in thousands) Amounts maturing within one year $ 18,778 $ 24,523 Amounts maturing after one year through two years - 4,860 $ 18,778 $ 29,383 The table below sets forth a summary of the changes in the fair value of the Company’s marketable securities for the six months period ended June 30, 2024: SCHEDULE OF CHANGES IN FAIR VALUE OF MARKETABLE SECURITIES Six months ended June 30, Six months ended June 30, 2024 2023 ($ in thousands) Balance at beginning of the period $ 29,383 - Additions 1,960 28,838 Maturity ( 13,000 ) Interest received ( 122 ) Changes in fair value during the period 557 ( 21 ) Balance at end of the period 18,778 28,817 NOTE 6 - EQUITY : Exercise of Series H Warrant The Series H Warrants have a term of the earlier of (i) five years from the date of issuance and (ii) 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. Following the announcement on May 28, 2024 of the one year follow up study results from the Company’s C-GUARDIANS pivotal trial, the Series H warrants for the purchase of 12,914,086 shares of common stock were exercised in full into 292,996 shares of common stock and pre-funded warrants exercisable into 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 deduction of placement agent fees of $ 1 million. The Series H warrants, each exercisable at $ 1.3827 per share of common stock and $ 1.3826 per pre-funded warrant, were issued as part of the private placement financing that the Company consummated on May 15, 2023. F- 13 As of June 30, 2024, there are 26,347,323 outstanding pre-funded warrants. As of June 30, 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 June 30, 2024, the Company has outstanding warrants to purchase an aggregate of 40,479,588 shares of common stock as follows: SCHEDULE OF ISSUANCE OF WARRANTS TO PURCHASE COMMON STOCK Number of underlying Common stock Exercise price Expiration date Series E Warrants 198,159 $ 27.000 September 24, 2024 Series F Warrants 433,878 $ 7.4250 June 5, 2025-October 16, 2025 Series G Warrants 1,092,344 $ 10.230 February 8, 2026 Series I Warrants 12,914,078 $ 1.3827 - * Series J Warrants 12,914,086 $ 1.3827 - * Series K Warrants 12,914,078 $ 1.3827 - * Underwriter Warrants 12,965 $ 7.4250 September 24, 2024 Total Warrants 40,479,588 * ● The Warrants have a term of the earlier of (i) May 15, 2025 and (ii) (A) 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), (B) 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 (C) 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. As of June 30, 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. During the six months ended June 30, 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. The fair value of the above restricted shares was approximately $ 5.07 million. During the six months ended June 30, 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. The fair value of the above restricted share units was approximately $ 1.77 million. During the six months ended June 30, 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 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. F- 14 In 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 ranging from 96.40 %- 119.38 %; and risk-free interest rate ranging from 3.93 %- 4.10 %. The fair value of the above options, using the Black-Scholes option-pricing model, was approximately $ 1.85 million. On April 1, 2024, the Company granted to consultants options to purchase a total of 125,000 shares of the Company’s common stock. The options have an exercise price of $ 2.37 per share, which was the fair market value of the Company’s common stock on the date of the grant. 25,000 options are subject to a two-year vesting period (of which 12,500 options are vesting in the first year and 12,500 options are vesting in the second year) and 100,000 options with performance conditions related to clinical activities. In 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 years; expected volatility ranging from 96.01 %- 100.76 %; and risk-free interest rate ranging from 4.33 %- 4.34 %. The fair value of the above options, using the Black-Scholes option-pricing model, was $ 233,169 . NOTE 7 – RELATED PARTIES TRANSACTIONS During the six and three months ended June 30, 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 $ 30,000 and $ 15,000 , respectively. NOTE 8 - NET LOSS PER SHARE : Basic and diluted net loss per share is computed by dividing the net loss for the period by the weighted average number of shares of common stock, pre-funded warrants and fully vested restricted stock units outstanding during the period. The calculation of diluted net loss 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. For 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 nor any other contingencies associated with them. For the six and three-month periods ended June 30, 2024, we had weighted average pre-funded warrants of 15,385,212 and 15,515,802 , respectively, which were used in the computations of net loss per share for the six and three-month periods. The 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 48,550,189 and 59,624,929 for the six and three-month periods ended June 30, 2024 and 2023, respectively. This amount includes 3,744,828 and 2,905,615 of unvested restricted stock included in the number of issued and outstanding shares as of June 30, 2024 and 2023, respectively. NOTE 9 - FINANCIAL INSTRUMENTS : a. Fair value of financial instruments The 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. b. As of June 30, 2024, and December 31, 2023, allowance for expected credit loss was immaterial. F- 15 NOTE 10- INVENTORY : SCHEDULE OF INVENTORIES June 30, December 31, 2024 2023 ($ in thousands) Finished goods $ 124 $ 210 Work in process 537 562 Raw materials and supplies 1,545 1,334 Total inventory $ 2,206 $ 2,106 NOTE 11 - ACCOUNTS PAYABLE AND ACCRUALS - OTHER : SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUALS - OTHER June 30, December 31, 2024 2023 ($ in thousands) Employees and employee institutions 1,656 2,188 Accrued vacation and recreation pay 384 287 Accrued expenses 1,149 1,115 Issuance costs not yet paid 1,000 - Clinical trial accrual 1,128 744 Current Operating lease liabilities 538 557 Other 183 190 Accounts Payable and Accruals - Other 6,038 5,081 NOTE 12 - DISAGGREGATED REVENUE AND ENTITY WIDE DISCLOSURES : Revenues are attributed to geographic areas based on the location of the customers. The following is a summary of revenues: SCHEDULE OF REVENUES ATTRIBUTED TO GEOGRAPHIC AREAS 2024 2023 2024 2023 Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 ($ in thousands) Germany $ 307 $ 276 $ 549 $ 490 Italy 264 338 558 605 Poland 207 79 359 198 Other * 961 956 1,784 1,595 Revenues $ 1,739 $ 1,649 $ 3,250 $ 2,888 * No single country included in other generated more than 10% of total revenue By principal customers: SCHEDULE OF REVENUES ATTRIBUTED TO GEOGRAPHIC AREAS BY PRINCIPAL CUSTOMERS 2024 2023 2024 2023 Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Customer A 18 % 17 % 17 % 17 % Customer B 12 % 5 % 11 % 7 % Customer C 6 % 11 % 9 % 12 % All substantially tangible long lived assets are located in Israel. F- 16