What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-12 compared with 2024-03-05 · 144 added, 243 removed, 126 unchanged (75% of the section changed)

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

are a medical device company focusing on the development and commercialization of our proprietary MicroNet™ stent platform for

the treatment of carotid artery disease and other vascular disease.

are a medical device company focusing on the development and commercialization of products for the treatment of carotid artery disease

and other vascular disease, including our proprietary CGuard™ stent platform.

A stent is an expandable scaffold-like device, usually

constructed of a metallic material, that is inserted into the lumen of the artery to create patency and revascularization of blood flow.

MicroNet, a micron mesh sleeve, is attached over a stent to provide embolic protection both during and after stenting procedures.

constructed of a metallic material, that is inserted into the lumen of an artery to create patency and improved blood flow.

of MicroNet™ mesh is attached over a stent to provide embolic protection both during and after stenting procedures.

CGuard EPS combines MicroNet and a unique self-expandable nitinol stent in a single device for use in carotid artery revascularization.

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patients across 24 trial sites in the U.S.

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

Prime, our next generation CAS stent platform.

primary endpoint is a composite of:

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

our next generation CAS stent platform.

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.

November 2023, we announced positive 30-day follow up results from the C-GUARDIANS trial in which stenting with the C-Guard Carotid

Stent System in patients with carotid artery stenosis and at high risk for carotid endarterectomy had a DSMI rate of 0.95%, measured

from the date of the procedure through 30 days follow-up post-procedure.

We anticipate reporting primary endpoint results from the

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

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

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

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

In furtherance

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

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

In addition, we intend to explore new indications for CGuard to leverage the advantages of stent design and mesh

protection, well suited in labels such as acute stroke with tandem lesions.

consider our current addressable market for our CGuard Carotid Stent System and SwitchGuard NPS to be both symptomatic and

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

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

the two approaches compete for the same patient population.

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

estimate that the addressable market for CGuard Carotid Stent System and SwitchGuard NPS is approximately $1.3 billion (source:

Health Research

International Personal Medical Systems, Inc.

September 13, 2021 Results of Update Report on Global Carotid Stenting Procedures and

Markets by Major Geography and Addressable Markets and internal estimates).

According to this same report and internal estimates,

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

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

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

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 C-Guard Carotid Stent

System in patients with carotid artery stenosis and at high risk for carotid endarterectomy had a DSMI rate of 0.95%, measured from the

date of the procedure through 30 days follow-up post-procedure.

In May 2024, we announced positive one-year follow up results from the

C-GUARDIANS trial, with a rate of 30-day DSMI and ipsilateral stroke between 31 and 365 days of 1.95%

data were used tothat may support the PMA submission in September 2024 with a view to potential FDA approval of the CGuard Prime carotid

stent system in the first half of 2025.

October 2024, the FDA approved the Company’s IDE to initiate the CGUARDIANS II pivotal study of its CGuard Prime 80cm Carotid Stent

System during transcarotid revascularization (TCAR) procedures.

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

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

In furtherance of our strategy

that focuses on establishing the CGuard Carotid Stent System as a viable alternative to vascular surgery, we are developing a new transcarotid

artery revascularization (TCAR) delivery system, SwitchGuard NPS, for transcarotid access and neuro protection.

In addition, we intend

to explore new indications for CGuard to leverage the advantages of stent design and mesh protection, well suited in labels such as acute

stroke with tandem lesions.

consider our current addressable market for our CGuard Carotid Stent System and SwitchGuard NPS to be both symptomatic and asymptomatic

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

includes not only carotid artery stenting patients but also individuals undergoing carotid endarterectomy, as the two approaches compete

for the same patient population.

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

the addressable market for CGuard Carotid Stent System and SwitchGuard NPS is approximately $1.3 billion (source:

Health Research International

Personal Medical Systems, Inc.

September 13, 2021 Results of Update Report on Global Carotid Stenting Procedures and Markets by Major

Geography and Addressable Markets and internal estimates).

According to this same report and internal estimates, assuming full penetration

of treatment for all individuals diagnosed with high-grade carotid artery stenosis, we estimate the total available market for CGuard

Carotid Stent System and SwitchGuard NPS to be approximately $9.3 billion, which may grow over time if expanded treatment options such

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

May 12, 2023, we entered into a securities purchase agreement (the “Purchase Agreement pursuant to which we agreed to sell and

issue in a private placement (the “Private Placement Offering) an aggregate of 10,266,270 shares (the “Private Placement

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

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

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

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

Common Stock (the “Series J Warrants”) and Series K warrants to purchase up to 12,914,078 shares of common stock (the

“Series K Warrants” and together with the Series H Warrants, Series I Warrants and Series J Warrants, the

“Warrants”), at an offering price of $1.6327 per Private Placement Share and associated Warrants and an offering price

of $1.6326 per Pre-Funded Warrant and associated Warrants.

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 12,914,078 shares of common stock (the “Series K Warrants” and

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

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

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

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

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

Pursuant to the Registration Rights Agreement, we were required to file a resale registration statement (the “Registration Statement”)

with the SEC to register for resale the Private Placement Shares and the shares of common stock issuable upon exercise of the Pre-Funded

Warrants and Warrants, within 20 days of the signing date of the Purchase Agreement (the “Signing Date”), and to have such

Registration Statement declared effective within 45 days after the Signing Date in the event the Registration Statement is not reviewed

by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by the SEC.

We were obligated to pay certain

liquidated damages if we fail to file the Registration Statement when required, fails to cause the Registration Statement to be declared

effective by the SEC when required, of if we fail to maintain the effectiveness of the Registration Statement.

The Registration Statement

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

We paid LifeSci Capital LLC, a placement fee equal to

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

In addition, we paid Piper Sandler & Co.

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

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

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.

In connection with the exercise of the Series H Warrants,

we also paid LifeSci Capital LLC, a placement fee equal to 5.6% of the aggregate gross proceeds from such exercise, or approximately

$1.0 million.

Accounting Policies

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following is a discussion of our most critical accounting policies, judgments and uncertainties that are inherent in our application

preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates using assumptions that affect

the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements

and the reported amounts of sales and expenses during the reporting periods.

Actual results could differ from those estimates.

applicable to these consolidated financial statements, the most significant estimates and assumptions relate to inventory valuations

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

securities consist of debt securities.

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

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

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

(income), net.

Concentration

of credit risk and allowance for doubtful accounts

instruments that may potentially subject us to a concentration of credit risk consist of cash and cash equivalents and short-term bank

deposits, which are deposited in major financially sound institutions in the U.S, Israel and Germany, and trade accounts receivable and

other receivables.

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

We perform ongoing

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

We also have a credit

insurance policy for some of our customers.

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

to make required payments.

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

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

The estimate is a result

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

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

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

Our inventories

generally have a limited shelf life and are subject to impairment as they approach their expiration dates.

We regularly evaluate the

carrying value of our inventories and when, based on such evaluation, factors indicate that impairment has occurred, we impair the inventories’

carrying value.

In addition, we write-off fails in production based on actual and estimated.

applicable to these consolidated financial statements, the most significant estimates and assumptions relate to the determination of

the lease terms in operating leases.

leases are included in operating lease right-of-use (“ROU”) assets, Accounts payable and accruals - Other, and operating

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leases with a lease term of 12 months or less.

contract with a customer exists only when:

1) the parties to the contract have approved it and are committed to perform their respective

obligations, 2) we can identify each party’s rights regarding the distinct goods or services to be transferred (“Performance

Obligations”), 3) we can determine the transaction price for the goods or services to be transferred, 4) the contract has commercial

substance and 5) it is probable that we will collect the consideration to which it will be entitled in exchange for the goods or services

that will be transferred to the customer.

Revenues are recorded in the amount of consideration to which we expect to be entitled in exchange

for Performance Obligations upon transfer of control to the customer, excluding sales taxes.

from sales of goods, including sales to distributors, is recognized when the customer obtains control of the product, once we have a

present right to payment, legal title, and risk and rewards of ownership are obtained by the customer.

This occurs when products are

recognize the incremental costs of obtaining contracts as an expense since the amortization period of the assets that we otherwise would

have recognized is one year or less.

The costs are recorded under selling and marketing expenses.

recognize revenue net of value added tax (VAT).

option awards are classified as equity awards and accounted for using the grant-date fair value method.

The fair value of share-based

awards is estimated using the Black-Scholes valuation model and expensed over the requisite service period, net of estimated forfeitures.

We elected to account for forfeitures as they occur.

elected to recognize compensation expenses for awards with only service conditions that have graded vesting schedules using the accelerated

multiple option approach.

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

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

achieving certain goals.

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

that the performance condition will be achieved.

of Operations

months ended December 31, 2024 compared to the twelve months ended December 31, 2023

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

twelve months ended December 31, 2022.

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

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

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

For the twelve months ended December 31, 2024, revenue increased by $804,000, or 13.0%, to $7,009,000, from $6,205,000 during the twelve

months ended December 31, 2023.

This increase was predominantly driven by growth in existing and new markets.

respect to regions, the increase in revenue was primarily attributable to a $772,000 increase in Europe, a $141,000 increase in Asia

and $24,000 increase in Latin America.

and a $14,000 increase in the Middle East.

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

This increase was offset by

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

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

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

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

This increase was offset

by a $103,000 decline in clinical revenue in the U.S .

mainly driven by the completion in June 2023 of the enrollment of patients in

our CGuardians IDE clinical trial as well as a $20,000 decline in other markets.

For the twelve months ended December 31, 2024, gross profit (revenue less cost of revenues) decreased by 16.7%, or $301,000,

to $1,506,000, compared to a gross profit of $1,807,000 for the same period in 2023.

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

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

in miscellaneous expenses.

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

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

This decrease in gross profit resulted from an increase

in cost of goods sold of $1,105,000.

This increase was primarily due to an $891,000 increase in material and labor costs, driven mainly

from higher sales volume, and increased compensation expense for new and current employees.

In addition, there were an additional $214,000

other cost of goods sold related expenses.

The increase of cost of goods sold was offset by the increase in revenues of $804,000 as described

Gross margin (gross profits as a percentage of revenue) decreased to 21.5% during the year ended December 31, 2024, from 29.1%

during the year ended December 31, 2023, driven by the factors mentioned above.

and Development Expenses .

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$5,653,000, to $13,634,000, from $7,981,000 during the twelve months ended December 31, 2023.

This increase resulted primarily from an increase

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

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

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

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

This increase resulted primarily from an

increase in compensation expenses of $2,705,000, mainly due to an increase of share-based compensation-related expenses and due to hiring

personnel in connection with our expansion plans in the United States, an increase of $1,379,000 of SwitchGuard NPS development and regulatory

cost, $961,000 related to clinical trials for CGuardians II and CGuardians III, an increase of $914,000 related to CGuard Prime product

preparation expenses for the anticipated U.S.

commercial launch of CGuard Prime, an increase of $448,000 related to an early feasibility

study of CGuard Prime for the treatment of acute stroke patients with tandem lesions, an increase of $239,000 related to the establishment

of operations in the United States and an increase of $71,000 in miscellaneous expenses.

These increases were offset by a decrease of

$1,064,000 in expenses associated with the C-Guardians FDA Study as the one-year follow-up finalized in the second quarter of 2024 and

the submission this quarter of the PMA application to the U.S.

and Marketing Expenses .

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to $6,069,000, from $3,865,000 during the twelve months ended December 31, 2023.

This increase resulted primarily from an increase of

compensation expenses of $151,000 mainly due to an increase of share-based compensation-related expenses due to the expense recognition

of grants made during the second quarter of 2023 and an increase of $50,000 in miscellaneous expenses.

This increase resulted primarily from an increase in

compensation expenses of $1,870,000 as we build our commercial sales force in the United States in anticipation for FDA approval, an

increase of $254,000 of promotional activities and an increase of $80,000 in miscellaneous expenses.

and Administrative Expenses .

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37.8%, or $4,202,000, to $15,306,000, from $11,104,000 during the twelve months ended December 31, 2023.

This increase resulted primarily from

an increase in compensation expenses of $2,177,000, mainly due to an increase of approximately $1,585,000 of share-based compensation-related

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

accruals of $592,000 mainly due to hiring of a General Manager of North America and VP of Global Marketing (who was subsequently promoted

to the Company’s Chief Commercial Officer in the third quarter of 2023), an increase in legal expenses of $292,000 and an increase

of $279,000 in miscellaneous expenses.

Income (Expenses) .

The increase was primarily

driven by a $3,113,000 increase in share-based compensation expenses, a $877,000 increase in salary expenses and related accruals

(mainly due to expected severance payments accrued for following the CFO’s announced retirement, new hires for our Miami

headquarters, and salary increases), and a $284,000 increase in employee headhunting fees.

These increases were offset by a $72,000

decrease in miscellaneous expenses.

Income, net .

For the twelve months ended December 31, 2024, financial income increased by $265,000, to $1,557,000 from $1,292,000

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

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

For the twelve months ended December 31, 2024, tax decreased by $6,000 compared to the twelve months ended December 31,

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

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The increase in net loss resulted primarily from an increase of $12,059,000 in operating

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

and Capital Resources

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

next 12 months.

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

CGuard reaches commercial profitability.

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

revenues, we may need to raise additional funds.

had an accumulated deficit as of December 31, 2024, of $254 million, as well as a net loss of $32.0 million and negative operating cash

We expect to continue incurring losses and negative cash flows from operations until our product, CGuard EPS, reaches commercial

profitability.

As a result of these expected losses and negative cash flows from operations, along with our current cash position, we

believe we do not have sufficient resources to fund operations for at least the next 12 months.

Therefore, there is substantial doubt

about our ability to continue as a going concern.

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

inflows from strategic partnerships.

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

needed for our operations.

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

curtail or cease operations.

inflows from strategic partnerships and exercise of warrants.

There are no assurances, however, that we will be successful in obtaining

the level of financing needed for our operations.

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

to reduce activities, curtail or cease operations.

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

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

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.

May 2024, we entered into an Equity Distribution Agreement (the “Distribution Agreement”) with Piper Sandler & Co., as

sales agent (“Piper Sandler”), pursuant to which we may offer and sell from time to time, at our option, through or to Piper

Sandler shares of our common stock having an aggregate offering price of up to $17 million (the “ATM Facility”).

pay Piper Sandler a commission at a fixed rate of 3.0% of the aggregate gross proceeds from each sale of the shares under the Distribution

As of the date hereof, we sold 845,399 shares pursuant to the Distribution Agreement for aggregate gross proceeds of

approximately $2,199,395.

months ended December 31, 2024 compared to the twelve months ended December 31, 2023

At December 31, 2024, we had cash and cash equivalents of $18,916,000 and marketable securities of $15,721,000 as compared to $9,640,000

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

We have historically met our cash needs

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

Our cash requirements are generally for research

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

of cash and cash equivalents and $29,383,000 marketable securities 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 cost, capital expenditures and general working capital.

the twelve months ended December 31, 2024, net cash used in our operating activities increased by $5,492,000 to $21,868,000, from $16,376,000

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of $1,746,000 in payments received from customers to $7,216,000 during the twelve months ended December 31, 2024, from $5,470,000 during

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

bank deposits

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

the same period in 2023 and an decrease of $311,000 in interest income received from marketable securities and money market funds.

provided by our investing activities was $12,641,000 during the twelve months ended December 31, 2024, compared to cash used by our investing

activities of $16,092,000 during the twelve months ended December 31, 2023.

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

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

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

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

The primary reason for the increase in cash provided by our

investing activities is proceeds from matured marketable securities, net of withdrawal of $43,200,000, offset by a decrease in withdrawal

from short-term bank deposits, net of investment in short-term deposits, of $13,000,000, an increase in an investment in long- term lease

deposits of $426,000 and an increase of $1,021,000 in payments made for purchase of property, plant and equipment during the twelve months

ended December 31, 2024.

provided by financing activities for the twelve months December 31, 2024, was $18,452,000.

The principal source of the cash provided

by financing activities during the twelve months ended December 31, 2024 were the proceeds from exercise of warrants of $16,854,000 net

of issuance costs and funds received from our ATM Facility that resulted in approximately $1,598,000 of aggregate net proceeds.

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

The principal source of the cash provided

by financing activities during the twelve months ended December 31, 2023, were the proceeds from the Private Placement Offering in May

2023 that resulted in approximately $37,534,000 of aggregate net proceeds.

Cash used by financing activities for the twelve months ended

December, 2022 was $140,000, the cash used by financing activities during the twelve months ended December, 2022 were due to issuance

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

of December 31, 2023, our current assets exceeded our current liabilities by a multiple of 7.3.

Current assets increased by $22,833,000

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

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

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

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

The total future payments

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

For additional

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

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

future payments for our operating lease obligation at December 31, 2024 were approximately $2,939,000.

For additional details regarding

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

Balance Sheet Arrangements

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or expenses, results of operations, liquidity, capital expenditures or capital resources.

Accounting Pronouncements

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

This guidance replaces the current 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 forecasts.

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.

This granted certain classes of

companies, including Smaller Reporting Companies (“SRCs”), additional time to implement major FASB standards, including ASU

Larger public companies had an effective date of December 15, 2019, including interim periods within those fiscal years.

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, we meet the definition of an SRC and are adopting the deferral period for

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.

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

on our consolidated financial statements.

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

Improvements to Reportable Segment Disclosures”.

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

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

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

loss and assets.

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

disclosures required under ASC 280.

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

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

The amendments are required to be

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

We are currently evaluating this

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

In December 2023, the

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

Improvements to Income Tax Disclosures”.

This guidance is intended to

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

The amendments in ASU 2023-09 address investor requests

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

and in foreign jurisdictions.

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

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

Early adoption is permitted.

We are currently evaluating

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

That May Affect Future Operations

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What changed 10-K

Item 7. Management’s Discussion and Analysis