UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

[X]☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: September 30, 20172021

 

OR

 

[  ]☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from              to

 

Commission file number: 001-35731

 

InspireMD, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware 26-2123838
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

 

4 Menorat Hamaor St.

Tel Aviv, Israel6744832

(Address of principal executive offices)

(Zip Code)

 

(888)776-6204

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] ☒ No [  ]☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] ☒ No [  ]☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer [  ]☐ Accelerated filer [  ]☐
Non-accelerated filer [  ] ☒ (Do not check if a smaller reporting company)
Smaller reporting company [X]☒
 Emerging growth company [  ]☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ] ☐ No [X] ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.0001 per shareNSPRNasdaq Capital Market
Series B Warrants, exercisable for one share of Common StockNSPRZNasdaq Capital Market

 

The number of shares of the registrant’s common stock, $0.0001 par value, outstanding as of November 7, 2017: 7,465,8894, 2021: 8,077,047

 

 

 

 

 

TABLE OF CONTENTS

Page
PART I
Item 1.Financial StatementsF-3F-1
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations3
Item 3.Quantitative and Qualitative Disclosures About Market Risk911
Item 4.Controls and Procedures1011
PART II
Item 1.Legal Proceedings12
Item 1A.Risk Factors12
Item 5.Other Information12
Item 6.Exhibits12

 2 
PART II
Item 1.Legal Proceedings10
Item 1A.Risk Factors11
Item 5.Other Information11
Item 6.Exhibits11

2

 

 

INSPIREMD, INC.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)AS OF AND FOR THE QUARTER ENDED SEPTEMBER 30, 2021

September 30, 2017

INSPIREMD, INC.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

September 30, 2017

TABLE OF CONTENTS

Page
CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance SheetsF-3F-2 - F-4F-3
Consolidated Statements of OperationsF-5F-4
Consolidated Statements of Changes in EquityF-5 - F-8
Consolidated Statements of Cash FlowsF-6F-9
Notes to the Consolidated Financial StatementsF-7F-10 - F-13F-14

The amounts are stated in U.S. dollars in thousands

F-2F-1
 

PART I

Item 1. Financial Statements

INSPIREMD, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(U.S. dollars in thousands)

 September 30, 2017  December 31, 2016  September 30, December 31, 
      2021 2020 
ASSETS                
CURRENT ASSETS:                
Cash and cash equivalents $4,765  $7,516  $13,059  $12,645 
Short-term bank deposits  24,012   - 
Accounts receivable:                
Trade, net  538   356   971   476 
Other  167   157   141   146 
Prepaid expenses  109   65   773   334 
Inventory  576   500   1,135   1,415 
Receivable for sale of shares  -   323 
TOTAL CURRENT ASSETS  6,155   8,594   40,091   15,339 
                
NON-CURRENT ASSETS:                
Property, plant and equipment, net  495   379   563   448 
Funds in respect of employee rights upon retirement  444   399 
Royalties buyout  19   38 
Operating lease right of use assets  1,166   1,265 
Fund in respect of employee rights upon retirement  786   725 
TOTAL NON-CURRENT ASSETS  958   816   2,515   2,438 
TOTAL ASSETS $7,113  $9,410  $42,606  $17,777 

F-3F-2
 

INSPIREMD, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(U.S. dollars in thousands other than share and per share data)

 September 30, 2017 December 31, 2016  September 30, December 31, 
      2021  2020 
LIABILITIES AND EQUITY                
                
CURRENT LIABILITIES:                
Current maturity of long-term loan $-  $2,680 
Accounts payable and accruals:                
Trade  402   618   556   236 
Other  2,293   1,447   3,164   3,469 
Advanced payment from customers  28   33 
TOTAL CURRENT LIABILITIES  2,723   4,778   3,720   3,705 
                
LONG-TERM LIABILITIES:        
Liability for employees rights upon retirement  610   587 
LONG-TERM LIABILITIES-        
Operating lease liabilities  831   999 
Liability for employees’ rights upon retirement  992   910 
        
TOTAL LONG-TERM LIABILITIES  610   587   1,823   1,909 
                
COMMITMENTS AND CONTINGENT LIABILITIES(Note 10)        
TOTAL LIABILITIES  3,333   5,365   5,543   5,614 
                
EQUITY:                
Common stock, par value $0.0001 per share; 150,000,000 shares authorized at September 30, 2017 and December 31, 2016; 7,465,889 and 1,475,318 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively  1   - 
Preferred B shares, par value $0.0001 per share; 500,000 shares authorized at September 30, 2017 and December 31, 2016; 180,992 and 311,521 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively  -   - 
Preferred C shares, par value $0.0001 per share; 1,172,000 shares authorized at September 30, 2017; 743,213 shares issued and outstanding at September 30, 2017  -   - 
        
Common stock, par value $0.0001 per share; 150,000,000 shares authorized at September 30, 2021 and December 31, 2020; 7,900,311 and 3,284,322 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively  1   * 
Preferred B shares, par value $0.0001 per share;
500,000 shares authorized at September 30, 2021 and December 31, 2020;
0 and 17,303 shares issued and outstanding at September 30, 2021 and December 31, 2020		  -   * 
Preferred C shares, par value $0.0001 per share;
1,172,000 shares authorized at September 30, 2021 and December 31, 2020; 1,718 and 2,343 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively		  *   * 
Preferred Stock, value        
Additional paid-in capital  142,632   135,959   216,059   180,339 
Accumulated deficit  (138,853)  (131,914)  (178,997)  (168,176)
Total equity  3,780   4,045   37,063   12,163 
Total liabilities and equity $7,113  $9,410  $42,606  $17,777 

 

*Represents an amount less than $1 thousand

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

F-4F-3
 

INSPIREMD, INC.

(Unaudited)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(U.S. dollars in thousands, except per share data)

         
 

Three months ended

September 30,

 

Nine months ended

September 30,

  

Three months ended

September 30,

 

Nine months ended

September 30,

 
 2017 2016 2017 2016  2021  2020  2021  2020 
                  
REVENUES $718  $469  $1,927  $1,572  $1,071  $980  $3,115  $2,327 
COST OF REVENUES  565   439   1,553   1,414   979   682   2,655   1,854 
GROSS PROFIT  153   30   374   158   92   298   460   473 
OPERATING EXPENSES:                                
Research and development  288   289   1,041   946   1,495   546   3,624   1,513 
Selling and marketing  671   309   1,835   1,077   802   485   2,146   1,486 
General and administrative  1,279   1,190   4,281   3,689   1,826   1,462   5,475   4,136 
Total operating expenses  2,238   1,788   7,157   5,712   4,123   2,493   11,245   7,135 
LOSS FROM OPERATIONS  (2,085)  (1,758)  (6,783)  (5,554)  (4,031)  (2,195)  (10,785)  (6,662)
FINANCIAL EXPENSES, net:                  (40)  (38)  (36)  (29)
Interest expenses  -   197   119   564 
Other financial expenses  1   40   36   74 
Total financial expenses  1   237   155   638 
LOSS BEFORE TAX EXPENSES  (2,086)  (1,995)  (6,938)  (6,192)
TAX EXPENSES  -   -   1   1 
NET LOSS $(2,086) $(1,995) $(6,939) $(6,193) $(4,071) $(2,233) $(10,821) $(6,691)
NET LOSS PER SHARE- basic and diluted $(0.19) $(0.85) $(0.87) $(5.98) $(0.53) $(0.96) $(1.50) $(5.75)
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES USED IN COMPUTING NET LOSS PER SHARE -Basic and diluted  11,126,366   2,341,807   8,711,755   1,034,943 
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING NET LOSS PER SHARE - basic and diluted  7,739,463   2,325,619   7,194,379   1,164,012 

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

F-5F-4
 

INSPIREMD, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWSCHANGES IN EQUITY

(Unaudited)

(U.S. dollars in thousands)thousands, except share data)

  Nine months ended 
  September 30, 
  2017  2016 
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net loss $(6,939) $(6,193)
Adjustments required to reconcile net loss to net cash used in operating activities:        
Depreciation and amortization  127   143 
Loss from sale of property, plant and equipment  13   - 
Change in liability for employees right upon retirement  23   (102)
Financial expenses  (505)  194 
Share-based compensation expenses  612   836 
Loss on amounts funded in respect of employee rights upon retirement, net  -   1 
Changes in operating asset and liability items:        
Increase in prepaid expenses  (44)  (32)
Increase in trade receivables  (182)  (137)
Decrease (increase) in other receivables  (10)  3 
Decrease (increase) in inventory  (76)  388 
Increase (decrease) in trade payables  (216)  (103)
Increase (decrease) in other payables and advance payment from customers  841   (612)
Net cash used in operating activities  (6,356)  (5,614)
CASH FLOWS FROM INVESTING ACTIVITIES:        
Purchase of property, plant and equipment  (237)  (13)
Amounts (funded) gained in respect of employee rights upon retirement, net  (45)  94 
Net cash provided by (used in) investing activities  (282)  81 
CASH FLOWS FROM FINANCING ACTIVITIES:        
Taxes withheld in respect of share issuance  (10)  (17)
Net proceeds from issuance of shares and warrants  6,072   14,424 
Repayment of long-term loan  (2,179)  (1,651)
Net cash provided by financing activities  3,883   12,756 
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS  4   (12)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS  (2,751)  7,211 
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD  7,516   3,257 
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF THE PERIOD $4,765  $10,468 

SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES:

     
         
Issuance costs  -  $375 
Warrant Liability  -  $123 
                                     
  Common stock  Series B
Convertible
Preferred Stock		  Series C
Convertible
Preferred Stock		  Additional paid-in  Accumulated  Total 
  Shares  Amount  Shares  Amount  Shares  Amount  capital  deficit  equity 
                            
BALANCE AT January 1, 2020  261,075   -*   17,303   -*   34,370   -*  $163,015  $(157,632) $5,383 
Net loss                              (6,691)  (6,691)
Exercise of pre-funded warrants  990,427   -*                   18       18 
                                     
Settlement of restricted stock units in shares of common stock  11,000   -*                           - 
Issuance of common stock, net of $945 issuance costs  770,813   -*                   10,809       10,809 
Exercise of Warrants F  191,107   -*                   1,418       1,418 
Exercise of Warrants G                                    
Exercise of Warrants G, shares                                    
Conversion of Series B Convertible Preferred Stock to common stock                                    
Conversion of Series B Convertible Preferred Stock to common stock, shares                                    
Exercise of Unit Purchase Option  16,906   -*                   82       82 
Conversion of Series C Convertible Preferred Stock to common stock  24,812   -*    -       (32,027)  -*           - 
Issuance of common shares at the market offering, net of $110 issuance costs                                    
Issuance of common shares at the market offering, net of $110 issuance costs, shares                                    
Share-based compensation related to restricted stock, restricted stock units and stock options award, net of forfeitures of 2,766 shares  137,802   -*                   261       261 
 Round up of shares due to reverse stock split effectuated on April 26, 2021                                    
 Round up of shares due to reverse stock split effectuated on April 26, 2021 , shares                                    
BALANCE AT September 30, 2020  2,403,942   -   17,303   -*   2,343   -*  $175,603  $(164,323) $11,280 

*Represents an amount less than $1 thousand

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

F-6F-5
 

INSPIREMD, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

(U.S. dollars in thousands, except share data)

  Common stock  

Series B

Convertible

Preferred Stock

  

Series C

Convertible

Preferred Stock

  Additional paid-in  Accumulated  Total 
  Shares  Amount  Shares  Amount  Shares  Amount  capital  deficit  equity 
                            
BALANCE AT July 1, 2020  2,223,933   -   17,303    -*   2,343    -*  $175,304  $(162,090) $13,214 
Net loss                              (2,233)  (2,233)
Issuance of common shares at the market offering, net of $110 issuance costs  39,540   -*   -        -        158       158 
                                     
Share-based compensation related to restricted stock and stock options award, net of forfeitures of 1,484 shares  140,469   -*                   141       141 
BALANCE AT September 30, 2020  2,403,942   -   17,303   -*   2,343  -*  $175,603  $(164,323) $11,280 

*Represents an amount less than $1 thousand

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

F-6

INSPIREMD, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

(U.S. dollars in thousands, except share data)

  Common stock  Series B
Convertible
Preferred Stock		  Series C
Convertible
Preferred Stock		  Additional paid-in  Accumulated  Total 
  Shares  Amount  Shares  Amount  Shares  Amount  capital  deficit  equity 
                            
BALANCE AT January 1, 2021  3,284,322   -*   17,303   -*   2,343   -*  $180,339  $(168,176) $12,163 
Net loss                              (10,821)  (10,821)
Issuance of common stock, including at the market offering net of $2,024 issuance costs  3,133,775   1    -   -   -   -   25,241    -   25,242 
Exercise of Warrants F  1,093,536   -*    -   -   -   -   8,120    -   8,120 
Exercise of Warrants G  131,876   -*   -   -   -   -   1,349   -   1,349 
Conversion of Series B Convertible Preferred Stock to common stock  207,528  -*   (17,303)   -*   -   -   -*   -   -* 
Conversion of Series C Convertible Preferred Stock to common stock  831   -*   -   -    (625)   -*   -*   -   -* 
Share-based compensation related to restricted stock, restricted stock units and stock options award, net of forfeitures of 19,036 shares  3,166   -*    -   -   -   -   1,010   -   1,010 
Round up of shares due to reverse stock split effectuated on April 26, 2021  45,277  -*   -   -   -   -   -   -   -* 
BALANCE AT September 30, 2021  7,900,311   1   -   -   1,718  -*  $216,059  $(178,997) $37,063 

*Represents an amount less than $1 thousand

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

F-7

INSPIREMD, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

(U.S. dollars in thousands, except share data)

  Common stock  Series B
Convertible
Preferred Stock		  Series C
Convertible
Preferred Stock		  Additional paid-in  Accumulated  Total 
  Shares  Amount  Shares  Amount  Shares  Amount  capital  deficit  equity 
                            
BALANCE AT July 1, 2021  7,914,339   1   -   -   1,718   -*  $215,755  $(174,926) $40,830 
                                     
Balance  7,914,339   1   -   -   1,718   --*  $215,755  $(174,926) $40,830 
Net loss                              (4,071)  (4,071)
Share-based compensation related to restricted stock, restricted stock units and stock options award, net of forfeitures of 13,077 shares  (11,917)  -*   -   -   -   -   304   -   304 
Round up of shares due to reverse stock split effectuated on April 26, 2021  (2,111) -*   -   -   -   -   -   -   - 
BALANCE AT September 30, 2021  7,900,311   1   -   -   1,718   -*  $216,059  $(178,997) $37,063 
Balance  7,900,311   1   -   -   1,718   -*  $216,059  $(178,997) $37,063 

*Represents an amount less than $1 thousand

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

F-8

INSPIREMD, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(U.S. dollars in thousands)

       
  Nine months ended
September 30		 
  2021  2020 
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net loss $(10,821) $(6,691)
Adjustments required to reconcile net loss to net cash used in operating activities:        
Depreciation  121   122 
Loss from sale of property, plant and equipment  1   14 
Change in liability for employees’ rights upon retirement  82   114 
Financial expense (income), net  1   (4)
Change in operating right of use asset and operating leasing liability  (58)  (19)
Share-based compensation expenses  1,010   261 
Changes in operating asset and liability items:        
Increase in prepaid expenses  (439)  (82)
Decrease (increase) in trade receivables  (495)  258 
Decrease (increase) in other receivables  5   (160)
Decrease (increase) in inventory  280   (152)
Increase (decrease) in trade payables  320   (219)
Decrease in other payables  (316)  (323)
Net cash used in operating activities  (10,309)  (6,881)
CASH FLOWS FROM INVESTING ACTIVITIES:        
Purchase of property, plant and equipment  (237)  (26)
Investment in short-term deposits  (24,000)  - 
Amounts funded in respect of employee rights upon retirement, net  (61)  (57)
Net cash used in investing activities  (24,298)  (83)
CASH FLOWS FROM FINANCING ACTIVITIES:        
Proceeds from issuance of shares and warrants and exercise of Pre-Funded Warrants and unit purchase option, net of $2,024 and $767 issuance costs, respectively  35,034   12,327 
Net cash provided by financing activities  35,034   12,327 
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS  (13)  5 
INCREASE IN CASH AND CASH EQUIVALENTS  414   5,368 
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD  12,645   5,514 
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF THE PERIOD $13,059  $10,882 
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:        
Acquisition of right-of-use assets by means of lease liabilities  91     
Sale of Fixed Asset (non-cash)  -   22 

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

F-9

INSPIREMD, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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’s coronary product combining MicroNet and a bare-metal stent (MGuard Prime™ EPS) is marketed for use in patients with acute coronary syndromes, notably acute myocardial infarction (heart attack) and saphenous vein graft coronary interventions (bypass surgery).
The Company markets its products through distributors in international markets, mainly in Europe.
As of the date of issuance of the 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 products (primarily CGuard™ EPS) reach 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.

The Company’s shares that previously traded on the NYSE American were approved for listing on the Nasdaq Capital Market (“Nasdaq”) and such shares began trading on Nasdaq on May 21, 2021 under the symbol, “NSPR.” The Company’s warrants that previously traded on the NYSE American were approved for listing on Nasdaq, and such warrants began trading on Nasdaq on June 8, 2021.

b.COVID-19 Pandemic
The COVID-19 global pandemic has led governments and authorities around the globe to take various precautionary measures in order to limit the spread of COVID-19, including government-imposed quarantines, lockdowns, and other public health safety measures. We experienced a significant COVID-19 related impact on our financial condition and results of operations, primarily during the year ended December 31, 2020, which we primarily attribute to the postponement of CGuard EPS procedures (non-emergency procedures), as hospitals have shifted resources to patients affected by COVID-19. To the best of our knowledge, most European countries in which we operate reinstated non-emergency procedures. However, new COVID-19 variants, and potentially increasing infection rates make the current COVID-related environment highly volatile and uncertain and we anticipate that the continuation of the pandemic and related restrictions and safety measures will likely result in continued fluctuations in sales of our products, and potentially enrollments in our studies, for the upcoming periods.

F-10
 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. In October 2014, the Company launched a limited market release of its carotid embolic prevention system (CGuard™ EPS), which combines MicroNet and a self-expandable nitinol stent in a single device to treat carotid artery disease. In January 2015, a new version of CGuard, with a rapid exchange delivery system, received CE mark approval in Europe and in September 2015, the Company announced the full market launch of CGuard EPS in Europe.

The Company’s coronary products combining MicroNet and a bare-metal stent (MGuard Prime™ EPS) are marketed for use in patients with acute coronary syndromes, notably acute myocardial infarction (heart attack) and saphenous vein graft coronary interventions (bypass surgery). The Company markets its products through distributors in international markets, mainly in Europe and Latin America.

b.Liquidity

The Company has an accumulated deficit as of September 30, 2017, as well as a history of net losses and negative operating cash flows in recent years. The Company expects to continue incurring losses and negative cash flows from operations until its products (primarily CGuard™ EPS) reach commercial profitability. As a result of these expected losses and negative cash flows from operations, along with the Company’s current cash position, the Company has sufficient resources to fund operations only for a period of up to 4 months from the date of issuing these interim consolidated financial statements. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern. These financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.


Management’s plans include the continued commercialization of the Company’s products and raising capital through the sale of additional equity securities, debt or capital inflows from strategic partnerships. There are no assurances however, that the Company will be successful in obtaining the level of financing needed for its operations. If the Company is unsuccessful in commercializing its products and raising capital, it may need to reduce activities, curtail or cease operations.

NOTE 2 - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements.statements for the year ended December 31, 2020. In the opinion of management,the Company, the financial statements reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly thefor a fair statement of its financial position as of September 30, 2021 and its results of operations ofand cash flows for the Company.three and nine months ended September 30, 2021 and 2020. These consolidated financial statements and notes thereto are unaudited and should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2016,2020, as found in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 16, 2017.March 8, 2021. The results ofoperations for the ninethree and threenine months ended September 30, 20172021 are not necessarily indicative of results that could be expected for the entire fiscal year.

INSPIREMD, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

NOTE 3 – RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS- EQUITY:

1)a.In March 2016,On April 19, 2021, the FASB issued ASU 2016-09 – ImprovementsCompany filed with the Secretary of State of Delaware a Certificate of Amendment to Employee Share Based Payment Accounting which simplifies certain aspectsthe Company’s Amended and Restated Certificate of the accounting for share-based payments, including accounting for income taxes, classificationIncorporation to effect a one-for-fifteen reverse stock split of awards as either equity or liabilities, classification on the statement of cash flows as well as allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur. This ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted the update during the quarter ended December 31, 2016, and has retroactively applied the guidanceits common stock, par value $0.0001 per share, effective as of January 1, 2016. April 26, 2021. All related share and per share data have been retroactively applied to the financial statements and their related notes for all periods presented.
b.

On February 8, 2021, the Company closed an underwritten public offering (the “Offering”) of 1,935,484 units (“Units”), with each Unit being comprised of one share of the Company’s common stock, par value $0.0001 per share, and one Series G warrant (the “Series G Warrants”) to purchase one-half of one share of Common Stock. In connection with this public offering, the underwriter exercised its over-allotment option in full and purchased an additional 290,322 shares of common stock and 145,161 Series G Warrants. The offering price to the public was $9.30 per Unit. The Series G Warrants are immediately exercisable at a price of $10.23 per and expire five years from the date of issuance.

The Company electedgranted the underwriter compensation warrants to accountpurchase up to 111,290 shares of Common Stock. The underwriter warrants have an exercise price of $10.23 per share and are exercisable immediately and for forfeitures as they occur rather than estimate expected forfeitures which resulted in a cumulative-effect adjustment to retained earnings asfive years from the date of effectiveness of the beginningregistration statement in connection with the Offering.

The net proceeds to the Company from the Offering, after giving effect to the exercise of the comparative period, January 1, 2016,underwriter’s over-allotment option, were approximately $18.9 million, after deducting underwriting discounts and commissions and payment of $457,000. Certain amounts or ratios presented herein for 2016 interim periods have been adjusted to reflectother expenses associated with the adoptionOffering, but excluding the proceeds, if any, from the exercise of this new guidance. Adoption of this update does not affectSeries G Warrants sold in the Company’s total equity. The following table summarizes the Company’s As Reported and As Adjusted changes to the consolidated statement of operations forOffering.

c.During the nine and three months periods ended September 30, 2016:2021, the Company sold 818,523 shares of its common stock pursuant to its at-the-market (ATM) issuance sales agreement with a sales agent. These sales resulted aggregate gross proceeds to the Company of approximately $5,659,000.

  3 Months Ended
September 30, 2016		  9 Months Ended
September 30, 2016		 
  As Reported  As Adjusted  As Reported  As Adjusted 
  ($ in thousands)  ($ in thousands) 
             
NET LOSS $(2,007) $(1,995) $(6,597) $(6,193)
NET LOSS PER SHARE- basic and diluted $(0.86) $(0.85) $(6.37) $(5.98)

F-11
 

2)

d.

On February 3, 2021, the Company entered into a distribution agreement (the “Distribution Agreement”) with three China-based partners, pursuant to which the Chinese partners will be responsible for conducting the necessary registration trials for commercial approval of the Company’s products in China, followed by an eight-year exclusive distribution right to sell the Company’s products in China with the term of the agreement continuing on a year-to-year basis unless terminated. Under the Distribution Agreement, the China-based partners will be subject to minimum purchase obligations. The Distribution Agreement may be terminated for cause upon failure to meet minimum purchase obligations, failure to obtain regulatory approvals or for other material breaches.

In January 2016,addition, and on the FASB issued ASU 2016-01, Recognition and Measurementsame day, the Company entered into an investment transaction with one of Financial Assets and Financial Liabilities, which addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The new standard is effective for annual periods and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustmentChinese parties to the balance sheet at the beginningDistribution Agreement, which included (i) a Securities Purchase Agreement (the “SPA”), pursuant to which investor agreed to invest $900,000 in exchange for 89,445 shares of the first reporting periodCompany’s common stock at a purchase price of $10.062 per share.

e.

During the nine months ended September 30, 2021, Series F and Series G warrants to purchase shares of common stock were exercised by investors at an exercise price of $7.425 and $10.23 per share, resulting in which the guidance is effective. Early adoption is not permitted exceptissuance of 1,225,412 shares of common stock for proceeds of approximately $9,469,000.

f.

During the provision to record fair value changes for financial liabilities undernine months ended September 30, 2021, all the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluatingremaining 17,303 shares of Series B Convertible Preferred Stock were converted into 207,528 shares of common stock.

g.

During the impact of adopting this guidance.

INSPIREMD, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

3)The FASB has issued the following standards that the Company has determined will not have a material impact on its consolidated financial statements upon their adoption:

In May 2014, the FASB issued Accounting Standards Codification (“ASC”) 606, Revenue from contracts with customers. The objective of the new revenue standard is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries, and across capital markets. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services, based on a five step model that includes the identification of the contract with the customer and the performance obligations in the contract, determination of the transaction price, allocation of the transaction price to the performance obligations in the contract and recognizing revenue when (or as) the entity satisfies a performance obligation. The revenue standard is effective for annual periods beginning on or after December 15, 2017.

On July 22, 2015, the FASB issued ASU No. 2015-11, “Simplifying the Measurement of Inventory,” which requires that inventory within the scope of the guidance be measured at the lower of cost and net realizable value. Inventory measured using last-in, first-out and the retail inventory method are not impacted by the new guidance. The new guidance was adopted by the Company during the first quarter of 2017.

In February 2016, the FASB issued ASU 2016-02, Leases, which requires to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The accounting standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.

NOTE 4 - LONG-TERM LOAN:

During the three months ended March 31, 2017, the Company paid the remaining interest and principal balances under the Company’s Loan and Security Agreement, dated as of October 23, 2013, in consideration of $2,684,000. All liens and other security interests granted by the Company and its subsidiaries in connection with the Loan and Security Agreement were terminated upon such payment.

NOTE 5 - EQUITY:

a.On March 14, 2017 , the Company closed a public offering of 1,069,822nine months ended September 30, 2021, 625 shares of Series C Convertible Preferred Stock Series B warrants to purchase up to 4,279,288were converted into 831 shares of common stockstock.

h.

During the nine months ended September 30, 2021, the Company granted to employees, directors and Series C warrantsconsultants’ options to purchase up to 4,279,288a total of 79,071 shares of the Company’s common stock. The options have an exercise prices ranging from $3.89 - $10.05 per share, which was the fair market value of the Company’s common stock (the “March 2017 Offering”)on the date of the grant. The options are subject to a three-year vesting period, with one-third of such awards vesting each year.

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 129.12%-136.78%; and risk-free interest rate ranging from 0.59%-1.17%. Each share

The fair value of the above options, using the Black-Scholes option-pricing model, was approximately $478,600.

i.

During the nine months ended September 30, 2021, the Company granted 22,202 restricted shares of the Company’s common stock to employees. 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 shares was approximately $143,346.

j.As of September 30, 2021, there were 1,718 shares of Series C Convertible Preferred Stock and the accompanying warrants were sold at a price of $6.40. Each share of Series C Convertible Preferred Stock isoutstanding, convertible into 4an aggregate of 2,280 shares of our common stock reflecting a conversion price equal to $1.60 per share.stock.

INSPIREMD, INC.

F-12

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The Company received gross proceeds of approximately $6.8 million from the offering, before deducting placement agent fees payable by the Company equal to 8.0% of the gross proceeds of the offering and a solicitation fee equal to 3.0% of the proceeds from the exercise of the Series C Warrants and offering expenses payable by the Company.

The holders of Series C Convertible Preferred Stock may elect to convert at any time. The Series C Convertible Preferred Stock has certain anti-dilution provisions which provisions require the lowering of the applicable conversion price, as then in effect, to the purchase price of equity or equity-linked securities issued in subsequent offerings.

The Series B warrants are exercisable immediately and have a term of exercise of five years from the date of issuance and have an exercise price of $2.00 per share of common stock.

The Series C warrants were exercisable immediately and had a term of exercise of six months from the date of issuance and had an exercise price of $1.60 per share of common stock. As of September 30, 2017 all Series C warrants were expired and none were exercised prior to their expiration.

For accounting purposes,2021, the Company analyzed the classificationhas outstanding warrants to purchase an aggregate of the Series C Convertible Preferred Stock, including whether the embedded conversion options should be bifurcated. As the Series C Convertible Preferred Stock is not redeemable, and the host contract was determined to be akin to equity, the entire instrument was classified as equity.

The Company has also concluded that the warrants accompanying Series C Convertible Preferred Stock are classified as equity, since the warrants bear a fixed conversion ratio and all other criteria for equity classification have been met.

During the 9 month period ended September 30, 2017, 326,609 shares of Series C Convertible Preferred Stock were converted into 1,306,4361,793,983 shares of common stock.stock as follows:

SCHEDULE OF ISSUANCE OF WARRANTS TO PURCHASE COMMON STOCK

  Number of
underlying
Common stock		  Exercise price 
Series E Warrants  198,159  $27.000 
Series F Warrants  433,878  $7.425 
Series G Warrants  1,092,344  $10.230 
Underwriter Warrants  18,277  $7.425 
Other warrants  51,325  $225.000 and above 
         
Total Warrants  1,793,983  $  

Pursuant toAs of September 30, 2021, the termsCompany had 155,000,000 authorized shares of the public offering of Series B Convertible Preferred Stock and accompanying warrants closed in July 2016, that provided the holders of the Series B Convertible Preferred Stock with certain anti-dilution provisions, which provisions require the lowering of the applicable conversion price, as then in effect, to the purchase price of equity or equity-linked securities issued in subsequent offerings, upon closing of the March 2017 offering, the conversion price of the Series B Convertible Preferred Stock was adjusted to $1.60capital stock, par value $0.0001 per share, of which 150,000,000 are shares of common stock and each share of Series B Convertible Preferred Stock became convertible into 20.6255,000,000 are shares of common“blank check” preferred stock. The holders

NOTE 4 – RELATED PARTIES TRANSACTIONS

On May 10, 2021, the board of Series B Convertible Preferred Stock are entitled to receive cumulative dividends at the rate per share of 15% per annumdirectors of the stated value for five years, payable in cash or common stock, at our discretion. AsCompany appointed a result of such adjustment, the Company was required to issue to the holders of the Series B Convertible Preferred Stock an aggregate of 9,063,314 additional shares of common stock upon conversion of the Series B Convertible Preferred Stock and the payment of the dividends thereunder in common stock, based on 311,521 shares of Series B Convertible Preferred Stock outstanding as of March 8, 2017.

The issuance of additional common stock at a price lower than $1.60 will entitle holders of Series B Convertible Preferred Stock and holders of Series C Convertible Preferred Stock to receive additional shares upon conversion and with respect to the Series B Convertible Preferred Stock additional shares or cash due to their dividend entitlement as described above.

new member. During the 9 month periodnine months ended September 30, 2017, 130,529 shares2021, a consulting company whose founder and CEO is our new board member provided certain marketing services in the amount of Series B Convertible Preferred Stock were converted into 4,711,281 shares of common stock.$30,000.

INSPIREMD, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

b.As of September 30, 2017 the Company has authorized 155,000,000 shares of capital stock, par value $0.0001 per share, of which 150,000,000 are shares of common stock and 3,328,000 are shares of “blank check” preferred stock.

NOTE 6- 5- NET LOSS PER SHARE:SHARE:

Basic and diluted net loss per share is computed by dividing the net loss for the period attributable to common stock (after adding the beneficial conversion feature included in the series C preferred shares) by the weighted average number of shares of common stock outstanding during the period, including 2,928,358 and 3,732,960 weighted average shares of common stock issuable to holders of Series B Convertible Preferred Stock for the nine and three month periods ended September 30, 2017, respectively (since they are convertible based on passage of time).period. The calculation of diluted net loss per share excludes potential share issuances of common stock upon the exercise of share options, warrants, unvested restricted stocksstock and placement agent unitunvested restricted stock units as the effect is anti-dilutive.

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 2,163,741 for the nine and three month periods ended September 30, 2021.

The total number of shares of common stock related to outstanding options, warrants, restricted stock, restricted stock units and Series C Convertible Preferred Stock and placement agent units excluded from the calculations of diluted loss per share were 10,234,3582,091,917 for the nine and three month periods ended September 30, 2017.2020.

The total number of shares of common stock related to outstanding options, warrants and restricted stock excluded from the calculations of diluted loss per share were 2,449,774 for the nine and three month periods ended September 30, 2016.NOTE 6 – FINANCIAL INSTRUMENTS:

a.Fair value of financial instruments

NOTE 7 - FAIR VALUE MEASURMENT

Fair value of financial instruments

The carrying amounts of financial instruments included in working capital 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 September 30, 2021, and December 31, 2020, allowance for doubtful accounts was $0.

As of September 30, 2017 and December 31, 2016, allowance for doubtful accounts was $72,000 and $336,000, respectively, with the decrease resulting primarily from bad debt write offs.

NOTE 8 - INVENTORY:

  September 30, 2017  December 31, 2016 
  ($ in thousands) 
    
Finished goods $113  $83 
Work in process  142   233 
Raw materials and supplies  321   184 
  $576  $500 

F-11F-13
 

INSPIREMD, INC.NOTE 7 – INVENTORY:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)SCHEDULE OF INVENTORY

  September 30,  December 31, 
  2021  2020 
  ($ in thousands) 
Finished goods $225  $350 
Work in process  329   376 
Raw materials and supplies  581   689 
Total inventory $1,135  $1,415 

(Unaudited)

NOTE 98 - ACCOUNTS PAYABLE AND ACCRUALS - OTHER:OTHER:

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUALS - OTHER

 September 30, 2017  December 31, 2016  September 30, December 31, 
 ($ in thousands)  2021  2020 
    ($ in thousands) 
Employees and employee institutions $1,126  $357   1,370   1,236 
Accrued vacation and recreation pay  133   137   332   278 
Accrued clinical trial expenses  476   467 
Accrued expenses  394   430   968   886 
Provision for sales commissions  164   56 
 $2,293  $1,447 
Accrual for settlement payment  -   580 
Current Operating lease liabilities  411   400 
Other  83   89 
Accounts payable and accruals - other $3,164  $3,469 

NOTE 10 - COMMITMENTS AND CONTINGENT LIABILITIES:

Litigation:

The Company received written communication from a distributor to provide unspecified compensation for pre-paid goods subject to the voluntary field action. After considering the views of its legal counsel as well as other factors, the Company’s management believes that there is a reasonably possible likelihood of a loss from any related future proceedings that would range from a minimal amount up to 1,075,000 Euros.

On April 26, 2016, the Company received a suit seeking damages from the Company amounting to $2.2 million in cash and unspecified compensation in equity in connection with certain finders’ fees. The Company’s management, after considering the views of its legal counsel as well as other factors, is of the opinion that a loss to the Company is neither probable nor in an amount or range of loss that is estimable.

In July 2016, a service provider filed a suit seeking damages from the Company’s subsidiary amounting to $1,967,822. The Company’s management, after considering the views of its legal counsel as well as other factors, is of the opinion that a loss to the Company is neither probable nor in an amount or range of loss that is estimable.

F-12

INSPIREMD, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

NOTE 119 -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

 2021  2020  2021  2020 
 Three months ended
September 30,		  Nine months ended
September 30,		  Three months ended
September 30,		  Nine months ended
September 30,		 
 2017  2016  2017  2016  2021  2020  2021  2020 
 ($ in thousands)  ($ in thousands)  ($ in thousands) 
              
Italy $189  $27  $423  $347  $219  $185  $678  $433 
Germany  136   213   371   536   213   292   690   551 
Poland  125   63   318   184 
Russia  107   -   216   -   118   -   261   116 
Belarus  29   52   120   75 
Other  257   177   797   614   396   440   1,168   1,043 
 $718  $469  $1,927  $1,572 
Revenues $1,071  $980  $3,115  $2,327 

 

By product:

SCHEDULE OF REVENUES ATTRIBUTED TO GEOGRAPHIC AREAS BY PRODUCT

 2021  2020  2021  2020 
 Three months ended
September 30,		 Nine months ended
September 30,		  Three months ended
September 30,		  Nine months ended
September 30,		 
 2017 2016 2017 2016  2021  2020  2021  2020 
 ($ in thousands) ($ in thousands)  ($ in thousands) 
            
CGuard $526  $277  $1,315  $952  $1,031  $833  $3,018  $2,075 
MGuard  192   192   612   620   40   147   97   252 
 $718  $469  $1,927  $1,572 
Revenue $1,071  $980  $3,115  $2,327 

By principal customers:

SCHEDULE OF REVENUES ATTRIBUTED TO GEOGRAPHIC AREAS BY PRINCIPAL CUSTOMERS

 2021  2020  2021  2020 
 Three months ended
September 30,		  Nine months ended
September 30,		  Three months ended
September 30,		  Nine months ended
September 30,		 
 2017  2016  2017  2016  2021  2020  2021  2020 
Customer A  16%  0%  12%  0%  19%  27%  21%  22%
Customer B  15%  0%  11%  0%  12%  9%  13%  11%
Customer C  14%  5%  10%  6%  12%  6%  10%  8%
Customer D  12%  1%  12%  15%  11%  -   8%  5%
Customer E  4%  11%  6%  5%
Customer F  0%  40%  3%  29%

All tangible long lived assets are located in Israel.

F-14

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q.

Unless the context requires otherwise, references in this Form 10-Q to the “Company,” “InspireMD,” “we,” “our” and “us” refer to InspireMD, Inc., a Delaware corporation, and its subsidiaries.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements,” which include information relating to future events, future financial performance, strategies, expectations, competitive environment and regulation. Words such as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and will probablymay not be accurate indications of when such performance or results will be achieved. Forward-looking statements are based on information we have when those statements are made or our management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:

●the impact of the COVID-19 pandemic on our history of recurring losses and negative cash flows from operating activities, significant future commitmentsmanufacturing, sales, business plan and the uncertainty regarding the adequacy of our liquidity to pursue our complete business objectives, and substantial doubt regarding global economy;
●negative clinical trial results or lengthy product delays in key markets;
●our ability to continue as a going concern;maintain compliance with the Nasdaq Capital Market listing standards;
●our need to raise additional capital to meet our business requirements in the future and such capital raising may be costly or difficult to obtain and could dilute out stockholders’ ownership interests;
●our ability to generate revenues from our products and obtain and maintain regulatory approvals for our products;
●our ability to successfully obtain, maintain and adequately protect our intellectual property;property rights;
●our dependence on a single manufacturing facility and our ability to comply with stringent manufacturing quality standards andstandards;
●our ability to increase production as necessary;
●the risk that the data collected from our current and planned clinical trials may not be sufficient to demonstrate that our technology is an attractive alternative to other procedures and products;
●market acceptance of our products;
●negative clinical trial resultsour need to raise additional capital to meet our business requirements in the future and such capital raising may be costly or lengthy product delays in key markets;difficult to obtain and could dilute our stockholders’ ownership interests;
●an inability to secure and maintain regulatory approvals for the sale of our products;
●intense competition in our industry, with competitors having substantially greater financial, technological, research and development, regulatory and clinical, manufacturing, marketing and sales, distribution and personnel resources than we do;
●entry of new competitors and products and potential technological obsolescence of our products;

●
●inability to carry out research, development and commercialization plans;

 3 

●loss of a key customer or supplier;

3

●technical problems with our research and products and potential product liability claims;
●product malfunctions;
●price increases for supplies and components;
●adverse economic conditions;
●insufficient or inadequate reimbursement by governmental and other third partythird-party payers for our products;
●our efforts to successfully obtain and maintain intellectual property protection covering our products, which may not be successful;
●adverse federal, state and local government regulation in the United States, Europe, or Israel and other foreign jurisdictions;
●the fact that we conduct business in multiple foreign jurisdictions, exposing us to foreign currency exchange rate fluctuations, logistical and communications challenges, burdens and costs of compliance with foreign laws and political and economic instabilityvolatility in each jurisdiction;certain jurisdictions;
●the escalation of hostilities in Israel, which could impair our ability to manufacture our products; and
●loss or retirement of key executives and research scientists.

The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with that may cause our actual results to differ from those anticipated in our forward-looking statements. For a discussion of these and other risks that relate to our business and investing in our common stock, you should carefully review the risks and uncertainties described in this Quarterly Report on Form 10-Q, and in our Annual Report on Form 10-K for the twelve month period ended December 31, 2016, and those described from time to time in our future reports filed with the Securities and Exchange Commission. The forward-looking statements contained in this Quarterly Report on Form 10-Q are expressly qualified in their entirety by this cautionary statement. We do not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated events.

OverviewAll information in this Quarterly Report on Form 10-Q relating to shares or price per share reflects the 1-for-15 reverse stock split effected by us on April 26, 2021.

Overview

We are a medical device company focusing on the development and commercialization of our proprietary MicroNet™ stent platform technology for the treatment of complex vascular and coronary disease. A stent is an expandable “scaffold-like” device, usually constructed of a metallic material, that is inserted into an artery to expand the inside passage and improve blood flow. Our MicroNet, a micron mesh sleeve, is wrapped over a stent to provide embolic protection in stenting procedures.

Our CGuard™ carotid embolic prevention system (“CGuard EPS”) combines MicroNet and a self-expandable nitinol stent in a single device for use in carotid artery applications. Our CGuard EPS received CE mark approval in the European Union in March 2013 and wewas fully launched its release on a limited basis in October 2014. In January 2015, a new version of CGuard, with a rapid exchange delivery system, received CE mark approval in Europe and in September 2015, we announced the full market launch of CGuard EPS in Europe.2015. Subsequently, we launched CGuard EPS in Argentina, ColombiaRussia and Russia.certain countries in Latin America and Asia, including India. In September 2020, we launched CGuard EPS in Brazil after receiving regulatory approval in July 2020 and as discussed below, on February 3, 2021, we executed a distribution agreement with Chinese partners for the purpose of expanding our presence in China. Currently, we are seeking strategic partners for a potential launch of CGuard EPS in Japan.

 

4

On September 8, 2020, we received approval from the U.S. Food and Drug Administration (“FDA”) of our Investigation Device Exemption (“IDE”), thereby allowing us to proceed with a pivotal study of our CGuard™ Carotid Stent System, C-Guardians, for prevention of stroke in patients in the United States. C-Guardians is a prospective, multicenter, single-arm, pivotal study to evaluate the safety and efficacy of the CGuard™ Carotid Stent System when used to treat symptomatic and asymptomatic carotid artery stenosis in patients undergoing carotid artery stenting. The trial will enroll approximately 315 subjects in a maximum of 40 study sites located in the United States and Europe. Study sites in Europe may contribute a maximum of approximately 50% of the total enrollees. The primary endpoint of the study will be the composite of incidence of death (all-cause mortality), all stroke, and myocardial infarction (DSMI) through 30-days post-index procedure, based on the clinical events committee (CEC) adjudication and ipsilateral stroke from 31-365 day follow-up, based on Clinical Events Committee (CEC) adjudication.

On July 22, 2021, we announced the initiation of enrollment and successful completion of the first cases of our C-Guardian trial of CGuard EPS. The first patients, who were under the care of principal investigator, Chris Metzger, M.D., system chair of clinical research at Ballard Health System in Eastern Tennessee, were successfully implanted with the CGuard EPS stent device. These are the first of 315 patients who are expected to be enrolled in the trial and receive CGuard EPS in the treatment of carotid artery stenosis in symptomatic and asymptomatic patients undergoing carotid artery stenting.

Additionally, we intend to continue to invest in current and future potential product and manufacturing enhancements for CGuard EPS that are expected to reduce cost of goods and/or provide the best-in-class performing delivery system. In furtherance of our strategy that focuses on establishing CGuard EPS as a viable alternative to vascular surgery, we are exploring adding new delivery systems and accessory solutions for procedural protection to our portfolio.

We consider the addressable market for our CGuard EPS to be individuals with diagnosed, symptomatic high-grade carotid artery stenosis (HGCS, ≥70% occlusion) for whom intervention is preferable to medical (drug) therapy. This group includes not only carotid artery stenting patients but also individuals undergoing carotid endarterectomy, as the two approaches compete for the same patient population. Assuming full penetration of the intervention caseload by CGuard EPS, we estimate that the addressable market for CGuard EPS was approximately $1.0 billion in 2017 (source: Health Research International 2017 Results of Update Report on Global Carotid Stenting Procedures and Markets by Major Geography and Addressable Markets).

Our MGuard™ Prime™ Embolic Protection Systemembolic protection system (“MGuard Prime EPS”) is marketed for use in patients with acute coronary syndromes, notably acute myocardial infarction (heart attack) and saphenous vein graft coronary interventions, (bypass surgery).or bypass surgery. MGuard Prime EPS combines MicroNet with a bare-metal cobalt-chromium based stent and, together with our first generation MGuard stent combining MicroNet with a bare-metal stainless steel stent, unless otherwise indicated, we refer to both kinds of bare-metal stents as our MGuard coronary products. We market and sell MGuard Prime EPS for the treatment of coronary disease in the European Union.stent. MGuard Prime EPS received CE mark approval in the European Union in October 2010 for improving luminal diameter and providing embolic protection. However, as a result of a shift in industry preferences away from bare-metal stents in favor of drug-eluting, (drug-coated)or drug-coated, stents, in 2014 we decided to curtail further development of this product in order to focus on the development of a drug-eluting stent product, MGuard DES™. Due to limited resources, though,however, our efforts have been limited to testing drug-eluting stents manufactured by potential partners for compatibility with MicroNet and seeking to incorporate MicroNet onto a drug-eluting stent manufactured by a potential partner.

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We The FDA has clarified that the primary mode of action for drug-eluting cardiovascular stents, which are also developingregulated as combination products, is that of the device component and has assigned the FDA Center for Devices and Radiological Health (CDRH) primary responsibility for premarket review and regulation, providing some clarity about what to expect regarding the regulatory framework related to the development of MGuard DES™. As a neurovascular flow diverter (“NGuard”), which is an endovascular device that directs blood flow away from cerebral aneurysms in order to ultimately sealresult of declining sales of the aneurysms. Our flow diverter would utilize an open cell, highly flexible metal scaffold to which MicroNet would be attached. We have completed initial pre-clinical testing of this product in both simulated bench models and standard in vivo pre-clinical models. However, as we plan to focus our resources on the further expansion of our sales and marketing activities for CGuard EPS and MGuard Prime EPS, and, provided thatwhich we have sufficient resources,believe is largely driven by the development of CGuardpredominant industry preferences favoring drug-eluting stents rather than bare metal stents such as MGuard Prime EPS with a smaller delivery catheter (5 French gauge) and its submission for CE mark approval,in ST-Elevation Myocardial Infarction (“STEMI”) patients, we do not intend to resume further developmentphase out future sales of NGuard until at least the third quarter of 2018.our MGuard Prime EPS in 2022.

We also intend to develop a pipeline of other products and additional applications by leveraging our MicroNet technology to new applications to improve peripheral vascular and neurovascular procedures, such as the treatment of the superficial femoral artery disease, vascular disease below the knee and neurovascular stenting to open diseased vesselsseal aneurysms in the brain.

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Presently, none of our products may be sold or marketed in the United States.

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

Recent Developments

On September 30, 2021, at our 2021 annual meeting of stockholders, our stockholders approved our 2021 Equity Incentive Plan.

On October 13, 2021, we announced that our CGuard EPS stent system received a positive opinion from the National Commission for the Evaluation of Medical Devices and Health Technologies (CNEDIMTS) of the French National Authority for Health (HAS) regarding reimbursement in France, and the CGuard EPS was being added to the list of reimbursed medical products (LPPR) effective October 25, 2021. This was the final step to full commercial launch of CGuard EPS following CNEDIMTS’ positive opinion for reimbursement received by the Company on May 11, 2021 for the treatment of symptomatic and non-symptomatic lesions when surgery is not indicated.

COVID-19 Developments

The COVID-19 global pandemic has led governments and authorities around the globe to take various precautionary measures in order to limit the spread of COVID-19, including government-imposed quarantines, lockdowns, and other public health safety measures. We experienced a significant COVID-19 related impact on our financial condition and results of operations, primarily during the year ended December 31, 2020, which we primarily attribute to the postponement of CGuard EPS procedures (non-emergency procedures), as hospitals have shifted resources to patients affected by COVID-19. To the best of our knowledge, most European countries in which we operate reinstated non-emergency procedures. However, new COVID-19 variants, and potentially increasing infection rates make the current COVID-related environment highly volatile and uncertain and we anticipate that the continuation of the pandemic and related restrictions and safety measures will likely result in continued fluctuations in sales of our products, and potentially enrollments in our studies, for the upcoming periods.

Critical Accounting Policies

A critical accounting policy is one that is both important to the portrayal of our financial condition and results of operation and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies are more fully described in both (i) “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and (ii) Note 2 of the Notes to the Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2016.2020. There have not been any material changes to such critical accounting policies since December 31, 2016.2020.

The currency of the primary economic environment in which our operations are conducted is the U.S. dollar (“$” or “dollar”).

Contingencies

We and our subsidiaries are involved in legal proceedings that arise from time to time in the ordinary course of business. We record accruals for these types of contingencies to the extent that we conclude the occurrence of such contingencies is probable and that the related liabilities are estimable. When accruing these costs, we recognize an accrual in the amount within a range of loss that is the best estimate within the range. When no amount within the range is a better estimate than any other amount, we accrue for the minimum amount within the range. Legal costs are expensed as incurred.

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Results of Operations

Three months ended September 30, 20172021 compared to the three months ended September 30, 20162020

Revenues. For the three months ended September 30, 2017,2021, revenue increased by $249,000,$91,000, or 53.1%9.3%, to $718,000$1,071,000, from $469,000$980,000 during the three months ended September 30, 2016.2020. This increase was predominantly driven by an 89.9%a 23.8% increase in sales volume of CGuard EPS from $277,000$833,000 during the three months ended September 30, 2020, to $1,031,000 during the three months ended September 30, 2021. This sales increase was mainly due to the fact that in the three months ended September 30, 2016,2021, procedures with CGuard EPS, which are generally scheduled for non-emergency cases, continued to $526,000return to normal levels in additional territories as compared to the three months ended September 30, 2020, when procedures with CGuard EPS were still somewhat postponed as hospitals shifted resources to patients affected by COVID-19. In addition, the sales increased due to sales related to stents used in our FDA clinical trial which occurred in the three months ended September 30, 2017 as we continued focus on expanding existing markets such as Italy, expansion into new geographies such as Russia, as well as the transition from our prior exclusive distribution partner for most of Europe to local distributors. The transition to local distributors reflects an effort to broaden our sales efforts from only interventional neuroradiologists to include vascular surgeons, interventional cardiologists and interventional radiologists, as well. Revenue from sales of MGuard EPS remained flat at $192,0002021, but not in the three months ended September 30, 2017, compared to the samecorresponding period in 2016.

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With respect to regions, the increase in revenue was primarily attributable to an increase of $233,000 in revenue from sales of CGuard EPS from our distributors in Europe and an increase of $21,000 in revenue from sales of CGuard EPS in Latin America.

Gross Profit. For the three months ended September 30, 2017, gross profit (revenue less cost of revenues) increased by 410.0%, or $123,000, to $153,000, compared to $30,000 during the same period in 2016.2020. The increase in gross profit resulted primarily from an increase of $249,000 in revenues (as mentioned above), a decrease of $25,000 of expenses related to the underutilization of our manufacturing resources and a decrease of $14,000 in miscellaneous expenses, partially offset by an increase in material and labor costs of $165,000, which resulted from our increase in sales. Gross margin (gross profits as a percentage of revenue) increased to 21.3% in the three months ended September 30, 2017 from 6.4% in the three months ended September 30, 2016.

Research and Development Expenses. For the three months ended September 30, 2017, research and development expenses remained relatively flat compared to the same period in 2016 due to an increase of $40,000 in a salary related accrual. This increase in research and development expenses was partially offset by a decrease of $41,000 in miscellaneous expenses.

Selling and Marketing Expenses. For the three months ended September 30, 2017, selling and marketing expenses increased by 117.2%, or $362,000, to $671,000, from $309,000 during the three months ended September 30, 2016. This increase in selling and marketing expenses resulted primarily from an increase of $195,000 in salary expenses, an increase of $100,000 in travel expenses and an increase of $67,000 in miscellaneous expenses. The increase in selling and marketing expenses was driven primarily to support the CGuard EPS sales and marketing related activities as we transitioned away from our prior exclusive distribution partner for most of Europe to using local distributors, as well as expansion of existing markets and into new geographies.

General and Administrative Expenses. For the three months ended September 30, 2017, general and administrative expenses increased by 7.5%, or $89,000, to $1,279,000 from $1,190,000 during the three months ended September 30, 2016. The increase in general and administrative expenses resulted primarily from an increase of $88,000 in salary expenses, primarily due to a salary related accrual, an increase of $67,000 in expenses related to our 2017 regulatory audit which included the recertification of our CE Mark as well as an increase of $35,000 in miscellaneous expenses. These increase in general and administrative expenses were partially offset by a decrease of $101,000 in share based compensation expenses due to the timing of vesting of certain equity grants to our chief executive officer and the reversal of certain equity grants to two former directors.

Financial Expenses. For the three months ended September 30, 2017, financial expenses decreased by 99.6% or $236,000, to $1,000, from $237,000 during the three months ended September 30, 2016. The decrease in financial expenses resulted from a decrease in interest expenses due to the repayment of the remaining balance of our outstanding indebtedness of $1.2 million on March 21, 2017.

Tax Expenses (Income). For the three months ended September 30, 2017, there was no material change in tax expenses (income) compared to the same period in 2016.

Net Loss. Our net loss increased by $91,000, or 4.6%, to $2,086,000 for the three months ended September 30, 2017, from $1,995,000 during the same period in 2016. The increase in net loss resulted primarily from an increase of $450,000 in operating expenses, partially offset by a decrease of $236,000 in financial expenses and an increase of $123,000 in gross profit.

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Nine months ended September 30, 2017 compared to the nine months ended September 30, 2016

Revenues. For the nine months ended September 30, 2017, revenue increased by $355,000, or 22.6%, to $1,927,000, from $1,572,000 during the nine months ended September 30, 2016. This increase was predominantly driven by a 38.1% increase in sales of CGuard EPS from $952,000 in the nine months ended September 30, 2016, to $1,315,000 in the nine months ended September 30, 2017, as we expanded into new geographies such as Russia, continued focus on expanding existing markets such as Italy, as well as the transition from our prior exclusive distribution partner for most of Europe to local distributors. The transition to local distributors reflects an effort to broaden our sales efforts from only interventional neuroradiologists to include vascular surgeons, interventional cardiologists and interventional radiologists, as well. This increase in sales of CGuard EPS was partially offset by a 1.3% decrease of 72.8% in sales of MGuard Prime EPS from $620,000 in$147,000 during the ninethree months ended September 30, 2016,2020, to $612,000 in$40,000 during the ninethree months ended September 30, 2017,2021, largely driven by doctors increasingly usingthe predominant industry preferences favoring drug-eluting stents rather than bare metal stents such as MGuard Prime EPS in STEMI patients.

With respect to geographical regions, the increase in revenue was primarily attributable to a $78,000 increase in revenue from Europe (primarily driven by a $134,000 increase of CGuard EPS sales, offset, in part, by a $56,000 decrease of MGuard Prime EPS sales for reasons discussed in the paragraph above).

Gross Profit. For the three months ended September 30, 2021, gross profit (revenue less cost of revenues) decreased by $206,000, to $92,000, from $298,000 during the three months ended September 30, 2020. This decrease in gross profit resulted from a $136,000 increase in material and labor costs (mainly due to an increase in sales volume as well as a short term increase in production cost per unit), an increase in write-offs of $66,000, due to components supply issues, a $57,000 increase in new employee training costs, and an increase of $333,000$38,000 in miscellaneous expenses during the three months ended September 30, 2021. This decrease was partially offset by a $91,000 increase in revenues mainly due to an increase in sales volume (as mentioned above). Gross margin (gross profits as a percentage of revenue) decreased to 8.6% during the three months ended September 30, 2021 from 30.4% during the three months ended September 30, 2020, driven by the reasons mentioned above.

Research and Development Expenses. For the three months ended September 30, 2021, research and development expenses increased by 173.8%, or $949,000, to $1,495,000, from $546,000 during the three months ended September 30, 2020. This increase resulted primarily from an increase of $708,000 in expenses related to the commencement of the C-Guardians FDA study, $151,000 in development expenses related to CGuard EPS new delivery system and accessory solutions and $91,000 in compensation expenses offset by a decrease of $1,000 in miscellaneous expenses.

Selling and Marketing Expenses. For the three months ended September 30, 2021, selling and marketing expenses increased by 65.4%, or $317,000, to $802,000, from $485,000 during the three months ended September 30, 2020. This increase resulted primarily from an increase in compensation expenses of $215,000 and other sales and marketing expenses of $102,000, both relating to increased activity associated with expansion of existing and new markets.

General and Administrative Expenses. For the three months ended September 30, 2021, general and administrative expenses increased by 24.9%, or $364,000, to $1,826,000, from $1,462,000 during the three months ended September 30, 2020. This increase resulted primarily from an increase in compensation expenses of $258,000, mainly due to an increase in salary expenses and related accruals of $137,000, and an increase of approximately $121,000 of share-based compensation-related expenses due to the expense recognition of grants made since August 31, 2020. In addition, we had an increase in Directors’ and Officers’ Liability Insurance expenses of $81,000, due to increased premiums caused by recent trends in the overall insurance industry, expenses pertaining to the higher costs of our annual stockholders meeting in 2021 compared to our annual stockholders meeting in 2020 of $63,000 offset by a decrease of $38,000 in miscellaneous expenses.

Financial Expenses. For the three months ended September 30, 2021, financial expenses increased by 5.3%, or $2,000, to $40,000, from $38,000 during the three months ended September 30, 2020.

Tax Expenses. For the three months ended September 30, 2021, there was no change in our tax expenses as compared to the three months ended September 30, 2020.

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Net Loss. Our net loss increased by $1,838,000, or 82.3%, to $4,071,000, for the three months ended September 30, 2021, from $2,233,000 during the three months ended September 30, 2020. The increase in net loss resulted primarily from an increase of $1,630,000 in operating expenses and a decrease of $206,000 in gross profit.

Nine months ended September 30, 2021 compared to the nine months ended September 30, 2020

Revenues. For the nine months ended September 30, 2021, revenue increased by $788,000, or 33.9%, to $3,115,000, from $2,327,000 during the nine months ended September 30, 2020. This increase was predominantly driven by a 45.4% increase in sales volume of CGuard EPS from $2,075,000 during the nine months ended September 30, 2020, to $3,018,000 during the nine months ended September 30, 2021. This sales increase was mainly due to the fact that in the nine months ended September 30, 2021, procedures with CGuard EPS, which are generally scheduled for non-emergency procedures began to return to normal levels as compared to the nine months ended September 30, 2020, when procedures with CGuard EPS were postponed as hospitals shifted resources to patients affected by COVID-19 beginning in February 2020. This increase in sales of CGuard EPS from our distributorswas partially offset by a decrease of 61.5% in Europe an increase of $132,000 in revenue from sales of MGuard Prime EPS from our distributors$252,000 during the nine months ended September 30, 2020, to $97,000 during the nine months ended September 30, 2021, largely driven by the predominant industry preferences favoring drug-eluting stents rather than bare metal stents such as MGuard Prime EPS in Latin America and anSTEMI patients.

With respect to geographical regions, the increase of $30,000in revenue was primarily attributable to a $743,000 increase in revenue from sales made in Europe (driven by a $835,000 increase of CGuard EPS from our distributorssales, offset, in Latin America, partially offsetpart, by a $92,000 decrease of $96,000 in revenue from sales of MGuard Prime EPS from our distributorssales for reasons discussed in Europe andthe paragraph above), as well as a decrease of $44,000$60,000 increase in CGuard EPS revenue from sales of MGuard Prime EPS from our distributorsmade in the Middle East.Asia.

Gross Profit. For the nine months ended September 30, 2017,2021, gross profit (revenue less cost of revenues) increaseddecreased by 136.7%2.7%, or $216,000,$13,000, to $374,000,$460,000, compared to $158,000 duringa gross profit of $473,000 for the same period in 2016. The increase2020. This decrease in gross profit resulted primarily from an increase of $355,000 in revenues (as mentioned above), a decrease of $76,000 of expenses related to the underutilization of our manufacturing resources and a decrease in write-offs of inventory$89,000, which were driven mainly by components supply issues, a $45,000 increase in new employees training costs and an increase of MGuard Prime EPS of $66,000. These increases$91,000 in gross profit weremiscellaneous expenses. This decrease was partially offset by ana $212,000 increase in revenues less the related material and labor costs of $244,000, which resulted from our increase in sales and an increase of $37,000 in miscellaneous expenses.(as mentioned above). Gross margin (gross profits as a percentage of revenue) increaseddecreased to 19.4% in14.8% during the nine months ended September 30, 20172021 from 10.1% in20.3% during the nine months ended September 30, 2016.2020, driven by the reasons mentioned above.

Research and Development Expenses. For the nine months ended September 30, 2017,2021, research and development expenses increased by 10.0%139.5%, or $95,000,$2,111,000, to $1,041,000,$3,624,000, from $946,000$1,513,000 during the nine months ended September 30, 2016.2020. This increase in research and development expenses resulted primarily from an increase of $191,000$1,191,000 in salary expenses primarily duerelated to the resignation and timingcommencement of the replacement of our former vice president of research and development who resigned on March 10, 2016, lowering our expensesC-Guardians FDA study, $515,000 in the nine months ended September 30, 2016 as well as a salary related accrual in 2017. In addition to the increase in salary expenses, the increase in research and development expenses for the nine months ended September 30, 2017, comparedrelated to the same period in 2016 resulted from an increase of $104,000 in development and clinical expenses associated with CGuard EPS primarily due to our pre-IDE meeting with the FDA. This increase however, was partially offset by a decrease of $166,000new delivery system and accessory solutions, $386,000 in share-based compensation expenses due to the recognition of all remaining unrecognized costs following the option cancellation agreement with our chief executive officer in 2016 while he was our chief operating officer, resulting in higher share-based compensation expenses in 2016, as well as a decrease of $34,000and $19,000 in miscellaneous expenses.

Selling and Marketing Expenses. For the nine months ended September 30, 2017,2021, selling and marketing expenses increased by 70.4%44.4%, or $758,000,$660,000, to $1,835,000,$2,146,000, from $1,077,000$1,486,000 during the nine months ended September 30, 2016.2020. This increase in selling and marketing expenses resulted primarily from an increase of $264,000 in salary expenses, an increase of $182,000 in travel expenses, an increase of $113,000 in consulting fees, an increase of $99,000 in share-based compensation expenses due to a former employee’s forfeiture of the former employee’s share-based compensation in 2016, reducing our 2016 share-based compensation expenses, for which, no such reduction occurred during 2017, an increase of $95,000 in expenditures related to our participation in trade shows$627,000 and promotional activities and an increase of $5,000 in miscellaneous expenses. The increase in sellingother sales and marketing expenses was primarilyof $33,000 both relating to support theincreased activity associated with expansion of existing and new sales and marketing CGuard EPS related activities due to the transition from our prior exclusive distribution partner for most of Europe to local distributors.markets.

General and Administrative Expenses. For the nine months ended September 30, 2017,2021, general and administrative expenses increased by 16.0%32.4%, or $592,000,$1,339,000, to $4,281,000,$5,475,000, from $3,689,000$4,136,000 during the nine months ended September 30, 2016. The2020. This increase in general and administrative expenses resulted primarily from an increase in compensation expenses of $292,000$1,289,000 mainly due to aincreases in salary related accrual, an increase of $121,000 in rentexpenses and related expense,accruals of $699,000 primarily due to a city tax refund we received in 2016, which reduced our 2016 rent and related expenses, while no such refund was received in 2017, as well as a termination fee for our Boston office inresult of temporary salary reductions during the nine months ended September 30, 2017, which2020 that were implemented in response to the COVID-19 effect on revenues as well as additional headcount. In addition, compensation expenses increased our rent and related expenses,due to an increase in $590,000 of $52,000share-based compensation-related expenses following the expense recognition of grants made since August 31, 2020. In addition, we had an increase in legalDirectors’ and Officers’ Liability insurance expenses of $308,000, due to increased premiums caused by recent trends in the overall insurance industry and an increase in shareholder related expenses of $127,000$181,000 mainly due to a special shareholders meeting (which occurred in 2021, but not in 2020) and also due to higher costs of our annual stockholder meeting in 2021 compared to our annual stockholder meeting in 2020. These increases were partially offset by a decrease of $400,000 due to expenses for a settlement agreement with an underwriter of prior offerings which occurred in the three months ended March 31, 2020 and a decrease of $39,000 in miscellaneous expenses.

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Financial ExpensesExpenses. . For the nine months ended September 30, 2017,2021, financial expenses decreasedincreased by 75.7%24.1%, or $483,000,$7,000, to $155,000,$36,000, from $638,000$29,000 during the nine months ended September 30, 2016. The decrease in financial expenses primarily resulted from a decrease in interest expenses due to the repayment of the remaining balance of our outstanding indebtedness of $1.2 million on March 21, 2017.2020.

Tax Expenses (Income).Expenses. For the nine months ended September 30, 2017,2021, there was no material change in our tax expenses (income)as compared to the same period in 2016.nine months ended September 30, 2020.

Net Loss. Our net loss increased by $746,000,$4,130,000, or 12.0%61.7%, to $6,939,000$10,821,000, for the nine months ended September 30, 2017,2021, from $6,193,000$6,691,000 during the same period in 2016.nine months ended September 30, 2020. The increase in net loss resulted primarily from an increase of $1,445,000$4,110,000 in operating expenses, partially offset by a decrease of $483,000 in financial expenses and an increase of $216,000 in gross profit.expenses.

Liquidity and Capital Resources

We had an accumulated deficit asAs of September 30, 2017,2021, we have the ability to fund our planned operations for at least the next 12 months from issuance date of $139 million, as well as a net loss of $6,939,000 and negative operating cash flows. Wethe financial statement. However, we expect to continue incurring losses and negative cash flows from operations until our products (primarily CGuardCGuard™ EPS) reach commercial profitability. AsTherefore, in order to fund our operations until such time that we can generate substantial revenues, we may need to raise additional funds.

On July 28, 2020, we entered into a Sales Agreement with A.G.P. pursuant to which we were able to offer and sell, from time to time, at our option, through or to A.G.P., up to an aggregate of approximately $9,300,000 of shares of our common stock (the “ATM Facility”). On January 11, 2021, we increased the aggregate amount of our shares of common stock that may be sold under the Sales Agreement from $9,300,000 to $10,382,954, and, as a result, utilized and sold the maximum amount allowable under the ATM Facility, which resulted in an aggregate amount of these expected losses$10,381,958.

On February 3, 2021, we entered into a Distribution Agreement with three China-based partners and negative cash flows from operations, alongon the same day, we entered into an investment transaction with QIDI, which included (i) a securities purchase agreement (“SPA”), pursuant to which QIDI agreed to invest $900,000 in exchange for shares of our current cash position,common stock at a purchase price of $10.062 per share, and (ii) an IRA, whereby QIDI was provided certain customary registration rights, including a commitment by us to file a registration statement with the SEC on Form S-1 or Form S-3 and have such registration statement become effective not later than 150 days following the closing of the transactions under the SPA. The transaction closed on February 5, 2021.

On February 8, 2021, we only have sufficient resourcesclosed an underwritten public offering of 1,935,484 units, with each such unit being comprised of one share of our common stock, par value $0.0001 per share, and one Series G Warrant to fund operations forpurchase one-half of one share of common stock. The offering price to the public was $9.30 per unit. The Series G Warrants were immediately exercisable at a periodprice of up$10.23 per share, subject to four monthsadjustment in certain circumstances, and expire five years from the date of filingissuance. We also granted the underwriter of this Quarterly Report on Form 10-Q. Therefore, there is substantial doubt about our abilitythe offering an option to continue as a going concern.

Our plans include the continued commercialization of our products and raising capital through the sale ofpurchase an 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 and raising capital, we may need to reduce activities, curtail or cease operations.

On March 14, 2017, we announced the closing of a “best efforts” public offering of Series C Convertible Preferred Stock, Series B warrants to purchase290,322 shares of common stock and Series C warrantsG Warrants to purchase shares of common stock. We received gross proceeds of approximately $6.8 million from the offering, before deducting placement agent fees and offering expenses.

Our outstanding shares of Series B Preferred Stock and Series B Preferred Stock contain anti-dilution provisions that may result in the reduction of the conversion price thereof in the future. This feature may result in an indeterminate number of145,161 shares of common stock, being issued upon conversion ofwhich the Series B Convertible Preferred Stock orunderwriter exercised in full. In connection with the Series C Convertible Preferred Stock. In addition, The Series B Convertible Preferred Stock provides foroffering, we granted to the payment of dividends in cash or in shares of our common stock, and we may not be ableunderwriter a compensation warrant to pay such dividends in cash, which will require uspurchase up to have111,290 shares of common stock available to paywith an exercise price of $10.23 per share and which are exercisable for five years from February 3, 2021, the dividend. Salesdate of additional shares of common stock issuable upon conversioneffectiveness of the Series B Convertible Preferred Stock or Series C Convertible Preferred stock as a result of anti-dilution adjustments or on the Series B Preferred Stock as dividends on the Series B Preferred Stock will dilute the interests of other security holders and may depress the price of our common stock. Accordingly, we may find it more difficult to raise additional equity capital while any of our Series B Convertible Preferred Stock or Series C Convertible Preferred Stock is outstanding.

On March 21, 2017, we paid down the remaining $1.2 million balance under our Loan and Security Agreement (the “Loan Agreement”), dated as of October 23, 2013, with Hercules Technology Growth Capital, Inc. (“Hercules”). All liens and other security interests granted to Hercules by us and our subsidiariesregistration statement filed in connection with the Loan Agreementoffering. Our net proceeds from the offering, after giving effect to the exercise of the underwriter’s over-allotment option, were terminated upon such payment.approximately $18.9 million, after deducting underwriting discounts and commissions and payment of other estimated expenses associated with the offering, but excluding the proceeds, if any, from the exercise of Series G Warrants sold in the offering.

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Nine months ended September 30, 20172021 compared to the nine months ended September 30, 20162020

General. At September 30, 2017,2021, we had cash and cash equivalents of $4,765,000,$13,059,000, as compared to $7,516,000$12,645,000 as of December 31, 2016.2020. 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.

For the nine months ended September 30, 2017,2021, net cash used in our operating activities increased $742,000by $3,428,000 to $6,356,000,$10,309,000, from $5,614,000 in$6,881,000 during the same period in 2016.2020. The primary reason for the increase in cash used in our operating activities was an increase of $2,123,000 in payments for third party related expenses and for professional services (primarily due to the commencement of $1,201,000 including the end of term charge of $520,000 to Hercules, from $3,833,000 to $5,034,000. ThisC-Guardians study and an increase in cash used in operating activities was partially offset bypremium payments of our Directors’ and Officers’ Liability Insurance and an increase of $351,000$1,267,000 in payments receivedcompensation costs paid during the nine months ended September 30, 2021, from customers from $1,421,000$4,601,000 in the nine months ended September 30, 20162020 to $1,772,000 in$5,868,000 during the same period in 20172021 as well as a decrease of $108,000$38,000 in salary payments received from $3,202,000 in the nine months ended September 30, 2016customers, to $3,094,000 in the same period in 2017.

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Cash used by our investing activities was $282,000$2,561,000 during the nine months ended September 30, 2017, resulting primarily2021, from the purchase of production equipment, compared to $81,000 of cash provided$2,599,000 during the same period in 2016 resulting primarily2020.

Cash used in our investing activities was $24,298,000 during the nine months ended September 30, 2021, compared to $83,000 during the nine months ended September 30, 2020. The primary reasons for the increase in cash used by our investing activities were an investment of $24,000,000 in short term bank deposits, an increase of $211,000 in payments made for purchase of property, plant and equipment to $237,000 during the nine months ended September 30, 2021, from $26 during the receipt of cash previously funded to employee retirement funds.same period in 2020.

Cash provided by financing activities for the nine months ended September 30, 20172021, was $3,883,000,$35,034,000, compared to $12,756,000$12,327,000 during the same period in 2016.2020. The principal sourcesources of the cash provided by financing activities during the nine months ended September 30, 2017, was the funds received from2021 were our March 2017February 2021 public offering of preferredcommon stock and warrants, exercise of Series F and Series G warrants, proceeds from an At-the-market offering as well as proceeds from the issuance of shares to Chinese distributor that resulted in approximately $6,072,000$35,034,000 of aggregate net proceeds, offset by loan repayments of $2,179,000.proceeds. The principal sourcesources of the cash provided by financing activities during the nine months ended September 30, 2016 was the funds received from the issuance2020 were our June 2020 public offering of preferredcommon stock, pre-funded warrants and warrants, the subsequent exercise of the pre-funded warrants sold in a publicthe offering, closed on July 7, 2016, as well issuanceas exercise of sharesour Series F warrants and warrantsunit purchase options that resulted in a concurrent public offering and private placement closed on March 21, 2016, for approximately $14,424,000$12,327,000 of aggregate net proceeds, offset by loan repayments of $1,651,000.proceeds.

As of September 30, 2017,2021, our current assets exceeded our current liabilities by a multiple of 2.3.10.8. Current assets decreasedincreased by $2,439,000$24,752,000 during the period and current liabilities decreasedincreased by $2,055,000$15,000 during the period. As a result, our working capital decreasedincreased by $384,000$24,737,000 to $3,432,000 at$36,371,000 as of September 30, 2017.2021.

Off Balance Sheet Arrangements

We have no off-balance sheet transactions, arrangements, obligations (including contingent obligations), or other relationships with unconsolidated entities or other persons that have, or may have, a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Recent Accounting Pronouncements

See Note 3 – “Recently Issued Accounting Pronouncements” in the accompanied financial statements.

Factors That May Affect Future Operations

We believe that our future operating results will continue to be subject to quarterly variations based upon a wide variety of factors, including the impact of the COVID-19 pandemic, cyclical nature of the ordering patterns of our distributors, timing of regulatory approvals, the implementation of various phases of our clinical trials and manufacturing efficiencies due to the learning curve of utilizing new materials and equipment. Our operating results could also be impacted by a weakening of the Euro and strengthening of the New Israeli Shekel, or NIS, both against the U.S. dollar. Lastly, other economic conditions we cannot foresee may affect customer demand, such as individual country reimbursement policies pertaining to our products. For a discussion of these and other risks that relate to our business, you should carefully review the risks and uncertainties described under the heading “Part II – Item 1A. Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2016,2020, and those described from time to time in our future reports filed with the Securities and Exchange Commission.

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The ultimate impact of the COVID-19 pandemic on the Company’s operations remains undetermined and will depend on future developments, which are highly uncertain and cannot be predicted with confidence at this time, including the duration of the COVID-19 pandemic, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that regulators, or the board or management of the Company, may determine are needed.

Contractual Obligations and Commitments

During the nine months ended September 30, 2017,2021, there were no material changes to our contractual obligations and commitments.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicableapplicable.

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Item 4. Controls and Procedures

Management’s Conclusions Regarding Effectiveness of Disclosure Controls and Procedures

As of September 30, 2017,2021, we conducted an evaluation, under the supervision and participation of management including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended). There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Based upon this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective at the reasonable assurance level as of September 30, 2017.2021.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the fiscal quarter ended September 30, 2017,2021, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may be involved in litigation that arises through the normal course of business.

On April 26, 2016, Microbanc, LLC and Todd Spenla of Microbanc, LLC filed suit in the New York State Supreme Court (New York County) against us asserting claims for breach of agreement, quantum meruit, unjust enrichment and fraud and seeking approximately $2.2 million and 9% of the amount of stock and warrants sold in 2011 and 2012 in alleged damages relating to certain alleged finders’ fees that they claim are owed. We removed the suit to federal court and filed a motion to dismiss all claims on June 30, 2016. By Order dated February 23, 2017, the U.S. District Court for the Southern District of New York granted our motion to dismiss the suit in its entirety. Microbanc, LLC and Todd Spenla had until March 16, 2017, to file a motion for application for leave to replead its claims for breach of contract. On March 16, 2017, Microbanc, LLC filed a motion for leave to file an amended complaint to replead all claims and to substitute Estate of Todd Spenla for the deceased plaintiff, Todd Spenla. WeThere have opposed this motion, which remains pending before the district court. On April 14, 2017, James D. Burchetta filed a motion to intervene as a plaintiff. On April 19, 2017, the court granted our request for an adjournment of this motion to intervene, pending resolution of Microbanc, LLC’s motion for leave to file the amended complaint and to substitute the Estate of Todd Spenla for the deceased plaintiff, Todd Spenla. We intend to contest the matter vigorously. Due to the uncertainties of litigation, however, we can give no assurance that we will prevail on any claims made against us in any such lawsuit. Also, we can give no assurance that any other lawsuits or claims brought in the future will not have an adverse effect on our financial condition, liquidity or operating results.

On July 12, 2016, Medpace Inc., a former service provider, filed suit with the Court of Common Pleas, Hamilton County, Ohio, against us asserting that we breached a master services agreement with Medpace Inc. by failing to pay Medpace Inc. certain fees purportedly owed to it in connection with Medpace Inc.’s provision of certain clinical development program services to Inspire Ltd. We have removed the suit to the U.S. District Court for the Southern District of Ohio. Since removal, Medpace Inc. has amended its complaint to name InspireMD Ltd., our wholly owned subsidiary, as the only defendant. Medpace Inc. is seeking $1,967,822 in damages plus interest, costs, attorneys’ fees and expenses against InspireMD Ltd. InspireMD Ltd. filed a motion to dismiss all claims on February 10, 2017. On May 17, 2017, the district court denied InspireMD’s motion to dismiss, but ordered Medpace Inc. to file a second amended complaint by June 5, 2017. Medpace Inc. filed a second amended complaint on June 5, 2017, and InspireMD again moved to dismiss all claims on June 19, 2017. That motion is fully briefed and awaits resolution in the district court. InspireMD Ltd. intends to contest this matter vigorously. Due to the uncertainties of litigation, however, we can give no assurance that InspireMD Ltd. will prevail on any claims made against InspireMD Ltd. in any such lawsuit. Also, we can give no assurance that any other lawsuits or claims brought in the future will not have an adverse effect on our financial condition, liquidity or operating results.

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Item 1A. Risk Factors

During the fiscal quarter ended September 30, 2017, there werebeen no material changes to the risk factors disclosedour legal proceedings as described in Part“Part I, Item 1A of the3. Legal Proceedings” in our Annual Report on Form 10-K filed with the SEC on March 8, 2021.

Item 1A. Risk Factors

Except for the year ended December 31, 2016, underRisk Factors included in our previous filings made with the heading “Risk Factors” other than the description ofSEC, there have been no material changes to our risk factors set forthfrom those disclosed in Part II,“Part I. Item 1A of1A. Risk Factors” in the Quarterly ReportForm 10-K filed with the SEC on Form 10-Q for the period ended March 31, 2017. Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described below, any one or more of which could, directly or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results and stock price.8, 2021.

Item 5. Other Information

Not applicableOn November 8, 2021, we entered into an amendment to the employment agreement of our chief executive officer, Marvin Slosman, dated December 9, 2019, pursuant to which we agreed to remove the definitive term of his employment such that his employment agreement shall expire if and when terminated by either party pursuant to the terms thereof.

On November 4, 2021, we entered into an amendment to the amended and restated employment agreement of our chief financial officer, chief administrative officer, secretary and treasurer, Craig Shore, dated May 5, 2014, as amended on January 5, 2015, July 25, 2016, March 25, 2019 and on August 14, 2020, pursuant to which we agreed to remove the definitive term of his employment such that his employment agreement shall expire if and when terminated by either party pursuant to the terms thereof.

Item 6. Exhibits

See Index to Exhibits.EXHIBIT INDEX

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Exhibit No.INSPIREMD, INC.Description
Date: November 7, 20173.1By:/s/ James Barry, Ph.D.
Name: James Barry, Ph.D
Title:President and Chief Executive Officer
Date: November 7, 2017By:/s/ Craig Shore
Name:Craig Shore
Title:Chief Financial Officer, Secretary and Treasurer

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EXHIBIT INDEX

Exhibit No.Description
3.1Amended and Restated Certificate of Incorporation, as amended through September 30, 2015 (incorporated by reference to Exhibit 3.1 to Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2015)
3.2Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to Current Report on Form 8-K filed with the Securities and Exchange Commission on April 1, 2011)June 29, 2021)
3.3Certificate of Designation, Preferences and Rights of Series A Preferred Stock (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed with the Securities and Exchange Commission on October 25, 2013)
3.4Certificate of Amendment to Amended and Restated Certificate of Incorporation of InspireMD, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on May 25, 2016)
3.5Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (incorporated by reference to Exhibit 3.5 to the Quarterly Report on Form 10-Q filed on August 9, 2016)
3.6Certificate of Amendment to Amended and Restated Certificate of Incorporation of InspireMD, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on September 29, 2016)
3.73.6Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on March 15, 2017)
4.13.7FormCertificate of CommonAmendment to Certificate of Designation of Preferences, Rights and Limitation of Series C Convertible Preferred Stock Certificate (incorporated by reference to Exhibit 4.1 to Amendment No. 3 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 5, 2013)
4.2Rights Agreement dated as of October 22, 2013 between InspireMD, Inc. and Action Stock transfer Corporation, as Rights Agent, including exhibits thereto (incorporated by reference to an exhibit to the Registration Statement on Form 8-A filed with Securities and Exchange Commission on October 25, 2013)
4.3Form of Series B Warrant Agent Agreement and Form of Series B Warrant (incorporated by reference to Exhibit 4.3 to Amendment No.3 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 6, 2017)
4.4Form of Series C Warrant Agent Agreement and Form of Series C Warrant (incorporated by reference to Exhibit 4.4 to Amendment No.3 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 6, 2017)
10.1

First Amendment to Nonqualified Stock Option Agreement dated November 16, 2011, by and between InspireMD, Inc. and Sol Barer, dated as of June 2, 2017 (incorporated by reference to Exhibit 10.13.1 to the Current Report on Form 8-K filed on June 2,November 29, 2017)

10.212 

3.8

FirstCertificate of Amendment to NonqualifiedCertificate of Designation of Preferences, Rights and Limitation of Series B Convertible Preferred Stock Option Agreement dated March 31, 2015, by and between InspireMD, Inc. and Sol Barer, dated as of June 2, 2017 (incorporated by reference to Exhibit 10.23.1 to the Current Report on Form 8-K filed on June 2,December 12, 2017)

10.3 

3.9FirstCertificate of Amendment to Nonqualified Stock Option Agreement dated June 30, 2015, byAmended and betweenRestated Certificate of Incorporation of InspireMD, Inc. and Sol Barer, dated as of June 2, 2017 (incorporated by reference to Exhibit 10.33.1 to the Current Report on Form 8-K filed on June 2, 2017)February 7, 2018)

10.4

3.10FirstCertificate of Amendment to Nonqualified Stock Option Agreement dated September 30, 2015, byAmended and betweenRestated Certificate of Incorporation of InspireMD, Inc. and Sol Barer, dated as of June 2, 2017 (incorporated by reference to Exhibit 10.43.1 to the Current Report on Form 8-K filed on June 2, 2017)March 28, 2019)

10.5

3.11Certificate of Amendment to Amended and Restated Certificate of Incorporation of InspireMD, Inc., dated April 14, 2021 (incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q filed on May 10, 2021)
10.1*+First Amendment to Nonqualified Stock OptionEmployment Agreement, dated June 30, 2016,November 8, 2021, by and between InspireMD, Inc. and Sol Barer, dated as of June 2, 2017 (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed on June 2, 2017)Marvin Slosman.

10.6
10.2*+FirstFifth Amendment to Nonqualified Stock OptionAmended and Restated Employment Agreement, dated December 7, 2016,November 4, 2021, by and between InspireMD, Inc. and Sol Barer, dated as of June 2, 2017 (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed on June 2, 2017)Craig Shore
31.1*Certification of PrincipalChief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.2002
31.2*Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.2002
32.1*Certification of PrincipalChief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.2002
32.2*Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.2002
101*The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017,2021, formatted in inline XBRL (eXtensible Business Reporting Language), (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Cash Flows, and (v) the Notes to the Condensed Consolidated Financial Statements
101.INSInline XBRL Instance Document
101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104*Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

* Filed herewith.

+ Management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

INSPIREMD, INC.
Date: November 8, 2021By:/s/ Marvin Slosman
Name:Marvin Slosman,
Title:President and Chief Executive Officer
(Principal Executive Officer)
Date: November 8, 2021By:/s/ Craig Shore
Name:Craig Shore
Title:

Chief Financial Officer, Secretary and Treasurer

(Principal Financial and Accounting Officer)

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