United States securities and exchange commission logo
January 27, 2021
Dagi Ben-Noon
Chief Executive Officer
Inspira Technologies OXY B.H.N. Ltd
2 Ha-Tidhar St.,
Ra anana, 436650
Israel
Re: Inspira
Technologies OXY B.H.N. Ltd
Draft Registration
Statement on Form F-1
Submitted December
29, 2020
CIK No. 0001837493
Dear Mr. Ben-Noon:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form F-1
Prospectus Summary
Our Company, page 1
1. We note your statement
here, on page 66 and on page 73 that the mortality rate for
patients on MV was
approximately 50% and that as a result of the COVID-19 pandemic,
the mortality rate for
patients on MV is estimated to have increased to 70%. Please revise
your disclosure to
provide the bases for these claims.
2. We note your statement
on page 1 that your AXT system has the potential to reduce
patients' length of
stay in ICU, rehabilitation period in the hospital and re-admission rate.
Dagi Ben-Noon
FirstName LastNameDagi
Inspira Technologies OXYBen-Noon
B.H.N. Ltd
Comapany
January 27,NameInspira
2021 Technologies OXY B.H.N. Ltd
January
Page 2 27, 2021 Page 2
FirstName LastName
We further note your disclosures on page 2 highlighting ease of use
and affordability.
Please balance these claims by explaining that your product candidate
remains in
development, has not been tested in humans, and is not cleared or
approved by FDA or
similar foreign regulatory bodies. To the extent that claims are
supported by pre-clinical
data or some other basis, please clarify.
3. Please revise the final paragraph on page 1 to clarify whether/when
you developed a
prototype of the AXT system. Given your disclosure concerning the
development and
design work that remains to be completed, please tell us whether the
graphic on page 71
depicts a prototype and whether that product was used in the
pre-clinical studies cited on
pages 73-74.
Implications of Being an Emerging Growth Company, page 4
4. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
Use of Proceeds, page 49
5. Please revise your disclosure to include the meaning of the phrase
"product integration."
Please also revise to include (i) whether the net proceeds of the
offering will be sufficient
to fund the purposes listed in this section and (ii) if a material
amount of other funds is
necessary, the amount necessary and sources of such other funds.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Critical Accounting Policies and Estimates
Share-based compensation , page 60
6. Please revise your disclosure to provide an analysis of the
uncertainties associated with
the methods, assumptions and estimates underlying your accounting
policy for share-
based compensation to provide greater insight into the quality and
variability of
information regarding your financial condition and operating
performance. In doing so,
please
Clarify how the volatility rate used in your option pricing model
was established. If
the 50% rate disclosed on page F-44 was based on similar companies
stock
volatility, please tell us the companies that formed the basis for
it, and explain what
makes such companies similar and comparable. Tell us about any
limitations or
uncertainties over that comparability. Refer to paragraph 47(a) of
IFRS 2, and
expand your disclosures within Note 2 of your financial statements
as well, as
applicable.
Clarify what you mean by the statement that the share price is
determined according
to the last known closing price of your Ordinary Shares at the
grant date. Clarify
your disclosure that states that your shares started trading on a
stock exchange in
Dagi Ben-Noon
FirstName LastNameDagi
Inspira Technologies OXYBen-Noon
B.H.N. Ltd
Comapany
January 27,NameInspira
2021 Technologies OXY B.H.N. Ltd
January
Page 3 27, 2021 Page 3
FirstName LastName
February 2011 given that you disclosed elsewhere in the document
that you were
incorporated in Israel in 2018.
7. Once you have an estimated offering price or range, please explain to
us how you
determined the fair value of the common stock underlying your equity
issuances, and the
reasons for any differences between the recent valuations of your
common stock leading
up to the initial public offering and the estimated offering price.
This information will help
facilitate our review of your accounting for equity issuances
including stock compensation
and beneficial conversion features. Please discuss with the staff how
to submit your
response.
Business
Industry Overview, page 68
8. We note your statement that it is believed that millions of additional
American adults
suffer from COPD but have not been diagnosed and are not being
treated. Please revise
your disclosure to clarify the source for this statement as well as
other similar statements,
including, without limitation, the following ones:
More than half of patients are placed on mechanical ventilators
within the first 24
hours of their admission to the ICU.
Recent data states that 18-69 hours of complete diaphragmatic
inactivity associated
with MV decreases cross-sectional areas of diaphragmatic fibers
by more than 50%
and that MV may affect the regulation of the respiratory center.
Total hospital stay costs for each patient admitted to ICU may
reach approximately
$148,000.
Currently Available Respiratory Support Solutions and Their Limitations, page
68
9. We note your statements in Table 1 and Table 2 regarding the
advantages of AXT
compared to mechanical ventilation. Given the current state of
development of the AXT
system, please explain to us why it is appropriate for you to state
that the AXT system has
competitive advantages over FDA-approved treatments. Please also
revise your
disclosure to (i) clarify, if true, that any potential benefits of the
AXT system as compared
to MV have yet to be observed in human trials and (ii) discuss any
detriments related to
the AXT system. Please also revise Table 2 to clarify which products
or treatments are
being compared to the AXT system.
Market Opportunity, page 73
10. Please provide us with the sources for your claims in the second
paragraph on page 73
including:
the prevalence of COPD is estimated to range between 7% and 19%;
3 million people are estimated to be suffering from acute
respiratory distress
syndrome annually;
the U.S. Health Organization statement that the growing number of
people suffering
Dagi Ben-Noon
FirstName LastNameDagi
Inspira Technologies OXYBen-Noon
B.H.N. Ltd
Comapany
January 27,NameInspira
2021 Technologies OXY B.H.N. Ltd
January
Page 4 27, 2021 Page 4
FirstName LastName
from respiratory problems could trigger an "economic tsunami";
and
the hospital admission and cost numbers discussed in the
paragraph.
Pre-Clinical Data and Results, page 75
11. Please revise your description of Table 3 to clarify whether each row
represents an
individual pig or refers to the results of a pre-clinical study.
Production and Manufacturing, page 76
12. Your disclosure on page 15 indicates that you are reliant on a limited
number of suppliers,
including sole and single-source suppliers. Please revise your
disclosure in this section to
discuss your manufacturing process in more detail, including any
reliance on sole and
single-source suppliers and the availability of alternative sources of
supply.
Research and Development and Governmental Grants, page 76
13. Your disclosure on page 38 and in the notes to your financial
statements appears to
indicate that the total amount of the grants received are "linked to
the U.S. dollar and
bearing interesting at an annual rate of LIBOR applicable to U.S.
dollar deposits." Please
revise your disclosure in this section, and elsewhere in the document
as appropriate, to
clarify whether the total amount of the grant that must be repaid
through royalties will
increase until repayments begin. Please also file the grant agreement
as an exhibit to your
registration statement or explain to us why it is not required to be
filed.
Management
Executive Compensation, page 85
14. We note that you present executive compensation on an aggregate basis.
However, your
disclosure on page 35 indicates that the Israeli Companies Law
requires you to disclose
the annual compensation of your senior officers on an individual
basis. Accordingly,
please present the executive compensation of your directors and senior
officers on an
individual basis, or advise. Refer to Part I, Item 6.B. of Form 20-F
(incorporated by
reference into Form F-1).
Related Party Transactions
Shareholders Loans, page 105
15. We note your discussions of the IPO deed among you, InSense Medical
Pty Ltd. ("IML"),
the Founders and Newburyport Partners Pty Ltd. We note that at the
time of this
agreement, based on disclosure elsewhere in the prospectus, you were
named Insense
Medical Ltd. We further note that IML is listed as one of your 5%
shareholders on page
104. Please revise your disclosure to clarify the nature of the
relationship between you and
IML including whether (i) the references to IML on pages 105-106 are
actually a
reference to you or to a subsidiary and (ii) both you and IML have the
same shareholders.
Dagi Ben-Noon
FirstName LastNameDagi
Inspira Technologies OXYBen-Noon
B.H.N. Ltd
Comapany
January 27,NameInspira
2021 Technologies OXY B.H.N. Ltd
January
Page 5 27, 2021 Page 5
FirstName LastName
16. Please revise to explain briefly why you did not conduct the initial
public offering on the
Australian Securities Exchange.
Description of Share Capital, page 107
17. We note your statement that you issued 27,795,209 ordinary shares to
"Inspira
Technologies Limited". Please revise your disclosure to indicate
whether this is a
reference to the shares issued to IML and Newburyport discussed on
page 106 or if your
disclosure on page 107 refers to a separate issuance of shares.
Audited Financial Statements for the Years Ended December 31, 2019
Statements of Comprehensive Loss, page F-6
18. You indicate that the number of shares in your statements of
comprehensive loss have
been restated based on rights issuance according to subsequent event
note. Please
include disclosure in Notes 9.B on page F-24 and 3.B on page F-42 in
quantified detail
regarding the transaction you are adjusting for, to include your
calculations of the
weighted average number of outstanding shares used in your loss per
share calculation.
Please tell us why the basic EPS and diluted EPS is the same on the
face of your
unaudited condensed interim statements of comprehensive income on page
F-36, in light
of the fact that you have options outstanding at June 30, 2020, and
revise your
presentation as appropriate. If the options are not included in the
calculation of
diluted earnings per share because they are antidilutive, the amount
and nature of the
instruments excluded should be disclosed in Note 3.B on page F-42 in
accordance with
paragraph 70(c) of IAS 33. Please assure that this note presents
information for the six
months periods ended on June 30, 2020 and 2019. Please ask your
independent auditor to
revise its report on page F-3 to reference the retroactive adjustment
to the number of
shares disclosed in your audited financial statements.
Notes to Financial Statements
Note 2 - Significant Accounting Policies
Share Based Compensation, page F-16
19. We note your disclosure explaining that where equity instruments are
granted to persons
other than employees, the statement of comprehensive loss is charged
with the fair value
of goods and services received. We also note your disclosure in the
notes to the unaudited
condensed interim financial statements on page F-44 that states that
"Since the service
providers are not employees, the fair value at the grant date was not
determined in
accordance with services provided but rather in accordance with the
options fair value."
Please revise to address the following:
Reconcile the apparent inconsistencies between these disclosures.
Explain to us how your accounting policy for recording instruments
granted to non-
employees complies with IFRS 2. Specifically clarify the extent to
which you were
able to reliably estimate the fair value of the goods or services
received in your
Dagi Ben-Noon
Inspira Technologies OXY B.H.N. Ltd
January 27, 2021
Page 6
response as well as in your revised disclosure.
Please identify the method of settlement, e.g. cash or equity in
your accounting policy
disclosure for all of your significant share based awards. Revise
your disclosures on
page F-16 to clarify as applicable.
Note 3 - Critical accounting estimates and judgments, page F-20
20. Please revise to specify the convertible loan issuances you refer to in
this note. Please
explain, with reference to authoritative literature, how you accounted
for your convertible
loan issuances, including subsequent modifications, referencing the
accounting principle
that was used and how it was applied. Revise your critical accounting
estimates section in
the MD&A to provide an analysis of the uncertainties associated with the
methods,
assumptions and estimates underlying your accounting policy for
convertible loan
issuances to provide greater insight into the quality and variability of
information
regarding your financial condition and operating performance, or direct
us to existing
disclosures.
Unaudited Condensed Interim Financial Statements
Notes to the Unaudited Condensed Interim Financial Statements
Note 17 - Subsequent Events, page F-31
21. We note that on December 20, 2020 you entered into a simple agreement for
future equity
(SAFE) and raised $2.6 million from this equity financing. Please
explain, with reference
to authoritative literature, how you accounted for the elements of this
transaction.
General
22. Please revise your prospectus to identify the underwriter(s) of the
offering.
You may contact Ibolya Ignat at (202) 551-3636 or Kevin Vaughn at (202)
551-3494 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Alan Campbell at (202) 551-4224 or Joe McCann at (202) 551-6262 with
any other
questions.
Sincerely,
FirstName LastNameDagi Ben-Noon
Division of
Corporation Finance
Comapany NameInspira Technologies OXY B.H.N. Ltd
Office of Life
Sciences
January 27, 2021 Page 6
cc: David Huberman, Esq.
FirstName LastName