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What changed in InspireMD, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of InspireMD, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+409 added−418 removedSource: 10-K (2023-12-31) vs 10-K (2022-12-31)

Top changes in InspireMD, Inc.'s 2023 10-K

409 paragraphs added · 418 removed · 288 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

116 edited+43 added−43 removed97 unchanged
Biggest changeOne of the measurements is called PSV (peak systolic volume) and is known to be highly correlated to the degree of in-stent restenosis; PSV values higher than 300 cm/sec are indicative of >70% stenosis, while PSV values lower than 104 cm/sec are indicative of The conclusions of the CARENET trial were: ● The CARENET trial demonstrated safety of the CGuard EPS stent, with a 30 day MACCE rate of 0%. ● Incidence of new ipsilateral lesions (percent of patients with new lesions on the ipsilateral side (same side where the stent was employed)) at 48 hours was reduced by almost half compared to published data, and volume was reduced almost tenfold. ● All but one lesion had resolved completely by 30 days. ● Twelve month data showed no stroke or stroke-related deaths, and no cardiac adverse events. ● Five year data showed no ipsilateral stroke or ipsilateral stroke-related deaths, and no stent restenosis or external carotid artery occlusion occurred in CARENET by 5 years, indicating normal healing and uncompromised side-branch patency. ● CGuard EPS offers enhanced benefits for patients undergoing CAS with unprecedented safety.
Biggest changeOne of the measurements is called PSV (peak systolic volume) and is known to be highly correlated to the degree of in-stent restenosis; PSV values higher than 300 cm/sec are indicative of >70% stenosis, while PSV values lower than 104 cm/sec are indicative of The conclusions of the CARENET trial were: ● The CARENET trial demonstrated safety of the CGuard EPS stent, with a 30 day MACCE rate of 0%. ● Incidence of new ipsilateral lesions (percent of patients with new lesions on the ipsilateral side (same side where the stent was employed)) at 48 hours was reduced by almost half compared to published data, and volume was reduced almost tenfold. ● All but one lesion had resolved completely by 30 days. ● Twelve-month data showed no stroke or stroke-related deaths, and no cardiac adverse events. ● Five-year data showed no ipsilateral stroke or ipsilateral stroke-related deaths, and no stent restenosis or external carotid artery occlusion occurred in CARENET by 5 years, indicating normal healing and uncompromised side-branch patency. ● CGuard EPS offers enhanced benefits for patients undergoing CAS with unprecedented safety. -10- Physician-Sponsored Clinical Trials for CGuard—PARADIGM-101 and PARADIGM -500 Studies PARADIGM-101 ( P rospective evaluation of A ll-comer pe R cutaneous c A roti D revascularization I n symptomatic and increased-risk asymptomatic carotid artery stenosis, using C G uard™ M esh-covered embolic prevention stent system-101) was an investigator-led, single center study with the objective of evaluating feasibility and outcome of routine use of CGuard EPS in 101 consecutive unselected all-comer patients referred for carotid revascularization, initiated in 2015.
CGuard EPS – Carotid Artery Applications Our CGuard EPS combines our MicroNet mesh and a self-expandable nitinol stent (a stent that expands without balloon dilation pressure or need of an inflation balloon) in a single device for use in carotid artery applications.
CGuard – Carotid Artery Applications Our CGuard EPS combines our MicroNet mesh and a self-expandable nitinol stent (a stent that expands without balloon dilation pressure or need of an inflation balloon) in a single device for use in carotid artery applications.
The composite index will be compared to a performance goal based on the observed rate of the two components of the primary endpoint from previous pivotal stent trials which are considered industry standard.
The composite index will be compared to a performance goal based on the observed rate of the two components of the primary endpoint from previous pivotal stent trials which are considered industry standard.
CGuard Prime Delivery System The CGuard Prime™ System is a mesh-covered self-expanding carotid stent that is loaded into a transfemoral rapid exchange (Rx) delivery system that we are developing and that is subject to regulatory approval.
CGuard Prime Stent System The CGuard Prime stent system is a mesh-covered self-expanding carotid stent that is loaded into a transfemoral rapid exchange (Rx) delivery system that we are developing and that is subject to regulatory approval.
Only one symptomatic patient had two new ischaemic brain lesions (1 ipsilateral and 1 contralateral). CGUARD Mesh-Covered Stent in Real World: The IRON-Guard Registry “CGUARD Mesh-Covered Stent in Real World: The IRON-Guard Registry using CGuard EPS” was a physician initiated prospective multi-center registry that included 200 patients from 12 medical centers in Italy.
Only one symptomatic patient had two new ischaemic brain lesions (1 ipsilateral and 1 contralateral). -12- CGUARD Mesh-Covered Stent in Real World: The IRON-Guard Registry “CGUARD Mesh-Covered Stent in Real World: The IRON-Guard Registry using CGuard EPS” was a physician initiated prospective multi-center registry that included 200 patients from 12 medical centers in Italy.
In the United States, we may be subject to the oversight of FDA, Office of the Inspector General within the Department of Health and Human Services (OIG), the Center for Medicare/Medicaid Services (CMS), the Department of Justice (DOJ), in addition to others. We supply products that may be reimbursed by federally funded programs such as Medicare.
In the United States, we may be subject to the oversight of FDA, Office of the Inspector General within the Department of Health and Human Services (OIG), the Center for Medicare and Medicaid Services (CMS), the Department of Justice (DOJ), in addition to others. We supply products that may be reimbursed by federally funded programs such as Medicare.
The healthcare laws that may be applicable to our business or operations include, but are not limited to: ● The federal Anti-Kickback Statute, which prohibits a person from knowingly and willfully offering, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, in return for or to induce referring or recommending an individual to another person to receive items or services or to purchase, lease, order, or arrange for any good, facility, item or service payable in whole or in part under a Federal health care program; ● Federal false claims laws and civil monetary penalty laws, including the False Claims Act, prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other government healthcare programs that are false or fraudulent, or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
The healthcare laws that may be applicable to our business or operations include, but are not limited to: ● The federal Anti-Kickback Statute, which prohibits a person from knowingly and willfully offering, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, in return for or to induce referring or recommending an individual to another person to receive items or services or to purchase, lease, order, or arrange for any good, facility, item or service payable in whole or in part under a Federal health care program; -26- ● Federal false claims laws and civil monetary penalty laws, including the False Claims Act, prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other government healthcare programs that are false or fraudulent, or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
Where there is a second number shown below after a ± symbol, it indicates the potential error in the measurement. 48 hours n=27 30 days n=26 Subjects with new Acute Ischemic Lesions (“AIL”) 10 1 Incidence of new lesions 37.0 % 4.0 % Total number new AIL 83 1 Avg. number new AIL per patient 3.19 ± 10.33 0.04 ± 0.20 Average lesion volume (cm 3 ) 0.039 ± 0.08 0.08 ± 0.00 Maximum lesion volume (cm 3 ) 0.445 0.116 Permanent AIL at 30 days — 1 -8- The healing process of the tissue and in-stent restenosis can be measured by a non-invasive form of ultrasound called duplex ultrasound.
Where there is a second number shown below after a ± symbol, it indicates the potential error in the measurement. 48 hours n=27 30 days n=26 Subjects with new Acute Ischemic Lesions (“AIL”) 10 1 Incidence of new lesions 37.0 % 4.0 % Total number new AIL 83 1 Avg. number new AIL per patient 3.19 ± 10.33 0.04 ± 0.20 Average lesion volume (cm 3 ) 0.039 ± 0.08 0.08 ± 0.00 Maximum lesion volume (cm 3 ) 0.445 0.116 Permanent AIL at 30 days — 1 The healing process of the tissue and in-stent restenosis can be measured by a non-invasive form of ultrasound called duplex ultrasound.
Key findings from the study are as follows: ● 100% success in implanting CGuard EPS without residual stenosis; ● No peri- or post-procedural complications; ● No deaths, major adverse events, minor or major strokes, or new neurologic symptoms during the six months following the procedure; ● Modified Rankin Scale improved for the symptomatic patients from 1.56 prior to the procedure to 0 afterwards; ● All vessels treated with CGuard EPS remained patent (open) at six months; and ● DW-MRI performed in 19 of 30 patients found no new ipsilateral lesions after 30 days and after six months compared with the baseline DW-MRI studies.
Key findings from the study are as follows: ● 100% success in implanting CGuard EPS without residual stenosis; -11- ● No peri- or post-procedural complications; ● No deaths, major adverse events, minor or major strokes, or new neurologic symptoms during the six months following the procedure; ● Modified Rankin Scale improved for the symptomatic patients from 1.56 prior to the procedure to 0 afterwards; ● All vessels treated with CGuard EPS remained patent (open) at six months; and ● DW-MRI performed in 19 of 30 patients found no new ipsilateral lesions after 30 days and after six months compared with the baseline DW-MRI studies.
Key 30-day results presented were: ● 100% success in implanting CGuard EPS; ● No MI, major stroke or death at 30 days; ● There were two transient ischemic attacks and five periprocedural minor strokes, including one thrombosis solved by surgery. ● Total elimination of post-procedural neurologic complications by 30 days; ● DW-MRI performed pre-procedure and between 24 and 72 hours post-procedure in 61 patients, indicated that 12 patients had new micro emboli (19%). ● At 12 months, there were no new major neurological adverse events, thrombosis or external carotid occlusion recorded; ● One myocardial infarction occurred at 12 months.
Key 30-day results presented were: ● 100% success in implanting CGuard EPS; ● No MI, major stroke or death at 30 days; ● There were two transient ischemic attacks and five periprocedural minor strokes, including one thrombosis solved by surgery. ● Total elimination of post-procedural neurologic complications by 30 days; ● DW-MRI performed pre-procedure and between 24- and 72-hours post-procedure in 61 patients, indicated that 12 patients had new micro emboli (19%). ● At 12-month, there were no new major neurological adverse events, thrombosis or external carotid occlusion recorded; ● One myocardial infarction occurred at 12 months.
A noncomprehensive list of the regulatory requirements that apply to our approved products classified as medical devices include: ● product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action; ● Quality Systems Regulations, which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the development and manufacturing process; -22- ● labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-label use or indication; ● clearance of product modifications that could significantly affect safety or efficacy or that would constitute a major change in intended use of one of our cleared devices (if obtained); ● approval of product modifications that affect the safety or effectiveness of one of our cleared devices (if obtained); ● medical device reporting regulations, which require that manufacturers comply with FDA requirements to report if their device may have caused or contributed to a death or serious injury, or has malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction of the device or a similar device were to recur; ● post-approval restrictions or conditions, including post-approval study commitments; ● post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device; ● the FDA’s recall authority, whereby it can ask, or under certain conditions order, device manufacturers to recall from the market a product that is in violation of governing laws and regulations; ● regulations pertaining to voluntary recalls; and, ● notices of corrections or removals.
A noncomprehensive list of the regulatory requirements that apply to our approved products classified as medical devices include: ● product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action; ● Quality Systems Regulations, which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the development and manufacturing process; -25- ● labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-label use or indication; ● clearance of product modifications that could significantly affect safety or efficacy or that would constitute a major change in intended use of one of our cleared devices (if obtained); ● approval of product modifications that affect the safety or effectiveness of one of our cleared devices (if obtained); ● medical device reporting regulations, which require that manufacturers comply with FDA requirements to report if their device may have caused or contributed to a death or serious injury, or has malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction of the device or a similar device were to recur; ● post-approval restrictions or conditions, including post-approval study commitments; ● post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device; ● the FDA’s recall authority, whereby it can ask, or under certain conditions order, device manufacturers to recall from the market a product that is in violation of governing laws and regulations; ● regulations pertaining to voluntary recalls; and, ● notices of corrections or removals.
At twelve months there were two additional deaths, which were not device or procedure-related resulting in a MACCE rate of 10.7% at one year. 30 days (n=30) 6 months (n=28) 12 months (n=28) MACCE (MI, stroke, death) (0) 0.0 % (1) 3.6 % (3) 10.7 % MI (0) 0.0 % (0) 0.0 % (0) 0.0 % stroke (0) 0.0 % (0) 0.0 % (0) 0.0 % death (0) 0.0 % (1) 3.6 % (3) 10.7 % CAS carries the risk of cerebral embolization during and following the procedure, leading to life-threatening complications, mainly cerebral ischemic events.
At twelve months there were two additional deaths, which were not device or procedure-related resulting in a MACCE rate of 10.7% at one year. -9- 30 days (n=30) 6 months (n=28) 12 months (n=28) MACCE (MI, stroke, death) (0) 0.0 % (1) 3.6 % (3) 10.7 % MI (0) 0.0 % (0) 0.0 % (0) 0.0 % stroke (0) 0.0 % (0) 0.0 % (0) 0.0 % death (0) 0.0 % (1) 3.6 % (3) 10.7 % CAS carries the risk of cerebral embolization during and following the procedure, leading to life-threatening complications, mainly cerebral ischemic events.
It is a second-generation stent with positive patient outcomes demonstrating significant reduction in post-procedural neurological events. Additionally, we intend to continue to evaluate potential product enhancements and manufacturing enhancements for CGuard EPS expected to reduce cost of goods or provide the best-in-class performing delivery system and accessory solutions.
It is a second-generation stent with positive patient outcomes demonstrating significant reduction in post-procedural neurological events. Additionally, we intend to continue to evaluate potential product and manufacturing enhancements for CGuard expected to reduce cost of goods or provide the best-in-class performing delivery system and accessory solutions.
However, while there are currently many market participants in the U.S. carotid stent market, we believe that the European market is somewhat more fragmented for CEA and CAS products, and, in our opinion, smaller competitors may be able to gain market share with greater flexibility and more efficiently than in the United States.
However, while there are currently many market participants in the U.S. carotid stent market, we believe that the European market is somewhat more fragmented for CAS products, and, in our opinion, smaller competitors may be able to gain market share with greater flexibility and more efficiently than in the United States.
Key findings from the study are as follows: ● 100% technical success was achieved in all patients: ● No major adverse events (death, stroke, or myocardial infarction) at 30 days. -12- The SIBERIA Trial for Carotid Artery Stenosis: A Randomized Controlled Trial of Conventional Versus Micronet™-Covered Stent Use in Percutaneous Neuroprotected Carotid Artery Revascularization: Peri-procedural and 30-day Diffusion-Weighted Magnetic Resonance Imaging and Clinical Outcomes (RCT trial) “The SIBERIA Trial for Carotid Artery Stenosis: A Randomized Controlled Trial of Conventional Versus Micronet™-Covered Stent Use in Percutaneous Neuroprotected Carotid Artery Revascularization: Peri-procedural and 30-day Diffusion-Weighted Magnetic Resonance Imaging and Clinical Outcomes” was an investigator-initiated randomized clinical trial, single-center study, which evaluated one hundred patients who qualified for carotid revascularization with high risk for surgery and were randomized 1:1 to either CGuard EPS or Acculink TM .
Key findings from the study are as follows: ● 100% technical success was achieved in all patients: ● No major adverse events (death, stroke, or myocardial infarction) at 30 days. -14- The SIBERIA Trial for Carotid Artery Stenosis: A Randomized Controlled Trial of Conventional Versus Micronet™-Covered Stent Use in Percutaneous Neuroprotected Carotid Artery Revascularization: Peri-procedural and 30-day Diffusion-Weighted Magnetic Resonance Imaging and Clinical Outcomes (RCT trial) “The SIBERIA Trial for Carotid Artery Stenosis: A Randomized Controlled Trial of Conventional Versus Micronet™-Covered Stent Use in Percutaneous Neuroprotected Carotid Artery Revascularization: Peri-procedural and 30-day Diffusion-Weighted Magnetic Resonance Imaging and Clinical Outcomes” was an investigator-initiated randomized clinical trial, single-center study, which evaluated one hundred patients who qualified for carotid revascularization with high risk for surgery and were randomized 1:1 to either CGuard EPS or Acculink TM .
Switchguard SwitchGuard is a Class IIa, non-invasive transcarotid artery revascularization (TCAR) device that we are developing and that is subject to regulatory approval that is composed of medical grade tubing with male Luer lock connectors at each end and an in-line 200-micron blood filter.
Switchguard NPS SwitchGuard NPS is a Class IIa, non-invasive transcarotid artery revascularization (TCAR) device that we are developing and that is subject to regulatory approval that is composed of medical grade tubing with male Luer lock connectors at each end and an in-line 200-micron blood filter.
The PARADIGM-101 study found that CGuard EPS is applicable in up to 90% of all-comer patients with carotid stenosis. -9- PARADIGM-101 was subsequently increased to include 500 consecutive patients with symptomatic or increased stroke risk asymptomatic atherosclerotic carotid stenosis patients. The new study is known as PARADIGM -500.
The PARADIGM-101 study found that CGuard EPS is applicable in up to 90% of all-comer patients with carotid stenosis. PARADIGM-101 was subsequently increased to include 500 consecutive patients with symptomatic or increased stroke risk asymptomatic atherosclerotic carotid stenosis patients. The new study is known as PARADIGM -500.
The first clinical results demonstrate the “One Size Fits All” stent can be implanted in internal carotid arteries with reference diameters within this range. -11- Key findings from the study were as follows: ● 100% technical success in implanting CGuard EPS; ● No neurological events within 30 days; ● The chronic outward force normalized by stent length demonstrated a near-equivalent radial force outcome; and ● The stent displayed only a minor difference between the minimal radial force at 9.0 mm (0.195 N/mm) and the maximal radial force at 5.5 mm (0.330 N/mm).
The first clinical results demonstrate the “One Size Fits All” stent can be implanted in internal carotid arteries with reference diameters within this range. -13- Key findings from the study were as follows: ● 100% technical success in implanting CGuard EPS; ● No neurological events within 30 days; ● The chronic outward force normalized by stent length demonstrated a near-equivalent radial force outcome; and ● The stent displayed only a minor difference between the minimal radial force at 9.0 mm (0.195 N/mm) and the maximal radial force at 5.5 mm (0.330 N/mm).
Safety and Efficacy of the New Micromesh-Covered Stent CGuard in Patients Undergoing Cartoid Artery Stenting: Early Experience From a Single Center “Safety and Efficacy of the New Micromesh-Covered Stent CGuard in Patients Undergoing Carotid Artery Stenting: Early Experience From a Single Center” was an investigator-led, single-center study which evaluated CGuard EPS in 82 consecutive patients.
Safety and Efficacy of the New Micromesh-Covered Stent CGuard in Patients Undergoing Carotid Artery Stenting: Early Experience From a Single Center “Safety and Efficacy of the New Micromesh-Covered Stent CGuard in Patients Undergoing Carotid Artery Stenting: Early Experience From a Single Center” was an investigator-led, single-center study which evaluated CGuard EPS in 82 consecutive patients.
We are seeking strategic partners for collaborative research, development, marketing, distribution, or other agreements, which could assist with our development and commercialization efforts for CGuard EPS and other potential products that are based on our MicroNet technology.
We are seeking strategic partners for collaborative research, development, marketing, distribution, or other agreements, which could assist with our development and commercialization efforts for CGuard and other potential products that are based on our MicroNet technology.
We are pursuing the following business strategies to achieve this objective. ● Widen the adoption of CGuard EPS . We are seeking to expand the population of CGuard EPS patients in those countries in which CGuard EPS is commercially available.
We are pursuing the following business strategies to achieve this objective. ● Widen the adoption of CGuard . We are seeking to expand the population of CGuard patients in those countries in which CGuard is commercially available.
Our CGuard™ carotid embolic prevention system (“CGuard EPS™”) combines MicroNet and a unique self-expandable nitinol stent in a single device for use in carotid artery revascularization. Our CGuard EPS originally received CE mark approval under Medical Device Directive 93/42/EEC (“MDD”) in the European Union (“EU”) in March 2013 and was fully launched in Europe in September 2015.
Our CGuard™ carotid embolic prevention system (“CGuard EPS”) combines MicroNet and a unique self-expandable nitinol stent in a single device for use in carotid artery revascularization. Our CGuard EPS originally received CE mark approval under Medical Device Directive 93/42/EEC (“MDD”) in the European Union (“EU”) in March 2013 and was fully launched in Europe in September 2015.
Under MDFUMA, PMAs (and supplemental PMAs) are subject to significantly higher user fees than 510(k) applications, and they also require considerably more time and resources. The FDA decides whether a device line must undergo either the 510(k) clearance or premarket approval based on statutory criteria that utilize a risk-based classification system.
Under MDUFMA, PMAs (and supplemental PMAs) are subject to significantly higher user fees than 510(k) applications, and they also require considerably more time and resources. The FDA decides whether a device line must undergo either the 510(k) clearance or premarket approval based on statutory criteria that utilize a risk-based classification system.
Before a premarket approval application is submitted, a manufacturer must apply for an Investigational Device Exemption (IDE) to conduct clinical trials.
Before a premarket approval application is submitted, a manufacturer must generally apply for an Investigational Device Exemption (IDE) to conduct clinical trials.
The federal Civil Monetary Penalties Law prohibits, among other things, the offering or transferring of remuneration to a Medicare or Medicaid beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular supplier of Medicare or Medicaid payable items or services; ● The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which includes provisions that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, and for knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and its implementing regulations, also imposes obligations and requirements on healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates that perform certain services for them that involve the use or disclosure of individually identifiable health information, with respect to safeguarding the privacy and security of certain individually identifiable health information; ● The federal transparency requirements under the Affordable Care Act, including the provision commonly referred to as the Open Payments Act or Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid or Children’s Health Insurance Program to report annually to Centers for Medicare and Medicaid Services, or CMS, information related to payments and other transfers of value to physicians and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members; and ● Analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may be broader in scope and apply to referrals and items or services reimbursed by both governmental and non-governmental third-party payors, including private insurers, many of which differ from each other in significant ways and often are not preempted by federal law, thus complicating compliance efforts. -24- Customers Our customer base is varied.
The federal Civil Monetary Penalties Law prohibits, among other things, the offering or transferring of remuneration to a Medicare or Medicaid beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular supplier of Medicare or Medicaid payable items or services; ● The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which includes provisions that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, and for knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and its implementing regulations, including privacy protection that impose obligations and requirements on healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates that perform certain services for them that involve the use or disclosure of individually identifiable health information, with respect to safeguarding the privacy and security of certain individually identifiable health information; ● The federal transparency requirements under the Affordable Care Act, including the provision commonly referred to as the Open Payments Act or Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid or Children’s Health Insurance Program to report annually to Centers for Medicare and Medicaid Services, or CMS, information related to payments and other transfers of value to physicians and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members; and ● Analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may be broader in scope and apply to referrals and items or services reimbursed by both governmental and non-governmental third-party payors, including private insurers, many of which differ from each other in significant ways and often are not preempted by federal law, thus complicating compliance efforts.
In addition to the applications described above, we believe that we will eventually be able to utilize our proprietary MicroNet technology to address imminent market needs for new product innovations to significantly improve patients’ care. We continue to broadly develop and protect intellectual property using our mesh technology.
In addition to the applications described above, we believe that we will eventually be able to utilize our proprietary MicroNet technology to address imminent market needs for new product innovations to significantly improve patient care. We continue to broadly develop and protect intellectual property using our mesh technology.
Except for 5 of our employees in Europe, our employees are not party to any collective bargaining agreements. We do not expect the collective bargaining agreements to which our employees are party to have a material effect on our business or results of operations. We also employ 3 independent contractors in Poland and 1 in Brazil.
Except for 5 of our employees in Europe, our employees are not party to any collective bargaining agreements. We do not expect the collective bargaining agreements to which our employees are party to have a material effect on our business or results of operations. We also employ 2 independent contractors in Poland and 1 in Brazil.
As a result, our activities may be subject to regulation by CMS and enforcement by OIG and DOJ.
As a result, our activities may be subject to regulation by CMS and potential enforcement by CMS, OIG and DOJ.
The patents and applications fall into a number of patent families, as listed below: Base Title of Patent Family Pending patent applications (Countries) Issued patents (Country and Patent No.) Issue Date Bifurcated Stent Assemblies US 8,961,586 China ZL200780046676.2 02/24/2015 9/26/2012 Deformable Tip for Stent Delivery and Methods of Use US 10,258,491 Israel 260,945 4/16/2019 07/01/2020 Handle for Two-Stage Deployment of a Stent US EP CN JP IN Shunts with Blood-Flow Indicators US PCT Device for Shunting Blood Between the Arterial and Venous Systems PCT Devices for shunting blood US In Vivo Filter Assembly US 9,132,261 09/15/2015 Knitted Stent Jackets Canada 2,666,728 Canada 2,887,189 China ZL200780046697.4 China ZL201210320950.3 EP 2076212 Germany, France, & UK US 10,137,015 India 323792 6/23/2015 5/1/2018 10/10/2012 12/2/2015 3/29/2017 11/27/2018 10/28/2019 Optimized Stent Jacket US Canada 2,670,724 Canada 3,013,758 China ZL201210454357.8 China ZL200780043259.2 India 297,257 Israel 230,922 US 9,132,003 US 9,526,644 US 9,782,281 US 10,070,976 US 10,406,006 US 10,406,008 US 11,051,959 EP 2088962 (BE, CH, DE, FR, UK, IT, IE, LX, NL) EP3292837 (UK, DE, FR, IE) 12/11/2018 09/14/2021 12/09/2015 01/02/2013 05/30/2018 10/01/2020 09/15/2015 10/10/2017 12/27/2016 09/11/2018 09/10/2019 09/10/2019 07/06/2021 10/11/2017 11/09/2022 Stent Apparatuses for Treatment Via Body Lumens and Methods of Use US EPO South Africa 2007/10751 Canada 2,609,687 Canada 2,843,097 EP 1885281 (CH, DE, FR, GB, IE, IT) US 10,932,926 US 10,058,440 US 10,070,977 10/27/2010 4/22/2014 10/27/2015 2/13/2019 03/02/2021 8/28/2018 9/11/2018 Stent Thermoforming Apparatus and Methods JP 6553178 US 9,527,234 US 10,376,393 Australia 2015326517 Canada 2962713 7/12/2019 12/27/2016 8/13/2019 05/21/2020 02/19/2019 Methods or using a self-adjusting stent assembly and kits including the same US (allowed) EP IN CN (div) JP China ZL 2019800679437 05/03/2022 The patents and patent applications listed above cover various aspects of our products, specifically focusing on the mesh sleeve covering our stents, as well as methods for production and delivery mechanisms of the stents.
The patents and applications fall into a number of patent families, as listed below: Base Title of Patent Family Pending patent applications (Countries) Issued patents (Country and Patent No.) Issue Date Bifurcated Stent Assemblies US 8,961,586 China ZL200780046676.2 02/24/2015 9/26/2012 Deformable Tip for Stent Delivery and Methods of Use US 10,258,491 Israel 260,945 4/16/2019 07/01/2020 Handle for Two-Stage Deployment of a Stent US (cont) EP CN JP IN US 11,844,893 12/12/2023 Shunts with Blood-Flow Indicators US (cont) EP CN JP (allowed) JP (divisional) US 11,844,893 12/19/2023 IN HK Device for Shunting Blood Between the Arterial and Venous Systems US EP CN JP IN HK Devices for shunting blood US PCT In Vivo Filter Assembly US 9,132,261 09/15/2015 Knitted Stent Jackets Canada 2,666,728 Canada 2,887,189 China ZL200780046697.4 China ZL201210320950.3 EP 2076212 Germany, France, & UK US 10,137,015 India 323792 6/23/2015 5/1/2018 10/10/2012 12/2/2015 3/29/2017 11/27/2018 10/28/2019 -19- Optimized Stent Jacket US (cont) Canada 2,670,724 Canada 3,013,758 China ZL201210454357.8 China ZL200780043259.2 India 297,257 Israel 230,922 US 9,132,003 US 9,526,644 US 9,782,281 US 10,070,976 US 10,406,006 US 10,406,008 US 11,051,959 EP 2088962 (BE, CH, DE, FR, UK, IT, IE, LX, NL) EP3292837 (UK, DE, FR, IE) 12/11/2018 09/14/2021 12/09/2015 01/02/2013 05/30/2018 10/01/2020 09/15/2015 10/10/2017 12/27/2016 09/11/2018 09/10/2019 09/10/2019 07/06/2021 10/11/2017 11/09/2022 Stent Apparatuses for Treatment Via Body Lumens and Methods of Use EPO South Africa 2007/10751 Canada 2,609,687 Canada 2,843,097 EP 1885281 (CH, DE, FR, GB, IE, IT) US 10,932,926 US 10,058,440 US 10,070,977 10/27/2010 4/22/2014 10/27/2015 2/13/2019 03/02/2021 8/28/2018 9/11/2018 Stent Thermoforming Apparatus and Methods JP 6553178 US 9,527,234 US 10,376,393 7/12/2019 12/27/2016 8/13/2019 Methods or using a self-adjusting stent assembly and kits including the same US (cont) EP IN CN (div) US 11,684,498 China ZL 2019800679437 06/27/2023 05/03/2022 Intravascular sheath US (provisional) The patents and patent applications listed above cover various aspects of our products, specifically focusing on the mesh sleeve covering our stents, as well as methods for production and delivery mechanisms of the stents.
In addition, in most cases, all sales costs, including sales representatives, incentive programs, and marketing trials, will be borne by the distributor. Under current agreements, distributors purchase stents from us at a fixed price. Our current agreements with distributors are generally for a term of two to three years.
In addition, in most cases, all sales costs, including sales representatives, incentive programs, and other marketing activities, will be borne by the distributor. Under current agreements, distributors purchase stents from us at a fixed price. Our current agreements with distributors are generally for a term of two to three years.
We have focused and we plan to continue to focus our marketing efforts primarily on key growth markets and to evaluate opportunities in new territories if and when they become available. In addition, we are using international trade shows and industry conferences to gain market exposure and brand recognition.
We have focused and we plan to continue to focus our marketing efforts primarily on key growth markets and to evaluate opportunities in new territories as they become available. In addition, we are using international trade shows and industry conferences to gain market exposure and brand recognition.
A PMA must be supported by extensive data including, but not limited to, analytical, preclinical, clinical trials, manufacturing, statutory preapproval inspections, and labeling to demonstrate to the FDA’s satisfaction the safety and effectiveness of the device for its intended use.
A PMA must be supported by extensive data including, but not limited to, analytical, preclinical, clinical trials, manufacturing, statutory preapproval inspections, and labeling to demonstrate to the FDA’s satisfaction the safety and effectiveness of the device is safe and effective for its intended use.
SwitchGuard is being developed to answer a need of flow reversal for cerebral protection in CAS since symptomatic distal embolization, caused by the release of material (thrombotic, necrotic, or atherosclerotic) from the site of the lesion during the intervention, is the most frequent and important complication of CAS.
SwitchGuard is being developed to answer a need of flow reversal for cerebral protection in coronary artery stenting (“CAS”) since symptomatic distal embolization, caused by the release of material (thrombotic, necrotic, or atherosclerotic) from the site of the lesion during the intervention, is the most frequent and important complication of CAS.
As we develop and seek regulatory approval in the United States and Europe for our new TCAR delivery system, SwitchGuard™, and continue to seek greater market share for CGuard EPS™, we expect to compete with Silk Road Medical in the total carotid artery revascularization market that comprises both CAS and carotid endarterectomy (“CEA”).
As we develop and seek regulatory approval in the United States and Europe for our new TCAR neuroprotection system SwitchGuard, and continue to seek greater market share for CGuard, we expect to compete with Silk Road Medical in the total carotid artery revascularization market that comprises CAS, TCAR and carotid endarterectomy (“CEA”).
Our mission is to offer a comprehensive set of delivery solutions (TCAR and Transfemoral) in order to deliver best in class results through patient outcomes by way of stent performance with CGuard EPS. We were organized in the State of Delaware on February 29, 2008.
Our mission is to offer a comprehensive set of delivery solutions (TCAR and Transfemoral) in order to deliver best in class results through patient outcomes by way of stent performance with CGuard Carotid Stent System and SwitchGuard NPS. We were organized in the State of Delaware on February 29, 2008.
If the device presents a “significant risk,” as defined by the FDA, to human health, the FDA requires the device sponsor to file an IDE application with the FDA and obtain IDE approval prior to initiation of enrollment of human subjects for clinical trials.
If the device presents a “significant risk,” as defined by the FDA, to human health, the FDA requires the device sponsor to file an IDE application with the FDA and obtain IDE approval prior to initiation of broader human clinical trials.
Additionally, we intend to continue to invest in current and future potential new indications, products and manufacturing enhancements for CGuard EPS that are expected to reduce cost of goods and/or provide the best-in-class performing delivery systems, such as CGuard Prime™for transfemoral access.
We continue to invest in current and future potential new indications, products and manufacturing enhancements for CGuard that are expected to reduce cost of goods and/or provide the best-in-class performing delivery systems, such as CGuard Prime.
Competition The markets in which we compete are highly competitive, subject to change and impacted by new product introductions and other activities of industry participants. -14- Carotid With respect to competition for our carotid embolic prevention system, CGuard EPS™, the manufacturers of products used in connection with CAS procedures in the United States, is comprised of a number of large companies, including Abbott Laboratories, Boston Scientific Corporation, Covidien Ltd.
Competition The markets in which we compete are highly competitive, subject to change and impacted by new product introductions and other activities of industry participants. -17- Carotid With respect to competition for our carotid embolic prevention system, CGuard EPS, the manufacturers of products used in connection with CAS procedures in the United States, including a number of large companies, including Abbott Laboratories, Boston Scientific Corporation, Medtronic and Cordis Corporation.
The complete assembly process for CGuard EPS and CGuard Prime, including knitting and securing the sleeve to the stent and the crimping of the sleeve stent on to a delivery catheter, is done at our Israel manufacturing site.
The complete assembly process for CGuard EPS and CGuard Prime, including knitting and securing the sleeved to the stent and the crimping of the sleeved stent in to a delivery catheter, is done at our Israel manufacturing site.
Class III medical devices are generally the highest risk devices and are therefore subject to the highest level of regulatory control by the FDA, since the FDA process of premarket approval involves scientific and regulatory review to evaluate the safety and effectiveness of Class III medical devices for the purpose(s) intended.
Class III medical devices are generally the highest risk devices and are therefore subject to more rigorous regulatory requirements by the FDA, since the FDA process of premarket approval involves scientific and regulatory review to evaluate the safety and effectiveness of Class III medical devices for the purpose(s) intended.
The De Novo request allows a regulatory pathway to classify novel medical devices for which general controls alone, or general and special controls, provide reasonable occurrence of safety and effectiveness for the intended use, but for which there is no legally marketed predicate device.
The De Novo request allows a regulatory pathway to classify novel medical devices and FDA will determine which category is appropriate for that device and for which general controls alone, or general and special controls, provide reasonable occurrence of safety and effectiveness for the intended use, but for which there is no legally marketed predicate device.
A “predicate device” is a pre-existing medical device to which equivalence can be drawn, that is either in Class I, Class II, or is a Class III device that was in commercial distribution before May 28, 1976, for which the FDA has not yet called for submission of a PMA.
A “predicate device” is a pre-existing medical device to which equivalence can be drawn, generally by a Class II device that was in commercial distribution before May 28, 1976, for which the FDA has not yet called for submission of a PMA.
(3) The FAMHP derogation does not apply. -19- FDA Government Regulation of Medical Devices for Human Subjects Many of our activities are subject to regulatory oversight by the FDA under provisions of the Federal Food, Drug, and Cosmetic Act and regulations thereunder, including regulations governing the development, marketing, labeling, promotion, manufacturing, and export of medical devices.
FDA Government Regulation of Medical Devices for Human Subjects Many of our activities are subject to regulatory oversight by the FDA under provisions of the Federal Food, Drug, and Cosmetic Act and regulations thereunder, including regulations governing the development, marketing, labeling, promotion, manufacturing, and export of medical devices.
We do not currently have a registered establishment with the FDA. If we are approved or cleared to manufacture, prepare, or process a device in the United States, we and any third-party manufacturers that we may use will be required to register our establishments with the FDA.
At this time, we have not registered as an establishment with the FDA. If we are approved or cleared to manufacture, prepare, or process a device in the United States, we and any third-party manufacturers that we may use will be required to register our establishments with the FDA.
Future Clinical Trials Pre and post-marketing clinical trials (outside the United States) could be conducted to further evaluate the safety and efficacy of CGuard EPS in specific indications and new products, such as SwitchGuard.
Future Clinical Trials Pre and post-marketing clinical trials (outside the United States) could be conducted to further evaluate the safety and efficacy of CGuard EPS in specific indications.
After the clinical trials have been completed, if at all, and the clinical trial data and results are collected and organized, a manufacturer may complete a premarket approval application. -21- After a PMA is sufficiently complete, the FDA will accept the application and begin an in-depth review of the submitted information.
After the clinical trials have been completed, if at all, and the clinical trial data and results are collected and organized, a manufacturer may complete a premarket approval application. -24- Following the IDE, a PMA application must be prepared and after a PMA is sufficiently complete, then the FDA will accept the application and begin an in-depth review of the submitted information.
CGuard Prime™ advances the first generation CGuard transfemoral delivery system with new handle design for deployment accuracy, new catheter design for more flexible navigation of tortuous anatomy especially in acute revascularize settings as well as two lengths, 135cm and 80cm for booth transfemoral and trans ,carotid access.
The CGuard Prime is available in two lengths: 80 cm and 135 cm. CGuard Prime advances the first generation CGuard transfemoral delivery system with new handle design for deployment accuracy, new catheter design for more flexible navigation of tortuous anatomy especially in acute revascularize settings as well as two lengths, 135cm and 80cm for booth transfemoral and transcarotid access.
We continue to expedite the review process for recertification under the MDR. -6- On September 8, 2020, we received approval from the FDA of our 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.
On September 8, 2020, we received approval from the FDA of our 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.
These regulations will require that we manufacture our products and maintain our documents in a prescribed manner with respect to design, manufacturing, testing and quality control activities.
These regulations will require that we manufacture our products and maintain our documents in a prescribed manner with respect to design, manufacturing, testing and quality control activities and ensure that marketing materials and promotion are in compliance.
FDA Approval/Clearance Requirements In the United States, most Class II or III medical devices must be cleared or approved by the FDA prior to commercialization. Unless an exemption applies, each medical device that we market or wish to market in the United States must receive 510(k) clearance or premarket approval.
FDA Approval/Clearance Requirements In the United States, most Class II or III medical devices must be cleared or approved by the FDA prior to commercialization. Unless an exemption applies, each medical device that is marketed in the United States must receive either 510(k) clearance or PMA.
In furtherance of our strategy that focuses on establishing CGuard EPS as a viable alternative to vascular surgery, we are developing a new transcarotid artery revascularization (TCAR) delivery system, SwitchGuard™, for transcarotid access and neuro protection.
In furtherance of our strategy that focuses on establishing the CGuard Carotid Stent System as a viable alternative to vascular surgery, we are developing a new transcarotid artery revascularization (TCAR) system, SwitchGuard™ neuroprotection system (“SwitchGuard NPS”), for transcarotid access and neuro protection.
In particular, our focus is on establishing CGuard EPS as a viable alternative (in appropriate cases) to conventional carotid stents and vascular surgery within the applicable medical communities.
In particular, our focus is on establishing CGuard as a viable alternative (in appropriate cases) to carotid endarterectomy and the use of conventional carotid stents within the applicable medical communities.
According to the same source, stroke is the second leading cause of disability, after dementia. -5- In 2022, 3.0 million people between the age of 50 and 89 years old were estimated to be diagnosed with high grade carotid artery disease, of which, approximately 394,000 of those diagnosed required intervention for carotid artery disease (according to the Health Research International Personal Medical Systems, Inc.
In 2022, 3.0 million people between the age of 50 and 89 years old were estimated to be diagnosed with high grade carotid artery disease, of which, approximately 394,000 of those diagnosed required intervention for carotid artery disease (according to the Health Research International Personal Medical Systems, Inc.
Some Class I devices also require premarket clearance by the FDA through the 510(k) process described below. Class II devices are subject to the FDA’s General Controls, and any other special controls as deemed necessary by the FDA to ensure the safety and effectiveness of the device.
Some Class I devices also require premarket clearance by the FDA through the 510(k) process described below. Class II devices are required to file a Premarket review of 510(k) application that may also require General Controls, and any other special controls as deemed necessary by the FDA to ensure the safety and effectiveness of the device.
The size, or aperture, of the current MicroNet ‘pore’ is only 150-180 microns in order to maximize protection against the potentially dangerous plaque and thrombus. The MicroNet mesh is the core technology around which we have developed products for specific applications.
MicroNet is made of a single fiber from a biocompatible polymer widely used in medical implantations. The size, or aperture, of the current MicroNet ‘pore’ is only 150-180 microns in order to maximize protection against the potentially dangerous plaque and thrombus. The MicroNet mesh is the core technology around which we have developed products for specific applications.
Our agreement with the supplier for the production of electro polished L605 bare-metal stents for CGuard EPS and CGuard Prime is priced on a per-stent basis, subject to the quantity of stents ordered.
The self-expanding bare-metal stents for our CGuard EPS and our CGuard Prime are being manufactured and supplied by a third-party. Our agreement with the supplier for the production of electro polished L605 bare-metal stents for CGuard EPS and CGuard Prime is priced on a per-stent basis, subject to the quantity of stents ordered.
Please refer to the table below setting forth the approvals and sales made for CGuard EPS on a country-by-country basis Approvals and Sales of CGuard EPS on a Country-by-Country Basis* Countries CGuard EPS Approval CGuard EPS Sales Argentina Y Y Australia N Y (2) Austria Y Y Belarus Y Y Belgium Y Y Brazil Y Y Bulgaria N N Chile N N Colombia Y Y Croatia Y N Cyprus Y Y Czech Republic Y Y Denmark Y N Dominican Republic N N Ecuador Y N Estonia Y Y Finland Y Y France Y Y Germany Y Y Greece Y Y Netherlands Y Y Hong Kong N N Hungary Y Y Iceland Y N India Y Y Ireland Y Y Israel Y Y Italy Y Y Kazakhstan Y Y Latvia Y Y Lithuania Y Y Liechtenstein Y N Luxembourg Y N Malaysia N N Malta Y N Mexico Y Y Montenegro N N New Zealand N N Norway Y N Peru N Y (2) Poland Y Y Portugal Y Y Romania Y Y Russia Y Y Saudi Arabia N N Serbia Y Y Slovakia N N Slovenia Y Y South Africa Y Y Spain Y Y Sweden Y Y Switzerland Y Y Turkey N N Taiwan Y Y Venezuela N N Vietnam N Y (2) Ukraine Y Y United Kingdom N(3) Y (2) United States N Y (1) * As discussed elsewhere, our CE mark for the marketing and sale of CGuard EPS in the EU under the MDD expired on November 12, 2022 and was reinstated during March 2023.
Please refer to the table below setting forth the approvals and sales made for CGuard EPS on a country-by-country basis Approvals and Sales of CGuard EPS on a Country-by-Country Basis* Countries CGuard EPS Approval CGuard EPS Sales Argentina Y Y Australia Y Y Austria Y Y Belarus Y Y Belgium Y Y Brazil Y Y Bulgaria N N Chile Y Y Colombia Y Y Croatia Y N Cyprus Y Y Czech Republic Y Y Denmark Y N Dominican Republic N N Ecuador Y N Estonia Y Y Finland Y Y France Y Y Germany Y Y Greece Y Y Netherlands Y Y Hong Kong N N Hungary Y N Iceland Y N India Y Y Ireland Y N Israel Y Y Italy Y Y Kazakhstan Y Y Latvia Y Y Lithuania Y Y Liechtenstein Y N Luxembourg Y N Malaysia N N Malta Y N Mexico Y Y Moldova Y Y Montenegro N N New Zealand Y N Norway Y N -22- Peru Y Y Poland Y Y Portugal Y Y Romania Y Y Russia Y Y Saudi Arabia N N Serbia Y Y Slovakia N N Slovenia Y Y South Africa Y Y Spain Y Y Sweden Y Y Switzerland Y Y Turkey N N Taiwan Y Y Venezuela N N Vietnam Y Y Ukraine Y Y United Kingdom Y Y United States N Y (1) (1) Refers to CGuard units used in our ongoing FDA trial.
Medical devices that are class II devices receive 510(k) clearance are “cleared” by the FDA to market, distribute, and sell in the United States. Medical devices that are class III devices obtain a premarket approval by the FDA are “approved” to market, distribute, and sell in the United States.
Medical devices that are class II devices receive 510(k) clearance are “cleared” by the FDA to market, distribute, and sell in the United States. Medical devices that are class III devices obtain a premarket approval by the FDA are “approved” to market, distribute, and sell in the United States, after FDA performs an on-site audit at the company premises.
During the last year our mesh supplier informed us that it will not be able to supply the polymer fiber in the future due to issues with raw materials, therefore we purchased inventory which should be sufficient to support our production needs in the next 2.5 years.
During 2022 our mesh supplier informed us that it will not be able to supply the polymer fiber in the future due to issues with raw materials, therefore we purchased inventory which should be sufficient to support our production needs until the end of 2026.
We currently have distribution agreements for our CE mark-approved CGuard EPS with medical product distributors based in Europe, the Middle East, Asia Pacific and Latin America. We are currently in discussions with additional distribution companies in Europe, Asia, and Latin America.
Customers Our customer base is varied. We currently have distribution agreements for our CE mark-approved CGuard EPS with medical product distributors based in Europe, the Middle East, Asia Pacific and Latin America.
In 2017, the 30-day positive results were published online-ahead-of-print in the European Journal of Vascular and Endovascular Surgery (2017), https://doi.org/10.1016/j.ejvs.2017.09.015. -10- Key findings from the study are as follows: ● 100% success in implanting CGuard EPS; ● One case of acute stent thrombosis occurred within 4 hours of the procedure: ● One minor stroke was recorded within the peri-operative period following the acute stent thrombosis, mentioned above; ● No new adverse neurological events were recorded at the post-operative period. ● DW-MRI was performed to assess the occurrence of new ischaemic brain lesions from the target vessel following placement of the CGuard stent peri- (48-72 hours) and post-operatively (30 days) in 21 and 11 patients, respectively.
Key findings from the study are as follows: ● 100% success in implanting CGuard EPS; ● One case of acute stent thrombosis occurred within 4 hours of the procedure: ● One minor stroke was recorded within the peri-operative period following the acute stent thrombosis, mentioned above; ● No new adverse neurological events were recorded at the post-operative period. ● DW-MRI was performed to assess the occurrence of new ischaemic brain lesions from the target vessel following placement of the CGuard stent peri- (48-72 hours) and post-operatively (30 days) in 21 and 11 patients, respectively.
As part of our trade secret policy, we rely on non-disclosure and confidentiality agreements with employees, consultants and other parties to protect trade secrets and other proprietary technology. -17- Trademarks We have registered or applied to register the following trademarks, which we use in connection with our products: ● InspireMD ® (US, European Union, and UK) ● MGuard ® (European Union, and UK) ● CGuard ® (US, European Union, and UK) ● MGuard Prime ® (European Union, and UK) ● NGuard ® (European Union and UK) ● PVGuard® (European Union, and UK) ● Micronet® (US) ● (MNP Micronet Protection logo) (European Union and UK) ● Carenet®)European Union and UK) ● SmartFit™ (US, UK and CN) ● SmartFit Logo (EP, UK, CN) ● CGuard Prime (EP, UK, US, CN, JP) ● SwitchGuard (EP, UK, US, JP) ● True North Medical (US, EP, UK) ● MicroMesh (US) ● MicroMesh logo (US, EP, UK CN, JP) ● Micronet logo (updated version) (US, EP, UK, CN, JP) The trademarks are renewable indefinitely, so long as we continue using the marks and make the appropriate filings when required.
Trademarks We have registered or applied to register the following trademarks, which we use in connection with our products: ● InspireMD ® (US, European Union, and UK) ● MGuard ® (European Union, and UK) ● CGuard ® (US, European Union, and UK) ● MGuard Prime ® (European Union, and UK) ● NGuard ® (European Union and UK) ● PVGuard® (European Union, and UK) ● Micronet® (US) ● (MNP Micronet Protection logo) (European Union and UK) ● Carenet®)European Union and UK) ● SmartFit™ (US, UK, EP and CN) ● SmartFit Logo (EP, UK, CN) ● CGuard Prime (EP, UK, US, CN, JP) ● SwitchGuard (EP, UK, US, JP) ● True North Medical (EP, UK) ● MicroMesh logo (EP, UK) ● Micronet logo (updated version) (US, EP, UK, JP) The trademarks are renewable indefinitely, so long as we continue using the marks and make the appropriate filings when required.
These trials would be designed to facilitate market acceptance and expand the use of the product. -13- Growth Strategy Our primary business objective is to utilize our proprietary MicroNet technology and products to become the industry standard for treatment of stroke and complex vascular disease and to provide a superior solution to the common acute problems caused by current stenting procedures, such as restenosis, embolic showers and late thrombosis.
Growth Strategy Our primary business objective is to utilize our proprietary MicroNet technology and products to become the industry standard for the treatment of carotid disease and prevention of stroke and to provide a superior solution to the common acute problems caused by current stenting procedures, such as restenosis, embolic showers and late thrombosis.
Currently, only high-risk patients to surgery are paid through the CMS coverage, NCA - Percutaneous Transluminal Angioplasty (PTA) of the Carotid Artery Concurrent with Stenting (CAG-00085R8) - Tracking Sheet (cms.gov) ● Continue to leverage our MicroNet technology to develop additional applications for interventional cardiologists and vascular surgeons.
This decision significantly increases the available market to endovascular procedures. Previously, only symptomatic patients at high-risk to surgery were covered through the CMS coverage, NCA - Percutaneous Transluminal Angioplasty (PTA) of the Carotid Artery Concurrent with Stenting (CAG-00085R8) - Tracking Sheet (cms.gov) ● Continue to leverage our MicroNet technology to develop additional applications for interventional cardiologists and vascular surgeons.
We continue to expedite the review process for recertification under the MDR. -18- We have or had regulatory approval and made sales of CGuard EPS either through distributors pursuant to distribution agreements or directly, in the countries listed in the table below.
In January 2024, we received CE mark recertification of CGuard EPS under the MDR. -21- We have or had regulatory approval and made sales of CGuard EPS either through distributors pursuant to distribution agreements or directly, in the countries listed in the table below.
If the clinical trial design is deemed to have “non-significant risk,” the clinical trial may be eligible for “abbreviated” IDE requirements. A clinical trial may be suspended by either the FDA or the IRB at any time for various reasons, including a belief that the risks to the study participants outweigh the benefits of participation in the study.
A clinical trial may be suspended by either the FDA or the IRB at any time for various reasons, including a belief that the risks to the study participants outweigh the benefits of participation in the study.
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 was designed to enroll approximately 315 subjects in a maximum of 40 study sites located in the United States and Europe.
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.
Our CGuard EPS original received CE mark approval in the EU in March 2013 and was fully launched in Europe in September 2015. Subsequently, we launched CGuard EPS in 30 plus countries and on February 3, 2021, we executed a distribution agreement with Chinese partners for the purpose of expanding our presence in China.
Subsequently, we launched CGuard EPS in 30 plus countries and on February 3, 2021, we executed a distribution agreement with Chinese partners for the purpose of expanding our presence in China.
In parallel, we aim at transitioning vascular surgeons from carotid endarterectomy procedures to carotid stenting with CGuard EPS and accessory devices, which we believe can greatly expand our customer base.
Our current strategy seeks to broaden our sales efforts to increase CGuard EPS penetration within the community of interventionalists. In parallel, we aim at transitioning vascular surgeons from carotid endarterectomy procedures to carotid stenting with CGuard and accessory devices, which we believe can greatly expand our customer base.
We have partnered and will continue to seek out partnerships with organizations focused on the treatment of stroke. We will also continue to engage advisory boards and to develop a network of key opinion leaders to assist us in our efforts to widen the adoption of CGuard EPS.
We will also continue to engage advisory boards and to develop a network of key opinion leaders to assist us in our efforts to widen the adoption of CGuard.
As such, we and our manufacturing facilities will be subject to FDA inspections for compliance with the FDA’s Quality System Regulation. Additionally, some of our subcontractors may also be subject to FDA announced and unannounced inspections for compliance with the FDA’s Quality System Regulation.
In addition, we and our manufacturing facilities will be subject to FDA inspections for compliance with the FDA’s Quality System Regulation. Additionally, some of our subcontractors may also be subject to FDA announced and unannounced inspections for compliance with the FDA’s Quality System Regulation and assurances that the Company is marketing appropriately the indications for use of the product.
Healthcare Laws and Regulations In addition to the FDA regulations, there are a variety of other healthcare laws and regulations to which we may be subject if any of our products are marketed, sold, distributed, and/or utilized in the United States.
FDA regulations also govern product labeling and prohibit a manufacturer from marketing a medical device for unapproved applications. U.S. Healthcare Laws and Regulations In addition to the FDA regulations, there are a variety of other healthcare laws and regulations to which we may be subject if any of our products are marketed, sold, distributed, and/or utilized in the United States.
(“Late cerebral embolization after emboli-protected carotid artery stenting assessed by sequential diffusion-weighted magnetic resonance imaging,” Journal of American College of Cardiology Cardiovascular Interventions , Volume 1, 2008) have shown that the majority of the incidents of embolic showers associated with carotid stenting occur post-procedure.
(“Late cerebral embolization after emboli-protected carotid artery stenting assessed by sequential diffusion-weighted magnetic resonance imaging,” Journal of American College of Cardiology Cardiovascular Interventions , Volume 1, 2008) have shown that the majority of the incidents of embolic showers associated with carotid stenting occur post-procedure. -7- Our CGuard EPS originally received CE mark approval in the EU in March 2013 and was fully launched in Europe in September 2015.
We continue to expedite the review process for recertification under the MDR. 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.
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.
Trade Secrets We also rely on trade secret protection to protect our interests in proprietary know-how and/or for processes for which patents are difficult to obtain or enforce.
We intend to aggressively continue patenting new technologies and to actively pursue any infringement of our key patents. -20- Trade Secrets We also rely on trade secret protection to protect our interests in proprietary know-how and/or for processes for which patents are difficult to obtain or enforce.
Many of these patents and applications cover aspects of our CGuard and MGuard technology. Patents outside the U.S. have been filed in Canada, China, Europe, Israel, India, Japan, Australia, and South Africa.
Patents outside the U.S. have been filed in Canada, China, Europe, Israel, India, Japan, Australia, and South Africa.
Premarket review and clearance by the FDA for Class II devices is accomplished through the 510(k) process. Pursuant to the Medical Device User Fee and Modernization Act of 2002 (MDUFMA), as of October 2002, unless a specific exemption applies, 510(k) submissions are subject to user fees. Certain Class II devices are exempt from this premarket review process.
Pursuant to the Medical Device User Fee and Modernization Act of 2002 (MDUFMA), as of October 2002, unless a specific exemption applies, 510(k) submissions are subject to user fees. Certain Class II devices are exempt from this premarket review process. -23- Class III includes devices with the greatest risk. Devices in this class must demonstrate safety and efficacy requirements.
According to the World Health Organization (https://www.who.int/cardiovascular_diseases/resources/atlas/en/) every year, 15 million people worldwide suffer a stroke, and nearly six million die and another five million are left permanently disabled.
This disruption in blood supply, together with plaque debris breaking off the artery walls and traveling to the brain, are the primary causes of stroke. According to the World Health Organization (https://www.who.int/cardiovascular_diseases/resources/atlas/en/) every year, 15 million people worldwide suffer a stroke, and nearly six million die and another five million are left permanently disabled.
Reversing blood flow has been shown to reduce stroke risk during carotid artery procedures. Physicians frequently use extension lines constructed from blood filter transfusion sets during interventional procedures for the purpose of A-V shunting. -7- NGuard EPS – Acute Stroke with Tandem Lesions In approximately 20% of acute strokes, the carotid artery is included in the cerebral occlusion pathway.
Reversing blood flow has been shown to reduce stroke risk during carotid artery procedures. -8- Physicians frequently use extension lines constructed from blood filter transfusion sets during interventional procedures for the purpose of A-V shunting.
C-Guardians is a prospective, multicenter, single-arm, pivotal study to evaluate the safety and efficacy of the CGuard™ Carotid Sten System when used to treat symptomatic and asymptomatic carotid artery stenosis in patients undergoing carotid artery stenting. The trial was designed to enroll approximately 315 subjects in a maximum of 40 study sites located in the United States and Europe.
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 (“CAS”).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, we have no experience in commercializing our CGuard EPS on a mass scale and face a number of challenges with respect to our commercialization efforts, including, among others, that: ● we may not have adequate financial or other resources to demonstrate adequate clinical results, attain required regulatory approvals and licensures, and begin the commercialization efforts for our CGuard EPS in our target markets; ● we may fail to obtain or maintain required regulatory approvals and licensures for our CGuard EPS in our target markets or may face adverse regulatory or legal actions relating to our products even if regulatory approval is obtained; ● we may not demonstrate adequate clinical safety and clinical effectiveness results from our CGuard EPS, to support regulatory body approval or market acceptance and adoption; ● we may not be able to scale up the manufacture of our CGuard EPS to commercial quantities at an adequate quality or at an acceptable cost; ● we may not be able to establish adequate sales, marketing and distribution channels; -29- ● healthcare professionals and patients may not accept our CGuard EPS; ● other technological may reduce the demand for our CGuard EPS; ● new alliances between existing market participants and the entrance of new market participants may interfere with our market penetration efforts; ● government and private third-party payors may not agree to provide coding, coverage and payment adequate to reimburse healthcare providers and patients for any or all of the purchase price of CGuard EPS, which may adversely affect healthcare providers’ and patients’ willingness to purchase our C-Scan system; ● uncertainty as to market demand may result in inefficient pricing of our CGuard EPS; ● we may not be able to adequately protect our intellectual property or may face third-party claims of intellectual property infringement; and ● we are dependent upon the results of ongoing clinical studies relating to our CGuard EPS and the products of our competitors.
Biggest changeIn addition, we have no experience in commercializing our CGuard Prime or any other product we develop on a mass scale and face a number of challenges with respect to our commercialization efforts, including, among others, that: ● we may not have adequate financial or other resources to demonstrate adequate clinical results, attain required regulatory approvals and licensures, and begin the commercialization efforts for our CGuard Prime, SwitchGuard or any other product we develop in our target markets; ● we may fail to obtain or maintain required regulatory approvals and licensures for our CGuard Prime, SwitchGuard or any other product we develop in our target markets or may face adverse regulatory or legal actions relating to our products even if regulatory approval is obtained; ● we may not demonstrate adequate clinical safety and clinical effectiveness results from our CGuard Prime, SwitchGuard or any other product we develop to support regulatory body approval or market acceptance and adoption; ● We may not be able to scale up the manufacture of our CGuard Prime, SwitchGuard or any other product we develop to commercial quantities at an adequate quality or at an acceptable cost; ● we may not be able to establish adequate sales, marketing and distribution channels; ● healthcare professionals and patients may not accept our CGuard Prime, SwitchGuard or any other product we develop; ● other technological challenges may reduce the demand for our CGuard Prime, SwitchGuard or any other product we develop; ● new alliances between existing market participants and the entrance of new market participants may interfere with our market penetration efforts; ● government and private third-party payors may not agree to provide coding, coverage and payment adequate to reimburse healthcare providers and patients for any or all of the purchase price of CGuard Prime, SwitchGuard or any other product we develop which may adversely affect healthcare providers’ and patients’ willingness to purchase our C-Scan system; -32- ● uncertainty as to market demand may result in inefficient pricing of our CGuard Prime, SwitchGuard or any other product we develop; ● we may not be able to adequately protect our intellectual property or may face third-party claims of intellectual property infringement; and ● we are dependent upon the results of ongoing clinical studies relating to our CGuard Prime and the products of our competitors.
International sales and operations are subject to a variety of risks, including: ● foreign currency exchange rate fluctuations; ● greater difficulty in staffing and managing foreign operations; ● greater risk of uncollectible accounts; ● longer collection cycles; ● logistical and communications challenges; ● potential adverse changes in laws and regulatory practices, including export license requirements, trade barriers, tariffs and tax laws; ● changes in labor conditions; ● burdens and costs of compliance with a variety of foreign laws; ● political and economic instability; ● the escalation of hostilities in Israel, which could impair our ability to manufacture our products; ● increases in duties and taxation; ● foreign tax laws and potential increased costs associated with overlapping tax structures; ● greater difficulty in protecting intellectual property; ● the risk of third party disputes over ownership of intellectual property and infringement of third party intellectual property by our products; and ● general economic and political conditions in these foreign markets.
International sales and operations are subject to a variety of risks, including: ● foreign currency exchange rate fluctuations; ● greater difficulty in staffing and managing foreign operations; ● greater risk of uncollectible accounts; ● longer collection cycles; ● logistical and communications challenges; ● potential adverse changes in laws and regulatory practices, including export license requirements, trade barriers, tariffs and tax laws; ● changes in labor conditions; ● burdens and costs of compliance with a variety of foreign laws; ● political and economic instability; ● the escalation of hostilities in Israel, which could impair our ability to manufacture our products; -50- ● increases in duties and taxation; ● foreign tax laws and potential increased costs associated with overlapping tax structures; ● greater difficulty in protecting intellectual property; ● the risk of third party disputes over ownership of intellectual property and infringement of third party intellectual property by our products; and ● general economic and political conditions in these foreign markets.
Further, even if valid and enforceable, our patents may not be sufficiently broad to prevent others from marketing products like ours, despite our patent rights. -42- The validity of our patent claims depends, in part, on whether prior art references exist that describe or render obvious our inventions as of the filing date of our patent applications.
Further, even if valid and enforceable, our patents may not be sufficiently broad to prevent others from marketing products like ours, despite our patent rights. The validity of our patent claims depends, in part, on whether prior art references exist that describe or render obvious our inventions as of the filing date of our patent applications.
Our competitors have maintained their positions in the market by, among other things, establishing intellectual property rights relating to their products and enforcing these rights aggressively against their competitors and new entrants into the market. All the major companies in the field of stents and related markets, including Boston Scientific Corporation, C.R. Bard, Inc., W.L.
Our competitors have maintained their positions in the market by, among other things, establishing intellectual property rights relating to their products and enforcing these rights aggressively against their competitors and new entrants into the market. All the major companies in the field of stents and related markets, including Boston Scientific, C.R. Bard, Inc., W.L.
Department of Health and Human Services information related to payments or other transfers of value made to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and ● state and federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers.
Department of Health and Human Services information related to payments or other transfers of value made to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and -43- ● state and federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers.
Additionally, any damage to or destruction of our Tel Aviv facility or its equipment, prolonged power outage or contamination at our facility would significantly impair our ability to produce CGuard EPS stents. Finally, the production of our stents must occur in a highly controlled, clean environment to minimize particles and other yield and quality-limiting contaminants.
Additionally, any damage to or destruction of our Tel Aviv facility or its equipment, prolonged power outage or contamination at our facility would significantly impair our ability to produce CGuard. Finally, the production of our stents must occur in a highly controlled, clean environment to minimize particles and other yield and quality-limiting contaminants.
Any such inability to enforce non-compete covenants may cause us to lose any competitive advantage resulting from advantages provided to us by such confidential information. We may become subject to claims for remuneration or royalties for assigned service invention rights by our employees, which could result in litigation and adversely affect our business.
Any such inability to enforce non-compete covenants may cause us to lose any competitive advantage resulting from advantages provided to us by such confidential information. -54- We may become subject to claims for remuneration or royalties for assigned service invention rights by our employees, which could result in litigation and adversely affect our business.
If a large number of patients in a study discontinue their participation in the study, the results from that study may not be positive or may not support a filing for regulatory approval of the product candidate. In addition, the time required to complete clinical trials is dependent upon, among other factors, the rate of patient enrollment.
If a large number of patients in a study discontinue their participation in the study, the results from that study may not be positive or may not support a filing for regulatory approval of the product. In addition, the time required to complete clinical trials is dependent upon, among other factors, the rate of patient enrollment.
Patient enrollment is a function of many factors, including the following: ● the size of the patient population; ● the nature of the clinical protocol requirements; ● the availability of other treatments or marketed therapies (whether approved or experimental); ● our ability to recruit and manage clinical centers and associated trials; ● the proximity of patients to clinical sites; and ● the patient eligibility criteria for the study.
Patient enrollment is a function of many factors, including the following: ● the size of the patient population; ● the nature of the clinical protocol requirements; ● the availability of other treatments or marketed therapies (whether approved or experimental); -39- ● our ability to recruit and manage clinical centers and associated trials; ● the proximity of patients to clinical sites; and ● the patient eligibility criteria for the study.
Gore & Associates, Inc. and Medtronic, Inc., have been repeatedly involved in patent litigation relating to stents since at least 1997. The field of stents and related markets have experienced rapid technological change and obsolescence in the past, and our competitors have strong incentives to stop or delay the introduction of new products and technologies.
Gore & Associates and Medtronic, have been repeatedly involved in patent litigation relating to stents since at least 1997. The field of stents and related markets have experienced rapid technological change and obsolescence in the past, and our competitors have strong incentives to stop or delay the introduction of new products and technologies.
The market prices of our common stock have been and are likely to continue to be highly volatile and could fluctuate widely in response to various factors, many of which are beyond our control, including the following: ● technological innovations or new products and services by us or our competitors; ● additions or departures of key personnel; ● our ability to execute our business plan; ● operating results that fall below expectations; ● loss of any strategic relationship; ● industry developments; ● economic, political and other external factors; and ● period-to-period fluctuations in our financial results. -51- In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies.
The market prices of our common stock have been and are likely to continue to be highly volatile and could fluctuate widely in response to various factors, many of which are beyond our control, including the following: ● technological innovations or new products and services by us or our competitors; ● additions or departures of key personnel; ● our ability to execute our business plan; ● operating results that fall below expectations; ● loss of any strategic relationship; ● industry developments; ● economic, political and other external factors; and ● period-to-period fluctuations in our financial results. -55- In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies.
This would have a material adverse effect on our business, financial condition and results of operations. We may become subject to claims by much larger and better capitalized competitors enforcing their intellectual property rights against us or seeking to invalidate our intellectual property or our rights thereto.
This would have a material adverse effect on our business, financial condition and results of operations. -35- We may become subject to claims by much larger and better capitalized competitors enforcing their intellectual property rights against us or seeking to invalidate our intellectual property or our rights thereto.
If we are unable to demonstrate that a product candidate is safe and effective in advanced clinical trials involving large numbers of patients, we will be unable to submit the necessary application to receive regulatory approval to commercialize the product candidate.
If we are unable to demonstrate that a product is safe and effective in advanced clinical trials involving large numbers of patients, we will be unable to submit the necessary application to receive regulatory approval to commercialize the product.
In these events, we may voluntarily implement a recall or market withdrawal or may be required to do so by a regulatory authority. In the European Economic Area, we must comply with the EU Medical Device Vigilance System.
In these events, we may voluntarily implement a recall or market withdrawal or may be required to do so by a regulatory authority. -40- In the European Economic Area, we must comply with the EU Medical Device Vigilance System.
Any such delay or failure of clinical trials could prevent us from commercializing our stent products, which would materially and adversely affect our results of operations and the value of our business; ● the results of our clinical trials may be insufficient to obtain regulatory approval for our product candidates; ● our products may in the future be subject to product notifications, recalls, or voluntary market withdrawals that could harm our reputation, business and financial results; ● we may be subject, directly or indirectly, to applicable U.S. federal and state anti-kickback, false claims laws, physician payment transparency laws, fraud and abuse laws or similar healthcare and security laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings; ● we may be exposed to product liability claims and insurance may not be sufficient to cover these claims; ● even if one or more of our products are approved by the FDA, we may fail to obtain an adequate level of reimbursement for our products by third party payors, such that there may be no commercially viable markets for our products or the markets may be much smaller than expected; ● in the United States and European Union, our business could be significantly and adversely affected by healthcare reform initiatives and/or other legislation or judicial interpretations of existing or future healthcare laws and/or regulations; ● if we are unable to obtain and maintain intellectual property protection covering our products, others may be able to make, use or sell our products, which would adversely affect our revenue; ● we are an international business, and we are exposed to various global and local risks that could have a material adverse effect on our financial condition and results of operations venue; ● our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidity risk; ● there are inherent limitations in all control systems, and misstatements due to error or fraud may occur and not be detected; -27- ● we anticipate being subject to fluctuations in currency exchange rates because we expect a substantial portion of our revenues will be generated in Euros and U.S. dollars, while a significant portion of our expenses will be incurred in New Israeli Shekels; ● if there are significant shifts in the political, economic and military conditions in Israel and its neighbours, it could have a material adverse effect on our business relationships and profitability; ● it may be difficult for investors in the United States to enforce any judgments obtained against us or some of our directors or officers; ● the market prices of our common stock and our publicly traded warrants are subject to fluctuation and have been and may continue to be volatile, which could result in substantial losses for investors; and ● our common stock could be delisted from the Nasdaq Stock Market if we fail to meet its continued listing requirements, including requirements with respect to the market value of publicly-held-shares, market value of listed shares, minimum bid price per share, and minimum stockholder’s equity, among others, and requirements relating to board and committee independence.
Any such delay or failure of clinical trials could prevent us from commercializing our stent products, which would materially and adversely affect our results of operations and the value of our business; -29- ● the results of our clinical trials may be insufficient to obtain regulatory approval for our products; ● our products may in the future be subject to product notifications, recalls, or voluntary market withdrawals that could harm our reputation, business and financial results; ● we may be subject, directly or indirectly, to applicable U.S. federal and state anti-kickback, false claims laws, physician payment transparency laws, fraud and abuse laws or similar healthcare and security laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings; ● we may be exposed to product liability claims and insurance may not be sufficient to cover these claims; ● even if one or more of our products are approved by the FDA, we may fail to obtain an adequate level of reimbursement for our products by third party payors, such that there may be no commercially viable markets for our products or the markets may be much smaller than expected; ● in the United States and European Union, our business could be significantly and adversely affected by healthcare reform initiatives and/or other legislation or judicial interpretations of existing or future healthcare laws and/or regulations; ● if we are unable to obtain and maintain intellectual property protection covering our products, others may be able to make, use or sell our products, which would adversely affect our revenue; ● we are an international business, and we are exposed to various global and local risks that could have a material adverse effect on our financial condition and results of operations venue; ● our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidity risk; ● there are inherent limitations in all control systems, and misstatements due to error or fraud may occur and not be detected; ● we anticipate being subject to fluctuations in currency exchange rates because we expect a substantial portion of our revenues will be generated in Euros and U.S. dollars, while a significant portion of our expenses will be incurred in New Israeli Shekels; ● if there are significant shifts in the political, economic and military conditions in Israel and its neighbours, it could have a material adverse effect on our business relationships and profitability; ● it may be difficult for investors in the United States to enforce any judgments obtained against us or some of our directors or officers; ● the market prices of our common stock and our publicly traded warrants are subject to fluctuation and have been and may continue to be volatile, which could result in substantial losses for investors; and ● our common stock could be delisted from the Nasdaq Stock Market if we fail to meet its continued listing requirements, including requirements with respect to the market value of publicly-held-shares, market value of listed shares, minimum bid price per share, and minimum stockholder’s equity, among others, and requirements relating to board and committee independence. -30- Risks Related to Our Financial Condition We have a history of net losses and may experience future losses.
If our manufacturing facilities are unable to provide an adequate supply of products, our growth could be limited and our business could be harmed. We currently manufacture our CGuard EPS at our facility in Tel Aviv, Israel.
If our manufacturing facilities are unable to provide an adequate supply of products, our growth could be limited and our business could be harmed. We currently manufacture CGuard at our facility in Tel Aviv, Israel.
In May 2017, the European parliament and the council of the European Union approved the MDR which has replaced the existing medical device directives (93/42/EEC). The new regulations entered into full application in May 26, 2021.
In May 2017, the European parliament and the council of the European Union approved the MDR which has replaced the existing medical device directives (93/42/EEC). The regulations entered into full application in May 26, 2021.
Any such events could adversely affect our ability to operate our business and our results of operations. We may be exposed to product liability claims and insurance may not be sufficient to cover these claims.
Any such events could adversely affect our ability to operate our business and our results of operations. -44- We may be exposed to product liability claims and insurance may not be sufficient to cover these claims.
If the conditions in the global economies remain uncertain or continue to be volatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopolitical events, our business, operating results and financial condition may be materially adversely affected.
If the conditions in the global economies remain uncertain or continue to be volatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Israel and Hamas and Russia and Ukraine, terrorism or other geopolitical events, our business, operating results and financial condition may be materially adversely affected.
If we fail to obtain FDA approval for CGuard EPS or any other products we may develop, our results of operations and the value of our business would be materially and adversely affected. We derive most of our revenue from sales of our CGuard EPS in CE marked countries and certain other select jurisdictions.
If we fail to obtain FDA approval for CGuard Prime, SwitchGuard or any other products we may develop, our results of operations and the value of our business would be materially and adversely affected. We derive most of our revenue from sales of our CGuard EPS in CE marked countries and certain other select jurisdictions.
Thus, only approximately one-third of the existing board of directors could be replaced at any election of directors. -52- As a former shell company, resales of shares of our restricted common stock in reliance on Rule 144 of the Securities Act are subject to the requirements of Rule 144(i).
Thus, only approximately one-third of the existing board of directors could be replaced at any election of directors. -56- As a former shell company, resales of shares of our restricted common stock in reliance on Rule 144 of the Securities Act are subject to the requirements of Rule 144(i).
Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the United States Patent and Trademark Office, or USPTO, or made a misleading statement, during prosecution. Under the Leahy-Smith Act, the validity of U.S. patents may also be challenged in post-grant proceedings before the USPTO.
Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the United States Patent and Trademark Office, or USPTO, or made a misleading statement, during prosecution. Under the Leahy-Smith Act, the validity of U.S. patents may also be challenged in post-grant and inter partes review proceedings before the USPTO.
Relatedly, certainty that clinical trials will meet desired endpoints, produce meaningful or useful data, and be free of unexpected adverse effects, or that the FDA will accept the validity of foreign clinical study data, as applicable, cannot be guaranteed, and such uncertainty could preclude or delay regulatory approvals and commercialization, resulting in significant financial costs and reduced revenue.
Relatedly, certainty that clinical trials must meet FDA requirements, including desired endpoints, produce meaningful or useful data, and be free of unexpected adverse effects, or that the FDA will accept the validity of foreign clinical study data, as applicable, cannot be guaranteed, and such uncertainty could preclude or delay regulatory approvals and commercialization, resulting in significant financial costs and reduced revenue.
Additionally, increases in inflation, along with the uncertainties surrounding COVID-19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing.
Additionally, increases in inflation, along with the uncertainties surrounding any resurgence of COVID-19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing.
If there were a disruption to our existing manufacturing facility, we would have no other means of manufacturing our CGuard EPS stents until we were able to restore the manufacturing capability at our facility or develop alternative manufacturing facilities.
If there were a disruption to our existing manufacturing facility, we would have no other means of manufacturing CGuard until we were able to restore the manufacturing capability at our facility or develop alternative manufacturing facilities.
Patients may discontinue their participation in our clinical studies, which may negatively impact the results of these studies and extend the timeline for completion of our development programs. Clinical trials for our product candidates require sufficient patient enrollment. We may not be able to enroll a sufficient number of patients in a timely or cost-effective manner.
Patients may discontinue their participation in our clinical studies, which may negatively impact the results of these studies and extend the timeline for completion of our development programs. Clinical trials for our products require sufficient patient enrollment. We may not be able to enroll a sufficient number of patients in a timely or cost-effective manner.
Patients enrolled in our clinical studies may discontinue their participation at any time during the study as a result of a number of factors, including withdrawing their consent or experiencing adverse clinical events, which may or may not be judged to be related to our product candidates under evaluation.
Patients enrolled in our clinical studies may discontinue their participation at any time during the study as a result of a number of factors, including withdrawing their consent or experiencing adverse clinical events, which may or may not be judged to be related to our products under evaluation.
The outcome following legal assertions of invalidity and unenforceability is unpredictable. -44- Derivation proceedings initiated by third parties or brought by us may be necessary to determine the priority of inventions and/or their scope with respect to our patent or patent applications or those of our licensors.
The outcome following legal assertions of invalidity and unenforceability is unpredictable. Derivation and interference proceedings initiated by third parties or brought by us may be necessary to determine the priority and ownership of inventions and/or their scope with respect to our patent or patent applications or those of our licensors.
We face risks that: ● the product candidate may not prove to be safe or effective; ● the product candidate’s benefits may not outweigh its risks; ● the results from advanced clinical trials may not confirm the positive results from pre-clinical studies and early clinical trials; -35- ● the FDA or comparable foreign regulatory authorities may interpret data from pre-clinical and clinical testing in different ways than us; and ● the FDA or other regulatory agencies may require additional or expanded trials and data.
We face risks that: ● the product may not prove to be safe or effective; ● the product’s benefits may not outweigh its risks; ● the results from advanced clinical trials may not confirm the positive results from pre-clinical studies and early clinical trials; ● the FDA or comparable foreign regulatory authorities may interpret data from pre-clinical and clinical testing in different ways than us; and ● the FDA or other regulatory agencies may require additional or expanded trials and data.
In addition, if there is a renewed outbreak of COVID-19, this may cause disruptions that could have a material adverse impact on our FDA clinical trial plans and timelines, including: ● Delays in receiving authorizations from local regulatory authorities, ethics committees and institutional review boards to initiate planned clinical trials; ● Delays or difficulties in enrolling patients in our clinical trials; ● Delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; ● Delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials, including interruptions in global shipping that may affect the transport of clinical trial materials; ● Changes in local regulations as part of a response to the COVID-19 pandemic which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether; ● Diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; ● Diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; ● Interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others, or interruption of clinical trial subject visits and study procedures, the occurrence of which could affect the integrity of clinical trial data; -33- ● Risk that participants enrolled in our clinical trials will acquire COVID-19 while the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed adverse events; ● Delays in necessary interactions with local regulators, ethics committees and other third parties and contractors due to limitations in employee resources or forced furlough of government employees; ● Limitations in employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; and ● Refusal of the FDA to accept data from clinical trials in affected geographies.
If there is a renewed outbreak of COVID-19 it may result in restrictions and safety measures that could cause fluctuations in sales of our products, ability to manufacture, as well as potential disruptions to our supply chain. -36- In addition, if there is a renewed outbreak of COVID-19, this may cause disruptions that could have a material adverse impact on our FDA clinical trial plans and timelines, including: ● Delays in receiving authorizations from local regulatory authorities, ethics committees and institutional review boards to initiate planned clinical trials; ● Delays or difficulties in enrolling patients in our clinical trials; ● Delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; ● Delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials, including interruptions in global shipping that may affect the transport of clinical trial materials; ● Changes in local regulations as part of a response to the COVID-19 pandemic which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether; ● Diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; ● Diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; ● Interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others, or interruption of clinical trial subject visits and study procedures, the occurrence of which could affect the integrity of clinical trial data; ● Risk that participants enrolled in our clinical trials will acquire COVID-19 while the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed adverse events; ● Delays in necessary interactions with local regulators, ethics committees and other third parties and contractors due to limitations in employee resources or forced furlough of government employees; ● Limitations in employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; and ● Refusal of the FDA to accept data from clinical trials in affected geographies.
Our ability to generate significant revenues and achieve profitability depends on our ability to successfully obtain required regulatory approvals in the U.S. as well as to demonstrate sufficient clinical evidence and manufacture commercial quantities of our CGuard EPS or any other products we may develop at an acceptable cost.
Our ability to generate significant revenues and achieve profitability depends on our ability to successfully obtain required regulatory approvals in the U.S. as well as to demonstrate sufficient clinical evidence and manufacture commercial quantities of our CGuard Prime, SwitchGuard and any other products we may develop at an acceptable cost.
In addition, several organizations and countries may restrict doing business with Israel and Israeli companies have been and are today subjected to economic boycotts. The interruption or curtailment of trade between Israel and its present trading partners could adversely affect our business, financial condition and results of operations.
In addition, several organizations and countries may restrict doing business with Israel and Israeli companies have been and are today subjected to economic boycotts. The interruption or curtailment of trade between Israel and its present trading partners could adversely affect our business, financial condition and results of operations. Finally, political conditions within Israel may affect our operations.
After March 15, 2013, under the Leahy-Smith America Invents Act, or the Leahy-Smith Act, enacted on September 16, 2011, the United States has moved to a first to file system. The Leahy-Smith Act also includes a number of significant changes that affect the way patent applications will be prosecuted and may also affect patent litigation.
After March 15, 2013, under the Leahy-Smith America Invents Act, or the Leahy-Smith Act, enacted on September 16, 2011, the United States has moved to a first to file system. The Leahy-Smith Act also includes a number of significant changes that affect the way patent applications are prosecuted and also affect patent litigation.
In addition, there may be insufficient demand for CGuard EPS or any other products we develop, such as CGuard Prime™ and SwitchGuard™. If we fail to generate sufficient revenues from these products, our results of operations and the value of our business and securities would be materially and adversely affected.
In addition, there may be insufficient demand for CGuard Prime, SwitchGuard and any other products we develop. If we fail to generate sufficient revenues from these products, our results of operations and the value of our business and securities would be materially and adversely affected.
Failure to obtain regulatory approval in foreign jurisdictions will prevent us from marketing our products in such jurisdictions. We market our products in international markets. In order to market our products in other foreign jurisdictions, we must obtain separate regulatory approvals from the appropriate governing body in each applicable country.
Failure to obtain regulatory approval in foreign jurisdictions will prevent us from marketing our products in such jurisdictions. We market CGuard EPS in certain international markets. In order to market any our products in other foreign jurisdictions, we must obtain separate regulatory approvals from the appropriate governing body in each applicable country.
In such cases, we may not be in a position to develop or commercialize products or services or our product candidates (and any relevant services) unless we successfully pursue litigation to nullify or invalidate the third-party intellectual property right concerned or enter into a license agreement with the intellectual property right holder, if available on commercially reasonable terms.
In such cases, we may not be in a position to develop or commercialize products or services unless we successfully pursue litigation to nullify or invalidate the third-party intellectual property right concerned or enter into a license agreement with the intellectual property right holder, if available on commercially reasonable terms.
We operate globally and develop and market products in multiple countries. Consequently, we face complex legal and regulatory requirements in multiple jurisdictions, which may expose us to certain financial and other risks. In addition, we are subject to global events beyond our control, including war, public health crises, such as pandemics and epidemics, trade disputes and other international events.
Consequently, we face complex legal and regulatory requirements in multiple jurisdictions, which may expose us to certain financial and other risks. In addition, we are subject to global events beyond our control, including war, public health crises, such as pandemics and epidemics, trade disputes and other international events.
Failure can occur at any time during the clinical trial process. If CGuard EPS does not function as expected over time, we may not achieve regulatory clearances, and may not be widely adopted by healthcare providers and patients.
Failure can occur at any time during the clinical trial process. If CGuard EPS, SwitchGuard or any other product we develop does not function as expected over time, we may not achieve regulatory clearances, and may not be widely adopted by healthcare providers and patients.
In the past, we have been impacted by the COVID-19 pandemic which has caused interruptions or delays of our business plan.
In the past, we were impacted by the COVID-19 pandemic, which has caused interruptions or delays of our business plan.
In addition, we rely on a third-party vendor to perform the sterilization process. A third-party vendor’s failure to properly sterilize a component may cause delays or disruptions in our manufacturing process. The COVID-19 pandemic has caused interruptions or delays of our business plan and if there is a renewed outbreak it may have a significant adverse effect on our business.
Finally, we rely on a third-party vendor to perform the sterilization process. A third-party vendor’s failure to properly sterilize a component may cause delays or disruptions in our manufacturing process. If there is a renewed outbreak of the COVID-19 pandemic, it may have a significant adverse effect on our business.
Clinical trials necessary to support a pre-market approval application to the FDA for our products, including CGuard EPS stent are expensive and require the enrollment of a large number of patients, and suitable patients may be difficult to identify and recruit, which may cause a delay in the development and commercialization of our product candidates.
Clinical trials necessary to support a pre-market approval application to the FDA for our products, including CGuard, SwitchGuard and any other product we develop stent are expensive and require the enrollment of a large number of patients, and suitable patients may be difficult to identify and recruit, which may cause a delay in the development and commercialization of our products.
If we were to initiate legal proceedings against a third-party to enforce a patent covering one of our new products or services, the defendant could counterclaim that the patent covering our product candidate is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace.
Competitors may infringe our intellectual property. If we were to initiate legal proceedings against a third-party to enforce a patent covering one of our products or services, the defendant could counterclaim that the patent covering our product is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace.
This could have a material adverse impact on our business, financial condition, results of operations or cash flows. Risks Related to our Clinical Trials and Regulatory Matters Completing clinical trials for CGuard EPS in the United States require meeting a number of regulatory requirements and must be conducted in compliance with the FDA’s IDE regulations.
This could have a material adverse impact on our business, financial condition, results of operations or cash flows. -37- Risks Related to our Clinical Trials and Regulatory Matters Completing clinical trials for CGuard, SwitchGuard or any other product we develop in the United States require meeting a number of regulatory requirements and must be conducted in compliance with the FDA’s IDE regulations.
If we are unable to meet any one or more of these challenges successfully, our ability to effectively commercialize our CGuard EPS system could be limited, which in turn could have a material adverse effect on our business, financial condition and results of operations.
If we are unable to meet any one or more of these challenges successfully, our ability to effectively commercialize CGuard Prime, SwitchGuard or any other product we develop could be limited, which in turn could have a material adverse effect on our business, financial condition and results of operations.
Furthermore, the results of our clinical trials are subject to human analyses and interpretation of the data accumulated, which could be affected by various errors due to, among others, lack of sufficient clinical experience with CGuard EPS, assumptions used in the statistical analysis of results, and interpretation errors in the analysis of the clinical trials results.
Furthermore, the results of our clinical trials are subject to human analyses and interpretation of the data accumulated, which could be affected by various errors due to, among others, lack of sufficient clinical experience with CGuard EPS, SwitchGuard or any other product we develop, assumptions used in the statistical analysis of results, and interpretation errors in the analysis of the clinical trials results.
Clinical failure can occur at any stage of clinical development. Our clinical trials have been conducted under differing protocols, while using specific inclusion criteria and we cannot assure you that its actual clinical performances will be satisfactory to support proposed indications and regulatory approvals and clinical acceptance and adoption, or that its use will not result in unanticipated complications.
Our clinical trials have been conducted under differing protocols, while using specific inclusion criteria and we cannot assure you that its actual clinical performances will be satisfactory to support proposed indications and regulatory approvals and clinical acceptance and adoption, or that its use will not result in unanticipated complications.
CGuard EPS is a complex medical device that requires training for qualified personal. CGuard EPS is a complex medical device that requires training for qualified personal, including physicians. Although our distributors will be required to ensure that CGuard EPS is prescribed only by trained clinicians, the potential for misuse of CGuard EPS still exists due to its complexity.
CGuard is a complex medical deice that requires training for qualified personal. CGuard and SwitchGuard are complex medical devices that requires training for qualified personal, including physicians. Although our distributors will be required to ensure that CGuard and SwitchGuard is prescribed only by trained clinicians, the potential for misuse of CGuard and SwitchGuard still exists due to its complexity.
In the event you are a non-U.S. investor, you should consult your tax advisors as to the consequences, under the tax laws of the country where you are resident for tax purposes, of acquiring, holding and disposing of our preferred stock and our warrants. Item 1B. Unresolved Staff Comments. Not applicable.
In the event you are a non-U.S. investor, you should consult your tax advisors as to the consequences, under the tax laws of the country where you are resident for tax purposes, of acquiring, holding and disposing of our preferred stock and our warrants.
In addition, later discovery of previously unknown problems with our products, including adverse events of unanticipated severity or frequency, or with our suppliers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: ● restrictions on the marketing or manufacturing of our product candidates, withdrawal of the product from the market, or voluntary or mandatory product recalls; ● fines, warning letters, or untitled letters; ● holds on clinical trials; ● refusal by the regulatory authority to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals; ● product seizure or detention, or refusal to permit the import or export of our product candidates; and ● injunctions, the imposition of civil penalties or criminal prosecution. -37- The FDA also requires that our sales and marketing efforts, as well as promotions, be consistent with various laws and regulations.
In addition, later discovery of previously unknown problems with our products, including adverse events of unanticipated severity or frequency, or with our suppliers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: ● restrictions on the marketing or manufacturing of our products, withdrawal of the product from the market, or voluntary or mandatory product recalls; ● fines, warning letters, or untitled letters; ● holds on clinical trials; ● refusal by the regulatory authority to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals; ● product seizure or detention, or refusal to permit the import or export of our products; and ● injunctions, the imposition of civil penalties or criminal prosecution.
If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantly expanded climate-related disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversight obligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues, investors may reconsider their capital investment in our Company, we may become subject to penalties, and customers and consumers may choose to stop purchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.
If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantly expanded climate-related disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversight obligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues, investors may reconsider their capital investment in our Company, we may become subject to penalties, and customers and consumers may choose to stop purchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition. -51- Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidity risk.
We expect these risks will increase as we pursue our strategy to expand operations into new geographic markets. We may not succeed in developing and implementing effective policies and strategies in each location where we conduct business.
We expect these risks will increase as we pursue our strategy to expand operations into new geographic markets. We may not succeed in developing and implementing effective policies and strategies in each location where we conduct business. Any failure to do so may harm our business, results of operations and financial condition.
These risks include, among others, the following: ● we have a history of net losses and may experience future losses; ● our history of recurring losses and negative cash flows from operating activities, significant future commitments and the uncertainty regarding the adequacy of our liquidity to pursue our complete business objectives, and substantial doubt regarding our ability to continue as a going concern; -26- ● we will 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 our stockholders’ ownership interests; ● failure to satisfy regulatory requirements of the new European Medical Device Regulation may prevent us from marketing CGuard EPS in countries requiring the CE mark. ● we may become subject to claims by much larger and better capitalized competitors enforcing their intellectual property rights against us or seeking to invalidate our intellectual property or our rights thereto; ● completing clinical trials for CGuard EPS in the United States require meeting a number of regulatory requirements and must be conducted in compliance with the FDA’s IDE regulations.
These risks include, among others, the following: ● we have a history of net losses and may experience future losses; ● our history of recurring losses and negative cash flows from operating activities, significant future commitments and the uncertainty regarding the adequacy of our liquidity to pursue our complete business objectives, ● we will 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 our stockholders’ ownership interests; ● we may become subject to claims by much larger and better capitalized competitors enforcing their intellectual property rights against us or seeking to invalidate our intellectual property or our rights thereto; ● completing clinical trials for CGuard Carotid Stent System and SwitchGuard NPS in the United States require meeting a number of regulatory requirements and must be conducted in compliance with the FDA’s IDE regulations.
Moreover, the timing of the commencement, continuation, and completion of any future clinical trial may be subject to significant delays attributable to various causes, including, but not limited to, scheduling conflicts with participating clinicians and clinical institutions, difficulties in identifying and enrolling patients who meet trial eligibility criteria, failure of patients to complete the clinical trial, delay in or failure to meet regulatory and/or IRB requirements to conduct a clinical trial at a one or more prospective sites, and shortages of supply in the investigational device.
Moreover, the timing of the commencement, continuation, and completion of any future clinical trial may be subject to significant delays attributable to various causes, including, but not limited to, scheduling conflicts with participating clinicians and clinical institutions, difficulties in identifying and enrolling patients who meet trial eligibility criteria, failure of patients to complete the clinical trial, delay in or failure to meet regulatory and/or IRB requirements to conduct a clinical trial at a one or more prospective sites, and shortages of supply in the investigational device. -38- Clinical trials necessary to support a PMA application are lengthy and expensive and require the enrollment of a large number of patients, and suitable patients may be difficult to identify and recruit.
During the last year our mesh supplier informed us that it will not be able to supply the polymer fiber in the future due to issues with raw materials, therefore we purchased inventory which should be sufficient to support our production needs in the next 2.5 years.
During 2022, our mesh supplier informed us that it will not be able to supply the polymer fiber in the future due to issues with raw materials, therefore we purchased inventory which should be sufficient to support our production needs until the middle of 2028.
This could in turn negatively affect our ability to access equity markets for capital. -48- Risks Related to Operating in Israel We anticipate being subject to fluctuations in currency exchange rates because we expect a substantial portion of our revenues will be generated in Euros and U.S. dollars, while a significant portion of our expenses will be incurred in New Israeli Shekels.
Risks Related to Operating in Israel We anticipate being subject to fluctuations in currency exchange rates because we expect a substantial portion of our revenues will be generated in Euros and U.S. dollars, while a significant portion of our expenses will be incurred in New Israeli Shekels.
For instance, we will need to raise additional funds to accomplish the following: ● furthering our efforts to ultimately seek the FDA approval for commercial sales of CGuard EPS in the United States; ● development of our current and future products, including CGuard EPS enhancements; ● pursuing growth opportunities, including more rapid expansion and funding regional distribution systems; ● making capital improvements to improve our infrastructure; ● hiring and retaining qualified management and key employees; ● responding to competitive pressures; ● complying with regulatory requirements such as licensing and registration; and ● maintaining compliance with applicable laws. -28- Any additional capital raised through the sale of equity or equity-backed securities may dilute our stockholders’ ownership percentages and could also result in a decrease in the market value of our equity securities.
For instance, we will need to raise additional funds to accomplish the following: ● furthering our efforts to ultimately seek the FDA approval for commercial sales of CGuard EPS and Switchguard NPS in the United States; ● development of our current and future products, including CGuard EPS and SwitchGuard NPS enhancements; ● pursuing growth opportunities, including more rapid expansion and funding regional distribution systems; ● making capital improvements to improve our infrastructure; ● hiring and retaining qualified management and key employees; ● responding to competitive pressures; ● complying with regulatory requirements such as licensing and registration; and ● maintaining compliance with applicable laws.
Therefore, we cannot be certain that we were the first to invent, or the first to file patent applications relating to, our stent technologies. Third parties may initiate adversarial proceedings, known as an inter-partes review (IPR) in the U.S. Patent and Trademark Office to challenge the validity of our patent claims in the United States.
Therefore, we cannot be certain that we were the first to invent, or the first to file patent applications relating to, our stent technologies and related surgical technologies that we are developing. Third parties may initiate adversarial proceedings, known as an inter-partes review (IPR) in the U.S.
There can be no assurance that we will be able to achieve sufficient revenues throughout the year or be profitable in the future.
We expect to incur additional operating losses for the foreseeable future. There can be no assurance that we will be able to achieve sufficient revenues throughout the year or be profitable in the future.
Additionally, pending patent applications which have been published can, subject to certain limitations, be later amended in a manner that could cover our services, our new products or the use of our new products. Third-party intellectual property right holders may also actively bring infringement claims against us.
Additionally, pending patent applications can, subject to certain limitations, be later amended in a manner that could cover our services, our new products or the use of our new products. Third-party intellectual property right holders may also actively bring infringement claims against us. We cannot guarantee that we will be able to successfully settle or otherwise resolve such infringement claims.
We have not received approvals in the United States and other jurisdictions and there can be no assurance that we will be able to receive regulatory approvals to commence marketing and sales for our CGuard EPS and other products we may develop, such as CGuard Prime™ and SwitchGuard™ in the United States or in such other jurisdictions.
We have not received approvals in the United States and certain other jurisdictions for CGuard Prime and have not received any approvals for SwitchGuard and there can be no assurance that we will be able to receive regulatory approvals to commence marketing and sales for our products in any jusrisdiction where we are seeking approvals.
Our products may in the future be subject to product notifications, recalls, or voluntary market withdrawals that could harm our reputation, business and financial results.
Any of these events could harm our business and operations and could negatively impact our stock price. Our products may in the future be subject to product notifications, recalls, or voluntary market withdrawals that could harm our reputation, business and financial results.
In general, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents, all of which could have a material adverse effect on our business and financial condition.
In general, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents, all of which could have a material adverse effect on our business and financial condition. -48- We may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming, and unsuccessful.
If such an infringement claim should be brought and be successful, we may be required to pay substantial damages, be forced to abandon our new products or services or seek a license from any patent holders.
If such an infringement claim should be brought and be successful, we may be required to pay substantial damages, be forced to abandon our new products or services or seek a license from any patent holders. No assurances can be given that a license will be available on commercially reasonable terms, if at all.
Additionally, the provisions include a reduction in the annual rate of inflation for hospitals which started in 2011 and the establishment of an independent payment advisory board to recommend ways of reducing the rate of growth in Medicare spending. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors.
Additionally, the provisions include a reduction in the annual rate of inflation for hospitals which started in 2011 and the establishment of an independent payment advisory board to recommend ways of reducing the rate of growth in Medicare spending.
Third parties can sometimes bring challenges against a patent holder to resolve these issues, as well. If a court decides that any such patents are not valid, not enforceable, not wholly owned by us, or are of a limited scope, we may not have the right to stop others from using our inventions.
If a court decides that any such patents are not valid, not enforceable, not wholly owned by us, or are of a limited scope, we may not have the right to stop others from using our inventions.
We may not obtain foreign regulatory approvals on a timely basis, if at all. CE mark approval or any future FDA approval does not ensure approval by regulatory authorities in other countries. We may not be able to file for regulatory approvals and may not receive necessary approvals to commercialize our products in certain markets.
We may not obtain foreign regulatory approvals on a timely basis, if at all. CE mark approval or any future FDA approval does not ensure approval by regulatory authorities in other countries.
Importantly, the CGuard EPS clinical trial and any others that we may conduct in the future, must be conducted in accordance with the FDA’s IDE regulations, which, among other things, establish requirements for investigational device labeling, prohibit pre-approval promotion of a device candidate, and specify recordkeeping, reporting, and monitoring responsibilities of study sponsors and study investigators. -34- We may not be able to obtain IRB approval to undertake clinical trials in the United States for any products we intend to market in the United States in the future.
Importantly, the C-GUARDIANS trial and any others that we are conducting or may conduct in the future, must be conducted in accordance with the FDA’s IDE regulations, which, among other things, establish requirements for investigational device labeling, prohibit pre-approval promotion of a device candidate, and specify recordkeeping, reporting, and monitoring responsibilities of study sponsors and study investigators.
Our research and development programs and commercial laboratory operations depend on our ability to attract and retain highly skilled scientists and technicians. We may not be able to attract or retain qualified scientists and technicians in the future due to the intense competition for qualified personnel among life science businesses.
We may not be able to attract or retain qualified scientists and technicians in the future due to the intense competition for qualified personnel among life science businesses.
Risk Related to Commercialization of Our Products While we derive most of our revenue from the sale of CGuard EPS in CE marked countries, our ability to generate significant revenues and achieve profitability depends, among other things, on our ability to receive FDA approval of CGuard EPS and other products we may develop, such as CGuard Prime™ and SwitchGuard™.
We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely impact our financial condition. -31- Risk Related to Commercialization of Our Products While we derive most of our revenue from the sale of CGuard EPS in CE marked countries, our ability to generate significant revenues and achieve profitability depends, among other things, on our ability to receive FDA approval of CGuard Prime and SwitchGuard and other products we may develop.
Additionally, we have only limited experience in filing and prosecuting the applications necessary to gain regulatory approvals, and our clinical, regulatory and quality assurance personnel are currently composed of only five employees. As a result, we may experience delays in connection with obtaining regulatory approvals for our products.
Any change in accepted metrics may result in reconfiguration of, and delays in, our clinical trials. Additionally, we have only limited experience in filing and prosecuting the applications necessary to gain regulatory approvals, and our clinical, regulatory and quality assurance personnel are currently composed of only ten employees.
The results of our clinical trials may be insufficient to obtain regulatory approval for our product candidates. We will only receive regulatory approval to commercialize a product candidate if we can demonstrate to the satisfaction of the FDA or the applicable foreign regulatory agency, in well designed and conducted clinical trials, that the product candidate is safe and effective.
We will only receive regulatory approval to commercialize CGuard Prime, SwitchGuard or any other product we develop if we can demonstrate to the satisfaction of the FDA or the applicable foreign regulatory agency, in well designed and conducted clinical trials, that the product is safe and effective.
Over time, a control may be inadequate because of changes in conditions, such as growth of the company or increased transaction volume, or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Over time, a control may be inadequate because of changes in conditions, such as growth of the company or increased transaction volume, or the degree of compliance with the policies or procedures may deteriorate.
Such misuse could result in adverse medical consequences for patients that could damage our reputation, subject us to costly product liability litigation and otherwise have a material adverse effect on our business, financial condition and results of operations. -31- We operate in an intensely competitive and rapidly changing business environment, and there is a substantial risk our products could become obsolete or uncompetitive.
Such misuse could result in adverse medical consequences for patients that could damage our reputation, subject us to costly product liability litigation and otherwise have a material adverse effect on our business, financial condition and results of operations.
We are, or may be, subject to federal, state and foreign healthcare laws and regulations and implementation of or changes to such healthcare laws and regulations could adversely affect our business and results of operations.
We may not be able to file for regulatory approvals and may not receive necessary approvals to commercialize our products in certain markets. -42- We are, or may be, subject to federal, state and foreign healthcare laws and regulations and implementation of or changes to such healthcare laws and regulations could adversely affect our business and results of operations.
In addition, patients participating in our clinical trials may die before completion of the trial or suffer adverse medical events unrelated to or related to our products. Delays in patient enrollment or failure of patients to continue to participate in a clinical trial may cause an increase in costs and delays or result in the failure of the clinical trial.
In addition, patients participating in our clinical trials may die before completion of the trial or suffer adverse medical events unrelated to or related to our products.
If we are unable to attract, retain and motivate our key personnel to accomplish our business objectives, we may experience constraints that will adversely affect our ability to support our operations, and our results of operations may be materially and adversely affected. -45- We are an international business, and we are exposed to various global and local risks that could have a material adverse effect on our financial condition and results of operations.
If we are unable to attract, retain and motivate our key personnel to accomplish our business objectives, we may experience constraints that will adversely affect our ability to support our operations, and our results of operations may be materially and adversely affected.
Consequently, you may be effectively prevented from pursuing remedies under U.S. federal and state securities laws against us or any of our non-U.S. directors or officers. -50- The tax benefits that are currently available to us under Israeli law require us to satisfy specified conditions.
Consequently, you may be effectively prevented from pursuing remedies under U.S. federal and state securities laws against us or any of our non-U.S. directors or officers.
Some of the components of our products are currently provided by only one vendor, or a single-source supplier. We may have difficulty obtaining similar components from other suppliers that are acceptable to the FDA or foreign regulatory authorities if it becomes necessary.
We may have difficulty obtaining similar components from other suppliers that are acceptable to the FDA or foreign regulatory authorities if it becomes necessary.
If we were unable to produce sufficient quantities of our CGuard EPS stents to meet market demand or for use in our current and planned clinical trials, or if our manufacturing process yields substandard stents, our development and commercialization efforts would be delayed.
If we were unable to produce sufficient quantities of CGuard, SwitchGuard or any other product we develop to meet market demand or for use in our current and planned clinical trials, or if our manufacturing process yields substandard stents, our development and commercialization efforts would be delayed. -34- To manufacture CGuard, SwitchGuard and any other product we develop in quantities to meet anticipated market demand if we were to receive FDA approval, we will need to increase manufacturing capacity, which will involve significant challenges.
Clinical trials involve use of a medical device candidate (or drug, biological, or other product candidate, as applicable) on human subjects under the supervision of qualified investigators in accordance with current Good Clinical Practices, including the requirement that all research subjects provide informed consent for their participation in the clinical study.
Failure to maintain compliance with IDE regulations could have a material adverse effect on our business. Clinical trials involve use of a medical device on human subjects under the supervision of qualified investigators in accordance with current Good Clinical Practices, including the requirement that all research subjects provide informed consent for their participation in the clinical study.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our headquarters are located in Tel Aviv, Israel, where we lease a 1,750 square meter office and manufacturing facility that has the capacity to manufacture and assemble 1,200 stents per month, based upon the production schedule of one shift per day.
Biggest changeItem 2. Properties. Our headquarters are located in Tel Aviv, Israel, where we lease a 1,700 square meter office and manufacturing facility that has the capacity to manufacture and assemble 2,000 stents per month, based upon the production schedule of one shift per day.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThere are currently no pending material legal proceedings, and we are currently not aware of any legal proceedings or claims against us or our property that we believe will have any significant effect on our business, financial position or operating results. Item 4. Mine Safety Disclosures. Not applicable. -53- PART II
Biggest changeThere are currently no pending material legal proceedings, and we are currently not aware of any legal proceedings or claims against us or our property that we believe will have any significant effect on our business, financial position or operating results. Item 4. Mine Safety Disclosures. Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock has been quoted on the Nasdaq Capital Market (“Nasdaq”) since May 21, 2021, under the symbol “NSPR.” The last reported sales price of our common stock on the Nasdaq on March 28, 2023, was $1.14 per share.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock has been quoted on the Nasdaq Capital Market (“Nasdaq”) since May 21, 2021, under the symbol “NSPR.” The last reported sales price of our common stock on the Nasdaq on March 4, 2024, was $2.57 per share.
We do not intend to pay cash dividends in the future; rather, we intend to retain future earnings, if any, to fund the operation and expansion of our business and for general corporate purposes. The holders of Series C Preferred Stock are not entitled to receive any dividends, unless and until specifically declared by our board of directors.
We do not intend to pay cash dividends in the future; rather, we intend to retain future earnings, if any, to fund the operation and expansion of our business and for general corporate purposes. -58- The holders of Series C Preferred Stock are not entitled to receive any dividends, unless and until specifically declared by our board of directors.
Record Holders As of March 28, 2023, we had 266 stockholders of record of our common stock. This figure includes an indeterminate number of stockholders who hold their shares in “street name.” Dividends In the past, we have not declared or paid cash dividends on our common stock.
Record Holders As of March 3, 2023, we had 278 stockholders of record of our common stock. This figure includes an indeterminate number of stockholders who hold their shares in “street name.” Dividends In the past, we have not declared or paid cash dividends on our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe primary reasons for the increase in cash provided by our investing activities was withdrawal of short-term deposits, net of investments of $9,000,000 during the twelve months ended December 31,2022 , compared to investment in short-term deposits, net of withdrawals of $22,000,000 during the twelve months ended December 31,2021, and due to a decrease in employee funds to $86,000 during the twelve months ended December 31, 2022, compared to employee funds of $113,000 during the same period in 2021, offset, in part, by an increase of $129,000 in net payments made for purchase of property, plant and equipment to $473,000 during the twelve months ended December 31, 2022, from $344,000 during the same period in 2021.
Biggest changeThe primary reason for the increase in cash used by our investing activities is an investment in marketable securities, net of withdrawal of $28,644,000, offset by an increase in withdrawal from short-term bank deposits, net of investment in short-term deposits, of $4,000,000, and a decrease of $92,000 in payments made for purchase of property, plant and equipment during the twelve months ended December 31, 2023. -64- Cash provided by financing activities for the twelve months December 31, 2023, was $37,534,000.
Actual results could differ from those estimates. As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to inventory valuations and assessing the likelihood of exercise of options to extend the lease term.
Actual results could differ from those estimates. As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to inventory valuations and assessing the likelihood of exercise of options to extend the lease term. Marketable securities Marketable securities consist of debt securities.
The amendment period added approximately $835,000 to the leasing liability. -56- Revenue recognition A contract with a customer exists only when: 1) the parties to the contract have approved it and are committed to perform their respective obligations, 2) we can identify each party’s rights regarding the distinct goods or services to be transferred (“Performance Obligations”), 3) we can determine the transaction price for the goods or services to be transferred, 4) the contract has commercial substance and 5) it is probable that we will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.
Revenue recognition A contract with a customer exists only when: 1) the parties to the contract have approved it and are committed to perform their respective obligations, 2) we can identify each party’s rights regarding the distinct goods or services to be transferred (“Performance Obligations”), 3) we can determine the transaction price for the goods or services to be transferred, 4) the contract has commercial substance and 5) it is probable that we will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.
We recognize the incremental costs of obtaining contracts as an expense since the amortization period of the assets that we otherwise would have recognized is one year or less. The costs are recorded under selling and marketing expenses. We recognize revenue net of value added tax (VAT).
We recognize the incremental costs of obtaining contracts as an expense since the amortization period of the assets that we otherwise would have recognized is one year or less. The costs are recorded under selling and marketing expenses.
Gross margin (gross profits as a percentage of revenue) increased to 21.6% during the twelve months ended December 31, 2022 from 16.8% during the twelve months ended December 31, 2021, driven by the reasons mentioned above. -57- Research and Development Expenses .
Gross margin (gross profits as a percentage of revenue) increased to 29.1% during the twelve months ended December 31, 2023, from 21.6% during the twelve months ended December 31, 2022, driven by the reasons mentioned above. Research and Development Expenses .
Our operating results could also be impacted by a weakening of the Euro and strengthening of the 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. Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Not applicable.
Our operating results could also be impacted by a weakening of the Euro and strengthening of the 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.
The principal sources of the cash used by financing activities during the twelve months ended December 31, 2022 were due to issuance costs associated with a shelf registration statement on Form S-3 filed with the SEC on June 3, 2022.
Cash used by financing activities for the twelve months ended December, 2022 was $140,000, the cash used by financing activities during the twelve months ended December, 2022 were due to issuance costs associated with a shelf registration statement on Form S-3 filed with the SEC on June 3, 2022.
Concentration of credit risk and allowance for doubtful accounts Financial instruments that may potentially subject us to a concentration of credit risk consist of cash and cash equivalents, which are deposited in major financially sound institutions in the United States, Israel and Germany, and trade accounts receivable.
Concentration of credit risk and allowance for doubtful accounts Financial instruments that may potentially subject us to a concentration of credit risk consist of cash and cash equivalents and short-term bank deposits, which are deposited in major financially sound institutions in the U.S, Israel and Germany, and trade accounts receivable and other receivables.
Share-based compensation Employee option awards are classified as equity awards and accounted for using the grant-date fair value method. The fair value of share-based awards is estimated using the Black-Scholes valuation model and expensed over the requisite service period, net of estimated forfeitures. We elected to account for forfeitures as they occur.
We recognize revenue net of value added tax (VAT). -62- Share-based compensation Employee option awards are classified as equity awards and accounted for using the grant-date fair value method. The fair value of share-based awards is estimated using the Black-Scholes valuation model and expensed over the requisite service period, net of estimated forfeitures.
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.
Overview We are a medical device company focusing on the development and commercialization of our proprietary MicroNet™ stent platform for the treatment of carotid artery disease and other vascular disease. A stent is an expandable “scaffold-like” device, usually constructed of a metallic material, that is inserted into the lumen of the artery to create patency and revascularization of blood flow.
For the twelve months ended December 31, 2022, gross profit (revenue less cost of revenues) increased by 48.1%, or $363,000, to $1,117,000, compared to a gross profit of $754,000 for the same period in 2021.
For the twelve months ended December 31, 2023, gross profit (revenue less cost of revenues) increased by 61.8%, or $690,000, to $1,807,000, compared to a gross profit of $1,117,000 for the same period in 2022.
With respect to regions, the increase in revenue was primarily attributable to a $269,000 increase in Latin America, a $112,000 increase in Asia, a $94,000 increase in Europe and a $50,000 increase in other geographies. This growth was mainly due to growth in existing and new markets.
With respect to regions, the increase in revenue was primarily attributable to a $1,036,000 increase in Europe, a $76,000 increase in Asia and $24,000 increase in Latin America. This growth was mainly due to growth in existing and new markets.
For the twelve months ended December 31, 2022, research and development expenses increased by 51.4%, or $2,652,000, to $7,810,000, from $5,158,000 during the twelve months ended December 31, 2021.
For the twelve months ended December 31, 2023, research and development expenses increased by 2.2%, or $171,000, to $7,981,000, from $7,810,000 during the twelve months ended December 31, 2022.
Our trade accounts receivable is derived from revenues earned from customers from various countries. We perform ongoing credit evaluations of our customers’ financial condition and, generally, require no collateral from customers. We also have a credit insurance policy for some customers. We maintain an allowance for doubtful accounts receivable based upon the expected ability to collect the accounts receivable.
Our trade accounts receivable is derived from revenues earned from customers from various countries. We perform ongoing credit evaluations of our customers’ financial condition and, requires no collateral from our customers. We also have a credit insurance policy for some of our customers.
This increase in gross profit resulted from a $186,000 increase in revenues (as mentioned above) less the associated related material and labor costs and a decrease of $177,000 in miscellaneous expenses.
This increase in gross profit resulted from a $484,000 increase in revenues less the associated related material and labor costs, a decrease in write-offs of $179,000 and a decrease of $27,000 in miscellaneous expenses.
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.
MicroNet, a micron mesh sleeve, is attached over a stent to provide embolic protection both during and after stenting procedures. Our CGuard EPS combines MicroNet and a unique self-expandable nitinol stent in a single device for use in carotid artery revascularization.
For the twelve months ended December 31, 2022, selling and marketing expenses increased by 26.0%, or $757,000, to $3,664,000, from $2,907,000 during the twelve months ended December 31, 2021.
Selling and Marketing Expenses . For the twelve months ended December 31, 2023, selling and marketing expenses increased by 5.5%, or $201,000, to $3,865,000, from $3,664,000 during the twelve months ended December 31, 2022.
In determining the present value of lease payments, we use the incremental borrowing rate based on the information available at the lease commencement date as the rate implicit in the lease is not readily determinable. The determination of the incremental borrowing rate requires management judgment based on information available at lease commencement.
Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, we use the incremental borrowing rate based on the information available at the lease commencement date as the rate implicit in the lease is not readily determinable.
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 was designed to enroll approximately 315 subjects in a maximum of 40 study sites located in the United States and Europe.
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 CAS.
General and Administrative Expenses . For the twelve months ended December 31, 2022, general and administrative expenses increased by 12.8%, or $951,000, to $8,356,000, from $7,405,000 during the twelve months ended December 31, 2021.
For the twelve months ended December 31, 2023, general and administrative expenses increased by 32.9%, or $2,748,000, to $11,104,000, from $8,356,000 during the twelve months ended December 31, 2022.
We continue to expedite the review process for recertification under the MDR. -54- 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.
On September 8, 2020, we received approval from the FDA of our 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.
This increase was predominantly driven by a 18.9% increase in sales volume of CGuard EPS, from $4,309,000 during the twelve months ended December 31, 2021, to $5,123,000 during the twelve months ended December 31, 2022.
This increase was predominantly driven by a 21.1% increase in sales volume of CGuard EPS, from $5,123,000 during the twelve months ended December 31, 2022, to $6,205,000 during the twelve months ended December 31, 2023. This sales increase was mainly due to growth in existing and new markets.
Our expenses for income taxes reflect primarily the tax liability due to potential tax exposure. Net Loss . Our net loss increased by $3,573,000, or 24.0%, to $18,491,000, for the twelve months ended December 31, 2021, from $14,918,000 during the twelve months ended December 31, 2021.
For the twelve months ended December 31, 2023, tax increased by $37,000 compared to the twelve months ended December 31, 2022. Our expenses for income taxes reflect primarily the tax liability due to potential tax exposure. Net Loss .
ROU assets represent Company’s right to use an underlying asset for the lease term and lease liabilities represent obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term.
Leases Operating leases are included in operating lease right-of-use (“ROU”) assets, Accounts payable and accruals - Other, and operating lease liabilities. ROU assets represent Company’s right to use an underlying asset for the lease term and lease liabilities represent obligation to make lease payments arising from the lease.
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.
The primary endpoint is a composite of: (1) incidence of major adverse events including Death (all-cause mortality), any Stroke, and Myocardial Infarction (DSMI) through 30-days post index procedure, or (2) ipsilateral stroke from day 31 to day 365 post-procedure. All events are adjudicated by an independent clinical events committee.
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 such as SwitchGuard.
In furtherance of our strategy that focuses on establishing the CGuard Carotid Stent System as a viable alternative to vascular surgery, we are developing a new transcarotid artery revascularization (TCAR) delivery system, SwitchGuard NPS, for transcarotid access and neuro protection.
We regularly evaluate the carrying value of our inventories and when, based on such evaluation, factors indicate that impairment has occurred, we impair the inventories’ carrying value. In addition, we write-off fails in production based on actual and estimated. Leases Operating leases are included in operating lease right-of-use (“ROU”) assets, Accounts payable and accruals - Other, and operating lease liabilities.
Our inventories generally have a limited shelf life and are subject to impairment as they approach their expiration dates. We regularly evaluate the carrying value of our inventories and when, based on such evaluation, factors indicate that impairment has occurred, we impair the inventories’ carrying value. In addition, we write-off fails in production based on actual and estimated.
The primary reason for the increase in cash used in our operating activities was an increase of $3,148,000 in payments for third party related expenses and for professional services (primarily due to payments related to our ongoing FDA trial, and production related payments), an increase of $802,000 in salary and bonus payments from $7,756,000 in the twelve months ended December 31, 2021 to $8,558,000 during the same period in 2022 offset, in part, by an increase of $1,618,000 in payments received from customers to $5,333,000 during the twelve months ended December 31, 2022, from $3,715,000 during the same period in 2021.
The primary reason for the increase in cash used in our operating activities was an increase of $731,000 in payments for third party related expenses and for professional services, an increase of $937,000 in salary and bonus payments from $8,558,000 in the twelve months ended December 31, 2022 to $9,495,000 during the same period in 2022, offset, in part, by an increase of $137,000 in payments received from customers to $5,470,000 during the twelve months ended December 31, 2023, from $5,333,000 during the same period in 2022 and an increase of $697,000 in interest income received from marketable securities, money market funds and short-term bank deposits Cash used by our investing activities was $16,092,000 during the twelve months ended December 31, 2023, compared to cash provided by our investing activities of $8,441,000 during the twelve months ended December 31, 2022.
For the twelve months ended December 31, 2022, revenue increased by $676,000, or 15%, to $5,171,000, from $4,495,000 during the twelve months ended December 31, 2021.
Results of Operations Twelve months ended December 31, 2023 compared to the twelve months ended December 31, 2022 Revenues . For the twelve months ended December 31, 2023, revenue increased by $1,034,000, or 20.0%, to $6,205,000, from $5,171,000 during the twelve months ended December 31, 2022.
For the twelve months ended December 31, 2022, net cash used in our operating activities increased by $2,332,000 to $15,542,000, from $13,210,000 during the same period in 2021.
Our cash requirements are generally for research and development, marketing and sales activities, finance and administrative cost, capital expenditures and general working capital. For the twelve months ended December 31, 2023, net cash used in our operating activities increased by $834,000 to $16,376,000, from $15,542,000 during the same period in 2022.
The increase in financial income primarily resulted from a $229,000 increase in interest income from short-term bank deposits and an increase of $181,000 in financial income related to changes in exchange rates. Tax Expenses . For the twelve months ended December 31, 2022, tax decreased by $17,000 compared to the twelve months ended December 31, 2021.
For the twelve months ended December 31, 2023, financial income increased by $1,042,000, to $1,292,000 from $250,000 during the twelve months ended December 31, 2022. The increase in financial income primarily resulted from a $1,152,000 increase in interest income from investment in marketable securities, money market funds and short-term bank deposits. Tax Expenses .
Current assets decreased by $15,768,000 during the period and current liabilities increased by $723,000 during the period. As a result, our working capital decreased by $16,491,000 to $16,256,000 as of December 31, 2022.
As of December 31, 2023, our current assets exceeded our current liabilities by a multiple of 7.3. Current assets increased by $22,833,000 during the period and current liabilities increased by $950,000 during the period. As a result, our working capital increased by $21,883,000 to $38,139,000 as of December 31, 2023.
This increase resulted primarily from an increase in salary expenses of $297,000, an increase in tradeshows and travel expenses of $288,000 in light of resumed marketing activities following the lifting of restrictions related to COVID-19, and an increase in share-based compensation expenses of $157,000 due to the expense recognition of grants made during the fourth quarter of 2021.
This increase resulted primarily from an increase of compensation expenses of $151,000 mainly due to an increase of share-based compensation-related expenses due to the expense recognition of grants made during the second quarter of 2023 and an increase of $50,000 in miscellaneous expenses. General and Administrative Expenses .
Assuming full penetration of the intervention caseload by CGuard EPS, we estimate that the addressable market for CGuard EPS will be approximately $666 million in 2022 (source: Health Research International Personal Medical Systems, Inc. September 13, 2021 Results of Update Report on Global Carotid Stenting Procedures and Markets by Major Geography and Addressable Markets).
Assuming full penetration of the intervention caseload by CGuard Carotid Stent System, we estimate that the addressable market for CGuard Carotid Stent System and SwitchGuard NPS is approximately $1.3 billion (source: Health Research International Personal Medical Systems, Inc.
According to this same report, assuming full penetration of the caseload for all individuals diagnosed with high-grade carotid artery stenosis, we estimate that the total available market for CGuard EPS in 2022 will be approximately $5 billion.
According to this same report and internal estimates, assuming full penetration of treatment for all individuals diagnosed with high-grade carotid artery stenosis, we estimate the total available market for CGuard Carotid Stent System and SwitchGuard NPS to be approximately $9.3 billion, which may grow over time if expanded treatment options such as CGuard Carotid Stent System and SwitchGuard NPS lead to increased patient screening for carotid artery disease.
We consider the current 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.
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.
In September 2020, we launched CGuard EPS in Brazil after receiving regulatory approval in July 2020 and 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 and other Asian countries.
Our CGuard EPS originally received CE mark approval under the MDD in the EU in March 2013 and was fully launched in Europe in September 2015. Subsequently, we launched CGuard EPS in over 30 countries and on February 3, 2021, we executed a distribution agreement with Chinese partners for the purpose of expanding our presence in the Asian markets.
We elected to recognize compensation expenses for awards with only service conditions that have graded vesting schedules using the accelerated multiple option approach. Results of Operations Twelve months ended December 31, 2022 compared to the twelve months ended December 31, 2021 Revenues .
We elected to account for forfeitures as they occur. We elected to recognize compensation expenses for awards with only service conditions that have graded vesting schedules using the accelerated multiple option approach. The attribution for nonemployee awards is in the same manner as if we had paid cash for the goods or services.
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, CGuard Prime.
We anticipate reporting primary endpoint results from the C-GUARDIANS trial in mid 2024 that may support the submission of a PMA application in the third quarter of 2024 with a view to potential FDA approval of the CGuard Prime stent system in the first half of 2025. -59- We continue to invest in current and future potential new indications, products and manufacturing enhancements for CGuard that are expected to reduce cost of goods and/or provide the best-in-class performing delivery systems, such as CGuard Prime.
The increase in net loss resulted primarily from an increase of $4,360,000 in operating expenses partially offset by an increase of $407,000 in financial income and an increase of $363,000 in gross profit.
Our net loss increased by $1,425,000, or 7.7%, to $19,916,000 for the twelve months ended December 31, 2022, from $18,491,000 during the twelve months ended December 31, 2022. The increase in net loss resulted primarily from an increase of $3,120,000 in operating expenses, offset by an increase of $1,042,000 in financial income and increase of $690,000 in gross profit.
Inventory Inventories are stated at the lower of cost (cost is determined on a “first-in, first-out” basis) or net realizable value. Our inventories generally have a limited shelf life and are subject to impairment as they approach their expiration dates.
The estimate is a result of our ongoing evaluation of collectability, customer creditworthiness, historical levels of credit losses, and future expectations. The allowance for expected credit losses was immaterial during the periods presented. -61- Inventory Inventories are stated at the lower of cost (cost is determined on a “first-in, first-out” basis) or net realizable value.
We were organized in the State of Delaware on February 29, 2008. Critical Accounting Policies We prepared our consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). U.S.
In addition, we paid Piper Sandler & Co. a financial advisory fee of $1.5 million, AGP/Alliance Global Partners a financial advisory fee of $250,000 and lead investor counsel expenses of $125,000. Critical Accounting Policies We prepared our consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). U.S.
The principal sources of the cash provided by financing activities during the twelve months ended December 31, 2021 were our February 2021 public offering of common 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 $35,034,000 of aggregate net proceeds. -59- As of December 31, 2022, our current assets exceeded our current liabilities by a multiple of 4.2.
The principal source of the cash provided by financing activities during the twelve months ended December 31, 2023 were the proceeds from the Private Placement Offering in May 2023 that resulted in approximately $37,534,000 of aggregate net proceeds.
The transaction closed on February 5, 2021. Twelve months ended December 31, 2022 compared to the twelve months ended December 31, 2021 General. At December 31, 2022, we had cash and cash equivalents of $4,632,000 and Short-term bank deposits of $13,171,000 as compared to $12,004,000 of cash and cash equivalents and $22,036,000 Short-term bank deposits as of December 31, 2021.
At December 31, 2023, we had cash and cash equivalents of $9,640,000 and marketable securities of $29,383,000 as compared to $4,632,000 of cash and cash equivalents and $13,171,000 Short-term bank deposits as of December 31, 2022. We have historically met our cash needs through a combination of issuing new shares, borrowing activities and product sales.
The performance goal will be considered met if the upper bound of the two-sided 95% confidence interval calculated from the observed primary endpoint rate is On July 23, 2021, we announced the initiation of enrollment and successful completion of the first cases of our C-Guardian trial of CGuard EPS.
The performance goal will be considered met if the upper bound of the two-sided 95% confidence interval calculated from the observed primary endpoint rate is In November 2023, we announced positive 30-day follow up results from the C-GUARDIANS trial in which stenting with the C-Guard Carotid Stent System in patients with carotid artery stenosis and at high risk for carotid endarterectomy had a DSMI rate of 0.95%, measured from the date of the procedure through 30 days follow-up post-procedure.
Liquidity and Capital Resources We had an accumulated deficit as of December 31, 2022 of $201 million, as well as a net loss of $18,491,000 and negative operating cash flows. We expect to continue incurring losses and negative cash flows from operations until our product, CGuard EPS, reach commercial profitability.
Liquidity and Capital Resources As of the date of issuance of the consolidated financial statements, we have the ability to fund our planned operations for at least the next 12 months. However, we expect to continue incurring losses and negative cash flows from operations until our products (primarily CGuard reaches commercial profitability.
Removed
Our CGuard EPS originally received CE mark approval in the European Union in March 2013 and was fully launched in Europe in September 2015. Subsequently, we launched CGuard EPS in Russia and certain countries in Latin America and Asia, including India.
Added
In January 2024, we received CE mark recertification under the EU’s Medical Device Regulation regulatory framework. Currently, we are seeking strategic partners for a potential launch of CGuard EPS in Japan and other Asian countries.
Removed
Our CE mark for CGuard EPS under the MDD expired on November 12, 2022, and we are in the final stages of technical documentation review by the Notified Body auditor to meet the MDR requirements for recertification.
Added
The study, which completed enrollment in June 2023, enrolled 316 patients across 24 trial sites in the U.S. and Europe and from April 2023 included deployment of the CGuard stent using CGuard Prime, our next generation CAS stent platform.
Removed
In the meantime, on February 14, 2023, we received a derogation per Article 97 paragraph 1 of Regulation 2017/745 from the Agency for Medicines and Health Products (FAMHP) allowing us to continue marketing CGuard EPS in the EU until August 15, 2023, subject to certain procedural requirements.
Added
In addition, we intend to explore new indications for CGuard to leverage the advantages of stent design and mesh protection, well suited in labels such as acute stroke with tandem lesions.
Removed
Subsequently, on March 20, 2023, Regulation (EU) 2023/607 was published allowing us to continue marketing CGuard EPS in EU countries under the MDD directive until December 31, 2027. As a result of the foregoing, we may market and sell CGuard EPS in the EU and certain other jurisdictions subject to certain procedural requirements while our MDR CE recertification is pending.
Added
We consider our current addressable market for our CGuard Carotid Stent System and SwitchGuard NPS to be both symptomatic and asymptomatic individuals with diagnosed high-grade carotid artery stenosis ) for whom intervention is preferable to medical (drug) therapy.
Removed
Study sites in Europe may contribute a maximum of approximately 50% of the total enrollees.
Added
September 13, 2021 Results of Update Report on Global Carotid Stenting Procedures and Markets by Major Geography and Addressable Markets and internal estimates).
Removed
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.
Added
Recent Developments Private Placement On May 12, 2023, we entered into a securities purchase agreement (the “Purchase Agreement pursuant to which we agreed to sell and issue in a private placement (the “Private Placement Offering) an aggregate of 10,266,270 shares (the “Private Placement Shares”) of our common stock, pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 15,561,894 shares of common stock and warrants to purchase up to an aggregate of 51,656,328 shares of common stock, consisting of Series H warrants to purchase up to 12,914,078 shares of common stock (the “Series H Warrants”), Series I warrants to purchase up to 12,914,078 shares of common stock (the “Series I Warrants”), Series J warrants to purchase up to 12,914,086 shares of Common Stock (the “Series J Warrants”) and Series K warrants to purchase up to 12,914,078 shares of common stock (the “Series K Warrants” and together with the Series H Warrants, Series I Warrants and Series J Warrants, the “Warrants”), at an offering price of $1.6327 per Private Placement Share and associated Warrants and an offering price of $1.6326 per Pre-Funded Warrant and associated Warrants.
Removed
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. We are currently continuing with the enrollment phase. In April 2022, we completed our first European recruitment.
Added
The Pre-Funded Warrants will be immediately exercisable at an exercise price of $0.0001 per share and will not expire until exercised in full. The Warrants will be immediately exercisable upon issuance at an exercise price of $1.3827 per share, subject to adjustment as set forth therein.
Removed
Our MGuard™ Prime™ embolic protection system (“MGuard Prime EPS”) was marketed for use in patients with acute coronary syndromes, notably acute myocardial infarction (heart attack) and saphenous vein graft coronary interventions, or bypass surgery. MGuard Prime EPS combines MicroNet with a bare-metal cobalt-chromium based stent.
Added
The Warrants have a term of the earlier of (i) five years from the date of issuance and (ii) (A) in the case of the Series H Warrants, 20 trading days following the Company’s public release of primary and secondary end points related to one year follow up study results from the Company’s C-GUARDIANS pivotal trial, (B) in the case of the Series I Warrants, 20 trading days following the Company’s announcement of receipt of Premarket Approval from the Food and Drug Administration (“FDA”) for the CGuard Prime Carotid Stent System (135 cm), (C) in the case of the Series J Warrants, 20 trading days following the Company’s announcement of receipt of FDA approval for the SwitchGuard and CGuard Prime 80 and (D) in the case on the Series K Warrants, 20 trading days following the end of the fourth fiscal quarter after the fiscal quarter in which the first commercial sales of the CGuard Carotid Stent System in the United States begins. -60- The Warrants may be exercised on a cashless basis if there is no effective registration statement registering the shares underlying the Warrants.
Removed
MGuard Prime EPS received CE mark approval in the European Union in October 2010 for improving luminal diameter and providing embolic protection. Over the past years there has been a shift in industry preferences away from bare-metal stents, such as MGuard Prime EPS in ST-Elevation Myocardial Infarction (“STEMI”) patients.
Added
Under the terms of the Pre-Funded Warrants and Warrants, certain of the selling stockholders may not exercise the Pre-Funded Warrants or Warrants to the extent such exercise would cause such selling stockholder, together with its affiliates and attribution parties, to beneficially own a number of shares of common stock which would exceed 4.99% or 9.99% of our then outstanding common stock following such exercise, excluding for purposes of such determination common stock issuable upon exercise of the Pre-Funded Warrants or Warrants which have not been exercised.
Removed
As a result of declining sales of the MGuard Prime EPS, which we believe this is largely driven by the predominant industry preferences favoring drug-eluting, or drug-coated, stents, during the second quarter of 2022 we ceased sales of our MGuard Prime EPS following a phase out period.
Added
The Warrants may be exercised into pre-funded warrants if the selling stockholder is unable to exercise the Warrant due to the foregoing beneficial ownership limitation or at the selling shareholder’s election. In connection with the Purchase Agreement, we entered into a registration rights agreement (the “Registration Rights Agreement”).
Removed
We also intend to develop a pipeline of other products and additional applications by leveraging our MicroNet technology to improve peripheral procedures such as the treatment of the superficial femoral artery disease and vascular disease below the knee as well as neurovascular procedures, such as the treatment of acute stroke. -55- Presently, none of our products may be sold or marketed in the United States, but we do derive revenues from the use of our products in the currently ongoing trials.
Added
Pursuant to the Registration Rights Agreement, we were required to file a resale registration statement (the “Registration Statement”) with the SEC to register for resale the Private Placement Shares and the shares of common stock issuable upon exercise of the Pre-Funded Warrants and Warrants, within 20 days of the signing date of the Purchase Agreement (the “Signing Date”), and to have such Registration Statement declared effective within 45 days after the Signing Date in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by the SEC.
Removed
We review our allowance for doubtful accounts quarterly by assessing individual accounts receivable and all other balances based on historical collection experience and an economic risk assessment.
Added
We were obligated to pay certain liquidated damages if we fail to file the Registration Statement when required, fails to cause the Registration Statement to be declared effective by the SEC when required, of if we fail to maintain the effectiveness of the Registration Statement.
Removed
If we determine that a specific customer is unable to meet its financial obligations to us, we provide an allowance for credit losses to reduce the receivable to the amount management reasonably believes will be collected, which is netted against “Accounts receivable — Trade”.
Added
The Registration Statement was subsequently filed on May 23, 2023 and declared effective on June 1, 2023. We paid LifeSci Capital LLC, a placement fee equal to 5.6% of the aggregate gross proceeds from the closing of the Private Placement Offering, or approximately $2.4 million, and legal expenses of $41,600.
Removed
Our Israeli subsidiary had a lease agreement for a facility in Israel, which expired on December 31, 2022, with an option to extend the agreement for two additional years until December 31, 2024.
Added
We elected the fair value option to measure and recognize our investments in debt securities in accordance with ASC 825, Financial Instruments as we manage our portfolio and evaluates the performance on a fair value basis.
Removed
On May 25, 2022 the Company amended the agreement mentioned above and extended it until December 31, 2026 as well as leasing of additional space in the facility, the additional space amendment was taken in consideration when calculating the operating lease right of use assets and liabilities.
Added
Changes in fair value, realized gains and losses on sales of marketable securities, are reflected in the statements of operation as finance expense (income), net.
Removed
This sales increase was mainly due to growth in existing and new markets and sales in the United States related to stents used in our C-Guardians FDA study as enrolment accelerated.
Added
We maintain the allowance for estimated losses resulting from the inability of our customers to make required payments. The allowance represents the current estimate of lifetime expected credit losses over the remaining duration of existing accounts receivable considering current market conditions and supportable forecasts when appropriate.
Removed
In addition, there was a $151,000 increase in revenue from North America due to sales in the United States related to stents used in our C-Guardians FDA study. Gross Profit .
Added
The determination of the incremental borrowing rate requires management judgment based on information available at lease commencement.

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