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What changed in InspireMD, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of InspireMD, Inc.'s 2023 and 2024 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 2024 report.

+393 added−361 removedSource: 10-K (2025-03-12) vs 10-K (2023-12-31)

Top changes in InspireMD, Inc.'s 2024 10-K

393 paragraphs added · 361 removed · 259 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

112 edited+32 added−27 removed117 unchanged
Biggest changeThe 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.
Biggest changeThe 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 USA China 8,961,586 ZL 20078046676.2 24-Feb-2015 26-Sep-2012 Deformable tip for stent delivery and methods of use USA Israel 10,258,491 260,945 16-Apr-2019 01-Jul-2020 Handle for Two-Stage Deployment of a Stent Europe China Japan India USA USA 11,839,561 12-Dec-2023 Shunts with Blood-Flow Indicators Europe India USA Hong Kong Japan China Hong Kong USA China Japan 11,844,893 ZL 2022800089963 7449627 19-Dec-2023 26-Nov-2024 06-Mar-2024 Device for Shunting Blood Between the Arterial and Venous Systems Europe India Hong Kong USA (CON) China (DIV) Japan (DIV) Hong Kong USA China Japan 12,070,542 ZL 2022800098002 7576884 27-Aug-2024 10-Sep-2024 24-Oct-2024 Devices for shunting blood USA China Europe India Japan In Vivo Filter Assembly USA 9,132,261 15-Sep-2015 Knitted Stent Jackets USA China India Canada China Canada Germany France UK 10,137,015 ZL200780046697.4 323792 2666728 ZL201210320950.3 2887189 EP2076212 EP2076212 EP2076212 27-Nov-2018 10-Oct-2012 28-Oct-2019 23-Jun-2015 02-Dec-2015 01-May-2018 29-Mar-2017 29-Mar-2017 29-Mar-2017 20 Optimized stent jacket USA Europe Canada China India China USA USA USA USA Israel USA USA Canada Belgium Switzerland Germany France UK Italy Ireland Luxembourg Netherlands Europe UK Germany France Ireland 10,070,976 EP2088962 2670724 ZL20078043259.2 297257 ZL201210454357.8 9,132,003 9,782,281 9,526,644 10,406,006 230,922 10,406,008 11,051,959 3,013,758 EP2088962 2088962 2088962 2088962 2088962 2088962 2088962 2088962 2088962 EP3292837 EP3292837 EP3292837 EP3292837 EP3292837 11-Sep-2018 11-Oct-2017 11-Dec-2018 02-Jan-2013 30-May-2018 09-Dec-2015 15-Sep-2015 10-Oct-2017 27-Dec-2016 10-Sep-2019 01-Oct-2020 10-Sep-2019 06-Jul-2021 14-Sep-2021 11-Oct-2017 11-Oct-2017 11-Oct-2017 11-Oct-2017 11-Oct-2017 11-Oct-2017 11-Oct-2017 11-Oct-2017 11-Oct-2017 09-Nov-2022 09-Nov-2022 09-Nov-2022 09-Nov-2022 09-Nov-2022 Stent apparatus for treatment via body lumens and methods of use Europe (Div) Europe China USA Canada South Africa USA Canada USA USA Germany France UK Ireland Italy Switzerland 2609687 2007/10751 10,070,977 2843097 10,058,440 10,932,926 EP1885281 EP1885281 EP1885281 EP1885281 EP1885281 EP1885281 22-Apr-2014 27-Oct-2010 11-Sep-2018 27-Oct-2015 28-Aug-2018 02-Mar-2021 13-Feb-2019 13-Feb-2019 13-Feb-2019 13-Feb-2019 13-Feb-2019 13-Feb-2019 Stent Thermoforming Apparatus and Methods USA USA Japan 9,527,234 10,376,393 6553178 27-Dec-2016 13-Aug-2019 12-Jul-2019 Methods of using a self-adjusting stent assembly and kits including same USA China 11,684,498 ZL 2019800679437 27-Jun-2023 03-May-2022 Intravascular sheath USA (UTI) PCT 21 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.
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.
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 % 9 CAS carries the risk of cerebral embolization during and following the procedure, leading to life-threatening complications, mainly cerebral ischemic events.
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.
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 approval.
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.
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 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.
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; 28 ● 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 (“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.
Pervasive and Continuing FDA Regulation A host of regulatory requirements apply to our approved devices, including the quality system regulation (which requires manufacturers to follow elaborate design, testing, control, documentation and other quality assurance procedures), the Medical Device Reporting regulations (which require that manufacturers report to the FDA specified types of adverse events involving their products), labeling regulations, and the FDA’s general prohibition against promoting products for unapproved or “off-label” uses.
Pervasive and Continuing FDA Regulation A host of regulatory requirements apply to our devices, including the quality system regulation (which requires manufacturers to follow elaborate design, testing, control, documentation and other quality assurance procedures), the Medical Device Reporting regulations (which require that manufacturers report to the FDA specified types of adverse events involving their products), labeling regulations, and the FDA’s general prohibition against promoting products for unapproved or “off-label” uses.
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 -15- From July 2021 to June 2023, 316 patients were prospectively enrolled at 24 sites in the US and the EU and from April 2023 included deployment of the CGuard stent using CGuard Prime, our next generation CAS stent platform.
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 From July 2021 to June 2023, 316 patients were prospectively enrolled at 24 sites in the US and the EU and from April 2023 included deployment of the CGuard stent using CGuard Prime, our next generation CAS stent platform.
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.
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 Y Y 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 N N India Y Y Ireland Y N Israel Y Y Italy Y Y Kazakhstan Y Y Latvia Y N 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 23 Peru Y Y Poland Y Y Portugal Y Y Romania Y Y Russia Y Y Saudi Arabia N N Serbia Y Y Slovakia Y 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.
Many of these companies are larger companies or divisions of publicly-traded companies that have certain competitive advantages, including greater capital resources, larger customer bases, broader product lines, larger sales forces, greater marketing and management resources, larger research and development staffs and larger facilities than ours and have established reputations, relationships with our target customers and worldwide distribution methods that are more effective than ours.
Many of these competitors are larger companies or divisions of publicly traded companies that have certain competitive advantages, including greater capital resources, larger customer bases, broader product lines, larger sales forces, greater marketing and management resources, larger research and development staffs and larger facilities than ours and have established reputations, relationships with our target customers and worldwide distribution methods that are more effective than ours.
In these situations, we intend to complete the required clinical studies to obtain reimbursement approval in countries where it makes economic sense to do so. In October 2023, CMS issued its final National Coverage Determination (“NCD”), expanding coverage of CAS to include both asymptomatic and standard risk patients, significantly expanding the U.S. CAS addressable market.
In these situations, we intend to complete the required clinical studies to obtain reimbursement approval in countries where it makes economic sense to do so. In October 2023, CMS issued its final National Coverage Determination (“NCD”), expanding coverage of both CAS and TCAR to include both asymptomatic and standard risk patients, significantly expanding the U.S. addressable market.
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.
The De Novo request allows a regulatory pathway to classify novel medical devices for which no predicate device exists, 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.
All events are adjudicated by an independent clinical events committee.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.
All events are adjudicated by an independent clinical events committee. The composite endpoint 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 second is transcarotid artery revascularization where a surgeon accesses the blocked carotid artery though an incision in the neck, and then places a stent to open the artery and prevent embolization while combining high-rate blood flow reversal to protect the brain.
The second is transcarotid artery revascularization (TCAR) where a surgeon accesses the blocked carotid artery though an incision in the neck, and then places a stent to open the artery and prevent embolization while combining high-rate blood flow reversal to protect the brain.
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.
Class III medical devices are generally the highest risk devices and are 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.
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.
This disruption in blood supply, together with plaque debris breaking off the artery walls and traveling to the brain, are significant 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.
We believe these improvements may allow us to reduce cost of goods and increase penetration in our existing geographies and better position us for entry into new markets. -18- Insurance Reimbursement While most countries have established reimbursement codes for stenting procedures, certain countries may require additional clinical data before recognizing coverage and/or to obtain a certain level of reimbursement for one or more of our products.
We believe these improvements may allow us to reduce cost of goods and increase penetration in our existing geographies and better position us for entry into new markets. 19 Insurance Reimbursement While most countries have established reimbursement codes for stenting procedures, certain countries may require additional clinical data before recognizing coverage and/or to obtain a certain level of reimbursement for one or more of our products.
We also use targeted equity-based grants with vesting conditions to facilitate retention of personnel, particularly for our key employees. We consider our relations with our employees to be good.
We also use targeted equity-based grants with vesting conditions to facilitate retention of personnel, particularly for our key employees. We consider our relations with our employees to be good. 30
September 13, 2021 Results of Update Report on Global Carotid Stenting Procedures and Markets by Major Geography and Addressable Markets). There are three current intervention treatments used for carotid artery disease. The first is a carotid endarterectomy where a surgeon accesses the blocked carotid artery though an incision in the neck, and then surgically removes the plaque.
September 13, 2021 Results of Update Report on Global Carotid Stenting Procedures and Markets by Major Geography and Addressable Markets). There are three current interventional treatments used for carotid artery disease. The first is a carotid endarterectomy, where a surgeon accesses the blocked carotid artery though an incision in the neck, and then surgically removes the plaque.
A product that lacks a predicate device will default to a Class III device, although a company may seek to submit a De Novo classification request, rather than a PMA.
A product that lacks a predicate device may default to a Class III device, although a company may seek to submit a De Novo classification request, rather than a PMA.
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.
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. 25 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.
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.
Some Class I devices also require premarket clearance by the FDA through the 510(k)-process described below. Class II devices are generally required to file a Premarket review, known as a 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 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 CGuard 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.
The performance goal was 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 CGuard 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.
Premarket Approval Pathway Our CGuard Carotid Stent System is classified as a Class III medical device (considered a PMA) by the FDA.
Premarket Approval Pathway The CGuard Carotid Stent System is classified as a Class III medical device (considered a PMA) by the FDA.
By statute, the FDA has 180 days to review the “accepted application,” although, generally, review of the application can take between one and three years, but it may take significantly longer. During this review period, the FDA may request additional information or clarification of information already provided.
By statute, the FDA has 180 days to review the “accepted application,” although, generally, FDA review of the application generally takes between one and three years, but it may take significantly longer. During this review period, the FDA may request additional information or clarification of information already provided.
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.
In January 2024, we received CE mark recertification of CGuard EPS under the MDR. 22 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.
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.
The complete assembly process for CGuard EPS and CGuard Prime, including knitting and securing the sleeve to the stent and the crimping of the sleeved stent into a delivery catheter, is done at our manufacturing site in Israel.
In addition, Class III devices cannot generally be marketed until they receive a premarket approval. The safety and effectiveness of Class III devices cannot be assured solely by the General Controls and the other requirements described above. These devices require formal clinical studies to demonstrate safety and effectiveness.
In addition, Class III devices cannot generally be marketed until they receive FDA approval. The safety and effectiveness of Class III devices cannot be assured solely by the General Controls and the other requirements described above. These devices generally require formal clinical studies to demonstrate safety and effectiveness.
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.
MicroNet is made of a single fiber from a biocompatible polymer widely used in medical implants. The size, or aperture, of the current MicroNet ‘pore’ is only 150-180 microns, designed 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.
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.
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 establishes requirements whether a device must undergo either the 510(k) clearance or premarket approval based on statutory criteria that utilize a risk-based classification system.
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.
The primary endpoint was a composite of: (1) incidence of major adverse events including Death (all-cause mortality), any Stroke, and Myocardial Infarction (DSMI) through 30-days post index procedure, or (2) ipsilateral stroke from day 31 to day 365 post-procedure. All events were adjudicated by an independent clinical events committee.
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.
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, embolization and thrombosis.
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.
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 other governmental reviews. We supply products that may be reimbursed by federally funded programs such as Medicare.
Premarket approval supplements often require submission of the same type of information as a premarket approval application, except that the supplement is limited to information needed to support any changes from the device covered by the original premarket approval application, and it may not require as extensive clinical data or the convening of an advisory panel. 510(k) Clearance Pathway We do not currently market, distribute, or sell any products that have market clearance by the FDA under its 510(k) process.
Premarket approval supplements often require submission of the same type of information as a premarket approval application, except that the supplement is limited to information needed to support any changes from the device covered by the original premarket approval application, and it may not require as extensive clinical data or the convening of an advisory panel. 510(k) Clearance Pathway We do not currently market, distribute, or sell any products that have market clearance by the FDA under its 510(k) process that are generally required as Class II devices.
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.
Class II devices also can have special controls such as performance standards, post-market surveillance, patient registries, and certain FDA guidelines may also apply to Class I devices. 26 A noncomprehensive list of the regulatory requirements that apply to our 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; ● 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.
The study, a prospective, single center, single-arm, open label, non-blinded study is expected to enroll 15 acute stroke patients across three U.S. sites to assess the safety and feasibility .of using CGuard EPS to treat acute ischemic stroke patients with tandem lesions. of Dr.
The study, a prospective, single center, single-arm, open label, non-blinded study is expected to enroll 15 acute stroke patients across three U.S. sites to assess the safety and feasibility of using CGuard Carotid Stent System to treat acute ischemic stroke patients with tandem lesions. of Dr.
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 was compared to a performance goal based on the observed rate of the two components of the primary endpoint from previous pivotal stent trials which are considered industry standard.
In October 2023, the Centers for Medicare and Medicaid Service (“CMS”) issued its final National Coverage Determination (“NCD”), expanding coverage of CAS to include both asymptomatic and standard risk patients, significantly expanding the U.S. CAS addressable market.
In October 2023, the Centers for Medicare and Medicaid Service (“CMS”) issued its final National Coverage Determination (“NCD”), expanding coverage for both CAS and TCAR to include both asymptomatic and standard risk patients, significantly expanding and supporting the future growth of the U.S. CAS addressable market.
The IDE application must be supported by appropriate data, such as analytical, animal and laboratory testing results, manufacturing information, and an Investigational Review Board (IRB) approved protocol showing that it is safe to test the device in humans and that the testing protocol is scientifically sound, as well as ensuring patient informed consent is obtained.
Part of the PMA process is to ensure that the IDE is the first application that must be supported by appropriate data, such as analytical, animal and laboratory testing results, manufacturing information, and an Investigational Review Board (IRB) approved protocol showing that it is safe to test the device in humans and that the testing protocol is scientifically sound, as well as ensuring patient informed consent is obtained.
Item 1. Business. 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.
Item 1. Business. Overview We are a medical device company focusing on the development and commercialization of products for the treatment of carotid artery disease and other vascular disease, including our proprietary CGuard™ stent platform.
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.
SwitchGuard is being developed to answer a need of flow reversal for cerebral protection in carotid interventions 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.
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.
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, and are in discussions with additional potential partners.
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. In January 2024, we received CE mark recertification under the EU’s Medical Device Regulation regulatory framework.
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. In January 2024, we received CE mark recertification under the EU’s Medical Device Regulation regulatory framework. On September 8, 2020, we received approval from the U.S.
We appointed Patrick Geraghty, M.D., professor of surgery and radiology, section of vascular surgery at Washington University School of Medicine in St. Louis, MO, and Patrick Muck, M.D., program director and chief of vascular surgery at Good Samaritan Hospital in Cincinnati, OH, to act as lead principal investigators for the trial.
Patrick Geraghty, M.D., professor of surgery and radiology, section of vascular surgery at Washington University School of Medicine in St. Louis, MO, and Patrick Muck, M.D., program director and chief of vascular surgery at Good Samaritan Hospital in Cincinnati, OH, are lead principal investigators for the trial.
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.
In October 2016, the 30-day positive results were published online-ahead-of-print in the Journal of Endovascular Therapy. 11 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.
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.
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.
A stent is an expandable “scaffold-like” device, usually constructed of a metallic material, that is inserted into the lumen of the artery to create patency and revascularization of blood flow. MicroNet, a micron mesh sleeve, is attached over a stent to provide embolic protection both during and after stenting procedures.
A stent is an expandable scaffold-like device, usually constructed of a metallic material, that is inserted into the lumen of an artery to create patency and improved blood flow. A sleeve of MicroNet™ mesh is attached over a stent to provide embolic protection both during and after stenting procedures.
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.
Except for four 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 1 independent contractor in Brazil.
We are currently testing a different source of PET showing equivalent mechanical properties of the original raw material. BioGeneral will produce the fiber from the new PET: samples were already produced for preliminary R&D testing. Complete validation process will take up to 18 months.
We are currently testing a different source of PET showing equivalent mechanical properties and biocompatibility of the original raw material. BioGeneral will produce the fiber from the new PET: some samples were already produced with different PET resins for preliminary R&D testing. Once the new resin will be chosen, complete validation process will take up to 18 months.
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 requirements by the FDA under provisions of the Federal Food, Drug, and Cosmetic Act and regulations and guidance thereunder, including requirements governing the development, marketing, labeling, promotional efforts, manufacturing, and exporting of medical devices.
Key findings from the study are as follows: ● Peri Procedure, the CGuard™ arm was observed to have a 57% reduction in new cerebral lesion average volume per patient (171 mm 3 vs. 73 mm 3 ), a statistically significant improvement (p=0.017) and 222 mm 3 vs. 84 mm 3 (p=0.038); ● Post Procedure (24-48 hours), the CGuard™ arm was observed to have a 78% reduction in the average volume of new cerebral lesions (157 mm 3 vs. 700 mm 3 ), a statistically significant improvement (p=0.007); ● At 30 days, DW-MRI showed zero new cerebral lessons in the CGuard™ arm versus six in the Acculink™ arm (p=0.03); ● At 30 days, there were zero strokes, myocardial infarctions or deaths in the CGuard arm and two events the Acculink™ arm (two strokes); ● At 365 there were zero cases of restenosis and vessel occlusion in the CGuard™ arm versus 3 cases of restenosis and 1 case of vessel occlusion in the Acculink™ arm; ● At 365 days, there were one event in the CGuard arm (one death) and five events the Acculink™ arm (two strokes, two deaths and one myocardial infarction).
The 12-month outcomes demonstrated a significantly higher prevalence of the combined endpoint of death, stroke or myocardial infarctions and in-stent restenosis and vessel occlusion rate in the first generation (single layer) carotid stent, Acculink TM , versus the MicroNet-Covered Stent, CGuard™. 15 Key findings from the study are as follows: ● Peri Procedure, the CGuard™ arm was observed to have a 57% reduction in new cerebral lesion average volume per patient (171 mm 3 vs. 73 mm 3 ), a statistically significant improvement (p=0.017) and 222 mm 3 vs. 84 mm 3 (p=0.038); ● Post Procedure (24-48 hours), the CGuard™ arm was observed to have a 78% reduction in the average volume of new cerebral lesions (157 mm 3 vs. 700 mm 3 ), a statistically significant improvement (p=0.007); ● At 30 days, DW-MRI showed zero new cerebral lessons in the CGuard™ arm versus six in the Acculink™ arm (p=0.03); ● At 30 days, there were zero strokes, myocardial infarctions or deaths in the CGuard arm and two events the Acculink™ arm (two strokes); ● At 365 there were zero cases of restenosis and vessel occlusion in the CGuard™ arm versus 3 cases of restenosis and 1 case of vessel occlusion in the Acculink™ arm; ● At 365 days, there were one event in the CGuard arm (one death) and five events the Acculink™ arm (two strokes, two deaths and one myocardial infarction).
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.
During 2022 our mesh supplier informed us that they will not be able to supply the polymer fiber in the future due to supply issues with the current PET resin, therefore we purchased inventory which should be sufficient to support our production needs until the end of 2027.
Adnan Siddiqui, Vice-Chairman and Professor of Neurosurgery at the State University of New York at Buffalo, CEO of the Jacobs Institute, is the Principal Investigator for the study. First patient enrollment is expected in the second quarter of 2024.
Adnan Siddiqui, Vice-Chairman and Professor of Neurosurgery at the State University of New York at Buffalo, CEO of the Jacobs Institute, is the Principal Investigator for the study. We began enrollment in the first quarter of 2025.
We are pursuing additional product registrations and distribution contracts with local distributors in other countries in Europe, Asia and Latin America. In February 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.
We are pursuing additional product registrations and distribution contracts with local distributors in other countries in Europe, Asia and Latin America. In February 2021, we executed a distribution agreement with Chinese partners for the purpose of expanding our presence in China.
The FDA’s 510(k) clearance pathway usually takes from three to twelve months but could take longer. In some cases, the FDA may require additional information, including clinical data, to make a determination regarding substantial equivalence.
The FDA’s 510(k) clearance pathway is established as 180 days for review, however, it usually takes from three to twelve months but could take longer. In some cases, the FDA may require additional information, including clinical data, to make a determination regarding substantial equivalence.
We believe the MicroNet will provide acute embolic protection at the time of the procedure, but more importantly, we believe that CGuard EPS will provide post-procedure protection against embolic dislodgement, which can occur up to 48 hours post-procedure. It is in this post-procedure time frame that embolization is the source of post-procedural strokes in the brain. Schofer, et al.
We believe the MicroNet will provide acute embolic protection at the time of the procedure, but more importantly, will provide post-procedure protection against embolic dislodgement. It is in this post-procedure time frame that embolization is the source of post-procedural strokes in the brain. Schofer, et al.
In November 2023, we announced a strategic agreement with Jacobs Institute to execute an early feasibility study of CGuard Prime for the treatment of acute stroke patients with tandem lesions.
Our goal is to develop CGuard Prime to mitigate strokes in this acute setting. In November 2023, we announced a strategic agreement with Jacobs Institute to execute an early feasibility study of CGuard Prime for the treatment of acute stroke patients with tandem lesions.
Intellectual Property Patents We have 59 issued patents, including 19 patents issued in the U.S., and 26 pending patent applications, 7 of which are pending in the United States. Many of these patents and applications cover aspects of our CGuard and MGuard technology.
Intellectual Property Patents We have 66 issued patents, including 20 patents issued in the U.S., and 27 pending patent applications, 6 of which are pending in the United States. Many of these patents and applications cover aspects of our CGuard and MGuard technology.
The third is carotid artery stenting, which is a minimally invasive endovascular treatment for carotid artery disease and an alternative to carotid endarterectomy. Endovascular techniques using stents and carotid embolic prevention system protect against plaque and debris traveling downstream, blocking off the vessel and disrupting blood flow.
The third is carotid artery stenting (CAS), which is a minimally invasive endovascular treatment for using stents and carotid embolic protection systems to protect against plaque and debris traveling downstream, blocking off the vessel and disrupting blood flow.
The study is expected to enroll 15 acute stroke patients across three U.S. sites to explore the safety and feasibility. of using CGuard Prime to treat acute ischemic stroke patients with tandem lesions.
The study is expected to enroll 15 acute stroke patients across three U.S. sites to explore the safety and feasibility of using CGuard Prime in this setting.
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 .
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 .
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.
Medical devices that are class II devices generally 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.
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.
According to the same source, stroke is the second leading cause of disability, after dementia. In 2022, three 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 required intervention (according to the Health Research International Personal Medical Systems, Inc.
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.
Our agreement with the supplier for the production of electro polished nitinol bare-metal stents for CGuard EPS and CGuard Prime is priced on a per-stent basis, subject to the quantity of stents ordered.
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.
SwitchGuard NPS SwitchGuard NPS is a Class IIa neuroprotection system (NPS) that we have developed and that is subject to regulatory approval, composed of medical grade tubing with male Luer lock connectors at each end and an in-line 200-micron blood filter.
Under the Distribution Agreement, the China-based partners will be subject to minimum purchase obligations. Manufacturing and Suppliers The polymer fiber for MicroNet is supplied by Biogeneral, Inc., a San Diego, California-based specialty polymer manufacturer for medical and engineering applications. Our catheter supplier for CGuard EPS supplies us with catheters that help create the base for our CGuard EPS stents.
Manufacturing and Suppliers The polymer fiber for MicroNet is supplied by Biogeneral, Inc., a San Diego, California-based specialty polymer manufacturer for medical and engineering applications. Our catheter supplier for CGuard EPS supplies us with catheters that help create the base for our CGuard EPS stents. Our agreement with the supplier may be terminated by us upon eight months’ notice.
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.
Our CGuard EPS originally 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.
Key findings from the study are as follows: ● 100% procedural success in implanting CGuard EPS; ● 1 death from hemorrhagic stroke (patient was admitted for immediate treatment of CAS due to stroke), 2 minor strokes, 6 TIAs and one nonfatal AMI at 24 hours; ● 1 minor stroke, 2 TIAs, three AMIs, no deaths and no stent thrombosis/occlusions between 24 hours and 30 days; and ● 1 minor stroke, 4 TIAs, 2 AMIs and 8 deaths (the 2 mentioned AMIs, 4 malignancies, 1 suicide and 1 undefined complication in Guillain-Barré Syndrome) between 30 days and 1 year.
The study’s preliminary results from the IRONGUAURD 2 study suggested in a real-world evaluation of carotid artery stenting, CGuard EPS can be safely used for treatment of extracranial carotid artery stenosis, allowing a low rate of post procedural adverse events by 12 months. 14 Key findings from the study are as follows: ● 100% procedural success in implanting CGuard EPS; ● 1 death from hemorrhagic stroke (patient was admitted for immediate treatment of CAS due to stroke), 2 minor strokes, 6 TIAs and one nonfatal AMI at 24 hours; ● 1 minor stroke, 2 TIAs, three AMIs, no deaths and no stent thrombosis/occlusions between 24 hours and 30 days; and ● 1 minor stroke, 4 TIAs, 2 AMIs and 8 deaths (the 2 mentioned AMIs, 4 malignancies, 1 suicide and 1 undefined complication in Guillain-Barré Syndrome) between 30 days and 1 year.
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”).
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.
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.
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. -7- Our CGuard EPS originally received CE mark approval in the EU in March 2013 and was fully launched in Europe in September 2015.
(“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.
The CGuard EPS technology is a highly flexible stent system that conforms to the carotid anatomy. We believe that our CGuard EPS design provides advantages over existing therapies in treating carotid artery stenosis, such as conventional carotid stenting and surgical endarterectomy, given the superior embolic protection characteristics provided by the MicroNet.
This danger is one of the greatest limitations of carotid artery stenting with conventional carotid stents. We believe that our CGuard EPS design provides advantages over existing therapies in treating carotid artery stenosis, such as conventional carotid stenting and surgical endarterectomy, given the superior embolic protection characteristics provided by the MicroNet.
Early Feasibility Study of CGuard EPS for Acute Stroke Patients with Tandem Lesions In November 2023, we announced the entry into a strategic agreement with the Jacobs Institute at the State University of New York at Buffalo to execute an early feasibility study of CGuard EPS for the treatment of acute stroke patients with tandem lesions.
On September 16, 2024, we submitted the clinical module of the PMA, which is currently under interactive review with the FDA. 16 Early Feasibility Study of CGuard EPS for Acute Stroke Patients with Tandem Lesions In November 2023, we announced the entry into a strategic agreement with the Jacobs Institute at the State University of New York at Buffalo to execute an early feasibility study of CGuard Carotid Stent System for the treatment of acute stroke patients with tandem lesions.
Our agreement with the supplier may be terminated by us upon eight months’ notice. On September 17, 2019, we amended the agreement with the supplier so that we are responsible for purchasing and handling inventory of components used in the manufacturing of CGuard EPS catheters, and they are responsible for the manufacturing process.
On September 17, 2019, we amended the agreement with the supplier so that we are responsible for purchasing and handling inventory of components used in the manufacturing of CGuard EPS catheters, and they are responsible for the manufacturing process. Our catheter supplier for CGuard Prime supplies us with catheters that help create the base for our CGuard Prime stent system.
Premarket approval is the FDA process of scientific and regulatory review to evaluate the safety and effectiveness of Class III medical devices and, in many cases, Class II medical devices.
Premarket approval (PMA) is the FDA process of scientific and regulatory review to evaluate the safety and effectiveness of Class III medical devices and, such reviews may also be done for Class II medical devices.
In February 2024, we appointed the principal investigators for the C-GUARDIANS II clinical trial of SwitchGuard NPS. Acute Stroke with Tandem Lesions It is estimated that 20-30% of acute ischemic strokes are caused by large vessel occlusion involve tandem lesions- high grade stenosis/occlusion of the internal carotid artery plus thrombotic occlusion of an intracranial vessel.
We submitted an IDE to the FDA for the C-GUARDIANS III clinical trial in December 2024, which, if approved, would allow us to initiate a clinical trial to support the clearance of the SwitchGuard NPS coupled with CGuard Prime. 8 Acute Stroke with Tandem Lesions It is estimated that 20-30% of acute ischemic strokes are caused by large vessel occlusion involve tandem lesions- high grade stenosis/occlusion of the internal carotid artery plus thrombotic occlusion of an intracranial vessel.
We plan to submit an IDE to the FDA in the second half of 2024 for C-GUARDIANS II, a multicenter, single-arm, pivotal study to evaluate the safety and efficacy of the SwitchGuard NPS for providing cerebral embolic protection during carotid artery stenting via the Transcarotid Artery Revascularization (TCAR) approach.
On December 30, 2024, we submitted an IDE to the FDA for CGUARDIANS III, a multicenter, single-arm, pivotal study to evaluate the safety and efficacy of the SwitchGuard NPS used in conjunction with the CGuard Prime 80cm Carotid Stent System for providing cerebral embolic protection during carotid artery stenting via the Transcarotid Artery Revascularization (TCAR) approach.
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.
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. 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.
We believe these patents and patent applications collectively cover all our existing products and may be useful in protecting our future technological developments.
We believe these patents and patent applications collectively cover all our existing products and may be useful in protecting our future technological developments. We intend to aggressively continue patenting new technologies and to actively pursue any infringement of our key patents.
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.
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. In addition, we and our manufacturing facilities will be subject to FDA inspections for compliance with the FDA’s Quality System Regulation.
In September 2015, we announced full market launch of CGuard EPS in Europe. Since 2017 we have focused on sales of our products through local distribution partners and our own internal sales initiatives to gain greater reach into all the relevant clinical specialties and to expand our geographic coverage.
Since 2017 we have focused on sales of our products through local distribution partners and our own internal sales initiatives to gain greater reach into all the relevant clinical specialties and to expand our geographic coverage. Product Positioning We believe that CGuard has the potential to become the standard of care in treating carotid artery disease.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

100 edited+76 added−33 removed232 unchanged
Biggest changeFor 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.
Biggest changeFor instance, we will need to raise additional funds to accomplish the following: ● commercialization efforts in the United States following anticipated FDA approval of CGuard™ Prime; ● expansion of manufacturing and operational capabilities, including scaling up production to meet expected demand and establishing necessary infrastructure in the United States; ● development of our current and future products, including potential enhancements to CGuard™ Prime and advancing SwitchGuard™ NPS; ● pursuing growth opportunities, such as expanding commercial activities in key international markets and strengthening regional distribution networks; ● growing our U.S. commercial organization, including hiring and retaining qualified personnel to support sales, marketing, and operations; ● responding to competitive pressures and evolving market dynamics, including potential reimbursement challenges and pricing pressures; ● meeting regulatory and compliance obligations, including post-market surveillance, product registrations, and adherence to evolving regulatory frameworks; and ● maintaining compliance with applicable laws and corporate governance requirements.
If a medical device candidate presents a significant risk, an IDE application must be submitted and approved prior to commencing any human clinical trials in the United States in connection with such device. In addition to our IDE approval, we must apply for and obtain IRB approval in connection with each clinical site before commencing any study activities.
If a medical device candidate presents a significant risk, an IDE application must be submitted and approved prior to commencing any human clinical trials in the United States in connection with such device. In addition to our IDE approval, we must apply for and obtain IRB approval in connection with each clinical study site before commencing any study activities.
If, we, or others, discover that a product is less effective than previously believed or causes undesirable side effects that were not previously identified, any of the following adverse events could occur: ● regulatory authorities may withdraw their approval of the product or seize the product; ● we, or any of our collaborators, may be required to recall the product, change the way the product is administered or conduct additional clinical trials; ● additional restrictions may be imposed on the marketing of, or the manufacturing processes for, the particular product; ● we, or any of our collaborators, may be subject to fines, injunctions or the imposition of civil or criminal penalties; ● regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication including with the product; ● we, or any of our collaborators, may be required to create a Medication Guide outlining the risks of the previously unidentified side effects for distribution to patients; ● we could be sued and held liable for harm caused to patients; ● physicians and patients may stop using our product; and ● our reputation may suffer.
If, we, or others, discover that a product is less effective than previously believed or causes undesirable side effects that were not previously identified, any of the following adverse events could occur: ● regulatory authorities may withdraw their approval of the product or seize the product; ● we, or any of our collaborators, may be required to recall the product, change the way the product is administered or conduct additional clinical trials; ● additional restrictions may be imposed on the marketing of, or the manufacturing processes of, the particular product; ● we, or any of our collaborators, may be subject to fines, injunctions or the imposition of civil or criminal penalties; ● regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication including with the product; ● we, or any of our collaborators, may be required to create a Medication Guide outlining the risks of the previously unidentified side effects for distribution to patients; ● we could be sued and held liable for harm caused to patients; ● physicians and patients may stop using our product; and ● our reputation may suffer.
The laws that may affect our ability to operate include: ● the federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs; ● federal civil and criminal false claims laws and civil monetary penalty laws, including the False Claims Act, which may be pursued through civil whistleblower or qui tam actions, impose criminal and civil penalties against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment or approval from Medicare, Medicaid or other third-party payors that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; ● federal criminal statutes created through the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which 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, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 and their respective implementing regulations, which imposes requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information; ● the federal transparency requirements under The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act, enacted into law in the United States in March 2010 (known collectively as the “Affordable Care Act”), including the provision commonly referred to as the Physician Payments Sunshine Act, which requires manufacturers of drugs, biologics, devices and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the U.S.
The laws that may affect our ability to operate include: ● the federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs; ● federal civil and criminal false claims laws and civil monetary penalty laws, including the False Claims Act, which may be pursued through civil whistleblower or qui tam actions, impose criminal and civil penalties against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment or approval from Medicare, Medicaid or other third-party payors that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; 45 ● federal criminal statutes created through the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which 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, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 and their respective implementing regulations, which imposes requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information; ● the federal transparency requirements under The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act, enacted into law in the United States in March 2010 (known collectively as the “Affordable Care Act”), including the provision commonly referred to as the Physician Payments Sunshine Act, which requires manufacturers of drugs, biologics, devices and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the U.S.
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.
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.
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.
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 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.
Any new regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of future products. -46- Risk Factors Related to Our Intellectual Property 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.
Any new regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of future products. Risk Factors Related to Our Intellectual Property 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.
Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business. Patent policy and rule changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents.
Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business. 51 Patent policy and rule changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents.
These raw materials or components may not always be available at our standards or on acceptable terms, if at all, and we may be unable to locate alternative suppliers or produce necessary materials or components on our own. Some of the components of our products are currently provided by only one vendor, or a single-source supplier.
These raw materials or components may not always be available at our standards or on acceptable terms, if at all, and we may be unable to locate alternative suppliers or produce necessary materials or components on our own. 39 Some of the components of our products are currently provided by only one vendor, or a single-source supplier.
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.
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.
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.
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; 54 ● 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.
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.
In addition, 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.
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.
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.
Factors that may inhibit our efforts to commercialize our products directly and without strategic partners include: ● our inability to recruit and retain adequate numbers of effective manufacturing, sales and marketing personnel; ● the inability of sales personnel to obtain access to or persuade physicians to use our stents; -33- ● the inability to price our products at a sufficient price point to ensure an adequate and attractive level of profitability; ● the difficulty of obtaining reimbursement from governmental and commercial payers; ● the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and ● unforeseen costs and expenses associated with creating and sustaining an independent manufacturing, sales and marketing organization.
Factors that may inhibit our efforts to commercialize our products directly and without strategic partners include: ● our inability to recruit and retain adequate numbers of effective manufacturing, sales and marketing personnel; ● the inability of sales personnel to obtain access to or persuade physicians to use our stents; 36 ● the inability to price our products at a sufficient price point to ensure an adequate and attractive level of profitability; ● the difficulty of obtaining reimbursement from governmental and commercial payers; ● the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and ● unforeseen costs and expenses associated with creating and sustaining an independent manufacturing, sales and marketing organization.
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.
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 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; 31 ● 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.
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.
Any of these events could harm our business and operations and could negatively impact our stock price. 42 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 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.
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.
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.
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. 33 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.
These market fluctuations may also significantly affect the market prices of our common stock. Our common stock could be delisted from the Nasdaq Capital Market if we fail to meet the Nasdaq Capital Market’s stockholders’ equity continued listing standards.
These market fluctuations may also significantly affect the market prices of our common stock. 59 Our common stock could be delisted from the Nasdaq Capital Market if we fail to meet the Nasdaq Capital Market’s stockholders’ equity continued listing standards.
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.
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.
For example, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. -49- The loss of key members of our senior management team or our inability to attract and retain highly skilled scientists and laboratory and field personnel could adversely affect our business .
For example, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. 53 The loss of key members of our senior management team or our inability to attract and retain highly skilled scientists and laboratory and field personnel could adversely affect our business .
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).
Thus, only approximately one-third of the existing board of directors could be replaced at any election of directors. 60 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).
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.
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.
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.
Importantly, the C-GUARDIANS and C-GUARDIANS II trials 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.
Abbott Laboratories, Boston Scientific Corporation, Medtronic, Cordis Corporation and Terumo Medical Corporation produce a polytetrafluoroethylene mesh-covered stent and a double layer metal stent, respectively 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 CEA.
Abbott Laboratories, Boston Scientific Corporation, Medtronic, Cordis Corporation and Terumo Medical Corporation produce a polytetrafluoroethylene mesh-covered stent and a double layer metal stent, respectively 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, which was acquired by Boston Scientific Corporation, in the total carotid artery revascularization market that comprises CAS, TCAR and CEA.
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.
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; ● 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.
As of the date hereof, we currently have 56 full-time employees located in Israel. -53- Since the war broke out on October 7, 2023, our operations have not been adversely affected by this situation, and we have not experienced disruptions to our clinical studies.
As of the date hereof, we currently have 67 full-time employees located in Israel. 57 Since the war broke out on October 7, 2023, our operations have not been adversely affected by this situation, and we have not experienced disruptions to our clinical studies.
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 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 security situation in Israel and Russia and Ukraine, terrorism or other geopolitical events, our business, operating results and financial condition may be materially adversely affected.
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.
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.
In 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.
In 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; ● 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. 34 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.
We expect a substantial portion of our revenues will be generated in U.S. dollars and Euros, while a significant portion of our expenses, principally salaries and related personnel expenses, is paid in New Israeli Shekels, or NIS.
We expect a substantial portion of our revenues will be generated in U.S. dollars and Euros, while a significant portion of our expenses, principally salaries and related personnel expenses, is paid in NIS.
If there are significant shifts in the political, economic and military conditions in Israel and its neighbors, it could have a material adverse effect on our business relationships and profitability. Our executive office, sole manufacturing facility and certain of our key personnel are located in Israel.
If there are significant shifts in the political, economic and military conditions in Israel and its neighbors, it could have a material adverse effect on our business relationships and profitability. Our current manufacturing facility, certain of our key personnel and one of our offices are located in Israel.
Moreover, effective internal control is necessary for us to provide reliable financial reports and prevent fraud. If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed.
If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed.
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.
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.
There are risks involved with establishing our own manufacturing, sales, marketing and distribution capabilities. We must commit significant financial and managerial resources to develop a manufacturing facility and marketing and sales force with technical expertise and with supporting distribution capabilities.
There are risks involved with establishing our own sales, marketing and distribution capabilities and partnering with a third party manufacturer. We must commit significant financial and managerial resources to develop a marketing and sales force with technical expertise and with supporting distribution capabilities.
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.
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.
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.
Additionally, increases in inflation, 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.
In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers, suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule and on budget.
In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers, suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule and on budget. 55 We are subject to financial reporting and other requirements that place significant demands on our resources.
We are currently testing a different source of PET showing equivalent mechanical properties of the original raw material however there can be no assurance that the alternative source will result in successful validation and if we are unable to timely source an alternative supplier this could result regulatory delays and the interruption of our manufacturing and delivery of stents for an extended period of time which would delay completion of our clinical trials or commercialization of our products.
However there can be no assurance that the alternative source will result in successful validation and if we are unable to timely source an alternative supplier this could result regulatory delays and the interruption of our manufacturing and delivery of stents for an extended period of time which would delay completion of our clinical trials or commercialization of our products.
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.
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.
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.
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. Failure to maintain compliance with IDE regulations could have a material adverse effect on our business.
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.
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.
Israel has held five general elections between 2019 and 2022, and prior to October 2023, the Israeli government pursued extensive changes to Israel’s judicial system, which sparked extensive political debate and unrest. To date, these initiatives have been substantially put on hold.
Israel has held five general elections between 2019 and 2022, and prior to October 2023, the Israeli government pursued extensive changes to Israel’s judicial system, which sparked extensive political debate and unrest.
We plan on self-commercializing CGuard Prime in the U.S. if we receive FDA approval and historically have no experience selling, marketing or distributing products in the U.S. We plan on self-commercializing CGuard Prime in the U.S., subject to receipt of FDA approval. As part of our plan, we intend to build out manufacturing, sales, marketing and distribution capabilities.
We plan on self-commercializing CGuard Prime in the U.S. if we receive FDA approval and historically have no experience selling, marketing or distributing products in the U.S. We plan on self-commercializing CGuard Prime in the U.S., subject to receipt of FDA approval.
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.
Failure to obtain such approvals or to comply with such regulations could have a material adverse effect on our business, financial condition and results of operations. 40 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.
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.
There can be no assurance that we will be able to achieve sufficient revenues throughout the year or be profitable in the future.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability. 44 Failure to obtain regulatory approval in foreign jurisdictions will prevent us from marketing our products in such jurisdictions.
Historically we have not had experience in manufacturing, selling, marketing or distributing products in the U.S. To be able to commercialize CGuard Prime upon approval, if at all, we must either develop internal manufacturing, sales, marketing and distribution capabilities, which is expensive and time-consuming, or enter into arrangements with third parties to perform these services.
To be able to commercialize CGuard Prime upon approval, if at all, we must either develop manufacturing, sales, marketing and distribution capabilities, which is expensive and time-consuming, or enter into arrangements with third parties to perform these services.
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.
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. 41 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.
Actual or perceived political instability in Israel or any negative changes in the political environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operations and growth prospects. We may not be able to enforce covenants not-to-compete under current Israeli law.
Actual or perceived political instability in Israel or any negative changes in the political environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operations and growth prospects.
These attacks resulted in extensive deaths, injuries and kidnapping of civilians and soldiers. Following the attack, Israel’s security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks.
These attacks resulted in extensive deaths, injuries and kidnapping of civilians and soldiers. Following the attack, Israel’s security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks. On January 19, 2025, a temporary ceasefire went into effect, the result of which is uncertain.
If any of our employees, agents, or the physicians or other providers or entities with whom we expect to do business are found to have violated applicable laws, we may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs, or, if we are not subject to such actions, we may suffer reputational harm for conducting business with persons or entities found, or accused of being, in violation of such laws.
In addition, the approval and commercialization of any of our products outside the United States will also likely subject us to non-U.S. equivalents of the healthcare laws mentioned above, among other non-U.S. laws. 46 If any of our employees, agents, or the physicians or other providers or entities with whom we expect to do business are found to have violated applicable laws, we may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs, or, if we are not subject to such actions, we may suffer reputational harm for conducting business with persons or entities found, or accused of being, in violation of such laws.
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.
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.
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.
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.
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 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.
Such an occurrence could discourage certain customers or suppliers from doing business with us and adversely affect how our stock trades. This could in turn negatively affect our ability to access equity markets for capital.
In addition, discovery and disclosure of a material weakness, by definition, could have a material adverse impact on our financial statements. Such an occurrence could discourage certain customers or suppliers from doing business with us and adversely affect how our stock trades. This could in turn negatively affect our ability to access equity markets for capital.
Examples may include implants, devices that support or sustain human life, and devices that are substantially important in diagnosing, curing, mitigating, or treating disease or in preventing impairment to human health.
Significant risk devices present a potential for serious risk to the health, safety, or welfare of a subject. Examples may include implants, devices that support or sustain human life, and devices that are substantially important in diagnosing, curing, mitigating, or treating disease or in preventing impairment to human health.
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.
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.
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.
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. 38 We operate in an intensely competitive and rapidly changing business environment, and there is a substantial risk our products could become obsolete or uncompetitive.
For example, any changes that reduce, or impede the ability to obtain, reimbursement for the type of products we intend to commercialize in the United States (or our products more specifically, if approved) or reduce medical procedure volumes could adversely affect our business plan to introduce our products in the United States.
For example, any changes that reduce, or impede the ability to obtain, reimbursement for the type of products we intend to commercialize in the United States (or our products more specifically, if approved) or reduce medical procedure volumes could adversely affect our business plan to introduce our products in the United States. 48 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) and (90/385/EEC).
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.
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.
Section 404 requires us to conduct an annual management assessment of the effectiveness of our internal controls over financial reporting. These reporting and other obligations place significant demands on our management, administrative, operational, internal audit and accounting resources. Any failure to maintain effective internal controls could have a material adverse effect on our business, operating results and stock price.
These reporting and other obligations place significant demands on our management, administrative, operational, internal audit and accounting resources. Any failure to maintain effective internal controls could have a material adverse effect on our business, operating results and stock price. Moreover, effective internal control is necessary for us to provide reliable financial reports and prevent fraud.
The FDA also requires that our sales and marketing efforts, as well as promotions, be consistent with various laws and regulations. Approved medical device promotions must be consistent with and not contrary to labeling, balanced, truthful and not false or misleading, adequately substantiated (when required), and include adequate directions for use.
Approved medical device promotions must be consistent with and not contrary to labeling, balanced, truthful and not false or misleading, adequately substantiated (when required), and include adequate directions for use and any warnings that may be required in the use of the device.
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.
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.
There can be no assurance that we will achieve any of the milestones set forth in the Warrants or that the Warrants will be exercised in cash in full.
In July 2024, we received gross proceeds of approximately $17.9 million following the exercise of the Series H Warrants in full. There can be no assurance that we will achieve any of the milestones set forth in the Warrants or that the Warrants will be exercised in cash in full.
Similarly, our third-party providers possess certain of our sensitive data and confidential information. The secure maintenance of this information is critical to our operations and business strategy.
The secure maintenance of this information is critical to our operations and business strategy.
We are subject to financial reporting and other requirements that place significant demands on our resources. We are subject to reporting and other obligations under the Securities Exchange Act of 1934, as amended, including the requirements of Section 404 of the Sarbanes-Oxley Act of 2002.
We are subject to reporting and other obligations under the Securities Exchange Act of 1934, as amended, including the requirements of Section 404 of the Sarbanes-Oxley Act of 2002. Section 404 requires us to conduct an annual management assessment of the effectiveness of our internal controls over financial reporting.
Our business and operations would suffer in the event of computer system failures, cyber-attacks or deficiencies in our cyber-security. In the ordinary course of our business, we collect and store sensitive data, including intellectual property, research data, our proprietary business information and that of our suppliers, technical information about our products, clinical trial plans and employee records.
In the ordinary course of our business, we collect and store sensitive data, including intellectual property, research data, our proprietary business information and that of our suppliers, technical information about our products, clinical trial plans and employee records. Similarly, our third-party providers possess certain of our sensitive data and confidential information.
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.
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. The FDA classifies medical device candidates into “significant risk” and “non-significant risk” devices.
In addition, if a regulatory authority approves our products, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export and recordkeeping for our products will be subject to extensive and ongoing regulatory requirements. -41- Moreover, if we obtain regulatory approval for any of our products, we will only be permitted to market our products for the indication approved by the regulatory authority, and such approval may involve limitations on the indicated uses or promotional claims we may make for our products.
Moreover, if we obtain regulatory approval for any of our products, we will only be permitted to market our products for the indication approved by the regulatory authority, and such approval may involve limitations on the indicated uses or promotional claims we may make for our products.
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.
The doubts regarding our potential ability to continue as a going concern may adversely affect our ability to obtain new financing on reasonable terms or at all. 32 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.
The intensity and duration of Israel’s current war against Hamas is difficult to predict at this stage, as are such war’s economic implications on the Company’s business and operations and on Israel’s economy in general.
The intensity and duration of Israel’s current war is difficult to predict at this stage, as are such war’s economic implications on the Company’s business and operations and on Israel’s economy in general. If the ceasefires declared collapse or a new war commences or hostilities expand to other fronts, our operations may be adversely affected.
Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. -45- Since its enactment, there have been judicial and Congressional challenges to certain aspects of the Affordable Care Act, to modify, repeal or otherwise invalidate all, or certain provisions of, the Affordable Care Act.
Since its enactment, there have been judicial and Congressional challenges to certain aspects of the Affordable Care Act, to modify, repeal or otherwise invalidate all, or certain provisions of, the Affordable Care Act.
If reimbursement for our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, market acceptance of our products would be impaired, and future revenues, if any, would be adversely affected.
If reimbursement for our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, market acceptance of our products would be impaired, and future revenues, if any, would be adversely affected. 47 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.
The MDR provided a transitional period for placing on the market or putting into service of medical devices, which period was further extended on March 20. 2023, but such transitional provisions are not relevant to our products where already certified under the The MDR imposes stricter requirements on medical device manufacturers and strengthens the supervising competences of the competent authorities of European Union member states, the notified bodies and the authorized representatives.
The regulations entered into full application on May 26, 2021. The MDR provided a transitional period for placing on the market or putting into service of medical devices, which period was further extended on March 20. 2023, but such transitional provisions are not relevant to our products where already certified under the MDR.
If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our shares of common stock. Risks Related to Our Business Operations We face risks associated with litigation and claims.
If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our shares of common stock. We may not be able to protect our intellectual property rights throughout the world.
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.
Such ESG matters may also impact our third-party contract manufacturers and other third parties on which we rely, which may augment or cause additional impacts on our business, financial condition, or results of operations. 56 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 (“NIS”).
Furthermore, there can be no assurance that all necessary regulatory approvals will be obtained for the manufacture, marketing and sale in any market of any new product developed or that any potential licensee will develop using our licensed technology.
Furthermore, there can be no assurance that all necessary regulatory approvals will be obtained for the manufacture, marketing and sale in any market of any new product developed or that any potential licensee will develop using our licensed technology. 43 Even if our products are approved by regulatory authorities, if we or our suppliers fail to comply with ongoing regulatory requirements, or if we experience unanticipated problems with our products, these products could be subject to restrictions or withdrawal from the market.
Such litigation or licenses could be costly or not available on commercially reasonable terms. It is inherently difficult to conclusively assess our freedom to operate without infringing on third-party rights.
It is inherently difficult to conclusively assess our freedom to operate without infringing on third-party rights.
In addition, since the commencement of these events, there have been continued hostilities along Israel’s northern border with Lebanon (with the Hezbollah terror organization) and southern border (with the Houthi movement in Yemen, as described below).
In addition, since the commencement of these events, there have been continued hostilities along Israel’s northern border with Lebanon (with the Hezbollah terror organization) and on other fronts from various extremist groups in region, such as the Houthis in Yemen and various rebel militia groups in Syria and Iraq.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+0 added−1 removed5 unchanged
Biggest changeFor more information about these risks, please see “Item 1.A – Risk Factors – Risks Related to Our Business Operations – Our business and operations would suffer in the event of computer system failures, cyber-attacks or deficiencies in our cyber-security.” in this Form 10-K.
Biggest changeFor more information about these risks, please see “Item 1.A – Risk Factors – Risks Related to Our Business Operations – Our business and operations would suffer in the event of computer system failures, cyber-attacks or deficiencies in our cyber-security.” in this Form 10-K. 61 Governance Our board of directors provides oversight of our cybersecurity program and helps guide our strategy for managing cybersecurity risks in the context of our overall risk management system .
This forms a critical part of our risk management strategy, facilitating effective management and mitigation of risks, and ensuring adherence to applicable regulatory and industry standards. -57- Overall, we believe that we have established a robust framework for confidentiality, integrity, and availability of information, adhering to relevant security standards, practices, and compliance requirements.
This forms a critical part of our risk management strategy, facilitating effective management and mitigation of risks, and ensuring adherence to applicable regulatory and industry standards. Overall, we believe that we have established a robust framework for confidentiality, integrity, and availability of information, adhering to relevant security standards, practices, and compliance requirements.
The Senior Vice President of Finance reports to our board of directors, as well as our Chief Executive Officer and Chief Financial Officer and other members of senior management as appropriate.
The Executive Vice President of Finance and Regional Manager reports to our board of directors, as well as our Chief Executive Officer and Chief Financial Officer and other members of senior management as appropriate.
Our cybersecurity program is managed by our Senior Vice President of Finance, our internal IT team and our external Chief Information Security Officer (“CISO”) whose is responsible for leading enterprise-wide cybersecurity strategy, protocols, framework, standards and processes.
Our cybersecurity program is managed by our Executive Vice President of Finance and Regional Manager, our internal IT team and our external Chief Information Security Officer (“CISO”) whose is responsible for leading enterprise-wide cybersecurity strategy, protocols, framework, standards and processes .
Removed
Governance Our board of directors provides oversight of our cybersecurity program and helps guide our strategy for managing cybersecurity risks in the context of our overall risk management system.

Item 2. Properties

Properties — owned and leased real estate

2 edited+5 added−0 removed0 unchanged
Biggest changeWe believe that our current facility is sufficient to meet anticipated future demand by adding additional shifts to our current production schedule.
Biggest changeWe believe that our current facility is sufficient to meet anticipated future demand by adding personnel to the current staff. Additionally, we can add a working shift to our current production schedule.
Item 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.
We continue to maintain premises 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.
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Item 2. Properties. In October 2024, we established our global headquarters in Miami, Florida, where we lease approximately 10,782 square feet for general office space, with onsite shipping and receiving of products, in Suites 215 and 280 of the 6303 Waterford at Blue Lagoon building located at 6303 Waterford District Drive, Miami, Florida 33126 .
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The lease rent commences on the date that the landlord delivers the entire premises to us with (i) the landlord’s completion of the construction of Suite 280 and (ii) the construction of Suite 215 being substantially complete (the “Commencement Date”).
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The lease has a term of 64 months from the Commencement Date (the “Term”), subject to a five-year extension in accordance with the terms of the lease. Pursuant to the lease, we paid the landlord a security deposit of $500,000.
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Provided that there are no events of default by us under the lease, the security deposit will be returned to us on an incremental basis throughout the Term.
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Pursuant to the lease, we have agreed to pay base rent of $22,911.75 per month during the first year of the Term, increasing on an incremental basis each subsequent year of the Term, as well as traditional lease expenses including, certain taxes, operating expenses and utilities.

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. 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 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 4, 2024, was $2.57 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 10, 2025, was $2.82 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. -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.
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.
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.
Record Holders As of March 12, 2025, we had 293 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 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. [Reserved] 59 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 59 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 66 Item 8. Financial Statements and Supplementary Data. 66 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. 66 Item 9A. Controls and Procedures. 66
Biggest changeItem 6. [Reserved] 63 Item 7. Management’s Discussion and Analysis of Financial Condition 63 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 68 Item 8. Financial Statements and Supplementary Data. 69 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. 69 Item 9A. Controls and Procedures. 69 Item 9B. Other Information. 69

Item 7. Management's Discussion & Analysis

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

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Biggest changeLiquidity 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.
Biggest changeWe expect to continue incurring losses and negative cash flows from operations until our product, CGuard EPS, reaches commercial profitability. As a result of these expected losses and negative cash flows from operations, along with our current cash position, we believe we do not have sufficient resources to fund operations for at least the next 12 months.
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.
The performance goal was 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.
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.
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 12,914,086 shares of common stock (the “Series H Warrants”), Series I warrants to purchase up to 12,914,078 shares of common stock (the “Series I Warrants”), Series J warrants to purchase up to 12,914,086 shares of Common Stock (the “Series J Warrants”) and Series K warrants to purchase up to 12,914,078 shares of common stock (the “Series K Warrants” and together with the Series H Warrants, Series I Warrants and Series J Warrants, the “Warrants”), at an offering price of $1.6327 per Private Placement Share and associated Warrants and an offering price of $1.6326 per Pre-Funded Warrant and associated Warrants. 64 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 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.
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.
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.
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, 2024, net cash used in our operating activities increased by $5,492,000 to $21,868,000, from $16,376,000 during the same period in 2023.
The principal source of the cash provided by financing activities during the twelve months ended December 31, 2023 were the proceeds from the Private Placement Offering in May 2023 that resulted in approximately $37,534,000 of aggregate net proceeds.
Cash provided by financing activities for the twelve months ended December 31, 2023, was $37,534,000. The principal source of the cash provided by financing activities during the twelve months ended December 31, 2023, were the proceeds from the Private Placement Offering in May 2023.
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.
Currently, we are seeking strategic partners for a potential launch of CGuard EPS in Japan and other Asian countries. 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.
Lease agreements that include lease and non-lease components are accounted for as a single lease component. The Company elected the short-term lease recognition exemption for leases with a lease term of 12 months or less.
Lease agreements that include lease and non-lease components are accounted for as a single lease component. The Company elected the short-term lease recognition exemption for leases with a lease term of 12 months or less. Results of Operations Twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023 Revenues .
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 .
The increase in financial income primarily resulted from a $293,000 increase in interest income from investment in marketable securities, money market funds and short-term bank deposits. Tax Expenses . For the twelve months ended December 31, 2024, tax decreased by $6,000 compared to the twelve months ended December 31, 2023.
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.
At December 31, 2024, we had cash and cash equivalents of $18,916,000 and marketable securities of $15,721,000 as compared to $9,640,000 of cash and cash equivalents and $29,383,000 marketable securities as of December 31, 2023. We have historically met our cash needs through a combination of issuing new shares, borrowing activities and product sales.
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.
All events were adjudicated by an independent clinical events committee. The composite index was compared to a performance goal based on the observed rate of the two components of the primary endpoint from previous pivotal stent trials which are considered industry standard.
The 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.
The Warrants will be immediately exercisable upon issuance at an exercise price of $1.3827 per share, subject to adjustment as set forth therein.
Contractual Obligations Operating lease payments represent our commitment for future rent made under non-cancelable lease for our offices in Israel. The total future payments for our operating lease obligation at December 31, 2023 were approximately $1,815,000 and are due in the next twelve months.
Contractual Obligations Operating lease payments represent our commitment for future rent made under non-cancelable lease for our offices in the U.S. and Israel. The total future payments for our operating lease obligation at December 31, 2024 were approximately $2,939,000.
There can be no assurance that we will achieve any of the milestones set forth in the Warrants or that the Warrants will be exercised in cash in full. Twelve months ended December 31, 2023 compared to the twelve months ended December 31, 2022 General .
There can be no assurance that we will achieve any of the milestones set forth in the Warrants or that the Warrants will be exercised in cash in full.
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.
With respect to regions, the increase in revenue was primarily attributable to a $772,000 increase in Europe, a $141,000 increase in Asia and a $14,000 increase in the Middle East. This growth was mainly due to growth in existing and new markets.
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”).
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.
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.
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.
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.
For the twelve months ended December 31, 2024, research and development expenses increased by 70.8%, or $5,653,000, to $13,634,000, from $7,981,000 during the twelve months ended December 31, 2023.
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.
For the twelve months ended December 31, 2024, selling and marketing expenses increased by 57.0%, or $2,204,000 to $6,069,000, from $3,865,000 during the twelve months ended December 31, 2023.
The primary reason for the increase in cash used by our investing activities is an investment in marketable securities, net of withdrawal of $28,644,000, offset by an increase in withdrawal from short-term bank deposits, net of investment in short-term deposits, of $4,000,000, and a decrease of $92,000 in payments made for purchase of property, plant and equipment during the twelve months ended December 31, 2023. -64- Cash provided by financing activities for the twelve months December 31, 2023, was $37,534,000.
The primary reason for the increase in cash provided by our investing activities is proceeds from matured marketable securities, net of withdrawal of $43,200,000, offset by a decrease in withdrawal from short-term bank deposits, net of investment in short-term deposits, of $13,000,000, an increase in an investment in long- term lease deposits of $426,000 and an increase of $1,021,000 in payments made for purchase of property, plant and equipment during the twelve months ended December 31, 2024.
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.
For the twelve months ended December 31, 2024, general and administrative expenses increased by 37.8%, or $4,202,000, to $15,306,000, from $11,104,000 during the twelve months ended December 31, 2023.
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 .
Our expenses for income taxes reflect primarily the tax liability due to potential tax exposure. Net Loss . Our net loss increased by $12,089,000, or 60.7%, to $32,005,000 for the twelve months ended December 31, 2023, from $19,916,000 during the twelve months ended December 31, 2023.
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.
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. In January 2024, we received CE mark recertification under the EU’s Medical Device Regulation regulatory framework.
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.
The primary reason for the increase in cash used in our operating activities was an increase of $4,409,000 in payments for third party related expenses and for professional services, an increase of $2,518,000 in salary and bonus payments from $9,495,000 in the twelve months ended December 31, 2023 to $12,013,000 during the same period in 2024, offset, in part, by an increase of $1,746,000 in payments received from customers to $7,216,000 during the twelve months ended December 31, 2024, from $5,470,000 during the same period in 2023 and an decrease of $311,000 in interest income received from marketable securities and money market funds.
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.
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.
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.
For the twelve months ended December 31, 2024, gross profit (revenue less cost of revenues) decreased by 16.7%, or $301,000, to $1,506,000, compared to a gross profit of $1,807,000 for the same period in 2023. This decrease in gross profit resulted from an increase in cost of goods sold of $1,105,000.
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 .
The increase of cost of goods sold was offset by the increase in revenues of $804,000 as described above. Gross margin (gross profits as a percentage of revenue) decreased to 21.5% during the year ended December 31, 2024, from 29.1% during the year ended December 31, 2023, driven by the factors mentioned above. Research and Development Expenses .
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.
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.
This increase was offset by a $92,000 decline in revenue in the U.S. as less stents were used in our C-GUARDIANS FDA study as trial enrollment ended in June 2023 as well as a $10,000 decline in other markets. Gross Profit .
This increase was offset by a $103,000 decline in clinical revenue in the U.S . mainly driven by the completion in June 2023 of the enrollment of patients in our CGuardians IDE clinical trial as well as a $20,000 decline in other markets. Gross Profit .
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.
Overview We are a medical device company focusing on the development and commercialization of products for the treatment of carotid artery disease and other vascular disease, including our proprietary CGuard™ stent platform.
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.
For the twelve months ended December 31, 2024, revenue increased by $804,000, or 13.0%, to $7,009,000, from $6,205,000 during the twelve months ended December 31, 2023. This increase was predominantly driven by growth in existing and new markets.
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.
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. 63 The primary endpoint was a composite of: (1) incidence of major adverse events including Death (all-cause mortality), any Stroke, and Myocardial Infarction (DSMI) through 30-days post index procedure, or (2) ipsilateral stroke from day 31 to day 365 post-procedure.
Therefore, in order to fund our operations until such time that we can generate substantial revenues, we may need to raise additional funds. Our plans include continued commercialization of our products and raising capital through sale of additional equity securities, debt or capital inflows from strategic partnerships.
Therefore, there is substantial doubt about our ability to continue as a going concern. Our plans include continued commercialization of our products and raising capital through sale of additional equity securities, debt or capital inflows from strategic partnerships and exercise of warrants.
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.
In connection with the exercise of the Series H Warrants, we also paid LifeSci Capital LLC, a placement fee equal to 5.6% of the aggregate gross proceeds from such exercise, or approximately $1.0 million. Critical Accounting Policies We prepared our consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). U.S.
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.
A stent is an expandable scaffold-like device, usually constructed of a metallic material, that is inserted into the lumen of an artery to create patency and improved blood flow. A sleeve of MicroNet™ mesh is attached over a stent to provide embolic protection both during and after stenting procedures.
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.
These increases were offset by a $72,000 decrease in miscellaneous expenses. Financial Income, net . For the twelve months ended December 31, 2024, financial income increased by $265,000, to $1,557,000 from $1,292,000 during the twelve months ended December 31, 2023.
Removed
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.
Added
Our 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 the MDD in the EU in March 2013 and was fully launched in Europe in September 2015.
Removed
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.
Added
In May 2024, we announced positive one-year follow up results from the C-GUARDIANS trial, with a rate of 30-day DSMI and ipsilateral stroke between 31 and 365 days of 1.95% These data were used tothat may support the PMA submission in September 2024 with a view to potential FDA approval of the CGuard Prime carotid stent system in the first half of 2025.
Removed
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.
Added
In October 2024, the FDA approved the Company’s IDE to initiate the CGUARDIANS II pivotal study of its CGuard Prime 80cm Carotid Stent System during transcarotid revascularization (TCAR) procedures.
Removed
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.
Added
The Warrants may be exercised on a cashless basis if there is no effective registration statement registering the shares underlying the Warrants.
Removed
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.
Added
Following the announcement of the one year follow up study results from the Company’s C-GUARDIANS trial, Series H Warrants to purchase 12,914,086 shares of common stock were exercised in full into 292,996 of shares of common stock and pre-funded warrants to purchase 12,621,090 shares of common stock.
Removed
Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates using assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting periods.
Added
The net proceeds to the Company from the exercise of the Series H Warrants were $16.9 million, after deducting placement agent fees. The Series H warrants, each exercisable at $1.3827 per common share and $1.3826 per pre-funded warrant, were issued as part of the private placement financing that the Company consummated on May 15, 2023.
Removed
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.
Added
Use of estimates As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to the determination of the lease terms in operating leases. 65 Leases Operating leases are included in operating lease right-of-use (“ROU”) assets, Accounts payable and accruals - Other, and operating lease liabilities.
Removed
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.
Added
This increase was primarily due to an $891,000 increase in material and labor costs, driven mainly from higher sales volume, and increased compensation expense for new and current employees. In addition, there were an additional $214,000 other cost of goods sold related expenses.
Removed
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.
Added
This increase resulted primarily from an increase in compensation expenses of $2,705,000, mainly due to an increase of share-based compensation-related expenses and due to hiring personnel in connection with our expansion plans in the United States, an increase of $1,379,000 of SwitchGuard NPS development and regulatory cost, $961,000 related to clinical trials for CGuardians II and CGuardians III, an increase of $914,000 related to CGuard Prime product preparation expenses for the anticipated U.S. commercial launch of CGuard Prime, an increase of $448,000 related to an early feasibility study of CGuard Prime for the treatment of acute stroke patients with tandem lesions, an increase of $239,000 related to the establishment of operations in the United States and an increase of $71,000 in miscellaneous expenses.
Removed
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.
Added
These increases were offset by a decrease of $1,064,000 in expenses associated with the C-Guardians FDA Study as the one-year follow-up finalized in the second quarter of 2024 and the submission this quarter of the PMA application to the U.S. FDA. 66 Selling and Marketing Expenses .
Removed
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.
Added
This increase resulted primarily from an increase in compensation expenses of $1,870,000 as we build our commercial sales force in the United States in anticipation for FDA approval, an increase of $254,000 of promotional activities and an increase of $80,000 in miscellaneous expenses. General and Administrative Expenses .
Removed
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.
Added
The increase was primarily driven by a $3,113,000 increase in share-based compensation expenses, a $877,000 increase in salary expenses and related accruals (mainly due to expected severance payments accrued for following the CFO’s announced retirement, new hires for our Miami headquarters, and salary increases), and a $284,000 increase in employee headhunting fees.
Removed
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.
Added
The increase in net loss resulted primarily from an increase of $12,059,000 in operating expenses. Liquidity and Capital Resources We had an accumulated deficit as of December 31, 2024, of $254 million, as well as a net loss of $32.0 million and negative operating cash flows.
Removed
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.
Added
Following the announcement of the one year follow up study results from the Company’s C-GUARDIANS trial, Series H Warrants to purchase 12,914,086 shares of common stock were exercised in full into 292,996 of shares of common stock and pre-funded warrants to purchase 12,621,090 shares of common stock.
Removed
The determination of the incremental borrowing rate requires management judgment based on information available at lease commencement.
Added
The net proceeds to the Company from the exercise of the Series H Warrants were $16.9 million after deducting placement agent fees. The Series H warrants, each exercisable at $1.3827 per common share and $1.3826 per pre-funded warrant, were issued as part of the private placement financing that the Company consummated on May 15, 2023.
Removed
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.
Added
In May 2024, we entered into an Equity Distribution Agreement (the “Distribution Agreement”) with Piper Sandler & Co., as sales agent (“Piper Sandler”), pursuant to which we may offer and sell from time to time, at our option, through or to Piper Sandler shares of our common stock having an aggregate offering price of up to $17 million (the “ATM Facility”).
Removed
Revenues are recorded in the amount of consideration to which we expect to be entitled in exchange for Performance Obligations upon transfer of control to the customer, excluding sales taxes.
Added
We will pay Piper Sandler a commission at a fixed rate of 3.0% of the aggregate gross proceeds from each sale of the shares under the Distribution Agreement.
Removed
Revenue from sales of goods, including sales to distributors, is recognized when the customer obtains control of the product, once we have a present right to payment, legal title, and risk and rewards of ownership are obtained by the customer. This occurs when products are shipped.
Added
As of the date hereof, we sold 845,399 shares pursuant to the Distribution Agreement for aggregate gross proceeds of approximately $2,199,395. 67 Twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023 General .
Removed
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.
Added
Cash provided by our investing activities was $12,641,000 during the twelve months ended December 31, 2024, compared to cash used by our investing activities of $16,092,000 during the twelve months ended December 31, 2023.
Removed
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.
Added
Cash provided by financing activities for the twelve months December 31, 2024, was $18,452,000.
Removed
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.
Added
The principal source of the cash provided by financing activities during the twelve months ended December 31, 2024 were the proceeds from exercise of warrants of $16,854,000 net of issuance costs and funds received from our ATM Facility that resulted in approximately $1,598,000 of aggregate net proceeds.
Removed
In addition, certain of our share-based awards to service providers are performance based, i.e., the vesting of these awards depends upon achieving certain goals. We recognize compensation expenses for awards with performance conditions when we conclude that it is probable that the performance condition will be achieved.
Removed
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.

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