UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended: June 30, 2022

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

For the transition period from to

Commission file number: 001-35731

InspireMD, Inc.

(Exact name of registrant as specified in its charter)

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

4 Menorat Hamaor St.

Tel Aviv, Israel 6744832

(Address of principal executive offices)

(Zip Code)

(888) 776-6204

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒		Smaller reporting company ☒
		Emerging growth company ☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		NSPR		Nasdaq Capital Market

The number of shares of the registrant’s common stock, $0.0001 par value, outstanding as of August 8, 2022: 8,323,200

TABLE OF CONTENTS

		Page
	PART I
Item 1.	Financial Statements	F-1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	10
Item 4.	Controls and Procedures	11

	PART II
Item 1.	Legal Proceedings	12
Item 1A.	Risk Factors	12
Item 5.	Other Information	12
Item 6.	Exhibits	12

INSPIREMD, INC.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE QUARTER ENDED JUNE 30, 2022

TABLE OF CONTENTS

	Page
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
Condensed Consolidated Balance Sheets	F-2 - F-3
Condensed Consolidated Statements of Operations	F-4
Condensed Consolidated Statements of Changes in Equity	F-5 - F-8
Condensed Consolidated Statements of Cash Flows	F-9
Notes to the Condensed Consolidated Financial Statements	F-10 - F-15

F-1

INSPIREMD, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(U.S. dollars in thousands)

	June 30,		December 31,
	2022		2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	6,393	$	12,004
Short-term bank deposits		20,078		22,036
Accounts receivable:
Trade, net		1,183		1,224
Other		171		165
Prepaid expenses		221		522
Inventory		1,454		1,143
TOTAL CURRENT ASSETS		29,500		37,094

NON-CURRENT ASSETS:
Property, plant and equipment, net		700		632
Operating lease right of use assets		1,717		1,081
Fund in respect of employee rights upon retirement		849		905
TOTAL NON-CURRENT ASSETS		3,266		2,618
TOTAL ASSETS	$	32,766	$	39,712

F-2

INSPIREMD, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

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

	June 30,			December 31,
	2022			2021
LIABILITIES AND EQUITY

CURRENT LIABILITIES:
Accounts payable and accruals:
Trade		1,127			893
Other		3,585			3,454
TOTAL CURRENT LIABILITIES		4,712			4,347

LONG-TERM LIABILITIES-
Operating lease liabilities		1,350			781
Liability for employees’ rights upon retirement		962			1,052

TOTAL LONG-TERM LIABILITIES		2,312			1,833

COMMITMENTS AND CONTINGENT LIABILITIES		-			-
TOTAL LIABILITIES		7,024			6,180

EQUITY:

Common stock, par value $0.0001 per share; 150,000,000 shares authorized at June 30, 2022 and December 31, 2021; 8,323,200 and 8,296,256 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		1			1
Preferred C shares, par value $0.0001 per share; 1,172,000 shares authorized at June 30, 2022 and December 31, 2021; 1,718 shares issued and outstanding at June 30, 2022 and December 31 2021, respectively		-	*		-	*
Additional paid-in capital		217,952			216,625
Accumulated deficit		(192,211	)		(183,094	)
Total equity		25,742			33,532
Total liabilities and equity	$	32,766		$	39,712

*	Represents an amount less than $1 thousand

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

F-3

INSPIREMD, INC.

(Unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

	2022			2021			2022			2021
	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021

REVENUES	$	1,531		$	1,038		$	2,714		$	2,044
COST OF REVENUES		1,100			776			2,161			1,676
GROSS PROFIT		431			262			553			368
OPERATING EXPENSES:
Research and development		2,056			1,290			3,736			2,129
Selling and marketing		986			636			1,732			1,344
General and administrative		2,070			1,776			4,252			3,649
Total operating expenses		5,112			3,702			9,720			7,122
LOSS FROM OPERATIONS		(4,681	)		(3,440	)		(9,167	)		(6,754	)
FINANCIAL INCOME (EXPENSES), net:		45			(67	)		50			4
LOSS BEFORE TAX EXPENSES		(4,636	)		(3,507	)		(9,117	)		(6,750	)
NET LOSS	$	(4,636	)	$	(3,507	)	$	(9,117	)	$	(6,750	)
NET LOSS PER SHARE - basic and diluted	$	(0.59	)	$	(0.46	)	$	(1.17	)	$	(0.98	)
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING NET LOSS PER SHARE - basic and diluted		7,807,795			7,704,707			7,806,030			6,918,090

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

F-4

INSPIREMD, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

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

	Shares		Amount		Shares			Amount		Shares			Amount		capital		deficit			equity
	Common stock				Series B Convertible Preferred Stock					Series C Convertible Preferred Stock					Additional paid-in		Accumulated			Total
	Shares		Amount		Shares			Amount		Shares			Amount		capital		deficit			equity

BALANCE AT January 1, 2021		3,284,322		-^*		17,303			-^*		2,343			-^*	$	180,339	$	(168,176	)	$	12,163
Net loss																		(6,750	)		(6,750	)
Issuance of common stock, including at the market offering net of $2,024 issuance costs		3,133,775		1		-			-		-			-		25,241		-			25,242
Exercise of Warrants F		1,093,536		-^*		-			-		-			-		8,120		-			8,120
Exercise of Warrants G		131,876		-^*		-			-		-			-		1,349		-			1,349
Conversion of Series B Convertible Preferred Stock to common stock		207,528		-^*		(17,303	)		-^*		-			-		-^*		-			-^*
Conversion of Series C Convertible Preferred Stock to common stock		831		-^*		-			-		(625	)		-^*		-^*		-			-^*
Share-based compensation related to restricted stock, restricted stock units and stock options award, net of forfeitures of 5,959 shares		15,083		-^*		-			-		-			-		706		-			706
Round up of shares due to reverse stock split effectuated on April 26, 2021		47,388		-^*		-			-		-			-		-		-			-
BALANCE AT June 30, 2021		7,914,339		1		-			-		1,718			-^*	$	215,755	$	(174,926	)	$	40,830

*	Represents an amount less than $1 thousand

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

F-5

INSPIREMD, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

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

	Shares		Amount		Shares		Amount		Shares		Amount		capital		deficit			equity
	Common stock				Convertible				Series C Convertible Preferred Stock				Additional paid-in		Accumulated			Total
	Shares		Amount		Shares		Amount		Shares		Amount		capital		deficit			equity

BALANCE AT April 1, 2021		7,852,791		1		-		-		1,718		-^*	$	215,372	$	(171,419	)	$	43,954
Net loss																(3,507	)		(3,507	)
Share-based compensation related to restricted stock, restricted stock units and stock options award, net of forfeitures of 2,683 shares		14,160		-^*		-		-		-		-		383		-			383
Round up of shares due to reverse stock split effectuated on April 26, 2021		47,388		-^*		-		-		-		-		-		-			-
BALANCE AT June 30, 2021		7,914,339		1		-		-		1,718		-^*	$	215,755	$	(174,926	)	$	40,830

*	Represents an amount less than $1 thousand

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

F-6

INSPIREMD, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

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

	Shares		Amount		Shares		Amount		capital		deficit			equity
	Common stock				Series C Convertible Preferred Stock				Additional paid-in		Accumulated			Total
	Shares		Amount		Shares		Amount		capital		deficit			equity

BALANCE AT January 1, 2022		8,296,256		1		1,718		-^*		216,625		(183,094	)		33,532
Net loss												(9,117	)		(9,117	)
Share-based compensation related to restricted stock, restricted stock units and stock options award, net of forfeitures of 4,563 shares		26,944		-^*				-		1,327		-			1,327
BALANCE AT June 30, 2022		8,323,200		1		1,718		-^*		217,952		(192,211	)		25,742

*	Represents an amount less than $1 thousand

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

F-7

INSPIREMD, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

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

	Common stock				Series C Convertible Preferred Stock				Additional paid-in		Accumulated			Total
	Shares		Amount		Shares		Amount		capital		deficit			equity

BALANCE AT April 1, 2022		8,317,876		1		1,718		-^*		217,278		(187,575	)		29,704
Net loss												(4,636	)		(4,636	)
Share-based compensation related to restricted stock, restricted stock units and stock options award		5,324		-^*				-		674		-			674
BALANCE AT June 30, 2022		8,323,200		1		1,718		-^*		217,952		(192,211	)		25,742

*	Represents an amount less than $1 thousand

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

F-8

INSPIREMD, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(U.S. dollars in thousands)

	2022			2021
	Six months ended June 30
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(9,117	)	$	(6,750	)
Adjustments required to reconcile net loss to net cash used in operating activities:
Depreciation		84			84
Loss from sale of property, plant and equipment		-			1
Loss on amounts funded in respect of employee rights upon retirement, net		103			-
Change in liability for employees’ rights upon retirement		(90	)		52
Other financial expenses		132			12
Change in operating right of use asset and operating leasing liability		(63	)		(69	)
Share-based compensation expenses		1,327			706
Increase in interest receivable on short term deposits		(42	)		-
Changes in operating asset and liability items:
Decrease in prepaid expenses		338			271
Decrease (increase) in trade receivables		41			(486	)
Decrease (increase) in other receivables		(6	)		10
Decrease (increase) in inventory		(311	)		73
Increase in trade payables		234			503
Increase (decrease) in other payables		127			(576	)
Net cash used in operating activities		(7,243	)		(6,169	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from withdrawal of (invest in) short-term deposits		2,000			-
Purchase of property, plant and equipment		(152	)		(80	)
Amounts funded in respect of employee rights upon retirement, net		(47	)		(34	)
Net cash provided by (used by) investing activities		1,801			(114	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance costs of At The Market offering		(37	)		-
Proceeds from issuance of shares and warrants and exercise of Pre-Funded Warrants net of $1,989 issuance costs,		-			35,069
Net cash provided by financing activities		(37	)		35,069
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		(132	)		(12	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(5,611	)		28,774
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD		12,004			12,645
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF THE PERIOD	$	6,393		$	41,419
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:
Acquisition of right-of-use assets by means of lease liabilities		835			91
Issuance Costs	$	-			35

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

F-9

INSPIREMD, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - DESCRIPTION OF BUSINESS