Unassociated Document

2.	Revise the prospectus, where appropriate, to expand your discussion of the transactions related to the share exchange, including your transactions with former chief executive officer Lynn Briggs and your escrow arrangement.

Response:

The Company has made the requested revision by expanding its discussions of the transactions related to the share exchange on pages 3, 27 and 55 of Amendment No. 2.

3.	We note your response to prior comment 2. Please provide marked pages from the journals and articles mentioned in the first and fifth paragraphs of this section supporting your disclosure.

Response:

The Company has enclosed herewith as Exhibit A are the marked pages from the reports mentioned in this section supporting the Company’s disclosure.

4.	Please clarify the reference in the sixth paragraph of this section to “percutaneous coronary intervention.”

Response:

The Company has made the requested revision by clarifying its reference to “percutaneous coronary intervention” on page 2 of Amendment No. 2.

We note your response to prior comment 4, including the final sentence of the third paragraph on page 2. However, your statement that one trademark (MGuard) refers to another (MGuard Prime) is not clear. Therefore, we reissue the comment. With a view to disclosure, please tell us whether you will need to secure an additional CE mark for MGuard Prime.

Response:

The Company has revised the disclosure by clarifying that references to MGuard™ are to both the Company’s initial product, MGuard™, and MGuard Prime™ on page 2 of Amendment No. 2. The Company affirms its disclosure that MGuard™ and MGuard Prime™ required and obtained separate CE mark approvals.

We expect to derive our revenue from sales of our MGuard stent products, page 5

We note that in response to prior comment 5 you expanded the bullet points in this risk factor to include cross-references to other risk factor headings. This response does not address our request that you expand your disclosure of the bulleted risks or provide appropriate discussion of such risks under separate headings. Therefore, we reissue prior comment 5.

U.S. Securities and Exchange Commission

September 21, 2011

Page 3

Response:

The Company has made the requested revision by deleting the bullet points in this risk factor on page 5 of Amendment No. 2, as the Company believes that these risks are appropriately discussed under separate headings.

We may have violated Israeli securities law, page 14

7.	We note your response to prior comment 8. Please expand this risk factor to disclose when you applied for a no-action determination, the status of your application and the fines and penalties that may be applicable.

Response:

The Company has made the requested revision to the risk factor by disclosing when InspireMD Ltd. applied for a no-action determination, the status of InspireMD Ltd.’s application and the fines and penalties that may be applicable on page 14 of Amendment No. 2.

Management’s Discussion and Analysis, page 18

Results of Operations, page 20

Six Months Ended June 30, 2011 Compared to Six Months Ended June 30, 2010, page 23

Please refer to our prior comment 12. We note your revised disclosure that explains that deferred revenue decreased by approximately 80% and this was offset by an increase in gross revenues of 93%, however, your discussion of the changes in deferred revenue to various distributors and the gross revenue to various distributors does not provide investors with the underlying reasons for the changes in revenues between periods. In light of the significant recognition of revenues during the six months period ended June 30, 2011 that were previously deferred, explain what events occurred during the six months period ended June 30, 2011 that resulted in the recognition of the related revenues. In addition, provide insight as to the underlying reasons for the increases in gross revenues to your various distributors during the period. Furthermore, as previously requested, please discuss and quantify each factor that caused the decrease in revenue between the six months ended June 30, 2011 and the six months ended June 30, 2010.

Response:

The Company has made the requested revision by discussing the factors that resulted in the recognition of revenues and the decrease in revenue for the six months ended June 30, 2011 and the six months ended June 30, 2010 on page 23 of Amendment No. 2.

Liquidity and Capital Resources, page 25

U.S. Securities and Exchange Commission

September 21, 2011

Page 4

9.	Please tell us where you have discussed your factoring arrangement in this section.

Response:

The Company has made the requested revision by discussing its factoring arrangement on page 25 of Amendment No. 2.

Our Industry, page 29

10.	We note your response to prior comment 15. Please tell us how you confirmed that the market data presented on pages 29, 30 and 38 reflects the most recent available data. Also, please provide marked pages from the reports mentioned in this section supporting your disclosure.

Response:

Based on its general research, the Company believes that the BMO Capital Markets report, dated as of January 2011, is one of the newest reports on the global drug-eluting stent market. In addition, the Company has revised its presentation of market data by citing the most recent World Health Organization fact sheet, updated as of June 2011, reporting worldwide deaths in 2008, on page 29 of Amendment No. 2.

The Company has enclosed herewith as Exhibit B are the marked pages from the reports mentioned in this section supporting the Company’s disclosure.

Our Products, page 29

11.

Please clarify the references to “myocardial blush grade” and “restenosis rates” in the second and third paragraphs on page 30, respectively. Also, clarify why the results of your clinical studies “suggest” higher levels of MBG and lower rates of adverse cardiac events and why, if true, these findings would give you a competitive advantage.

Response:

The Company has made the requested revision by clarifying references to “myocardial blush grade” and “restenosis rates” and clarifying its discussion of the MGuard Coronary stent with respect to contributing to higher levels of myocardial blush grade and lower rates of major adverse cardiac event rates on page 30 of Amendment No. 2.

The Company notes that it used the term “suggest” with respect to higher levels of myocardial blush grade and lower rates of major adverse cardiac event rates because the clinical studies were not comparative trials of the MGuard Coronary stent compared to other bare-metal and drug-eluting stents and so any comparison can only suggestive and not conclusive.

Product Development and Critical Milestones, page 31

Pre-Clinical Studies, page 31

U.S. Securities and Exchange Commission

September 21, 2011

Page 5

12.

We note that certain information related to FDA Approval, U.S. Sales, Start of Study and End of Study remained “To be determined” as of the date of the initial filing of the registration statement. We also note that in this amendment to the registration statement you have revised your disclosure to reflect that the same information is “Not applicable.” With a view to disclosure, please explain the bases for the changed disclosure.

Response:

The Company has made the requested revision by changing the appropriate disclosures to “To be determined” on pages 31 and 32 of Amendment No. 2. The Company notes that the achievement of these milestones remain subject to further consideration by the Company.

13.	We note your disclosure on pages 9 and 10 of your Form 8-K filed on April 6, 2011. However, your tabular disclosure in this section appears to indicate that the start and end of the studies have been delayed. With a view to disclosure, please explain the reasons for the delays.

Response:

With respect to the preclinical studies for MGuard Coronary, the drug-eluting mesh trials have been either delayed or indefinitely paused due to the Company raising less money than anticipated, and the start of the cobalt-chromium stent plus bio-stable mesh trial was delayed by one fiscal quarter due to a delay in the Company’s receipt of anticipated funding.

With respect to the preclinical studies for MGuard Peripheral/Carotid, the start of study of the self expending system plus mesh trial has been delayed due to a delay in the Company’s receipt of anticipated funding.

With respect to the MGuard Coronary clinical trial for the worldwide and Israel International MGuard Observational Studies, the end enrollment and end of study dates were incorrect in the Form 8-K filed on April 6, 2011 due to a typographical error.

With respect to the MGuard Coronary clinical trial for the Master randomized control trial, the start and end enrollment dates have been delayed by a fiscal quarter and the end of study date has been delayed by two fiscal quarters due to delays in the necessary approvals of the trial by local ethical committees in certain of the participant countries.

With respect to the MGuard Coronary clinical trials for the drug-eluting stent, the Company currently does not have sufficient funds to begin these trials due to the Company raising less money than anticipated and the prioritization of Company funds for the MGuard Coronary FDA trial.

With respect to the MGuard Peripheral clinical trial for the self expanding system + mesh, the start date has been delayed due to a delay in the Company’s receipt of anticipated funding.

With respect to the MGuard Carotid clinical trial for the self expanding system plus mesh, the start, end enrollment and end of study dates were incorrect in the Form 8-K filed on April 6, 2011 due to a typographical error.

Ongoing Clinical Trials, page 34

U.S. Securities and Exchange Commission

September 21, 2011

Page 6

14.	We note your response to prior comment 19 and reissue. With a view to disclosure, please provide the staff with a clear explanation as to the differing results of your 2005 and 2006 studies.

Response:

The Company’s pre-clinical studies of the MGuard Coronary with bio-stable mesh stent, conducted in 2005 and 2006, were performed on animal test subjects. After the test results of these pre-clinical studies demonstrated feasibility by comparing the performance of the MGuard Coronary with bio-stable mesh stent as compared to standard bare metal stents, the Company commenced clinical trials performed on human subjects, without modifying the design of the MGuard Coronary with bio-stable mesh stent, to test for safety. Because the pre-clinical studies were performed on animal subjects and the clinical trials were performed on human subjects and because the tests had different endpoints, the Company is unable to compare the pre-clinical studies and clinical trials in a way that connects the two results together in a meaningful manner.

15.	We note that on page 34 you disclose the number of patients in your studies as of June 1, 2011. We also note that you have disclosed on page 36 your plan to launch a study in the second fiscal quarter of 2011. Please revise the prospectus to update your disclosure.

Response:

The Company has made the requested revision by updating the number of patients in each of the disclosed studies and updating its disclosure of the clinical trial that commenced in the second fiscal quarter of 2011 on pages 34 and 36 of Amendment No. 2.

Future Clinical Trials, page 36

16.

We note your response to prior comments 16. We also note your revised disclosure under “Government Regulation” on page 41. Please reconcile your disclosure of the countries in which you will seek approval and provide a discussion of the necessary steps and timeline for approval in these countries, including applicable local requirements.

Response:

The Company has made the requested revision by discussing the necessary steps and timeline for each country in which it is seeking approval on page 41 of Amendment No. 2.

17.

In this regard, it is unclear why you have elected not to discuss your plans for product approval in China given your disclosure in the prospectus that you are “aggressively pursuing additional registrations” in China as well as other countries. We also note your disclosure that you have filed for intellectual property protection in China. Please revise your prospectus accordingly.

Response:

The Company has made the requested revision by disclosing its growth strategy towards China with respect to its MGuard technology on page 38 of Amendment No. 2.

U.S. Securities and Exchange Commission

September 21, 2011

Page 7

Manufacturing and Suppliers, page 42

18.

We note your response to prior comments 17 and 24. Please expand your discussion of the material terms of your license agreement to include a description of term, termination and indemnification provisions, if any. To the extent there are additional material provisions, please describe. Also, provide similarly expanded discussion of the material terms of the other manufacturing and supply agreements disclosed in this section.

Response:

The Company has made the requested revision by expanding its discussion of its manufacturing and supply agreements on page 42 of Amendment No. 2.

Selling Stockholders, page 51

19.	We note your response to prior comment 27. Given the nature of the transaction being registered, please advise the staff of the company’s basis for determining that the transaction is appropriately characterized as a transaction that is eligible to be made on a shelf basis under Rule 415(a)(1)(i).

Response:

For the reasons set forth below, the Company believes that the shares of common stock that the Company is proposing to register for resale in Amendment No. 2 are eligible for registration on a delayed or continuous basis pursuant to Rule 415(a)(1)(i) of the Securities Act of 1933, as amended (the “Securities Act”).

Background

On March 31, 2011, the Company, InspireMD Ltd. and shareholders of InspireMD Ltd. (the “InspireMD Shareholders”) consummated a share exchange agreement pursuant to which the InspireMD Shareholders transferred all of their ordinary shares in InspireMD Ltd. to the Company in exchange for 46,471,907 newly issued shares of common stock of the Company. In addition, the remaining holders of InspireMD Ltd.’s ordinary shares separately transferred all of their ordinary shares of InspireMD Ltd.to the Company, in exchange for an aggregate of 4,194,756 newly issued shares of common stock of the Company. As a result of these share exchanges, InspireMD Ltd. became a wholly owned subsidiary of the Company. In connection with the share exchange transactions, pursuant to a securities purchase agreement dated as of March 31, 2011 (the “Securities Purchase Agreement”), the Company sold shares of its common stock and five-year warrants to purchase up to 3,226,999 shares of common stock at an exercise price of $1.80 per share (the “March $1.80 Warrants”) in a private placement to accredited investors (the “March Private Placements”). In addition, the Company issued shares of its common stock and a warrant to purchase 373,740 shares of common stock to the placement agent (the “Placement Agent”) in connection with the March Private Placements at an exercise price of $1.80 per share (the “Placement Agent Warrant”). On April 18, 2011, pursuant to the Securities Purchase Agreement, the Company issued to an accredited investor shares of its common stock and a warrant to purchase 333,333 shares of the Company’s common stock at an exercise price of $1.80 per share on the same terms as the March $1.80 Warrants (the “April Follow-On Warrant”). On April 18, 2011, the Company entered into private placement transactions (the “April 18 Private Placements”) pursuant to which it issued to certain accredited investors shares of its common stock and warrants to purchase up to an aggregate of 141,666 shares of common stock at an exercise price of $1.80 per share (the “April 18 $1.80 Warrants”). On April 21, 2011, the Company entered into a private placement transaction (the “(the “April 21 Private Placement” and, together with the April 18 Private Placements, the April Private Placements”) pursuant to which it issued to a certain investor shares of its common stock and warrants to purchase up to an aggregate of 16,667 shares of common stock at an exercise price of $1.80 per share (the “April 21 $1.80 Warrant” and, together with the April 18 $1.80 Warrants, the “April $1.80 Warrants”). In connection with the April 18 Private Placements, the Company issued the Placement Agent a warrant to purchase 57,000 shares of common stock at an exercise price of $1.80 per share (the “April Placement Agent Warrant” and, together with the March $1.80 Warrants, the Placement Agent Warrant, the April Follow-On Warrant, the April 18 $1.80 Warrants and the April 21 $1.80 Warrants, the “Warrants”).

U.S. Securities and Exchange Commission

September 21, 2011

Page 8

415 Analysis

In 1983, the Staff of the Commission (the “Staff”) adopted Rule 415 under the Securities Act to permit the registration of offerings to be made on a delayed or continuous basis. Rule 415 specifies certain conditions that must be met by an issuer in order to avail itself of the Rule. In relevant part, Rule 415 provides:

“(a) Securities may be registered for an offering to be made on a continuous or delayed basis in the future, Provided, That:

(1) The registration statement pertains only to:

(i) Securities which are to be offered or sold solely by or on behalf of a person or persons other than the registrant, a subsidiary of the registrant or a person of which the registrant is a subsidiary;”

Under Rule 415(a)(1)(i), an issuer may register shares to be sold on a delayed or continuous basis by selling stockholders in a bona fide secondary offering without restriction.

In the event that the offering registered by Amendment No. 2 is re-characterized as a primary offering on behalf of the Company, (i) the offering would have to be made on a fixed price basis (in other words, the “Selling Stockholders”, as identified on page 51 of Amendment No. 2, would not be able to sell their securities at prevailing market prices), (ii) the Selling Stockholders would be deemed to be “underwriters” with respect to the offering (with the attendant liabilities under Section 11 of the Securities Act), and (iii) in accordance with the Staff’s long-standing interpretive position, Rule 144 would not be available to the Selling Stockholders to effect resales of their securities registered in the offering.

U.S. Securities and Exchange Commission

September 21, 2011

Page 9

As a result of the foregoing consequences, the Staff’s interpretation of Rule 415 has a potentially dramatic impact on the ability of smaller public companies, like the Company, to raise capital and on the ability of a selling stockholder to effect the resale of its securities. Therefore, the Staff has previously acknowledged that a secondary offering should only be re-characterized as a primary offering after a careful and complete review of the relevant facts and circumstances. Specifically, in its Compliance and Disclosure Interpretations, the Staff has set forth a detailed analysis of the relevant factors that should be examined. Interpretive Response 612.09 (“CDI 612.09”), posted by the Staff on January 26, 2009, provides that:

“It is important to identify whether a purported secondary offering is really a primary offering, i.e., the selling shareholders are actually underwriters selling on behalf of an issuer. Underwriter status may involve additional disclosure, including an acknowledgment of the seller’s prospectus delivery requirements. In an offering involving Rule 415 or Form S-3, if the offering is deemed to be on behalf of the issuer, the Rule and Form in some cases will be unavailable (e.g., because of the Form S-3 ‘public float’ test for a primary offering, or because Rule 415(a)(l)(i) is available for secondary offerings, but primary offerings must meet the requirements of one of the other subsections of Rule 415). The question of whether an offering styled a secondary one is really on behalf of the issuer is a difficult factual one, not merely a question of who receives the proceeds. Consideration should be given to how long the selling shareholders have held the shares, the circumstances under which they received them, their relationship to the issuer, the amount of shares involved, whether the sellers are in the business of underwriting securities, and finally, whether under all the circumstances it appears that the seller is acting as a conduit for the issuer.” (emphasis added)

As CDI 612.09 indicates, the question is a “difficult” and “factual” one that involves an analysis of many factors and “all the circumstances.”

Each of the relevant factors listed in CDI 612.09 is discussed below in the context of the offering under Amendment No. 2. Based on a proper consideration of all of those factors, the Company believes that the Staff should conclude that Amendment No. 2 relates to a valid secondary offering and that the shares of common stock issuable upon exercise of the Warrants can be registered for sale on behalf of the selling stockholders pursuant to Rule 415.

How Long the Selling Stockholders have Held the Securities

The holders of the March $1.80 Warrants and the Placement Agent Warrant (collectively, the “March Warrant Holders”) have held their shares of the Company’s common stock and their Warrants since March 31, 2011. The holders of the April Follow-On Warrant and the April Placement Agent Warrant are also March Warrant Holders, and thus have held shares of the Company’s common stock and a majority of their Warrants since March 31, 2011. The holders of the April 18 $1.80 Warrants have held their shares of the Company’s common stock and their Warrants since April 18, 2011 and the holder of the April 21 $1.80 Warrants have held its shares of the Company’s common stock and its Warrants since April 21, 2011. Each of the Selling Stockholders is offering only approximately 10% of the shares underlying each Selling Stockholder’s Warrants. As such, even subsequent to the offering, each Selling Stockholder will remain a holder of shares of the Company’s common stock and warrants to purchase shares of the Company’s common stock.

U.S. Securities and Exchange Commission

September 21, 2011

Page 10

While all of the Warrants are immediately convertible, none of the Selling Stockholders have converted any portions of the Warrants, and no shares underlying the Warrants have therefore been issued.

In Compliance and Disclosure Interpretation 116.19 (“CDI 116.19”) with respect to Securities Act forms, the Staff noted that:

[i]n a PIPE transaction, a company will be permitted to register the resale of securities prior to their issuance if the company has completed a Section 4(2)-exempt sale of the securities (or in the case of convertible securities, of the convertible security itself) to the investor, and the investor is at market risk at the time of filing of the resale registration statement.

CDI 116.19 therefore contemplates that a valid secondary offering of shares may occur without delay so long as the Company has completed the Section 4(2)-exempt sale of the convertible security and the investor carries the market risk at the time the resale registration statement is filed.

This concept is consistent with longstanding custom and practice in the PIPEs marketplace, as registration rights in connection with PIPEs transactions ordinarily require the filing of a resale registration statement shortly after closing (typically 30 days) and effectiveness of that registration statement shortly thereafter (typically 90 days after closing). A concern that a short period of time elapsing between closing and registration may indicate the presence of a primary offering is inconsistent with CDI 116.19.

The Circumstances Under Which the Securities were Received

Of the 414,942 shares being registered in Amendment No. 2, 322,700 shares of common stock are issuable upon exercise of the March $1.80 Warrants that were issued in the March Private Placements, 15,833 shares of common stock are issuable upon exercise of the April $1.80 Warrants that were issued in the April Private Placements, 33,333 shares of common stock are issuable upon exercise of the April Follow-On Warrant that was issued in a private placement as a follow-on offering to the March Private Placements, 37,374 shares of common stock are issuable upon exercise of the Placement Agent Warrant that was issued to the Placement Agent as consideration for its service as placement agent for the March Private Placements and 5,700 shares of common stock are issuable upon exercise of the April Placement Agent Warrant that was issued to the Placement Agent as consideration for its service as placement agent for the April 18 Private Placements. Such transactions were exempt from registration pursuant to Section 4(2) of the Securities Act and Regulation D promulgated thereunder. The March Private Placements, the April Private Placements, the issuance of the March Placement Agent Warrant and the issuance of the April Placement Agent Warrant were arms’ length transactions and the Company’s legal counsel did not provide any services to any of the Selling Stockholders in connection with these transactions.

U.S. Securities and Exchange Commission

September 21, 2011

Page 11

In addition to the above analysis, the Staff should note that the Warrants do not include any price “resets”, floating price conversion rights or other “toxic” features that have previously prompted the Staff’s concerns regarding “Extreme Convertible” transactions. Further, the Warrants do not even provide for anti-dilution protection based on the price of future issuances by the Company. The only anti-dilution provisions in Warrants are customary structural anti-dilution protection provisions in the event of fundamental organic changes in the Company’s capital structure, such as stock splits or stock dividends. These anti-dilution adjustments are consistent with those that the Staff has previously indicated do not raise a concern with respect to the Staff’s interpretation of Rule 415(a)(1)(i).

The Relationship to the Company

None of the Selling Stockholders is currently, or has ever been, an affiliate of the Company. Moreover, after Amendment No. 2 is declared effective and assuming that all of the registered securities are sold, no Selling Stockholder will own more than 5.2% of the issued and outstanding common stock of the Company on a fully diluted basis.

The Amount of Shares Involved

The Company understands that where a registration involved more than approximately one-third of the issuer’s public float, the Staff would analyze whether the transaction was in fact a disguised primary offering rather than a valid secondary offering.1 If an issuer sought to register more than one-third of its public float, the Company understands that the Staff has been instructed to examine the transaction to see if it implicates Staff concerns that a secondary offering might be a “disguised” primary offering for Rule 415 purposes. However, this offering falls well below the one-third threshold, as less than one percent of the outstanding shares of common stock of the Company are being registered. In addition, the Company notes that there are more than forty selling stockholders offering shares to be sold, further supporting the fact that this is a secondary offering by existing stockholders of the Company’s common stock and not a “disguised” primary offering.

The Company understands that where a registration involved more than approximately one-third of the issuer’s public float, the Staff would analyze whether the transaction was in fact a disguised primary offering rather than a valid secondary offering.1 If an issuer sought to register more than one-third of its public float, the Staff was instructed to examine the transaction to see if it implicated Staff concerns that a secondary offering might be a “disguised” primary offering for Rule 415 purposes. However, this offering falls well below the one-third threshold, as less than one percent of the outstanding shares of common stock of the Company are being registered. In addition, the Company notes that there are more than forty selling stockholders offering shares to be sold, further supporting the fact that this is a secondary offering by existing stockholders of the Company’s common stock and not a “disguised” primary offering.

_____________________

1 See Keller, Stanley and William Hicks, “Unblocking Clogged PIPEs: SEC Focuses on Availability of Rule 415,” Insights, May 2007.

U.S. Securities and Exchange Commission

September 21, 2011

Page 12

The Company also notes that this is not a PIPE transaction where a company is attempting to create a public market for its securities by registering securities on a secondary basis which it could not register on a primary basis, where the Company understands the Staff has had concerns in recent years. Rather, this is a registration involving an already publicly-traded company of shares held by Selling Stockholders who will remain stockholders of the Company subsequent to the offering.

Whether the Selling Stockholders are in the Business of Underwriting Securities

To the Company’s knowledge, none of the Selling Stockholders are in the business of underwriting securities.

Whether the Circumstances Indicate that the Selling Stockholders are Acting as a Conduit for the Company

Each of the Selling Stockholders has purchased the securities offered in Amendment No. 2 with independent counsel and in arm’s length transactions, except for the Placement Agent, which received its shares as consideration for its services as placement agent for the Company. The Selling Stockholders are not offering the shares issuable upon exercise of the Warrants on behalf of the Company. The Selling Stockholders will, as a group, continue to have a large ownership interest in the Company after all of the securities offered in Amendment No. 2 are sold. The shares of common stock issuable upon exercise of the Warrants being offered in Amendment No. 2 represent less than 3.5% of the common stock of the Company, calculated on a fully-diluted basis, owned by each Selling Stockholder. As discussed above, none of the Selling Stockholders are now, nor have they ever been, affiliates of the Company. Finally, the Warrants do not include any toxic features that have previously prompted the Staff’s concerns with respect to PIPE transactions and the size of the offering relative to the Company’s public float is not dispositive of an illegal distribution.

Financial Statements for the Years Ended December 31, 2010 and 2009

Note 2 – Significant Accounting Policies, page F-8

1. Revenue Recognition, page F-10

20.

We note from your response to our prior comment 33 that you provide free products as incentives to certain distributors but see you indicate you will provide disclosures of credits, rebates, price protection and other similar incentives if relevant. We also note from the Addendum to the Distribution Agreement with Hand-Prod (filed as exhibit 10.28) that it appears that you offer this distributor free stents as indicated in the tabular summary. Please explain if these incentives are material and explain your response that you will disclose if relevant.

U.S. Securities and Exchange Commission

September 21, 2011

Page 13

Response:

Free stents provided to distributors during the years ended December 31, 2009 and 2010, were in the amount of approximately $15,000 and $80,000, respectively, based upon the average selling price of stents at the relevant period. The Company believes that the number and dollar amount of free stents are not material and, as such, no additional disclosures are necessary. The Company does not offer other incentives such as credits, rebates and price protection.

21.

In this regard, we note from the tabular summary provided as part of the Addendum to the Distribution Agreement that the stents will be placed in a special warehouse and shipped when the order to send the stents is received. Please tell us more about the storage and delivery process and specify at which point you recognize revenue for the stents. Please refer to the applicable guidance in SAB 104 as part of your response.

Response:

According to the Addendum to the Distribution Agreement, the Company will place Hand Prod Sp. Z.o.o’s stents in a separate warehouse in the Company’s offices. In accordance with SAB 104 guidance, the revenue from the stents ordered by Hand Prod Sp. Z.o.o will be recorded only after delivery occurred and title, risks and rewards for the product transfer to the customer. No bill and hold transactions are made and revenue is recognized only when the conditions above are met.

22.	Additionally, we note from the tabular summary provided as part of the Addendum to the Distribution Agreement that Hand Prod will pre pay for orders or pay after the invoice is received. Please tell us if these payments are for multiple deliverables or are only for the stents.

Response:

There are no multiple deliverables applicable with respect to this transaction and the payments relate only to the stents.

Note 8 – Long-Term Loan, page F-17

23.	Please refer to our prior comment 37. While we see your disclosure that the bank asked you to grant additional fixed liens in November 2010, we do not see where you explain the underlying reason for that request. As previously requested, please revise your disclosure accordingly.

Response:

The Company has made the requested revision by clarifying the disclosure related to the additional fixed liens on page F-18 of Amendment No. 2.

Note 10 – Commitments and Contingent Liabilities, page F-20

c. Litigation, page F-21

U.S. Securities and Exchange Commission

September 21, 2011

Page 14

24.

Please refer to our prior comment 38. While we note your revised disclosure in 10.c. 1) and other similar subsequent listings in this litigation disclosure section that you have not recorded an expense related to damages because management is of the opinion that a loss is neither probable nor estimable, in our prior comment we specifically referred to the disclosure requirements regarding a reasonably possible loss or range of loss. For each claim that no accrual is made for loss contingency or an exposure to loss exists in excess of the amount accrued, please explain to us if there is at least a reasonable possibility that a loss or an additional loss may have been incurred and your reasons for such conclusion. Please note that for unrecognized contingencies associated to each claim listed on page F-21 and F-46 that meet the criteria in paragraph 3 of ASC 450-20-50 you are required to disclose (i) the nature of the contingency, and (ii) the possible loss or range of loss or provide a statement that such an estimate cannot be made. Please revise your disclosure accordingly.

Response:

With respect to each of the claims that no accrual was made for loss contingency or an exposure to loss exists in excess of each amount accrued, the Company believes that the amounts claimed represent the maximum exposure that is reasonably possible of being incurred. Therefore, the possible range of loss with respect to each claim is the range between zero and the amount claimed.

The Company has made the requested revision by clarifying the disclosure related to litigation on page F-21 of Amendment No. 2.

25.

Please refer to our prior comment 39. Please further explain why you allocated the $134,000 expense to the year ended December 31, 2006 when the claim was submitted in November 2010. In this regard, please tell us how much of the total expense was recorded in 2005 and 2006, and explain why you believe it is appropriate to adjust prior financial statements to record this expense when the claim was submitted in November 2010. Please provide a similar explanation as it relates to Note 10 c. 6. We also noted that your revised disclosures in c.5) and c.6) eliminated the date the claim was filed, i.e. November 2010. Please explain your rationale for this revision. We will continue to review your response to our prior comment 39 upon receipt of the aforementioned information.

Response:

While the Company had issued only drafts of consolidated financial statements, final consolidated financial statements in accordance with U.S. GAAP were not issued until the Company issued its 2009 financial statements in connection with the initial filing of the Form S-1.

With respect to the litigations referenced in Note 10c.5 and c.6, the Company first became aware of the events that gave rise to litigation in 2005 and 2006. During that period, the Company had discussions with each of the plaintiffs on an informal basis. In 2010, each of the plaintiffs formalized their claim by filing lawsuits in Magistrate’s Court in Tel Aviv. Because there were no consolidated financial statements in accordance with U.S. GAAP issued for years prior to 2009, the provision for the claims related to the litigation referenced in Note 10c.5 were recognized in an amount equal to $134,000 in the years ended December 31, 2005 and 2006 and that the provision for the claims related to the litigation referenced in Note 10c.6 were recognized in an amount equal to $53,000 in the year ended December 31, 2006.

U.S. Securities and Exchange Commission

September 21, 2011

Page 15

The Company has made the requested revision by restoring the date the claim was filed to the disclosure related to these litigations on page F-21 of Amendment No. 2.

26.

We note from your response to our prior comment 39 that the fair value of the stock options with respect to the litigation described in Note 10c.4 was $2.5 million using the Black-Scholes valuation model, as of May 2009, which was the period for which the claimant claims these stock options. In this regard, please explain to us how you accounted for these stock options at the initial recognition of this claim and your accounting or planned accounting between the initial recognition of this claim and the date that the actual stock options are granted. Please provide references to the authoritative literature, which supports your accounting. Additionally, please clarify for us if any of the stock options have been granted, providing as part of your response the grant dates and number of stock options. Please provide a similar explanation as it relates to the stock options discussed in Note 10c.3 and 10c.5.

Response:

With respect to the litigation described in Note 10c.4, the Company has not recorded an expense related to the stock options in connection with this matter because the Company, after considering the views of its legal counsel as well as other factors, is of the opinion that a loss to the Company with respect to the stock options is neither probable nor reasonably possible and the amount or range of possible loss is not estimable. No options were granted to the claimant in the litigation described in Note 10c.4.

With respect to the litigation described in Note 10c.3, the options to purchase 30,435 ordinary shares of the Company were valued as of the date of the investment for which the claimant claims to be entitled to a finder fee. There were no material changes from the date of valuation to the date the parties reached a settlement. As stated in Note 10c.3, options to purchase 30,435 ordinary shares of the Company were granted as part of the settlement.

With respect to the litigation described in Note 10c.5, the options to purchase 496,056 ordinary shares of the Company were valued as of the date the claimant claimed to be entitled to the options, as previously discussed in the response to question 25 above. During the relevant period (the years ended December 2005 and 2006), a total of 372,041 out of the 496,056 options were granted to the claimant. With regard to the measurement date of the stock options, as the third parties entitlement to the stock options in consideration to services that have been provided by them, the Company has applied the provisions of ASC 505-50, regarding equity-based payments to nonemployees.

In accordance with ASC 505-50, the issuer shall measure the fair value of the equity instruments in these transactions using the stock price and other measurement assumptions as of the earlier of the following dates:

(i) The date at which a commitment for performance by the counterparty to earn the equity instruments is reached (a performance commitment); or

(ii) The date at which the counterparty’s performance is complete.

Accordingly, the Company has measured the fair value of the stock options at the date at which the counterparty’s performance is complete.

27.	Please refer to our prior comment 40. It appears you have revised this disclosure to change the $1,020 thousands in claims to $20,000. Please explain.

U.S. Securities and Exchange Commission

September 21, 2011

Page 16

Response:

The $1,020,000 in claims was composed of two different claims. One claim arising in the ordinary course of the Company’s business, as mentioned in Note 10c.1, equaled $20,000, in the aggregate, and the other claim, as described in Note 10c.7, equaled $1,000,000. Please see the descriptions of Note 10c.1 and 10c.7 on page F-21 of Amendment No. 2.

28.

We note that you have recorded provisions relating to claims made against you based upon the opinion of your legal counsel. We also see that you have not recorded an expense related to damages in connection with certain other matters because management, after consultation with legal counsel, is of the opinion that the ultimate resolution of these claims will not result in a loss to the Company. Please refer to Question 233.02 of the Compliance and Disclosure Interpretations on Securities Act Rules, which can be found at

http://www.sec.gov/divisions/corpfin/guidance/securitiesactrules-interps.htm

and describe to us and revise this note to clarify the nature and extent of your reliance on legal counsel in determining whether a liability was required and the amount of each of the provisions you recorded. In particular, please differentiate between those instances where you relied exclusively on the opinion of legal counsel to provide you the amount of the required liability versus the instances where the opinion of legal counsel was one of other factors considered by management in reaching its conclusion.

Response:

The Company acknowledges that it is solely responsible for all estimated and recorded provisions in its financial statements. In assessing such legal claims described in Note 10, the Company’s management consults with its legal counsel regarding each claim prior to reaching a conclusion as to the probability and potential amount or range of liability of the claim. The Company’s management considers the views of legal counsel as well as other factors in reaching its conclusions. The Company has clarified the descriptions of the legal claims disclosed in Note 10 on pages F-21 of Amendment No. 2.

Note 13 – Supplementary Financial Statement Information, page F-30

f. Financial expenses (income), net, page F-31

29.

Please refer to our prior comment 41. We note from your disclosure in footnote 7 that your initial valuation of the beneficial conversion feature was $308,000. Please further explain in your disclosure how you determined that the intrinsic value of the beneficial conversion feature at the time of extinguishment was equal to the original beneficial conversion feature in the amount of $308,000. Additionally, tell us whether you made any prior payments on the loan, and how you included this as part of your analysis.

U.S. Securities and Exchange Commission

September 21, 2011

Page 17

Response:

The intrinsic value of the beneficial conversion feature at the time of extinguishment was equal to the original beneficial conversion feature because the share price did not change from the signing date of the loan agreement to the time of extinguishment based on additional funds raised from new investors at those periods. The Company has made no prior payments on the loan.

30.	In this regard, based on the guidance of FASB ASC 470-20-40-3, it appears that any gain recognized should be recorded as a gain or loss on extinguishment of the convertible debt security. Please revise your disclosures accordingly.

Response:

The Company has made the requested revision by clarifying the disclosure related to supplementary financial statement information on page F-31 of Amendment No. 2.

Please direct any questions or comments concerning this response to the undersigned at (212) 659-4974.

	Very truly yours,

	/s/ Rick A. Werner

	Rick A. Werner, Esq.

cc: Ofir Paz, InspireMD, Inc.

Exhibit A

Exhibit B