EQUITY

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

EQUITY

NOTE 9 - EQUITY

a. Share capital

The Company’s common stock are listed on the Nasdaq Capital Market.

Private Placement

On May 12, 2023, the Company entered into a securities purchase agreement (the “Purchase Agreement”) pursuant to which the Company 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 the Company’s 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. The Private Placement Offering closed on May 16, 2023.

Aggregate gross proceeds to the Company in respect of the Private Placement Offering were $42.2 million, before deducting fees payable to the placement agent and other offering expenses payable by the Company which amounted to approximately $4.6 million. If the Warrants are exercised in cash in full this would result in an additional $71.4 million of gross proceeds.

INSPIREMD, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 9 – EQUITY (continued):

The Pre-Funded Warrants are immediately exercisable at an exercise price of $0.0001 per share and will not expire until exercised in full. The Warrants are immediately exercisable upon issuance at an exercise price of $1.3827 per share. 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 (PMA) from the Food and Drug Administration, or 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 transcarotid system and CGuard Prime 80 cm 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 begin. The Warrants may be exercised on a cashless basis if there is no effective registration statement registering the shares underlying the warrants.

The Company issued a total of 307,260 shares of its common stock in connection with the exercise of Pre-Funded Warrants to purchase 307,271 shares of common stock on a cashless basis.  As of December 31, 2023, there are Pre-Funded Warrants to purchase an aggregate of 15,254,623 share of common stock outstanding.

Pursuant to the full ratchet anti-dilution adjustment provisions in the respective certificate of designation for the Company’s Series C Preferred Stock, the conversion price of the outstanding shares of the Series C Preferred Stock was reduced to $1.3827 per share, effective as of the date of the securities purchase agreement entered for the Offering, and the number of shares of common stock issuable upon conversion of the Series C Preferred Stock increased by 5,668 additional shares of common stock upon conversion of the Series C Preferred Stock, based on 1,718 shares of Series C Preferred Stock outstanding as of May 16, 2023.

As of December 31, 2023 and 2022, there were 1,718 shares of Series C Preferred Stock outstanding, convertible into an aggregate of 7,952 and 2,284 shares of the Company’s common stock, respectively with a total stated value of $10,997.

As of December 31, 2023, the Company has outstanding warrants to purchase an aggregate of 53,396,008 shares of common stock as follows:

	Number of underlying Common stock		Exercise price
Series E Warrants		198,159	$	27.0000
Series F Warrants		433,878	$	7.4250
Series G Warrants		1,092,344	$	10.2300
Series H Warrants		12,914,086	$	1.3827
Series I Warrants		12,914,078	$	1.3827
Series J Warrants		12,914,086	$	1.3827
Series K Warrants		12,914,078	$	1.3827
Underwriter Warrants		15,299	$	7.4250
Total Warrants		53,396,008	$

As of December 31, 2023, the Company has 155,000,000 authorized shares of capital stock, par value $0.0001 per share, of which 150,000,000 are shares of common stock and 5,000,000 are shares of “blank check” preferred stock.

INSPIREMD, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 9 – EQUITY (continued):

b. Share-Based Compensation

1) On September 30, 2021, at our 2021 annual meeting of stockholders, our stockholders approved our 2021 Equity Incentive Plan.   The Company’s. 2021 Equity Incentive Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other awards, which may be granted singly, in combination, or in tandem.   As of December 31, 2023, we had 7,731,618 shares of common stock available for future issuance under our 2021 Equity Incentive Plan.

5) The following table summarizes information about stock options granted to employees:

	Year ended December 31
	2023					2022
	Number of options			Weighted average exercise price		Number of options			Weighted average exercise price
Outstanding - beginning of period		294,712			5.21		289,408		$	5.29
Granted		1,097,250			1.89		7,841			2.61
Forfeited		(12,266	)		4.00		(2,537	)		5.70
Outstanding- end of period		1,379,696			2.58		294,712		$	5.21
Exercisable at the end of the period		215,709			5.38		123,115			5.51

6) The following table summarizes information about stock options granted to non-employees:

	Year ended December 31
	2023				2022
	Number of options		Weighted average exercise price		Number of options		Weighted average exercise price
Outstanding - beginning of period		166,669		3.37		20,002		6.90
Granted		625,000		1.71		146,667		2.89
Outstanding - end of period		791,669		2.06		166,669		3.37
Exercisable at the end of the period		84,667		3.42		35,667		3.61

7) The following table summarizes information about restricted stock granted to employees:

	Year ended December 31
	2023			2022
	Number of restricted stock
Outstanding - beginning of period		355,951			527,668
Granted		2,914,340			45,494
Forfeited		(29,695	)		(10,832	)
Vested		(186,510	)		(206,379	)
Outstanding - end of period		3,054,086			355,951

INSPIREMD, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 9 – EQUITY (continued):

8) The following table summarizes information about RSUs granted to employees:

	Year ended December 31
	2023		2022
	Number of RSUs
Outstanding - beginning of period		237,078		237,078
Granted		1,045,150		-
Outstanding - end of period		1,282,228		237,078

9) The following table provides additional information about all options outstanding and exercisable:

	Outstanding as of December 31, 2023
Exercise price	Options outstanding		Weighted average remaining contractual life (years)		Options exercisable
$1.15-2.97		1,786,211		9.28		73,946
$3.30-4.12		227,932		8.53		95,075
$4.95-10.05		153,169		7.00		127,303
$16.50		4,053		6.01		4,053
		2,171,365		9.03		300,376

The weighted average of the remaining contractual life of total vested and exercisable options as of December 31, 2023 was 7.54 years.

The aggregate intrinsic value of the total exercisable options as of December 31, 2023 was approximately $10,983.

The weighted average fair value of options granted to employees was $1.65 and $2.33 for the years ended December 31, 2023 and 2022, respectively. The weighted average fair value of options granted was estimated using the Black-Scholes option-pricing model.

The weighted average fair value of options granted to consultants was $1.50 and $2.57 for the years ended December 31, 2023 and 2022, respectively. The weighted average fair value of options granted was estimated using the Black-Scholes option-pricing model.

The weighted average fair value of restricted stock granted was $1.95 and $2.42 for the years ended December 31, 2023 and 2022, respectively.

The weighted average fair value of RSU granted was $1.76 for the year ended December 31, 2023.

The vesting period for outstanding stock options, restricted stock, and RSUs is typically three years, with one-third of the awards vesting annually. Additionally, some of our share-based awards to service providers are performance-based, vesting upon the achievement of specified performance criteria related to clinical or marketing activities.

INSPIREMD, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 9 – EQUITY (continued):

10) The following table sets forth the assumptions that were used in determining the fair value of options granted to employees for the year December 31, 2023 and 2022:

	Year ended December 31
	2023	2022
Expected life	5.125-6.5 years	5.125-6.5 years
Risk-free interest rates	3.58%-4.73%	1.79%-2.88%
Volatility	109.62%-125.61%	127.43%-130.93%
Dividend yield	-	-

The Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. Accordingly, as to ordinary course options granted, the expected term was determined using the simplified method, which takes into consideration the option’s contractual life and the vesting periods (for non-employees, the expected term is equal to the option’s contractual life).

The annual risk-free rates are based on the yield rates of zero coupon non-index linked U.S. Federal Reserve treasury bonds as both the exercise price and the share price are in dollar terms. The Company’s expected volatility is derived from its historical data.

11)

As of December 31, 2023, the total unrecognized compensation cost on employee and non-employee stock options, restricted stock and RSUs, related to unvested stock-based compensation, amounted to approximately $7.18 million. This cost is expected to be recognized over a weighted-average period of approximately 0.97 years. This expected cost does not include the impact of any future stock-based compensation awards.

12)

The following table summarizes the allocation of total share-based compensation expense in the consolidated statements of operations:

	Year ended December 31
	2023		2022
	($ in thousands)
Cost of revenues	$	93	$	72
Research and development		649		582
Sales and marketing		416		318
General and administrative		3,332		1,380
	$	4,490	$	2,352

INSPIREMD, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)