EQUITY

12 Months Ended

Dec. 31, 2024

Equity [Abstract]

EQUITY

NOTE 9 - EQUITY

a. Share capital

The Company’s shares of 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.

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.

In 2024 and 2023, the Company issued a total of 1,728,382 and 307,260 shares of its common stock, respectively, in connection with the exercise of Pre-Funded Warrants to purchase 1,728,390 and 307,271, respectively, shares of common stock of which 200,000 and 307,271, respectively, Pre-Funded Warrants were exercised to 199,992 and 307,260 shares of its common stock on a cashless basis.As of December 31, 2024 and 2023, there are Pre-Funded Warrants to purchase an aggregate of 26,147,323 and 15,254,623, respectively shares of common stock outstanding.

INSPIREMD, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

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, 2024 and 2023, there were 1,718 shares of Series C Preferred Stock outstanding, convertible into an aggregate of 7,952 shares of the Company’s common stock, with a total stated value of $10,997.

Exercise of Series H Warrant

The Series H Warrants had a term of the earlier of (i) five years from the date of issuance and (ii) (A) 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.

Following the announcement on May 28, 2024 of the one year follow up study results from the Company’s C-GUARDIANS pivotal trial, the Series H Warrants were exercised in full into 292,996 shares of common stock and pre-funded warrants exercisable into 12,621,090 shares of common stock. The net proceeds to the Company from the exercise of the Series H Warrants were $16.9 million after deduction of placement agent fees of approximately $1 million. The Series H Warrants, each exercisable at $1.3827 per share of common stock and $1.3826 per pre-funded warrant, were issued as part of the Private Placement Offering.

ATM Offering

On May 31, 2024, the Company entered into an at-the-market (“ATM”) facility with Piper Sandler & Co. (“Piper”) pursuant to an Equity Distribution Agreement (the “Distribution Agreement”). In accordance with the Distribution Agreement, the Company is entitled, at its sole discretion, to offer and sell through or to Piper Sandler, acting as a sales agent, shares of its common stock having an aggregate offering price of up to $17.0 million throughout the period during which the ATM facility remains in effect. The Company has agreed to pay Piper a commission of 3.0% of the gross proceeds from the sale of shares of common stock under the ATM facility. For the year ended December 31, 2024, the net proceeds to the Company from the issuance of 647,277 shares of common stock were $1,598 thousand after deduction of issuance fees of approximately $81 thousand.

As of December 31, 2024, the Company has outstanding warrants to purchase an aggregate of 40,268,464 shares of common stock as follows:

	Number of underlying Common stock		Exercise price		Expiration date
Series F Warrants		433,878	$	7.4250	June 5, 2025-October 16, 2025
Series G Warrants		1,092,344	$	10.230	February 8, 2026
Series I Warrants		12,914,078	$	1.3827	*
Series J Warrants		12,914,086	$	1.3827	*
Series K Warrants		12,914,078	$	1.3827	*
Total Warrants		40,268,464

*

The Warrants have a term of the earlier of (i) May 15, 2028 and (ii) (A) 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), (B) 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 (C) 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.

During the years ended December 31, 2024 and 2023, a total of 213,458 and 54,135 warrants expired, respectively.

INSPIREMD, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 9 – EQUITY (continued):

b. Share-Based Compensation

1) On September 30, 2021, at the Company’s 2021 annual meeting of stockholders, the Company’s stockholders approved the 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, 2024, we had 9,237,869 shares of common stock available for future issuance under the 2021 Equity Incentive Plan.

2) On September 30, 2024, the compensation committee of the Company’s board of directors approved the InspireMD, Inc. 2024 Inducement Plan (the “2024 Inducement Plan”) to be used exclusively for grants of equity-based awards to individuals who were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company.

As of December 31, 2024, the Company had 1,957,763 shares of common stock available for future issuance under the 2024 Inducement Plan.

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

	Year ended December 31
	2024					2023
				Weighted					Weighted
	Number of options			average exercise price		Number of options			average exercise price
Outstanding - beginning of the year		1,379,696			2.58		294,712			5.21
Granted		777,761			3.07		1,097,250			1.89
Forfeited		(3,314	)		3.54		(12,266	)		4.00
Outstanding- end of period		2,154,143			2.76		1,379,696			2.58
Exercisable at the end of the year		644,882			3.36		215,709			5.38

INSPIREMD, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

	Year ended December 31
	2024				2023
			Weighted				Weighted
	Number of options		average exercise price		Number of options		average exercise price
Outstanding - beginning of the year		791,669		2.06		166,669		3.37
Granted		125,000		2.37		625,000		1.71
Outstanding - end of period		916,669		2.10		791,669		2.06
Exercisable at the end of the year		387,333		2.37		84,667		3.42

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

	Year ended December 31
	2024			2023
	Number of restricted stock
Outstanding - beginning of the year		3,054,086			355,951
Granted		2,217,966			2,914,340
Forfeited		(128,660	)		(29,695	)
Vested		(1,069,428	)		(186,510	)
Outstanding - end of the year		4,073,964			3,054,086

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

	Year ended December 31
	2024		2023
	Number of RSUs
Outstanding - beginning of the year		1,282,228		237,078
Granted		563,499		1,045,150
Outstanding - end of the year		1,845,727		1,282,228

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

	Outstanding as of December 31, 2024
Exercise price	Options outstanding		Weighted average remaining contractual life (years)		Options exercisable
$1.15-3.14		2,686,358		8.56		704,641
$3.30-4.12		227,932		7.53		171,052
$4.95-10.05		152,469		6.00		152,469
$16.50		4,087		5.01		4,053
		3,070,846		8.35		1,032,215

The weighted average of the remaining contractual life of total vested and exercisable options as of December 31, 2024 was 7.73 years.

The aggregate intrinsic value of the total exercisable options as of December 31, 2024 was approximately $494,250.

The weighted average fair value of options granted to employees was $2.54 and $1.65 for the years ended December 31, 2024 and 2023, 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 $1.87 and $1.50 for the years ended December 31, 2024 and 2023, 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 $2.94 and $1.95 for the years ended December 31, 2024 and 2023, respectively.

The weighted average fair value of RSU granted was $3.14 and $1.76 for the years ended December 31, 2024 and 2023, respectively.

The vesting period for outstanding stock options, restricted stock, and RSUs is typically three years, with one-third of the awards vesting annually. The options and restricted stock to directors are subject to a one-year vesting period. 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)

8) The following table sets forth the assumptions that were used in determining the fair value of options granted to employees and consultants for the year December 31, 2024 and 2023:

	Year ended December 31
	2024	2023
Expected life	5.125-10 years	5.125-6.5 years
Risk-free interest rates	3.93%-4.44%	3.58%-4.73%
Volatility	91.82%-119.38%	109.62%-125.61%
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.

9)

As of December 31, 2024, 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 $7.29 million. This cost is expected to be recognized over a weighted-average period of approximately 0.85 years. This expected cost does not include the impact of any future stock-based compensation awards.

10)

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

	Year ended December 31
	2024		2023
	($ in thousands)
Cost of revenues	$	256	$	93
Research and development		2,412		649
Sales and marketing		1,025		416
General and administrative		6,445		3,332
	$	10,138	$	4,490

INSPIREMD, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)