NSPR 10-K & 10-Q changes, risk factors and insider trading
InspireMD, Inc. · Nasdaq · Surgical & Medical Instruments & Apparatus · CIK 1433607 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We have only recently transitioned to a commercial stage medical device company in the United States, which may make it difficult for analysts and investors to evaluate the success of our business to date and to assess our future viability.”
New heading “CGuard Prime has been commercially launched in the United States, and we have limited experience manufacturing, selling, marketing and distributing products in the U.S. The timing of uptake and distribution efforts are unpredictable and there is a risk that we may not achieve and sustain commercial success for the CGuard Prime.”
New heading “CGuard Prime, or any other product candidate that may receive marketing approval in the future, may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success and the market opportunity for CGuard Prime or any other product candidate may be smaller than our estimates.”
New heading “If the commercial launch of CGuard Prime in the United States for which we established a direct sales organization and distribution capabilities is not successful for any reason, we could incur substantial costs and our investment in our direct sales organization and distribution capabilities would be lost if we cannot retain or reassign our sales, marketing, market access and medical affairs personnel.”
New heading “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 abilities to successfully commercialize CGuard Prime and receive FDA approval of SwitchGuard and other products we may develop. If we fail to successfully commercializae CGuard Prime or obtain FDA approval for SwitchGuard or any other products we may develop, our results of operations and the value of our business would be materially and adversely affected.”
New heading “We may not be able to achieve or maintain satisfactory pricing and margins for our products.”
New heading “Clinical trials necessary to support regulatory submissions for our products, including the C-GUARDIANS II study evaluating the CGuard Prime 80 cm stent system for TCAR procedures and the C-GUARDIANS III study evaluating the SwitchGuard NPS, are often lengthy and difficult to conduct, and delays or failures in these trials could adversely affect our business.”
New heading “Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, cleared or approved or commercialized in a timely manner or at all, which could negatively impact our business.”
New heading “CGuard EPS, CGuard Prime, and SwitchGuard NPS are complex medical devices that require training for qualified personnel.”
New heading “If we fail to maintain or establish reliable supply arrangements, or if we experience interruptions in the supply of key materials or components, our ability to manufacture and commercialize our products could be adversely affected.”
New heading “Our business is dependent upon the total market opportunity for CAS and our ability to penetrate it through continued adoption of CAS by hospitals and physicians.”
New heading “Adoption of CAS depends upon appropriate physician training, and inadequate training may lead to adverse patient outcomes, adversely affect adoption of CAS and adversely affect our business.”
New heading “Our results of operations could be materially harmed if we are unable to accurately forecast customer demand for our products and manage our inventory.”
New heading “Our quarterly and annual results may fluctuate significantly and may not fully reflect the underlying performance of our business.”
New heading “Defects or failures associated with our products could lead to additional recalls, safety alerts or litigation, as well as significant costs and negative publicity.”
New heading “The use, misuse or off-label use of our products may result in injuries that lead to product liability suits, which could be costly to our business.”
New heading “If we are unable to manage the anticipated growth of our business, our future revenue and operating results may be harmed.”
New heading “Changes to trade policy, including tariff and customs regulations, or failure to comply with such regulations may have an adverse effect on our reputation, business, financial condition and results of operations.”
New heading “Changes in tax laws could have a material adverse effect on our business, cash flow, results of operations or financial conditions.”
Removed heading “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. If we fail to obtain FDA approval for CGuard Prime, SwitchGuard or any other products we may develop, our results of operations and the value of our business would be materially and adversely affected.”
Removed heading “Although we met the primary endpoint in our C-GUARDIANS trial of the CGuard Carotid Stent System, the results may not be sufficient to support FDA approval.”
Removed heading “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.”
Removed heading “CGuard and Switch Guard are complex medical devices that requires training for qualified personal.”
Removed heading “If we fail to maintain or establish satisfactory agreements or arrangements with suppliers or if we experience an interruption of the supply of materials from suppliers, we may not be able to obtain materials that are necessary to develop our products.”
Removed heading “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. 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.”
Largest changes
“Tariffs, economic sanctions and other changes in U.S. trade policy have in the past and could in the future trigger retaliatory actions by affected countries, and certain foreign governments have instituted or are considering imposing retaliatory measures on certain U.S. goods. Further, any emerging protectionist or nationalist trends (whether regulatory- or consumer-driven) either in the United States or in other countries could affect the trade environment. …”see in full comparison
“Defects or failures associated with our products could lead to additional recalls, safety alerts or litigation, as well as significant costs and negative publicity.”see in full comparison
“Changes to trade policy, including tariff and customs regulations, or failure to comply with such regulations may have an adverse effect on our reputation, business, financial condition and results of operations.”see in full comparison
“The U.S. government has recently imposed, or is currently considering imposing, tariffs on certain products, including medical devices, on certain trade partners, including Israel. On February 20, 2026, the Supreme Court ruled that the International Emergency Economic Powers Act (“IEEPA”) does not authorize a U.S. President to impose tariffs during peacetime national emergencies and that the challenge to the legality of the tariffs imposed under IEEPA (the “incremental tariffs”) was within the exclusive jurisdiction of the U.S. Court of International Trade. In response to this ruling, the U.S. …”see in full comparison
“On January 12, 2025, Regulation (EU) 2021/2282 of the European Parliament and of the Council of December 15, 2021 on health technology assessment and amending Directive 2011/24/EU, or the EU HTA Regulation, became applicable. The EU HTA Regulation stipulates joint clinical assessments at EU level for certain medical devices. A Joint Clinical Assessment (JCA) under the EU HTA Regulation is a centralized, EU-level evaluation of the comparative clinical effectiveness and safety of health technologies, including medical devices. …”see in full comparison
see in full comparisonCompletingCompletion of clinical trials forCGuard,CGuard Prime 80 cm in TCAR procedures (C-GUARDIANS II), SwitchGuardorNPS (C-GUARDIANS III), and any other investigational productwecandidatesdevelop in the United States require meeting a number of regulatory requirements and must be conducted inrequires compliance withthe FDA’sFDA IDEregulations.regulations,Failureand failure tomaintainmeetcompliancethesewith IDE regulationsrequirements couldhave amateriallymaterial adverse effect onharm our business.
Full comparison: every changed paragraph (177)
In
May 2023, we issued four series of Warrantswarrants that expire upon the earlier of (i) five years andfollowing issuance or (ii) 20 trading days
following the occurrence of
certain milestones specific to each series. If all of the Warrantsfour series of warrants are exercised in cash in
full, this would result in $71.4 million of gross
proceeds. In July 2024, we received gross proceeds of approximately $17.9 million following
the exercise of the Series H Warrants in full. In July 2025, we received gross proceeds of approximately $17.9 million following the
exercise of the Series I Warrants in full. In July 2025, we completed a private placement that generated approximately $40.1 million
in gross proceeds. For additional information, see “Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations – Recent Developments – Private Placements.” There can be no assurance that we will achieve any
of the milestones set forth in the remaining unexercised Warrants or that thethese Warrants will be exercised
in cash in full.
We have only recently transitioned to a commercial stage medical device company in the United States, which may make it difficult for analysts and investors to evaluate the success of our business to date and to assess our future viability.
We only recently launched CGuard Prime in the United States following FDA approval in June 2025. Consequently, any predictions that analysts and investors make about our future success or viability may not be as accurate as they could be if we had more experience commercializing CGuard Prime in the United States. To be profitable, we will need to successfully transition our focus to expand our commercialization capabilities through our direct sales organization and build our distribution capabilities to support the commercial launch of CGuard Prime in the United States. Ultimately, we may not be successful in such a transition.
CGuard Prime has been commercially launched in the United States, and we have limited experience manufacturing, selling, marketing and distributing products in the U.S. The timing of uptake and distribution efforts are unpredictable and there is a risk that we may not achieve and sustain commercial success for the CGuard Prime.
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. If we fail to obtain FDA approval for CGuard Prime, SwitchGuard or any other products we may develop, our results of
operations and the value of our business would be materially and adversely affected.
We
derive most of our revenue from sales of our CGuard EPS in CE marked countries and certain other select jurisdictions. We have not received
approvals in the United States and certain other jurisdictions for CGuard Prime and have not received any approvals for SwitchGuard and
there can be no assurance that we will be able to receive regulatory approvals to commence marketing and sales for our products in any
jusrisdiction where we are seeking approvals. Our ability to generate significant revenues and achieve profitability depends on our ability
to successfully obtain required regulatory approvals in the U.S. as well as to demonstrate sufficient clinical evidence and manufacture
commercial quantities of our CGuard Prime, SwitchGuard and any other products we may develop at an acceptable cost. In addition, there
may be insufficient demand for CGuard Prime, SwitchGuard and any other products we develop. If we fail to generate sufficient revenues
from these products, our results of operations and the value of our business and securities would be materially and adversely affected.
The
future success of our business cannot be determined at this time, and we do not anticipate generating significant revenues from product
sales for the foreseeable future. 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:
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.
Although
we met the primary endpoint in our C-GUARDIANS trial of the CGuard Carotid Stent System, the results may not be sufficient to support FDA approval.
In
June 2023, we completed enrollment in the C-GUARDIANS trial. 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. 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 to 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. There can be no assurance that the primary endpoint
results will be sufficient to support FDA approval. 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. Furthermore, the results of our clinical trials are
subject to human analyses and interpretation of the data accumulated, which could be affected by various errors due to, among
others, lack of sufficient clinical experience with CGuard EPS, SwitchGuard or any other product we develop, assumptions used in the
statistical analysis of results, and interpretation errors in the analysis of the clinical trials results. Failure can occur at any
time during the clinical trial process. If CGuard EPS, SwitchGuard or any other product we develop does not function as expected
over time, we may not achieve regulatory clearances, and may not be widely adopted by healthcare providers and patients.
Even
if products we develop receive regulatory approval or clearance, we will be subject to ongoing reporting obligations, and the products
and the manufacturing operations will be subject to continuing regulatory review, including FDA inspections. The outcome of this ongoing
review may result in the withdrawal of a product from the market, the interruption of the manufacturing operations and/or the imposition
of labeling and/or marketing limitations. Since many more patients are exposed to drugs and medical devices following their marketing
approval, serious but infrequent adverse reactions that were not observed in clinical trials may be observed during the commercial marketing
of the product. In addition, the manufacturer and the manufacturing facilities we will use to produce any product will be subject to
periodic review and inspection by the FDA and other, similar foreign regulators. Later discovery of previously unknown problems with
any product, manufacturer or manufacturing process, or failure to comply with regulatory requirements, may result in actions such as:
We
have engaged Aptyx, a contract manufacturer, to transfer the manufacturing of CGuard Prime finished goods to full-scale production at
their ISO Class 7 cleanroom facility in North Carolina. Using a third party poses a number of risks,
such as: (i) they may not perform to our standards or legal requirements; (ii) they may not produce reliable results; (iii) they may
not perform in a timely manner; (iv) they may not maintain confidentiality of our proprietary information; (v) disputes may arise with
respect to ownership of rights to technology developed with our partners; and (vi) disagreements could cause delays in, or termination
of, the research, development or commercialization of our products or result in litigation or arbitration. Moreover, some third parties
are located in markets subject to political and social risk, corruption, violence, infrastructure problems and natural disasters, in
addition to country-specific privacy and data security risk given current legal and regulatory environments. Failure of third parties
to meet their contractual, regulatory, and other obligations may materially affect our business.
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.
WeIn
planJuly on2025, self-commercializingwe announced the official commercial launch of CGuard Prime in the U.S.,U.S. subject to receipt offollowing FDA approval.approval in June 2025, and we are currently
executing on the commercialization plan. As part of our plan, we are building out
a sales, marketing and distribution capabilities and
have engaged with a contract manufacturer.manufacturer Historicallyto supplement our internal manufacturing capacity. Historically, prior to the commencement
of our commercialization activities in the U.S., we havedid not hadhave experience in
manufacturing, selling, marketing or distributing products
in the U.S. To be able to successfully commercialize CGuard Prime upon approval, if at
all, we mustmay eitherneed to further develop our existing manufacturing, sales, marketing
and distribution capabilities, which is expensive and time-consuming, or
enter into arrangements with third parties to perform these
services.
In
October 2024, we established our global headquarters in Miami, Florida to support the anticipatedU.S. U.S.commercial launch and commercialization of
the CGuard Prime carotid stent system.Prime. During
2024, we started the build-out of the infrastructure for commercial operations in the U.S.
designed to support the anticipated commercialization
of the CGuard Prime carotid stent system.Prime. In addition, to support our anticipated
production growth followingin connection with the anticipated commercialization of the CGuard Prime carotid stent system, Prime,
we have engaged Aptyx,Aptyx a contract manufacturer that is a developer and manufacturer of complex components and devices for the life sciences,
manufacturer, to transfer the manufacturing of CGuard Prime finished goods to full-scale production at their ISO Class 7 cleanroom facility
in North
Carolina.
There
are risks involved within establishing our own sales, marketing and distribution capabilities and partnering with a third partythird-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. Factors that may inhibit our efforts to commercialize our products directly and without strategic
partners include:
We
are continuing to expand our commercialization capabilities and to build our distribution capabilities to support the commercialization
of CGuard Prime. We expect that it will take time for this team to generate significant sales momentum, if it does so at all. We may
not be successful in recruiting and retaining the manufacturing, sales and marketing personnel necessary to sell CGuard PrimePrime, upon approval, if
at all, and, even ifand we do build a sales force, we
may not be successful in marketing CGuard Prime, which would have a material adverse
effect on our business, financial condition and
results of operations.
In addition, other factors that have and may continue to inhibit our efforts to successfully commercialize CGuard Prime in the United States include our ability to access key health care decision makers, price CGuard Prime at a sufficient price point to ensure an adequate and attractive level of profitability, and maintain sufficient financial resources to cover the costs and expenses associated with creating and sustaining a capable sales and marketing organization and related commercial infrastructure. If we are not successful in setting our marketing, pricing and reimbursement strategies, recruiting and maintaining effective sales and marketing personnel or building and maintaining the infrastructure to support commercial operations in the United States and elsewhere, we will have difficulty successfully commercializing CGuard Prime in the U.S. market, which would adversely affect our business and financial condition.
If we are unable to establish and maintain our own manufacturing, sales, marketing and distribution capabilities or enter into successful arrangements with third parties to perform these services, our future product revenues and profitability may be materially adversely affected. If we are not successful in commercializing CGuard Prime in the United States, we may be required to collaborate or partner with a third-party medical device or biotechnology company with existing products. To the extent we collaborate or partner, the financial value will be shared with another party and we will need to establish and maintain a successful collaboration arrangement, and we may not be able to enter into these arrangements on acceptable terms or in a timely manner in order to establish CGuard Prime in the U.S. market. To the extent that we enter into co-promotion or other arrangements, any revenues we receive will depend upon the efforts of third parties, which may not be successful and are only partially in our control. In that event, our product revenues may be lower than if we marketed and sold our products directly with the highest priority, and we may be required to reduce or eliminate much of our commercial infrastructure and personnel as a result of such collaboration or partnership.
CGuard Prime, or any other product candidate that may receive marketing approval in the future, may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success and the market opportunity for CGuard Prime or any other product candidate may be smaller than our estimates.
CGuard Prime, or any other product candidate that may be approved in the future by the appropriate regulatory authorities for marketing and sale, may fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community. Physicians are often reluctant to switch their patients from existing medical devices even when new and potentially more effective or convenient products enter the market.
Efforts to educate the medical community and third-party payors on the benefits of CGuard Prime over its competition have required significant resources and may not ultimately be successful. If CGuard Prime, or any other product candidate that may be approved in the future for marketing and sale in the future, does not achieve an adequate level of market acceptance, we may not generate significant revenues and we may not become profitable. The degree of market acceptance of CGuard Prime, or any other product candidate that may be approved in the future, will depend on a number of factors, including:
● the advantages of the product compared to competitive products;
● the number of competitors approved for similar uses;
● the relative promotional effort and marketing success of us as compared with our competitors;
● how the product is positioned in physician treatment guidelines and pathways;
● the prevalence and severity of any side effects;
● the functionality and ease of use of the product;
● the efficacy and safety of the product;
● our ability to offer the product for sale at competitive prices;
● the product’s tolerability, consistency of performance, convenience and ease of administration compared to alternative product;
● the willingness of the target patient population to try, and of physicians to utilize, the product;
● limitations or warnings, including use restrictions, contained in the product’s approved labeling;
● the strength of sales, marketing and distribution support;
● the timing of market introduction of our approved products as well as competitive products;
● adverse publicity about the product or favorable publicity about competitive products;
● potential product liability claims;
● changes in the standard of care for the targeted indications of the product; and
● availability and amount of coverage and reimbursement from government payors, managed care plans and other third-party payors.
In addition, the potential market opportunities for CGuard Prime and any other product are difficult to estimate precisely. Our estimates of the potential market opportunities are predicated on many assumptions, including industry knowledge and publications, third-party research reports and other surveys. While we believe that our internal assumptions are reasonable, these assumptions involve the exercise of significant judgment on the part of our management, are inherently uncertain and the reasonableness of these assumptions has not been assessed by an independent source. If any of the assumptions prove to be inaccurate, the actual markets for our therapeutic candidate could be smaller than our estimates of the potential market opportunities.
If the commercial launch of CGuard Prime in the United States for which we established a direct sales organization and distribution capabilities is not successful for any reason, we could incur substantial costs and our investment in our direct sales organization and distribution capabilities would be lost if we cannot retain or reassign our sales, marketing, market access and medical affairs personnel.
To achieve commercial success for CGuard Prime in the United States, we have expended and anticipate that we will continue to expend significant resources to support our direct sales organization and distribution capabilities. There are risks involved with establishing our own sales, marketing, distribution, training and support capabilities. For example, recruiting and training sales and marketing personnel is expensive and time consuming and could delay our ability to focus on other priorities. If the commercial launch of CGuard Prime in the United States is not successful for any reason, this would be costly, and our investment would be lost if we cannot retain or reassign our sales, marketing, market access and medical affairs personnel or terminate on favorable terms any agreements entered into with third parties to support our commercialization efforts.
Factors that may inhibit or limit our efforts to commercialize CGuard Prime in the United States on our own include:
If our direct sales organization and distribution capabilities fail, or are otherwise unsuccessful, it would materially adversely impact the commercialization of CGuard Prime in the United States, impact our ability to generate revenue and harm our business.
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 abilities to successfully commercialize CGuard Prime and receive FDA approval of SwitchGuard and other products we may develop. If we fail to successfully commercializae CGuard Prime or obtain FDA approval for SwitchGuard or any other products we may develop, our results of operations and the value of our business would be materially and adversely affected.
We derive most of our revenue from sales of our CGuard EPS in CE marked countries and certain other select jurisdictions, and we only recently announced the official commercial launch of CGuard Prime in July 2025. In addition, we have not received any approvals for SwitchGuard and there can be no assurance that we will be able to receive regulatory approvals to commence marketing and sales for our products in any jurisdiction where we are seeking approvals. Our ability to generate significant revenues and achieve profitability depends on our ability to successfully commercialize and manufacture commercial quantities of CGuard Prime and obtain required regulatory approvals for SwitchGuard and any other products we may develop at an acceptable cost. In addition, there may be insufficient demand for CGuard Prime, SwitchGuard and any other products we commercialize or develop. If we fail to generate sufficient revenues from these products, our results of operations and the value of our business and securities would be materially and adversely affected.
If
we are unable to establish our own manufacturing, sales, marketing and distribution capabilities or enter into successful arrangements
with third parties to perform these services, any future product revenues and our profitability, may be materially adversely affected.
We
believe that physicians will not widely adopt our products unless they determine, based on experience, long-term clinical data, published
peer reviewedpeer-reviewed journal articles and payor coverage policies, among other factors, that the use of our products provide a safe and effective
alternative to other existing treatments for the conditions we are seeking to address.
Our
business strategy following the anticipated commercialization
of the CGuard Prime carotid stent system depends on our ability to manufacture, and our contract
manufacturers’ ability to manufacture, our current and future products in sufficient quantities and on a timely basis to meet customer
demand, while adhering to product quality standards, complying with regulatory quality system requirements and managing manufacturing
costs. We currently manufacture our CGuard EPS and our CGuard Prime at our own facility in Israel where we handle the entire 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. In addition, to support our anticipated production growth following the
anticipated commercialization of the CGuard Prime carotid stent system, we have engaged Aptyx, a contract manufacturer, to transfer the
manufacturing of CGuard Prime finished goods to full-scale production at their ISO Class 7 cleanroom facility in North Carolina. If our
or our manufacturing partners’ facilities suffers damage, or a force majeure event, this could materially impact our ability to
operate.
As
demand for our products increases, we will have to invest additional resources to purchase components, sub-assemblies and materials,
hire and train employees, and enhance our manufacturing processes. If we or our manufacturing partners fail to increase our production
capacity efficiently, we may not be able to fill customer orders on a timely basis, our sales may not increase in line with our expectations,
and our operating margins could fluctuate or decline. In addition, although we expect some of our products in development to share product
features, components, sub-assemblies and materials with our existing products, the manufacture of these products may require modification
of our or our manufacturing partners’ current production processes or unique production processes, the hiring of specialized employees,
the identification of new suppliers for specific components, sub-assemblies and materials or the development of new manufacturing technologies.
It may not be possible for us or our manufacturing partners to manufacture these products at a cost or in quantities sufficient to make
these products commercially viable or to maintain current gross margins, all of which could have a material adverse effect on our business,
financial condition and results of operations.
Finally,
the production of our stents must occur in a highly controlled, clean environment to minimize particles and other yield and quality-limiting
contaminants. In spite of stringent quality controls, weaknesses in process control or minute impurities in materials may cause a substantial
percentage of defective products in a lot. If we or our third party manufacturer are unable to maintain stringent quality controls, or
if contamination problems arise, our clinical development and commercialization efforts could be delayed, which would harm our business
and results of operations.
CGuard
and Switch Guard are complex medical devices 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. 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.
The
medical device market is highly competitive. We compete with many medical device companies globally in connection with our current products
and products under development. We face intense competition from numerous pharmaceutical and biotechnology companies in the therapeutics
area, as well as competition from academic institutions, government agencies and research institutions. Abbott Laboratories, Boston Scientific
Corporation, Medtronic, Cordis Corporation and Terumo Medical Corporation produce a polytetrafluoroethylene mesh-covered stent and a
double layer metal stent, respectivelystent. As we develop and seek regulatory approval in the United States and Europe for our new TCAR neuroprotection
system system, SwitchGuard
NPS, and continue to seek greater market share for CGuard,CGuard Prime, 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.market. Most of our
current and potential competitors, including but not limited to those listed
above, have, and will continue to have, substantially greater
financial, technological, research and development, regulatory and clinical,
manufacturing, marketing and sales, distribution and personnel
resources than we do. There can be no assurance that we will have sufficient
resources to successfully commercialize our products, if
and when they are approved for sale. The worldwide market for stent products is characterized
by intensive development efforts and rapidly
advancing technology. For example, during the second quarter of 2022 we ceased sales of our MGuard Prime EPS following a phase out period
due to a shift in industry preferences. Our future success will depend largely upon our ability to anticipate
and keep pace with those
developments and advances. Current or future competitors could develop alternative technologies, products or
materials that are more
effective, easier to use or more economical than what we or any potential licensee develop. If our technologies or products become obsolete
or uncompetitive, our related product sales and licensing revenue would decrease. This would have a material adverse effect on our business,
financial condition
and results of operations.
We may not be able to achieve or maintain satisfactory pricing and margins for our products.
Manufacturers of medical devices have a history of price competition, and we can give no assurance that we will be able to achieve satisfactory prices for our products or maintain prices at the levels we have historically achieved. Any decline in the amount that payers reimburse our customers for CAS could make it difficult for customers to continue using, or to adopt, our products and could create additional pricing pressure for us. In addition, the introduction of competitive stents that could be used in CAS procedures and other products could also put pressure on the pricing of our products. If we are forced to lower the price we charge for our products, our gross margins will decrease, which will adversely affect our ability to invest in and grow our business. If we are unable to maintain our prices, or if our costs increase and we are unable to offset such increase with an increase in our prices, our margins could erode. We will continue to be subject to significant pricing pressure, which could harm our business and results of operations. Also, our use of distributors in non-U.S. countries may adversely impact our gross margins.
Based
on the prolific litigation that has occurred in the stent industry and the fact that we may pose a competitive threat to some large and
well-capitalized companies that own or control patents relating to stents and their use, manufacture and delivery, we believe that it
is possible that one or more third parties will assert a patent infringement claim against the manufacture, use or sale of our stents
based on one or more of these patents. These companies also own patents relating to the use of drugs to treat restenosis, stent architecture,
catheters to deliver stents, and stent manufacturing and coating processes and compositions, as well as general delivery mechanism patents
like rapid exchange, which might be alleged to cover one or more of our products. In addition, it is possible that a lawsuit of which
we are not aware asserting patent infringement, misappropriation of intellectual property, or related claims may have already been filed
against us. As the number of competitors in the stent market grows and asour thecommercial geographiessales inexpand which we commercially market grow in number
and scope,geographically, the possibility of
patent infringement by us, and/or a patent infringementus or misappropriation claim against us,us increases.
If
we fail to maintain or establish satisfactory agreements or arrangements with suppliers or if we experience an interruption of the supply
of materials from suppliers, we may not be able to obtain materials that are necessary to develop our products.
We
depend on outside suppliers for certain raw materials. 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. We may have difficulty obtaining
similar components from other suppliers that are acceptable to the FDA or foreign regulatory authorities if it becomes necessary. In
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.
We are currently testing a different source of PET showing equivalent mechanical properties and biocompatibility 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.
Management's Discussion & Analysis (MD&A)
New heading “Terms of the May 2023 Pre-Funded Warrants”
New heading “Terms of the May 2023 Warrants (Series H, I, J and K)”
New heading “Milestone-Based Exercises Under the May 2023 Warrants”
New heading “Series H Warrant Exercise”
New heading “Series I Warrant Exercise”
New heading “PMA approval of the CGuard Prime Carotid Stent System and Commercial Launch in the United States”
New heading “CE Mark Approval for CGuard Prime Under European MDR”
New heading “Year ended December 31, 2025 compared to the year ended December 31, 2024”
New heading “Year ended December 31, 2025 compared to the year ended December 31, 2024”
Removed heading “Twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023”
Removed heading “Twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023”
Largest changes
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for fiscal years 2025 and 2024. For a comparison of our results of operations and financial condition for fiscal years 2024 and 2023, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2024 Annual Report on Form 10-K, filed with the SEC on March 12, 2025.see in full comparison
“PMA approval of the CGuard Prime Carotid Stent System and Commercial Launch in the United States”see in full comparison
“Twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023”see in full comparison
“Twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023”see in full comparison
“Year ended December 31, 2025 compared to the year ended December 31, 2024”see in full comparison
“Year ended December 31, 2025 compared to the year ended December 31, 2024”see in full comparison
Full comparison: every changed paragraph (70)
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for fiscal years 2025 and 2024. For a comparison of our results of operations and financial condition for fiscal years 2024 and 2023, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2024 Annual Report on Form 10-K, filed with the SEC on March 12, 2025.
We
are a medical device company focusingspecializing onin the development and commercialization of products for the treatment of carotid artery disease
and other vascular disease,conditions. includingOur portfolio includes two commercial products based on our proprietary CGuard™ carotid stent platform.technology,
designed to provide market-leading embolic protection during and after stenting procedures. A stent is an expandable scaffold-like device,metallic
device usually
constructedplaced of a metallic material, that is inserted into the lumen ofin an artery to createwiden patencythe lumen and improvedrestore blood flow. A sleeve
of MicroNet™ mesh is attached over a stent to provide embolic protection both during and after stenting procedures.
Our first product, the CGuard Carotid Embolic Prevention System (“CGuard EPS”), integrates a self-expanding nitinol stent with a MicroNet mesh sleeve as a single device for carotid artery revascularization. In January 2024, we received CE Mark recertification for CGuard EPS under the EU Medical Device Regulation (“MDR”). Our CGuard EPS previously held CE Mark approval under the former Medical Device Directive (“MDD”). CGuard EPS is marketed in over 30 countries outside the United States through a network of distributors.
Our second product, the CGuard Prime Carotid Stent System (“CGuard Prime”), uses the same stent and MicroNet mesh with a differentiated deployment mechanism. CGuard Prime received premarket approval (“PMA”) by the U.S. Food and Drug Administration (“FDA”) on June 23, 2025, and is marketed exclusively in the United States through our direct salesforce. It also received MDR CE Mark approval on June 12, 2025.
For more information regarding our business and operations, see “Item 1 – Business” above.
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. 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. 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. C-GUARDIANS is a prospective, multicenter,
single-arm, pivotal study to evaluate the safety and efficacy of the CGuard™ Carotid Stent System when used to treat symptomatic
and asymptomatic carotid artery stenosis in patients undergoing CAS. 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
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. 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 performance
goal was considered met if the upper bound of the two-sided 95% confidence interval calculated from the observed primary endpoint rate
is < 11.6% and the p-value is less than 0.025.
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. 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.
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.
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. In furtherance of our strategy
that focuses on establishing the CGuard Carotid Stent System as a viable alternative to vascular surgery, we are developing a new transcarotid
artery revascularization (TCAR) delivery system, SwitchGuard NPS, for transcarotid access and neuro protection. In addition, we intend
to explore new indications for CGuard to leverage the advantages of stent design and mesh protection, well suited in labels such as acute
stroke with tandem lesions.
We
consider our current addressable market for our CGuard Carotid Stent System and SwitchGuard NPS to be both symptomatic and asymptomatic
individuals with diagnosed high-grade carotid artery stenosis ) for whom intervention is preferable to medical (drug) therapy. This group
includes not only carotid artery stenting patients but also individuals undergoing carotid endarterectomy, as the two approaches compete
for the same patient population. Assuming full penetration of the intervention caseload by CGuard Carotid Stent System, we estimate that
the addressable market for CGuard Carotid Stent System and SwitchGuard NPS is approximately $1.3 billion (source: Health Research International
Personal Medical Systems, Inc. September 13, 2021 Results of Update Report on Global Carotid Stenting Procedures and Markets by Major
Geography and Addressable Markets and internal estimates). According to this same report and internal estimates, assuming full penetration
of treatment for all individuals diagnosed with high-grade carotid artery stenosis, we estimate the total available market for CGuard
Carotid Stent System and SwitchGuard NPS to be approximately $9.3 billion, which may grow over time if expanded treatment options such
as CGuard Carotid Stent System and SwitchGuard NPS lead to increased patient screening for carotid artery disease.
Private
PlacementPlacements
May 2023 Private Placement Offering
On
May 12, 2023, we entered into a securities purchase agreement (the “Purchase Agreement pursuant to which we agreed to sellissued and
issue sold in a private placement (the “May
2023 Private Placement Offering”) (i) an aggregate of 10,266,270 shares (the “Private Placement
Shares”) of our common stock, pre-funded warrantsstock (the “Pre-FundedMay Warrants2023 Shares”), (ii)
pre-funded warrants to purchase up to 15,561,894 shares of
common stock (the “May 2023 Pre-Funded Warrants”), and (iii) warrants
to purchase up to an aggregate of 51,656,328 shares of common stock,stock (the “May 2023 Warrants”), consisting of Series H warrants to purchasewarrants,
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”),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.warrants.
The May 2023 Shares and associated warrants were sold at an offering price of $1.6327 per share and associated warrants, and the May 2023 Pre-Funded Warrants were sold at an offering price of $1.6326 per May Pre-Funded Warrant and associated warrants. Aggregate gross proceeds totaled approximately $42.2 million, and after deducting placement agent fees and other issuance costs of approximately $4.6 million, net proceeds to the Company were approximately $37.6 million.
Terms of the May 2023 Pre-Funded Warrants
The May 2023 Pre-Funded Warrants were immediately exercisable at an exercise price of $0.0001 per share and did not expire until exercised in full. As of the date of this Annual Report on Form 10-K, the May 2023 Pre-Funded Warrants have been exercised in full. Under their terms, holders were not able to exercise a Pre- May 2023 Funded Warrant if the exercise would result in the holder beneficially owning more than 4.99% or 9.99% of our outstanding shares of common stock (as elected by the holder), subject to customary permitted increases with advance notice.
Terms of the May 2023 Warrants (Series H, I, J and K)
The May 2023 Warrants were immediately exercisable at an exercise price of $1.3827 per share and are exercisable until the earlier of (i) five years after issuance and (ii) the applicable milestone-triggered expiration date, as follows:
The May 2023 Warrants may be exercised on a cashless basis if there is no effective registration statement for the underlying shares of common stock issuable upon the exercise thereof. A registration statement on Form S-3 (File No. 333-272149) registering the shares underlying the May 2023 Warrants was declared effective on June 2, 2023.
Milestone-Based Exercises Under the May 2023 Warrants
Following the achievement of the applicable milestones during 2024 and 2025, the May 2023 Warrants were exercised as follows:
Series H Warrant Exercise
After we announced positive one-year results from the C-GUARDIANS pivotal trial, all Series H Warrants were exercised in full into 292,996 shares of common stock and 12,621,090 pre-funded warrants. Gross proceeds totaled approximately $17.9 million, and after deducting placement agent fees and issuance costs of approximately $1.0 million, net proceeds were approximately $16.9 million.
Series I Warrant Exercise
Following our June 24, 2025 announcement that the FDA granted PMA approval for CGuard Prime in the United States, all Series I Warrants were exercised in full into 2,352,393 shares of common stock and 10,561,685 pre-funded warrants. Gross proceeds totaled approximately $17.9 million, and net proceeds were approximately $16.9 million after issuance costs of approximately $1.0 million.
August 2025 Private Placement Offering
On July 30, 2025, we entered into a securities purchase agreement with investors pursuant to which we issued and sold in a private placement (the “August 2025 Private Placement Offering”) an aggregate of 6,791,380 shares (the “August 2025 Shares”) of common stock and pre-funded warrants (the “August 2025 Pre-Funded Warrants”) to purchase up to 9,764,804 shares of common stock, at an offering price of $2.42 per August 2025 Share and $2.4199 per August 2025 Pre-Funded Warrant. The August 2025 Pre-Funded Warrants are immediately exercisable at an exercise price of $0.0001 per share and will not expire until exercised in full.
Aggregate gross proceeds totaled approximately $40.1 million, after deducting placement agent fees and other issuance costs of approximately $3.1 million, net proceeds to the Company were approximately $37 million.
PMA approval of the CGuard Prime Carotid Stent System and Commercial Launch in the United States
On June 23, 2025, the FDA granted PMA approval of CGuard Prime in the United States.
Following such approval, in July 2025, we announced the official commercial launch of CGuard Prime in the United States. In October 2024, we established our global headquarters in Miami, Florida to support the U.S. launch and commercialization of CGuard Prime.
CE Mark Approval for CGuard Prime Under European MDR
On June 12, 2025, we received CE Mark approval under the EU’s MDR for CGuard Prime.
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 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.
The
Warrants may be exercised on a cashless basis if there is no effective registration statement registering the shares underlying the Warrants.
Under the terms of the Pre-Funded Warrants and Warrants, certain of the selling stockholders may not exercise the Pre-Funded Warrants
or Warrants to the extent such exercise would cause such selling stockholder, together with its affiliates and attribution parties, to
beneficially own a number of shares of common stock which would exceed 4.99% or 9.99% of our then outstanding common stock following
such exercise, excluding for purposes of such determination common stock issuable upon exercise of the Pre-Funded Warrants or Warrants
which have not been exercised. 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.
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. 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. 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.
Year ended December 31, 2025 compared to the year ended December 31, 2024
Revenues. For the year ended December 31, 2025, revenue was $8,979,000, an increase of $1,970,000, or 28.1%, compared to $7,009,000 during the year ended December 31, 2024. The increase was driven by the commercial launch of the CGuard Prime product through direct sales in the U.S. following FDA approval in June 2025, and continued growth in sales of the CGuard EPS product through distributors in international markets.
With respect to regions, the increase in revenue was primarily attributable to $1,385,000 increase in North America due to the commercial launch of CGuard Prime in the U.S. in the second half of 2025, and a $585,000 increase in international markets from continued penetration of our CGuard EPS product.
Gross Profit. For the year ended December 31, 2025, gross profit (revenue less cost of revenues) was $2,649,000 compared to gross profit of $1,506,000 for 2024. The increase resulted mainly from the increase in revenue year-on-year.
Gross margin represents our gross profit as a percentage of our revenue. Gross margin was 29.5% for the year ended December 31, 2025, an increase of 8.0 percentage points compared to 21.5% for the year ended December 31, 2024. This increase in gross margin resulted primarily from a more favorable revenue mix driven by direct U.S. sales, which carry higher margins due to a higher average selling price per unit compared with international distributor sales.
Research and Development Expenses. For the year ended December 31, 2025, research and development expenses were $15,003,000, an increase of $1,369,000, or 10.0%, compared to $13,634,000 during the year ended December 31, 2024. This increase resulted primarily due to higher staff levels in connection with our expansion in the U.S., and higher development and clinical expenses for the SwitchGuard NPS and CGuard Prime 80 cm carotid stent system, respectively. These increases were partially offset by a decrease in expenses for the C-GUARDIANS clinical study and related product preparation activity prior to the FDA approval of CGuard Prime in June 2025.
Twelve
months ended December 31, 2024 compared to the twelve months ended December 31, 2023
Revenues.
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.
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. 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. 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. 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. 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. 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. 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. 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.
Selling
and Marketing Expenses. For the twelve monthsyear ended December 31, 2024,2025, selling and marketing expenses increasedwere by$16,553,000, 57.0%,an increase of $10,484,000,
or $2,204,000
172.7%, compared to $6,069,000, from $3,865,000$6,069,000 during the twelve monthsyear ended December 31, 2023.2024. This increase resulted primarily from anhigher increasecommercial staffing
levels in
compensation expensesconnection with the commercial launch of $1,870,000CGuard as we build our commercial sales forcePrime 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.U.S.
General and Administrative Expenses. For the year ended December 31, 2025, general and administrative expenses were $20,707,000, an increase of $5,401,000, or 35.3%, compared to $15,306,000 during the year ended December 31, 2024. The increase was primarily driven by new hires, professional services expenses, and occupancy-related costs related to the Company’s expansion of U.S. operations to support the commercial launch of CGuard Prime.
General
and Administrative Expenses. 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. 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. These increases were offset by a $72,000
decrease in miscellaneous expenses.
Financial
Income, net. For the twelve monthsyear ended December 31, 2024,2025, financial income increasedwas by$891,000, $265,000,a decrease of $666,000, compared to $1,557,000 from $1,292,000
during the twelve monthsyear ended December 31, 2023.2024. The increasedecrease in financial income primarily resulted from a $293,000$403,000 increase in interestfinancial expenses
related to changes in exchange rates and a $264,000 decrease in income from investment in marketable securities,securities and money market funds
due andto short-termlower bankinterest deposits.rates.
Tax
Expenses. For the twelve monthsyear ended December 31, 2024,2025, tax decreasedexpenses increased by $6,000$4,000 compared to the twelve monthsyear ended December 31,
2023. 2024. 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 monthsyear ended December 31, 2023,2025 fromwas $19,916,000$48,786,000, an increase of $16,781,000, or 52.4%, compared to $32,005,000
during the twelve monthsyear ended December 31, 2023.2024. The increase in net loss resulted primarily from an increase of $12,059,000$17,254,000 in operating
expenses.
We
had an accumulated deficit as of December 31, 2024,2025, of $254$302.3 million, as well as a net loss of $32.0$48.8 million and negative operating
cash cash
flows.flows for fiscal year 2025. We expect to continue incurring losses and negative cash flows from operations until we expand our product, CGuard EPS, reaches commercial
profitability.revenue to a scale that funds our commercial resources, development activities and support functions. 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. Therefore, there is substantial doubt
about our ability to continue as a going concern.
In
May 2023, we closed athe May 2023 Private Placement Offering that resulted in aggregate gross proceeds of approximately $42.2 million,
before deducting
fees payable to the placement agent and other offering expenses payable by the Company.us. If the May 2023 Warrants from the Private Placement Offering
are exercised
in cash in full this would result in an additional $71.4 million of gross proceeds.proceeds (of which approximately $33.8 million has been received
as of the date of this Annual Report on Form 10-K). There can be no assurance that we will
achieve any of the remaining milestones set
forth in the May 2023 Warrants or that the outstanding May 2023 Warrants will be exercised in cash in full.
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. 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 privateMay
2023 placementPrivate financingPlacement that the Company consummated on May 15, 2023.Offering.
Following the announcement of the PMA approval of the CGuard Prime carotid stent system in the United States, Series I warrants to purchase 12,914,078 shares of common stock were exercised in full into 2,352,393 shares of common stock and pre-funded warrants to purchase 10,561,685 shares of common stock during June and July 2025. The net proceeds from the exercise of the Series I Warrants were $16.9 million after deducting placement agent fees. The Series I warrants, each exercisable at $1.3827 per common share and $1.3826 per pre-funded warrant, were issued as part of the May 2023 Private Placement Offering.
In
May 2024, we entered into an Equity Distribution Agreement (the “Distribution Agreement”) with Piper Sandler & Co., as
sales agent (“Piper Sandler”),. pursuantPursuant to whichthe Distribution Agreement, 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$75 million (the “ATM Facility”).
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. As of the date hereof, we sold 845,3991,366,190 shares pursuant to the
Distribution Agreement for aggregate gross proceeds of
approximately $2,199,395.$3,473,314.
What changed in the latest 10-Q
Risk Factors
New heading “If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted.”
New heading “Our restructuring and the associated workforce reduction may not result in anticipated savings, could result in total costs and expenses that are greater than expected and could disrupt our business.”
New heading “Changes to trade policy, including tariff and customs regulations, or failure to comply with such regulations may have an adverse effect on our reputation, business, financial condition and results of operations.”
Largest changes
“Tariffs, economic sanctions and other changes in U.S. trade policy have in the past and could in the future trigger retaliatory actions by affected countries, and certain foreign governments have instituted or are considering imposing retaliatory measures on certain U.S. goods. Further, any emerging protectionist or nationalist trends (whether regulatory- or consumer-driven) either in the United States or in other countries could affect the trade environment. …”see in full comparison
“If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted.”see in full comparison
“Changes to trade policy, including tariff and customs regulations, or failure to comply with such regulations may have an adverse effect on our reputation, business, financial condition and results of operations.”see in full comparison
“Furthermore, our restructuring plan may be disruptive to our operations. For example, our workforce reductions could yield unanticipated consequences, such as attrition beyond planned staff reductions, increased difficulties in our day-to-day operations and reduced employee morale. …”see in full comparison
“We have begun to implement a restructuring plan that includes a reduction in our workforce, and we expect to continue to implement this plan. We may incur additional expenses not currently contemplated due to events associated with the reduction in force, and our restructuring activities may subject us to reputational risks and litigation risks and expenses. We may not realize, in full or in part, the anticipated benefits, savings and improvements in our cost structure from our restructuring efforts due to unforeseen difficulties, delays or unexpected costs. …”see in full comparison
“Because we currently manufacture our products in Israel and remain dependent on shipments from Israel to serve the U.S. market while we continue efforts to expand manufacturing capacity in the United States, changes in tariffs, customs duties, import regulations or other trade measures applicable to products imported into the United States could increase our costs, reduce our margins, disrupt our supply chain, adversely affect customer demand or require us to modify our manufacturing, sourcing or distribution strategies. …”see in full comparison
Full comparison: every changed paragraph (20)
Management
has concluded that there is substantial doubt about our ability to continue as a going concern, and our condensed financial statements
for the quarter ended MarchJune 31,30, 2026 includes an explanatory paragraph as to our ability to continue as a going concern, which could prevent
prevent us from obtaining new financing on reasonable terms or at all.
Because
we have had recurring losses and negative cash flows from operating activities, substantial doubt exists regarding our ability to remain
as a going concern at the same level at which we are currently performing. Accordingly, our condensed financial statements for the quarter
ended MarchJune 31,30, 2026 includes an explanatory paragraph as to our potential inability to continue as a going concern. 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.
If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted.
Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include, among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that we maintain a minimum of $2,500,000 in stockholders’ equity and a market value of listed securities of at least $5 million.
On July 17, 2026, we received a notification letter, or the Notification Letter, from the Nasdaq Listing Qualifications notifying us that we are not in compliance with the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2), or the Rule, for continued listing on The Nasdaq Capital Market. The Notification Letter provides that we have 180 calendar days, or until January 13, 2027, to regain compliance with the Rule. To regain compliance, the bid price of our common stock must have a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days. In the event we do not regain compliance by January 13, 2027, we may then be eligible for an additional 180 days if we meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and will need to provide written notice of our intention to cure the deficiency during the second compliance period. If we do not qualify for the second compliance period or fail to regain compliance during the second compliance period, then Nasdaq will notify us of its determination to delist our common stock, at which point we will have an opportunity to appeal the delisting determination to a Hearings Panel.
No assurance can be given that we will be able to regain compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards could result in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in a corresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.
Our restructuring and the associated workforce reduction may not result in anticipated savings, could result in total costs and expenses that are greater than expected and could disrupt our business.
We have begun to implement a restructuring plan that includes a reduction in our workforce, and we expect to continue to implement this plan. We may incur additional expenses not currently contemplated due to events associated with the reduction in force, and our restructuring activities may subject us to reputational risks and litigation risks and expenses. We may not realize, in full or in part, the anticipated benefits, savings and improvements in our cost structure from our restructuring efforts due to unforeseen difficulties, delays or unexpected costs. If we are unable to realize the expected operational efficiencies and cost savings from the restructuring, our operating results and financial condition would be adversely affected. In addition, to the extent we do not realize such anticipated operational efficiencies, we may need to undertake additional workforce reductions or restructuring activities in the future.
Furthermore, our restructuring plan may be disruptive to our operations. For example, our workforce reductions could yield unanticipated consequences, such as attrition beyond planned staff reductions, increased difficulties in our day-to-day operations and reduced employee morale. The changes to our operations and the reduction in workforce may yield unintended consequences and costs, such as the loss of institutional knowledge and expertise, attrition beyond our intended reductions in force, and a reduction in morale among our remaining employees, all of which may have an adverse effect on our business, results of operations or financial condition. If employees who were not affected by the reductions in force seek alternative employment, this could result in our seeking contractor support at unplanned additional expense or harm our productivity. Any employee litigation related to the headcount reduction could be costly and prevent management from fully concentrating on the business.
Our workforce reductions could also harm our ability to attract and retain qualified management, scientific, technical, and manufacturing personnel who are critical to our business. For example, the workforce reduction may negatively impact our regulatory, technical operations, and commercial functions, which would have a negative impact on our ability to successfully develop, and ultimately, commercialize our products. We may also discover that the reductions in workforce could make it difficult for us to pursue new opportunities and initiatives and require us to hire qualified replacement personnel, which may require us to incur additional and unanticipated costs and expenses. Our future financial performance and our ability to develop our products or additional assets will depend, in part, on our ability to effectively manage any future growth or restructuring, as the case may be. Our failure to successfully accomplish any of the above activities and goals may have a material adverse impact on our business, results of operations and financial condition.
The
manufacturing and marketing of medical devices involves an inherent risk that our products may prove to be defective and cause a health
risk even after regulatory clearances have been obtained. The FDA and similar governmental authorities in other countries have the authority
to require the recall of commercialized products in the event of material regulatory deficiencies or defects in design or manufacture.
Medical devices may also be modified after regulatory clearance is obtained to such an extent that additional regulatory clearance is
necessary before the device can be further marketed. In these events, we may voluntarily implement a recall or market withdrawal or may
be required to do so by a regulatory authority. For example, in May 2026, we announced a voluntary recall in the U.S. of CGuard Prime,
initiated in consultation with the FDA. This decision followed our determination during controlled launch that the technical success
of the delivery system during CAS procedures had not met performance expectationsexpectations. Such recall, and any recalls in the future, could
result result
in significant current and future costs and other negative impacts associated with such recalls (including inventory write-off
costs, costs,
refunds and other remediation costs), loss of revenues, sales or customers, potential actions by regulators or other governmental
entities, entities,
potential claims and lawsuits by customers and patients (including class action product liability litigation), other operational
impacts impacts
and consequences such as business disruption, loss of personnel and distraction of management or other key employees, the restatement
of previously issued financial statements, inability to raise capital, as well as negative publicity and damage to our reputation, which
could have a material adverse impact on our business, results of operations and financial condition.
Defects
or failures associated with our products hashave led to recalls, and could lead to additional recalls, safety alerts or litigation, as well
as significant costs and negative publicity.
For
example, in May 2026, we announced a voluntary recall in the U.S. of CGuard Prime, initiated in consultation with the FDA. This decision
followed our determination during controlled launch that the technical success of the delivery system during CAS procedures had not met
performance expectations. Such recall, and any recalls in the future, could result in significant current and future costs and other
negative impacts associated with such recalls (including inventory write-off costs, refunds and other remediation costs), loss of revenues,
sales or customers, potential actions by regulators or other governmental entities, potential claims and lawsuits by customers and patients
(including class action product liability litigation), other operational impacts and consequences such as business disruption, loss of
personnel and distraction of management or other key employees, or the restatement of previously issued financial statements, inability
to raise capital, as well as negative publicity and damage to our reputation, which could have a material adverse impact on our business,
results of operations and financial condition.
Changes to trade policy, including tariff and customs regulations, or failure to comply with such regulations may have an adverse effect on our reputation, business, financial condition and results of operations.
Changes in U.S. or international social, political, regulatory and economic conditions or in laws and policies governing trade, manufacturing, development and investment in the countries where we currently conduct our business could adversely affect our business, reputation, financial condition and results of operations. Changes or proposed changes in U.S. or other countries’ trade policies may result in restrictions and economic disincentives on international trade.
We currently manufacture, package and distribute all of our products, including CGuard Prime, which we commercially launched in July 2025 following FDA approval of the PMA in June 2025, at our own facility in Israel. To support our anticipated production growth following the commercialization of CGuard Prime, we have engaged Aptyx to expand our manufacturing capacity of CGuard Prime finished goods to full-scale production at their ISO Class 7 cleanroom facility in North Carolina. While we are in the process of establishing manufacturing operations in the United States with Aptyx, this transition will take time, and until it is operational, we expect to rely entirely on product shipments from Israel to the U.S. market.
The U.S. government has recently adopted, proposed and considered a variety of tariff measures and other trade restrictions affecting imports from numerous countries, and additional changes to U.S. trade policy remain under active consideration. The implementation, modification, suspension, expiration, extension or judicial review of existing or proposed tariffs and trade measures has created and may continue to create significant uncertainty for companies engaged in international manufacturing and cross-border commerce. In addition, new investigations under U.S. trade laws, changes to customs rules, import restrictions, sanctions or other trade-related measures could result in additional duties, restrictions or compliance obligations affecting imported products and components.
Because we currently manufacture our products in Israel and remain dependent on shipments from Israel to serve the U.S. market while we continue efforts to expand manufacturing capacity in the United States, changes in tariffs, customs duties, import regulations or other trade measures applicable to products imported into the United States could increase our costs, reduce our margins, disrupt our supply chain, adversely affect customer demand or require us to modify our manufacturing, sourcing or distribution strategies. We cannot predict the scope, duration or outcome of current or future trade actions, related legal challenges, or any retaliatory measures by affected countries. Any of these developments could have a material adverse effect on our business, financial condition and results of operations.
Tariffs, economic sanctions and other changes in U.S. trade policy have in the past and could in the future trigger retaliatory actions by affected countries, and certain foreign governments have instituted or are considering imposing retaliatory measures on certain U.S. goods. Further, any emerging protectionist or nationalist trends (whether regulatory- or consumer-driven) either in the United States or in other countries could affect the trade environment. Our business, like many other corporations, would be impacted by changes to the trade policies of the United States and foreign countries (including governmental action related to tariffs, international trade agreements, or economic sanctions). We cannot predict whether, and to what extent, trade policies will change in the future. If tariffs or other trade restrictions are imposed on products manufactured in Israel while we remain dependent on Israeli manufacturing, our cost of goods sold for the U.S. market may increase materially, which could negatively impact our gross margins and limit our pricing flexibility. Additionally, changes to trade agreements or customs regulations between the U.S. and Israel could increase lead times, introduce logistical complexities, or require modifications to our supply chain planning. These or similar trade-related developments may have a material adverse effect on our business, financial condition, and results of operations.
Further,
in April 2024 and October 2024, Iran launched a series of drone and missile strikes against Israel, to which Israel responded. In addition,
in response to ongoing Iranian aggression and support of proxy attacks against Israel, on June 13, 2025, Israel conducted a series of
preemptive defensive air strikes in Iran targeting Iran’s nuclear program and military commanders. While a ceasefire was reached
in June 2025 following 12 days of hostilities, on February 28, 2026, the United States and Israel launched coordinated military strikes
against Iran, including attacks on strategic military infrastructure and leadership targets, with the stated aim of degrading Iran’s
capacity to conduct or support hostile operations against them. In response, Iran has fired missiles and drones toward population centers
and military installations in Israel, Europe and neighboring countries in the Gulf region, and also launched counter-strikes against
U.S. forces and allied bases throughout the Gulf region. WhileAlthough the United States and Iran have announced ceasefire and de-escalation
arrangements from time to time, including a temporarymemorandum ceasefireof agreedunderstanding toentered betweeninto Iranon June 17, 2026 that contemplates the termination
of military operations on multiple fronts, hostilities have resumed and themay U.S. on April 8,
2026 as part of ongoing negotiations for a permanent ceasefire agreement, the situation remains volatile and uncertain. Although the
ceasefire has been subject to extensions and continued diplomatic engagement, it has reportedly been characterized by tensions, alleged
violations and stalled negotiations. We cannot predict if and to what extent this ceasefire will remain in effectcontinue or upheld or whether
hostilities may resume or further escalate. A broader regional conflict involving
additional state and non-state actors remains a significant
risk risk. How long and how severe the conflicts in Gaza, Northern Israel, Lebanon,
Iran or the broader region last and become is unknown at
this time and any renewed or continued clash among Israel, Hamas, Hezbollah,
Iran or other countries or militant groups in the region
may escalate in the future into a greater regional conflict. Continued military
escalation, retaliatory actions, or broader regional
involvement may adversely affect economic conditions, disrupt markets, and create
uncertainty that could negatively impact our business,
financial condition and results of operations.
Management's Discussion & Analysis (MD&A)
New heading “Workforce Reduction Initiative”
New heading “Six months ended June 30, 2026, compared to the six months ended June 30, 2025”
Largest changes
“In May 2026, we announced a voluntary recall in the U.S. of CGuard Prime, initiated in consultation with the FDA. The Company acted after determining during a controlled launch that the technical success rate of the delivery system during CAS procedures had not met performance expectations. The voluntary action was limited to the CGuard Prime delivery system and did not involve the CGuard stent implant. The Company’s assessment did not identify new safety concerns for patients who had previously received a CGuard implant. …”see in full comparison
“In May 2026, we announced a voluntary recall in the U.S. of CGuard Prime, initiated in consultation with the FDA. The Company acted after determining during a controlled launch that the technical success of the delivery system during CAS procedures had not met performance expectations. The voluntary action pertained specifically to the CGuard Prime delivery system and did not include the CGuard stent implant. The action was voluntary with no implications for the safety of patients who had previously received the CGuard stent. …”see in full comparison
“Gross loss. For the six months ended June 30, 2026, gross loss (revenue less cost of revenues) was $87,000 compared to gross profit of $605,000 for the six months ended June 30, 2025. The decrease in gross profit was primarily attributable to the voluntary recall of CGuard Prime products in the U.S., including $734,000 in net credits issued to customers, which reduced revenues, as well as inventory impairment and inventory obsolescence charges of a combined $1,085,000 related to our CGuard Prime delivery system, which increased cost of revenues. …”see in full comparison
“Gross Profit (Loss). For the three months ended June 30, 2026, gross loss (revenue less cost of revenues) was $774,000 compared to gross profit of $313,000 for the three months ended June 30, 2025. The decrease in gross profit was primarily attributable to the voluntary recall of CGuard Prime products in the U.S., including the net credits of $734,000 issued to customers, which reduced revenues, and approximately $612,000 of inventory impairment associated with CGuard Prime inventory, which increased cost of revenues.”see in full comparison
“We expect to incur aggregate restructuring charges of approximately $0.9 million to $1.2 million, consisting primarily of employee severance and related employee termination costs. Because the workforce reduction was initiated after June 30, 2026, no liability associated with these actions was recorded in the accompanying consolidated financial statements as of June 30, 2026.”see in full comparison
Full comparison: every changed paragraph (47)
Our
first product, the CGuard Carotid Embolic Prevention System (“CGuard EPS”), integrates a self-expanding nitinol stent with
a MicroNet mesh sleeve as a single device for carotid artery revascularization. In January 2024, we received CE Mark recertification
for CGuard EPS under the EU Medical Device Regulation (“MDR”). Our CGuard EPS previously held CE Mark approval under the
former Medical Device Directive (“MDD”). CGuard EPS is marketed in over 30 countries outside the United States through a
network of distributors. In the first quarter of 2026, we submitted a premarket approval for the CGuard EPS with a view to potential
FDA approval in the insecond the third quarterhalf of 2026.
Our
second product, the CGuard Prime Carotid Stent System (“CGuard Prime”), uses the same stent and MicroNet mesh as the CGuard
EPS with a differentiated deployment mechanism. CGuard Prime received premarket approval (“PMA”) by the U.S. Food and Drug
Administration (“FDA”) on June 23, 2025,2025. andIn isMay marketed2026, exclusivelywe announced a voluntary recall in the UnitedU.S. Statesof throughCGuard ourPrime, directundertaken
in salesforce.consultation with the FDA after a controlled launch demonstrated that the technical success of its delivery system during CAS procedures
Itdid not meet performance expectations, with the voluntary action pertaining specifically to the delivery system and not to the CGuard
stent implant. For additional information, see “FDA Matters” below. CGuard Prime also received MDR CE Mark approval
on June 12, 2025.
In
October 2024, the FDA approved the Company’s IDE to initiate the CGUARDIANS II pivotal study of its CGuard Prime 80 cm carotid
stent system during transcarotid revascularization (“TCAR”) procedures. In the first quarter of 2026, we completed enrollment
in the CGUARDIANS II pivotal study.study, and in June 2026, we announced summary 30-day outcome data from the study, which showed
acute device success of 100% with no major adverse events. In May 2026, the FDA approved the Company’s IDE to initiate the CGUARDIANS
III pivotal
study of its CGuard Prime 80 cm carotid stent system during TCAR procedures.procedures, and in June 2026, we announced enrollment
of the first patient.
FDA Matters
In May 2026, we announced a voluntary recall in the U.S. of CGuard Prime, initiated in consultation with the FDA. The Company acted after determining during a controlled launch that the technical success rate of the delivery system during CAS procedures had not met performance expectations. The voluntary action was limited to the CGuard Prime delivery system and did not involve the CGuard stent implant. The Company’s assessment did not identify new safety concerns for patients who had previously received a CGuard implant. We believe we have identified the root cause of the deployment resistance and are implementing design modifications intended to address the issue. We are currently performing verification and validation testing of these modifications in support of a PMA supplement to the FDA which we expect to submit in the fourth quarter of 2026. We cannot provide any assurance that the FDA will be satisfied with the corrective actions we are implementing in connection with the voluntary recall, or as to the timing of the resolution of such issues. Until these issues are resolved to the FDA’s satisfaction, we may be unable to resume commercialization of CGuard Prime in the United States. If the FDA determines that our corrective actions are inadequate or requires additional remediation, testing, validation or regulatory submissions, such requirements could increase costs, delay or prevent FDA acceptance or approval of our proposed PMA supplement, extend the duration of the voluntary recall, delay our ability to reintroduce CGuard Prime to the U.S. market or otherwise adversely affect our future commercialization plans, which could have a material adverse effect on our business, financial condition and results of operations. During the six months ended June 30, 2026, substantially all affected products were returned, and credits were issued to customers. We recorded approximately $734,000 as a reduction of revenue related to these returns and approximately $612,000 of inventory impairment associated with the recall.
Workforce Reduction Initiative
Subsequent to June 30, 2026, we commenced implementation of a workforce reduction as part of a broader initiative to reduce our operating expenses, improve operational efficiency and better align our resources with our strategic priorities. The workforce reduction is expected to reduce the number of positions in the organization by almost 20%. We expect the initiative to result in annualized operating expense savings of approximately $9.0 million, primarily through reduced personnel-related expenses resulting from both the elimination of certain employee positions and the decision not to fill certain currently vacant positions. These estimates are based on management’s current expectations regarding personnel reductions and hiring plans, and actual cost savings may differ from those currently anticipated.
We expect to incur aggregate restructuring charges of approximately $0.9 million to $1.2 million, consisting primarily of employee severance and related employee termination costs. Because the workforce reduction was initiated after June 30, 2026, no liability associated with these actions was recorded in the accompanying consolidated financial statements as of June 30, 2026.
We expect the workforce reduction to be substantially completed by the end of the third quarter of 2026. Actual costs incurred may differ from current estimates. We expect these actions to better align our resources with key product development, regulatory, clinical and commercialization priorities while reducing our overall operating expense base.
In
May 2026, we announced a voluntary recall in the U.S. of CGuard Prime, initiated in consultation with the FDA. The Company acted
after determining during a controlled launch that the technical success of the delivery system during CAS procedures had not met
performance expectations. The voluntary action pertained specifically to the CGuard Prime delivery system and did not include the CGuard
stent implant. The action was voluntary with no implications for the safety of patients who had previously received the
CGuard stent. The Company expects to establish a reserve for customer returns of approximately
$700,000 and a reserve for inventory impairment and remediation costs of approximately $650,000.
We
were organized in the State of Delaware on February 29, 2008. In October 2024, we established our global headquarters in Miami, Florida
to support the U.S. launch and commercialization of CGuard Prime.
A
critical accounting policy is one that is both important to the portrayal of our financial condition and results of operationoperations and requires
management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect
of matters that are inherently uncertain. Our critical accounting policies are more fully described in both (i) “Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and (ii) Note 2 of the Notes to the Consolidated Financial
Statements included in the Annual Report on Form 10-K for the year ended December 31, 2025. There have not been any material changes
to such critical accounting policies since December 31, 2025.
Three
months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025
Revenues.
For the three months ended MarchJune 31,30, 2026, revenue was $3,398,000,$1,771,000, ana increasedecrease of $1,869,000,$7,000, or 1220.4 %, compared to $1,529,000$1,778,000 during
the three
months ended MarchJune 31,30, 2025. GrowthThe decrease was primarily attributable to the net impact of $734,000 of credits issued in connection with
the voluntary recall of CGuard Prime products in the quarterU.S. wasin drivenMay mainly2026, bywhich theoffset commercialrevenues launchgenerated offrom direct sales of the CGuard
Prime product in the U.S. following FDA approval in June 2025,U.S., and continued growth in sales of the CGuard product through distributors
in international markets.
With respect to geographical regions, U.S. revenue was $(351,000) for the three months ended June 30, 2026, compared to $27,000 for the three months ended June 30, 2025. The decrease of $378,000 in the U.S., was primarily due to the aforementioned credits issued in connection with the voluntary recall of CGuard Prime products. This decrease was partially offset by 21% growth in international markets, with international revenue increasing to $2,122,000 for the three months ended June 30, 2026, compared to $1,751,000 for the three months ended June 30, 2025, including increases of $128,000 in Europe, $176,000 in Latin America and $67,000 in all other regions, reflecting continued growth in demand in these markets.
Gross Profit (Loss). For the three months ended June 30, 2026, gross loss (revenue less cost of revenues) was $774,000 compared to gross profit of $313,000 for the three months ended June 30, 2025. The decrease in gross profit was primarily attributable to the voluntary recall of CGuard Prime products in the U.S., including the net credits of $734,000 issued to customers, which reduced revenues, and approximately $612,000 of inventory impairment associated with CGuard Prime inventory, which increased cost of revenues.
Gross margin represents our gross profit or loss as a percentage of revenue. Gross margin was negative 43.7% for the three months ended June 30, 2026, a decrease of 61.3 percentage points compared to gross margins of 17.6% for the three months ended June 30, 2025, primarily due to the factors discussed above.
With
respect to geographical regions, the increase in revenue was primarily attributable to a $1,151,000 increase in North America due to
the commercial launch of CGuard Prime in the U.S. following FDA approval in June 2025, and a $718,000 increase in international markets
outside North America due to continued adoption of our CGuard technology.
Gross
Profit. For the three months ended March 31, 2026, gross profit (revenue less cost of revenues) was $687,000 compared to gross profit
of $292,000 for the three months ended March 31, 2025. The increase resulted mainly from the increase in revenue year-on-year, partially
offset by higher cost of revenues resulting from an impairment charge of $473,000 for inventory obsolescence related to our CGuard Prime
delivery system Gross
margin represents our gross profit as a percentage of our revenue. Gross margin was 20.2% for the three months ended March 31, 2026,
an increase of 1.1 percentage points compared to 19.1% for the three months ended March 31, 2025. This increase in gross margin resulted
primarily from a more favorable revenue mix driven by direct sales in the U.S., which carry higher margins due to a higher average selling
price per unit compared with sales to international distributors. The impact from the favorable sales mix was primarily offset by the
impact of the impairment charge for excess and obsolete inventory referenced above.
Research
and Development Expenses. For the three months ended MarchJune 31,30, 2026, research and development expenses were $4,763,000,$4,295,000, an increase
of $704,000,$461,000, or 17.4%,12%, compared to $4,059,000$3,834,000 during the three months ended MarchJune 31,30, 2025. This increase resulted primarily due tofrom higher
staff levels in connection with our expansion in the U.S., an increase in regulatory activities expenses,development and higher development and
clinical expenses for the SwitchGuard NPS and CGuard Prime 80 cm carotid stent system, respectively.regulatory Theseactivity increasesrelated wereto
the partiallyPMA offset
byfor aCGuard decreaseNPS, inand expensesredesign work for the C-GUARDIANSCGuard clinical study and related product preparation activity prior to the FDA approval of CGuard
Prime in135 June 2025.cm.
Selling
and Marketing Expenses. For the three months ended MarchJune 31,30, 2026, selling and marketing expenses were $5,180,000,$5,221,000, an increase of
$2,430,000,$1,049,000, or 88.4%,25.1%, compared to $2,750,000$4,172,000 during the three months ended MarchJune 31,30, 2025. This increase resulted primarily from higher
commercial staffing levels in connection withfollowing the commercial launch of CGuard Prime in the U.S. in July 2025.
General
and Administrative Expenses. For the three months ended MarchJune 31,30, 2026, general and administrative expenses were $4,722,000,$4,155,000, a decrease
of $221,000,$1,171,000, or 4.5%,22%, compared to $4,943,000$5,326,000 during the three months ended MarchJune 31,30, 2025. The decrease was primarily driven by alower
compensation reductionexpenses, mainly due to severance costs related to our former chief financial officer’s retirement that were recognized
in the three months ended June 30, 2025, and lower share-based compensation expense resulting from forfeitures associated with executive employees who departed during the period.expense.
Financial Income. For the three months ended June 30, 2026, financial income was $121,000 compared to financial expense of $132,000 during the three months ended June 30, 2025, representing a decline in the financial expense of $253,000, or 191.7%. The increase in financial income primarily resulted from higher income from investment in marketable securities and money market funds and lower financial expenses related to changes in exchange rates.
Financial
Income. For the three months ended March 31, 2026, financial income was $289,000, a decrease of $5,000 or 1.7% compared to $294,000
during the three months ended March 31, 2025.
Tax
Expenses. We did not incur any tax expenses during the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025.
Net
Loss. For the three months ended MarchJune 31,30, 2026, our net loss was $13,689,000,$14,324,000, an increase of $2,523,000,$1,173,000, or 22.6%,8.9%, compared to $11,166,000$13,151,000
during the three months ended MarchJune 31,30, 2025. The increase in net loss resulted primarily from a decrease in gross profit of $1,087,000
and an increase in total operating expenses of $2,913,000$339,000, partially offset by an increase in operatingfinancial income of $253,000 compared to
expenses.the prior-year period.
Six months ended June 30, 2026, compared to the six months ended June 30, 2025
Revenues. For the six months ended June 30, 2026, revenue was $5,169,000, an increase of $1,862,000, or 56.3%, compared to $3,307,000 during the six months ended June 30, 2025. The increase was driven mainly by direct sales of the CGuard Prime product in the U.S. and continued growth in sales of the CGuard product through distributors in international markets. The increase was partially offset by $734,000 of credits issued in connection with the voluntary recall of CGuard Prime products in the U.S. during the six months ended June 30, 2026.
With respect to geographical regions, U.S. revenue was $827,000 for the six months ended June 30, 2026, compared to $54,000 for the six months ended June 30, 2025. The increase of approximately $772,000 was driven by commercial sales of CGuard Prime, partially offset by credits issued in connection with the voluntary recall of CGuard Prime in May 2026. International revenue was $4,342,000 for the six months ended June 30, 2026, compared to $3,253,000 for the six months ended June 30, 2025. Revenue from international markets grew by $1,089,000, or 33%, including $557,000 in Europe, $348,000 in Latin America and $184,000 in all other regions. The international sales performance reflects continued growth in demand in these markets.
Gross loss. For the six months ended June 30, 2026, gross loss (revenue less cost of revenues) was $87,000 compared to gross profit of $605,000 for the six months ended June 30, 2025. The decrease in gross profit was primarily attributable to the voluntary recall of CGuard Prime products in the U.S., including $734,000 in net credits issued to customers, which reduced revenues, as well as inventory impairment and inventory obsolescence charges of a combined $1,085,000 related to our CGuard Prime delivery system, which increased cost of revenues. These impacts were partially offset by the increase in revenue year-over-year.
Gross margin represents our gross profit or loss as a percentage of revenue. Gross margin was negative 1.7% for the six months ended June 30, 2026, a decrease of 20.0 percentage points compared to gross margin of 18.3% for the six months ended June 30, 2025, primarily due to the factors discussed above.
Research and Development Expenses. For the six months ended June 30, 2026, research and development expenses were $9,058,000, an increase of $1,165,000, or 14.8%, compared to $7,893,000 during the six months ended June 30, 2025. The increase was primarily driven by higher clinical trial expenses related to the initiation of the CGUARDIANS III pivotal trial and higher compensation expenses due to the hiring of new employees in connection with our expansion in the United States. These increases were partially offset by lower clinical trial expenses due to the completion of the CGUARDIANS I and CGUARDIANS II pivotal trials.
Selling and Marketing Expenses. For the six months ended June 30, 2026, selling and marketing expenses were $10,401,000, an increase of $3,479,000, or 50.3%, compared to $6,922,000 during the six months ended June 30, 2025. This increase resulted primarily from higher commercial staffing levels following the commercial launch of CGuard Prime in the U.S. in July 2025.
General and Administrative Expenses. For the six months ended June 30, 2026, general and administrative expenses were $8,877,000, a decrease of $1,392,000, or 13.6%, compared to $10,269,000 during the six months ended June 30, 2025. The decrease was primarily driven by lower compensation expenses, mainly due to severance costs related to our former chief financial officer’s retirement that were recognized in the six months ended June 30, 2025, and lower share-based compensation expense.
Financial Income. For the six months ended June 30, 2026, financial income was $410,000, an increase of $248,000, or 153.1%, compared to $162,000 during the six months ended June 30, 2025. The increase in financial income primarily resulted from higher income from investment in marketable securities and money market funds and lower financial expenses related to changes in exchange rates.
Tax Expenses. For the six months ended June 30, 2026, there was no material change in our tax expenses as compared to the six months ended June 30, 2025.
Net Loss. For the six months ended June 30, 2026, our net loss was $28,013,000, an increase of $3,696,000, or 15.2%, compared to $24,317,000 during the six months ended June 30, 2025. The increase in net loss resulted primarily from a decrease in gross profit and an increase in total operating expenses, partially offset by an increase in financial income compared to the prior-year period.
We
had an accumulated deficit as of MarchJune 31,30, 2026, of $316$330 million, as well as a net loss of $13.7$28 million for the threesix months ended MarchJune 30,
31, 2026 and negative operating cash flows. We expect to continue incurring losses and negative cash flows from operations until we expand
our commercial revenue to a scale that funds our commercial resources, development activities and support
functions. 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. Therefore, there is substantial doubt about our ability to continue as a going concern.
In May 2023, we closed a private placement offering that resulted in aggregate gross proceeds of approximately $42.2 million, before deducting fees payable to the placement agent and other offering expenses payable by us, pursuant to which we issued and sold 10,266,270 shares of our common stock, 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 “May 2023 Warrants”), at an offering price of $1.6327 per Private Placement Share and associated May 2023 Warrants and an offering price of $1.6326 per pre-funded warrant and associated May 2023 Warrants. If the May 2023 Warrants are exercised in cash in full this would result in an additional $71.4 million of gross proceeds (of which approximately $33.8 million has been received as of the date of this Quarterly Report on Form 10-Q). There can be no assurance that we will achieve any of the remaining milestones set forth in the outstanding May 2023 Warrants or that the outstanding May 2023 Warrants will be exercised in cash in full. The exercise price of the outstanding May 2023 Warrants is $1.3827 per share. The Series J Warrants expire 20 trading days after FDA approval of SwitchGuard and CGuard Prime 80 cm, while the Series K Warrants expire on October 28, 2026, which is 20 trading days after the end of the fourth fiscal quarter following the commencement of first U.S. commercial sales of CGuard Prime in July 2025. The last reported sale price of our shares of common stock on August 13, 2026 was $0.8401 per share. We believe that the likelihood that warrant holders will exercise their outstanding May 2023 Warrants, and therefore the amount of cash proceeds we would receive, is dependent upon the trading price of our shares of common stock. If the trading price of our shares of common stock is less than $1.3827 per share, we believe that warrant holders will be unlikely to exercise their outstanding May 2023 Warrants.
In
May 2024, we entered into an Equity Distribution Agreement (the “2024 Distribution Agreement”) with Piper Sandler & Co.,
as sales agent (“Piper Sandler”). Pursuant to the 2024 Distribution Agreement, we were able to offer and sell from time to
time, time,
at our option, through or to Piper Sandler shares of our common stock having an aggregate offering price of up to $75 million.
We paid
Piper Sandler a commission at a fixed rate of 3.0% of the aggregate gross proceeds from each sale of the shares under the 2024
Distribution Agreement. On April 3, 2026, we terminated the 2024 Distribution Agreement
in connection with our entry into the 2026 Distribution
Agreement (as defined below) with BTIG (as defined below). During the first quarter
half of 2026, we did not sell any shares pursuant to the
2024 Distribution Agreement.
ThreeSix
months ended MarchJune 31,30, 2026, compared to the ThreeSix months ended MarchJune 31,30, 2025
General.
As of MarchJune 31,30, 2026, we had cash and cash equivalents of $11,362,000$15,149,000 and marketable securities of $30,208,000,$15,272,000 as compared to cash and
cash equivalents of $8,939,000 and marketable securities of $45,272,000 as of December 31, 2025. We have historically met our cash needs
through a combination of issuing new shares, borrowing activities and product sales. Our cash requirements are generally for research
and development, marketing and sales activities, finance and administrative costs, capital expenditures and general working capital.
For
the threesix months ended MarchJune 31,30, 2026, net cash used in our operating activities increased by $3,545,000,$6,107,000, or 40.3%,35.7%, to $12,337,000,$23,232,000, from
$8,792,000$17,125,000 during the same period in 2025. The primary reasons for the increase in cash used in our operating activities were an increase
of $5,038,000$6,741,000 in compensation costs paid during the threesix months ended MarchJune 31,30, 2026 (from $6,132,000$11,474,000 in the threesix months ended MarchJune 30,
31, 2025 to $11,170,000$18,215,000 in the threesix months ended MarchJune 31,30, 2026), an increase of $1,937,000 in payments to vendors, clinical service providers
and other professional service providers, offset by an increase of $1,561,000$2,617,000 in payments received from customers
during the threesix months
ended MarchJune 31,30, 2026 (from $1,555,000$3,380,000 in the threesix months ended MarchJune 31,30, 2025 to $3,116,000$5,997,000 during the three
six months ended MarchJune 31,30, 2026).
Cash
provided by our investing activities was $14,779,000$29,432,000 during the threesix months ended MarchJune 31,30, 2026, compared to $1,702,000$7,024,000 during the six
three months ended MarchJune 31,30, 2025. The primary reason for the increase in cash provided by our investing activities is withdrawal of $30,000,000
$15,000,000 from our investment in marketable securities.
There
was no cash provided by financing activities for the threesix months ended MarchJune 31,30, 2026. Cash provided by financing activities for the six
three months ended MarchJune 31,30, 2025, was $506,000.$2,643,000. The source of the cash provided by financing activities during the threesix months ended June
March 31,30, 2025, were the proceeds from exercise of Series I warrants of $1,947,000, and proceeds from issuance of shares of $506,000,$696,000, net of
issuance costs, received from theour 2024ATM Distribution Agreement.Program.
We believe that our future operating results will continue to be subject to quarterly variations based upon a wide variety of factors, including the market acceptance of the U.S. commercial launch, cyclical nature of the ordering patterns of our distributors, timing of regulatory approvals, the implementation of various phases of our clinical trials, manufacturing efficiencies due to the learning curve of utilizing new materials and equipment and the costs or other consequences associated with any current or future product recall that may occur. Product recalls in particular have adversely affected and may continue to adversely affect our operating results through the direct costs of executing a recall, lost revenues resulting from the removal of affected products from the market and the interruption of sales during any remediation period, costs associated with redesigning and remanufacturing affected products, potential regulatory, litigation and other legal costs, and longer-term reputational harm that may reduce market acceptance of our current and future products. Our operating results could also be impacted by a weakening of the Euro and strengthening of the NIS, both against the U.S. dollar. Lastly, other economic conditions we cannot foresee may affect customer demand, such as individual country reimbursement policies pertaining to our products.
During
the threesix months ended MarchJune 31,30, 2026, there were no material changes to our contractual obligations and commitments since the year ended
December 31, 2025.
NSPR insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 8 Form 4 filings (4 insiders, 8 trade dates, 394,397 shares, about $454.1K) and open-market sales in 1 filing (1 insider, 14 trade dates, 85,295 shares, about $189.6K). Net open-market shares: 309,102 (purchases minus sales); net value about $264.5K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-05-27 | Stuka Paul |
Open-market purchase | 20,000 | $0.88 | $17.6K |
| 2026-05-19 | Gleason Shane Thomas |
Open-market sale | 22,778 | $1.01 | $23.0K |
| 2026-05-14 | Stuka Paul |
Open-market purchase | 5,000 | $1.15 | $5.8K |
| 2026-05-13 | Stuka Paul |
Open-market purchase | 10,000 | $1.16 | $11.6K |
| 2026-05-12 | Slosman Marvin |
Open-market purchase | 21,000 | $1.20 | $25.2K |
| 2026-05-11 | Stuka Paul |
Open-market purchase | 10,000 | $1.19 | $11.9K |
| 2026-05-11 | Stuka Paul |
Open-market purchase |
10,000 | $1.19 | $11.9K |
| 2026-05-08 | Stuka Paul |
Open-market purchase | 65,626 | $1.16 | $76.1K |
| 2026-05-08 | Stuka Paul |
Open-market purchase |
65,626 | $1.16 | $76.1K |
| 2026-05-07 | Ward Scott R. |
Open-market purchase | 73,255 | $1.15 | $84.2K |
| 2026-05-07 | Stuka Paul |
Open-market purchase | 6,378 | $1.15 | $7.3K |
| 2026-05-07 | Roubin Gary S |
Open-market purchase | 90,000 | $1.18 | $106.2K |
| 2026-05-06 | Ward Scott R. |
Open-market purchase | 15,995 | $1.15 | $18.4K |
| 2026-05-06 | Stuka Paul |
Open-market purchase | 1,517 | $1.12 | $1.7K |
| 2026-02-02 | Gleason Shane Thomas |
Open-market sale | 2,941 | $1.59 | $4.7K |
| 2025-05-30 | Gleason Shane Thomas |
Open-market sale | 7,186 | $2.51 | $18.0K |
| 2025-05-29 | Gleason Shane Thomas |
Open-market sale | 3,760 | $2.51 | $9.4K |
| 2025-05-27 | Gleason Shane Thomas |
Open-market sale | 1,572 | $2.51 | $3.9K |
| 2025-05-23 | Gleason Shane Thomas |
Open-market sale | 2,482 | $2.51 | $6.2K |
| 2025-02-25 | Gleason Shane Thomas |
Open-market sale | 10,000 | $3.65 | $36.5K |
| 2025-02-04 | Gleason Shane Thomas |
Open-market sale | 5,132 | $2.46 | $12.6K |
| 2025-02-03 | Gleason Shane Thomas |
Open-market sale | 7,073 | $2.51 | $17.8K |
| 2025-01-31 | Gleason Shane Thomas |
Open-market sale | 9,923 | $2.55 | $25.3K |
| 2025-01-30 | Gleason Shane Thomas |
Open-market sale | 2,454 | $2.51 | $6.2K |
| 2025-01-29 | Gleason Shane Thomas |
Open-market sale | 3,660 | $2.46 | $9.0K |
| 2025-01-28 | Gleason Shane Thomas |
Open-market sale | 2,476 | $2.61 | $6.5K |
| 2025-01-27 | Gleason Shane Thomas |
Open-market sale | 3,858 | $2.71 | $10.5K |
Well-known investors holding NSPR (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 65,750 | $107.2K | — | Sold out |
| Renaissance Technologies | 2026-06-30 | 112,832 | $79.0K | 0.0% | Added 541% |
| Millennium Management (Israel Englander) | 2026-06-30 | 37,677 | $26.4K | 0.0% | Reduced 66% |