8-K
InspireMD, Inc. (NSPR)
UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
Washington,D.C. 20549
FORM8-K
CURRENTREPORT
Pursuantto Section 13 or 15(d) of the
SecuritiesExchange Act of 1934
Dateof Report (Date of earliest event reported): November 9, 2020
InspireMD,Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-35731 | 26-2123838 |
|---|---|---|
| (State or other jurisdiction<br><br> <br>of incorporation) | (Commission<br><br> <br>File Number) | (IRS Employer<br><br> <br>Identification No.) |
| 4 Menorat Hamaor St.<br><br> <br>Tel Aviv, Israel | 6744832 | |
| --- | --- | |
| (Address<br> of principal executive offices) | (Zip<br> Code) |
(888)776-6804
(Registrant’s telephone number, including area code)
N/A
(Former Name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| [ ] | Written<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| [ ] | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement<br> communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of exchange on which registered |
|---|---|---|
| Common<br> Stock, par value $0.0001 per share | NSPR | NYSE<br> American |
| Warrants,<br> exercisable for one share of Common Stock | NSPR.WS | NYSE<br> American |
| Series<br> B Warrants, exercisable for one share of Common Stock | NSPR.WSB | NYSE<br> American |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item2.02 Results of Operations and Financial Condition.
On November 9, 2020, InspireMD, Inc. issued a press release announcing its financial and operating results and recent highlights for the third quarter and nine months ended September 30, 2020. A copy of that press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K that is furnished pursuant to this Item 2.02 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number | Description |
|---|---|
| 99.1 | Press release, dated November 9, 2020 (furnished herewith pursuant to Item 2.02) |
| -2- |
| --- |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| InspireMD, Inc. | ||
|---|---|---|
| Date:<br> November 9, 2020 | By: | /s/ Craig Shore |
| Name: | Craig<br> Shore | |
| Title: | Chief<br> Financial Officer |
| -3- |
| --- |
Exhibit99.1
InspireMDAnnounces Third Quarter 2020 Financial Results
Thirdquarter 2020 revenue returns to pre-COVID-19 levels
Managementto host investor conference call today, November 9, 2020 at 8:30 a.m. ET
TelAviv, Israel— November 9, 2020 – InspireMD, Inc. (NYSE American: NSPR)(“Inspire” or the “Company”), developer of the CGuard™ Embolic Prevention System (EPS) for the prevention of stroke caused by the treatment of Carotid Artery Disease (CAD), today announced financial and operating results for the third quarter ended September 30, 2020.
Third Quarter 2020 and recent highlights:
| ● | The<br> U.S. Food and Drug Administration (FDA) granted InspireMD approval of its Investigational Device Exemption (IDE) application<br> to initiate a pivotal study of CGuard™ EPS. The company has begun to plan its pivotal study and has retained Dr. Christine<br> Brennan, recognized expert in carotid artery disease, as a consultant during the planning process. |
|---|---|
| ● | InspireMD<br> added Dr. Gary Roubin to its Board of Directors. One of the most recognized interventional cardiologists in the world, Dr.<br> Roubin’s pioneering work in carotid stenting and embolic protection devices brings knowledge and experience that will<br> be invaluable. During his tenure as Chief of Interventional Cardiology at The University of Alabama at Birmingham and later<br> as Department Chairman and Chief of Service of the Lenox Hill Hospital Cardiac and Vascular program in New York, he helped<br> bring both programs to international standing in peripheral, neurovascular, and cardiac interventions. Dr. Roubin’s<br> vast clinical experience has enabled him to recognize and advance technical innovations that improve patient outcomes. He<br> played a pivotal role in the success of Mednova Inc., which was acquired by Abbott Vascular, resulting in the introduction<br> and marketing in the U.S. of the top selling carotid embolic protection system (NAV6) and stent system (XACT). |
| ● | The<br> Company appointed Andrea Tommasoli as senior vice president of global sales and marketing. Andrea’s leadership of our<br> global sales and marketing effort is an investment in our customer and commercial focus and provides the essential leadership<br> needed to elevate our growth and acceleration to standard of care with CGuard EPS. Andrea’s experience in leading commercial<br> teams, in particular, indirect channel partners, globally adds immediate value to our geographic expansion and higher performance<br> in served markets. |
| ● | InspireMD<br> appointed Patrick Jamnik as vice president of business development and strategic initiatives. Patrick will oversee the Company’s<br> business development activities and play a key role in advancing our short and long-term strategic goals. |
Marvin Slosman, InspireMD’s Chief Executive Officer commented, “Our third quarter financial results return us to our pre-COVID revenue levels, and while we remain cautiously optimistic about the fourth quarter, new restrictions instituted to combat the spread of COVID-19 may provide additional uncertainly in our markets. Nevertheless, our strategic pathway to growth for CGuard EPS is robust, rooted in broadening market share in endovascular carotid artery stent procedures in our served markets, while encouraging practitioners to make the shift from carotid endarterectomy to carotid stenting and launching our products in new countries. We view carotid artery disease as the next significant vascular condition to shift toward an endovascular standard of care, much the same way cerebral aneurysms, coronary artery disease, thoracic/abdominal aortic aneurysms, and peripheral artery disease already have. Therefore, making the case for the value of expanded application of carotid stenting to the vascular surgeon and INR (interventional neuroradiology) communities remains a top priority.
“Another of our key goals is the initiation of our pivotal study in the United States, and we are buoyed by the addition of Dr. Gary Roubin to our Board of Directors and Dr. Christine Brennan as a strategic advisor, both of whom will be instrumental in the development and implementation of the trial. While it is important to continue to grow revenues in the markets we currently serve, we believe our investments in the world’s largest markets, including the United States, China and Japan, will pave a pathway to global adoption of CGuard EPS.
“Finally, to meet the needs of each physician specialty, our strategy includes developing a new advanced tool set of adjunctive delivery system options including periprocedural embolic protection, specifically targeted for the vascular surgical community, all intended to drive adoption of CGuard EPS. These advances represent additional significant revenue pathways for InspireMD, and we are excited to broaden our portfolio and build on our growth and market adoption,” concluded Mr. Slosman.
FinancialResults for the Third Quarter and Nine Months ended September 30, 2020
For the three months ended September 30, 2020, revenue increased by $41,000, or 4.4%, to $980,000, from $939,000 during the three months ended September 30, 2019. This increase was predominantly driven by a 69.0% increase in sales volume of MGuard EPS from $87,000 during the three months ended September 30, 2019, to $147,000 during the three months ended September 30, 2020. This increase was mainly due to the timing of shipments to one of the distributors for a tender recently won. This increase was offset, in part, by a 2.2% decrease in sales volume of CGuard Prime EPS from $852,000 during the three months ended September 30, 2019, to $833,000 during the three months ended September 30, 2020, largely driven by procedures with CGuard EPS, which are generally scheduled or non-emergency procedures, only beginning to return to normal levels towards the end of the quarter as hospitals began to re-shift resources to non-COVID-19 patients.
For the three months ended September 30, 2020, gross profit increased by 132.8%, or $170,000, to $298,000, from $128,000 during the three months ended September 30, 2019. This increase in gross profit resulted from a $94,000 increase in revenues (as described above), less the related material and labor costs, a $56,000 decrease in write-offs, which were driven by a component supply issue during the three months ended September 30, 2019 and which did not reoccur during the three months ended September 30, 2020, and a decrease of $20,000 in miscellaneous expenses during the three months ended September 30, 2020. Gross margin increased to 30.4% during the three months ended September 30, 2020 from 13.6% during the three months ended September 30, 2019, driven by the factors mentioned above.
Total operating expenses for the quarter ended September 30, 2020 were $2,493,000, an increase of 17.3% compared to $2,125,000 for the same period in 2019. This increase was primarily due to increases of $127,000 in compensation expenses, $116,000 in development expenses associated with CGuard EPS, mainly related to the new advanced delivery system, $92,000 of Directors’ and Officers’ Liability Insurance expense due to recent economic changes in the insurance industry, $71,000 in regulatory expenses associated with compliance to new European Union standards, $60,000 mainly due to the timing of our annual shareholders meeting, and $79,000 of miscellaneous expense. These increases were partially offset by a decrease in travel expenses of $177,000 in light of restrictions imposed by governments worldwide in order to mitigate the spread of COVID-19.
For the three months ended September 30, 2020, financial expenses decreased by 47.9%, or $35,000, to $38,000, from $73,000 during the three months ended September 30, 2019. The decrease in financial expenses primarily resulted from changes in exchange rates.
Net loss for the third quarter of 2020 totaled $2,233,000, or $0.06 per basic and diluted share, compared to a net loss of $2,070,000, or $1.26 per basic and diluted share, for the same period in 2019.
For the nine months ended September 30, 2020, revenue decreased by $381,000, or 14.1%, to $2,327,000, from $2,708,000 during the nine months ended September 30, 2019. This decrease was predominantly driven by a 11.5% decrease in sales volume of CGuard EPS from $2,344,000 during the nine months ended September 30, 2019, to $2,075,000 during the nine months ended September 30, 2020, mainly due to the postponement of procedures with CGuard EPS, which are generally scheduled or non-emergency procedures, as hospitals shifted resources to patients affected by COVID-19. In addition, there was a 30.8% decrease in sales volume of MGuard Prime EPS from $364,000 during the nine months ended September 30, 2019, to $252,000 during the nine months ended September 30, 2020, mainly due to the impact of COVID-19, as mentioned above.
For the nine months ended September 30, 2020, gross profit decreased by 4.8%, or $24,000, to $473,000, compared to a $497,000 for the same period in 2019. This decrease in gross profit resulted from a $119,000 decrease in revenues (as mentioned above), less the related material and labor costs. This decrease was partially offset by a decrease of $69,000 in expenses related to upgrades made to our production facilities during the nine months ended September 30, 2019 that did not reoccur during the nine months ended September 30, 2020 and a decrease of $26,000 in miscellaneous expenses during the nine months ended September 30, 2020. Gross margin increased to 20.3% during the nine months ended September 30, 2020 from 18.4% during the nine months ended September 30, 2019, driven by the factors mentioned above.
Total operating expenses for the nine months ended September 30, 2020 were $7,135,000, a decrease of 8.6% compared to $7,807,000 for the same period in 2019. This decrease was primarily due to a decrease of $708,000 in clinical expenses associated with CGuard EPS, mainly related to the IDE approval process, for which an approval from the FDA was received on September 8, 2020, $354,000 due to settlement expenses that were paid to a former service provider pursuant to a settlement agreement during the nine months ended September 30, 2019, $316,000 in travel expenses in light of restrictions imposed by governments worldwide in order to mitigate the spread of COVID-19, $150,000 in quality assurance and regulatory expenses related to the development of various projects and $91,000 in promotional expenses, primarily related to having already built our social media infrastructure in 2019. These decreases were partially offset by an increase in expenses of $400,000 due to the settlement agreement with the underwriter of our prior offerings paid during the nine months ended September 30, 2020, $280,000 in development expenses related to CGuard EPS new advanced delivery system, $130,000 in regulatory expenses required for new regulatory standards set by the European Union, and $115,000 in our Directors’ and Officers’ Liability Insurance expenses, partially due to recent changes in the insurance industry, and $22,000 of miscellaneous expenses.
Financial expenses for the nine months ended September 30, 2020 was $29,000 compared to $173,000 for the same period in 2019. The decrease in financial expenses primarily resulted from changes in exchange rates.
Net loss for the nine months ended September 30, 2020 totaled $6,691,000, or $0.38 per basic and diluted share, compared to a net loss of $7,483,000, or $5.79 per basic and diluted share, for the same period in 2019.
As of September 30, 2020, cash and cash equivalents were $10,882,000 compared to $5,514,000 as of December 31, 2019.
ConferenceCall and Webcast Details
Management will host a conference call at 8:30AM ET today, November 9, 2020, to review financial results and provide an update on corporate developments. Following management’s formal remarks, there will be a question and answer session. Participants are asked to pre-register for the call through the following link: https://dpregister.com/sreg/10149730/dc9d128e76.
Please note that registered participants will receive their dial in number upon registration and will dial directly into the call without delay. Those without internet access or unable to pre-register may dial in by calling: 1-866-777-2509 (domestic) or 1-412-317-5413 (international). All callers should dial in approximately 10 minutes prior to the scheduled start time and ask to be joined into the InspireMD call.
The conference call will also be available through a live webcast found here: https://services.choruscall.com/links/nspr201109.html
Additionally, it will be broadcast live through the Company’s website via the following link: https://www.inspiremd.com/en/investors/investor-relations/.
A webcast replay of the call will be available approximately one hour after the end of the call through February 9, 2021 at the above links. A telephonic replay of the call will be available through November 23, 2020 and may be accessed by calling 1-877-344-7529 (domestic) or 1-412-317-0088 (international) and using access code 10149730.
AboutInspireMD, Inc.
InspireMD seeks to utilize its proprietary MicroNet® technology to make its products the industry standard for carotid stenting by providing outstanding acute results and durable stroke free long-term outcomes.
InspireMD’s common stock is quoted on the NYSE American under the ticker symbol NSPR and certain warrants are quoted on the NYSE American under the ticker symbol NSPR.WS and NSPR.WSB.
Forward-lookingStatements
This press release contains “forward-looking statements.” Such statements may be preceded by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control, and cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) market acceptance of our existing and new products, (ii) negative clinical trial results or lengthy product delays in key markets, (iii) an inability to secure regulatory approvals for the sale of our products, (iv) the impact of the COVID-19 pandemic on our manufacturing, sales, business plan and the global economy; (v) intense competition in the medical device industry from much larger, multinational companies, (vi) product liability claims, (vii) product malfunctions, (viii) our limited manufacturing capabilities and reliance on subcontractors for assistance, (ix) insufficient or inadequate reimbursement by governmental and other third party payers for our products, (x) our efforts to successfully obtain and maintain intellectual property protection covering our products, which may not be successful, (xi) legislative or regulatory reform of the healthcare system in both the U.S. and foreign jurisdictions, (xii) our reliance on single suppliers for certain product components, (xiii) the fact that we will need to raise additional capital to meet our business requirements in the future and that such capital raising may be costly, dilutive or difficult to obtain and (xiv) the fact that we conduct business in multiple foreign jurisdictions, exposing us to foreign currency exchange rate fluctuations, logistical and communications challenges, burdens and costs of compliance with foreign laws and political and economic instability in each jurisdiction. More detailed information about the Company and the risk factors that may affect the realization of forward looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s web site at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.
InvestorContacts:
Craig Shore
Chief Financial Officer
InspireMD, Inc.
888-776-6804
CORE IR
CONSOLIDATEDSTATEMENTS OF OPERATIONS ^(1)^
(U.S. dollars in thousands, except per share data)
| Three<br> months ended | Nine<br> months ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September<br> 30, | September<br> 30, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Revenues | $ | 980 | $ | 939 | $ | 2,327 | $ | 2,708 | ||||
| Cost<br> of revenues | 682 | 811 | 1,854 | 2,211 | ||||||||
| Gross<br> Profit | 298 | 128 | 473 | 497 | ||||||||
| Operating<br> Expenses: | ||||||||||||
| Research<br> and development | 546 | 442 | 1,513 | 2,432 | ||||||||
| Selling<br> and marketing | 485 | 537 | 1,486 | 1,791 | ||||||||
| General<br> and administrative | 1,462 | 1,146 | 4,136 | 3,584 | ||||||||
| Total<br> operating expenses | 2,493 | 2,125 | 7,135 | 7,807 | ||||||||
| Loss<br> from operations | (2,195 | ) | (1,997 | ) | (6,662 | ) | (7,310 | ) | ||||
| Financial<br> expenses | (38 | ) | (73 | ) | (29 | ) | (173 | ) | ||||
| Net<br> Loss | (2,233 | ) | (2,070 | ) | (6,691 | ) | (7,483 | ) | ||||
| Net<br> loss per share – basic and diluted | $ | (0.06 | ) | $ | (1.26 | ) | $ | (0.38 | ) | $ | (5.79 | ) |
| Weighted<br> average number of shares of common stock used in computing net loss per share – basic and diluted | 34,884,285 | 1,648,302 | 17,460,184 | 1,293,321 |
CONSOLIDATEDBALANCE SHEETS ^(2)^
(U.S. dollars in thousands)
| September<br> 30, | December<br> 31, | ||||
|---|---|---|---|---|---|
| 2020 | 2019 | ||||
| ASSETS | |||||
| Current<br> Assets: | |||||
| Cash<br> and cash equivalents | $ | 10,882 | $ | 5,514 | |
| Accounts<br> receivable: | |||||
| Trade,<br> net | 565 | 823 | |||
| Other | 332 | 150 | |||
| Prepaid<br> expenses | 169 | 87 | |||
| Inventory | 1,388 | 1,236 | |||
| Total<br> current assets | 13,336 | 7,810 | |||
| Non-current<br> assets: | |||||
| Property,<br> plant and equipment, net | 415 | 547 | |||
| Operating<br> lease right of use assets | 1,215 | 937 | |||
| Funds<br> in respect of employee rights upon retirement | 643 | 586 | |||
| Total<br> non-current assets | 2,273 | 2,070 | |||
| Total<br> assets | $ | 15,609 | $ | 9,880 | |
| December<br> 31, | |||||
| --- | --- | --- | --- | --- | --- |
| 2019 | |||||
| LIABILITIES<br> AND EQUITY | |||||
| Current<br> liabilities: | |||||
| Accounts<br> payable and accruals: | |||||
| Trade | 427 | $ | 646 | ||
| Other | 2,123 | 2,449 | |||
| Contract<br> liability | 19 | 20 | |||
| Total<br> current liabilities | 2,569 | 3,115 | |||
| Long-term<br> liabilities: | |||||
| Operating<br> lease liabilities | 917 | 653 | |||
| Liability<br> for employees’ rights upon retirement | 843 | 729 | |||
| Total<br> long-term liabilities | 1,760 | 1,382 | |||
| Total<br> liabilities | 4,329 | 4,497 | |||
| Equity: | |||||
| Common<br> stock, par value 0.0001 per share; 150,000,000 shares authorized at September 30, 2020 and December 31, 2019; 36,059,128<br> and 3,916,134 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | 3 | - | |||
| Preferred<br> B shares, par value 0.0001 per share; 500,000 shares authorized at September 30, 2020 and December 31, 2019; 17,303<br> shares issued and outstanding at September 30, 2020 and December 31, 2019. | - | - | |||
| Preferred<br> C shares, par value 0.0001 per share; 1,172,000 shares authorized at September 30, 2020 and December 31, 2019; 2,343<br> and 34,370 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | - | - | |||
| Additional<br> paid-in capital | 175,600 | 163,015 | |||
| Accumulated<br> deficit | (164,323 | ) | (157,632 | ) | |
| Total<br> equity | 11,280 | 5,383 | |||
| Total<br> liabilities and equity | 15,609 | $ | 9,880 |
All values are in US Dollars.
(1) All 2020 financial information is derived from the Company’s 2020 unaudited financial statements, as disclosed in the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission; all 2019 financial information is derived from the Company’s 2019 unaudited financial statements, as disclosed in the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission.
(2) All September 30, 2020 financial information is derived from the Company’s 2020 unaudited financial statements, as disclosed in the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission. All December 31, 2019 financial information is derived from the Company’s 2019 audited financial statements as disclosed in the Company’s Annual Report on Form 10-K, for the twelve months ended December 31, 2019 filed with the Securities and Exchange Commission.