QTEX 20-F/A
QTREX Quantum Ltd. (QTEX)
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Amendment No. 1)
OR
For
the fiscal year ended
OR
OR
Commission
File No.:
(Exact name of registrant as specified in its charter)
Translation of registrant’s name into English: Not applicable
State
of
(Jurisdiction of incorporation or organization)
Tel: +972.4.6230333
(Address of principal executive offices)
Tel:
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes
☐
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act of 1934.
Yes
☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☒ | Emerging Growth Company |
If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, 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.
| † | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Yes
☐ No
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.
☒
International Financial Reporting Standards as issued by the International Accounting Standards Board ☐
Other ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company.
Yes
☐ No
EXPLANATORY NOTE
We are filing this Amendment No. 1 (this “Amendment”) to our Annual Report on Form 20-F (the “Original Filing”) for the sole purpose of amending Item 18 of the Original Filing to amend the date of the auditor’s opinion located on page F-2 of this Amendment. For clarity, the audited financial statements as of and for the fiscal years ended December 31, 2024, 2023, and 2022 included in this Amendment No. 1 are unchanged from the audited financial statements included in the Original Filing.
In addition, pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, the certifications pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002 have been re-executed as of the date of, and are re-filed as part of, this Amendment No. 1 as Exhibits 12.1, 12.2, 13.1 and 13.2.
Other than expressly set forth herein, this Amendment No. 1 does not, and does not purport to, amend or restate any other information contained in the Original Filing nor does this Amendment No. 1 reflect any events that have occurred after the Original Filing was filed.
| Page | ||
| EXPLANATORY NOTE | ||
| PART III | ||
| ITEM 17. | FINANCIAL STATEMENTS | 1 |
| ITEM 18. | FINANCIAL STATEMENTS. | 1 |
| ITEM 19. | EXHIBITS. | 1 |
| SIGNATURES | 2 | |
i
PART III
ITEM 17. FINANCIAL STATEMENTS
We have elected to provide financial statements and related information pursuant to Item 18.
ITEM 18. FINANCIAL STATEMENTS
The financial statements and the related notes required by this Item are included in this Amendment No. 1 to our annual report on Form 20-F beginning on page F-1.
ITEM 19. EXHIBITS
| * | Filed herewith. |
| % | Furnished herewith. |
1
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on Form 20-F filed on its behalf.
| INSPIRA TECHNOLOGIES OXY B.H.N. LTD. | ||
| Date: March 28, 2025 | By: | /s/ Dagi Ben-Noon |
| Dagi Ben-Noon | ||
| Chief Executive Officer | ||
2
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
TABLE OF CONTENTS
______________________
________________
____________
The amounts are stated in thousands of U.S. dollars
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To The Board of Directors and Shareholders of Inspira Technologies Oxy B.H.N. Ltd.
Ha-Tidhar Street 2, Ra’anana, Israel
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Inspira Technologies Oxy B.H.N. Ltd. (the “Company”) as of December 31, 2024 and 2023, the related statements of comprehensive loss, changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively, the “Financial Statements”). In our opinion, the Financial Statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Going Concern
The accompanying Financial Statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the Financial Statements, the Company is at its development stage, therefore, it has suffered recurring losses and negative cash flows from operations since inception. As of December 31, 2024, the Company had incurred accumulated losses of $67 million. The Company’s operations have been funded substantially through issuance of shares and warrants. Considering the above, the Company’s dependency on external funding for its operations raises a substantial doubt about the Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding these matters are described in Note 1. The Financial Statements do not include any adjustments that might result from the outcome of these uncertainties.
Basis for Opinion
These Financial Statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these Financial Statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the Financial Statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the Financial Statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Financial Statements. We believe that our audits provide a reasonable basis for our opinion.
| We have served as the Company’s auditors since 2018. | |
| /s/ | |
| March 6, 2025 | Certified Public Accountants (Isr.) |
| BDO Member Firm |
F-2
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
BALANCE SHEETS
(US dollars in thousands)
| December 31, | December 31, | |||||||||
| Note | 2024 | 2023 | ||||||||
| ASSETS | ||||||||||
| Current Assets | ||||||||||
| Cash and cash equivalents | ||||||||||
| Deposits | 3 | |||||||||
| Other current assets | 4 | |||||||||
| Inventory | 5 | |||||||||
| Total current assets | ||||||||||
| Non-Current Assets: | ||||||||||
| Right of use assets, net | 9 | |||||||||
| Property, plant and equipment, net | 6 | |||||||||
| Total non-current assets | ||||||||||
| Total Assets | ||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
| Current Liabilities: | ||||||||||
| Trade accounts payables | ||||||||||
| Other accounts payables | 7 | |||||||||
| Lease liabilities | 9 | |||||||||
| Financial liabilities at fair value | 10 | |||||||||
| Total current liabilities | ||||||||||
| Non-Current Liabilities: | ||||||||||
| Lease liabilities | 9 | |||||||||
| Total non- current liabilities | ||||||||||
| COMMITMENTS AND CONTINGENCIES | 8 | |||||||||
| Shareholders’ Equity: | ||||||||||
| Ordinary shares, par value: Authorized Issued and outstanding | ||||||||||
| Share capital and additional paid in capital | 11 | |||||||||
| Accumulated losses | ( | ) | ( | ) | ||||||
| Total Shareholders’ Equity | ||||||||||
| Total liabilities and Shareholders’ Equity | ||||||||||
These Financial Statements were authorized by the Board of Directors on March 6, 2025.
The accompanying notes are an integral part of the Financial Statements.
F-3
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
STATEMENTS OF COMPREHENSIVE LOSS
(US dollars in thousands except for loss per share)
| Year
ended December 31, | ||||||||||||||
| Note | 2024 | 2023 | 2022 | |||||||||||
| Research and development expenses | 12 | |||||||||||||
| General and administrative expenses | 13 | |||||||||||||
| Sales and marketing expenses | 14 | |||||||||||||
| Other expenses (income) | ||||||||||||||
| Operating loss | ||||||||||||||
| Interest income from deposits | ( | ) | ( | ) | ( | ) | ||||||||
| Finance expenses (income), net | 15 | ( | ) | ( | ) | |||||||||
| Loss before tax | ||||||||||||||
| Taxes on income | ||||||||||||||
| Total comprehensive and net loss | ||||||||||||||
| Net loss per ordinary share, basic and diluted | ( | ) | ( | ) | ( | ) | ||||||||
| Weighted average number of ordinary shares outstanding basic and diluted | ||||||||||||||
The accompanying notes are an integral part of the Financial Statements.
F-4
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(US dollars in thousands)
For the year ended December 31, 2024:
| Ordinary Share Capital | ||||||||||||||||
| Number of shares | Share capital and Additional Paid in Capital | Accumulated deficit | Total | |||||||||||||
| Balance as of January 1, 2024: | ( | ) | ||||||||||||||
| Changes during the period: | ||||||||||||||||
| Issuance of ordinary shares, private warrants and pre-funded warrants, net | ||||||||||||||||
| Exercise of options | ||||||||||||||||
| Exercise of June 2024 pre-funded warrants into ordinary shares | ||||||||||||||||
| Restricted share unit (“RSU”)vesting | ||||||||||||||||
| Issuance of ordinary shares- advisor fees | ||||||||||||||||
| Share-based compensation | - | |||||||||||||||
| Comprehensive and net loss | - | ( | ) | ( | ) | |||||||||||
| Balance as of December 31, 2024 | ( | ) | ||||||||||||||
F-5
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(US dollars in thousands)
For the year ended December 31, 2023:
| Ordinary Share Capital | ||||||||||||||||
| Number of shares | Share capital and Additional Paid in Capital | Accumulated deficit | Total | |||||||||||||
| Balance as of January 1, 2023: | ( | ) | ||||||||||||||
| Changes during the period: | ||||||||||||||||
| Issuance of ordinary shares and private warrants, net | ||||||||||||||||
| Issuance of placement agent warrants (Note 11.3) | - | |||||||||||||||
| Issuance of ordinary shares (pursuant to an at-the-market facility) | ||||||||||||||||
| Exercise of share based payments | ||||||||||||||||
| RSU vesting | ||||||||||||||||
| Share-based compensation | - | |||||||||||||||
| Comprehensive and net loss | - | ( | ) | ( | ) | |||||||||||
| Balance as of December 31, 2023 | ( | ) | ||||||||||||||
The accompanying notes are an integral part of the Financial Statements.
F-6
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(US dollars in thousands)
For the year ended December 31, 2022:
| Ordinary Share Capital | ||||||||||||||||
| Number of shares | Share capital and Additional Paid in Capital | Accumulated deficit | Total | |||||||||||||
| Balance as of January 1, 2022: | ( | ) | ||||||||||||||
| Changes during the period: | ||||||||||||||||
| Exercise of share based payments | ||||||||||||||||
| RSU vesting | ||||||||||||||||
| Share-based compensation | - | |||||||||||||||
| Comprehensive and net loss | - | ( | ) | ( | ) | |||||||||||
| Balance as of December 31, 2022 | ( | ) | ||||||||||||||
(*)
The accompanying notes are an integral part of the Financial Statements.
F-7
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
STATEMENTS OF CASH FLOW
(US dollars in thousands)
| Year ended December 31 | ||||||||||||
| 2024 | 2023 | 2022 | ||||||||||
| CASH FLOW FROM OPERATING ACTIVITIES: | ||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||
| Depreciation | ||||||||||||
| Capital loss | ||||||||||||
| Share based compensation expenses | ||||||||||||
| Share based compensation – placement agent warrants | ||||||||||||
| Evaluation of financial liability at fair value | ( | ) | ( | ) | ||||||||
| Expiration of financial liability | ( | ) | ||||||||||
| Issuance cost | ||||||||||||
| Issuance of ordinary shares - advisor fees | ||||||||||||
| Prepayments of lease liabilities | ( | ) | ( | ) | ( | ) | ||||||
| Decrease (increase) in right of use assets, net | ( | ) | ( | ) | ||||||||
| Decrease (increase) in other current assets | ( | ) | ||||||||||
| (Decrease) increase in trade accounts payables | ( | ) | ||||||||||
| (Decrease) increase in other accounts payable | ( | ) | ||||||||||
| (Increase) decrease in inventory | ( | ) | ||||||||||
| Unrealized foreign exchange (gain) loss | ( | ) | ||||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ( | ) | ||||||
| CASH FLOW FROM INVESTING ACTIVITIES: | ||||||||||||
| Purchase of property, plant, and equipment | ( | ) | ( | ) | ( | ) | ||||||
| Change in deposits, net | ( | ) | ||||||||||
| Net cash provided (used in) investing activities | ( | ) | ||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
| Issuance of ordinary shares, pre-funded warrants and ordinary warrants, net | ||||||||||||
| Exercise of options | ||||||||||||
| Exercise of pre-funded warrants | ||||||||||||
| Issuance of ordinary shares (issuances pursuant to an at-the-market facility) | ||||||||||||
| Net cash provided by financing activities | ||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ( | ) | ||||||||
| Net increase (decrease) in cash and cash equivalents and restricted cash | ( | ) | ( | ) | ||||||||
| Cash, cash equivalents and restricted cash at the beginning of the period | ||||||||||||
| Cash, cash equivalents and restricted cash at the end of the period | ||||||||||||
The accompanying notes are an integral part of the Financial Statements.
F-8
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
STATEMENTS OF CASH FLOW
(US dollars in thousands)
APPENDIX A - RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on the balance sheet that sum to the total of the same such amounts shown in the statement of cash flows.
| Year ended December 31, | ||||||||||||
| 2024 | 2023 | 2022 | ||||||||||
| Cash and cash equivalents | ||||||||||||
| Restricted cash | ||||||||||||
| Total cash, cash equivalents and restricted cash shown in the statement of cash flows | ||||||||||||
APPENDIX B – NON-CASH TRANSACTIONS:
| Year ended December 31, | ||||||||||||
| 2024 | 2023 | 2022 | ||||||||||
| Other receivable in connection to December private placement | ||||||||||||
| Accrued issuance expenses | ( | ) | ||||||||||
| Financial liability- placement agent fee (Note 10-A) | ( | ) | ||||||||||
| Share based compensation- placement agent warrants against additional paid in capital (Note 11) | ( | ) | ( | ) | ||||||||
| ( | ) | ( | ) | |||||||||
APPENDIX C - AMOUNT PAID DURING THE PERIOD:
| Year ended December 31, | ||||||||||||
| 2024 | 2023 | 2022 | ||||||||||
| Interest paid | ||||||||||||
The accompanying notes are an integral part of the Financial Statements
F-9
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 1 - GENERAL:
| 1. | Inspira Technologies Oxy B.H.N. Ltd (the “Company”) was incorporated in Israel and commenced its operations on February 27, 2018. The Company operates in the medical technology industry in the field of respiratory support technology engaged in the research, development, manufacturing related activities, and go-to-market activities of proprietary products and technologies. The Company is developing the following products: |
| ● | The INSPIRA ART (Augmented Respiratory Technology), which is a respiratory support technology targeted toward utilizing blood monitoring and direct blood oxygenation to boost patient saturation levels within minutes while the patient is awake. The aim is to provide an alternative to invasive mechanical ventilation, associated with high risks, complications, high costs and high mortality rates. | |
| ● | The HYLA blood sensor, which is a non-invasive optical blood sensor designed to perform real-time and continuous blood parameter measurements, potentially reducing the need for intermittent blood samples from patients. | |
| ● | The INSPIRA ART100 System, an advanced form of life support system, better known by the medical industry as a cardiopulmonary bypass system, has been designed for use in procedures requiring cardiopulmonary bypass for six hours or less. |
The Company’s INSPIRA™ ART100 system received U.S. Food and Drug Administration 510(k) regulatory clearance for cardiopulmonary bypass procedures and Israeli Medical Equipment Division certification for extra-corporeal membrane oxygenation and cardiopulmonary bypass procedures. The Company’s other products, including the INSPIRA™ ART and HYLA™ blood sensor, have not yet been tested or used in humans and have not been approved by any regulatory entity.
| 2. | On April 1, 2024, the Company entered into a purchase agreement with two investors in a registered direct offering (the “2024 April Offering”), pursuant to which the Company issued an aggregate of |
| 3. | On June 14, 2024, the Company entered into a purchase agreement with an individual private investor in a registered direct offering (the “2024 June Offering”), pursuant to which the Company issued: (i) |
| 4. | On December 27, 2024, the Company entered into a purchase agreement with several investors in a private placement financing (the “December Private Placement”), pursuant to which the Company issued (i) an aggregate of |
F-10
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 1 - GENERAL (CONT.):
| 5. | The accompanying financial statements (the “Financial Statements”)
have been prepared assuming that the Company will continue as a going concern. To date, the Company is in its development stage. Therefore,
the Company has suffered recurring losses from operations and negative cash flows from operations since inception. As of December 31,
2024, the Company had incurred accumulated losses of $ |
| 6. | Our offices are located in Ra’anana, Israel. On October 7, 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Following the attack, Israel declared war against Hamas and the Israeli military began to call-up reservists for an active duty. Other regional hostilities, since October 7, 2023, concurrently became more pronounced. This includes and has included a northern front war igniting between Israel and Hezbollah, which as of February 24, 2025 we are under a ceasefire, hostilities between Israel and Iran, which have included Iranian strikes against Israel in April 2024 and October 2024, and subsequent retaliation by Israel to both instances, and a continued conflict between Israel and the Houthi Movement in Yemen. |
As of the date of these Financial Statements, these events have no material impact on the Company’s operations.
| 7. | Although we do not currently conduct business in Russia and Ukraine, the escalation of geopolitical instability in Russia and Ukraine as well as currency fluctuations in the Russian Ruble has had a negative impact on worldwide markets. Such impact may negatively impact our supply chain, our operations and future growth prospects in that region. As a result of the crisis in Ukraine, both the U.S. and other countries have implemented sanctions against certain Russian individuals and entities. Our global operations expose us to risks that could adversely affect our business, financial condition, results of operations, cash flows or the market price of our securities, including the potential for increased tensions between Russia and other countries resulting from the current situation involving Russia and Ukraine, tariffs, economic sanctions and import-export restrictions imposed, and retaliatory actions, as well as the potential negative impact on our potential business and sales in the region. Current geopolitical instability in Russia and Ukraine and related sanctions by the U.S. and other governments against certain companies and individuals may hinder our ability to conduct business with potential customers and vendors in these countries. |
| 8. | These Financial Statements were authorized by the Board of Directors on March 6, 2025. |
F-11
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:
The accompanying Financial Statements have been prepared in conformity with the U.S. GAAP. The significant accounting policies followed in the preparation of the Financial Statements are as follows:
A. Use of estimates:
The preparation of Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the Financial Statements, and the reported amounts of expenses during the reporting period.
Items subject to such estimates and assumptions include:
| ● | stock-based compensation expense; | |
| ● | fair value financial liabilities; | |
| ● | recognition, measurement, and disclosure of contingent liabilities; | |
| ● | Interest rate used for lease liability measurement. |
As of the date of issuance of the Financial Statements, the Company is not aware of any material specific events or circumstances that would require it to update its estimates, judgments, or to revise the carrying values of its assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the Financial Statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company’s Financial Statements.
B. Foreign Currency
The currency of the primary economic environment in which the operations of the Company are conducted is the U.S. dollar (“USD”). The Company’s funding and expected revenues are mostly in USD. Thus, the functional currency of the Company is in USD.
Transactions and balances originally denominated in USD are presented at their original amounts. Balances in non-USD currencies are translated into USD using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-USD transactions and other items in the statements of income (indicated below), the following exchange rates are used: (i) for transactions – exchange rates at transaction dates or average exchange rates; and (ii) for other items (derived from non-monetary balance sheet items such as depreciation and amortization) – historical exchange rates. Currency transaction gains and losses are presented in financial expenses (income), net as appropriate. The functional currency of the Company is USD.
F-12
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):
C. Property, Plant, and Equipment
Property and equipment are stated at cost. Depreciation is computed based on the straight-line method, over the estimated useful life of the assets.
Annual rates of depreciation are as follows:
| % | ||
| Computers | ||
| R&D equipment | ||
| Furniture and office equipment | ||
| Leasehold Improvements |
D. Inventory
Inventories are stated at the lower of cost or net realizable value. Inventory write-offs are provided to cover risks arising from slow-moving items, technological obsolescence, excess inventories, discontinued products, and for market prices lower than cost, if any.
The Company periodically evaluates the quantities on hand relative to historical and projected sales volume (which is determined based on an assumption of future demand and market conditions) and the age of the inventory. At the point of the loss recognition, a new lower cost basis for that inventory has been established.
Cost is determined for all types of inventory using the moving average cost method plus indirect costs.
E. Leases
The Company implemented Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”) using the modified retrospective approach for all lease arrangements as of such date. The Company leases office space and vehicles under operating leases.
Arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term.
The
lease liability was measured at the present value of the remaining lease payments, discounted using the Company’s incremental borrowing
rate. The weighted-average rate applied was
For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. Variable lease expenses are recorded when incurred.
F. Research and Development Costs.
Research and development expenses consist primarily of payroll, payroll related expenses, subcontractors, and materials. Costs are expensed as incurred.
G. Government Grants
The Company receives royalty-bearing grants from the Israeli Innovation Authority (“IIA”) for approved research and development projects Under Israeli law, royalties on the revenues derived from products and services developed using such grants, are payable to the Israeli Government.
The grants are linked to the exchange rate of the dollar to the New Israeli Shekel and bear interest of the Secured Overnight Financing Rate (“SOFR”) per year (SOFR is a benchmark interest rate which replaced LIBOR).
F-13
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):
The amounts of grants received and recorded into income should be disclosed for each period presented. The research and development grants are presented in the statement of operations as an offset to related research and development expenses. Companies are required to pay royalties in connection with such grants at specified rates, up to the total dollar-linked amount of such grants. research and development (“R&D”). The Company did not generate sales as of December 31, 2024; therefore, no liability was recorded in these Financial Statements.
H. Finance Income and Expenses.
Finance income is composed of interest on deposits and revaluation of financial liabilities at fair value, while finance expenses are composed of the revaluation of certain financial liabilities at fair value, bank charges and net currency exchange rates differences.
I. Current Taxes
The current tax liability is measured using the tax rates and tax laws that have been enacted or substantively enacted by the reporting date as well as adjustments required in connection with the tax liability in respect of previous years. The Company has no tax liability due to its carry forward losses.
J. Share-Based Compensation.
Share-based compensation expenses related to employees, directors and subcontractors’ options or restricted share units (“RSU”) which recognized based on their fair value, which is based on the fair value of the underlying Ordinary Shares as to the de-minimis exercise price using the graded vesting method.
The Company recognizes compensation expense for grants of share-based awards to its employees based on the estimated fair value on the grant date. Compensation cost for awards is recognized over the requisite service period, which approximates the vesting period. Share-based compensation is included in research and development, selling and marketing and general and administrative expenses. Forfeitures of equity grants are recognized as incurred.
All issuances of stock options or other equity instruments to non-employees as consideration for goods or services received by the Company are accounted for based on the fair value of the equity instruments issued.
K. Warrants and Pre-Funded Warrants
The Company issues warrants and pre-funded warrants as part of its financing activities or compensation arrangements. Warrants are derivative financial instruments that entitle the holder to purchase a specified number of the Company’s Ordinary Shares at a predetermined exercise price. Warrants and pre-funded warrants issued by the Company may have various terms, including expiration dates, exercise prices, and conditions.
The Company classifies warrants as either equity or liabilities upon issuance, based on specific terms and conditions and in accordance with Accounting Standard Codification (“ASC”) 815, Derivatives and Hedging. Warrants and pre-funded warrants are classified as equity if they meet the criteria for equity classification outlined in ASC 815-40. Otherwise, warrants are classified as liabilities.
L. Severance
Israeli
labor law generally requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain other
circumstances. The Company’s pension and severance pay liabilities are covered mainly by insurance policies. Pursuant to section
14 of the Israeli Severance Compensation Act, 1963 (“Section 14”), the Company’s employees are entitled to monthly
deposits, at a rate of
F-14
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):
M. Basic and Diluted Loss Per Share
Basic and diluted loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of Ordinary Shares and pre-funded warrants outstanding during the financial year, adjusted for Ordinary Shares and pre-funded warrants issued during the year, if applicable.
N. Fair Value Measurements
The Company measures and discloses fair value in accordance with the Financial Accounting Standards Board (“FASB”), ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, there exists a three-tier fair-value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level 1 – unadjusted quoted prices are available in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date.
Level 2 – pricing inputs are other than quoted prices in active markets that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.
Level 3 – pricing inputs are unobservable for the non-financial asset or liability and only used when there is little, if any, market activity for the non-financial asset or liability at the measurement date. The inputs into the determination of fair value require significant management judgment or estimation. Level 3 inputs are considered as the lowest priority within the fair value hierarchy.
This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.
The fair value of cash is based on its demand value, which is equal to its carrying value. Additionally, the carrying value of all other short-term monetary assets and liabilities are estimated to be equal to their fair value due to the short-term nature of these instruments.
O. Concentration of Credit Risk
The Company maintains certain cash balances in a well-known Israeli banks and U.S based banks.
Part of the Company’s operating expenses are denominated in New Israeli Shekel (“NIS”), and therefore, subject to foreign currency risk.
F-15
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):
P. Cash and Cash Equivalent
Cash equivalents are highly liquid investments that are readily convertible into cash, typically with an original maturity of three months or less from the date of purchase that are not restricted as to withdrawal or use and are readily convertible to known amounts of cash.
Restricted cash consists of funds that are contractually restricted to bank guarantee due to rental agreements. The Company has presented restricted cash separately from cash and cash equivalents in the balance sheets.
Bank
deposits with maturities of more than three months, but less than one year, and which are not restricted are included in short-term deposits.
Such deposits are stated at cost which approximates market value. As of December 31, 2024 and December 31, 2023, the Company had short-term
deposits in the amounts of $
Q. Segment Information
The Company has a single operating and reportable segment. The Company’s chief operating decision maker (“CODM”), who is the Chief Executive Officer, evaluates the performance of its business based on financial data consistent with the presentation in the accompanying Financial Statements for the purposes of making operating decisions, assessing financial performance, and allocating resources.
R. New accounting Pronouncements
Accounting Standards Adopted in 2024
In March 2023, the FASB issued Accounting Standard Updated No. 2023-01 “Lease (Topic 842)”. Topic 842 requires that entities determine whether a related party arrangement between entities under common control (hereinafter referred to as a common control arrangement) is a lease. If the arrangement is determined to be a lease, an entity must classify and account for the lease on the same basis as an arrangement with an unrelated party (on the basis of legally enforceable terms and conditions).That represents a change from the requirements of Topic 840, Leases, which required that an entity classify and account for an arrangement on the basis of economic substance when those terms and conditions were affected by the related party nature of the arrangement. The amendments in this Update affect all lessees that are a party to a lease between entities under common control in which there are leasehold improvements. The amendments apply to all entities (that is, public business entities, private companies, not-for-profit. The Company adopted ASU 2023-01 on January 1, 2024, its adoption did not have a material impact on the Financial Statements and related disclosures.
In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820), “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions” which clarifies that contractual restrictions on equity security sales are not considered part of the security unit of account and, therefore, are not considered in measuring fair value. In addition, the restrictions cannot be recognized and measured as separate units of account. Disclosures on such restrictions are also required. The amendments are effective for Fiscal years beginning after December 15, 2023, and interim periods within those fiscal years on a prospectively basis. The Company expects that ASU 2022-03 will not have a material impact on its Financial Statements and related disclosures.
F-16
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment. The ASU’s amendments are effective for all public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of this pronouncement on our Financial Statements.
Accounting Pronouncements Issued but Not Yet Adopted
In December 2023, the FASB issued ASU 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, which addresses the accounting and disclosure requirements for certain crypto assets. This ASU requires entities to subsequently measure certain crypto assets at fair value, with changes in fair value recorded in net income in each reporting period. In addition, entities are required to provide additional disclosures about the holdings of certain crypto assets. The ASU’s amendments are effective for all entities holding assets that meet certain scope criteria for fiscal years beginning after December 15, 2024, including interim periods within those years. Early adoption is permitted for both interim and annual periods. If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. We do not expect this pronouncement to have a material impact on our Financial Statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. Under this ASU, public entities must annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). This ASU’s amendments are effective for all entities that are subject to Topic 740, Income Taxes, for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of this pronouncement on our disclosures.
NOTE 3 – DEPOSITS:
The Company’s deposits consist of short-term bank deposits with maturities of more than three months but less than one year. The deposits bear annual interest. Interest earned is recorded as finance income, net in the statement of operations during the years for which the Company held short-term deposits.
As
of December 31, 2024, the Company had a deposit in NIS at Bank Leumi in the amount of $
As
of December 31, 2023, the Company had a deposit in USD at Bank Leumi in the amount of $
F-17
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 4 - OTHER CURRENT ASSETS:
| December 31, 2024 | December 31,
2023 | |||||||
| Prepaid expenses | ||||||||
| Institutions | ||||||||
| Restricted Cash | ||||||||
| Others | ||||||||
| Total | ||||||||
NOTE 5 - INVENTORY
| December 31, 2024 | December 31,
2023 | |||||||
| Raw materials | ||||||||
| Work in progress | ||||||||
| Finished good (*) | ||||||||
| Total | ||||||||
(*)
NOTE 6 - PROPERTY AND EQUIPMENT, NET:
For the year ended December 31, 2024:
| Computers | Leasehold improvements | R&D equipment | Furniture and office equipment | Total | ||||||||||||||||
| Cost | ||||||||||||||||||||
| At January 1, 2024 | ||||||||||||||||||||
| Additions | ||||||||||||||||||||
| At December 31, 2024 | ||||||||||||||||||||
| Accumulated depreciation | ||||||||||||||||||||
| At January 1, 2024 | ||||||||||||||||||||
| Depreciation | ||||||||||||||||||||
| At December 31, 2024 | ||||||||||||||||||||
| Net book value: | ||||||||||||||||||||
| As of December 31, 2024 | ||||||||||||||||||||
F-18
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 6 - PROPERTY AND EQUIPMENT, NET (CONT.):
For the year ended December 31, 2023:
| Computers | Leasehold improvements | Development equipment | Furniture and office equipment | Total | ||||||||||||||||
| Cost | ||||||||||||||||||||
| At January 1, 2023 | ||||||||||||||||||||
| Additions | ||||||||||||||||||||
| At December 31, 2023 | ||||||||||||||||||||
| Accumulated depreciation | ||||||||||||||||||||
| At January 1, 2023 | ||||||||||||||||||||
| Depreciation | ||||||||||||||||||||
| At December 31, 2023 | ||||||||||||||||||||
| Net book value: | ||||||||||||||||||||
| As of December 31, 2023 | ||||||||||||||||||||
NOTE 7 - OTHER ACCOUNTS PAYABLE:
| December 31, 2024 | December 31, 2023 | |||||||
| Employees’ salaries and related liabilities | ||||||||
| Related parties | ||||||||
| Accrued expenses | ||||||||
| Other | ||||||||
| Total | ||||||||
NOTE 8 - COMMITMENTS AND CONTINGENCIES
A. Royalties to the IIA:
In
September 2019, the IIA approved a grant to the Company for the development of intravenous blood oxygenation system for an aggregate
budget of NIS
F-19
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 8 - COMMITMENTS AND CONTINGENCIES (CONT.):
In
October 2023, the IIA approved a grant to support another development project of the Company at an aggregate budget of NIS
The
program is for the period beginning January 2024 through March 2025, and as of December 31, 2024, the Company received total funds in
the amount of NIS
According
to the agreements with the IIA, The Company will pay royalties of
The
Company had not generated sales as of December 31, 2024; therefore, no liability was recorded in these Financial Statements. As of December
31, 2024, the maximum obligation with respect to the grants received from the IIA, contingent upon entitled future sales, is $
The Company has obligations regarding know-how, technology, or products, not to transfer the information, rights thereon and production rights which derive from the research and development without the IIA Research Committee approval.
B. Legal Claims
In the normal course of business, various legal claims and other contingent matters may arise. Management believes that any liability that may arise from such matters would not have a material adverse effect on the Company’s results of operations or financial condition as of and for the years ended December 31, 2024, and 2023.
On December 12, 2021, the Company terminated its employment agreement with Dr. Udi Nussinovitch, one of its founders who served as the Company’s Chief Scientific Officer since March 2018. On February 24, 2022, the Company sued Mr. Nussinovitch for breach good faith and his fiduciary duties as a shareholder and former officer of the Company. On November 9, 2022, Mr. Nussinovitch filed a Statement of Claim against the Company,, as well as a Statement of Claim with the regional labor court in Tel Aviv, Israel on November 8, 2022. Mr. Nussinovitch alleged certain deficiencies in the Company’s Extraordinary General Meeting of Shareholders held on Friday, December 17, 2021, resulting from his status as a minority shareholder. In addition, with respect to the labor dispute, Mr. Nussinovitch is seeking renumeration and the issuance of Ordinary Shares.
On July 19. 2023, a partial hearing about the labor dispute was held, in which the parties were required by the court to file their positions on a stay of the proceeding pending the decision on the case initiated by Mr. Nussinovitch in the District Court. On January 21, 2024, a partial hearing about the civil case was held. During the hearing, the court suggested the parties consider the possibility of resolving the case through an out-of-court arrangement or mediation. The parties agreed to a mediation process which did not succeed. On January 7, 2025, Mr. Nussinovitch filed a motion to amend his Statement of Claim, requesting to modify the requested relief. Instead of the original remedies sought, Mr. Nussinovitch now requests that the Company or Mr. Ben Noon and Mr. Hayon purchase all of his rights and shares in the Company at their average value from the date of the Company’s initial public offering until the date of the general meeting held on December 17, 2021. On January 13, 2025, a pretrial hearing was held. The court denied Mr. Nussinovitch’s motion to amend and instructed him to notify whether he wishes to withdraw his original claim or maintain it. As of the date of these Financial Statements, Mr. Nussinovitch has not yet provided his response.
As of the date of these Financial Statements, the Company believes that the claims will result in no payments by the Company.
F-20
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 9 – LEASE LIABILITIES
Lease Commitments – Operating Leases:
In
September 2021, the Company entered into a lease agreement for its facilities in Ra’anana, Israel. The lease agreement is for a
period of 69 months commencing September 1, 2021, and the Company began to pay lease and related expenses after completing 3 months of
lease. The Company has the option to shorten the period and terminates the lease agreement after completing 45 months of rent by paying
an amount of NIS
The
Company has various operating leases for vehicles that expire through 2027. The Company leases vehicles for approximately three-year
periods from multiple different leasing companies and from time to time increases or decreases the number of leased vehicles according
to its current needs. The leased vehicles are used by the Company’s headquarters staff and other employees whose employment agreements
include an obligation on the Company to provide a vehicle. The agreements with the leasing companies include termination options, allowing
for early cancellation by paying a penalty of
The
total expenses related to the leases were $
The right-of-use asset and lease liability are initially measured at the present value of the lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate based on the information available at the date of determining the present value of the lease payments.
The Company’s incremental borrowing rate is estimated to approximate the interest rate on similar terms and payments and in economic environments where the leased asset is located.
The
Company has various operating leases for vehicles that expire through 2027.
December 31, 2024 | December 31, 2023 | |||||||
| Operating lease liabilities, current | ||||||||
| Operating lease liabilities long-term | ||||||||
| Total operating lease liabilities | ||||||||
| Weighted Average of Remaining Lease Term | ||||||||
| Weighted-average discount rate - operating leases | % | % | ||||||
F-21
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 9 – LEASE LIABILITIES (CONT.):
Lease payments for the Company’s right-of-use assets over the remaining lease periods as of December 31, 2024, are as follows:
| Year ended December 31, | U.S. dollars in thousands | |||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| Total undiscounted lease payment | ||||
| Less: Interest (*) | ( | ) | ||
| Present value of lease liabilities | ||||
(*)
NOTE 10 – FINACIAL LIABILITIES AT FAIR VALUE:
December 31, 2024 | December 31, 2023 | |||||||
| Financial liability (A) | ||||||||
| Private warrants (B) | ||||||||
| Total | ||||||||
A Financial Liability
| 1. | The Company agreed to pay fees of |
| 2. | The Company agreed to pay fees of |
The
financial liability fair value as of December 31, 2024, and 2023 is $
F-22
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 10 – FINACIAL LIABILITIES AT FAIR VALUE (CONT.):
B Private warrants
On
December 26, 2023, the Company entered into a certain securities purchase agreement (Note 11.3), pursuant to which it issued unregistered
warrants, to purchase up to an aggregate of
The Private Warrants include cashless exercise mechanism, according to the terms specified in the agreement.
The Private Warrants may create obligation to transfer cash to the investors at fundamental transactions within the Black Scholes option pricing framework.
Therefore, the Company accounts for the Private Warrants as financial liability instruments that are measured at fair value and recognized financial expenses or income through profit and loss.
The company measured fair value by using Black-Scholes option pricing model;
The key inputs that were used in the private warrants fair value as of December 31, 2023, were:
| ● | risk-free interest rate | |
| ● | expected volatility | |
| ● | expected dividend yield of | |
| ● | expected term of warrants – |
The key inputs that were used in the private warrants fair value as of December 31, 2024, were:
| ● | risk-free interest rate | |
| ● | expected volatility | |
| ● | expected dividend yield of | |
| ● | expected term of warrants – |
The
fair value of the Private Warrants as of December 31, 2024 and 2023 was $
NOTE 11 – SHAREHOLDERS’ EQUITY:
A. Share capital:
| Number
of shares as of December 31, 2024 | Number
of shares as of December 31, 2023 | |||||||||||||||
| Authorized | Issued and outstanding | Authorized | Issued and outstanding | |||||||||||||
| Ordinary shares | ||||||||||||||||
| 1. | During the year ended December 31, 2022, the Company issued an aggregate amount of |
| 2. | On April 4, 2023, the Company entered into a sales agreement (the “Sales Agreement”) with Roth Capital Partners, LLC, as sales agent, pursuant to which the Company could offer and sell, from time to time, through the sales agent, Ordinary Shares pursuant to an at-the-market facility (“ATM”). In 2023, the Company sold |
F-23
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 11 - SHAREHOLDERS’ EQUITY (CONT.):
| 3. | On December 26, 2023, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional investor in a registered direct offering (the “Registered Direct Offering”), pursuant to which the Company issued (i) |
The Company concluded that the Pre-Funded Warrants are not within the scope of ASC480. Further, applying ASC 815-40, the Company concluded that the pre-funded warrants are indexed to the Company’s own stock and meet the conditions for equity classification, and thus should be presented within equity.
As for the common warrants, the Company concluded that they should be classified as a liability under ASC 815-40, as they are not indexed to the Company’s own stock.
The
pre-funded warrants were exercised on the same day and the day after the transaction in full in an exercise price of $
The
aggregate proceeds received by the Company from the Registered Direct Offering were approximately $
The
Company issued the placement agent in the Registered Direct Offering a number of warrants equal to a total of
The
Placement Agent Warrants were substantially on the same terms as the Warrants issued to the investor in the offering, except an exercise
price of $
Those cash and non-cash issuance costs were accounted proportionally to issuance expenses and decrease of additional paid in capital, according to the ratio of the liability versus equity in the Registered Direct offering.
| 4. | During the year ended December 31, 2023, the Company issued an aggregate amount of |
| 5. | On April 1, 2024, the Company completed its 2024 April Offering, whereby the Company sold |
| 6. | On May 20, 2024, the Company issued warrant to purchase |
| 7. | On June 14, 2024, the Company completed its 2024 June Offering, whereby the Company sold: (i) |
Net
proceeds received by the Company from the 2024 June Offering were approximately $
F-24
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 11 - SHAREHOLDERS’ EQUITY (CONT.):
The
Company also received $
The Company concluded that the June Pre-Funded Warrants are not within the scope of ASC 480. Further, applying ASC 815-40, the Company concluded that the June Pre-Funded Warrants are indexed to the Company’s own stock and meet the conditions for equity classification, and thus should be presented within equity.
The
Company issued the June Placement Agent in the agreement warrants equal to a total of
The
Company accounting treatment for the June Placement Agent Warrants as equity-classified instruments (as part of additional paid in capital),
based on an assessment of ASC 718. The fair value of the June Placement Agent Warrants at the issuance date was $
The cash and non-cash issuance costs were recorded against additional paid in capital, due to the classification of the Ordinary Shares and the June Pre-Funded Warrants as equity instrument.
| 8. | On June 30, 2024, the Company issued |
| 9. | On December 27, 2024, the Company completed its December Private Placement, whereby the Company sold (i) |
F-25
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 11 - SHAREHOLDERS’ EQUITY (CONT.):
The Company concluded that the December Private Warrants and December Pre-Funded Warrants are not within the scope of ASC 480. Further, applying ASC 815-40, the Company concluded that the December Private Warrants and December Pre-Funded Warrants are indexed to the Company’s own stock and meet the conditions for equity classification, and thus should be presented within equity.
The
gross proceeds received by the Company from the December Private Offering were approximately $
The cash and non-cash issuance costs were recorded against additional paid in capital.
| 10. | During the year ended December 31, 2024, the Company issued an aggregate amount of |
B. Warrants reserves -Composition and movements:
| 1. |
| Number of Warrants | Weighted-average exercise price | Weighted average remaining contractual term (in years) | ||||||||||
| Balance as of December 31, 2023 | ||||||||||||
| Issued | ||||||||||||
| Exercised | ( | ) | ||||||||||
| Expired | ( | ) | ||||||||||
| Balance as of December 31, 2024 | ||||||||||||
| 2. |
Exercise Price | Warrants December 31, 2024 | Expiration date | ||||
| Balance as of December 31, 2024 | ||||||
F-26
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 11 - SHAREHOLDERS’ EQUITY (CONT.):
C. Loss per share:
Loss per share has been calculated using the weighted average number of Ordinary Shares and pre-funded warrants in issue during the relevant financial periods, the weighted average number of equity shares in issue and profit for the period as follows:
| Year
ended December 31, 2024 | Year
ended December 31, 2023 | Year
ended December 31, 2022 | ||||||||||
| Loss for the period | ||||||||||||
| Total number of Ordinary Shares | ||||||||||||
| Weighted average number of Ordinary Shares and pre-funded warrants | ||||||||||||
| Basic and diluted loss per share | ( | ) | ( | ) | ( | ) | ||||||
NOTE 12 - RESEARCH AND DEVELOPMENT EXPENSES:
| Year
ended December 31, 2024 | Year
ended December 31, 2023 | Year
ended December 31, 2022 | ||||||||||
| Salary and related expenses | ||||||||||||
| Materials and related expenses | ||||||||||||
| Share based payment | ||||||||||||
| Depreciation | ||||||||||||
| Subcontractors | ||||||||||||
| IIA participation | ( | ) | ||||||||||
| Other | ||||||||||||
| Total | ||||||||||||
F-27
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 13 - GENERAL AND ADMINISTRATIVE EXPENSES:
| Year
ended December 31, 2024 | Year
ended December 31, 2023 | Year
ended December 31, 2022 | ||||||||||
| Professional fees | ||||||||||||
| Salary and related expenses | ||||||||||||
| Share-based payment | ||||||||||||
| Director fees | ||||||||||||
| Insurance expenses | ||||||||||||
| Office maintenance | ||||||||||||
| Depreciation | ||||||||||||
| Travel abroad | ||||||||||||
| Fundraising expenses | ||||||||||||
| Others | ||||||||||||
| Total | , | |||||||||||
NOTE 14 - SALES AND MARKETING EXPENSES:
| Year
ended December 31, 2024 | Year
ended December 31, 2023 | Year
ended December 31, 2022 | ||||||||||
| Salary and related expenses | ||||||||||||
| Share-based payment | ||||||||||||
| Professional fees | ||||||||||||
| Other | ||||||||||||
NOTE 15– FINANCIAL (INCOME) AND EXPENSES:
| Year
ended December 31, 2024 | Year
ended December 31, 2023 | Year
ended December 31, 2022 | ||||||||||
| Revaluation of financial liabilities at fair value through profit or loss | ( | ) | ( | ) | ||||||||
| Foreign currency transaction income | ( | ) | ( | ) | ||||||||
| Finance expense in respect of lease liability | ( | ) | ||||||||||
| Others | ( | ) | ( | ) | ||||||||
| Total expenses (Income) | ( | ) | ( | ) | ||||||||
F-28
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 16 - TAXES ON INCOME:
| A. | Taxes on income: |
The
Israeli corporate tax rate was
| B. | Net operating losses carry forwards: |
Carryforward
tax losses of the Company as of December 31, 2023, amounted to approximately $
Carryforward
tax losses of the Company as of December 31, 2024, amounted to approximately $
The deferred tax assets and liabilities are composed of the following:
| December 31, 2024 | December 31, 2023 | |||||||
| Deferred tax assets: | ||||||||
| Net operating loss carryforward | ||||||||
| Accrued expenses | ||||||||
| R&D temporary differences | ||||||||
| Fund raising costs 2023 | ||||||||
| Operating lease liability | ||||||||
| Total deferred tax assets | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Deferred tax liabilities: | ||||||||
| Total deferred tax liabilities | ||||||||
| Net deferred taxes | ||||||||
| Year
ended December 31, 2024 | Year
ended December 31, 2023 | Year
ended December 31, 2022 | ||||||||||
| Loss before taxation | ( | ) | ( | ) | ( | ) | ||||||
| Theoretical tax credit at applicable statutory rate: | ( | ) | ( | ) | ( | ) | ||||||
| Non-allowable expenses | ( | ) | ( | ) | ( | ) | ||||||
| Temporary differences and tax losses for which no Deferred Tax Asset is recognized | ( | ) | ( | ) | ( | ) | ||||||
| Income tax benefit | ||||||||||||
F-29
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 17 – SHARE-BASED PAYMENT:
| 1. | On
March 24, 2022, the Company’s board of directors (“Board of directors”) approved a grant of |
| 2. | On
March 24, 2022, the Company’s Board of Directors approved a grant of |
| 3. | On
April 6, 2022, the Company’s Board of Directors approved a grant of |
| 4. | On
May 19, 2022, the Company’s Board of Directors approved a grant of |
| 5. | On
November 22, 2022, the Company’s Board of Directors approved a grant of |
| 6. | On
January 22, 2024, the Company’s Board of Directors approved a grant of |
| 7. | On
February 5, 2024, the Company’s Board of Directors approved a grant of |
The fair value of all granted options was estimated by using the Black Scholes option pricing model, which was aimed to model the value of the Company’s assets over time. The simulation approach was designed to take into account the terms and conditions of the share options, as well as the capital structure of the Company and the volatility of its assets, on the date of grant based on certain assumptions.
The following inputs were used to measure the fair value of the option at grant date:
| March
24, 2022 | January
22, 2024 | February
5, 2024 | |||||
| (i) | Expected volatility | ||||||
| (ii) | Dividend rate | ||||||
| (iii) | Expected term (vesting period) | Three years | Three years | ||||
| (iv) | Contractual life | Ten years | Ten years | ||||
| (v) | Free risk rate |
F-30
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 17 – SHARE-BASED PAYMENT (CONT.):
The fair value of all granted RSUs was the Company’s quote price at the grant date.
During the
year ended December 31, 2024, the Company recorded share-based payment expenses to employees, directors and subcontractors in the amount
of $
During the
year ended December 31, 2023, the Company recorded share-based payment expenses to employees, directors and subcontractors in the amount
of $
During the
year ended December 31, 2022, the Company recorded share-based payment expenses to employees, directors and subcontractors in the amount
of $
The options to services providers and advisers outstanding as December 31, 2024, 2023 and 2022 were as follows:
| Year
ended December 31, 2024 | Year
ended December 31, 2023 | Year
ended December 31, 2022 | ||||||||||||||||||||||
| Number
of options | Weighted
average Exercise price NIS | Number
of options | Weighted
average Exercise price NIS | Number
of options | Weighted
average Exercise price NIS | |||||||||||||||||||
| Outstanding at beginning of year | ||||||||||||||||||||||||
| Reclassified to employees and directors | ||||||||||||||||||||||||
| Granted | ||||||||||||||||||||||||
| Exercised | ( | ) | ||||||||||||||||||||||
| Forfeited | ||||||||||||||||||||||||
| Options outstanding | ||||||||||||||||||||||||
| Options exercisable | ||||||||||||||||||||||||
| Share-based payment expenses | $ | $ | $ | |||||||||||||||||||||
The RSUs to services providers and advisers outstanding as of December 31, 2024, 2023 and 2022 were as follows:
| Year
ended December 31, 2024 | Year
ended December 31, 2023 | Year
ended December 31, 2022 | ||||||||||
| Number
of RSUs | Number
of RSUs | Number
of RSUs | ||||||||||
| Outstanding at beginning of year | ||||||||||||
| Granted | ||||||||||||
| Vested | ||||||||||||
| RSUs outstanding | ||||||||||||
| RSU’s Vested | ||||||||||||
| Share-based payment expenses | $ | $ | $ | |||||||||
F-31
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 17 - SHARE BASED PAYMENT (CONT.):
The options to employees and directors outstanding as of December 31, 2024, 2023 and 2022 were as follows:
| Year
ended December 31, 2024 | Year
ended December 31, 2023 | Year
ended December 31, 2022 | ||||||||||||||||||||||
| Number
of options | Weighted
average Exercise price NIS | Number
of options | Weighted
average Exercise price NIS | Number
of options | Weighted
average Exercise price NIS | |||||||||||||||||||
| Outstanding at beginning of year | ||||||||||||||||||||||||
| Granted | ||||||||||||||||||||||||
| Exercised | ||||||||||||||||||||||||
| Forfeited | ||||||||||||||||||||||||
| Options outstanding | ||||||||||||||||||||||||
| Options exercisable | ||||||||||||||||||||||||
| Share-based payment expenses | $ | $ | - | $ | - | |||||||||||||||||||
The RSUs to employees and directors outstanding as of December 31, 2024, 2023 and 2022 were as follows:
| Year
ended December 31, 2024 | Year
ended December 31, 2023 | Year
ended December 31, 2022 | ||||||||||
| Number
of RSUs | Number
of RSUs | Number
of RSUs | ||||||||||
| Outstanding at beginning of year | ||||||||||||
| Granted | ||||||||||||
| Forfeited | ||||||||||||
| Vested | ||||||||||||
| RSUs outstanding | ||||||||||||
| RSU’s Vested | ||||||||||||
| Share-based payment expenses | $ | $ | $ | |||||||||
F-32
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO FINANCIAL STATEMENTS
In thousands $ (except share and per share data)
NOTE 18 - RELATED PARTIES:
The following transactions arose with related parties
Transactions and balances with related parties:
| 1. |
| December 31,
2024 | December 31,
2023 | December 31, 2022 | ||||||||||
| Salary and related expenses – officers and directors | ||||||||||||
| Share based payment – officers and directors | ||||||||||||
| 2. |
| Name | Nature of transaction | December 31, 2024 | December 31, 2023 | |||||||
| Officers | ( | ) | ( | ) | ||||||
| Directors | ( | ) | ( | ) | ||||||
NOTE 19 - SUBSEQUENT EVENTS:
| 1. | Following the closing of the December Private Placement, $ |
| 2. | During January and February 2025, the Company received funds in the amount of NIS |
| 3. | On February 20, 2025, the Company’s Board of Directors approved a grant of |
| 4. | On February 20, 2025, the Company’s Board of Directors approved a grant of |
| 5. | On February 20, 2025, the Company’s Board of Directors approved a grant of |
F-33