Financial Performance - The company has incurred net losses of approximately $10.3 million and $16.9 million for the years ended December 31, 2022, and 2021, respectively, with an accumulated deficit of approximately $39 million as of December 31, 2022[51]. - The company has not generated any revenue from product sales and may never be profitable, as it has no products approved for marketing in any jurisdiction[55]. - As of December 31, 2022, the company's cash and cash equivalents were approximately $13.9 million, with a working capital of approximately $12.4 million, expected to fund operations for the next 12 months[60]. - The company expects to incur significant and increasing operating losses for the foreseeable future until it can successfully commercialize its products[52]. Research and Development - The company anticipates significant increases in research and development expenses as it plans expanded studies and seeks marketing approvals for its products[52]. - The company has focused on developing its INSPIRA ART system, HYLA Blood Sensor, and ALICE device, but has limited operating history and experience in the medical device industry[50]. - The company is focused on developing respiratory support technology and its success relies on market acceptance and regulatory approvals for its products[69]. Market and Competition - Future revenue generation will depend on successful commercialization of products, which includes establishing sales, marketing, and distribution infrastructure[55]. - The company faces numerous risks related to product development, including regulatory approvals, market acceptance, and competition from existing solutions[65]. - The company may encounter significant competition from various companies with greater financial and marketing resources, impacting its market position[77]. - The company competes with major players in the ICU and acute respiratory care market, such as Boston Scientific and Medtronic, which have greater resources and market share[98][99]. - Intense competition in the medical device sector may result in price reductions, longer selling cycles, and lower product margins, impacting revenue potential[101]. Regulatory and Compliance Risks - The company is subject to extensive government regulation, and non-compliance could result in significant penalties and operational restrictions[131]. - The FDA regulates the company's product candidates as medical devices, requiring extensive compliance with safety and effectiveness standards[130]. - The company must comply with ongoing regulatory requirements post-marketing, including submitting periodic reports to the FDA as a condition of 510(k) clearance[144]. - Regulatory compliance with data protection laws, such as the California Consumer Privacy Act (CCPA), could lead to increased costs and potential liabilities[122]. - The company is required to manufacture products in accordance with federal, state, and foreign regulations, with potential consequences for non-compliance including recalls[150]. Funding and Financial Stability - The company may need to raise substantial additional funding, which may not be available on acceptable terms, potentially requiring curtailment of product development efforts[60]. - Significant revenue is expected to be derived from strategic relationships with distributors such as Innovimed and Glo-Med; failure to maintain these relationships could lead to a material decrease in revenues[70]. - The company may face difficulties in recruiting additional employees necessary for its growth, which could disrupt operations[93]. Legal and Litigation Risks - The company faces potential litigation risks that could harm its reputation and financial results[105]. - Product liability claims and recalls could lead to significant costs and management distractions, impacting business operations[106]. - The company may face significant litigation expenses and resource diversion due to potential claims of intellectual property infringement from third parties[202]. Economic and Market Conditions - The COVID-19 pandemic has caused disruptions that may adversely affect the company's business and results of operations, with ongoing uncertainties regarding its impact[67]. - Economic conditions, including the COVID-19 pandemic and geopolitical tensions, may adversely affect customer spending and overall business performance[107][111]. Intellectual Property - The company faces challenges in protecting intellectual property, which is critical for maintaining competitive advantage in the market[192]. - The company’s ability to commercialize products may be adversely affected by existing patents held by third parties, necessitating costly licenses or litigation[197]. - Changes in patent laws or their interpretation could increase uncertainties and costs related to the prosecution and enforcement of patent applications[203]. Employee and Management Risks - As of March 28, 2023, the company had 38 full-time employees, and the loss of key personnel could adversely affect its business operations[92]. - The company may face challenges in managing growth activities, potentially leading to increased expenses and reduced revenue generation capabilities[94]. International Operations - International expansion poses various risks, including regulatory, operational, and financial challenges that could adversely affect future operations[95][96]. - The company must obtain international regulatory registrations and approvals to market its products outside the United States, which can be expensive and time-consuming[166]. Shareholder and Market Dynamics - The trading price of the company's Ordinary Shares and Warrants has been volatile since the initial public offering in July 2021, influenced by broader market conditions and specific industry factors[212]. - The company has never paid cash dividends and does not anticipate doing so in the foreseeable future[218].

PART I [Key Information](index=11&type=section&id=ITEM%203.%20KEY%20INFORMATION.) The company faces significant financial, business, regulatory, intellectual property, and market-related risks [Risks Related to Financial Condition and Capital Requirements](index=12&type=section&id=D.%20Risk%20Factors%20-%20Financial%20Condition%20and%20Capital%20Requirements) The development-stage company faces ongoing operating losses, no product revenue, and requires substantial future funding Financial Performance Summary | Financial Metric | 2021 | 2020 | | :--- | :--- | :--- | | **Net Loss** | $17 million | $7.2 million | | **Accumulated Deficit (as of Dec 31, 2021)** | $28.8 million | - | - The company has not generated any revenue from product sales to date and its ability to achieve profitability is dependent on successfully developing and obtaining regulatory approval for its products[49](index=49&type=chunk) - As of December 31, 2021, the company had approximately **$23.7 million** in cash and cash equivalents, which is expected to fund operations only through July 2023, necessitating substantial additional capital for commercialization[53](index=53&type=chunk) [Risks Related to Business and Industry](index=16&type=section&id=D.%20Risk%20Factors%20-%20Business%20and%20Industry) Success hinges on ART system acceptance, intense competition, supply chain, pandemic, and regulatory challenges - The company's business is highly dependent on the successful development, manufacturing, and commercialization of its respiratory support products, which is a complex and uncertain process[58](index=58&type=chunk) - The company faces intense competition from major market players in the respiratory care market, including Boston Scientific, ResMed, Medtronic, and Philips Healthcare, who have significantly greater financial and marketing resources[88](index=88&type=chunk)[89](index=89&type=chunk) - The business is exposed to disruptions from the COVID-19 pandemic, which could adversely affect operations, personnel availability, and clinical trial timelines[60](index=60&type=chunk) - The company relies on third-party manufacturers and suppliers for components, making it vulnerable to supply shortages, increased costs, and quality control issues[71](index=71&type=chunk) [Risks Related to Product Development and Regulatory Approval](index=30&type=section&id=D.%20Risk%20Factors%20-%20Product%20Development%20and%20Regulatory%20Approval) Extensive and uncertain regulatory approval processes, including FDA and EU, pose significant risks to product commercialization - The company's products are subject to extensive and complex regulation by the FDA and foreign regulatory agencies, and failure to comply could result in significant enforcement actions, including fines, recalls, and prohibitions on sales[120](index=120&type=chunk)[121](index=121&type=chunk) - Obtaining FDA clearance (510(k)) or approval (PMA) is an expensive, lengthy, and uncertain process. The company plans a multi-step approach, including a 510(k) submission for its ECLS system, but delays or failure to secure approval would harm the business[122](index=122&type=chunk)[124](index=124&type=chunk)[128](index=128&type=chunk) - In the European Economic Area (EEA), products must comply with the EU Medical Devices Regulation (MDR) to receive a CE mark, which is required for sales. This process involves a conformity assessment by a Notified Body and evaluation of clinical data[129](index=129&type=chunk)[131](index=131&type=chunk) - Legislative reforms in the U.S. (such as changes to the 510(k) process) and the EU (such as the new MDR) could make it more difficult and costly to obtain and maintain regulatory approvals for the company's products[159](index=159&type=chunk)[166](index=166&type=chunk) [Risks Related to Intellectual Property](index=42&type=section&id=D.%20Risk%20Factors%20-%20Intellectual%20Property) Protecting intellectual property, including patents and trade secrets, is crucial but faces global enforcement and infringement risks - The company's success relies on its ability to protect its patent rights and trade secrets. There is no guarantee that its submitted patent applications will result in registered patents, which could allow competitors to manufacture similar products[179](index=179&type=chunk)[180](index=180&type=chunk) - The company may face infringement claims from third parties, which could block its ability to commercialize products and result in substantial damages or the need to obtain costly licenses[184](index=184&type=chunk)[186](index=186&type=chunk) - Changes in U.S. patent laws, such as the Leahy-Smith America Invents Act, could increase the uncertainties and costs surrounding patent prosecution and enforcement[190](index=190&type=chunk) - Protecting intellectual property rights globally is expensive and challenging, as the laws of some foreign countries do not protect these rights to the same extent as in the United States[196](index=196&type=chunk)[198](index=198&type=chunk) [Risks Related to Ownership of Ordinary Shares and Warrants](index=46&type=section&id=D.%20Risk%20Factors%20-%20Ownership%20of%20Ordinary%20Shares%20and%20Warrants) Share price volatility, significant insider control, no dividends, and foreign issuer exemptions pose risks to investors - The trading price of the company's Ordinary Shares (IINN) and Warrants (IINNW) has been and is expected to continue to be highly volatile[201](index=201&type=chunk) - As of March 13, 2022, principal shareholders, officers, and directors beneficially own approximately **30%** of the company's Ordinary Shares, allowing them to potentially exert significant control over shareholder matters[206](index=206&type=chunk) - The company qualifies as an "emerging growth company" and a "foreign private issuer," exempting it from certain SEC and Nasdaq governance and reporting requirements, which may offer less protection to investors compared to domestic U.S. issuers[208](index=208&type=chunk)[212](index=212&type=chunk) - The company may be classified as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes, which could result in negative tax consequences for U.S. shareholders[216](index=216&type=chunk) [Risks Related to Israeli Law and Our Operations in Israel](index=50&type=section&id=D.%20Risk%20Factors%20-%20Israeli%20Law%20and%20Operations) Israeli operations face regional instability, IIA grant restrictions, and unique corporate law challenges for M&A and legal enforcement - The company's operations are based in Israel, making it subject to potential political, economic, and military instability in the region, which could adversely affect business operations[220](index=220&type=chunk) - The company has received approximately **$800,000** in grants from the Israeli Innovation Authority (IIA). These grants require royalty payments of **3%** on future product sales and restrict the transfer of technology and manufacturing outside of Israel without IIA approval and potential penalties[225](index=225&type=chunk) - Provisions of Israeli corporate and tax law may delay or prevent a merger or acquisition, even if such a transaction would be favorable to shareholders[228](index=228&type=chunk)[229](index=229&type=chunk) - Enforcing U.S. court judgments against the company, its Israeli-based officers, and directors may be difficult in Israel, and asserting U.S. securities law claims in Israeli courts is challenging[230](index=230&type=chunk) [Information on the Company](index=53&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY.) Inspira Technologies develops the ART system for respiratory support, pursuing global approvals and partnerships in a competitive market [History and Development of the Company](index=53&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Incorporated in Israel in 2018, the company listed on Nasdaq in 2021 as an emerging growth and foreign private issuer - The company was incorporated in Israel in 2018 and listed on the Nasdaq Capital Market on July 16, 2021, under the symbols "IINN" and "IINNW"[232](index=232&type=chunk) Capital Expenditures Summary | Year | Capital Expenditures (USD) | | :--- | :--- | | 2021 | $182,000 | | 2020 | $23,000 | | 2019 | $31,000 | [Business Overview](index=54&type=section&id=B.%20Business%20Overview) The company develops the ART system, an artificial lung, pursuing global regulatory approvals, distribution, and IP protection for a large market - The company is developing the Augmented Respiration Technology (ART) system, a minimally invasive, extracorporeal respiratory support device designed to function as an external "artificial lung" and serve as an alternative to mechanical ventilation (MV)[238](index=238&type=chunk)[240](index=240&type=chunk) - The company's go-to-market strategy includes pursuing worldwide regulatory approvals, collaborating with leading medical centers, and establishing strategic distribution agreements. Agreements have been signed for distribution in Spain, Portugal, Poland, the Czech Republic, Slovakia, and six U.S. states[264](index=264&type=chunk)[301](index=301&type=chunk)[302](index=302&type=chunk)[303](index=303&type=chunk) - The company has completed approximately **40** pre-clinical in-vivo feasibility tests in swine models, which demonstrated the ART system's ability to temporarily increase oxygen gas exchange during induced respiratory failure[305](index=305&type=chunk)[306](index=306&type=chunk)[307](index=307&type=chunk) Key Patent Applications | Application Title | Filing Date | Status | | :--- | :--- | :--- | | A Cannula Fixation Device (IL 286271) | Sep 10, 2021 | Examination report received | | Dual Lumen Cannula and Methods of Use (PCT/IL2021/051335) | Nov 10, 2021 | International application filed | | Dual Lumen Cannula and Methods of Use (U.S. 17/523,811) | Nov 10, 2021 | Awaiting examination (expedited) | | Extracorporeal Oxygenation System... (PCT/IL2021/051431) | Dec 01, 2021 | International application filed | [Organizational Structure](index=87&type=section&id=C.%20Organizational%20Structure) Inspira Technologies Oxy B.H.N. Ltd. is an Israeli corporation with no subsidiaries - The company is an Israeli corporation and currently has no subsidiaries[356](index=356&type=chunk)[357](index=357&type=chunk) [Property, Plants and Equipment](index=88&type=section&id=D.%20Property,%20Plants%20and%20Equipment) The company leases approximately **670 square meters** for its operations in Ra'anana, Israel, until August 2027 - The company leases approximately **670 square meters** of office and R&D space in Ra'anana, Israel, with the lease ending in August 2027. The monthly rent is approximately **$14,218**[359](index=359&type=chunk) [Operating and Financial Review and Prospects](index=88&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS.) In 2021, operating and net losses significantly increased due to higher G&A and new marketing expenses, offset by strong IPO and warrant exercise proceeds [Operating Results](index=88&type=section&id=A.%20Operating%20Results) Operating and net losses significantly increased in 2021, primarily driven by higher general and administrative and new sales and marketing expenses Operating Performance Summary | Metric (USD in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | **Operating Loss** | 13,432 | 6,269 | | **Net Loss** | 16,955 | 7,228 | - General and administrative expenses increased by **209%** to **$7.6 million** in 2021, primarily due to higher share-based compensation, directors' fees, and costs associated with being a public company[383](index=383&type=chunk) - Sales and marketing expenses were **$1.95 million** in 2021, compared to none in 2020, as the company began building its go-to-market capabilities. Approximately **60%** of these expenses were related to share-based compensation[384](index=384&type=chunk) - Research and development expenses remained stable at **$3.9 million** in 2021, with increases in salaries and subcontractor costs being offset by decreases in materials expenses and IIA grant participation[381](index=381&type=chunk) [Liquidity and Capital Resources](index=93&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) The company's cash position significantly improved to **$23.7 million** by year-end 2021, primarily from **$30.4 million** in financing activities Cash Flow Summary | Cash Flow (USD in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | (7,875) | (1,876) | | Net cash used in investing activities | (246) | (26) | | Net cash provided by financing activities | 30,422 | 2,289 | | **Net increase in cash** | **22,299** | **387** | - Financing activities in 2021 provided **$30.4 million**, primarily from the IPO (**$14.7 million** net), exercise of tradable warrants (**$8.7 million** net), and convertible loans/SAFEs (**$7.2 million** net)[396](index=396&type=chunk) - The company ended 2021 with **$23.7 million** in cash and cash equivalents, up from **$0.5 million** at the end of 2020[392](index=392&type=chunk) [Directors, Senior Management and Employees](index=94&type=section&id=ITEM%206.%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES.) This section details the company's leadership, compensation, board practices, and employee count, highlighting Israeli governance differences [Directors and Senior Management](index=94&type=section&id=A.%20Directors%20and%20Senior%20Management) The leadership team includes co-founders Dagi Ben-Noon and Joe Hayon, supported by a six-member Board and Scientific Advisory Board - The senior management team consists of Dagi Ben-Noon (CEO), Joe Hayon (CFO, President), and Avi Shabtai (COO and VP of R&D)[402](index=402&type=chunk) - The Board of Directors is chaired by Prof. Benad Goldwasser and includes five other members[402](index=402&type=chunk)[407](index=407&type=chunk) [Compensation](index=99&type=section&id=B.%20Compensation) Aggregate compensation for directors and senior management totaled approximately **$6.9 million** in 2021, largely from share-based awards Executive Compensation Summary | Compensation Component (USD) | 2021 (8 persons) | | :--- | :--- | | Salary, bonuses, and related benefits | $936,521 | | Pension, retirement, and similar benefits | $105,772 | | Share-Based Compensation | $5,875,552 | | **Total** | **~$6,917,845** | - A new compensation policy for officers and directors was approved by shareholders on December 17, 2021, for a period of five years[460](index=460&type=chunk) [Board Practices](index=102&type=section&id=C.%20Board%20Practices) The six-member board, with four independent directors, follows Israeli corporate governance practices, differing from Nasdaq rules - The Board of Directors consists of **six** members, with **four** determined to be independent under Nasdaq rules[437](index=437&type=chunk) - The company has established an Audit Committee and a Compensation Committee, with Lior Amit, Limor Rozen, and Tal Parnes serving on both[451](index=451&type=chunk)[457](index=457&type=chunk) - As a foreign private issuer, the company follows Israeli law instead of certain Nasdaq rules regarding quorum requirements, compensation approval processes, and shareholder approval for specific corporate actions[434](index=434&type=chunk)[436](index=436&type=chunk) - **Quorum:** A quorum is two or more shareholders holding at least **25%** of voting rights, lower than the Nasdaq requirement of **33 1/3%**[620](index=620&type=chunk)[624](index=624&type=chunk) - **Officer Compensation:** Compensation is determined by the compensation committee and board, not necessarily by independent directors alone[620](index=620&type=chunk)[624](index=624&type=chunk) - **Shareholder Approval:** The company follows Israeli law for shareholder approval of corporate actions, which differs from Nasdaq Rule 5635 regarding acquisitions, equity compensation plans, and private placements[620](index=620&type=chunk)[624](index=624&type=chunk) [Employees](index=114&type=section&id=D.%20Employees) The company's workforce grew to **26** employees by year-end 2021, supplemented by contractors, with no union representation Employee Headcount | Date | Employee Count | | :--- | :--- | | Dec 31, 2021 | 26 (23 full-time, 3 part-time) | | Dec 31, 2020 | 9 (7 full-time, 2 part-time) | | Dec 31, 2019 | 7 (6 full-time, 1 part-time) | [Share Ownership](index=114&type=section&id=E.%20Share%20Ownership) The 2019 Equity Incentive Plan, amended in 2021, reserves over **4.1 million** shares for equity grants to employees and directors - The company's 2019 Equity Incentive Plan allows for the grant of options and RSUs to directors, employees, and consultants[502](index=502&type=chunk) - As of March 13, 2022, **4,180,898** Ordinary Shares were reserved for issuance under the 2019 Plan[502](index=502&type=chunk) [Major Shareholders and Related Party Transactions](index=115&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS.) Co-founders and insiders hold significant ownership, and related party transactions include employment agreements and past IPO-related settlements [Major Shareholders](index=115&type=section&id=A.%20Major%20Shareholders) Co-founders Dagi Ben-Noon and Joe Hayon are major shareholders, with executive officers and directors collectively owning **29.4%** Major Shareholder Summary | Shareholder | Position | Percentage Owned | | :--- | :--- | :--- | | Dagi Ben-Noon | CEO, Director | 10.52% | | Joe Hayon | CFO, President, Director | 10.52% | | Udi Nussinovitch | Former CSO | 6.61% | | **All Exec. Officers & Directors (8 persons)** | **Group** | **29.4%** | [Related Party Transactions](index=117&type=section&id=B.%20Related%20Party%20Transactions) Related party transactions include executive employment and equity agreements, plus a past settlement of a terminated ASX IPO plan - The company has standard employment, indemnification, and equity award agreements with its executive officers and directors[514](index=514&type=chunk)[515](index=515&type=chunk) - A previous plan to conduct an IPO on the Australian Securities Exchange (ASX) via an agreement with InSense Medical Pty Ltd (IML) was terminated in November 2020. A convertible loan from IML was settled through the issuance of **676,061** Ordinary Shares and **169,016** warrants to IML[517](index=517&type=chunk)[518](index=518&type=chunk)[520](index=520&type=chunk) [Financial Information](index=118&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION.) This section covers financial statement references, a legal proceeding regarding IPO services, and the company's no-dividend policy - The company is involved in a legal proceeding with Exchange Listing, LLC, a former consultant, regarding services provided for the IPO. The plaintiff seeks damages of approximately **$250,000** and **75,000** Ordinary Shares[524](index=524&type=chunk) - The company has never declared or paid cash dividends and does not intend to in the foreseeable future. Dividend payments are also restricted by Israeli Companies Law[525](index=525&type=chunk)[526](index=526&type=chunk) [Additional Information](index=120&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION.) This section details material contracts, Israeli tax laws, currency controls, and potential PFIC implications for U.S. shareholders [Taxation](index=121&type=section&id=E.%20Taxation) Israeli corporate tax, dividend withholding, capital gains, and potential adverse PFIC tax consequences for U.S. shareholders are discussed - The general corporate tax rate for Israeli companies is **23%** as of 2018[543](index=543&type=chunk) - Dividends paid to non-Israeli residents are generally subject to a **25%** withholding tax (or **30%** for a "substantial shareholder"), though this may be reduced by an applicable tax treaty[562](index=562&type=chunk) - For U.S. investors, there is a risk that the company could be considered a Passive Foreign Investment Company (PFIC). If so, U.S. Holders would be subject to adverse tax rules on distributions and gains, and the company does not intend to provide the information necessary for a QEF election[577](index=577&type=chunk)[578](index=578&type=chunk)[579](index=579&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=129&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK.) The company's main market risks are foreign currency exchange fluctuations, particularly NIS/USD, and minimal interest rate risk - The company's primary market risk is foreign currency exchange risk, as approximately **80%** of its expenses are denominated in NIS while its reporting currency is the U.S. dollar[594](index=594&type=chunk) - Interest rate risk is considered low, as the company's investments primarily consist of cash, cash equivalents, and short-term deposits[596](index=596&type=chunk) PART II [Use of Proceeds](index=130&type=section&id=ITEM%2014.%20MATERIAL%20MODIFICATIONS%20TO%20THE%20RIGHTS%20OF%20SECURITY%20HOLDERS%20AND%20USE%20OF%20PROCEEDS.) The company raised **$14 million** net from its July 2021 IPO, with proceeds used as outlined in the prospectus - The company completed its IPO on July 16, 2021, raising net proceeds of **$14 million** after deducting underwriting discounts and offering costs from the **$16 million** gross proceeds[604](index=604&type=chunk) [Controls and Procedures](index=130&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES.) Management deemed disclosure controls effective as of December 2021, with exemptions for internal control reporting as an emerging public company - Management concluded that as of December 31, 2021, the company's disclosure controls and procedures were effective[606](index=606&type=chunk) - The report does not include a management report or auditor attestation on internal control over financial reporting, due to exemptions for newly public and emerging growth companies[607](index=607&type=chunk)[608](index=608&type=chunk) [Principal Accountant Fees and Services](index=131&type=section&id=ITEM%2016C.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES.) Fees to principal accountant Ziv Haft increased to **$119,500** in 2021 for audit and fundraising-related services Principal Accountant Fees | Fee Type (USD) | 2021 | 2020 | | :--- | :--- | :--- | | Audit Fees | $119,500 | $107,500 | | **Total** | **$119,500** | **$107,500** | [Corporate Governance](index=132&type=section&id=ITEM%2016G.%20CORPORATE%20GOVERNANCE.) As a foreign private issuer, the company follows Israeli corporate governance, differing from Nasdaq rules on quorum, compensation, and shareholder approvals - The company follows Israeli corporate governance practices in lieu of certain Nasdaq rules, permitted under the foreign private issuer exemption[619](index=619&type=chunk)[620](index=620&type=chunk) - **Quorum:** A quorum is two or more shareholders holding at least **25%** of voting rights, lower than the Nasdaq requirement of **33 1/3%**[620](index=620&type=chunk)[624](index=624&type=chunk) - **Officer Compensation:** Compensation is determined by the compensation committee and board, not necessarily by independent directors alone[620](index=620&type=chunk)[624](index=624&type=chunk) - **Shareholder Approval:** The company follows Israeli law for shareholder approval of corporate actions, which differs from Nasdaq Rule 5635 regarding acquisitions, equity compensation plans, and private placements[620](index=620&type=chunk)[624](index=624&type=chunk) PART III [Financial Statements](index=135&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS.) Audited 2021 financial statements show significant asset and equity growth driven by IPO proceeds, despite increased comprehensive loss from operating expenses [Statements of Financial Position](index=139&type=section&id=Statements%20of%20Financial%20Position) Total assets grew to **$25.9 million** and equity turned positive to **$20.4 million** by year-end 2021, primarily due to IPO and warrant proceeds Statements of Financial Position Summary | (USD in thousands) | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **25,870** | **987** | | Cash and cash equivalents | 23,749 | 496 | | **Total Liabilities** | **5,516** | **2,691** | | **Total Equity** | **20,354** | **(1,704)** | [Statements of Comprehensive Loss](index=140&type=section&id=Statements%20of%20Comprehensive%20Loss) The company reported a net loss of **$17.0 million** and an operating loss of **$13.4 million** in 2021, driven by increased R&D, G&A, and marketing expenses Statements of Comprehensive Loss Summary | (USD in thousands, except per share data) | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Research and development expenses | 3,909 | 3,873 | 887 | | Sales and marketing expenses | 1,951 | - | - | | General and administrative expenses | 7,572 | 2,447 | 384 | | **Operating loss** | **13,432** | **6,269** | **1,271** | | **Total net loss** | **16,955** | **7,228** | **4,575** | | **Basic and diluted loss per share** | **(3.20)** | **(3.67)** | **(2.40)** | [Statements of Cash Flows](index=144&type=section&id=Statements%20of%20Cash%20Flows) Net cash used in operations increased to **$7.9 million** in 2021, while financing activities provided **$30.4 million**, resulting in a **$22.3 million** cash increase Statements of Cash Flows Summary | (USD in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | (7,877) | (1,876) | | Net cash used in investing activities | (246) | (26) | | Net cash provided by financing activities | 30,422 | 2,289 | | **Net increase in cash and cash equivalents** | **22,299** | **387** |

Exhibit 99.2 2021 Update inspirate | Highlights | 03 | | --- | --- | | Financial Summary | 04 | | CEO Operational Summary | 05 | | Core Technology | 08 | | Photos | 09 | | Financial Statements | 12 | | Additional Information | 19 | 19 2 Inspirations HIGHLIGHTS SUMMARY | $23.2M increase in our cash and cash equivalents to $23.7M | Cash | | Our business has shown strong resilience during these unprecedented times. | | --- | --- | --- | --- | | as of December 31, 2021, compared to $496,000 as of December 31, 2 ...