Inspira Technologies Oxy B.H.N. .(IINN) - 2023 Q4 - Annual Report

Executive Summary Inspira Technologies made significant progress in 2023, including FDA submissions, advanced technology development, and securing substantial distribution agreements, while exploring strategic partnerships CEO Commentary & Strategic Highlights Inspira Technologies' CEO highlighted significant progress in 2023, including FDA submissions for INSPIRA™ ART100 and planned submission for HYLA™ blood sensor. The company is advancing its INSPIRA™ ART Gen 2 and VORTX™ technologies, achieving high accuracy for HYLA™ and securing pre-conditional distribution agreements totaling up to $546 million, while also exploring strategic partnerships - Achieved significant progress in diversifying business development and reaching important milestones in 2023[2] - Submitted INSPIRA™ ART100 to the U.S. Food and Drug Administration (FDA) and plans to submit HYLA™ blood sensor for FDA clearance later in 2024[2] - Signed pre-conditional summary distribution agreements totaling up to $546 million, subject to product development and regulatory approvals[2] - Focused on working with potential strategic partners to leverage strengths of large corporations[2] Financial Performance Inspira Technologies reported reduced operating expenses and net loss in 2023, despite a decrease in cash and a significant increase in financial liabilities Full Year 2023 Financial Highlights Inspira Technologies reported a decrease in total operating expenses and a reduced net loss in 2023 compared to 2022, primarily due to a decline in share-based compensation and D&O insurance costs. Cash and cash equivalents decreased, while financial liabilities at fair value significantly increased Key Financial Metrics | Metric | 2023 (US$ thousands) | 2022 (US$ thousands) | Change (YoY) | | :-------------------------- | :------------------- | :------------------- | :----------- | | Total Operating Expenses | 12,133 | 14,893 | -18.53% | | Net Loss | 11,286 | 14,976 | -24.64% | Balance Sheet Highlights | Metric | Dec 31, 2023 (US$ thousands) | Dec 31, 2022 (US$ thousands) | Change (YoY) | | :-------------------------- | :--------------------------- | :--------------------------- | :----------- | | Cash and cash equivalents | 7,361 | 13,903 | -47.06% | | Financial liabilities at fair value | 1,470 | 26 | +5553.85% | Operating Expense Breakdown | Expense Category | 2023 (US$ thousands) | 2022 (US$ thousands) | Change (YoY) | | :-------------------------- | :------------------- | :------------------- | :----------- | | Research and development (R&D) | 7,320 | 8,183 | -10.55% | | General and administrative (G&A) | 4,063 | 5,375 | -24.41% | | Sales and marketing (S&M) | 746 | 1,328 | -43.82% | Business Updates Inspira Technologies achieved key milestones in late 2023, including high accuracy for its HYLA™ sensor, a grant for VORTX™, a new U.S. patent, FDA submission, and strategic agreements for clinical trials Recent Business Developments Inspira Technologies achieved several key milestones in late 2023, including 95% accuracy for its HYLA™ blood sensor, a grant for VORTX™ technology from the Israeli Innovation Authority, and a new U.S. patent for the INSPIRA™ ART device. The company also submitted its INSPIRA ART 100 to the FDA and signed a strategic agreement for clinical trials, contributing to potential revenues of over $546 million from distribution agreements - HYLA™ blood sensor achieved 95% accuracy compared to standard blood gas analyzers, enabling continuous and real-time blood monitoring[7] - Received a grant from the Israeli Innovation Authority (IIA) for the VORTX™ Disposable Blood Oxygenation Technology[8] - Granted an additional U.S. patent for the INSPIRA™ ART respiratory medical device, specifically for a novel automated self-priming module[9] - Submitted the INSPIRA ART 100 cardio-pulmonary bypass device to the U.S. FDA via the 510(k) pathway, with potential clearance expected in the first half of 2024[10] - Signed a strategic agreement with Innovimed SpA. z o.o for planned clinical trials of INSPIRA™ ART medical devices, contributing to over $546 million in potential revenues from distribution agreements across multiple regions[11] Company Information Inspira Technologies is an innovative medical technology company developing Augmented Respiration Technology (INSPIRA ART) to rebalance patient oxygen saturation, with products currently in development and awaiting regulatory approval About Inspira Technologies Inspira Technologies is an innovative medical technology company focused on respiratory treatment. It has developed Augmented Respiration Technology (INSPIRA ART) to rebalance patient oxygen saturation, aiming to reduce the need for invasive mechanical ventilation. The company's products are currently in development and have not yet been tested in humans or approved by regulatory entities - Inspira Technologies is an innovative medical technology company in the respiratory treatment arena[12] - Developed Augmented Respiration Technology (INSPIRA ART) designed to rebalance patient oxygen saturation levels, potentially allowing patients to remain awake during treatment and reducing the need for invasive mechanical ventilation[12] - Company's products have not yet been tested or used in humans and have not been approved by any regulatory entity[12] Legal & Disclosures This section outlines the forward-looking nature of statements in the press release, subject to risks and uncertainties, with no obligation for public updates Forward-Looking Statements Disclaimer This press release contains forward-looking statements based on current management expectations, subject to factors and uncertainties that could cause actual results to differ materially. The company disclaims any obligation to publicly update these statements, advising readers to consult the 'Risk Factors' section in its annual report on Form 20-F for more detailed information - The press release contains express or implied forward-looking statements based on current management expectations[14] - These statements are subject to factors and uncertainties that could cause actual results to differ materially from those described[14] - The Company undertakes no obligation to publicly release any revisions to these forward-looking statements, and more detailed risks are in the annual report on Form 20-F[14] Financial Statements The financial statements reveal a decrease in total assets and equity, a reduced comprehensive loss, and significant changes in liabilities and capital structure for 2023 Statements of Balance Sheets The balance sheet shows a decrease in total assets from $16,166 thousand in 2022 to $9,310 thousand in 2023, primarily driven by a reduction in cash and cash equivalents. Total liabilities increased, mainly due to a significant rise in financial liabilities at fair value, while total equity decreased substantially Assets | ASSETS (US dollars in thousands) | December 31, 2023 | December 31, 2022 | | :------------------------------- | :---------------- | :---------------- | | Cash and cash equivalents | 5,041 | 6,783 | | Cash deposits | 2,320 | 7,120 | | Other accounts receivable | 432 | 589 | | Total current assets | 7,793 | 14,492 | | Right of use assets, net | 1,011 | 1,263 | | Property, plant and equipment, net | 506 | 411 | | Total non-current assets | 1,517 | 1,674 | | Total Assets | 9,310 | 16,166 | Liabilities and Shareholders' Equity | LIABILITIES AND SHAREHOLDERS' EQUITY (US dollars in thousands) | December 31, 2023 | December 31, 2022 | | :------------------------------------------------------------- | :---------------- | :---------------- | | Trade accounts payables | 198 | 152 | | Other accounts payable | 1,026 | 1,216 | | Lease liabilities (current) | 290 | 268 | | Financial Liabilities at Fair Value | 1,470 | 26 | | Total current liabilities | 2,984 | 1,662 | | Lease liabilities (non-current) | 588 | 873 | | Total non-current liabilities | 588 | 873 | | Share capital and additional paid in capital | 61,259 | 57,866 | | Accumulated deficit | (55,521) | (44,235) | | Total equity | 5,738 | 13,631 | | Total Liabilities and Shareholders' Equity | 9,310 | 16,166 | Statements of Comprehensive Loss Inspira Technologies reported a decrease in total comprehensive loss for the year ended December 31, 2023, to $11,286 thousand from $14,976 thousand in 2022. This improvement was driven by reductions across all operating expense categories (R&D, S&M, G&A) and favorable finance income Comprehensive Loss | (US dollars in thousands) | Year ended December 31, 2023 | Year ended December 31, 2022 | | :------------------------ | :--------------------------- | :--------------------------- | | Research and development expenses | 7,320 | 8,183 | | Sales and marketing expenses | 746 | 1,328 | | General and administrative expenses | 4,063 | 5,375 | | Other expenses (income) | 4 | 7 | | Operating loss | 12,133 | 14,893 | | Interest Income from deposits | (318) | (192) | | Finance expenses(income), net | (529) | 275 | | Loss before tax | 11,286 | 14,976 | | Taxes on income | - | - | | Total comprehensive loss for the period | 11,286 | 14,976 | Statements of Changes in Shareholders' Equity Shareholders' equity decreased from $13,631 thousand at the beginning of 2023 to $5,738 thousand by year-end. This was primarily due to the total comprehensive loss of $11,286 thousand, partially offset by capital raised through share issuances and share-based compensation Changes in Shareholders' Equity | (US dollars in thousands) | Number of shares | Share capital and additional paid in capital | Accumulated deficit | Total | | :------------------------ | :--------------- | :------------------------------------------- | :------------------ | :---- | | Balance on January 01, 2023 | 11,338,940 | 57,866 | (44,235) | 13,631 | | Issuance of shares and private warrants, net | 3,031,250 | 1,806 | - | 1,806 | | Issuance of Placement agent warrants | - | 131 | - | 131 | | Issuance of shares (pursuant to ATM facility) | 17,566 | 26 | - | 26 | | Exercise of share-based payments | 37,972 | 3 | - | 3 | | Restricted share unit ("RSU") vesting | 1,226,448 | - | - | - | | Share-based compensation | - | 1,427 | - | 1,427 | | Comprehensive and net loss | - | - | (11,286) | (11,286) | | Balance on December 31, 2023 | 15,652,176 | 61,259 | (55,521) | 5,738 |