| Item
1.01 | Entry
into a Material Definitive Agreement. |
On
May 12, 2023, InspireMD, Inc. (the “Company”) entered into a securities purchase agreement (the “Purchase
Agreement”) pursuant to which the Company agreed to sell and issue in a private placement (the “Private Placement
Offering) an aggregate of 10,266,270 shares (the “Private Placement Shares”) of the Company’s common stock, par
value $0.0001 per share (the “Common Stock”), pre-funded warrants (the “Pre-Funded Warrants”) to purchase up
to 15,561,894 shares of Common Stock and warrants to purchase up to an aggregate of 51,656,328 shares of Common Stock, consisting of
Series H warrants to purchase up to 12,914,086 shares of Common Stock (the “Series H Warrants”), Series I warrants to
purchase up to 12,914,078 shares of Common Stock (the “Series I Warrants”), Series J warrants to purchase up to
12,914,086 shares of Common Stock (the “Series J Warrants”) and Series K warrants to purchase up to 12,914,078 shares of
Common Stock (the “Series K Warrants” and together with the Series H Warrants, Series I Warrants and Series J Warrants,
the “Warrants”), at an offering price of $1.6327 per Private Placement Share and associated Warrants and an offering
price of $1.6326 per Pre-Funded Warrant and associated Warrants.
The
Pre-Funded Warrants will be immediately exercisable at an exercise price of $0.0001 per share and will not expire until exercised in
full. The Warrants will be immediately exercisable upon issuance at an exercise price of $1.3827 per share, subject to adjustment as
set forth therein. The Warrants have a term of the earlier of (i) five years from the date of issuance and (ii) (A) in the case of the
Series H Warrants, 20 trading days following the Company’s public release of primary and secondary end points related to one year
follow up study results from the Company’s C-Guardians pivotal trial, (B) in the case of the Series I Warrants, 20 trading days
following the Company’s announcement of receipt of Premarket Approval (PMA) from the Food and Drug Administration (“FDA”)
for the CGuard Prime Carotid Stent System (135 cm), (C) in the case of the Series J Warrants, 20 trading days following the Company’s
announcement of receipt of FDA approval for the SwitchGuard transcarotid system and CGuard Prime 80 cm and (D) in the case on the Series
K Warrants, 20 trading days following the end of the fourth fiscal quarter after the fiscal quarter in which the first commercial sales
of the CGuard Carotid Stent System in the United States begin. The Warrants may be exercised on a cashless basis if there is no effective
registration statement registering the shares underlying the warrants.
In
connection with the Purchase Agreement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”).
Pursuant to the Registration Rights Agreement, the Company is required to file a resale registration statement (the “Registration
Statement”) with the Securities and Exchange Commission (the “SEC”) to register for resale the Private Placement Shares
and the shares of Common Stock issuable upon exercise of the Pre-Funded Warrants and Warrants, within 20 days of the signing date of
the Purchase Agreement (the “Signing Date”), and to have such Registration Statement declared effective within 45 days after
the Signing Date in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the
Registration Statement is reviewed by the SEC. The Company will be obligated to pay certain liquidated damages if the Company fails to
file the Registration Statement when required, fails to cause the Registration Statement to be declared effective by the SEC when required,
of if the Company fails to maintain the effectiveness of the Registration Statement.
The
Purchase Agreement and the Registration Rights Agreement contain representations, warranties, indemnification and
other provisions customary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreement provides
that for a period of one year following the closing of the offering, the Company will not effect or enter into an agreement to effect
a “variable rate transaction” as defined in the Purchase Agreement. In addition, pursuant to the Purchase Agreement, the
Company agreed to abide by certain customary standstill restrictions for a period of one year following the closing of the Private Placement Offering.
During the period commencing on the closing of the Private Placement Offering and ending on the earlier of (i) the fifth anniversary of
the closing of the Private Placement Offering and (ii) the date that any of OrbiMed Advisors LLC (“OrbiMed”) and Soleus Capital
Management, L.P. (“Soleus”) holds less than 50% of the Private Placement Shares and Pre-Funded Warrants, then OrbiMed and
Soleus shall each have the right, subject to certain exceptions, to appoint an independent, non-voting board observer (a “Board
Observer”) and such Board Observer shall have the right to, among others things, to be present and participate at meetings of the
board of directors, or any committee thereof, of the Company.
Aggregate
gross proceeds to the Company in respect of the Private Placement Offering are approximately $42.2 million, before deducting fees payable
to the placement agent and other offering expenses payable by the Company. If the Warrants are exercised in cash in full this would result
in an additional $71.4 million of gross proceeds. The Private Placement Offering is expected to close on or about May 15, 2023, subject
to satisfaction of customary closing conditions.
The
Company agreed to pay LifeSci Capital LLC, a placement fee equal to 5.6% of the aggregate gross proceeds from the closing of the Private
Placement Offering and a non-accountable expense allowance of $25,000. In addition, the Company has agreed to pay Piper Sandler &
Co. a financial advisory fee of $1.5 million and
AGP/Alliance Global Partners a financial advisory fee of $250,000.
The
Private Placement Shares, the Pre-Funded Warrants and the Warrants to be issued in the Private Placement Offering and the shares of Common
Stock underlying such Pre-Funded Warrants and Warrants are being offered and sold pursuant to an exemption from the registration requirements
under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The investors have represented that
they are accredited investors, as that term is defined in Regulation D, or qualified institutional buyers as defined in Rule 144(A)(a),
and have acquired such securities for their own account and have no arrangements or understandings for any distribution thereof. The
offer and sale of the foregoing securities is being made without any form of general solicitation or advertising. The Private Placement
Shares, Pre-Funded Warrants and Warrants to be issued in the Private Placement Offering, and the shares of Common Stock underlying such
Pre-Funded Warrants and Warrants have not been registered under the Securities Act or applicable state securities laws. Accordingly,
such securities may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable
exemption from the registration requirements of the Securities Act and such applicable state securities laws.
This
Current Report on Form 8-K shall not constitute an offer to sell or the solicitation to buy nor shall there be any sale of the shares
or warrants in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such state or jurisdiction.
The
foregoing descriptions of the Purchase Agreement, the Pre-Funded Warrants, the Warrants and the Registration Rights Agreement are not
complete, and are qualified in their entireties by reference to the full text of such documents, copies of which are filed as exhibits
to this Current Report on Form 8-K and are incorporated by reference herein.
Warning
Concerning Forward Looking Statements
This
Current Report on Form 8-K contains statements which constitute forward looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and other securities laws. These forward looking statements are based upon the Company’s present
intent, beliefs or expectations, but forward looking statements are not guaranteed to occur and may not occur for various reasons, including
some reasons which are beyond the Company’s control. For example, this Current Report states that the Private Placement Offering
is expected to close on or about May 15, 2023. In fact, the closing of the Private Placement Offering is subject to various conditions
and contingencies as are customary in securities purchase agreements in the United States. If these conditions are not satisfied or the
specified contingencies do not occur, this offering may not close. For this reason, among others, you should not place undue reliance
upon the Company’s forward looking statements. Except as required by law, the Company undertakes no obligation to revise or update
any forward looking statements in order to reflect any event or circumstance that may arise after the date of this Current Report.