InspireMD Reports Financial Results for the Quarter and Six Month Period Ended

InspireMD Reports Financial Results for

the Quarter and Six Month Period

Ended December 31, 2013

BOSTON, MA - February 26,

2014 - InspireMD Inc. (NYSE MKT: NSPR) ("InspireMD" or the "Company"), a leader in embolic

protection systems, today announced financial and operating results for the quarter and the six month period ended December 31,

"We closed 2013 on a very positive

note and created momentum across all four phases of our business strategy," stated Alan Milinazzo, Chief Executive Officer

of InspireMD. "Our MASTER II trial is on track to be fully enrolled by the end of 2014. We made significant progress within

our product pipeline over the past few months, including implanting the CGuard Carotid embolic protection system in patients for

the first time. We are also advancing our DES program after initial positive testing of the MicroNet mesh with a number of CE marked

drug eluting stents. Both of these important programs should further enable the fourth element of our strategy which involves partnering

to accelerate our business. Finally, revenue growth in our Tier 1 countries continued to improve and we added key sales positions

recently to further support our commercial efforts," Milinazzo concluded.

Operational Overview

The Master II clinical trial is on track

to complete enrollment in the fourth quarter of 2014. In total, the multi-center, randomized trial is set to include up to 70 sites

in the U.S. and Europe and as many as 1,114 patients. The MASTER II trial is evaluating the safety and effectiveness of the MGuard

Prime EPS in patients suffering from ST Elevation Myocardial Infarction (STEMI). The results are intended to support the

Company's Investigational Device Exemption (IDE) application with the U.S. Food and Drug Administration (FDA) to market the

MGuard Prime MicroNet covered coronary stent system in the U.S.

recently announced that its new CGuard carotid embolic protection system has been successfully implanted in multiple patients.

These initial clinical placements are expected to provide physician feedback and information for the Company to better understand

the complexities and challenges of treating this patient population and help define further clinical activities for CGuard. The

next step for the CGuard will be moving forward with the CARENET (CARotid Embolic protection using microNET)

study, which will evaluate the safety and efficacy of the CGuard EPS.

InspireMD has initiated bench testing the

viability of combining its proprietary MicroNet technology with several already CE Marked drug eluting coronary stents. These tests

will evaluate the safety and efficacy of the stent when it is combined with the Company's MicroNet technology. This is an

important phase in the development of our next generation embolic protection system.

From a commercial standpoint, the results

of the MASTER trial 12-month follow up have been used to advance the Company's evolving sales strategy. Directing these sales

efforts is a new leadership team appointed during the quarter to focus on Tier 1 regions as well as support partners distributing

the MGuard in other regions. In order to more effectively support sales in Europe, InspireMD entered into an agreement with Healthlink

Europe, a medical device support services and distribution company, to provide logistical and customer support for InspireMD's

commercial operations and clinical activities.

Quarter Ended December 31 2013 Financial

Revenue for the quarter ended December

31, 2013 was $1.6 million, an increase of 15.1% compared to $1.4 million for the same period in 2012. This reflects a 39.5% year-over-year

increase within Tier 1 regions.

Gross profit for the quarter ended December

31, 2013 totaled $0.9 million, an increase of 7.3% compared to $0.8 million for same period in 2012. Gross margin for the three

months ended December 31, 2013 was 55.5%, a decrease from 59.5% in the three months ended December 31, 2012. The quarter ended

December 31, 2013 included a write off of $0.1 million of inventory. Excluding this write off, the gross profit would have increased

by 20.3% to $1.0 million and gross margin would have been 62.2% for the period.

Total operating expenses for the quarter

ended December 31, 2013 were $5.8 million, an increase of 12.3% compared to $5.2 million for the same period in 2012. This was

primarily due to increased sales and marketing expenses as the Company focuses on building its sales infrastructure for future

growth in Tier 1 countries and research and development expenses attributable to the MASTER II trial.

The loss from operations for the quarter

ended December 31, 2013 was $4.9 million, an increase of 13.2% compared to a loss of $4.4 million for the same period in 2012.

Total financial expenses for the quarter

ended December 31, 2013 were $0.4 million, compared to financial income of $2.5 million in the same period in 2012. During the

quarter ended December 31, 2012, the Company recognized $3.5 million of financial income pertaining to the non-cash revaluation

of certain warrants and $0.9 million of amortization expense and related issuance costs pertaining to its previously outstanding

senior convertible debentures. The quarter ended December 31, 2013 included a non-cash expense of $0.1 million associated with

certain anti-dilution rights. Excluding these non-cash effects, the financial expenses for the quarter ended December 31, 2013

would have totaled $0.3 million, as compared to $0.2 million for the same period in 2012.

The net loss for the quarter ended December

31, 2013 totaled $5.4 million, or $0.16 per basic and diluted share, compared to a net loss of $1.9 million, or $0.11 per basic

and diluted share in the same period in 2012.

Non-GAAP net loss for the quarter ended

December 31, 2013 was $4.5 million, or $0.13 per basic and diluted share, an increase of 45.7% compared to a non-GAAP net loss

of $3.1 million, or $0.18 for the same period in 2012. The non-GAAP net loss for the quarter ended December 31, 2013 primarily

excludes $0.7 million of share-based compensation. The non-GAAP net loss for quarter ended December 31, 2012 primarily excludes

$2.6 million in non-recurring, non-cash income associated with the Company's previously retired convertible debt and associated

warrants, $0.9 million of MGuard royalties buyout expenses and $0.5 million in share-based compensation.

Six Months Ended December 31 2013 Financial

Revenue for the six month period ended

December 31, 2013 was $3.1 million, an increase of 67.0% compared to $1.9 million for the same period in 2012. This reflects a

120.6% year-over-year increase within Tier 1 regions.

Gross profit for the six month period December

31, 2013 totaled $1.7 million, an increase of 53.7% compared to $1.1 million for same period in 2012. The increase in gross profit

is attributable to an increase in revenue, partially offset by $0.3 million in inventory write off and non-recurring effects of

the consolidation of our manufacturing facilities.

Gross margin for the six month period ended

December 31, 2013 was 53.6%, a decrease from 58.2% in the six month period ended December 31, 2012. Excluding the non-recurring

effects of the consolidation of our manufacturing facilities and inventory write off in the six month period ended December 31,

2013, gross margin for the six month period ended December 31, 2013 would have been 63.2%.

Total operating expenses for the six month

period ended December 31, 2013 were $10.5 million, an increase of 20.2% compared to $8.7 million for the same period in 2012. This

was primarily due to increased research and development expenses attributable to the MASTER II trial and sales and marketing expenses

as the Company focuses on building its sales infrastructure for future growth in Tier 1 countries.

The loss from operations for the six month

period ended December 31, 2013 was $8.8 million, an increase of 15.4% compared to a loss of $7.6 million for the same period in

Total financial expenses for the six month

period ended December 31, 2013 were $0.5 million, a decrease of 71.2% compared to $1.7 million in the same period in 2012. During

the six month period ended December 31, 2012, the Company recognized $0.3 million of financial income pertaining to the non-cash

revaluation of certain warrants and $1.6 million of amortization expense and related issuance costs pertaining to its previously

outstanding senior convertible debentures. Excluding these non-cash effects, as well as the non-cash effects of the anti-dilution

rights in the 2013 period, financial expenses would have totaled $0.3 million and $0.4 million for the six month periods ended

December 31, 2013 and December 31, 2012, respectively.

The net loss for the six month period ended

December 31, 2013 decreased 1.0% to $9.3 million, or $0.27 per basic and diluted share, compared to a net loss of $9.4 million,

or $0.54 per basic and diluted share in the same period in 2012.

Non-GAAP net loss for the six month period

ended December 31, 2013 was $7.6 million, or $0.22 per basic and diluted share, compared to a non-GAAP net loss of $5.7 million

or $0.33 for the same period in 2012. The non-GAAP net loss for the six month period ended December 31, 2013 primarily excludes

$1.5 million of share-based compensation. The non-GAAP net loss for six month period ended December 31, 2012 primarily excludes

$1.4 million in share-based compensation, $1.3 million in non-recurring, non-cash cost associated with the Company's previously