NSPR

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended December 31, 2010, for Saguaro Resources, Inc. (Note: The input metadata references "Inspiremd, Inc.", but the filing text identifies the registrant as Saguaro Resources, Inc., a Delaware corporation in the exploration stage). The company is classified as a "Development Stage Enterprise" and a "Shell Company." Its primary business activity involves the acquisition and exploration of mining properties, specifically the Sky 1-4 mineral claims in Nevada. As of the reporting date, the company has generated no revenues.

Key Financial Metrics

Liquidity & Debt: The company holds only $9 in cash. Total liabilities consist entirely of $9,905 in "Advances from Officers," which are non-interest bearing and have no fixed maturity. The company has no long-term debt.

Material Changes vs. Prior Period

• Operating Expenses: General and administrative expenses decreased slightly to $2,595 for the three months ended Dec 31, 2010, compared to $2,680 in the same period in 2009. For the six-month period, expenses were $7,595 compared to $9,275 in the prior year.
• Cash Position: Cash decreased from $5,944 at June 30, 2010, to $9 at December 31, 2010, due to net cash used in operating activities of $5,935 during the six-month period.
• Liabilities: Advances from officers increased by $1,660 during the six-month period to reach $9,905.
• Asset Impairment: The filing notes that mineral rights were impaired 100% as of June 30, 2008, and no new exploration assets were capitalized in the current period.

Outlook, Risks, and Material Agreements

Share Exchange Agreement (Reverse Merger)

On December 29, 2010, Saguaro Resources entered into a Share Exchange Agreement with InspireMD Ltd. (an Israeli company). Upon closing, Saguaro's sole officer/director will resign, and InspireMD's officers will take over. The company's business will transition entirely to InspireMD's operations.

Closing Conditions: The transaction is contingent on several conditions, including:

• A private placement raising at least $7.5 million in net proceeds.
• Receipt of a favorable Israeli tax pre-ruling.
• Execution of the agreement by shareholders holding at least 80% of InspireMD shares.
• Specific share structure requirements (5.5 million shares outstanding, with 1.5 million in escrow).

Going Concern & Liquidity Risks

The company has received a "Going Concern" opinion from its auditors. It has incurred cumulative losses of $42,396 since inception and has insufficient cash to meet operating expenses. Future financing is required to continue operations. There is no assurance that the Share Exchange or the required $7.5 million private placement will be consummated.

Internal Controls

Management identified material weaknesses in internal controls, including a lack of a functioning audit committee, inadequate segregation of duties, and ineffective controls over financial reporting. Remediation plans include appointing outside directors and segregating duties, pending the availability of funds.

Investor Verification Checklist

• Transaction Status: Verify if the Share Exchange with InspireMD Ltd. has closed and if the $7.5 million private placement was successfully funded.
• Capital Adequacy: Confirm current cash levels and whether the company has secured additional funding to cover the $9,905 owed to officers and ongoing operating costs.
• Regulatory Compliance: Check for any subsequent filings (8-K or 10-K) regarding the status of the reverse merger and the appointment of new management.
• Asset Valuation: Note that the company's mining claims have been deemed to have poor exploration results and are fully impaired; the company's value is now entirely dependent on the InspireMD transaction.
• Internal Controls: Monitor progress on remediation of material weaknesses in financial reporting, specifically the establishment of an independent audit committee.