Business Context and Reporting Period
Company: Topspin Medical, Inc. (Note: Input metadata referenced "My Size, Inc.", but the filing text identifies the registrant as Topspin Medical, Inc.)
Reporting Period: Quarter and six months ended June 30, 2009.
Status: Development Stage Company. Operational activities were suspended in October 2008 due to financial constraints, with only finance department employees retained. The company is seeking financing to resume operations or pursue new opportunities.
Key Financial Metrics (NIS in thousands)
| Metric | Six Months Ended June 30, 2009 | Three Months Ended June 30, 2009 | Balance Sheet (June 30, 2009) |
|---|---|---|---|
| Revenue | 0 | 0 | N/A |
| Net Loss | (1,683) | (701) | N/A |
| Operating Loss | (1,850) | (1,099) | N/A |
| Cash & Equivalents | N/A | N/A | 2,347 |
| Accumulated Deficit | N/A | N/A | (182,124) |
| Total Current Liabilities | N/A | N/A | 4,092 |
| Long-Term Liabilities | N/A | N/A | 2 |
Note: All financial figures are in New Israeli Shekels (NIS) in thousands, except per share data.
Material Changes vs. Prior Period
- Operational Suspension: R&D and Selling/Marketing expenses dropped to zero for the six months ended June 30, 2009, compared to NIS 10,895 and NIS 557 respectively in the same period in 2008, following the suspension of operations in October 2008.
- Financing Income: Net financing income decreased significantly to NIS 167 (six months 2009) from NIS 18,166 (six months 2008). The 2008 figure was heavily influenced by fair value changes in debentures and warrants.
- Cash Position: Cash and cash equivalents decreased from NIS 3,385 (Dec 31, 2008) to NIS 2,347 (June 30, 2009).
- Liabilities: A tax provision of NIS 1,385 was recorded in current liabilities, representing an estimate of potential tax liability from the conversion of Series A Bonds in late 2008.
Outlook, Risks, and Contingencies
- Going Concern: The filing states substantial doubt about the company's ability to continue as a going concern. Management estimates the need to raise additional funds to support activities for the next 12 months and to redeem long-term liabilities.
- Strategic Pivot (KAST Acquisition): On June 2, 2009, the company entered an agreement to acquire an 89% interest in Kiryat Anavim – Silicon Technologies, Ltd. (KAST), a manufacturer of silicon materials. Closing is subject to conditions, including due diligence and creditor releases, with an anticipated date of October 15, 2009.
- Government Grants: The company expects to receive grants from the Office of the Chief Scientist (OCS) for 2008 expenses (approx. NIS 3,200) but has not recorded them as assets due to uncertainty.
- Legal Contingency: A former employee filed a suit for NIS 20,000 regarding payroll holdover; management believes the probability of the claim being accepted is low and has not accrued a provision.
Investor Verification Checklist
- Cash Runway: Verify if the current cash balance of NIS 2.3 million is sufficient to cover the tax provision (NIS 1.4 million) and ongoing administrative costs until new funding is secured.
- KAST Deal Status: Confirm the status of the conditions precedent for the KAST acquisition, specifically the release of creditors and completion of due diligence, as the deal is not yet closed.
- Tax Liability: Investigate the final determination of the NIS 1.385 million tax provision related to the Series A Bond conversion.
- Capital Raising: Assess the feasibility of raising additional capital given the current market environment and the company's suspended operational status.