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: Fiscal year ended December 31, 2009
Business Overview: The Company, operating through its Israeli subsidiary, was engaged in the R&D of miniaturized MRI sensors for cardiac and prostate imaging. Due to severe financial constraints and a lack of expected government grants, the Company suspended all operational activities and terminated nearly all employees in October 2008. As of December 31, 2009, the Company had no revenue, no R&D activity, and only two finance employees. Management has decided to discontinue the development of its original intellectual property and is pursuing acquisition of new business lines or financing to continue as a going concern.
Key Financial Metrics
| Metric | 2009 (NIS) | 2009 (USD Approx.) | 2008 (NIS) | 2008 (USD Approx.) |
|---|---|---|---|---|
| Revenue | 0 | $0 | 0 | $0 |
| Net Loss | (1,676,000) | ($426,181) | (20,150,000) | ($5,616,255) |
| Operating Expenses | 1,930,000 | $490,769 | 23,688,000 | $6,430,570 |
| Cash Flow from Operations | (3,799,000) | ($966,028) | (25,398,000) | ($6,728,000) |
| Cash and Equivalents (Year End) | 1,002,000 | $265,430 | 3,385,000 | $896,688 |
| Total Assets | 1,312,000 | $347,550 | 4,391,000 | $1,163,178 |
| Total Liabilities | 2,488,000 | $659,073 | 5,188,000 | $1,374,305 |
| Accumulated Deficit | (182,117,000) | ($48,242,914) | (180,441,000) | ($47,798,940) |
Note: USD conversions based on exchange rates provided in the filing (approx. NIS 3.775 = $1.00 for year-end balances).
Material Changes vs. Prior Period
- Operational Status: The Company remained in a suspended state throughout 2009, with no R&D or marketing expenses, compared to active (though winding down) operations in 2008.
- Net Loss Reduction: Net loss decreased by approximately 90% from NIS 20.15 million in 2008 to NIS 1.68 million in 2009, primarily due to the termination of employees and cessation of R&D.
- General & Administrative (G&A): G&A expenses dropped by 75% to NIS 1.93 million in 2009 from NIS 7.73 million in 2008.
- Financial Income: Financial income decreased by 95% to NIS 254,000 in 2009 from NIS 4.88 million in 2008. The 2008 figure included significant gains from the settlement of convertible debentures.
- Debt Settlement: In late 2008, the Company settled Series A Debentures by converting NIS 50 million of principal into 450 million shares and paying NIS 12.5 million in cash. No new debt was issued in 2009.
Guidance, Outlook, Risks, and Unusual Items
- Going Concern: The independent auditors have issued a report with an emphasis of matter regarding the Company's ability to continue as a going concern. Cash resources are insufficient for operations for the next twelve months without additional financing.
- Regulatory Risk (TASE): On February 4, 2010, the Tel Aviv Stock Exchange (TASE) notified the Company that it failed to meet preservation regulations due to equity below NIS 2 million. The Company was granted an extension until June 30, 2010, to increase equity or face transfer to the preservation list.
- Strategic Pivot: Management discontinued development of its MRI intellectual property in January 2010. The Company is now seeking to acquire new business lines or assets, potentially in the biotech sector.
- Recent Financing: On January 27, 2010, the Company entered an investment agreement with Medgenesis Partners Ltd. for approximately $212,000 in exchange for shares and warrants. This transaction is subject to shareholder approval and other conditions.
- Failed Acquisition: An acquisition agreement with Anavid Insulation Products entered in June 2009 was cancelled in October 2009 due to a failure to close by the agreed date.
Investor Verification Checklist
- Cash Runway: Verify current cash balances and burn rate to confirm if the company can survive until June 30, 2010 (TASE deadline).
- Financing Status: Confirm the status of the Medgenesis investment agreement and whether the shareholder meeting required for approval has been successfully held.
- TASE Compliance: Monitor whether the Company successfully raises equity to meet the NIS 2 million threshold to avoid delisting or transfer to the preservation list.
- Asset Valuation: Assess the value of the Company's remaining assets (primarily cash and restricted deposits) versus its liabilities and accumulated deficit.
- Intellectual Property: Note that the Company has formally decided to discontinue its core MRI technology development; verify if any IP has been sold or licensed.