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DESCRIPTION OF BUSINESS
3 Months Ended
Sep. 30, 2012
DESCRIPTION OF BUSINESS [Abstract]  
DESCRIPTION OF BUSINESS

NOTE 1 - DESCRIPTION OF BUSINESS

 

InspireMD, Inc., formerly Saguaro Resources, Inc., (the "Company"), a public company, is a Delaware corporation formed on February 29, 2008. On March 28, 2011, the Company changed its name to InspireMD, Inc. in connection with a share exchange transaction between the Company and InspireMD Ltd., a limited company incorporated under the laws of the State of Israel in April 2005.

 

The Company has had recurring losses and negative cash flows from operating activities and has significant future commitments. For the three months ended September 30, 2012, the Company had losses of approximately $7.5 million and negative cash flows from operating activities of approximately $2.4 million. Additionally, as of September 30, 2012, the Company has a capital deficiency of $756,000. The Company's management believes that its working capital as of September 30, 2012 of approximately $8.6 million should enable it to continue funding the negative cash flows from operating activities until October 2013, when its senior secured convertible debentures (the "2012 Convertible Debentures") are subject to a noncontingent redemption option that could require the Company to make a payment of $13.3 million, including accrued interest. Since the Company expects to continue incurring negative cash flows from operations and in light of the cash requirement in connection with the 2012 Convertible Debentures, there is substantial doubt about the Company's ability to continue operating as a going concern. These financial statements include no adjustments of the values of assets and liabilities and the classification thereof, if any, that will apply if the Company is unable to continue operating as a going concern.

 

The Company will need to raise further capital at some future point in time, through the sale of additional equity securities or debt. The Company's future capital requirements and the adequacy of the Company's available funds will depend on many factors, including the Company's ability to successfully commercialize the Company's MGuardTM products, development of future products, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement the Company's product offerings. However, the Company may be unable to raise sufficient additional capital when the Company needs it or with favorable terms. The terms of any securities issued by the Company in future financings may be more favorable to new investors, and may include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders of any of the Company's securities then outstanding. If the Company is unable to obtain adequate funds on reasonable terms, the Company will need to curtail operations significantly, including possibly postponing or halting the Company's Unites States of America ("U.S.") Food and Drug Administration clinical trials or entering into financing agreements with unattractive terms.