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DESCRIPTION OF BUSINESS
6 Months Ended
Jun. 30, 2014
DESCRIPTION OF BUSINESS [Abstract]  
DESCRIPTION OF BUSINESS

NOTE 1 - DESCRIPTION OF BUSINESS

 

InspireMD, Inc., a Delaware corporation (the "Company"), together with its subsidiaries, is a medical device company focused on the development and commercialization of its proprietary stent platform technology, MGuard™. MGuard provides embolic protection in stenting procedures by placing a micron mesh sleeve over a stent. The Company's initial products are marketed for use in patients with acute coronary syndromes, notably acute myocardial infarction (heart attack) and saphenous vein graft coronary interventions (bypass surgery). The Company markets its products through distributors in international markets, mainly in Europe, Latin America and the Middle East, and through direct sales to hospitals in Europe.

 

The Company has an accumulated deficit of $95.8 million as of June 30, 2014, as well as net losses and negative operating cash flows in recent years and the current quarter. The Company expects to continue incurring losses and negative cash flows from operations until its MGuard™ products reach commercial profitability. As a result of these expected losses and negative cash flows from operations, along with the Company's current cash position, the Company does not have sufficient resources to fund operations for the next twelve months. Therefore, there is substantial doubt about the Company's ability to continue as a going concern.

 

Management's plans include the continued commercialization of the MGuard™ products and raising capital through the sale of additional equity securities or debt, including through the Company's "At-the-Market" equity program. There are no assurances, however, that the Company will be successful in obtaining the level of financing needed for its operations. If the Company is unsuccessful in commercializing its MGuard™ products and raising capital, it may need to reduce activities, curtail or cease operations.

 

These financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

 

On April 30, 2014, the Company initiated a voluntary field corrective action ("VFA") of its MGuard Prime EPS to address the issue of stent retention following reports of MGuard Prime EPS stent dislodgements. The Company received approval from the European regulatory agency on June 18, 2014 for its plan to modify its MGuard Prime EPS stents in order improve stent retention and performance, and has begun modifying existing units of the MGuard Prime EPS. The VFA had an adverse impact on both the commercial and clinical activities relating to the MGuard Prime EPS in the three months ended June 30, 2014.

 

The expense associated with the modifications performed, and the modifications that will be performed as a result of the VFA is estimated to be $400,000 and was recorded in "Cost of revenues" in the three months ended June 30, 2014.