D. Medical Announces Strategic Reorganization
March 22 2012 - 6:45AM
D. Medical Industries Ltd. (Nasdaq:DMED) (TASE:DMED) ("D. Medical"
or the "Company"), a medical device company engaged through its
subsidiaries in the research, development, manufacture and sale of
innovative products for diabetes treatment and drug delivery,
announced today that it has initiated a strategic restructuring
designed to focus its business on maximizing and realizing the
value of the Company's novel technology and intellectual property
by licensing and/or selling such technology (or part of it) to
third parties. In parallel, the Company will continue to pursue new
OEM and high volume sales opportunities.
The restructuring, which is designed to significantly reduce the
Company's ongoing operating expenses and is effective immediately,
includes a contemplated staff reduction and a voluntary reduction
in the compensation of, among others, the chairman of the board,
the chief executive officer, chief financial officer and the chief
operating officer. The Company estimates that its current actions
will reduce its cash burn rate to approximately NIS 700-800
thousand per month. In connection with D. Medical's efforts to
reduce its ongoing operating expenses, it is also contemplating a
possible reduction in the size of its Board of Directors.
The Company and its subsidiaries will continue to support its
current customer base and will continue to employ its management
and customer support personnel.
"The strategic restructuring announced today is a direct result
of the challenging market conditions the Company is facing. The
Company and its subsidiaries have successfully accomplished a
number of milestones. For example, the Company's innovative
Spring Zone insulin pump has achieved a CE Mark and its
breakthrough Spring™ Universal Infusion Set has obtained FDA
clearance, CE Mark and a Health Canada marketing license. Thus far,
the industry has reacted very positively to our
products. Patients, physicians and diabetes educators have
shown particular early interest in Spring™ Universal, as
demonstrated by the fact that approximately 100,000 units of this
product have already been supplied to our customers.
Nevertheless, we believe that under the current and foreseen
market conditions, this reorganization is in the best interest of
the Company and its shareholders. Accordingly, we plan to
focus on marketing the Company's technology in a way that will
maximize its value," said Efri Argaman, D. Medical's Chief
Executive Officer.
In making the announcement, D. Medical stated that there can be
no assurance that its efforts to license and/or sell its technology
(or part of it) to third parties will result in a transaction. The
Company does not intend to disclose developments with respect to
the aforementioned efforts unless and until its Board of Directors
has approved a specific transaction.
About D. Medical
D. Medical is a medical device company that holds through its
subsidiaries a portfolio of products and intellectual property in
the area of insulin and drug delivery. D. Medical has developed
durable and semi-disposable insulin pumps, which continuously
infuse insulin into a patient's body, using its proprietary
spring-based delivery technology. D. Medical believes that its
spring-based delivery mechanism is cost-effective compared to the
motor and gear train mechanisms that drive competitive insulin
pumps and also allows it to incorporate certain advantageous
functions and design features in its insulin pumps. For more
information, please visit http://www.dmedicalindustries.com
(corporate) and http://www.springnow.com (healthcare professionals,
patients and care givers).
Forward-Looking Statements
This press release contains forward-looking statements (as
defined by the Israeli Securities Law, 1968, Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended) relating, among
others, to the announced strategic reorganization, the Company's
ability to maximize and realize the value of its novel technology
and intellectual property assets by licensing and/or selling such
technology or part of it to third parties, the Company's ability to
find OEM and high volume supply opportunities, the Company's
ability to reduce its ongoing operating expenses and cash burn, the
extent of such reduction in the Company's ongoing operating
expenses and cash burn, and the Company's and its management's
assumptions and evaluations regarding their ability to maximize and
realize the value of the Company's technology and intellectual
property and reduce the Company's ongoing expenses. The
forward-looking statements involve risks and uncertainties, and are
based on D. Medical's current expectations and beliefs. No
assurances can be given that any of the events anticipated by the
forward-looking statements will transpire or occur, or of any of
them will transpire or occur, what impact it will have on D.
Medical's results of operations or financial condition. D. Medicals
does not undertake to update any forward-looking statements.
CONTACT: Company Contact:
Amir Loberman
Chief Financial Officer
D. Medical Industries LTD
T: +972-73-2507135
info@springnow.com
North American Investor Contact:
Stephen Kilmer
Kilmer Lucas Inc.
T: 212-618-6347
stephen@kilmerlucas.com
Israeli Investor Relations:
Michal Efraty
T: +972-3-6950380
M: +972-52-3044404
michal@efraty.com
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