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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM
10-Q/A
 Amendment
No. 1
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR
THE QUARTERLY PERIOD ENDED March 31, 2011.
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD FROM  TO
 Commission File Number: 333-144472
 Topspin Medical, Inc.
 (Exact name of registrant as specified in its charter)
 DELAWARE
    
    51-0394637(State or other jurisdiction of incorporation or
    
    (IRS Employer Identification No.)organization)25 LechiBnei-Brak, Israel
    
    N/A(Address of registrants principal executive offices)
    
    (Zip Code)
 972-3-5257368
(Telephone number, including area code)
 N/A
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
 þ o
 o o
 11,645,405




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##### 



TOPSPIN MEDICAL, INC.
 FORM 10-Q
 FOR THE QUARTER ENDED March 31, 2011
 PagePART I. FINANCIAL INFORMATION
    
    
    3ITEM 1. FINANCIAL STATEMENTS
    
    
    3ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
    
    
    25ITEM 4T. CONTROLS AND PROCEDURES
    
    
    30PART II. OTHER INFORMATION
    
    
    31ITEM 5. OTHER INFORMATION
    
    
    31ITEM 6. EXHIBITS
    
    
    31SIGNATURES
    
    
    32Exhibit 31.1Exhibit 31.2Exhibit 32.1




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FORWARD-LOOKING STATEMENTS




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PART I. FINANCIAL INFORMATION
 
 ITEM 1.
    
    FINANCIAL STATEMENTS
 TOPSPIN MEDICAL, INC.
 (A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
 As of March 31, 2011




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TOPSPIN MEDICAL, INC. AND ITS SUBSIDIARY
 INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2011




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##### 



TOPSPIN MEDICAL, INC. AND ITS SUBSIDIARY
 INTERIM CONSOLIDATED FINANCIAL STATEMENTS
 AS OF MARCH 31, 2011
 UNAUDITED
 INDEX
 PageConsolidated Balance Sheets
    
    
    2Consolidated Statements of Operations
    
    
    3Statements of Changes in Shareholders Deficiency
    
    
    4Consolidated Statements of Cash Flows
    
    
    5  6Notes to Interim Consolidated Financial Statements
    
    
    7  9




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TOPSPIN MEDICAL, INC. AND ITS SUBSIDIARY
 
 CONSOLIDATED BALANCE SHEETS
NIS in thousands (except share and per share data)
 December 31,
    
    
    March 31,2010
    
    
    2011UnauditedASSETSCURRENT ASSETS:Cash and cash equivalents
    
    
    33
    
    
    
    74Accounts receivable and prepaid expenses
    
    
    49
    
    
    
    7282
    
    
    
    146LIABILITIES AND SHAREHOLDERS DEFICIENCYCURRENT LIABILITIES:Trade payables
    
    
    658
    
    
    
    795Other payables and accrued expenses
    
    
    63
    
    
    
    452Tax provision
    
    
    1,254
    
    
    
    1,2311,975
    
    
    
    2,478SHAREHOLDERS DEFICIENCY:Share capital -Common shares of $0.001 par value -Authorized 2,000,000 and 50,000,000
shares as of December 31, 2010 and
March 31, 2011; Issued and outstanding
1,522,942 and 11,645,405 shares as of
December 31, 2010 and March 31, 2011,
respectively
    
    
    6
    
    
    
    43Additional paid-in capital
    
    
    181,015
    
    
    
    182,772Receipts on account of shares
    
    
    1,518
    
    
    
    Accumulated deficit
    
    
    (184,432
    )
    
    
    (185,147
    )(1,893
    )
    
    
    (2,332
    )82
    
    
    
    146
  May 31, 2011Date of approval of the
    
    Ascher Shmulewitz
    
    Eitan Shtarkman
    
    Uri Ben-Orfinancial statements
    
    Chairman of the Board
    
    CEO
    
    CFO
  - 2 -




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TOPSPIN MEDICAL, INC. AND ITS SUBSIDIARY
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
NIS in thousands (except share and per share data)
 Year ended
    
    
    Three months endedDecember 31,
    
    
    March 31,2010
    
    
    2010
    
    
    2011UnauditedGeneral and administrative expenses
    
    
    2,512
    
    
    
    803
    
    
    
    700Financial income (expenses), net
    
    
    197
    
    
    
    24
    
    
    
    (15
    )Net loss
    
    
    (2,315
    )
    
    
    (779
    )
    
    
    (715
    )Basic and diluted loss per Common share
    
    
    (1.520
    )
    
    
    (0.511
    )
    
    
    (0.109
    )Weighted average number of Common
shares outstanding used in basic and
diluted net loss per share calculation
    
    
    1,522,942
    
    
    
    1,522,942
    
    
    
    6,584,174
   - 3 -




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TOPSPIN MEDICAL, INC. AND ITS SUBSIDIARY
 
 STATEMENTS OF CHANGES IN SHAREHOLDERS DEFICIENCY
NIS in thousands (except share data)
 Number ofoutstanding
    
    
    Share
    
    
    Additional
    
    
    Receipts
    
    
    
    
    
    
    Totalshares
    
    
    capital
    
    
    paid-in
    
    
    on account
    
    
    Accumulated
    
    
    shareholdersCommon *)
    
    
    capital
    
    
    of shares
    
    
    deficit
    
    
    deficiencyBalance as of
January 1, 2010
    
    
    1,522,942
    
    
    
    6
    
    
    
    180,935
    
    
    
    
    
    
    
    (182,117
    )
    
    
    (1,176
    )Stock-based
compensation
expense
    
    
    
    
    
    
    
    
    
    
    80
    
    
    
    
    
    
    
    
    
    
    
    80Receipts on
account of shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,518
    
    
    
    
    
    
    
    1,518Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,315
    )
    
    
    (2,315
    )Balance as of
December 31, 2010
    
    
    1,522,942
    
    
    
    6
    
    
    
    181,015
    
    
    
    1,518
    
    
    
    (184,432
    )
    
    
    (1,893
    )Stock-based
compensation
expense
    
    
    
    
    
    
    
    
    
    
    27
    
    
    
    
    
    
    
    
    
    
    
    27Shares issuance
    
    
    10,122,463
    
    
    
    37
    
    
    
    1,730
    
    
    
    (1,518
    )
    
    
    
    
    
    
    249Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (715
    )
    
    
    (715
    )Balance as of
March 31, 2011
(unaudited)
    
    
    11,645,405
    
    
    
    43
    
    
    
    182,772
    
    
    
    
    
    
    
    (185,147
    )
    
    
    (2,332
    )
 
 *)
    
    In December 2010, the Company recorded a share consolidation of 500 for one against all
shares of the Company, see Note 1d. Accordingly, all share and per share data in the financial
statements were retroactively adjusted to reflect the share consolidation.   - 4 -




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TOPSPIN MEDICAL, INC. AND ITS SUBSIDIARY
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
NIS in thousands
 Year ended
    
    
    Three months endedDecember 31,
    
    
    March 31,2010
    
    
    2010
    
    
    2011UnauditedCash flows from operating activities:Net loss
    
    
    (2,315
    )
    
    
    (779
    )
    
    
    (715
    )Adjustments to reconcile net loss to net cash
used in operating activities (a)
    
    
    (255
    )
    
    
    (289
    )
    
    
    529Net cash used in operating activities
    
    
    (2,570
    )
    
    
    (1,068
    )
    
    
    (186
    )Cash flows from investing activities:Change in restricted deposits, net
    
    
    59
    
    
    
    48
    
    
    
    Net cash provided by investing activities
    
    
    59
    
    
    
    48
    
    
    
    Cash flows from financing activities:Issuance of shares
    
    
    
    
    
    
    
    
    
    
    208Loan from related party
    
    
    1,542
    
    
    
    200
    
    
    
    19Net cash provided by financing activities
    
    
    1,542
    
    
    
    200
    
    
    
    227Increase (decrease) in cash and cash equivalents
    
    
    (969
    )
    
    
    (820
    )
    
    
    41Cash and cash equivalents at the beginning of the
period
    
    
    1,002
    
    
    
    1,002
    
    
    
    33Cash and cash equivalents at the end of the period
    
    
    33
    
    
    
    182
    
    
    
    74
   - 5 -




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TOPSPIN MEDICAL, INC. AND ITS SUBSIDIARY
 CONSOLIDATED STATEMENTS OF CASH FLOWS
NIS in thousands
 Year ended
    
    
    Three months endedDecember 31,
    
    
    March 31,2010
    
    
    2010
    
    
    2011Unaudited(a) Adjustments to reconcile net loss to net
cash used in operating activities:Depreciation
    
    
    9
    
    
    
    1
    
    
    
    Finance expenses (income) on loan from
interested party
    
    
    (24
    )
    
    
    
    
    
    
    41Stock-based compensation
    
    
    80
    
    
    
    2
    
    
    
    27Decrease (increase) in accounts
receivables and prepaid expenses
    
    
    193
    
    
    
    (68
    )
    
    
    (23
    )Increase (decrease) in trade payables
    
    
    518
    
    
    
    (58
    )
    
    
    137Decrease in liabilities in respect of
options to employees and consultants
    
    
    (3
    )
    
    
    
    
    
    
    Increase (decrease) in tax provision,
other payables and accrued expenses
    
    
    (1,028
    )
    
    
    (166
    )
    
    
    347Total adjustments
    
    
    (255
    )
    
    
    (289
    )
    
    
    529(b) Supplemental disclosure of non cash
flows activities:Loan converted into receipts on account
of shares
    
    
    1,518
    
    
    
    
    
    
    
    Issuance of shares
    
    
    
    
    
    
    
    
    
    
    1,518
   - 6 -




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TOPSPIN MEDICAL, INC. AND ITS SUBSIDIARY
 
 NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NIS in thousands (except share and per share data)
 NOTE 1:- GENERAL
 a.
    
    Topspin Medical, Inc. (the Company) and its subsidiary, Topspin
Medical (Israel) Ltd. (the subsidiary) (collectively the Group) were engaged in
research and development of a medical MRI technology.
 In October 2008, the Company suspended its activities as described in b below.
 The Company was incorporated and commenced operation in September 1999 as a
private company registered in Delaware, U.S. On September 1, 2005, the Company
issued securities to the public in Israel and became publicly traded on the Tel
Aviv Stock Exchange (TASE). In 2007, the Company listed some of its securities
with the U.S. Securities and Exchange Commission (SEC). The Companys shares are
traded only in Israel in NIS.
 On January 24, 2010, the Company decided to discontinue the development of its
intellectual property due to managements assessment from December 2009 that the
Company will not be able to finalize the development of its intellectual property
or sell products based on such intellectual property.
 b.
    
    Since the suspension of the Companys operational activity in October
2008 and as of the date of the financial statements, the Company is not engaged in
any operational activity. Additionally, in January 2010, Companys management
decided to suspend the support in protection of its intellectual property
(registered patent and patent applications).
 c.
    
    The Group has not generated any revenues and has not achieved
profitable operations or positive cash flows from operations. The Company has an
accumulated deficit of NIS 185,147 as of March 31, 2011, and it incurred a net loss
of NIS 715 and negative cash flows from operating activities in the amount of NIS
186 for the three months ended March 31, 2011.
 There is uncertainty about the Companys ability to generate revenues or raise
sufficient funds in the near term, if any. These factors, among other factors
raise substantial doubt about the Companys ability to continue as a going
concern. The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or the
amounts and classification of liabilities that may result from the outcome of this
uncertainty.
 The Companys management is currently acting to raise the necessary funds for the
operation of the Company and for finding operational activities for the Company in
the field of life science or other fields.
  - 7 -




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TOPSPIN MEDICAL, INC. AND ITS SUBSIDIARY
 NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NIS in thousands (except share and per share data)
 NOTE 1:- GENERAL (Cont.)
 d.
    
    On February 13, 2011 the Company effected the Chapter 11 settlement
according to which the Companys capital structure was modified effective from that
date. The Companys authorized share capital increased to 50,000,000 shares of $
0.001 par value each. The Company also initiated a proceeding for swapping the
(unquoted) share and warrant certificates with the holders of shares and warrants
that are registered in the registry of the Companys shareholders and warrant
holders.
 In addition, as part of the settlement, on February 13, 2011, the Company
completed the allocation of 10,122,463 shares to Medgenesis against the write off
of the Companys debt totaling $484 thousand.
 e.
    
    On February 4, 2010, the Tel Aviv Stock Exchange (TASE) notified the
Company that it does not comply with the preservation regulations due to having
equity lower than NIS 2,000 in the last four reporting quarters. The Company was
given an extension until June 30, 2010 to increase its equity. If the required
increase in equity does not occur until that date, the TASE Board of Directors will
discuss transferring the Companys shares to the preservation list.
 On July 18, 2010, the Company received notification from TASE that the Companys
shares will be transferred to the maintenance list beginning July 19, 2010. The
Company was given an extension until July 18, 2012 to increase its equity,
otherwise, its shares will be eliminated from trading commencing July 20, 2012.
 f.
    
    On March 2, 2010, the Board of Directors approved to grant Mr. Zvi
Linkovski, director in the Company, 10 million options which are exercisable into
10 million Common shares of $0.001 par value each which make up 1.19% of the
Companys fully diluted equity. The options exercise price is NIS 0.0143. 50% of
the options would vest on February 16, 2011 and after then, every quarter 6.25% of
the options would vest. The grant is conditional on enlarging the option pool as
part of increasing the Companys issued stock, changing the Companys status from a
shell company (as defined in the Securities Exchange Act of 1934) into an active
one. As of the date of the financial statements, the option pool and the Companys
status were not enlarged.
 As of March 31, 2011, an expense was recorded in the amount of approximately NIS
107.
 NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
 The significant accounting policies applied in the annual financial statements of the
Company as of December 31, 2010 are applied consistently in these consolidated financial
statements.
  - 8 -




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TOPSPIN MEDICAL, INC. AND ITS SUBSIDIARY
 NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NIS in thousands (except share and per share data)
 NOTE 3:- UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
 The accompanying unaudited interim consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States for
interim financial information. Accordingly, they do not include all the information and
footnotes required by accounting principles generally accepted in the United States for
complete financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three-month period ended March 31, 2011 are not
necessarily indicative of the results that may be expected for the year ended December
31, 2011.
  - 9 -




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ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
  Overview
 TopSpin
Israel
 TASE SEC See PART II, Item 5. Market for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity SecuritiesMarket for Common Equity and Related Stockholder
Matters)
 see Part II, Item 7. Managements Discussion and Analysis of
Financial Condition and Results of Operation OCS
  Investment Agreement Medgenesis Stockholder
 Initial
Payment
  Loan Agreement Funds Letter Company
 Bankruptcy Court Plan




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Second
Loan
    Liquidity and Capital Resources




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Operating Activities
  Financing Activities
  Investing Activities
  Results of Operations
  Revenues
  Research and Development Expense
  Selling and Marketing Expense
  General and Administrative Expense
  Financing Income
  Taxes on Income
  Critical Accounting Policies




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Office Lease Commitments
   
 ITEM 4T.
    
    CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
 Exchange Act
  Changes in Internal Control Over Financial Reporting




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PART II. OTHER INFORMATION
 
 ITEM 6.
    
    EXHIBITS
 ExhibitNumber
    
    Description31.1
    
    
    Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a-14(a)31.2
    
    
    Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a-14(a)32.1
    
    
    Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350 Certifications as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002




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SIGNATURES
  Date: June 9, 2011
    TOPSPIN MEDICAL, INC.By:

Ascher SmuelevitzChairman of the Board of Directors
and
acting Principal Executive Officer




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EXHIBIT INDEX
 ExhibitNumber
    
    Description31.1
    
    
    Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a-14(a)31.2
    
    
    Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a-14(a)32.1
    
    
    Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350 Certifications as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002