D. Medical in strategic reorganization
D. Medical Industries (NASDAQ, TASE:DMED) 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 the technology, or part of it, to third parties.
At the same time, D. Medical said it will continue to pursue new OEM and high volume sales opportunities.
The restructuring is designed to significantly reduce the company’s ongoing operating expenses, effective immediately. It includes a contemplated staff reduction and a voluntary cut in the compensation of the chairman of the board, the CEO, CFO and COO, among others.
D. Medical figures the moves will reduce its cash burn rate to approximately 700,000 to 800,000 NIS a month. The company is also considering a possible reduction in the size of its board.
In a statement, CEO Efri Argaman said 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,” he said.
Mr. Argaman listed a series of corporate accomplishments and milestones, and said the industry has reacted very positively to D. Medical’s products, including the Spring Universal Infusion Set. Approximately 100,000 units of the product have already been supplied to 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,” Mr. Argaman said. “Accordingly, we plan to focus on marketing the company’s technology in a way that will maximize its value.”