10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

MARK ONE

[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarterly Period ended June 30, 2013 or

[  ] 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: 0-11772

SPO MEDICAL INC.

(Exact name of registrant specified in its charter)

Delaware	25-1411971
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3 Gavish Street, POB 2454, Kfar Saba, Israel

 (Address of principal executive offices, including zip code)

972-9-966-2520

 (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  [ X ]   No   [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes [ X ]   No   [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a Smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [  ] Accelerated filer [  ] Non-accelerated filer [  ] (Do not check if a smaller reporting company) smaller reporting company  [ X ]

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ]  No [ X ]

As of August 8, 2013, SPO Medical Inc. had outstanding 93,025,271 shares of common stock, par value $0.01 per share.

INDEX PAGE

	PAGE
PART I — FINANCIAL INFORMATION	2
Forward Looking Statements	2
Item 1 - Financial Statements	F-1
Unaudited Condensed Interim Consolidated Balance Sheet June 30, 2013 and audited Consolidated balance sheet December 31, 2012	F-1
Unaudited Condensed Interim Consolidated Statements of Operations for the three and six months ended June 30, 2013 and 2012	F-2
Unaudited Condensed Interim Consolidated Statements of Cash Flows for the six months ended June 30, 2013 and 2012	F-3
Notes to Condensed Interim Consolidated Financial Statements	F-4
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations	3
Item 4 - Controls and Procedures	6
PART II — OTHER INFORMATION	6
Item 2- Unregistered Sales of Equity Securities and Use of Proceeds	6
Item 3 - Defaults upon Senior Securities	7
Item 5 - Other Information
Item 6 – Exhibits	7
SIGNATURES	8

1

PART I - FINANCIAL INFORMATION

 FORWARD LOOKING STATEMENTS

THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND RELATED NOTES CONTAINED ELSEWHERE IN THIS FORM 10-Q. CERTAIN STATEMENTS MADE IN THIS DISCUSSION ARE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY TERMINOLOGY SUCH AS "MAY," "WILL," "SHOULD," "EXPECTS," "INTENDS," "ANTICIPATES," "BELIEVES," "ESTIMATES," "PREDICTS," OR "CONTINUE" OR THE NEGATIVE OF THESE TERMS OR OTHER COMPARABLE TERMINOLOGY AND INCLUDE, WITHOUT LIMITATION, STATEMENTS BELOW REGARDING: THE COMPANY'S INTENDED BUSINESS PLANS; EXPECTATIONS AS TO PRODUCT PERFORMANCE; EXPECTATIONS AS TO MARKET ACCEPTANCE OF THE COMPANY'S TECHNOLOGY; AND BELIEF AS TO THE SUFFICIENCY OF CASH RESERVES. BECAUSE FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES, THERE ARE IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. THESE FACTORS INCLUDE, BUT ARE NOT LIMITED TO, SUFFICIENCY OF CASH RESERVES, THE COMPANY'S ABILITY TO OBTAIN ADDITIONAL NEEDED FINANCING; GOING CONCERN QUALIFICATIONS; THE COMPETITIVE ENVIRONMENT GENERALLY AND IN THE COMPANY'S SPECIFIC MARKET AREAS; CHANGES IN TECHNOLOGY; INFLATION; ECONOMIC CONDITIONS IN GENERAL AND IN THE COMPANY'S SPECIFIC MARKET AREAS; DEMOGRAPHIC CHANGES; CHANGES IN FEDERAL, STATE AND /OR LOCAL GOVERNMENT LAW AND REGULATIONS AFFECTING THE TECHNOLOGY; CHANGES IN OPERATING STRATEGY OR DEVELOPMENT PLANS; AND THE ABILITY TO ATTRACT AND RETAIN QUALIFIED PERSONNEL. ALTHOUGH THE COMPANY BELIEVES THAT EXPECTATIONS REFLECTED IN THE FORWARD-LOOKING STATEMENTS ARE REASONABLE, IT CANNOT GUARANTEE FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS. MOREOVER, NEITHER THE COMPANY NOR ANY OTHER PERSON ASSUMES RESPONSIBILITY FOR THE ACCURACY AND COMPLETENESS OF THESE FORWARD-LOOKING STATEMENTS. THE COMPANY IS UNDER NO DUTY TO UPDATE ANY FORWARD-LOOKING STATEMENTS AFTER THE DATE OF THIS REPORT TO CONFORM SUCH STATEMENTS TO ACTUAL RESULTS.

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ITEM 1. FINANCIAL STATEMENTS

SPO MEDICAL INC. AND ITS SUBSIDIARY

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)

	June 30,			December 31,
	2013			2012
	Unaudited
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	244		$	24
Accounts receivable - trade		1			—
Prepaid expenses and other accounts receivable		25			10
		270			34
LONG TERM INVESTMENTS
Severance pay fund		148			142
		148			142
Total net assets	$	418		$	176
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current Liabilities
Short-term loans	$	1,492		$	1,081
Trade payables		59			5
Employees and Payroll accruals		662			563
Accrued expenses and other liabilities		488			502
		2,701			2,151
Long-Term Liabilities
Warrants to issue shares	(*)	—			18
Long-Term Loans		—			375
Accrued severance pay		251			235
		251			628
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS’ DEFICIENCY
Preferred stock of $0.01 par value
Authorized - 2,000,000 shares, issued and outstanding - none
Common stock $0.01 par value-
Authorized - 100,000,000 shares, issued and outstanding - 79,806,254 and 56,463,544 shares as at June 30, 2013 and December 31, 2012, respectively		798			565
Additional paid-in capital		17,997			17,832
Accumulated deficit		(21,329	)		(21,000	)
		(2,534	)		(2,603	)
Total liabilities and stockholders’ deficiency	$	418		$	176
(*) Less than 1

The accompanying notes to these financial statements are an integral part thereof.  

F-1

SPO MEDICAL INC.AND ITS SUBSIDIARY

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands except share data)

	Three months ended June 30,						Six months ended June 30,
	2013			2012			2013			2012
	Unaudited						Unaudited
Revenues	$	100		$	—		$	249		$	—
Cost of revenues		85			—			210			—
Gross profit		15			—			39			—
Operating expenses
Selling and marketing	$	17		$	125		$	17		$	257
General and administrative		97			79			213			137
Total operating expenses		114			204			230			394
Operating loss		(99	)		(204	)		(191	)		(394	)
Financial income (expense), net		(83	)		(25	)		(138	)		(85	)
Net Loss for the period	$	(182	)	$	(229	)	$	(329	)	$	(479	)
Basic and diluted loss per share	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.01	)
Weighted average number of shares outstanding used in computation of basic loss per share		70,861,109			41,779,650			65,422,210			40,676,872

The accompanying notes to these financial statements are an integral part thereof.

F-2

SPO MEDICAL INC.

AND ITS SUBSIDIARY

CONDENSED INTERIM STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

	Six months ended June 30,
	2013			2012
	Unaudited
Cash Flows from Operating Activities
Net Loss for the period	$	(329	)	$	(479	)
Adjustments to reconcile loss to net cash used in operating activities:
Non-cash expenses related to convertible debt		61			40
Stock-based compensation expenses related to employees, service providers		—			253
Non-cash expense related to warrants to issue shares		(18	)		17
Changes in assets and liabilities:
Increase in accrued interest payable on loans		31			38
(Increase) in accounts receivables		(1	)		—
(Increase) in prepaid expenses and other receivables		(15	)		(10	)
Increase in trade payables		54			11
Increase in accrued severance pay, net		10			8
Increase (decrease) in accrued expenses and other liabilities		109			(58	)
Net cash used in operating activities		(98	)		(180	)
Cash Flows from Financing Activities
Proceeds from sale of shares and warrants, net of issuance costs		227			—
Payments of loans		(13	)		(18	)
Proceeds from loan		104			175
Net cash provided by financing activities		318			157
Increase (decrease) in cash and cash equivalents		220			(23	)
Cash and cash equivalents at the beginning of the period		24			37
Cash and cash equivalents at the end of the period	$	244		$	14
Non cash transactions
Conversion of convertible debt to shares	$	67		$	37
Exercise of warrants in consideration of concession of debt	$	24		$	22
Discount on convertible notes recognized to beneficial conversion feature	$	80		$	—
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest	$	34		$	14

The accompanying notes to these financial statements are an integral part thereof.

F-3

SPO MEDICAL INC AND ITS SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS

(U.S. dollars in thousands (except share data))

NOTE 1    -     General

SPO Medical Inc. (hereinafter referred to as "SPO" or the "Company") is engaged in the design, development and marketing of non-invasive pulse oximetry technologies to measure blood oxygen saturation and heart rate. The applications are marketed, in the following sectors; professional medical care, homecare, sports, safety and search & rescue.

The Company was originally incorporated under the laws of the State of Delaware in September 1981 under the name "Applied DNA Systems, Inc." On November 16, 1994, the Company changed its name to "Nu-Tech Bio-Med, Inc." On December 23, 1998, the Company changed its name to "United Diagnostic, Inc." Effective April 21, 2005, the Company acquired (the "Acquisition Transaction") 100% of the outstanding capital stock of SPO Medical Equipment Ltd., a company incorporated under the laws of the State of Israel ("SPO Ltd."), pursuant to a Capital Stock Exchange Agreement dated as of February 28, 2005 between the Company, SPO Ltd. and the shareholders of SPO Ltd., as amended and restated on April 21, 2005 (the "Exchange Agreement"). In exchange for the outstanding capital stock of SPO Ltd., the Company issued to the former shareholders of SPO Ltd. a total of 5,769,106 shares of the Company's common stock, par value $0.01 per share ("Common Stock"), representing approximately 90% of the Common Stock then issued and outstanding after giving effect to the Acquisition Transaction. As a result of the Acquisition Transaction, SPO Ltd. became a wholly owned subsidiary of the Company as of April 21, 2005 and, subsequent to the Acquisition Transaction, the Company changed its name to "SPO Medical Inc." Upon consummation of the Acquisition Transaction, the Company effectuated a forward subdivision of the Company's Common Stock issued and outstanding on a 2.65285:1 basis.

The merger between UNDI and the SPO Ltd was accounted for as a reverse merger. As the shareholders of SPO Ltd received the largest ownership interest in the Company, SPO Ltd was determined to be the "accounting acquirer" in the reverse acquisition. As a result, the historical financial statements of the Company were replaced with the historical financial statements of the SPO Ltd.

NOTE 2    -     Basis of Presentation

The accompanying un-audited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with Rule 8-03 of Regulation S-X. These financial statements reflect all adjustments, consisting of normal recurring adjustments and accruals, which are, in the opinion of management, necessary for a fair presentation of the financial position of the Company as of June 30, 2013 and the results of operations and cash flows for the interim periods indicated in conformity with generally accepted accounting principles applicable to interim periods. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Operating results for the three and six months ended June 30, 2013, are not necessarily indicative of the results that may be expected for the year ended December 31, 2013.

Certain prior years' amounts have been reclassified in conformity with current year's financial statements.

NOTE 3    -     Going Concern

As reflected in the accompanying financial statements, the Company’s operations for the six months ended June 30, 2013, resulted in a net loss of $329 and the Company’s balance sheet reflects a net stockholders’ deficit of $2,534. The Company’s ability to continue operating as a “going concern” is dependent on its ability to generate additional revenues or raise additional working capital. As disclosed in previous filings with the Securities and Exchange Commission, management has been attempting to raise additional cash from current and potential stockholders and, in May 2013, the Company raised net proceeds of $227 from accredited investors. While it has no commitments for additional amounts, the Company plans to continue its capital raising efforts.These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

F-4

NOTE 4   - Loans Payable

On January 4, 2013, the Company entered into a Convertible Note Agreement pursuant to which the Company received a loan in the principal amount of $32.5. The scheduled maturity date of the note is January 4, 2014. The note bears interest at a per annum rate of 8%. Commencing June 18, 2013, the Investor is entitled to convert all or any part of the outstanding and unpaid principal amount on the note, as well as the interest accrued, into shares of the Company’s Common Stock at a conversion rate equal to 55% of the average of the five lowest closing sale prices during the ten days preceding the conversion date.

On February 5, 2013, the Company entered into a Convertible Note Agreement pursuant to which the Company received an additional loan in the principal amount of $32.5 from the above referenced investor. The scheduled maturity date of the note is February 5, 2014. The note bears interest at a per annum rate of 8%. Commencing July 28, 2013, the Investor is entitled to convert all or any part of the outstanding and unpaid principal amount on the note, as well as the interest accrued, into shares of the Company’s Common Stock at a conversion rate equal to 55% of the average of the five lowest closing sale prices during the ten days preceding the conversion date.

On April 12, 2013, the Company entered into a Convertible Note Agreement pursuant to which the Company received an additional loan in the principal amount of $32.5 from the above referenced investor. The scheduled maturity date of the note is April 12, 2014. The note bears interest at a per annum rate of 8%. Commencing October 9, 2013, the Investor is entitled to convert all or any part of the outstanding and unpaid principal amount on the note, as well as the interest accrued, into shares of the Company’s Common Stock at a conversion rate equal to 55% of the average of the five lowest closing sale prices during the ten days preceding the conversion date.

NOTE 5    -     Stockholders Equity

Issuance of Securities

On May 8, 2013, the Company entered into a Subscription Agreement with two accredited investors (the “Investors”), pursuant to which the Company sold and issued to the Investors (the “Private Placement”) a total of 10,000,000 shares of the Company's Common Stock for proceeds of $227, net of issuance expenses. In connection with the Private Placement, warrants (the “Warrants”) for an additional 5,000,000 shares of the Company’s Common Stock were issued to one of the Investors. The Warrants are exercisable through May 8, 2018 at a per share exercise price of $0.10.

On May 29, 2013, the Company issued 2,366,639 shares to satisfy an obligation to issue shares.

During the six months ended June 30, 2013, the Company issued 10,976,071 shares of its common stock upon conversion of $67 in principal and accrued interest of convertible promissory notes.

NOTE 6    -     Financial Expenses

Financial expenses for the six months ended June 30, 2013 and 2012 are comprised of the following:

	2013			2012
Non-cash expenses related to conversion features	$	(61	)	$	(40	)
Non-cash expenses related to warrants to issue shares		18			(7	)
Interest in respect of debt instruments		(65	)		(52	)
Exchange rate differences caused by fluctuations in the exchange rate with the New Israeli Shekel ("NIS") on liabilities denominated in NIS held by the subsidiary		(30	)		14
		(138	)		(85	)

F-5

 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 

THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR FINANCIAL STATEMENTS AND THE NOTES RELATED TO THOSE STATEMENTS. SOME OF OUR DISCUSSION IS FORWARD-LOOKING AND INVOLVES RISKS AND UNCERTAINTIES. FOR INFORMATION REGARDING RISK FACTORS THAT COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, REFER TO THE RISK FACTORS SECTION OF THE ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2012.

OVERVIEW

SPO Medical Inc. (“we” or the “Company”) is engaged in the design, development and marketing of non-invasive pulse oximetry technologies to measure blood oxygen saturation and heart rate. We have developed and patented proprietary technology that enables the measurement of heart rate and oxygen saturation levels in the blood, which is known as Reflectance Pulse Oximetry (RPO). Using RPO, a sensor can be positioned on various body parts, hence minimizing problems from motion artifacts and poor perfusion. The unique design features contribute to substantially lower power requirements and enhance wireless, stand-alone configurations facilitating expanded commercial possibilities. As of August 2013, we held 12 patents issued by the United States Patent and Trademark Office ("USPTO") covering various aspects of our technologies. Our technologies are currently applied to products that are designed for use by in the homecare, professional medical care, sports, safety and search and rescue markets.

We are primarily engaged in developing, manufacturing and licensing our technology to third parties for integration with products in the general wellness, recreational, baby monitoring and sports monitoring fields. We pursue joint ventures, OEM type arrangements, research and or subcontracting agreements relating to our oximetry technology with respect to the general wellness, recreational, baby monitoring and sports monitoring fields. Since August 2012, we have partnered with HoMedics LLC, a distributor and manufacturer of leading brands in an array of consumer health, wellness and electronic lifestyle categories throughout the Americas, Europe, the Asia-Pacific region, Africa and the Middle-East, for the distribution of a private labeled, over the counter pulse oximeter for non-medial consumer wellness applications.

We are currently focused on exploiting the sports and wellness markets by developing cutting edge products based on our proprietary technology. These are multibillion dollar markets which we intend to penetrate with our disruptive technologies. Our current products under development include an innovative wellness watch, a baby monitoring unit and a sports watch.

 The SPO sports watch has been designed to measure continuous heart-rate wirelessly, without the need to wear a conventional chest strap.  This is a major and unique practical advantage over current products that we believe exist in the general leisure and wellness market.  As importantly, the sports watch will be able to read the heart rate without the sports enthusiast ceasing his physical activity. This will be made possible through the use of SPO’s patented reflectance technology. Subject to raising significant additional funds, of which no assurance can be provided, we anticipate that the product should become commercially available during 2014.

In addition to the sports watch, we have commenced commercialization of an innovative wellness watch that measures the number of activities and calories burned by an individual performs on a given day.  The watch, designed for both children and adults, features a display function to continuously measure the number of daily activities against preset recommended goals. SPO has designed and patented the functionality of the watch to be an affordable, simple-to-use, fashion accessory to encourage users to increase their mobility and overall wellness and to wear it with pride. In December 2011, we signed an exclusive agreement with a large private time-piece manufacture to manufacture and sell our wellness watch to department stores, mid-tier mass-market and food & drug stores throughout North America. The agreement specifies that the manufacturer will finance all costs associated with bringing the wellness watch to the marketplace. We and the manufacturer have agreed to divide the profit margin from the sale of the wellness watch net of all costs associated with manufacturing and marketing of the product.

3

In addition, we are developing an innovative home-baby monitoring device for continuous measurement of wellness information to the parent or caregiver, while the baby is sleeping. This parental reassurance tool gives the company a technological competitive edge in providing an innovative, high performance solution for a market application that is applicable to most family homes. Subject to raising significant additional funds, of which no assurance can be provided, we believe that the product could become commercially available during 2014.

Current Operational Highlights

We recorded revenues of $316,000 for the year ended December 2012 and $249,000 for the six months ended June 30, 2013. All revenues to date are primarily attributable to the arrangement with HoMedics. As of June 30, 2013, we had a backlog of approximately $249,000, consisting of orders for additional units of our wellness product that we expect to deliver during the third quarter of 2013.

We have generated significant operating losses since inception and we have a limited operating history upon which an evaluation of our prospects can be made. Our prospects must therefore be evaluated in light of the problems, expenses, delays and complications associated with a development stage company.

In May 2013, we raised $250,000 from the sale of our securities to two accredited investors. However, we need to raise additional funds in order to realize in full our business plan as well as pay outstanding loans in the approximate amount of $1,492,000 which mature by June 30, 2014. In January 2010, we restructured our operations in an attempt to focus primarily on our core technology for non-medical market operations. As of August 2013, we had two employees working on a full-time basis. In addition, all research and development activities are performed on a sub-contracted basis. If we are unable to raise additional capital, it may be necessary for us to take further cost cutting measures to reduce our cash burn including laying-off additional personnel and/or cease operations entirely. No assurance can be given that we will be able to raise additional capital. These conditions raise substantial doubt about our ability to continue as a going concern.

CRITICAL ACCOUNTING POLICIES

The discussion and analysis of our financial condition and results of operations are based upon our unaudited consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, bad debts, investments, intangible assets and income taxes. Our estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

We have identified the accounting policies below as critical to our business operations and the understanding of our results of operations.

REVENUE RECOGNITION

We generate revenues principally from product manufacturing. Revenues generated from product manufacturing are recognized when such products are shipped; subcontracted research and development services are recognized when such services are performed.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

4

RESULTS OF OPERATIONS

COMPARISON OF THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND THE THREE AND SIX MONTHS ENDED JUNE 30, 2012

REVENUES. Revenues for the three and six months ended June 30, 2013 were $100,000 and $249,000, respectively. No revenues were recorded for the corresponding periods in 2012. The increase in revenues during the each of the three and six months ended June 30, 2013 as compared to the corresponding periods in 2012 is attributable to shipments of our new consumer wellness product to mass-market retailers.

COSTS OF REVENUES. Costs of revenues include all costs related to subcontracted manufacturing and product delivery. Cost of Revenues for the three and six months ended June 30, 2013 were $85,000 and $210,000, respectively. No costs of revenues were recorded for the corresponding periods in 2012.

SELLING AND MARKETING EXPENSES. Selling and marketing expenses consist primarily of costs relating to compensation attributable to consultants for the provision of public relations, promotion and marketing services geared to the recreational sports and wellness markets. Selling and marketing expenses for three and six months ended June 30, 2013 were $17,000 and $17,000, respectively, as compared to $125,000 and $257,000, respectively, for the corresponding periods in 2012. Selling and marketing expenses for the three and six months ended June 30, 2012 included stock based non-cash expenses of $125,000 and $250,000, respectively, The decrease in selling and marketing expenses during the three and six months ended June 30, 2013 as compared to the corresponding periods in 2012 is primarily attributable to the reduction in stock based non-cash expenses.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses primarily consist of salaries and other related costs for personnel in executive and other administrative functions. Other significant costs include professional fees for legal and accounting services. General and administrative expenses for the three and six months ended June 30, 2013 were $97,000 and $213,000, respectively, as compared to $79,000 and $137,000 for the corresponding periods in 2012.  The increase in general and administrative expenses during the three and six months ended June 30, 2013 as compared to the corresponding periods in 2012 is primarily attributable to increased professional fees and product liability insurance.

FINANCIAL EXPENSE, NET. Finance expense, net for the three months and six months ended June 30, 2013 were $83,000 and $138,000, respectively, as compared to $25,000 and $85,000 for the corresponding periods in 2012. The increase was primarily attributable to fluctuations in the exchange rate of the New Israeli Shekel (“NIS”) on liabilities denominated in NIS held by the subsidiary.

NET LOSS. For the six months ended June 30, 2013 and 2012, we had net losses of $329,000 and $479,000, respectively. The decrease in net loss for the six months ended June 30, 2013 compared to corresponding six month period in 2012 is primarily attributable to a reduction in stock based non-cash marketing expenses.

LIQUIDITY AND CAPITAL RESOURCES

We need to raise additional funds in order to meet our on-going operating requirements, pay outstanding loans in the aggregate approximate amount of $1,492,000 and to realize our restructured business plan. Following the capital raise of $250,000 in May 2013 referred to below, our currently existing cash resources are sufficient to satisfy our operating requirements through December 31, 2013. If we are unable to raise additional capital through a financial raise or revenues, it may be necessary for us to take further measures to reduce our cash burn including laying-off additional personnel, or ceasing operations entirely. No assurance can be given that we will be able to raise the needed capital. These conditions raise substantial doubt about our ability to continue as a going concern. Any additional equity financings is likely to be dilutive to holders of our Common Stock and debt financing, if available, may require us to be bound by significant repayment obligations and covenants that restrict our operations.

As of June 30, 2013, we had $244,000 in cash and cash equivalents available to us.

We generated negative cash flow from operating activities of approximately $98,000 during the six months ended June 30, 2013 compared to $180,000 for the 2012 corresponding period.

5

 To date, we have financed our operations primarily from debt financing and the sale of our securities. See Notes 4 and 5 in our consolidated financial statements accompanying this Quarterly Report on Form 10-Q.

On May 8, 2013, we raised $250,000 from the private placement of a total of 10,000,000 shares of our common stock to two accredited investors. In connection with such private placement, we also issued to one of the investors warrants exercisable through May 2018 to purchase up to an additional 5,000,000 shares of our common stock at a per share exercise price of $0.10.

ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 13a-14(c).

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with participation of management, including our Chief Executive Officer, who serves as our principal executive officer and principal financial and accounting officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to provide reasonable assurance that material information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms

Management is aware that there is a lack of segregation of duties due to the small number of employees dealing with general administrative and financial matters. However, at this time, management has decided that considering the employees involved, the control procedures in place, and the outsourcing of certain financial functions, the risks associated with such lack of segregation are low and the potential benefits of adding additional employees to clearly segregate duties do not justify the expenses associated with such increases. Management will periodically reevaluate this situation. If the volume of the business increases and sufficient capital is secured, it is our intention to increase staffing to mitigate the current lack of segregation of duties within the general administrative and financial functions.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Such limitations include the fact that human judgment in decision-making can be faulty and that breakdowns in internal control can occur because of human failures, such as simple errors or mistakes or intentional circumvention of the established process.

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING. During the quarter ended June 30, 2013, there were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, these controls.

PART II - OTHER INFORMATION

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following paragraph sets forth certain information with respect to all securities sold by us during the three months ended June 30, 2013 without registration under the Securities Act:

On May 8, 2013, we entered into a Subscription Agreement with two accredited investors (the “Investors”), pursuant to which we sold and issued to the Investors a total of 10,000,000 shares of the Company's Common Stock for proceeds of $250,000. In connection with the Private Placement, warrants for an additional 5,000,000 shares of the Company’s Common Stock was issued to one of the Investors. The Warrants are exercisable through May 8, 2018 at a per share exercise price of $0.10

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The sale and issuance of the shares of Common Stock and the warrants (and the issuance of shares of Common Stock upon exercise thereof) have been determined to be exempt from registration under the Securities Act of 1933, in reliance on Section 4(2) thereof and Rule 506 of Regulation D promulgated thereunder as a transaction by an issuer not involving a public offering, in which the investors are accredited and have acquired the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof. None of the transactions described above involved general solicitation or advertising.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

We first disclosed in the quarterly report on Form 10-Q for the three months ended March 31, 2008, that we had not repaid principal and accrued interest that became due during the quarterly period covered by such report. We disclosed in subsequent quarterly reports on Form 10-Q additional amounts that became due in ensuing quarterly periods and the results of our efforts to resolve these matters. As of June 30, 2013, there continues to remain outstanding, in the aggregate approximately $1,003,000 of such principal and accrued interest. We continue to hold discussions with certain of the holders of the outstanding debt in an attempt to resolve this matter; no assurance can be provided that we will be successful in concluding any mutually acceptable resolution of this matter.

ITEM 6. EXHIBITS.

4.1	Form of Investor Warrant used in the Financing Referred to in Exhibit 101
10.1	Form of Subscription Agreement.
31	Rule 13a - 14(a) Certification of Principal Executive Officer (and Principal Financial and Accounting Officer)
32	Section 1350 Certification of Principal Executive Officer (and Principal Financial and Accounting Officer)
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase
101.DEF*	XBRL Taxonomy Extension Definition Linkbase
101.LAB*	XBRL Taxonomy Extension Label Linkbase
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase

   * Furnished herewith 

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SIGNATURES

Pursuant to the requirements of the Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

DATE: August 8, 2013	/s/ Michael Braunold
	Michael Braunold
	Chief Executive Officer  (Principal Executive
	Officer and Principal
	Financial and Accounting Officer) and Director

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EX-4.1

EXHIBIT 4.1

FORM OF WARRANT

NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE REPRESENTATIONS AND AGREEMENTS MADE BY THE RECORD HOLDER HEREOF SET FORTH IN THIS WARRANT.

SPO MEDICAL INC.

Number of Shares: ______                                                                        Date of Issuance: May __, 2013

FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the undersigned, SPO Medical Inc., a Delaware corporation (together with its successors and assigns, the “Issuer” or the “Company”), hereby certifies that, ___________, or his/its registered permitted assigns (the “Holder”) is entitled to subscribe for and purchase, during the period specified in this Warrantup to 4,500,000 shares (subject to adjustment as hereinafter provided) of the duly authorized, validly issued, fully paid and non-assessable Common Stock (the “Common Stock”) of the Company (in each such case, the “Warrant Shares”), at an exercise price per share equal to $0.10 (“Per Share Warrant Price”); subject, however, to the provisions and upon the terms and conditions hereinafter set forth.

1. Warrant Period; Exercise of Warrant

1.1 Exercise. The Warrant shall be immediately exercisable and shall continue to be exercisable through the Expiration Date (such period being the “Warrant Period”). The term “Expiration Date” shall mean the fifth anniversary of the date of issuance. The Holder may exercise this Warrant, in whole or part, , by the surrender of this Warrant (with a duly executed exercise form in the form attached at the end hereof as Exhibit A) at the principal office of the Company, together with the proper payment of the Per Share Warrant Price times the applicable number of Warrant Shares.

1.2 Upon such surrender of this Warrant and proper payment, the Company will (a) issue a certificate or certificates in the name of Holder for the Warrant Shares to which the Holder shall be entitled and (b) if the Warrant is exercised in part, deliver to the Holder certificates evidencing the balance, if any, of the Warrant Shares to be issuable pursuant to the provisions of this Warrant.

2. Representations and Warranties

The Holder (i) represents, warrants, covenants and agrees that the Warrant and the underlying Warrant Shares are being acquired by the Holder for the Holder's own account, for investment purposes only, and not with a view to any public distribution thereof or with any present intention of so distributing all or any part of the Warrant or the Warrant Shares; (ii) understands (x) that if it should thereafter decide to dispose of such Warrant or Warrant Shares (which it does not contemplate at such time) it may do so only in compliance with the Securities Act, including any exemption there from, and (y) this Warrant and the Warrant Shares are not registered under the Securities Act; and (iii) acknowledges that, as of the date hereof, it has been given a full opportunity to ask questions of and to receive answers from the Company concerning this Warrant and the Warrant Shares and the business of the Company and to obtain such information as it desired in order to evaluate the acquisition of this Warrant and the Warrant Shares, and all questions have been answered to its full satisfaction.

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3. Reservation of Shares

3.1 The Company covenants that it has authorized and shall maintain in reserve, and will keep available solely for issuance or delivery upon exercise of the Warrant, the Warrant Shares and other securities and properties as from time to time shall be receivable upon the exercise of this Warrant.

3.2 The shares of Common Stock represented by each and every certificate for Warrant Shares delivered upon exercise of this Warrant shall at the time of such delivery, be duly authorized, validly issued and outstanding, fully paid and non-assessable and not subject to preemptive rights or rights of first refusal. The Company shall pay all documentary, stamp or similar taxes and other similar governmental charges that may be imposed with respect to the issuance or delivery of any Common Shares upon exercise of the Warrants (other than income taxes); provided, however, that if the Common Shares are to be delivered in a name other than the name of the Holder, no such delivery shall be made unless the person requesting the same has paid to the Company the amount of transfer taxes or charges incident thereto, if any.

4. Adjustment

4.1 In case of any consolidation or merger of the Company with or into another corporation (other than a merger or consolidation in which the Company is the surviving or the continuing corporation), such successor corporation or entity, as the case may be, shall (i) execute with the Holder an agreement that the Holder shall have the right thereafter to receive upon the exercise of the Warrant the kind and amount of shares and/or other securities or other property which he would have owned or have been entitled to receive after the happening of such consolidation or merger had the Warrant been exercised immediately prior to such action, (ii) make effective provision in its certificate of its incorporation or otherwise, if necessary, in order to effect such agreement, and (iii) set aside or reserve for the benefit of the Holder, the stock, securities, property and cash to which the Holder would be entitled to upon exercise of this Warrant.

4.2 In case the Company shall (A) pay a dividend or make a distribution on its shares of Capital Stock (B) subdivide or reclassify its outstanding Capital Stock into a greater number of shares, or (C) combine or reclassify its outstanding Capital Stock into a smaller number of shares or otherwise effect a reverse split, (other than a change in par value or from no par value to a specific par value), both the number of Warrant Shares and the Exercise Price shall be proportionately adjusted so that the Holder shall have the right thereafter to receive upon exercise of this Warrant solely the kind and amount of shares as the Holder would have owned had this Warrant been exercised immediately prior to such dividend, subdivision, combination or reclassification.

4.3 The above provisions of this section 4 shall similarly apply to successive reclassifications and changes of shares of capital stock of the Company and to successive consolidations.

4.4 Upon the occurrence of each adjustment pursuant to this Section 4, the Company at its expense will promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based, and promptly deliver such certificate to the Holder in accordance with the provisions of Section 10 hereof.

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5. Limited Transfer

The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant this Warrant has not been registered under the United States Securities Act of 1933, as amended, (the "Act") or similar applicable laws in other jurisdictions and has been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective registration statement under the Act or similar applicable laws relating to such security or an opinion of counsel satisfactory to the Company that registration is not so required under the Act or similar applicable laws. Each certificate for the Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section.

6. Loss, etc. of Warrant

Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and of indemnity reasonably satisfactory to the Company, if lost, stolen or destroyed, and upon surrender and cancellation of this Warrant, if mutilated, and upon reimbursement of the Company's reasonable incidental expenses, the Company shall execute and deliver to the Holder a new Warrant of like date, tenor and denomination.

7. Warrant Holder Not Shareholder

Except as otherwise provided herein, this Warrant does not confer upon the Holder any right to vote or to consent or to receive notice as a shareholder of the Company, as such, in respect of any matters whatsoever, or any other rights or liabilities as a shareholder, prior to the exercise hereof.

8. Ownership Caps and Certain Exercise Restrictions.

(a) Notwithstanding anything to the contrary contained herein, the number of shares of Common Stock that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following such exercise (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), does not exceed 9.999% (the “Maximum Percentage”) of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise).  For such purposes, “beneficial ownership” shall be determined in accordance with Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.  The Company’s obligation to issue shares of Common Stock in excess of the limitation referred to in this Section shall be suspended (and shall not terminate or expire notwithstanding any contrary provisions hereof) until such time, if any, as such shares of Common Stock may be issued in compliance with such limitation, but in no event later than the Expiration Date.  By written notice to the Company, the Holder may waive the provisions of this Section or increase or decrease the Maximum Percentage to any other percentage specified in such notice, but any such waiver or increase will not be effective until the 61st day after such notice is delivered to the Company. In all circumstances, exercise of this Warrant shall be deemed to be the Holder’s representation that such exercise conforms to the provisions of this Section 11 and the Company shall be under no obligation to verify or ascertain compliance by the Holder with this provision

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(b ) In no event may the Holder exercise this Warrant in whole or in part unless the Holder is an “accredited investor” as defined in Regulation D under the Securities Act at the time of exercise.

9. Headings

The headings of this Warrant have been inserted as a matter of convenience and shall not affect the construction hereof.

10. Notices.

Unless otherwise provided, any notice required or permitted under this Warrant shall be given in writing to the appropriate addresses set forth below.

(i) If to the Company, at 3 HaGavish St. Kfar Saba, Israel 44425.

(ii)               if to the Holder, to the address set forth in the Subscription Agreement or such other address as the Holder may designate.

11. Governing Law

This Warrant shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and performed within such State.

12. Waiver

Except as expressly provided herein, neither this Warrant nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought.

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed as of the date first written above.

SPO MEDICAL INC.

By: __________________________

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EXHIBIT A

WARRANT EXERCISE FORM

_________________, 20___

TO:

RE: Exercise of Warrant

The undersigned hereby irrevocably elects to exercise the attached Warrant to the extent of ___________________ shares of Common Stock of SPO Medical Inc. then issuable according to the terms thereof at the per share price of $0.10. Payment to the Company of the total purchase price for such shares has been made simultaneously with the delivery of this exercise of warrant.

By: ___________________

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EX-10.1

EXHIBIT 10.1

FORM OF SUBSCRIPTION AGREEMENT

SPO Medical Inc.

Attention: Michael Braunold, CEO

Gentlemen:

1. Subscription.

(a) Subject to the terms and conditions of this Agreement the undersigned (the "Purchaser") hereby irrevocably subscribes for and agrees to purchase shares of the common stock, par value $0.01 per share (each a “Share” and collectively, the “Shares”) of SPO Medical Inc. (hereinafter the “Company”) at a price per Share of USD $0.025 of the Company as defined below (the Shares sometimes referred to as the "Units"), for an aggregate purchase price (the “Purchase Price ") and for the number of Shares set forth below and on the signature page hereto.

(b) Payment. Upon execution of this Agreement, the Purchaser will pay by wire transfer to an account designated by the Company the full amount of the purchase price of the Units for which the Purchaser is subscribing.

(c) The “Closing Date” shall be the date that the Purchase Price is transmitted by wire transfer or otherwise credited to or for the benefit of the Company. Subject to the satisfaction or waiver of the terms and conditions of this Agreement, on the Closing Date, the Purchaser shall purchase and the Company shall sell to the Purchaser the Shares for the Purchase Price indicated thereon, as described above in this Agreement.

2.                  Representations, Warranties and Covenants of the Purchaser. The Purchaser hereby acknowledges that his investment in the Units involves a high degree of risk and his economic circumstances are such that he can afford the loss of his investment. The Purchaser further acknowledges, represents, warrants and agrees as follows:

(a) The Purchaser is an “accredited investor” as defined by Rule 501 under the Securities Act of 1933, as amended (the “Act”), and the Purchaser is capable of evaluating the merits and risks of Subscriber’s investment in the Company and has the capacity to protect the Purchaser’s own interests. The Purchaser meets the requirements of at least one of the suitability standards for an “accredited investor” as set forth on the Accredited Investor Certification contained herein;

(b) None of the Units have been registered under the Act or any state securities laws. The Purchaser understands that the offering and sale of the Units is intended to be exempt from registration under the Act, by virtue of Section 4(2) and/or Section 4(6) thereof and the provisions of Regulation D promulgated thereunder, based, in part, upon the representations, warranties and agreements of the Purchaser contained in this Agreement;

(c) Neither the Securities and Exchange Commission nor any state securities commission has approved the sale of the Units or the common stock being purchased hereby or into which the warrants are convertible nor has the Commission passed upon or endorsed the merits of the Offering;

(d) The Purchaser has had the opportunity to obtain any information, to the extent the Company had such information in its possession or could acquire it without unreasonable effort or expense, necessary to verify the accuracy of the information contained in all documents received or reviewed in connection with the purchase of the Units and has had the opportunity to meet with representatives of the Company and to have them answer any questions and provide such additional information regarding the terms and conditions of this particular investment and the finances, operations, business and prospects of the Company deemed relevant by the Purchaser.

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(e) The Purchaser has been furnished with or has had access at the EDGAR Website of the Securities and Exchange Commission to the Company's Form 10-K filed on April 11, 2013 for the fiscal year ended December 31, 2012, together with all subsequent filings made available at the EDGAR website prior to the date hereof (hereinafter referred to collectively as the "Reports"). In evaluating the suitability of an investment in the Company, the Purchaser has not relied upon any representation or other information (oral or written) other than as contained in the Reports. The Purchaser and its advisors, if any, have been furnished with or have been given access to all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Units which have been requested by the Purchaser. The Purchaser and its advisors, if any, have been afforded the opportunity to ask questions of the Company and its management and have received complete and satisfactory answers to any such inquiries;

(f) The Purchaser is unaware of, is in no way relying on, and did not become aware of the Offering of the Units through or as a result of, any form of general solicitation or general advertising including, without limitation, any article, notice, advertisement or other communications published in any newspaper, magazine or similar media or broadcast over television or radio, in connection with the Offering and is not subscribing for Units and did not become aware of the Offering as a result of any seminar or meeting to which the Purchaser was invited by, or any solicitation of a subscription by, a person not previously known to the Purchaser;

(g) The Purchaser has taken no action which would give rise to any claim by any person for brokerage commissions, finders’ fees or the like relating to this Agreement or the transactions contemplated hereby;

(h) The Purchaser has sufficient knowledge and experience in financial, tax, and business matters, and, in particular, investments in securities, so as to enable the Purchaser to utilize the information made available to the Purchaser to evaluate the merits and risks of an investment in the Units and to make an informed investment decision with respect thereto;

(i) The Purchaser is acquiring the Units solely for his own account for investment and not with a view to resale or distribution thereof, in whole or in part. The Purchaser has no agreement or arrangement, formal or informal, with any person to sell or transfer all or any part of the Units purchased hereunder, and the Purchaser has no plans to enter into any such agreement or arrangement;

(j) The Purchaser must bear the substantial economic risks of the investment in the Units indefinitely because none of the securities included in the Units may be sold, hypothecated or otherwise disposed of unless subsequently registered under the Act and applicable state securities laws or an exemption from such registration is available. The Purchaser acknowledges and understands legends shall be placed on the certificates representing the shares of common stock into which the warrants are convertible to the effect that they have not been registered under the Act or applicable state securities laws. Appropriate notations thereof will be made on the securities issued substantially as follows:

“THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT OR IN A TRANSACTION WHICH, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, QUALIFIES AS AN EXEMPT TRANSACTION UNDER THE ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.”

(k) In addition, the certificates representing the common stock of the Company, and any and all securities issued in replacement thereof or in exchange therefore, shall bear such legend as may be required by the securities laws of the jurisdiction in which Purchaser resides.

(l) The Purchaser has adequate means of providing for the purchaser’s current financial needs and foreseeable contingencies and has no need for liquidity of the investment in the Units for an indefinite period of time;

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(m) The Purchaser: (i) if a natural person represents that he has reached the age of 21 and has full power and authority to execute and deliver this Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof and has adequate means for providing for his current financial needs and anticipated future needs and possible personal contingencies and emergencies and has no need for liquidity in the investment in the Units; (ii) if a corporation, partnership, limited liability company or partnership, association, joint stock company, trust, unincorporated organization or other entity represents that such entity is duly organized, validly existing and in good standing under the laws of the state of its organization, the consummation of the transactions contemplated hereby is authorized by, and will not result in a violation of state law or its charter or other organizational documents, such entity has full power and authority to execute and deliver this Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof and to purchase and hold the securities constituting the Units, the execution and delivery of this Agreement has been duly authorized by all necessary action, this Agreement has been duly executed and delivered on behalf of such entity and is a legal, valid and binding obligation of such entity; and (iii) if executing this Agreement in a representative or fiduciary capacity, represents that it has full power and authority to execute and deliver this Agreement in such capacity and on behalf of the subscribing individual, ward, partnership, trust, estate, corporation, limited liability company or partnership, or other entity has full right and power to perform pursuant to this Agreement and make an investment in the Company, and that this Agreement constitutes a legal, valid and binding obligation of such entity. The execution and delivery of this Agreement will not violate or be in conflict with any order, judgment, injunction, agreement or controlling document to which the Purchaser is a party or by which it is bound;

(n) The Purchaser acknowledges that the Company is in the development stage, has been engaged in business for only a short period of time and has limited operations. The Purchaser is knowledgeable about investment considerations in development-stage companies. The Purchaser’s overall commitment to investments which are not readily marketable is not excessive in view of the Purchaser’s net worth and financial circumstances and the purchase of the Units will not cause such commitment to become excessive. The investment in the Units is suitable one for the Purchaser;

(o) The Purchaser agrees that it may not sell, transfer, pledge, encumber, hypothecate, permit to be subject to a security interest, grant an option in or otherwise dispose of the Units being acquired hereunder or the shares of Common Stock into which the warrants are to be convertible unless such securities are registered under the Securities Act or unless an opinion of counsel satisfactory is delivered to the Company that no such registration is required is delivered to the Company;

(p) The Purchaser represents that the foregoing representations and warranties are true and correct as of the date hereof and, unless it otherwise notifies the Company prior to the Closing Date shall be true and correct as of the Closing Date.

4. Representations and Warranties of the Company. The Company represents and warrants to the Purchaser as follows:

4.1             Organization and Authority; Subsidiaries. The Company is a corporation validly existing and in good standing under the laws of the State of Delaware, with full power and authority to enter into and perform this Agreement and the other agreements contemplated hereby to which it is a party. The Company is duly licensed or qualified to do business as a foreign corporation and is in good standing under the laws of all other jurisdictions in which the character of the properties owned or leased by it therein or in which the transaction of its business makes such qualification necessary, except for jurisdictions where failure to become licensed or to so qualify could not reasonably be expected to have a material adverse effect on the business and operations of the Company taken as a whole. The Company has all requisite corporate power and authority to own its properties, to carry on its business as now conducted, and to enter into and perform its obligations under this Agreement.

4.2             Authorization; Binding Effect. The Company has taken all corporate actions which are necessary to authorize the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby.

4.3             No Bankruptcy or Insolvency. The Company has not filed any voluntary petition in bankruptcy or been adjudicated a bankrupt or insolvent, filed by petition or answer seeking any reorganization, liquidation, dissolution or similar relief under any federal bankruptcy, insolvency, or other debtor relief law, or sought or consented to or acquiesced in the appointment of any trustee, receiver, conservator or liquidator of all or any substantial part of its properties. No court of competent jurisdiction has entered an order, judgment or decree approving a petition filed against the Company seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any federal bankruptcy act, or other debtor relief law, and no other liquidator has been appointed of the Company or of all or any substantial part of its properties.
 

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4.4                          No Litigation. There are no actions, suits or proceedings of any type pending or, to the knowledge of the Company, threatened, against the Company which if adversely determined could have a material adverse effect on the business and operations of the Company taken as a whole.

4.5                          No Violation or Conflict. Assuming the representations and warranties of the Purchaser in Section 3 are true and correct neither the issuance and sale of the Units do, nor the issuance of the Warrant Shares upon the exercise of the Warrant will, (i) violate, conflict with, result in a breach of, or constitute a default (or an event which with the giving of notice or the lapse of time or both would be reasonably likely to constitute a default) under (A) the articles or certificate of incorporation, charter or bylaws of the Company, or (B) the terms of any bond, debenture, note or any other evidence of indebtedness, or any agreement, stock option or other similar plan, indenture, lease, mortgage, deed of trust or other instrument to which the Company is a party or by which it is bound.

4.6                          Investment Company. The Company is not, and is not controlled by, an “Investment Company” within the meaning of the Investment Company Act.

4.7                          Governmental Consents and Notices. No consent, approval or authorization of or designation, declaration or filing with any governmental authority on the part of the Company is required in connection with the valid execution and delivery of this Agreement, or the offer, sale or issuance of the Units, or the consummation of any other transaction contemplated hereby, except qualification (or taking such action as may be necessary to secure an exemption from qualification, if available) of the offer and sale of the Units under applicable state and federal securities laws, which qualification if required, will be accomplished in a timely manner or the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws.

4.8                          Units and Common Stock. The Common Stock when issued, will be duly authorized, validly issued, fully paid and nonassessable.

4.9                          Intellectual Property Rights and Interests. The Company has not received any written or oral notice or claim that the Company is infringing the intellectual property rights of any other person or legal entity or that the Company is in material breach or default of any license granting to the Company rights in any intellectual property. To the knowledge of the Company as of the date hereof, without having conducted any independent investigation or analysis of its intellectual property rights and the use thereof by third parties, no third party is infringing upon any intellectual property rights proprietary to the Company.

4.10                      Filings. At the times of their respective filings, all of the Reports complied in all material respects with the requirements of the Securities Act of 1933, as amended, and the Exchange Act and in each case the rules and regulations of the Commission promulgated thereunder. None of the Company’s Reports contained, at the time they were filed, any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading.

4.11                      No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances that would cause the offering of the Securities pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act in a manner that would prevent the Company from selling the Securities pursuant to Regulation D and Rule 506 thereof under the Securities Act, nor will the Company or any of its affiliates or subsidiaries take any action or steps that would cause the offering of the Securities to be integrated with other offerings.

4.12                      No Fees. The Company has not employed any broker or finder or incurred any liability for any brokerage or investment banking fees, commissions, finders' structuring fees, financial advisory fees or other similar fees in connection with the transactions contemplated by this agreement.

4.13                      Rights of Other Affecting the Transaction. There are no preemptive rights of any person to acquire the Units or the Warrant Shares or any portion thereof. No other party has a currently exercisable right of first refusal which would be applicable to any or all of the transactions contemplated by the Transaction Agreements. On the Closing Date, the Company shall provide Purchaser in writing with the total number of outstanding shares of the Company’s common stock, which number shall be true and correct.

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5. Undertaking. Until such time as all the Shares or the Warrant Shares are saleable by the Purchaser without restriction, the Company will prepare and furnish to the Purchaser and make publicly available in accordance with Rule 144 or any successor rule such information as is required for the Purchasers to sell the Securities under Rule 144 under the Securities Act of 1933, as amended. The Company further covenants that it will take such further action as any holder of Securities may reasonably request, all to the extent required from time to time to enable such Person to sell such Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144.

6. Indemnification. The Company agrees to indemnify and hold harmless the Purchaser, and its officers, directors, employees, agents, control persons and affiliates against all losses, liabilities, claims, damages, and expenses whatsoever (including, but not limited to, any and all expenses incurred in investigating, preparing, or defending against any litigation commenced or threatened) based upon or arising out of any actual or alleged false representation or warranty, or misrepresentation or omission to state a material fact, or breach by the Company of any covenant or agreement made by the Company herein or in any other document delivered in connection with this Agreement, except to the extent such losses, liabilities, claims, damages, and expenses result primarily from Purchaser's failure to perform any covenant or agreement contained in this Agreement or the Purchaser's or its officer’s, director’s, employee’s or agent’s illegal or willful misconduct, gross negligence, recklessness or bad faith (in each case, as determined by a non-appealable judgment to such effect) in performing its obligations under this Agreement.

7. Irrevocability; Binding Effect. The Purchaser hereby acknowledges and agrees that the subscription hereunder is irrevocable by the Purchaser, except as required by applicable law, and that this Agreement shall survive the death or disability of the Purchaser and shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives, and permitted assigns. If the Purchaser is more than one person, the obligations of the Purchaser hereunder shall be joint and several and the agreements, representations, warranties, and acknowledgments herein shall be deemed to be made by and be binding upon each such person and such person’s heirs, executors, administrators, successors, legal representatives, and permitted assigns.

8. Amendment. This Agreement shall not be amended, modified or waived except by an instrument in writing signed by the party against whom any such amendment, modification or waiver is sought.

9. Notices. Any notice or other communication required or permitted to be given hereunder shall be in writing

(a) if to Company,

SPO Medical Inc.

3 HaGavish St. Kfar Saba, Israel 44425.

Telephone No.: (011-972-9) 966-2520

Telecopier No.: (011-972-9) 966-2525

mbraunold@spoglobal.com

with a copy to:

Aboudi & Brounstein
            Law Offices

Rechov Gavish 3, POB 2432

Kfar Saba Industrial Zone 44641 Israel

Telephone No.: (011-972-9) 764-4833

Telecopier No.: (011-972-9) 764-4834

Gerald@a-blaw.com

(b) if to the Purchaser, at the address set forth on the signature page hereof .

10. Assignability. This Agreement and the rights, interests and obligations hereunder are not transferable or assignable by the Purchaser.

5

11. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflicts of laws principles.

12. Use of Pronouns. All pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the person or persons referred to may require.

13. Confidentiality. The Purchaser acknowledges and agrees that any information or data it has obtained from or about the Company, including, without limitation, the business plan of the Company, not otherwise properly in the public domain, was received in confidence. The Purchaser agrees not to divulge, communicate or disclose, except as may be required by law or for the performance of this Agreement, or use to the detriment of the Company or for the benefit of any other person or persons, or misuse in any way, any confidential information of the Company, including any scientific, technical, trade or business secrets of the Company and any scientific, technical, trade or business materials that are treated by the Company as confidential or proprietary, including, but not limited to, ideas, discoveries, inventions, developments and improvements belonging to the Company and confidential information obtained by or given to the Company about or belonging to third parties.

14. Miscellaneous.

(a) This Agreement constitutes the entire agreement between the Purchaser and the Company with respect to the subject matter hereof and supersede all prior oral or written agreements and understandings, if any, relating to the subject matter hereof. The terms and provisions of this Agreement  may be waived, or consent for the departure wherefrom granted, only by a written document executed by the party entitled to the benefits of such terms or provisions.

(b) The Purchaser’s representations and warranties made in this Agreement shall survive the execution and delivery hereof and delivery of the Units to the Purchaser.

(c) Each of the parties hereto shall pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or others engaged by such party) in connection with this Agreement and the transactions contemplated hereby whether or not the transactions contemplated hereby are consummated.

(d) This Agreement may be executed in one or more counterparts each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.

(e) Each provision of this Agreement shall be considered separable and if for any reason any provision or provisions hereof are determined to be invalid or contrary to applicable law, such invalidity or illegality shall not impair the operation of or affect the remaining portions of this Agreement.

(f) Paragraph titles are for descriptive purposes only and shall not control or alter the meaning of this Agreement as set forth in the text.

Accredited Investor Certification and Questionnaire

(Check the appropriate box(es))

1. Please check the appropriate box.

____ (i) I am a natural person who had individual income of more than $200,000 in each of the most recent two years or joint income with my spouse in excess of $300,000 in each of the most recent two years (in each case including foreign income, tax exempt income and full amount of capital gains and losses but excluding any income of other family members and any unrealized capital appreciation) and reasonably expect to reach that same income level for the current year);

____(ii) I am a natural person whose individual net worth (i.e., total assets in excess of total liabilities), or joint net worth with my spouse, will at the time of purchase of the Units described in this subscription agreement to which this certification is attached be in excess of $1,000,000;

6

For purposes of calculating net worth under this Category (ii), (A) the undersigned’s primary residence shall not be included as an asset, (B) indebtedness that is secured by the undersigned’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability, (C) to the extent that the indebtedness that is secured by the primary residence is in excess of the fair market value of the primary residence, the excess amount shall be included as a liability, and (d) if the amount of outstanding indebtedness that is secured by the primary residence exceeds the amount outstanding 60 days prior to the execution of this Subscription Agreement, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability.

____ (iii) The undersigned is an entity (other than a trust) in which all of the equity owners are “accredited investors” within one or more of the above categories.  If relying upon this Category alone, each equity owner must complete a separate copy of this Agreement;  

____ (iv) The Purchaser is a trust, which trust has total assets in excess of $5,000,000, which is not formed for the specific purpose of acquiring the Units offered hereby and whose purchase is directed by a sophisticated person as described in Rule 506(b)(ii) of Regulation D and who has such knowledge and experience in financial and business matters that he is capable of evaluating the risks and merits of an investment in the Units;

____ (v) I am a director or executive officer of the Company; or

____ (vi) The Purchaser is an entity (other than a trust) in which all of the equity owners meet the requirements of at least one of the above subparagraphs.

The undersigned agrees that the undersigned will notify the Company at any time on or prior to the Closing in the event that the representations and warranties in this Accredited Investor Certification and Questionnaire shall cease to be true, accurate and complete.

(2) Suitability (please answer each question)

a)      For an individual, please describe any college or graduate degrees held by you:

b)      For all subscribers, please state whether you have you participated in other private placements before:

YES NO

(c) If your answer to question (b) above was “YES”, please indicate frequency of such prior participation in private placements of:

	Public Companies	Private Companies
Frequently
Occasionally
Never

(d) For individuals, do you expect your current level of income to significantly decrease in the foreseeable future?

YES NO

(e) For trust, corporate, partnership and other institutional subscribers, do you expect your total assets to significantly decrease in the foreseeable future?

YES NO

7

(f) For all subscribers, are you familiar with the risk aspects and the non-liquidity of investments such as the Securities for which you seek to purchase?

YES NO

(g) For all subscribers, do you understand that there is no guarantee of financial return on this investment and that you run the risk of losing your entire investment?

YES NO

(3) Manner in which title is to be held: (circle one)

(a) Individual Ownership

(b) Community Property

(c) Joint Tenant with Right of Survivorship (both parties must sign)

(d) Partnership

(e) Tenants in Common

(f) Company

(g) Trust

(h) Other

(4) NASD Affiliation.

Are you affiliated or associated with an NASD member firm (please check one):

YES NO

If Yes, please describe:

_________________________________________________________

_________________________________________________________

_________________________________________________________

*If subscriber is a Registered Representative with an NASD member firm, have the following acknowledgment signed by the appropriate party:

The undersigned NASD member firm acknowledges receipt of the notice required by the NASD Conduct Rules.

_________________________________

Name of NASD Member Firm

By: ______________________________

Authorized Officer

Date: ____________________________

The undersigned is informed of the significance to the Company of the foregoing representations and answers contained in this Purchaser Questionnaire and such answers have been provided under the assumption that the Company will rely on them.

[Remainder of page intentionally blank, signature pages follow]

8

IN WITNESS WHEREOF, the Purchaser has executed this Agreement this ___ day of May, 2013.

$

(Aggregate Purchase Price)                                                                          # Shares (Purchase Price / 0.025)

If the Purchaser is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY or TRUST:

[NAME OF ENTITY]

[ADDRESS]

_______________________________

Federal Taxpayer

Identification Number

By: _______________________

Name: _______________________

Title: _______________________

SUBSCRIPTION ACCEPTED AND AGREED TO

THIS ____DAY OF May, 2013.

SPO Medical Inc.

By: _____________________________

Name: Michael Braunold

Title: CEO

9

EX-31

EXHIBIT 31

RULE 13A-14(A) / 15D-14(A) CERTIFICATION

I, Michael Braunold, certify that:

1.      I have reviewed this Quarterly Report on Form 10-Q for the three months ended June 30, 2013 of SPO Medical Inc.

2.      Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.      Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s  internal control over financial reporting that occurred during the registrant’s  most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5.       I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant's board of directors (or persons fulfilling the equivalent function):

a)      All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)      Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2013

/s/ Michael Braunold

Michael Braunold

Chief Executive Officer (Principal Executive Officer
and Principal Financial and Accounting Officer)

EX-32

EXHIBIT 32

SECTION 1350 CERTIFICATION

In connection with the Quarterly Report of SPO Medical, Inc. (the "Company") on Form 10-Q for the three months ended June 30, 2013 (the "Report") filed with the Securities and Exchange Commission, I, Michael Braunold, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 8, 2013

/s/ Michael Braunold

Michael Braunold

Chief Executive Officer (Principal Executive Officer
and Principal Financial and Accounting Officer)

A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906 HAS BEEN PROVIDED TO SPO MEDICAL INC. AND WILL BE RETAINED BY SPO MEDICAL INC. AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST.

XML

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Statement [Abstract]
Revenues	$ 100		$ 249
Cost Of Revenues	85		210
Gross Profit	15		39
Operating Expenses
Selling And Marketing	17	125	17	257
General And Administrative	97	79	213	137
Total Operating Expenses	114	204	230	394
Operating Loss	(99)	(204)	(191)	(394)
Financial (income) Expense, Net	(83)	(25)	(138)	(85)
Net Loss For The Period	$ (182)	$ (229)	$ (329)	$ (479)
Basic And Diluted Loss Per Share	$ 0	$ (0.01)	$ (0.01)	$ (0.01)
Weighted Average Number Of Shares Outstanding Used In Computation Of Basic Loss Per Share	70,861,109	41,779,650	65,422,210	40,676,872

XML

STOCKHOLDER'S EQUITY

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Stockholder's Equity

NOTE 5    -     Stockholders Equity

Issuance of Securities

On May 8, 2013, the Company entered into a Subscription Agreement with two accredited investors (the “Investors”), pursuant to which the Company sold and issued to the Investors (the “Private Placement”) a total of 10,000,000 shares of the Company's Common Stock for proceeds of $227, net of issuance expenses. In connection with the Private Placement, warrants (the “Warrants”) for an additional 5,000,000 shares of the Company’s Common Stock were issued to one of the Investors. The Warrants are exercisable through May 8, 2018 at a per share exercise price of $0.10.

On May 29, 2013, the Company issued 2,366,639 shares to satisfy an obligation to issue shares.

During the six months ended June 30, 2013, the Company issued 10,976,071 shares of its common stock upon conversion of $67 in principal and accrued interest of convertible promissory notes.

XML

GENERAL

6 Months Ended

Jun. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

General

NOTE 1    -     General

SPO Medical Inc. (hereinafter referred to as "SPO" or the "Company") is engaged in the design, development and marketing of non-invasive pulse oximetry technologies to measure blood oxygen saturation and heart rate. The applications are marketed, in the following sectors; professional medical care, homecare, sports, safety and search & rescue.

The Company was originally incorporated under the laws of the State of Delaware in September 1981 under the name "Applied DNA Systems, Inc." On November 16, 1994, the Company changed its name to "Nu-Tech Bio-Med, Inc." On December 23, 1998, the Company changed its name to "United Diagnostic, Inc." Effective April 21, 2005, the Company acquired (the "Acquisition Transaction") 100% of the outstanding capital stock of SPO Medical Equipment Ltd., a company incorporated under the laws of the State of Israel ("SPO Ltd."), pursuant to a Capital Stock Exchange Agreement dated as of February 28, 2005 between the Company, SPO Ltd. and the shareholders of SPO Ltd., as amended and restated on April 21, 2005 (the "Exchange Agreement"). In exchange for the outstanding capital stock of SPO Ltd., the Company issued to the former shareholders of SPO Ltd. a total of 5,769,106 shares of the Company's common stock, par value $0.01 per share ("Common Stock"), representing approximately 90% of the Common Stock then issued and outstanding after giving effect to the Acquisition Transaction. As a result of the Acquisition Transaction, SPO Ltd. became a wholly owned subsidiary of the Company as of April 21, 2005 and, subsequent to the Acquisition Transaction, the Company changed its name to "SPO Medical Inc." Upon consummation of the Acquisition Transaction, the Company effectuated a forward subdivision of the Company's Common Stock issued and outstanding on a 2.65285:1 basis.

The merger between UNDI and the SPO Ltd was accounted for as a reverse merger. As the shareholders of SPO Ltd received the largest ownership interest in the Company, SPO Ltd was determined to be the "accounting acquirer" in the reverse acquisition. As a result, the historical financial statements of the Company were replaced with the historical financial statements of the SPO Ltd.

XML

GOING CONCERN

6 Months Ended

Jun. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Going Concern

NOTE 3    -     Going Concern

As reflected in the accompanying financial statements, the Company’s operations for the six months ended June 30, 2013, resulted in a net loss of $329 and the Company’s balance sheet reflects a net stockholders’ deficit of $2,534. The Company’s ability to continue operating as a “going concern” is dependent on its ability to generate additional revenues or raise additional working capital. As disclosed in previous filings with the Securities and Exchange Commission, management has been attempting to raise additional cash from current and potential stockholders and, in May 2013, the Company raised net proceeds of $227 from accredited investors. While it has no commitments for additional amounts, the Company plans to continue its capital raising efforts.These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

XML

FINANCIAL EXPENSES

6 Months Ended

Jun. 30, 2013

Other Income and Expenses [Abstract]

Financial Expenses

NOTE 6    -     Financial Expenses

Financial expenses for the six months ended June 30, 2013 and 2012 are comprised of the following:

	2013			2012
Non-cash expenses related to conversion features	$	(61	)	$	(40	)
Non-cash expenses related to warrants to issue shares		18			(7	)
Interest in respect of debt instruments		(65	)		(52	)
Exchange rate differences caused by fluctuations in the exchange rate with the New Israeli Shekel ("NIS") on liabilities denominated in NIS held by the subsidiary		(30	)		14
		(138	)		(85	)

XML

LOANS PAYABLE

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Loans Payable

NOTE 4   - Loans Payable

On January 4, 2013, the Company entered into a Convertible Note Agreement pursuant to which the Company received a loan in the principal amount of $32.5. The scheduled maturity date of the note is January 4, 2014. The note bears interest at a per annum rate of 8%. Commencing June 18, 2013, the Investor is entitled to convert all or any part of the outstanding and unpaid principal amount on the note, as well as the interest accrued, into shares of the Company’s Common Stock at a conversion rate equal to 55% of the average of the five lowest closing sale prices during the ten days preceding the conversion date.

On February 5, 2013, the Company entered into a Convertible Note Agreement pursuant to which the Company received an additional loan in the principal amount of $32.5 from the above referenced investor. The scheduled maturity date of the note is February 5, 2014. The note bears interest at a per annum rate of 8%. Commencing July 28, 2013, the Investor is entitled to convert all or any part of the outstanding and unpaid principal amount on the note, as well as the interest accrued, into shares of the Company’s Common Stock at a conversion rate equal to 55% of the average of the five lowest closing sale prices during the ten days preceding the conversion date.

On April 12, 2013, the Company entered into a Convertible Note Agreement pursuant to which the Company received an additional loan in the principal amount of $32.5 from the above referenced investor. The scheduled maturity date of the note is April 12, 2014. The note bears interest at a per annum rate of 8%. Commencing October 9, 2013, the Investor is entitled to convert all or any part of the outstanding and unpaid principal amount on the note, as well as the interest accrued, into shares of the Company’s Common Stock at a conversion rate equal to 55% of the average of the five lowest closing sale prices during the ten days preceding the conversion date.

XML

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Statement of Financial Position [Abstract]
Preferred Stock, Par Value	$ 0.01	$ 0.01
Preferred Stock, Authorized	2,000,000	2,000,000
Preferred Stock, Issued
Preferred Stock, Outstanding
Common Stock, Par Value	$ 0.01	$ 0.01
Common Stock, Authorized	100,000,000	100,000,000
Common Stock, Issued	79,806,254	56,463,544
Common Stock, Outstanding	79,806,254	56,463,544

XML

General (Narrative) (Details) (SPO Medical Equipment Limited, USD $)	0 Months Ended
	Apr. 21, 2005
SPO Medical Equipment Limited
Business Acquisition [Line Items]
Outstanding Capital stock Acquired, Percentage	100.00%
Common Stock Issued To Former Shareholders	5,769,106
Common Stock, Price Per Share	$ 0.01
Forward Subdivision Of The Company Common Stock Issued And Outstanding	Upon consummation of the Acquisition Transaction, the Company effectuated a forward subdivision of the Company's Common Stock issued and outstanding on a 2.65285:1 basis.
Common Stock Acquired, Percentage	90.00%

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash Flows From Operating Activities
Net Loss For The Period	$ (329)	$ (479)
Adjustments To Reconcile Loss To Net Cash Used In Operating Activities:
Non-cash Expenses Related To Convertible Debt	61	40
Stock-based Compensation Expenses Related To Employees, Service Providers		253
Non-cash Expense Related To Warrants To Issue Shares	(18)	17
Changes In Assets And Liabilities:
Increase In Accrued Interest Payable On Loans	31	38
(increase) In Accounts Receivables	(1)
(Increase) In PrepaiId Expenses And Other Receivables	(15)	(10)
Increase In Trade Payable	54	11
Increase In Accrued Severance Pay, Net	10	8
Increase (decrease) In Accrued Expenses And Other Liabilities	109	(58)
Net Cash Used In Operating Activities	(98)	(180)
Cash Flows From Financing Activities
Proceeds From Sale Of Shares And Warrants, Net Of Issuance Costs	227
Payments Of Loans	(13)	(18)
Proceeds From Loan	104	175
Net Cash Provided By Financing Activities	318	157
Increase (Decrease) In Cash And Cash Equivalents	220	(23)
Cash And Cash Equivalents At The Beginning Of The Period	24	37
Cash And Cash Equivalents At The End Of The Period	244	14
Non Cash Transactions
Conversion Of Convertible Debt To Shares	67	37
Exercise Of Warrants In Consideration Of Concession Of Debt	24	22
Discount On Convertible Notes Recognized To Beneficial Conversion Feature	80
Supplemental Disclosure Of Cash Flow Information:
Cash Paid During The Period For Interest	$ 34	$ 14

XML

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013		Dec. 31, 2012
CURRENT ASSETS
Cash And Cash Equivalents	$ 244		$ 24
Accounts Receivable - Trade	1
Prepaid Expenses And Other Accounts Receivable	25		10
Total Current Assets	270		34
LONG TERM INVESTMENTS
Severance Pay Fund	148		142
Total Long Term Investments	148		142
Total net assets	418		176
Current Liabilities
Short-term Loans	1,492		1,081
Trade Payables	59		5
Employees And Payroll Accruals	662		563
Accrued Expenses And Other Liabilities	488		502
Current Liabilities, Total	2,701		2,151
Long-Term Liabilities
Warrants To Issue Shares		[1]	18
Long-term Loans			375
Accrued Severance Pay	251		235
Long-Term Liabilities, Total	251		628
STOCKHOLDERS' DEFICIENCY
Preferred stock of $0.01 par value Authorized - 2,000,000 shares, issued and outstanding - none
Common stock $0.01 par value-Authorized - 100,000,000 shares, issued and outstanding 79,806,254 and 56,463,544 shares as at June 30, 2013 and December 31, 2012 , respectively	798		565
Additional Paid-in Capital	17,997		17,832
Accumulated Deficit	(21,329)		(21,000)
Stockholders' Equity Attributable to Parent, Total	(2,534)		(2,603)
Total liabilities and stockholders' deficiency	$ 418		$ 176

[1] Less than 1

XML

FINANCIAL EXPENSES (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Financial Expenses Details
Non-Cash Expenses Related To Conversion Features			$ (61)	$ (40)
Non-Cash Expenses Related To Warrants To Issue Shares			18	(7)
Interest In Respect Of Debt Instruments			(65)	(52)
Exchange Rate Differences Caused By Fluctuations In The Exchange Rate With The New Israeli Shekel (NIS) On Liabilities Denominated In NIS Held By The Subsidiary			(30)	14
Financial Expense, Net	$ (83)	$ (25)	$ (138)	$ (85)

XML

STOCKHOLDERS EQUITY (Narrative) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended		0 Months Ended	6 Months Ended	0 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	May 29, 2013 Common Stock	Jun. 30, 2013 Common Stock Convertible Promissory Note	May 08, 2013 Private Placement - Two Accredited Investors Common Stock	May 08, 2013 Private Placement - One of the Two Accredited Investors Warrants
Common Stock Sold And Issued To Investors					10,000,000
Proceeds From Sale Of Common Stock To Investors, Net Of Issuane Expenses	$ 227				$ 227
Warrants issued						5,000,000
Warrants Exercisable Date						May 08, 2018
Excercise price of warrants						$ 0.10
Shares of common stock issued in conversion of debt			2,366,639	10,976,071
Debt conversion original debt amount	$ 67	$ 37		$ 67

XML

FINANCIAL EXPENSES (Tables)

6 Months Ended

Jun. 30, 2013

Other Income and Expenses [Abstract]

Schedule of Financial Expense

Financial expenses for the six months ended June 30, 2013 and 2012 are comprised of the following:

	2013			2012
Non-cash expenses related to conversion features	$	(61	)	$	(40	)
Non-cash expenses related to warrants to issue shares		18			(7	)
Interest in respect of debt instruments		(65	)		(52	)
Exchange rate differences caused by fluctuations in the exchange rate with the New Israeli Shekel ("NIS") on liabilities denominated in NIS held by the subsidiary		(30	)		14
		(138	)		(85	)

XML

BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Basis Of Presentation

NOTE 2    -     Basis of Presentation

The accompanying un-audited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with Rule 8-03 of Regulation S-X. These financial statements reflect all adjustments, consisting of normal recurring adjustments and accruals, which are, in the opinion of management, necessary for a fair presentation of the financial position of the Company as of June 30, 2013 and the results of operations and cash flows for the interim periods indicated in conformity with generally accepted accounting principles applicable to interim periods. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Operating results for the three and six months ended June 30, 2013, are not necessarily indicative of the results that may be expected for the year ended December 31, 2013.

Certain prior years' amounts have been reclassified in conformity with current year's financial statements.

XML

LOANS PAYABLE (Narrative) (Details) (USD $)	0 Months Ended
	Jan. 04, 2013 Convertible Note Agreement-January 4, 2013	Feb. 05, 2013 Convertible Note Agreement-February 5, 2013	Apr. 12, 2013 Convertible Note Agreement-April 12, 2013
Debt Instrument [Line Items]
Proceeds From Convertible Notes	$ 32,500	$ 32,500	$ 32,500
Debt Instrument Maturity Date	Jan. 04, 2014	Feb. 05, 2014	Apr. 12, 2014
Convertible Note Interest Rate	8.00%	8.00%	8.00%
Debt Instrument Conversion Terms	Commencing June 18, 2013, the Investor is entitled to convert all or any part of the outstanding and unpaid principal amount on the note, as well as the interest accrued, into shares of the Company's Common Stock at a conversion rate equal to 55% of the average of the five lowest closing sale prices during the ten days preceding the conversion date.	Commencing July 28, 2013, the Investor is entitled to convert all or any part of the outstanding and unpaid principal amount on the note, as well as the interest accrued, into shares of the Company's Common Stock at a conversion rate equal to 55% of the average of the five lowest closing sale prices during the ten days preceding the conversion date.	Commencing October 9, 2013, the Investor is entitled to convert all or any part of the outstanding and unpaid principal amount on the note, as well as the interest accrued, into shares of the Company's Common Stock at a conversion rate equal to 55% of the average of the five lowest closing sale prices during the ten days preceding the conversion date.

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 08, 2013
Document And Entity Information
Entity Registrant Name	SPO Medical Inc
Entity Central Index Key	0000716778
Document Type	10-Q
Document Period End Date	Jun. 30, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	No
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		93,025,271
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2013