Business Context and Reporting Period
This Form 8-K Current Report, filed on February 25, 2021, by ReWalk Robotics Ltd. (trading symbol: RWLK), details a material definitive agreement entered into on February 19, 2021. The company, an emerging growth company incorporated in Israel, announced a private placement transaction expected to close on or about February 25, 2021.
Key Financial Metrics and Transaction Details
The filing outlines a capital raise rather than operational financial results. Key transaction metrics include:
- Gross Proceeds: Approximately $40.0 million.
- Securities Issued: 10,921,502 ordinary shares and warrants to purchase up to 5,460,751 ordinary shares (Purchaser Warrants).
- Purchase Price: $3.6625 per share and associated warrant.
- Warrant Terms (Purchaser): Exercise price of $3.60 per share; exercisable for 5.5 years.
- Placement Agent Fees: H.C. Wainwright & Co., LLC received a 7.5% cash fee and a 1.0% management fee on gross proceeds, plus warrants to purchase 655,290 shares (Wainwright Warrants) at $4.578125 per share.
- Expenses: Up to $90,000 for legal and out-of-pocket expenses, plus a $35,000 non-accountable expense allowance.
Material Changes and Use of Proceeds
The primary material change is the dilution of existing shareholders due to the issuance of new equity and warrants. The company anticipates using the net proceeds for the following purposes:
- Sales, marketing, and reimbursement expenses for the ReStore device and personal 6.0 devices.
- Broadening third-party payor and CMS coverage for the ReWalk Personal device.
- Commercializing new product lines via distribution agreements.
- Research and development of lightweight exo-suit technology and future spinal cord injury device designs.
- Routine product updates and general corporate purposes, including working capital.
Guidance, Outlook, and Risks
Management provided no specific financial guidance or revenue projections in this filing. The document includes extensive forward-looking statements subject to significant risks, including:
- Regulatory and Compliance: Risks related to FDA approvals, the mandatory 522 postmarket surveillance study, and maintaining Nasdaq listing requirements.
- Market and Operational: Dependence on third-party payor reimbursement, supply chain constraints, and the impact of the COVID-19 pandemic.
- Financial: Risks of substantial dilution from periodic share issuances and the ability to repay secured indebtedness.
- Lock-Up Provisions: The company agreed not to issue equity or convertible securities for 60 days following the effective date of the registration statement, with a one-year restriction on floating-price securities.
Investor Verification Checklist
- Verify the closing of the private placement and the actual net proceeds received after fees.
- Confirm the filing and effective date of the registration statement for resale of shares (required by March 11, 2021, with effectiveness targeted by April 20, 2021).
- Monitor the company's cash burn rate and working capital needs relative to the $40 million raised.
- Review subsequent filings for updates on the ReStore device commercialization and CMS coverage expansion.
- Assess the impact of the new share issuance on earnings per share and total share count.