Business Context and Reporting Period
This Form 8-K Current Report was filed by ReWalk Robotics Ltd. (trading symbol: RWLK) on December 8, 2020, regarding events occurring on December 3, 2020. The company, incorporated in Israel and listed on the Nasdaq Capital Market, specializes in robotic exoskeletons for mobility assistance. The filing details the closing of a private placement transaction to raise capital.
Key Financial Metrics and Transaction Details
- Gross Proceeds: Approximately $8.0 million raised from the private placement.
- Securities Issued: 5,579,776 ordinary shares and warrants to purchase up to 4,184,832 ordinary shares.
- Purchase Price: $1.43375 per share and associated warrant.
- Warrant Terms (Purchaser): Exercise price of $1.34 per share; exercisable until June 8, 2026.
- 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 334,787 shares at $1.7922 per share.
- Expenses: Up to $90,000 for legal and out-of-pocket expenses, plus a $35,000 non-accountable expense allowance.
- Use of Proceeds: Sales and marketing for ReStore and ReWalk Personal devices, research and development, and general corporate purposes including working capital.
Material Changes and Liquidity
The filing does not provide comparative financial statements (revenue, profit, or cash flow) for the current period versus the prior period. However, it highlights a material change in the company's capital structure through the issuance of new equity and warrants. The filing explicitly references a "substantial doubt" regarding the company's ability to continue as a going concern, as noted in the independent auditor's opinion for the fiscal year ended December 31, 2019. This capital raise is intended to address liquidity needs and fund future operations.
Guidance, Risks, and Contingencies
Management Commentary and Outlook: Management anticipates using net proceeds to broaden third-party payor coverage, commercialize new product lines, and fund R&D. The company is subject to a 35-day lock-up period following the effectiveness of the registration statement for the new shares, during which it cannot issue additional equity or convertible securities (with specific exceptions).
Risks and Contingencies:
- Going Concern: Substantial doubt exists regarding the company's ability to continue as a going concern without additional capital.
- Regulatory and Market Risks: Risks include maintaining Nasdaq listing requirements, obtaining regulatory approvals (FDA), and achieving reimbursement from third-party payors.
- Operational Risks: The COVID-19 pandemic has adversely affected operations. There are risks related to supply chain dependencies, intellectual property protection, and cybersecurity.
- Dilution: The issuance of shares and warrants creates a risk of substantial dilution to existing shareholders.
Investor Verification Checklist
- Verify the exact net proceeds after deducting the 8.5% placement agent fees and legal expenses.
- Confirm the status of the registration statement required to be filed by December 18, 2020, and its expected effectiveness date.
- Review the most recent Form 10-K to assess the severity of the "substantial doubt" regarding the going concern status.
- Monitor the company's ability to meet Nasdaq continued listing requirements given the capital raise.
- Check for any subsequent filings regarding the commercialization progress of the ReStore and ReWalk Personal devices.