Business Context and Reporting Period
This Form 8-K filing by ReWalk Robotics Ltd. (not Lifeward Ltd.) covers events occurring between December 31, 2019, and February 10, 2020. The report details the execution of a public offering of units, the engagement of a placement agent, and the pricing and closing of the transaction.
Key Financial Metrics and Transaction Details
- Offering Size: 5,600,000 units (common and pre-funded).
- Offering Price: $1.25 per common unit; $1.249 per pre-funded unit.
- Expected Net Proceeds: Approximately $7.0 million (before deducting placement agent fees and estimated offering expenses).
- Placement Agent Fees: 7.5% cash fee and 1.0% management fee of aggregate gross proceeds.
- Placement Agent Warrants: Warrants to purchase 336,000 ordinary shares (6.0% of shares placed) at an exercise price of $1.5625 (125% of the public offering price).
- Expense Reimbursement: Up to $35,000 for general expenses, $90,000 for legal fees, and $10,000 for clearing expenses.
- Closing Date: February 10, 2020.
Material Changes and Use of Proceeds
The primary material change is the successful completion of a capital raise to address liquidity needs. The filing does not provide comparative revenue, profit, or cash flow metrics for the period. The Company anticipates using the net proceeds for:
- Sales, marketing, and reimbursement expenses for the ReStore device and ReWalk Personal device.
- Research and development for lightweight exo-suit technology for lower limb disabilities (including stroke) and spinal cord injury devices.
- General corporate purposes.
Guidance, Risks, and Contingencies
Lock-Up Restrictions: The Company agreed to a 90-day lock-up period following the closing, restricting the issuance of equity or convertible securities, with specific exceptions for strategic transactions and the existing agreement with Timwell Corporation Limited. Additionally, for six months, the Company cannot issue securities with floating conversion prices or enter into future-determined price agreements (excluding its existing "at-the-market" program).
Material Risks Disclosed:
- Going Concern: The filing references a substantial doubt regarding the Company's ability to continue as a going concern as noted in its 2018 financial statements.
- Regulatory and Commercial: Risks include maintaining Nasdaq listing compliance, obtaining third-party payor reimbursement, FDA regulatory approvals, and the outcome of a mandatory 522 postmarket surveillance study.
- Legal: Ongoing shareholder class action litigation related to the initial public offering.
- Operational: Dependence on third-party suppliers and manufacturers, and cybersecurity risks.
Investor Verification Checklist
- Verify the final net proceeds received after deducting all fees and expenses against the $7.0 million estimate.
- Confirm the Company's current cash position and runway post-offering to assess the "going concern" risk.
- Review the specific terms of the Investment Agreement with Timwell Corporation Limited referenced as an exception to the lock-up.
- Monitor the status of the shareholder class action litigation regarding the IPO.
- Check for updates on the FDA's 522 postmarket surveillance study and reimbursement approvals for ReStore and ReWalk Personal.