Business Context and Reporting Period
This Form 8-K, dated October 17, 2017, reports preliminary results of operations for ReWalk Robotics Ltd. (noted as Lifeward Ltd. in metadata) for the three and nine months ended September 30, 2017. The company is an emerging growth company incorporated in Israel, developing robotic exoskeletons for spinal cord injury patients.
Key Financial Metrics
| Metric | 3 Months Ended Sept 30, 2017 | 9 Months Ended Sept 30, 2017 | 3 Months Ended Sept 30, 2016 | 9 Months Ended Sept 30, 2016 |
|---|---|---|---|---|
| Revenue | $1.7 million | $6.2 million | $1.4 million | $4.3 million |
| Units Placed | 16 | 84 | 23 | 80 |
| Units Covered by Insurance | 7 | 34 | 13 | 41 |
Liquidity: Cash and cash equivalents were approximately $12.9 million as of September 30, 2017, compared to $12.4 million as of September 30, 2016, and $23.7 million as of December 31, 2016.
Profit, Margins, and Debt: The filing text does not provide clear values for net profit, operating margins, or specific debt balances.
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased for both the three-month and nine-month periods compared to the prior year. The nine-month increase was driven by sales mix, specifically higher sales to the U.S. Veterans' Administration for a clinical study (60 units placed since inception) and increased conversion of rental units to purchases.
- Geographic Mix: For the nine months ended September 30, 2017, 68% of revenue originated from the United States and 32% from Europe. In the prior year period, the split was 70% U.S., 21% Europe, and 9% Asia-Pacific.
- Insurance Claims: Pending insurance claims increased to 218 as of September 30, 2017, from 149 as of September 30, 2016.
Outlook, Risks, and Contingencies
Going Concern: Management and auditors have expressed substantial doubt regarding the company's ability to continue as a going concern based on financial statements for the second quarter of 2017 and fiscal 2016.
Key Risks:
- Ability to achieve reimbursement from third-party payors.
- Outcome of ongoing shareholder class action litigation regarding the initial public offering.
- Ability to repay secured indebtedness and secure future capital, which may involve dilution.
- Regulatory developments regarding the mandatory post-market 522 surveillance study.
- Market acceptance and reputation of products.
Unusual Items: The results are preliminary and unaudited; they are subject to adjustment upon completion of financial closing procedures.
Investor Verification Checklist
- Verify the final audited financial statements to confirm the preliminary revenue figures and assess the actual cash burn rate.
- Review the status of the 218 pending insurance claims and the likelihood of reimbursement approval.
- Assess the details of the secured indebtedness and the company's immediate plan to address the "substantial doubt" regarding its going concern status.
- Monitor the progress of the Veterans' Administration clinical study and its impact on future sales mix.
- Check for updates on the shareholder class action litigation and potential regulatory outcomes of the 522 study.