Business Context and Reporting Period
This Form 8-K Current Report was filed by ReWalk Robotics Ltd. (trading symbol: RWLK) on September 27, 2021, with the report date of September 27, 2021. The filing discloses the entry into a Material Definitive Agreement and the issuance of unregistered equity securities. The company is incorporated in Israel and its ordinary shares are listed on the Nasdaq Capital Market.
Key Financial Metrics and Transaction Details
The filing details a Registered Direct Offering and a concurrent Private Placement (collectively, the "Offering") that closed on September 29, 2021. Key financial terms include:
- Gross Proceeds: Approximately $32.5 million before deducting placement agent fees and offering expenses.
- Securities Issued:
- 15,403,014 Ordinary Shares sold at $2.035 per share.
- 610,504 Pre-Funded Warrants sold at $2.034 per warrant (exercise price $0.001). All were exercised in full on September 27, 2021.
- 8,006,759 Ordinary Warrants issued in a private placement with an exercise price of $2.00 per share.
- Placement Agent Fees: H.C. Wainwright & Co., LLC received a cash fee of 7.5% and a management fee of 1.0% of aggregate gross proceeds, plus warrants to purchase up to 960,811 Ordinary Shares at $2.5438 per share.
- Expenses: The company agreed to pay up to $90,000 for legal fees and up to $15,950 for clearing expenses, plus a non-accountable expense allowance of $35,000.
The filing does not provide specific revenue, profit, cash flow, or debt figures for the reporting period, as this is a transactional filing rather than a periodic financial report.
Material Changes and Use of Proceeds
The primary material change is the significant capital raise of approximately $32.5 million. The company anticipates using the net proceeds for:
- 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 added through distribution agreements.
- Research and development of lightweight exo-suit technology and future spinal cord injury device designs.
- Routine product updates, general corporate purposes, working capital, and potential acquisitions.
Guidance, Outlook, and Risks
Management Commentary and Restrictions:
- The company agreed to a 90-day lock-up period following the closing, restricting the issuance of ordinary shares or convertible securities, with certain exceptions for acquisitions and compensatory issuances.
- A one-year restriction was placed on issuing securities with floating conversion/exercise prices or entering into equity lines of credit (except for an at-the-market facility with Wainwright after six months).
- Market Conditions: Risks related to the adverse effects of the COVID-19 pandemic on business operations.
- Capital Requirements: The ability to maintain sufficient funds to meet future capital requirements for product development and commercialization.
- Regulatory and Listing: Risks regarding maintaining Nasdaq listing requirements, obtaining regulatory approvals, and compliance with medical device reporting regulations.
- Commercialization: Challenges in achieving reimbursement from third-party payors (including CMS), establishing a pathway to commercialize in China, and gaining market acceptance.
- Dilution: The risk of substantial dilution resulting from periodic issuances of ordinary shares.
Important Facts for Investor Verification
- Verify the exact net proceeds after deducting the 8.5% total placement agent fees and other offering expenses.
- Confirm the total number of shares outstanding post-offering, including the 15,403,014 shares sold, the 610,504 shares from exercised Pre-Funded Warrants, and the potential dilution from 8,006,759 Ordinary Warrants and 960,811 Placement Agent Warrants.
- Monitor the company's progress in securing CMS and third-party payor coverage for the ReWalk Personal device, as this is a primary use of proceeds.
- Review the company's compliance with Nasdaq listing requirements, given the risks cited regarding potential delisting.
- Track the status of the mandatory 522 postmarket surveillance study and any FDA regulatory developments.