Business Context and Reporting Period
This Form 8-K is filed by ReWalk Robotics Ltd. (noting the input metadata reference to "Lifeward Ltd." appears to be an error as the document explicitly names ReWalk Robotics) on April 23, 2019. The report addresses updates regarding deficiencies under Nasdaq listing rules, specifically Rule 5550(b) regarding stockholders' equity and Rule 5550(a) regarding minimum bid price.
Key Financial Metrics and Liquidity
- Capital Raises: The Company completed a follow-on public offering on February 25, 2019, netting approximately $3.7 million, and a registered direct offering with a concurrent private placement of warrants on April 5, 2019, netting approximately $3.8 million.
- Stockholders' Equity: Based on preliminary results as of March 31, 2019, on a pro forma basis including the proceeds from the above transactions, the Company believes it has satisfied the $2.5 million stockholders' equity requirement for continued listing.
- Use of Proceeds: Funds are designated for market development, reimbursement activities, and R&D, alongside strengthening the balance sheet.
- Going Concern: The filing references a previous opinion by auditors indicating substantial doubt regarding the Company's ability to continue as a going concern.
Material Changes and Listing Status
- Rule 5550(a) Compliance (Bid Price): The Company effected a one-for-twenty-five reverse share split on April 1, 2019. Nasdaq confirmed on April 15, 2019, that the closing bid price remained at or above $1.00 for ten consecutive business days, closing this deficiency.
- Rule 5550(b) Compliance (Equity): While the Company believes it has met the equity requirement on a pro forma basis as of March 31, 2019, Nasdaq will monitor ongoing compliance. If the Form 10-Q for the quarter ended June 30, 2019, does not evidence compliance, the Company may face immediate delisting without a cure period.
- Future Capital Needs: The Company intends to reduce expenses and raise additional funds through public or private placements or strategic transactions to maintain compliance through the remainder of fiscal year 2019.
Outlook, Risks, and Contingencies
- Delisting Risk: Failure to maintain stockholders' equity compliance in the upcoming 10-Q could result in immediate delisting. The Company retains the right to appeal such a determination.
- Capital Constraints: Risks include the ability to secure capital given limitations under the effective Form S-3 registration statement and potential dilution of shareholders.
- Operational Risks: Key risks include the ability to achieve reimbursement from third-party payors, regulatory approvals (including FDA post-market surveillance), and the outcome of ongoing shareholder class action litigation regarding the IPO.
- Liquidity and Market: There is a risk of decreased liquidity and reduced market capitalization following the reverse share split.
Investor Verification Checklist
- Verify the Company's actual stockholders' equity in the upcoming Form 10-Q for the quarter ended June 30, 2019, to confirm continued Nasdaq compliance.
- Monitor the status of the ongoing shareholder class action litigation related to the initial public offering.
- Assess the Company's progress in securing additional capital to fund operations and R&D beyond the $7.5 million raised in early 2019.
- Review updates on reimbursement approvals and the results of the mandatory post-market 522 surveillance study.
- Confirm the impact of the one-for-twenty-five reverse share split on trading liquidity and market capitalization.