Business Context and Reporting Period
This Form 8-K filing by ReWalk Robotics Ltd. (noted as Lifeward Ltd. in metadata) reports preliminary, unaudited results of operations for the three and nine months ended September 30, 2018. The report was filed on October 15, 2018. The Company is an emerging growth company developing robotic exoskeletons for spinal cord injury patients.
Key Financial Metrics
| Metric | 3 Months Ended Sept 30, 2018 | 9 Months Ended Sept 30, 2018 | 9 Months Ended Sept 30, 2017 |
|---|---|---|---|
| Revenue | $1.6 million | $5.0 million | $6.2 million |
| Units Placed | 22 | 66 | 84 |
| Insurance-Covered Units | 12 | 26 | 34 |
| Cash and Equivalents | $5.2 million (as of Sept 30, 2018) | ||
| Long-Term Debt |
Geographic Revenue Mix (9 Months 2018): United States (65%), Europe (32%), Other (3%).
Debt Status: Total long-term debt is approximately $12.3 million. This includes a deferral of $0.5 million in principal and interest payments under a loan agreement with Kreos Capital V (Expert Fund) Limited, deferred until October 2, 2018.
Material Changes vs. Prior Period
- Revenue Decline: Revenue decreased to $1.6 million for the quarter (from $1.7 million in 2017) and $5.0 million for the nine-month period (from $6.2 million in 2017).
- Unit Volume Decrease: Total unit placements dropped to 66 for the nine months ended September 30, 2018, compared to 84 in the prior year period.
- Liquidity Reduction: Cash and cash equivalents fell significantly to $5.2 million as of September 30, 2018, down from $14.6 million at December 31, 2017, and $12.9 million at September 30, 2017.
- Insurance Claims: Pending insurance claims increased slightly to 226 as of September 30, 2018, from 218 in the prior year.
Outlook, Risks, and Management Commentary
Going Concern: Management and previous auditors have expressed substantial doubt regarding the Company's ability to continue as a going concern.
Key Risks and Contingencies:
- Capital Needs: The Company faces risks regarding its ability to secure capital from equity and debt financings, which may be restricted by Form S-3 limitations or market conditions.
- Debt Repayment: There is a specific risk regarding the ability to repay secured indebtedness.
- Regulatory and Clinical: Risks include the outcome of the mandatory post-market 522 surveillance study and FDA regulatory developments.
- Legal: Ongoing shareholder class action litigation related to the initial public offering.
- Timwell Transaction: Risks associated with the potential failure of remaining issuances to Timwell, which could impact liquidity and prevent the formation of a China joint venture.
- Delisting Risk: Potential failure to maintain Nasdaq Capital Market listing requirements.
Disclaimer: The independent registered public accounting firm has not audited or reviewed these preliminary results. Actual results may differ materially.
Investor Verification Checklist
- Verify the final audited financial statements for the quarter ended September 30, 2018, to confirm preliminary revenue and cash figures.
- Confirm the status of the $0.5 million debt payment deferral with Kreos Capital V and whether it was resolved by the October 2, 2018 deadline.
- Assess the Company's current cash runway given the drop to $5.2 million and the "substantial doubt" regarding going concern status.
- Review updates on the Timwell joint venture and any new equity or debt financing efforts to address liquidity constraints.
- Monitor the status of the shareholder class action litigation and the FDA 522 surveillance study results.