Business Context and Reporting Period
This Form 8-K Current Report was filed by ReWalk Robotics Ltd. (trading symbol: RWLK) on June 10, 2019. The registrant is an emerging growth company incorporated in Israel, with principal executive offices in Yokneam Ilit. The report details a capital raising transaction entered into on June 10, 2019, with an expected closing date of June 12, 2019.
Key Financial Metrics and Transaction Details
- Offering Structure: Sale of 833,334 ordinary shares at $6.00 per share and warrants to purchase up to 416,667 ordinary shares at an exercise price of $6.00.
- Gross Proceeds: Expected to be approximately $5.0 million before deducting fees and expenses.
- 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 50,000 shares at $7.50 per share.
- Expenses: The Company agreed to reimburse the placement agent up to $30,000 for expenses, with specific caps of $50,000 for legal fees and $10,000 for clearing expenses.
- Use of Proceeds: Net proceeds are designated for sales and marketing, reimbursement expenses, third-party payor coverage, and R&D costs for the ReStore™ exo-suit and platform expansion.
Material Changes and Covenants
The filing discloses a material definitive agreement and unregistered sales of equity securities. Key covenants include:
- Lock-up Period: A 15-day period following closing during which the Company cannot issue or announce the issuance of ordinary shares or convertible securities, subject to customary exceptions.
- Restricted Issuance: A six-month restriction on issuing securities with floating conversion prices or future-determined prices, excluding the existing at-the-market offering program with Piper Jaffray & Co. under specific conditions.
Outlook, Risks, and Management Commentary
Management anticipates using the capital to broaden market development and advance clinical research. However, the filing contains significant risk disclosures:
- Going Concern: Management and auditors have concluded there are substantial doubts regarding the Company's ability to continue as a going concern.
- Regulatory and Clinical Risks: Risks include the outcome of the mandatory post-market 522 surveillance study and the 510(k) submission for the ReStore device.
- Market Risks: Potential delisting from the Nasdaq Capital Market, decreased liquidity following a recent reverse share split, and substantial dilution from periodic share issuances.
- Legal and Operational: Ongoing shareholder class action litigation regarding the IPO, cybersecurity risks, and challenges in securing reimbursement from third-party payors.
Investor Verification Checklist
- Verify the actual closing date and final net proceeds received after fees.
- Review the latest Form 10-K and 10-Q for details on the "substantial doubt" regarding the going concern status.
- Monitor the status of the FDA 522 surveillance study and the 510(k) submission for the ReStore exo-suit.
- Check for updates on the shareholder class action litigation related to the initial public offering.
- Assess the impact of the recent reverse share split on share liquidity and market capitalization.