Business Context and Reporting Period
This Form 8-K was filed by ReWalk Robotics Ltd. (noted as Lifeward Ltd. in metadata) on January 11, 2018. The report addresses a regulatory update regarding the company's continued listing status on The Nasdaq Capital Market. The company is an emerging growth company incorporated in Israel.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, or debt figures for the current period. However, it references the following financial thresholds and conditions:
- Stockholders' Equity Requirement: The company previously failed to meet the minimum $2,500,000 requirement under Nasdaq Listing Rule 5550(b).
- Market Value of Listed Securities (MVLS): The company did not meet the alternative $35,000,000 standard.
- Net Income Standard: The company did not meet the $500,000 net income requirement.
- Going Concern: The filing notes that auditors have expressed substantial doubt regarding the company's ability to continue as a going concern based on financial statements for fiscal 2016 and the third quarter of 2017.
Material Changes and Events
The primary event reported is the receipt of an "Update Letter" from Nasdaq on January 11, 2018, following a "Deficiency Notice" issued on November 10, 2017. Nasdaq has granted an extension for the company to regain compliance with Rule 5550(b). The extension is conditional on the company demonstrating compliance on two specific dates:
- December 31, 2017: Compliance must be demonstrated in the Form 10-K filed by March 30, 2018.
- March 30, 2018: Compliance must be demonstrated in the Form 10-Q for the quarter ended March 30, 2018.
If the company fails to show compliance on either date, Nasdaq will notify the company that its ordinary shares will be delisted. The company retains the right to appeal a delisting determination to a Nasdaq Hearings Panel, during which shares would remain listed pending a decision.
Outlook, Risks, and Management Commentary
Management believes that based on the compliance plan submitted, including estimated financial results as of December 31, 2017 and plans for 2018, the company will be able to demonstrate compliance to Nasdaq. The filing includes extensive forward-looking statements and risk factors, including:
- Liquidity and Capital: Risks regarding the ability to repay secured indebtedness and secure future capital from equity or debt financings.
- Operations: Uncertainty regarding sales growth, market acceptance, and reimbursement from third-party payors.
- Regulatory and Legal: Risks related to FDA regulatory developments, the mandatory post-market 522 surveillance study, and ongoing shareholder class action litigation regarding the IPO.
- Going Concern: Continued substantial doubt about the company's ability to continue as a going concern.
Investor Verification Checklist
- Verify the company's actual stockholders' equity and market value of listed securities as of December 31, 2017, upon the filing of the Form 10-K.
- Confirm the company's ability to meet the compliance deadline of March 30, 2018, as evidenced in the subsequent Form 10-Q.
- Review the audited financial statements for the "substantial doubt" regarding the going concern status.
- Monitor the status of the ongoing shareholder class action litigation and the FDA's 522 surveillance study results.
- Assess the company's progress in securing capital to repay secured indebtedness and fund operations.