Business Context and Reporting Period
This Form 8-K was filed by ReWalk Robotics Ltd. on June 13, 2017, reporting events that occurred on June 9, 2017. The filing details an amendment to a material definitive loan agreement with Kreos Capital V (Expert Fund) Limited ("Kreos").
Key Financial Metrics and Debt Structure
- Outstanding Principal (Pre-Amendment): $17,154,328.34
- Amount Converted to Note: $3,000,000
- Remaining Loan Principal: $14,154,328.34
- Note Interest Rate: 10.75% per annum, payable monthly in arrears
- Conversion Price: $1.268 per share (based on 30-day average closing price)
- Maturity Date: June 9, 2020, or earlier upon a "Change of Control"
- End of Loan Payments: 1% of the principal amount (payable upon conversion or maturity, convertible into shares)
Material Changes Versus Prior Period
The Company amended its existing $20.0 million line of credit agreement with Kreos. Specifically, $3.0 million of the outstanding principal was restructured into a secured convertible promissory note. The remaining principal balance was reduced to approximately $14.15 million and is subject to an amended repayment schedule. The filing does not provide comparative financial data for prior periods regarding revenue or operating margins.
Outlook, Risks, and Unusual Items
- Prepayment Restriction: The Company is prohibited from prepaying the outstanding principal under the new Note before the Maturity Date.
- Registration Obligation: The Company must file a Form S-3 registration statement to enable Kreos to resell shares issued upon conversion of the Note.
- Security Interest: The Note is secured by all of the Company's assets, including intellectual property and equity interests in subsidiaries.
- Unregistered Sale: The issuance of the Note was exempt from registration under Section 4(a)(2) of the Securities Act and Regulation S.
Investor Verification Checklist
- Verify the exact terms of the amended repayment schedule for the remaining $14.15 million loan principal.
- Confirm the status of the Form S-3 registration statement required for the resale of convertible shares.
- Assess the impact of the 10.75% interest rate and 1% end-of-loan payment on future cash flow.
- Review the definition of "Change of Control" in the Loan Agreement to understand potential acceleration triggers.