Business Context and Reporting Period
This Form 8-K Current Report was filed by ReWalk Robotics Ltd. (not Lifeward Ltd.) on July 6, 2020, regarding events occurring on July 1, 2020. The company, incorporated in Israel and trading on the Nasdaq Capital Market under the symbol RWLK, announced the closing of a capital raising transaction.
Key Financial Metrics and Transaction Details
- Gross Proceeds: Approximately $9.0 million.
- Shares Issued: 4,938,278 ordinary shares sold at $1.8225 per share.
- Purchaser Warrants: Warrants issued to purchase up to 2,469,139 ordinary shares at an exercise price of $1.76 per share, exercisable for 5.5 years.
- Placement Agent Fees: H.C. Wainwright & Co., LLC received a 7.5% cash fee, a 1.0% management fee, and warrants to purchase 296,297 shares at $2.2781 per share.
- Expenses: $60,000 for placement agent expenses and $12,900 for clearing expenses.
- Use of Proceeds: Sales and marketing for ReStore and ReWalk Personal devices, R&D for lightweight exo-suit technology and spinal cord injury devices, and general corporate purposes.
Material Changes and Lock-Up Provisions
The filing details a material definitive agreement and unregistered sales of equity securities. The company agreed to a 35-day lock-up period following the closing, during which it cannot issue or announce the issuance of ordinary shares or convertible securities, subject to customary exceptions. Additionally, for 12 months post-closing, the company is restricted from issuing securities with floating conversion prices or entering into future-determined price agreements, except for an at-the-market facility available 90 days after closing.
Outlook, Risks, and Management Commentary
Management anticipates using the net proceeds to broaden third-party payor coverage and commercialize new product lines. The filing includes significant forward-looking statements and risk factors, including:
- Going Concern: The company's independent auditors previously expressed substantial doubt about its ability to continue as a going concern based on the fiscal year ended December 31, 2019.
- Operational Risks: Adverse effects of the COVID-19 pandemic, reliance on third-party suppliers, and the need for regulatory approvals.
- Financial Risks: Potential delisting from Nasdaq if listing requirements are not met, substantial dilution from periodic share issuances, and the outcome of ongoing shareholder class action litigation.
- Product Risks: Challenges in achieving reimbursement from third-party payors and the results of mandatory postmarket surveillance studies.
Investor Verification Checklist
- Verify the exact net proceeds after deducting the 8.5% total fees and $72,900 in expenses.
- Confirm the current status of the "substantial doubt" regarding the company's ability to continue as a going concern.
- Review the terms of the 12-month restriction on floating price securities to understand future capital raising limitations.
- Check the status of the ongoing shareholder class action litigation related to the initial public offering.
- Monitor the company's compliance with Nasdaq Capital Market listing requirements.