Item 1. Financial Statements
ITEM 1 .
FINANCIAL STATEMENTS
REWALK ROBOTICS LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share data)
September 30,
December 31,
2023
2022
(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
32,590
$
67,896
Trade receivable, net (Net from credit losses of $ 352
and $ 26
as of September 30, 2023 and December 31, 2022, respectively)
3,529
1,036
Prepaid expenses and other current assets
2,254
649
Inventories
6,043
2,929
Total current assets
44,416
72,510
LONG-TERM ASSETS
Restricted cash and other long-term assets
772
694
Operating lease right-of-use assets
2,077
836
Property and equipment, net
1,047
196
Intangible assets
13,369
-
Goodwill
7,538
-
Total long-term assets
24,803
1,726
Total assets
$
69,219
$
74,236
The accompanying notes are
an integral part of these condensed consolidated financial statements.
4
REWALK ROBOTICS LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share data)
September 30,
December 31,
2023
2022
(unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Current maturities of operating leases liability
$
1,245
$
564
Trade payables
5,658
1,950
Employees and payroll accruals
1,701
1,282
Deferred revenues
1,611
301
Earnout liability
1,906
-
Other current liabilities
693
685
Total current liabilities
12,814
4,782
LONG-TERM LIABILITIES
Earnout liability
1,741
-
Deferred revenues
1,645
890
Non-current operating leases liability
856
333
Other long-term liabilities
387
66
Total long-term liabilities
4,629
1,289
Total liabilities
17,443
6,071
COMMITMENTS AND CONTINGENT LIABILITIES
Shareholders’ equity:
Share capital
Ordinary share of NIS 0.25
par value-Authorized: 120,000,000
shares at September 30, 2023 (unaudited) and December 31, 2022; Issued: 64,047,124
and 63,023,506
shares at September 30, 2023 (unaudited) and December 31, 2022, respectively; Outstanding: 60,024,517
and 60,090,298
shares as of September 30, 2023 (unaudited) and December 31, 2022 respectively
4,481
4,489
Additional paid-in capital
280,742
279,857
Treasury Shares at cost, 4,022,607
and 2,933,208
ordinary shares at September 30, 2023 and December 31, 2022 respectively
( 3,203
)
( 2,431
)
Accumulated deficit
( 230,244
)
( 213,750
)
Total shareholders’ equity
51,776
68,165
Total liabilities and shareholders’ equity
$
69,219
$
74,236
The accompanying
notes are an integral part of these condensed consolidated financial statements.
5
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS
(In thousands, except share
and per share data)
(Unaudited)
Three
Months Ended
September
30,
Nine
Months Ended
September
30,
2023
2022
2023
2022
Revenues
$
4,403
$
886
$
6,970
$
3,332
Cost of revenues
3,540
665
4,960
2,100
Gross profit
863
221
2,010
1,232
Operating expenses:
Research and development, net
1,262
1,065
2,830
2,928
Sales and marketing
4,088
2,588
9,076
7,119
General and administrative
3,455
2,001
7,579
5,282
Total operating expenses
8,805
5,654
19,485
15,329
Operating loss
( 7,942
)
( 5,433
)
( 17,475
)
( 14,097
)
Financial (expenses) income, net
411
( 1
)
1,047
( 69
)
Loss before income taxes
( 7,531
)
( 5,434
)
( 16,428
)
( 14,166
)
Taxes on income
-
26
66
90
Net loss
$
( 7,531
)
$
( 5,460
)
$
( 16,494
)
$
( 14,256
)
Net loss per ordinary share, basic and diluted
$
( 0.13
)
$
( 0.09
)
$
( 0.28
)
$
( 0.23
)
Weighted average number of shares used in computing net loss per ordinary share, basic
and diluted
59,798,413
62,793,847
59,509,781
62,611,580
The accompanying notes are
an integral part of these condensed consolidated financial statements.
6
REWALK ROBOTICS
LTD. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CHANGES
IN SHAREHOLDERS’ EQUITY
(In thousands, except share
data)
(Unaudited)
Ordinary Shares
Additional
paid-in
Treasury
Accumulated
Total
shareholders’
Number
Amount
capital
Shares
deficit
equity
Balance as of June 30, 2022
62,678,308
4,675
279,215
-
( 202,977
)
80,913
Share-based compensation to employees and non-employees
-
-
320
-
-
320
Issuance of ordinary shares upon vesting of employees and non-employees RSUs
223,637
16
( 16
)
-
-
-
Treasury Shares at cost
( 184,629
)
( 13
)
-
( 170
)
( 183
)
Net loss
-
-
-
-
( 5,460
)
( 5,460
)
Balance as of September 30, 2022
62,717,316
4,678
279,519
( 170
)
( 208,437
)
75,590
Balance as of June 30, 2023
59,346,139
4,435
280,455
( 3,203
)
( 222,713
)
58,974
Share-based compensation to employees and non-employees
-
-
333
-
-
333
Issuance of ordinary shares upon vesting of RSUs by employees and non-employees
678,378
46
( 46
)
-
-
-
Net loss
-
-
-
-
( 7,531
)
( 7,531
)
Balance as of September 30, 2023
60,024,517
4,481
280,742
( 3,203
)
( 230,244
)
51,776
Ordinary Shares
Additional paid-in
Treasury
Accumulated
Total
shareholders’
Number
Amount
capital
Shares
deficit
equity
Balance as of December 31, 2021
62,480,163
4,661
278,903
-
( 194,181
)
89,383
Share-based compensation to employees and non-employees
-
-
646
-
-
646
Issuance of ordinary shares upon vesting of employees and non-employees RSUs
421,782
30
( 30
)
-
-
-
Treasury Shares at cost
( 184,629
)
( 13
)
-
( 170
)
-
( 183
)
Net loss
-
-
-
-
( 14,256
)
( 14,256
)
Balance as of September 30, 2022
62,717,316
4,678
279,519
( 170
)
( 208,437
)
75,590
Balance as of December 31, 2022
60,090,298
4,489
279,857
( 2,431
)
( 213,750
)
68,165
Share-based compensation to employees and non-employees
-
-
955
-
-
955
Issuance of ordinary shares upon vesting of RSUs by employees and non-employees
1,023,618
70
( 70
)
-
-
-
Treasury shares at cost
( 1,089,399
)
( 78
)
-
( 772
)
-
( 850
)
Net loss
-
-
-
-
( 16,494
)
( 16,494
)
Balance as of September 30, 2023
60,024,517
4,481
280,742
( 3,203
)
( 230,244
)
51,776
The accompanying notes are
an integral part of these condensed consolidated financial statements.
7
REWALK ROBOTICS
LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
2023
2022
Cash flows used in operating activities:
Net loss
$
( 16,494
)
$
( 14,256
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
898
161
Share-based compensation
955
646
Remeasurement of earn out liability
40
-
Deferred taxes
-
2
Interest income
( 13 )
-
Exchange rate fluctuations
24
182
Changes in assets and liabilities:
Trade receivables, net
( 720
)
138
Prepaid expenses, operating lease right-of-use assets and other assets
( 849
)
( 115
)
Inventories
( 480
)
( 550
)
Trade payables
1,895
524
Employees and payroll accruals
( 347
)
( 153
)
Deferred revenues
( 23
)
( 5
)
Operating lease liabilities and other liabilities
( 1,069
)
( 552
)
Net cash used in operating activities
( 16,183
)
( 13,978
)
Cash flows used in investing activities:
Purchase of property and equipment
( 2
)
( 25
)
Acquisition of a business, net of cash acquired
( 18,068
)
-
Net cash used in investing activities
( 18,070
)
( 25
)
Cash flows from financing activities:
Purchase of treasury shares
( 992
)
( 183
)
Net cash used in financing activities
( 992
)
( 183
)
Effect of Exchange rate changes on Cash, Cash Equivalents and Restricted Cash
( 24
)
( 182
)
Decrease in cash, cash equivalents, and restricted cash
( 35,269
)
( 14,368
)
Cash, cash equivalents, and restricted cash at beginning of period
68,555
89,050
Cash, cash equivalents, and restricted cash at end of period
$
33,286
$
74,682
Supplemental disclosures of non-cash flow information
Classification of other current assets to property and equipment, net
$
-
$
22
Classification of inventory to property and equipment, net
$
194
$
67
Classification of property and equipment, net to inventory
$
39
$
-
ROU assets obtained from new lease liabilities
$
513
$
-
Supplemental cash flow information:
Cash and cash equivalents
$
32,590
$
74,027
Restricted cash included in other long-term assets
696
655
Total Cash, cash equivalents, and restricted cash
$
33,286
$
74,682
The
accompanying notes are an integral part of these condensed consolidated financial statements.
8
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
1: GENERAL
a.
ReWalk Robotics Ltd.
(“RRL”, and together with its subsidiaries, the “Company”) was incorporated under the laws of the State of Israel
on June 20, 2001 and commenced operations on the same date.
b.
RRL has three wholly-owned
(directly and indirectly) subsidiaries: (i) ReWalk Robotics, Inc. (“RRI”) incorporated under the laws of Delaware on February
15, 2012, (ii) ReWalk Robotics GMBH (“RRG”) incorporated under the laws of Germany on January 14, 2013, and (iii) AlterG,
Inc. (“AlterG” or “AGI”) incorporated in Delaware on October 21, 2004 under the name of Gravus, Inc. On June 30,
2005, the Company changed its name and re-incorporated in Delaware under the name of AlterG, Inc.
c.
The Company is a medical
device company that is designing, developing, and commercializing innovative technologies that enable mobility and wellness in rehabilitation
and daily life for individuals with physical and neurological conditions. The Company’s initial product offerings were the ReWalk
Personal and ReWalk Rehabilitation Exoskeleton devices for individuals with spinal cord injury (collectively, the “SCI Products”).
These devices are robotic exoskeletons that are designed for individuals with paraplegia that use our patented tilt-sensor technology
and an on-board computer and motion sensors to drive motorized legs that power movement. These SCI Products allow individuals with spinal
cord injury the ability to stand and walk again during everyday activities at home or in the community.
The
Company has sought to expand its product offerings beyond the SCI Products through internal development and distribution agreements. The
Company has developed its ReStore Exo-Suit device, which it began commercializing in June 2019. The ReStore is a powered, lightweight
soft exo-suit intended for use during the rehabilitation of individuals with lower limb disability due to stroke. During the second quarter
of 2020, the Company signed two separate agreements to distribute additional product lines in the United States. The Company is the exclusive
distributor of the MYOLYN MyoCycle FES Pro cycles to U.S. rehabilitation clinics and for the MyoCycle Home cycles available to US veterans
through VA hospitals. In the second quarter of 2020, the Company also became the exclusive distributor of the MediTouch Tutor movement
biofeedback systems in the United States; however, due to unsatisfactory sales performance of the MediTouch product lines, the Company
terminated this agreement as of January 31, 2023. We refer to the MediTouch and MyoCycle devices as our “Distributed Products.”
On
August 11, 2023, pursuant to an Agreement and Plan of Merger among RRI, AGI, Atlas Merger Sub, Inc., a wholly owned subsidiary of RRI
(“Merger Sub”), and Shareholder Representative Services LLC, date August 8, 2023, RRI acquired AGI and AGI became a wholly
owned subsidiary of the Company.
For
accounting purposes, RRI was considered the acquirer and AGI was considered the acquiree. The acquisition was accounted for using the
acquisition method of accounting. See Note 5 for additional information.
The
Company made its first acquisition to supplement its internal growth when it acquired AGI, a leading provider of AlterG Anti-Gravity systems
for use in physical and neurological rehabilitation. The Company paid a cash purchase price of $ 19.0
million at closing and additional cash earnouts may be paid based upon a percentage of AlterG’s year-over-year revenue growth over
the two years following the closing. The AlterG systems use patented, NASA-derived Differential Air Pressure (“DAP”) technology
to reduce the effects of gravity and allow people to rehabilitate with finely calibrated support and reduced pain. The Company will
continue to evaluate other products for distribution or acquisition that can broaden its product offerings further to help individuals
with physical and neurological injury and disability.
9
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The
Company markets and sells its products directly to institutions and individuals and through third-party distributors. The Company sells
its products directly primarily in the United States, through a combination (depending on the product line) of direct sales and distributors
in Germany, Canada, and Australia, and primarily through distributors in other markets. In its direct markets, the Company has established
relationships with clinics and rehabilitation centers, professional and college sports teams, and individuals and organizations in the
spinal cord injury community, and in its indirect markets, the Company’s distributors maintain these relationships. RRI and AGI
market and sell products mainly in the United States. RRG markets and sells the Company’s products mainly in Germany and Europe.
d.
As of September 30,
2023, the Company incurred a consolidated net loss of $ 16.5
million and has an accumulated deficit in the total amount of $ 230.2 million.
The Company’s cash and cash equivalents as of September 30, 2023 totaled $ 32.6
million and the Company’s negative operating cash flow for the nine months ended September 30, 2023 was $ 16.2 million.
The Company has sufficient funds to support its operations for more than 12 months following the issuance date of its unaudited condensed
consolidated financial statements for the nine months ended September 30, 2023.
The
Company expects to incur future net losses and its transition to profitability is dependent upon, among other things, the successful development
and commercialization of its products and product candidates, the establishment of contracts for the distribution of new product lines,
or the acquisition of additional product lines, any of which, or in combination, would contribute to the achievement of a level of revenues
adequate to support its cost structure. Until the Company achieves profitability or generates positive cash flows, it will continue to
need to raise additional cash. The Company intends to fund future operations through cash on hand, additional private and/or public offerings
of debt or equity securities, cash exercises of outstanding warrants or a combination of the foregoing. In addition, the Company may seek
additional capital through arrangements with strategic partners or from other sources and will continue to address its cost structure.
Notwithstanding, there can be no assurance that the Company will be able to raise additional funds or achieve or sustain profitability
or positive cash flows from operations.
NOTE
2: UNAUDITED
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The
accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted
accounting principles. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles
in the United States for complete financial statements. In management’s opinion, the accompanying financial statements reflect all
adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented.
The Company’s interim period results do not necessarily indicate the results that may be expected for any other interim period or
for the full fiscal year.
These
unaudited interim condensed consolidated financial statements and accompanying notes should be read in conjunction with the 2022 consolidated
financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31,
2022 (the “2022 Form 10-K”). There have been no changes in the significant accounting policies from those that were disclosed
in the consolidated financial statements for the fiscal year ended December 31, 2022 included in the 2022 Form 10-K, unless otherwise
stated.
10
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
3: SIGNIFICANT
ACCOUNTING POLICIES
a.
Business Combinations
The
Company accounts for business combinations in accordance with ASC 805, “Business Combinations”. For business combinations
accounted for under the acquisition method, ASC 805 requires recognition of assets acquired, liabilities assumed, and any non-controlling
interest at the acquisition date, measured at their fair values as of that date. The Company determines the recognition of intangible
assets based on the following criteria: (i) the intangible asset arises from contractual or other rights; or (ii) the intangible asset
is separable or divisible from the acquired entity and capable of being sold, transferred, licensed, returned or exchanged.
The
excess of the fair value of the purchase price over the fair values of the identifiable assets and liabilities is recorded as goodwill.
Determining the fair value of the identifiable assets and liabilities requires management to use significant judgment and estimates including
the forecasted revenue and revenues growth rates, discount rates, customer contract renewal rates and customer attrition rates. The process
of estimating the fair values requires significant estimates, especially with respect to intangible assets. Management’s determination
of fair value of assets acquired and liabilities assumed at the acquisition date is based on the best information available in the circumstances
and incorporates management’s own assumptions and involves a significant degree of judgment.
Acquisition
related costs include legal fees, consulting and success fees, and other non-recurring integration related costs. Acquisition-related
costs are expensed as incurred.
b.
Goodwill and Other
Intangibles
For
business combinations, the purchase prices are allocated to the tangible assets and intangible assets acquired and liabilities assumed
based on their estimated fair values on the acquisition dates, with the remaining unallocated purchase prices recorded as goodwill.
The
Company has no indefinite-lived intangible assets other than goodwill. Acquired identifiable finite-lived intangible assets include identifiable
acquired technology, customer relationships, trademarks and backlog and are amortized on a straight-line basis over the estimated useful
lives of the assets. The Company routinely reviews the remaining estimated useful lives of finite-lived intangible assets.
Goodwill
is not amortized and is tested for impairment at least annually.
The
Company operates as one reporting unit and the fair value of the reporting unit is estimated using quoted market prices of the Company’s
stock in active markets. The Company tests goodwill for impairment annually in the fourth quarter and whenever events or changes in circumstances
indicate the carrying amount of goodwill may not be recoverable.
When
testing goodwill for impairment, the Company may first perform a qualitative assessment. If the Company determines it is not more likely
than not the reporting unit’s fair value is less than its carrying value, then no further analysis is necessary. If the Company
determines that it is more likely than not that the fair value of its reporting unit is less than its carrying amount, then the quantitative
impairment test will be performed. The Company may elect to bypass the qualitative assessment and proceed directly to performing a quantitative
analysis. Under the quantitative impairment test, if the carrying amount of the Company’s reporting unit exceeds its fair value,
the Company recognizes an impairment of goodwill for the amount of this excess.
11
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
As
of September 30, 2023, no impairments of goodwill have been recognized.
The
Company evaluates the recoverability of long-lived assets, including property and equipment and intangible assets subject to amortization
for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be fully recoverable.
Such events and changes may include significant changes in performance relative to expected operating results, significant changes in
asset use, significant negative industry or economic trends, and changes in the Company’s business strategy. Recoverability of these
assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate.
If such review indicates that the carrying amount of long-lived assets is not recoverable, the carrying amount of such assets is reduced
to fair value. There were no impairment charges to long-lived assets during the periods presented.
c.
Fair
Value Measurements
Cash
and cash equivalents, restricted cash, prepaid expenses and other assets, trade payables and accrued expenses and other liabilities, are
stated at their carrying value which approximates their fair value due to the short time to the expected receipt or payment.
The
following tables present information about the Company’s financial assets and liabilities that are measured in fair value on a recurring
basis as of September 30, 2023 and December 31, 2022 (in thousands):
Fair
value measurements as of
Description
Fair
Value
Hierarchy
September 30,
2023
December
31,
2022
Financial
assets:
Money market funds included
in cash and cash equivalent
Level
1
$
2,507
$
-
Treasury bills included
in cash and cash equivalent
Level
1
2,507
-
Total Assets Measured
at Fair Value
$
5,014
$
-
Financial
Liabilities:
Earnout
Level
3
$
3,647
$
-
Total liabilities measured
at fair value
$
3,647
$
-
The
Company classifies cash equivalents within Level 1, and earnout is classified within Level 3, because the Company uses quoted market prices
or alternative pricing sources and models utilizing market observable inputs to determine their fair values.
The
earnout was valued using a Monta Carlo simulation analysis, which is considered to be a Level 3 fair value measurement.
12
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The
following table summarizes the warrants liability activity as of September 30, 2023 (in thousands):
Earnout
Initial Measurement (August
11, 2023)
$
3,607
Change in fair value
40
Balance September 30,
2023
$
3,647
d.
Revenue Recognition
The
Company generates revenues from sales of products. The Company sells its products directly to end customers and through distributors.
The Company sells its products to clinics and rehabilitation centers, professional and college sports teams, private individuals (who
finance the purchases by themselves, through fundraising or reimbursement coverage from insurance companies), and distributors.
Disaggregation
of Revenues (in thousands)
Three
Months Ended
September
30,
Nine
Months Ended
September
30,
2023
2022
2023
2022
Product
$
3,632
$
484
$
5,563
$
2,377
Rental
303
267
685
609
Service and warranty
468
135
722
346
Total Revenues
$
4,403
$
886
$
6,970
$
3,332
Product
revenue
Revenue
from Products is comprised of sale of anti-gravity products, sale of systems products to rehabilitation facilities and sale of Personal
systems to end users. Revenues generated from the sale of Products are recognized at a point in time, once the customer has obtained the
legal title to the items purchased.
For
systems sold to rehabilitation facilities, the Company includes insignificant training and considers the elements in the arrangement to
be a single performance obligation. Therefore, the Company recognizes revenue for the system and training only after delivery in accordance
with the agreement's delivery terms to the customer and after the training has been completed.
For
sales of Personal systems to end users, and for sales of Personal or Rehabilitation systems to third party distributors, the Company does
not provide training to the end user as this training is completed by the Rehabilitation centers or by the distributor that have previously
completed the ReWalk Training program. Therefore, the Company recognizes revenue in such sales upon delivery.
The
Company generally does not grant a right of return for its products. In rare circumstances the Company provides a right of return for
its products. In those cases, the Company records reductions to revenue for expected future product returns based on the Company’s
historical experience and estimates.
During
2023, the Company offered six products: (1) ReWalk Personal, (2) ReWalk Rehabilitation, (3) ReStore, (4) MyoCycle and (5) MediTouch (6)
Anti-Gravity Products. Due to unsatisfactory sales performance of the MediTouch product lines, we terminated the distribution agreement
as of January 31, 2023.
13
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
ReWalk
Personal and ReWalk Rehabilitation are SCI Products, which are currently designed for everyday use by paraplegic individuals at home and
in their communities. SCI Products are custom fitted for each user, as well as for use by paraplegic patients in the clinical rehabilitation
environment, where they provide individuals access to valuable exercise and therapy. ReWalk Rehabilitation is a ReWalk Personal 6.0 product
sold with multiple sizes of our adjustable parts to allow different users the ability to train within a clinic.
The
ReStore is a powered, lightweight soft exo-suit intended for use in the rehabilitation of individuals with lower limb disability due to
stroke in the clinical rehabilitation environment.
The
Company also sells Distributed Products that include the MyoCycle, which uses Functional Electrical Stimulation (“FES”) technology,
and MediTouch tutor movement biofeedback devices. The Company markets the Distributed Products in the United States for use at home or
in clinic.
The
Anti-Gravity Products are anti-gravity systems for use in physical and neurological rehabilitation and athletic training, both domestically
and internationally. This transformative technology uses patented, NASA-derived Differential Air Pressure technology to reduce the effects
of gravity and allow people to move in new ways with finely calibrated support and reduced pain.
Rental
revenue
Rental
revenue for the Anti-Gravity systems is accounted for under ASC Topic 842, Leases. The Company rents its
products to customers for a fixed monthly fee over the rental term, which typically ranges from 2 to 3 years. Rental revenues are recorded
as earned on a monthly basis.
The
Company also offers for the SCI Products a rent-to-purchase model in which the Company recognizes revenue ratably according to the agreed
rental monthly fee for a limited period prior to selling its products.
Service
and warranties
The
Company services its products after expiration of the initial warranty. Service revenue, consisting of time and materials to perform the
repairs, is recorded as services are rendered which corresponds with the period in which the related expenses are incurred.
Warranties
are classified as either an assurance type or a service type warranty. A warranty is considered an assurance type warranty if it provides
the customer with assurance that the product will function as intended for a limited period of time. An assurance type warranty is not
accounted for as a separate performance obligation under the revenue model.
14
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SCI
Products include a five-year warranty. The first two years are considered as an assurance type warranty and the additional period is considered
an extended service arrangement, which is a service type warranty. A service type warranty is either sold with a unit or separately for
a unit for which the warranty has expired. A service type warranty is accounted as a separate performance obligation and revenue is recognized
ratably over the life of the warranty.
The
ReStore device is sold with a two-year warranty which is considered as assurance type warranty.
The
Distributed Products are sold with assurance type warranty ranging from between one year to ten years, depending on the specific product
and part.
For
Anti-Gravity Products, the Company offers customers extended warranty contracts that extend or enhance the technical support, parts, and
labor coverage offered as part of the base warranty included with the anti- gravity system products. Extended warranty revenue is recognized
ratably over the extended warranty coverage period. The Company offers a one-year assurance type warranty to customers in the U.S. and
two years assurance type warranty for spare parts only to its international distributors.
Contract
balances (in thousands)
September 30,
December 31,
2023
2022
Trade
receivable, net of credit losses (1)
$
3,529
$
1,036
Deferred
revenues (1) (2)
$
3,256
$
1,191
(1)
Balance presented net
of unrecognized revenues that were not yet collected.
(2)
During the nine months
ended September 30, 2023, $ 290 thousand
of the December 31, 2022 deferred revenues balance was recognized as revenues.
Deferred
revenue is composed primarily of unearned revenue related to service type warranty obligations, multi-year services contracts, as well
as other advances and payments which the Company received from customers prior to satisfying the performance obligation, for which revenue
has not yet been recognized.
The
Company’s unearned performance obligations as of September 30, 2023 and the
estimated revenue expected to be recognized in the future related to the service type warranty amounts to $3.2 million, which will be
fulfilled over one to five years.
15
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
e.
Concentrations of Credit
Risks:
The
below table reflects the concentration of credit risk for the Company’s current customers as of September 30, 2023, to which substantial
sales were made:
September 30,
December 31,
2023
2022
Customer
A
*
)
27
%
Customer
B
*
)
13
%
Customer
C
-
13
%
Customer
D
-
11
%
*)
Less than 10%
The
allowance for credit losses is based on the Company’s assessment of the collectability of accounts. The Company regularly assessed
collectability based on a combination of factors, including an assessment of the current customer’s aging balance, the nature and
size of the customer, the financial condition of the customer, and future expected economic conditions. Trade receivables deemed uncollectable
are charged against the allowance for credit losses when identified. As of September 30, 2023, and December 31, 2022, trade receivables
are presented net of allowance for credit losses in the amount of $ 352 thousand
and $ 26
thousand, respectively.
f.
Warranty
provision
For
assurance-type warranty, the Company records a provision for the estimated cost to repair or replace products under warranty at the time
of sale. Factors that affect the Company’s warranty reserve include the number of units sold, historical and anticipated rates of
warranty repairs and the cost per repair.
US
Dollars
in
thousands
Balance at December 31,
2022
$
92
AGI acquisition –
see note 5
535
Provision
271
Usage
( 285
)
Balance at September
30, 2023
$
613
g.
Basic
and diluted net loss per ordinary share:
Basic
and diluted net loss per share was the same for each period presented as the inclusion of all potential shares of ordinary shares and
warrants outstanding would have been anti-dilutive.
For
the nine months ended September 30, 2023 and 2022, the total number of ordinary shares related to the outstanding warrants and share option
plans aggregated to 19,463,658
and 19,464,888 ,
respectively, was excluded from the calculations of diluted loss per ordinary share since it would have an anti-dilutive effect.
16
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
h.
New
Accounting Pronouncements
Recently
Implemented Accounting Pronouncements
i.
Financial Instruments
In
June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.
ASU 2016-13 amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology,
which will result in the more timely recognition of losses. The Company adopted ASU 2016-13 as of January 1, 2023. The adoption of this
standard did not have a material impact on the Company’s consolidated financial statements.
NOTE
4: INVENTORIES
The
components of inventories are as follows (in thousands):
September 30,
December 31,
2023
2022
Finished products
$
3,805
$
2,421
Raw materials
2,238
508
$
6,043
$
2,929
NOTE
5: BUSINESS
COMBINATION
On
August 11, 2023, pursuant to an Agreement and Plan of Merger among RRI, AGI, Merger Sub, and Shareholder Representative Services LLC,
RRI, August 8, 2023, the Company acquired AGI and AGI became a wholly owned subsidiary of the Company. AGI develops, manufactures, and
markets anti-gravity systems for use in physical and neurological rehabilitation and athletic training, both in the United States
and internationally. The aggregate purchase price was a total of $ 19.0
million in cash, subject to working capital and other customary purchase price adjustments. Additional cash earnouts (in an anticipated
amount of approximately $ 4.0
million in the aggregate) may be paid based upon a percentage of AGI’s year-over-year future revenue growth over the next two years
subject to working capital and other customary purchase price adjustments.
The
total consideration transferred is as follows (in thousands):
Cash
$
18,493
Earnout
payments
$
3,607
Total
consideration
$
22,100
Earnout
payments
The
Company will pay an amount of cash equal to 65% of the amount, if any, by which AGI revenue attributable to the first 12 months period
exceeds revenue target ("first earnout payment"), and an amount in cash equal to 65% of the amount, if any, by which AGI revenue attributable
to the following 12 months period exceeds the revenue from the first 12 month period ("second earnout payment"). At the
date of acquisition, management estimated fair value of the earnout payment based on the actual up to date performance of the acquired
entity and the probability of the earn out payment occurrence to be at approximately $ 3.6
million. The Earn-out was accounted for as a liability and will be remeasured at each reporting period through consolidated statement
of operations.
17
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The
Company has accounted for the AGI acquisition as a business combination. The Company has preliminarily allocated the purchase price of
approximately $ 22.1
million fair values, and the excess of the purchase price over the aggregate fair values is recorded as goodwill.
The
following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date (in thousands):
Cash
and cash equivalent
$
478
Restricted
cash
51
Accounts
receivable
1,773
Inventory
3,330
Prepaid
expenses and other current assets
470
Right
of use asset
1,151
Property
and equipment, net
827
Other
non-current assets
30
Goodwill
7,538
Intangible
assets
14,133
Accounts
payable
( 2,082
)
Accrued
compensation
( 766
)
Other
accrued liabilities
( 1,059
)
Deferred
revenue
( 2,088
)
Warranty
Obligations
( 535
)
Leases
Liability
( 1,151
)
Total
purchase consideration
$
22,100
The
following table presents the details of the intangible assets acquired at the date of AGI acquisition (in thousands):
Estimated
Fair
Value
Estimated
Useful Life (Years)
Trademark
$
795
3
Technology
6,161
4
Customer
relationship - Warranty
201
2
Customer
relationship - Rental
2,102
4
Customer
relationship - Distribution
4,578
5
Backlog
296
1
18
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Under
the preliminary purchase price allocation, the Company allocates the purchase price to tangible and identified intangible assets acquired
and liabilities assumed based on the preliminary estimates of their fair values. The fair values for the intangible assets acquired were
primarily based on significant inputs that are not observable in the market and thus represent a Level 3 measurement in the fair value
hierarchy. Customer relationships, distributor relationships, backlog, trademark and developed technology were valued using the income
approach, based on estimated projections of expected cash flows to be generated by the assets, discounted to the present value at discount
rates commensurate with perceived risk. The discounted cash flow analyses factor in assumptions on revenue and expense growth rates including
estimates of customer growth and attrition rates, distributor growth and attrition rates, technology obsolescence, and relief from royalty
projections. Additionally, these discounted cash flow analyses factor in expected amounts of working capital, fixed assets, assembled
workforce and cost of capital for each intangible asset. Such estimates are subject to change during the measurement period which is not
expected to exceed one year. Any adjustments to the preliminary purchase price allocation identified during the measurement period will
be recognized in the period in which the adjustments are determined.
The
Company incurred acquisition-related costs of $ 2.5
million included in General and administrative costs.
The
table below presents the pro forma revenue and earnings of the combined business as if the acquisition had occurred as of January 1, 2022 (in
thousands):
Three
Months Ended
September
30,
Nine
Months Ended
September
30,
2023
2022
2023
2022
Revenues
$
5,920
$
6,403
$
18,041
$
18,146
Net
loss
$
( 6,422
)
$
( 5,785
)
$
( 16,042
)
$
( 20,729
)
The
total revenues and net income of AGI, included in the consolidated income statement, since the acquisition date and for the nine and three
months ended September 30, 2023, amounted to 2,941
thousand and 154
thousand, respectively.
The
pro forma information was determined based on the historical results of the Company and unaudited financial results of AGI. These proforma
results reflect additional depreciation and amortization that would have been charged assuming the fair value adjustments to property,
plant, and equipment and intangible asset occurred at the beginning of the period, along with consequential tax effects. The unaudited
pro forma results have been prepared for comparative purposes only and are not necessarily indicative of what would have occurred had
the business combinations been completed on January 1, 2022, nor it is necessarily indicative of future results of operations of the combined
company. Furthermore, the unaudited pro forma financial information does not reflect the impact of any synergies resulting from the acquisition.
19
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
6: GOODWILL
AND OTHER INTANGIBLE ASSETS, NET
The
Company has $ 7.5
million of goodwill related to its purchase of AGI in the third quarter of fiscal year 2023, which has an indefinite life, and is not
deductible for tax purposes.
As
of September 30, 2023, the components of, and changes in, the carrying amount of intangible assets, net, were as follows (in thousands):
September 30, 2023
Cost
Accumulated
Amortization
Intangible
Assets, Net
Trademark
795
( 37
)
758
Technology
6,161
( 215
)
5,946
Customer
relationship - Warranty
201
( 14
)
187
Customer
relationship - Rental
2,102
( 74
)
2,028
Customer
relationship - Distribution
4,578
( 128
)
4,450
Backlog
296
( 296
)
-
Total Amortized Intangible
Assets
14,133
( 764
)
13,369
The
estimated amortization expense is shown below (in thousands):
Fiscal
2023 (period remaining)
$
844
Fiscal
2024
3,347
Fiscal
2025
3,307
Fiscal
2026
3,143
Fiscal
2027
2,172
Fiscal
2028
556
Total
13,369
NOTE
7: COMMITMENTS
AND CONTINGENT LIABILITIES
a.
Purchase commitments:
The
Company has contractual obligations to purchase goods from its contract manufacturer as well as raw materials from different vendors.
Purchase obligations do not include contracts that may be canceled without penalty. As of September 30, 2023, non-cancelable outstanding
obligations amounted to approximately $ 2.2
million.
b.
Operating lease commitment:
(i)
The
Company operates from leased facilities in Israel, the United States and Germany. These leases expire in 2025. A portion
of the Company’s facilities leases is generally subject to annual changes in the Consumer Price Index (the “CPI”). The
changes to the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was
incurred.
20
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(ii)
RRL
and RRG lease cars for their employees under cancelable operating lease agreements expiring at various dates between 2023 and 2026.
A subset of the Company’s car leases is considered variable. The variable lease payments for such cars leases are based on actual
mileage incurred at the stated contractual rate. RRL and RRG have an option to be released from these agreements, which may result in
penalties in a maximum amount of approximately $ 26
thousand as of September 30, 2023.
The
Company’s future lease payments for its facilities and cars, which are presented as current maturities of operating leases and non-current
operating leases liabilities on the Company’s condensed consolidated balance sheets as of September 30, 2023 are as follows (in
thousands):
2023
$
328
2024
1,312
2025
638
2026
4
Total lease payments
2,282
Less: imputed interest
( 181
)
Present value of future
lease payments
2,101
Less: current maturities
of operating leases
( 1,245
)
Non-current operating
leases
$
856
Weighted-average remaining
lease term (in years)
1.9
Weighted-average
discount rate
9.18
Lease
expense under the Company’s operating leases was $ 269
thousand and $ 175
thousand for the three months ended September 30, 2023, and 2022, respectively. For the nine months ended September 30, 2023, and 2022,
the lease expense was $ 657
thousand and $ 538
thousand, respectively.
c.
Royalties
The
Company’s research and development efforts are financed, in part, through funding from the Israel Innovation Authority (“IIA”).
Since the Company’s inception through September 30, 2023, the Company received funding from the IIA in the total amount of $ 2.4
million. Out of the $ 2.4
million in funding from the IIA, a total amount of $ 1.6
million were royalty-bearing grants, $ 400
thousand was received in consideration of 209
convertible preferred A shares, which converted after the Company’s initial public offering in September 2014 into ordinary
shares in a conversion ratio of 1 to 1 , while $ 450
thousand was received without future obligation. The Company is obligated to pay royalties to the IIA, amounting to 3 %
of the sales of the products and other related revenues generated from such projects, up to 100 %
of the grants received. The royalty payment obligations also bear interest at the LIBOR rate. The obligation to pay these royalties is
contingent on actual sales of the applicable products and in the absence of such sales, no payment is required.
As
of September 30, 2023, the Company paid royalties to the IIA in the total amount of $ 110
thousand.
There
were no
royalty payments for the three and nine months ended September 30, 2023 and $ 3
thousand for the three months ended September 30, 2022. For the nine months ended September 30, 2022, the royalty expenses were $ 7
thousand.
As
of September 30, 2023, the contingent liability to the IIA amounted to $ 1.6
million. The Israeli Research and Development Law provides that know-how developed under an approved research and development program
may not be transferred to third parties without the approval of the IIA.
21
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Such
approval is not required for the sale or export of any products resulting from such research or development. The IIA, under special circumstances,
may approve the transfer of IIA-funded know-how outside Israel, in the following cases:
(a)
the grant recipient pays to the IIA a portion of the sale price paid in consideration for such IIA-funded know-how or in consideration
for the sale of the grant recipient itself, as the case may be, which portion will not exceed six times the amount of the grants received
plus interest (or three times the amount of the grant received plus interest, in the event that the recipient of the know-how has committed
to retain the R&D activities of the grant recipient in Israel after the transfer); (b) the grant recipient receives know-how from
a third party in exchange for its IIA-funded know-how; (c) such transfer of IIA-funded know-how arises in connection with certain types
of cooperation in research and development activities; or (d) If such transfer of know-how arises in connection with a liquidation by
reason of insolvency or receivership of the grant recipient.
Additionally,
the License Agreement requires the Company to pay Harvard royalties on net sales, see Note 8 below for more information about the Collaboration
Agreement and the License Agreement.
AGI
earns royalties under a license agreement with a third party and are recognized as earned. Royalty revenues totaled $ 31
thousand for the period ended September 30, 2023.
d.
Liens:
As
part of the Company’s other long-term assets and restricted cash, an amount of $ 696
thousand has been pledged as security in respect of a guarantee granted to a third party. Such deposit cannot be pledged to others or
withdrawn without the consent of such third party.
e.
Legal Claims:
Occasionally,
the Company is involved in various claims such as product liability claims, lawsuits, regulatory examinations, investigations, and other
legal matters arising, for the most part, in the ordinary course of business. The outcome of any pending or threatened litigation and
other legal matters is inherently uncertain, and it is possible that resolution of any such matters could result in losses material to
the Company’s consolidated results of operations, liquidity, or financial condition. Except as otherwise disclosed herein, the Company
is not currently party to any material litigation.
NOTE
8: RESEARCH
COLLABORATION AGREEMENT AND LICENSE AGREEMENT
On
May 16, 2016, the Company entered into a Collaboration Agreement (as amended, the “Collaboration Agreement”) and an Exclusive
License Agreement (as amended, the “License Agreement”) with Harvard. The Collaboration Agreement concluded on March 31, 2022.
Under
the License Agreement, Harvard has granted the Company an exclusive, worldwide royalty-bearing license under certain patents of Harvard
relating to lightweight “soft suit” exoskeleton system technologies for lower limb disabilities, a royalty-free license under
certain related know-how and the option to obtain a license under certain inventions conceived under the joint research collaboration.
The
License Agreement required the Company to pay Harvard an upfront fee, reimbursements for expenses that Harvard incurred in connection
with the licensed patents, royalties on net sales and several milestone payments contingent upon the achievement of certain product development
and commercialization milestones. The Harvard License Agreement will continue in full force and effect until the expiration of the last-to-expire
valid claim of the licensed patents.
22
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
As
of September 30, 2023, the Company achieved three of the milestones which represent all development milestones under the License Agreement.
The Company continues to evaluate the likelihood that the other milestones will be achieved on a quarterly basis.
The
Company has recorded expenses in the amount of $ 7 thousand
and $ 26 thousand
as research and development expenses related to the License Agreement and to the Collaboration Agreement for the three months ended September
30, 2023, and 2022, respectively. For the nine months ended September 30, 2023, and 2022, the expenses were $ 28 thousand
and $ 60
thousand, respectively. No withholding tax was deducted from the Company’s payments to Harvard in respect of the Collaboration Agreement
and the License Agreement since this is not taxable income in Israel in accordance with Section 170 of the Israel Income Tax Ordinance
1961-5721.
NOTE
9: SHAREHOLDERS’
EQUITY
a.
Share
option plans:
As
of September 30, 2023, and December 31, 2022, the Company had reserved 1,020,872
and 2,934,679
ordinary shares, respectively, for issuance to the Company’s and its affiliates’ respective employees, directors, officers,
and consultants pursuant to equity awards granted under the Company's 2014 Incentive Compensation Plan (the “2014 Plan”).
Options
to purchase ordinary shares generally vest over four years, with certain options to non-employee directors vesting quarterly over one
year. Any option that is forfeited or canceled before expiration becomes available for future grants under the 2014 Plan.
There
were no options granted during the nine months ended September 30, 2023 and 2022.
The
fair value of RSUs granted is determined based on the price of the Company's ordinary shares on the date of grant.
A
summary of employee share options activity during the nine months ended September 30, 2023 is as follows:
Number
Average
exercise
price
Average
remaining
contractual
life
(in years)
Aggregate
intrinsic
value
(in
thousands)
Options
outstanding as of December 31, 2022
43,994
$
41.27
4.39
$
-
Granted
-
-
-
-
Exercised
-
-
-
-
Forfeited
( 1,230
)
35.86
-
-
Options
outstanding as of September 30, 2023
42,764
$
41.42
3.74
$
-
Options
exercisable as of September 30, 2023
42,764
$
41.42
3.74
$
-
The
aggregate intrinsic value in the table above represents the total intrinsic value that would have been received by the option holders
had all option holders that hold options with positive intrinsic value exercised their options on the last date of the exercise period.
No options were exercised during the three and nine months ended September 30, 2023 and 2022.
23
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
A
summary of employees and non-employees RSUs activity during the nine months ended September 30, 2023 is as follows:
Number
of shares underlying outstanding RSUs
Weighted
average grant date fair value
Unvested
RSUs as of December 31, 2022
2,755,057
$
1.16
Granted
2,225,475
0.67
Vested
( 1,023,618
)
1.14
Forfeited
( 110,438
)
1.16
Unvested
RSUs as of September 30, 2023
3,846,476
$
0.87
The
weighted average grant date fair value of RSUs granted during the nine months ended September 30, 2023, and 2022 was $ 0.87
and $ 1.00 ,
respectively.
As
of September 30, 2023, there were $ 3.1 million
of total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Company's 2014
Plan. This cost is expected to be recognized over a period of approximately 3.0
years.
The
number of options and RSUs outstanding as of September 30, 2023 is set forth below, with options separated by range of exercise price.
Range
of exercise price
Options
and RSUs outstanding as of September 30, 2023
Weighted
average
remaining
contractual
life
(years) (1)
Options
outstanding and exercisable as of September 30, 2023
Weighted
average
remaining
contractual
life
(years) (1)
RSUs
only
3,846,476
-
-
-
$ 5.37
12,425
5.49
12,425
5.49
$ 20.42
- $ 33.75
12,943
4.6
12,943
4.6
$ 37.14
- $ 38.75
8,090
0.23
8,090
0.23
$ 50
- $ 52.50
6,731
3.72
6,731
3.72
$ 182.5
- $ 524
2,575
2.1
2,575
2.1
3,889,240
3.74
42,764
3.74
(1)
Calculation
of weighted average remaining contractual term does not include the RSUs that were granted, which have an indefinite contractual term.
b.
Share-based
awards to non-employee consultants:
As
of September 30, 2023, there are no outstanding options or RSUs held by non-employee consultants.
24
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
c.
Treasury shares:
On
June 2, 2022, the Company’s Board of Directors approved a share repurchase program to repurchase up to $ 8.0 million
of its Ordinary Shares, par value NIS 0.25
per share. On July 21, 2022, the Company received approval from an Israeli court for the share repurchase program. The program was scheduled
to expire on the earlier of January 20, 2023, or reaching $ 8.0 million
of repurchases. On December 22, 2022, the Company’s Board of Directors approved an extension of the repurchase program, with such
extension to be in the aggregate amount of up to $ 5.8
million. The extension was approved by an Israeli court on February 9, 2023, and it expired on August 9, 2023.
As
of September 30, 2023, pursuant to the Company’s share repurchase program, the Company had repurchased a total of 4,022,607
of its outstanding ordinary shares at a total cost of $ 3.5
million.
d.
Warrants
to purchase ordinary shares:
The
following table summarizes information about warrants outstanding and exercisable that were classified as equity as of September 30, 2023:
Issuance
date
Warrants
outstanding
Exercise
price
per
warrant
Warrants
outstanding
and
exercisable
Contractual
term
(number)
(number)
December
31, 2015 (1)
4,771
$
7.500
4,771
See
footnote (1)
December
28, 2016 (2)
1,908
$
7.500
1,908
See
footnote (1)
November
20, 2018 (3)
126,839
$
7.500
126,839
November
20, 2023
November
20, 2018 (4)
106,680
$
9.375
106,680
November
15, 2023
February
25, 2019 (5)
45,600
$
7.187
45,600
February
21, 2024
April 5,
2019 (6)
408,457
$
5.140
408,457
October
7, 2024
April 5,
2019 (7)
49,015
$
6.503
49,015
April
3, 2024
June 5, 2019,
and June 6, 2019 (8)
1,464,665
$
7.500
1,464,665
June
5, 2024
June 5, 2019
(9)
87,880
$
9.375
87,880
June
5, 2024
June 12,
2019 (10)
416,667
$
6.000
416,667
December
12, 2024
June 10,
2019 (11)
50,000
$
7.500
50,000
June
10, 2024
February
10, 2020 (12)
28,400
$
1.250
28,400
February
10, 2025
February
10, 2020 (13)
105,840
$
1.563
105,840
February
10, 2025
July 6, 2020
(14)
448,698
$
1.760
448,698
January
2, 2026
July 6, 2020
(15)
296,297
$
2.278
296,297
January
2, 2026
December
8, 2020 (16)
586,760
$
1.340
586,760
June
8, 2026
December
8, 2020 (17)
108,806
$
1.792
108,806
June
8, 2026
February
26, 2021 (18)
5,460,751
$
3.600
5,460,751
August
26, 2026
February
26, 2021 (19)
655,290
$
4.578
655,290
August
26, 2026
September
29, 2021 (20)
8,006,759
$
2.000
8,006,759
March
29, 2027
September
29, 2021 (21)
960,811
$
2.544
960,811
September
27, 2026
19,420,894
19,420,894
25
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(1)
Represents
warrants for ordinary shares issuable upon an exercise price of $ 7.500
per share, which were granted on December
31, 2015 to Kreos Capital V (Expert) Fund Limited (“Kreos”) in connection with a loan made by Kreos to the
Company and are currently
exercisable (in whole or in part) until the earlier of (i) December 30, 2025 or (ii) immediately prior to the consummation of a merger,
consolidation, or reorganization of the Company with or into, or the sale or license of all or substantially all the assets or shares
of the Company to, any other entity or person, other than a wholly owned subsidiary of the Company, excluding any transaction in which
the Company’s shareholders prior to the transaction will hold more than 50% of the voting and economic rights of the surviving entity
after the transaction. None of these warrants had been exercised as of September 30, 2023 .
(2)
Represents
common warrants that were issued as part of the $ 8.0 million
drawdown under the Loan Agreement which occurred on December 28, 2016. See footnote 1 for exercisability terms.
(3)
Represents
common warrants that were issued as part of the Company’s follow-on public offering in November 2018.
(4)
Represents
common warrants that were issued to the underwriters as compensation for their role in the Company’s follow-on public offering in
November 2018.
(5)
Represents
warrants that were issued to the exclusive placement agent as compensation for its role in the Company’s follow-on public offering
in February 2019.
(6)
Represents
warrants that were issued to certain institutional purchasers in a private placement in the Company’s registered direct offering
of ordinary shares in April 2019.
(7)
Represents
warrants that were issued to the placement agent as compensation for its role in the Company’s April 2019 registered direct offering.
(8)
Represents
warrants that were issued to certain institutional investors in a warrant exercise agreement on June 5, 2019, and June 6, 2019, respectively.
(9)
Represents
warrants that were issued to the placement agent as compensation for its role in the Company’s June 2019 warrant exercise agreement
and concurrent private placement of warrants.
(10)
Represents
warrants that were issued to certain institutional investors in a warrant exercise agreement in June 2019.
(11)
Represents
warrants that were issued to the placement agent as compensation for its role in the Company’s June 2019 registered direct offering
and concurrent private placement of warrants.
(12)
Represents
warrants that were issued to certain institutional purchasers in a private placement in the Company’s best efforts offering of ordinary
shares in February 2020. As of September 30, 2023, 3,740,100
warrants were exercised for total consideration of $ 4,675,125 .
During the three and nine months that ended September 30, 2023, no warrants were exercised.
(13)
Represents
warrants that were issued to the placement agent as compensation for its role in the Company’s February 2020 best efforts offering.
As of September 30, 2023, 230,160
warrants were exercised for total consideration of $ 359,625 .
During the three and nine months that ended September 30, 2023, no warrants were exercised.
26
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(14)
Represents
warrants that were issued to certain institutional purchasers in a private placement in our registered direct offering of ordinary shares
in July 2020. As of September, 30, 2023, 2,020,441
warrants were exercised for total consideration of $ 3,556,976 .
During the three and nine months that ended September 30, 2023, no warrants were exercised.
(15)
Represents
warrants that were issued to the placement agent as compensation for its role in the Company’s July 2020 registered direct offering.
(16)
Represents
warrants that were issued to certain institutional purchasers in a private placement in our private placement offering of ordinary shares
in December 2020. As of September 30, 2023, 3,598,072
warrants were exercised for total consideration of $ 4,821,416 .
During the three and nine months that ended September 30, 2023, no warrants were exercised.
(17)
Represents
warrants that were issued to the placement agent as compensation for its role in the Company’s December 2020 private placement.
As of September 30, 2023, 225,981
warrants were exercised for total consideration of $ 405,003 .
During the three and nine months that ended September 30, 2023, no warrants were exercised.
(18)
Represents
warrants that were issued to certain institutional purchasers in a private placement in our private placement offering of ordinary shares
in February 2021.
(19)
Represents
warrants that were issued to the placement agent as compensation for its role in the Company’s February 2021 private placement.
(20)
Represents
warrants that were issued to certain institutional purchasers in a private placement in our registered direct offering of ordinary shares
in September 2021.
(21)
Represents
warrants that were issued to the placement agent as compensation for its role in the Company’s September 2021 registered direct
offering.
e.
Share-based
compensation expense for employees and non-employees:
The
Company recognized non-cash share-based compensation expense for both employees and non-employees in the condensed consolidated statements
of operations as follows (in thousands):
Nine
Months Ended
September
30,
2023
2022
Cost
of revenues
$
5
$
10
Research
and development, net
112
60
Sales
and marketing
270
167
General
and administrative
568
409
Total
$
955
$
646
27
REWALK
ROBOTICS LTD. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
10: FINANCIAL
(EXPENSES) INCOME, NET
The
components of financial (expenses) income, net were as follows (in thousands):
Three
Months Ended
September
30,
Nine
Months Ended
September
30,
2023
2022
2023
2022
Foreign
currency transactions and other
$
17
$
( 1
)
$
39
$
( 50
)
Interest
income
394
-
1,024
-
Bank
commissions
-
-
( 16
)
( 19
)
$
411
$
( 1
)
$
1,047
$
( 69
)
NOTE
11: GEOGRAPHIC
INFORMATION AND MAJOR CUSTOMER AND PRODUCT DATA
Summary
information about geographic areas:
ASC
280, “Segment Reporting” establishes standards for reporting information about operating segments. Operating segments are
defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing performance. The Company manages its business on the basis
of one
reportable segment and derives revenues from selling systems and services. The following is a summary of revenues within geographic areas
(in thousands):
Three
Months Ended
September 30,
Nine
Months Ended
September 30,
2023
2022
2023
2022
Revenues
based on customer’s location:
United
States
$
2,497
$
395
$
4,298
$
1,193
Europe
1,466
488
2,201
2,023
Asia-Pacific
94
2
123
113
Rest
of the world
346
1
348
3
Total
revenues
$
4,403
$
886
$
6,970
$
3,332
September 30,
December 31,
2023
2022
Long-lived
assets by geographic region (*):
Israel
$
552
$
757
United
States
2,438
231
Germany
134
44
$
3,124
$
1,032
(*)
Long-lived
assets are comprised of property and equipment, net, and operating lease right-of-use assets.
Nine
Months Ended
September 30,
2023
2022
Major
customer data as a percentage of total revenues:
Customer
A
15.9
%
21.8
%
*)
Less than 10%
28
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.