Document/ExhibitDescriptionPagesSize 1: 10-Q Quarterly Report HTML 447K
2: EX-10.1 Material Contract HTML 429K
3: EX-10.2 Material Contract HTML 77K
4: EX-31.1 Certification -- §302 - SOA'02 HTML 30K
5: EX-31.2 Certification -- §302 - SOA'02 HTML 30K
6: EX-32.1 Certification -- §906 - SOA'02 HTML 24K
7: EX-32.2 Certification -- §906 - SOA'02 HTML 24K
14: R1 Document And Entity Information HTML 47K
15: R2 Condensed Consolidated Balance Sheets HTML 113K
16: R3 Condensed Consolidated Balance Sheets HTML 45K
(Parenthetical)
17: R4 Condensed Consolidated Statements of Operations HTML 74K
and Comprehensive Loss
18: R5 Consolidated Statements of Stockholders' Equity HTML 76K
19: R6 Condensed Consolidated Statements of Cash Flows HTML 120K
20: R7 Organization HTML 35K
21: R8 Basis of Presentation and Summary of Significant HTML 62K
Accounting Policies and Estimates
22: R9 Accumulated Other Comprehensive Income (Loss) HTML 29K
23: R10 Fair Value Measurements HTML 71K
24: R11 Inventories, net HTML 35K
25: R12 Revenue Recognition HTML 66K
26: R13 Investment in Unconsolidated Affiliate HTML 35K
27: R14 Accrued Liabilities HTML 41K
28: R15 Long-Term Debt HTML 44K
29: R16 Lease Obligations HTML 48K
30: R17 Capitalization and Equity Structure HTML 70K
31: R18 Stock-based Compensation HTML 83K
32: R19 Income Taxes HTML 26K
33: R20 Commitments and Contingencies HTML 31K
34: R21 Net Loss Per Share HTML 43K
35: R22 Segment Disclosures HTML 56K
36: R23 Related Party Transactions HTML 28K
37: R24 Subsequent Events HTML 28K
38: R25 Basis of Presentation and Summary of Significant HTML 95K
Accounting Policies and Estimates (Policies)
39: R26 Accumulated Other Comprehensive Income (Loss) HTML 29K
(Tables)
40: R27 Fair Value Measurements (Tables) HTML 69K
41: R28 Inventories, net (Tables) HTML 37K
42: R29 Revenue Recognition (Tables) HTML 57K
43: R30 Accrued Liabilities (Tables) HTML 42K
44: R31 Long-Term Debt (Tables) HTML 36K
45: R32 Lease Obligations (Tables) HTML 40K
46: R33 Capitalization and Equity Structure (Tables) HTML 58K
47: R34 Stock-based Compensation (Tables) HTML 84K
48: R35 Net Loss Per Share (Tables) HTML 45K
49: R36 Segment Disclosures (Tables) HTML 58K
50: R37 Organization (Details) HTML 37K
51: R38 Basis of Presentation and Summary of Significant HTML 40K
Accounting Policies and Estimates (Details)
52: R39 Accumulated Other Comprehensive Income (Loss) HTML 34K
(Details)
53: R40 Fair Value Measurements - Fair Value Hierarchies HTML 38K
(Details)
54: R41 Fair Value Measurements - Change in Level 3 HTML 38K
(Details)
55: R42 Inventories, net (Details) HTML 38K
56: R43 Revenue Recognition - Deferred Revenue (Details) HTML 42K
57: R44 Revenue Recognition - Deferred Revenue Activity HTML 30K
(Details)
58: R45 Revenue Recognition - Additional Information HTML 40K
(Details)
59: R46 Revenue Recognition - Performance Obligations HTML 36K
(Details)
60: R47 Revenue Recognition - Disaggregation of Revenue HTML 45K
(Details)
61: R48 Investment in Unconsolidated Affiliate (Details) HTML 62K
62: R49 Accrued Liabilities - Schedule of Accrued HTML 41K
Liabilities (Details)
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Warranty (Details)
64: R51 Long-Term Debt - Additional Information (Details) HTML 55K
65: R52 Long-Term Debt - Debt Repayment (Details) HTML 46K
66: R53 Lease Obligations - Additional Information HTML 41K
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67: R54 Lease Obligations - Future Minimum Payments HTML 50K
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68: R55 Capitalization and Equity Structure - Additional HTML 85K
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69: R56 Capitalization and Equity Structure - Warrants HTML 58K
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70: R57 Capitalization and Equity Structure - Valuation HTML 41K
Assumptions (Details)
71: R58 Stock-based Compensation - Additional Information HTML 47K
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72: R59 Stock-based Compensation - Stock Option Activity HTML 79K
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73: R60 Stock-based Compensation - Valuation Assumptions HTML 34K
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,”“accelerated filer,”“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ¨
Accelerated filer x
Non-accelerated filer ¨
Smaller
reporting company x
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act o
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
The number of shares of registrant’s common stock outstanding as of April 29, 2019 was 67,669,227.
Accounts
receivable, net of allowances of $179 and $128, respectively
3,793
3,660
Inventories, net
3,300
3,371
Prepaid expenses and other current assets
506
281
Total
current assets
16,835
14,967
Property and equipment, net
2,331
2,365
Right-of-use assets
1,365
—
Goodwill
189
189
Other
assets
140
134
Total assets
$
20,860
$
17,655
Liabilities
and Stockholders' Equity
Current liabilities:
Accounts payable
$
2,474
$
3,156
Accrued
liabilities
3,286
3,541
Deferred revenues, current
1,211
1,102
Note payable, current
2,333
2,333
Lease
liabilities, current
406
—
Total current liabilities
9,710
10,132
Deferred revenues
1,499
1,495
Note
payable, net
2,093
2,648
Lease liabilities
1,006
—
Warrant liability
1,964
585
Other
non-current liabilities
54
67
Total liabilities
16,326
14,927
Commitments and contingencies (Note 14)
Stockholders'
equity:
Convertible preferred stock, $0.001 par value; 10,000 shares authorized; none issued and outstanding at March 31, 2019 and December 31, 2018
—
—
Common stock, $0.001
par value; 141,429 shares authorized; 67,529 and 62,963, shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively
68
63
Additional paid-in capital
182,107
173,903
Accumulated
other comprehensive income (loss)
56
(92
)
Accumulated deficit
(177,697
)
(171,146
)
Total stockholders' equity
4,534
2,728
Total
liabilities and stockholders' equity
$
20,860
$
17,655
The accompanying notes are an integral part of these condensed consolidated financial statements
Notes to Condensed Consolidated Financial Statements
($ and share amounts in thousands, except per share amounts)
(Unaudited)
1. Organization
Description of Business
Ekso Bionics Holdings, Inc. (the “Company”) designs, develops and sells exoskeleton technology to augment human strength, endurance and mobility. The Company’s exoskeleton technology serves multiple
markets and can be used both by able-bodied users as well as by persons with physical disabilities. The Company has sold or leased devices that (a) enable individuals with neurological conditions affecting gait (stroke and spinal cord injury) to rehabilitate and to walk again and (b) allow industrial workers to perform heavy duty work for extended periods. Founded in 2005, the Company is headquartered in the Bay Area and is listed on the Nasdaq Capital Market under the symbol “EKSO."
Liquidity and Going Concern
As of March 31, 2019,
the Company had an accumulated deficit of $177,697. Largely as a result of significant research and development activities related to the development of the Company’s advanced technology and commercialization of this technology into its medical device business, the Company has incurred significant operating losses and negative cash flows from operations since inception. In the three months ended March 31, 2019, the Company used $5,177 of cash
in its operations.
Cash on hand at March 31, 2019 was $9,236, compared to $7,655 at December 31, 2018. As noted in Note 9, Long-Term Debt, borrowings under the Company’s long-term debt agreement have a requirement of minimum cash on hand equivalent to three months of cash burn. As of March 31, 2019, the most recent determination of this restriction, $4,908
of cash must remain as restricted, with such amounts to be re-computed at each month end period. After considering cash restrictions, effective unrestricted cash as of March 31, 2019 is estimated to be $4,328. Based on the current forecast, the Company’s cash on hand will not be sufficient to satisfy the Company’s operations for the next twelve months from the date of issuance of these condensed consolidated financial statements, which raises substantial doubt about the Company’s ability to continue as a going concern.
Based
upon the Company’s current cash resources, the recent rate of using cash for operations and investment, and assuming modest increases in current revenue, the Company believes it has sufficient resources to meet its financial obligations until late in the second quarter of 2019. While the Company will require significant additional financing, the Company’s actual capital requirements may vary significantly and will depend on many factors. The Company plans to continue its investments (i) in its clinical and sales initiatives to accelerate adoption
of the Ekso robotic exoskeleton in the rehabilitation market, (ii) in its research, development and commercialization activities with respect to an Ekso robotic exoskeleton for rehabilitation, and/or (iii) in the development and commercialization of able-bodied exoskeletons for industrial use.
The Company is actively pursuing opportunities to obtain additional financing through public or private equity and/or debt financings and corporate collaborations. Sales of additional equity securities by the Company could result in the dilution of the interests of existing stockholders. There can be no assurance that financing will be available when required in sufficient amounts, on acceptable terms or at all. In
the event that the necessary additional financing is not obtained, the Company may be required to further reduce its discretionary overhead costs substantially, including research and development, general and administrative, and sales and marketing expenses or otherwise curtail operations.
2. Basis of Presentation and Summary of Significant Accounting Policies and Estimates
Basis of Presentation
In the opinion of management, the accompanying unaudited condensed consolidated financial statements have been prepared on a consistent basis with the
audited consolidated financial statements for the fiscal year ended December 31, 2018, which included an explanatory paragraph expressing substantial doubt about the Company’s ability to continue as a going concern in the report of the Company's independent registered public accounting firm, and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth herein. Certain reclassifications have been made to conform to the current period’s presentation. The Company’s investment in a variable interest entity (“VIE”) in which it exercises significant
influence but does not control and is not the primary beneficiary is accounted for using the equity method. The condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and therefore, omit certain information and footnote disclosure necessary to present the financial statements
Notes to Condensed Consolidated Financial Statements
($ and share amounts in thousands, except per share amounts)
(Unaudited)
in
accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, which was filed with the SEC on February 28, 2019. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the entire fiscal year or any future periods.
Use
of Estimates
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet, and the reported amounts of revenues and expenses during the reporting period. For the Company, these estimates include, but are not limited to: revenue recognition, deferred revenue and the deferral of the associated costs, future warranty costs, accounting for leases, useful lives assigned to long-lived assets, valuation of inventory, realizability of deferred tax assets, the valuation of employee stock options and warrants, and contingencies. Actual results could differ from those estimates.
Foreign
Currency
The assets and liabilities of foreign subsidiaries and equity investments, where the local currency is the functional currency, are translated from their respective functional currencies into U.S. dollars at the rates in effect at the balance sheet date and revenue and expense amounts are translated at average rates during the period, with resulting foreign currency translation adjustments recorded in accumulated other comprehensive income (loss) as a component of stockholders’ equity. Gains and losses from the re-measurement of balances denominated in currencies other than the entity's functional currency, are recorded in other expense, net in the accompanying consolidated statements of operations and comprehensive loss.
Investment
in Unconsolidated Affiliate
Equity investments in which the Company exercises significant influence, but does not control and is not the primary beneficiary, are accounted for using the equity method. Investments accounted for under the equity method of accounting are recorded at cost within other assets on the consolidated balance sheets and subsequently increased or decreased by the Company's proportionate share of the net income or loss of the investee. The Company records its proportionate share of net income or loss of the investee in net investment income. The
Company records its proportionate share of other comprehensive income or loss of the investee as a component of other comprehensive income. Dividends or other equity distributions in excess of the Company's cumulative equity in earnings of the investee are recorded as a reduction of the investment. Differences in the basis of the investments and the separate net asset values of the investees, if any, are amortized into net income over the remaining useful lives of the underlying assets and liabilities, except for the excess related to goodwill, if any.
The Company believes the equity method is an appropriate means for it to recognize increases or decreases measured by U.S. GAAP in the economic resources
underlying the investments. Regular evaluation of these investments is appropriate to evaluate any potential need for impairment. The Company uses evidence of a loss in value to identify if an investment has an other than a temporary decline.
Variable Interest Entities
The Company determines whether it has relationships with entities defined as variable interest entities (VIEs) in accordance with ASC 810, Consolidation. Under this guidance, a VIE is consolidated by the variable interest holder that is determined to be the primary beneficiary.
An
entity in which the Company holds a variable interest is a VIE if any of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) as a group, the holders of equity investment at risk lack either the direct or indirect ability through voting rights or similar rights to make decisions about an entity's activities that most significantly impact the entity's economic performance or the obligation to absorb the expected losses or right to receive the expected residual returns, or (c) the voting rights of some investors are disproportionate to their obligation to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both and substantially all of the entity's activities either involve or are conducted
on behalf of an investor with disproportionately few voting rights.
Notes to Condensed Consolidated Financial Statements
($ and share amounts in thousands, except per share amounts)
(Unaudited)
The primary beneficiary is defined as the variable interest holder that is determined to have the controlling financial interest as a result of having both (a) the power
to direct the activities of a VIE that most significantly impact the economic performance of the VIE and (b) the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. The Company determines whether an entity is a VIE at the inception of its variable interest in the entity and upon the occurrence of certain reconsideration events. The Company continually reassesses whether it is the primary beneficiary of VIEs in which it holds a variable interest.
Inventory
Inventories are recorded at the lower of cost or net realizable value. Cost is computed using the standard
cost method, which approximates actual cost on a first-in, first-out basis. Materials from vendors are received and recorded as raw material. Once the raw materials are incorporated in the fabrication of the product, the related value of the component is recorded as work in progress or WIP. Direct and indirect labor and applicable overhead costs are also allocated and recorded to WIP inventory. Finished goods are comprised of completed products that are ready for customer shipment. The Company periodically evaluates the carrying value of inventory on hand for potential excess amounts over sales and forecasted demand. Excess and obsolete inventories identified, if any, are recorded as an inventory impairment charge to the consolidated statements of operations and comprehensive loss. The Company's
estimate of write downs for excess and obsolete inventory is based on a detailed analysis of on-hand inventory and purchase commitments in excess of forecasted demand.
Leases
In February 2016, the FASB issued Accounting Standard Update, or ASU, No. 2016-02, Leases (Topic 842), to enhance the transparency and comparability of financial reporting related to leasing arrangements. The Company adopted the standard effective January 1, 2019.
At the inception of an arrangement, the
Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received.
Leases
with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes the lease expense for such leases on a straight-line basis over the lease term.
Lease expense is recognized over the expected term on a straight-line basis. Operating leases are recognized on the balance sheet as right-of-use assets, lease liabilities current and lease liabilities non-current. As a result, the Company no longer recognizes deferred rent on the balance sheet.
Revenue Recognition
Revenue is recognized upon transfer
of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which when capable of being distinct, are accounted for as separate performance obligations.
The Company’s medical device segment (EksoHealth) revenue is primarily generated through the sale and rental of the Ekso GT and associated software (SmartAssist and VariableAssist),
and sale of accessories, and support and maintenance contracts (Ekso Care). Revenue from medical device product sales is recognized at the point in time when control of the product transfers to the customer. Transfer of control generally occurs upon shipment from the Company’s facility for sales of the Ekso GT, software, and accessories. Ekso Care support and maintenance contracts extend coverage beyond the Company’s standard warranty agreements. The separately priced Ekso Care contracts range from 12 to 48 months. The
Company receives payment at the inception of the contract and recognize revenue over the term of the agreement. Revenue from medical device leases is recognized over the lease term, typically over 12 months.
Notes to Condensed Consolidated Financial Statements
($ and share amounts in thousands, except per share amounts)
(Unaudited)
The
Company’s industrial device segment (EksoWorks) revenue is generated by the sales of the upper body exoskeleton (EksoVest) and the support arm (EksoZeroG). Revenue from industrial device sales is recognized at the point in time when control of the product transfers to the customer. Transfer of control generally occurs upon shipment from the Company’s facility.
Refer to Note 6 – Revenue Recognition for further information, including revenue disaggregated by source.
Going Concern
The Company assesses its ability to continue as a
going concern at every interim and annual period in accordance with Accounting Standards Codification 205-40. The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
Concentration of Credit Risk and Other Risks and Uncertainties
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable. The Company maintains its cash accounts in excess of federally insured limits. However,
the Company believes it is not exposed to significant credit risk due to the financial position of the depository institutions in which these deposits are held. The Company extends credit to customers in the normal course of business and performs ongoing credit evaluations of its customers. Concentrations of credit risk with respect to accounts receivable exist to the full extent of amounts presented in the condensed consolidated financial statements. The Company does not require collateral from its customers to secure accounts receivable.
Accounts receivable are derived from the sale of products shipped to and services performed
for customers. Invoices are aged based on contractual terms with the customer. The Company reviews accounts receivable for collectability and records an allowance for credit losses, as needed. The Company has not experienced any material losses related to accounts receivable as of March 31, 2019 and December 31, 2018.
Many of the sales contracts with customers outside of the U.S. are settled in a foreign currency. The
Company does not enter into any foreign currency hedging agreements and is susceptible to gains and losses from foreign currency fluctuations. To date, the Company has not experienced significant gains or losses upon settling foreign currency denominated accounts receivable.
In
January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminated the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities are required to record an impairment charge based on the excess of the carrying amount over its fair value. This update will be effective for the Company beginning January 1, 2020 and early adoption is permitted. The Company does not expect the impact of adopting ASU 2017-04 to be material on its consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure
Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The standard modifies the disclosure requirements on fair value measurements in Topic 820 by removing the requirement to disclose the reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing of such transfers. The standard expands the disclosure requirements for Level 3 fair value measurement, primarily focused on changes in unrealized gains and losses included in other comprehensive income. The amendments in this Update will be effective for all the Company in the first quarter of 2020. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of the amendments in this update will have on its consolidated financial
statements and related disclosures.
Notes to Condensed Consolidated Financial Statements
($ and share amounts in thousands, except per share amounts)
(Unaudited)
Recently Adopted Accounting Standards
In February 2016, the FASB
issued ASU 2016-02-Leases (ASC 842) and subsequent amendments to the initial guidance under ASU 2017-13, ASU 2018-10 and ASU 2018-11 (collectively, Topic 842) which superseded existing guidance on accounting for leases in ASC 840, Leases (ASC 840). Topic 842 requires the Company to recognize on its balance sheet a lease liability representing the present value of future lease payments and a right-of-use asset representing the lessee's right to use, or control the use of a specified asset for the lease term for any operating lease with a term greater than one year. This standard is effective for the Company in the first quarter of 2019. The Company used the modified retrospective transition method, under which we
applied the standard to each lease that had commenced as of the beginning of January 1, 2019. In addition, the Company elected to apply the package of practical expedients permitted under the transition guidance, which among other things, allowed the Company to carry forward the historical lease classification.
Upon adoption of this standard on January 1, 2019, the Company recorded right–of–use assets and corresponding lease liabilities of $1,454 and $1,498,
respectively. As of March 31, 2019, the right–of–use assets and corresponding lease liabilities in the Company's condensed consolidated balance sheets were $1,365 and $1,412, respectively. The adoption of this standard did not have a material impact on the Company’s condensed consolidated statements of operations or cash flows, nor did it have a material impact on the financial covenants set forth in the Company's long-term debt agreement. The
Company has provided detailed disclosures as required by the new standard (Refer to Note 10, Lease Obligations).
In August 2018, the SEC published Release No. 33–10532, Disclosure Update and Simplification, or DUSTR, which adopted amendments to certain disclosure requirements that have become redundant, duplicative, overlapping, outdated or superseded, in light of other SEC disclosure requirements, GAAP, or changes in the information environment. While most of the DUSTR amendments eliminate outdated or duplicative disclosure requirements, the final rule amends the interim financial statement requirements to include a reconciliation of changes in stockholders’ equity (deficit) in the notes or as a separate statement for each period for which a statement of comprehensive income (loss) is required to be filed. The new interim reconciliation of changes in stockholders’ equity
(deficit) is included herein as a separate statement.
3. Accumulated Other Comprehensive Income (Loss)
The following table sets forth the changes to accumulated comprehensive income (loss), net of tax, by component for the three months ended March 31, 2019:
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Three levels of inputs, of which the first two are considered observable and the last unobservable, may be used to measure fair value which are the following:
•
Level 1—Quoted prices
in active markets for identical assets or liabilities. The Company considers a market to be active when transactions for the asset occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
•
Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Notes to Condensed Consolidated Financial Statements
($ and share amounts in thousands, except per share amounts)
(Unaudited)
•
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The valuation of Level 3 investments requires the use of significant management judgments or estimation.
The
Company’s fair value hierarchies for its financial assets and liabilities which require fair value measurement are as follows:
The
following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities for the period ended March 31, 2019, which were measured at fair value on a recurring basis:
Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which when capable of being distinct, are accounted for as separate performance obligations. Revenue recognition is evaluated based on the following five steps: (i) identification of the contract with the customer;
(ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied.
Notes to Condensed Consolidated Financial Statements
($
and share amounts in thousands, except per share amounts)
(Unaudited)
For multiple-element arrangements, revenue is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are determined based on observable prices at which the Company separately sells its products or services. If a standalone selling price is not directly observable, the Company estimates the selling price based on market conditions and entity-specific factors including features and functionality of the product and/or services, the geography of the
Company’s customers, type of the Company’s markets. Any discounts or other reductions to the transaction price are allocated proportionately to all performance obligations within the multiple-element arrangement.
Timing of revenue recognition may differ from the timing of invoicing to customers and receipt of payment. For the sale of its products, the Company generally recognizes revenue at a point in time through the ship-and-bill performance obligations. For the lease of its products, the
Company generally recognizes revenue over the lease term commencing upon the completion of customer training. For service agreements, the Company generally invoices customers at the beginning of the coverage period and record revenue related to the billed amounts over time, equivalent to the coverage period of the maintenance and support contract.
Deferred revenue is comprised mainly of unearned revenue related to extended support and maintenance contracts (Ekso Care) but also includes other offerings for which the Company
has been paid in advance and earns revenue when the Company transfers control of the product or service.
At March 31, 2019, the Company’s deferred revenue, was $2,710. Excluding customer deposits, the
Company expects to recognize approximately $764 of the deferred revenue in the remainder of 2019, $788 in 2020, and $1,103 thereafter.
In addition to deferred revenue, the Company has non-cancellable backlog of $815 related to its contracts for rental units with its customers. These rental contracts are classified as operating leases,
typically with 12-month lease terms, and rental income is recognized on a straight-line basis over the lease term.
As of March 31, 2019, and December 31, 2018, accounts receivable, net of allowance for doubtful accounts, were $3,793 and $3,660, respectively, and are included in current assets on the Company’s condensed consolidated balance sheets.
Notes to Condensed Consolidated Financial Statements
($ and share amounts in thousands, except per share amounts)
(Unaudited)
The allowance for doubtful accounts reflects the Company’s best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. Payment terms and conditions vary by contract
type, although terms generally include a requirement of payment within 30 to 60 days.
Disaggregation of revenue
The following table disaggregates the Company’s revenue by major source for the three months ended March 31, 2019:
EksoHealth
EksoWorks
Total
Device
revenue
$
2,075
$
717
$
2,792
Service, support and rentals
705
—
705
Parts
and other
34
85
119
$
2,814
$
802
$
3,616
7. Investment
in Unconsolidated Affiliate
On January 30, 2019, the Company entered into an agreement (the "JV Agreement") with Zhejiang Youchuang Venture Capital Investment Co., Ltd (“ZYVC”) and another partner to establish Exoskeleton Intelligent Robotics Co. Limited (the “Investee”), a Chinese limited liability company designed to develop and serve the exoskeleton market in China and other Asian markets and to create a global exoskeleton manufacturing center in the Zhejiang Province of China.
The Company has the right to receive a 20%
ownership interest in the Investee in exchange for the successful transfer of licenses for its manufacturing technology and relevant Chinese patent rights (the “IP”). The Company will also be entitled to receive royalties on the Investee’s medical and industrial product sales in China, Hong Kong, Malaysia and Singapore. The Company has one year from the date of the Investee’s formation to complete the transfer of the IP. Since the transferred IP was developed internally by the Company, all previous expenditures to develop the technology were recognized as expense in the period incurred and there was no carrying value on the
Company’s consolidated balance sheet. The Company expects that it will recognize a gain on the Technology License Agreement based on the fair value of the Company’s equity interest in the Investee once control of the IP is transferred.
The Investee is a VIE for which the Company is not the primary beneficiary as the Company does not have the power to direct the activities that most significantly influence the economic performance of the entity. In addition to the
Company’s exchange of license rights for the manufacturing technology, the Investee will be capitalized through cash investments of up to approximately $92,000 by the other two parties over the initial ten-year term of the agreement. The investment in the Investee is accounted for under the equity method of accounting because the Company has significant influence over the Investee through its ownership interest, technology license and manufacturing service agreements and representation on the board of directors. As of March 31, 2019, there is no impact to the Company’s consolidated balance sheet except for the
direct transaction costs which have been capitalized and will be included as part of the investment balance when the IP is transferred. Direct costs of $36 are included in other assets in the Company’s condensed consolidated balance sheets as of March 31, 2019. In addition to contributing the licensed IP, the Company’s obligations to the Investee include assisting the Investee to become proficient in using the IP to manufacture products that meet regulatory standards, and providing supervision of appointed directors. The primary risks that the Company is exposed to from
its involvement with the VIE include operational risk, foreign currency exposure risk and foreign regulatory risk. As of March 31, 2019, the Company has no other implied or unfunded commitments related to the Investee and its maximum exposure to risk of loss will be limited to the carrying value of the investment.
Equity Investments
Concurrent with the signing of the agreement, ZYVC agreed to invest an aggregate of $10,000 in equity investments in the Company taking place
in two tranches. On January 30, 2019, the Company executed a Share Purchase Agreement (the “SPA”) under which the Company sold 3,067 shares of its common stock for $5,000 at a purchase price of $1.63. The SPA contains an anti-dilution right for a 60-day period after closing, under which the investors were entitled to receive additional common shares if the Company
Notes to Condensed Consolidated Financial Statements
($ and share amounts in thousands, except per share amounts)
(Unaudited)
had issued shares at a price below $1.63 during that period. This provision expired unexercised for all investors in April 2019. The Company recorded $8 in direct issuance costs as a reduction to the gross equity proceeds.
The remaining $5,000
investment in the Company’s common stock is contingent upon the shipment of the first products from the manufacturing facility. The equity investment price will be the volume weighted average price of 20 trading days before the issuing date, but with a collar so that the equity price will be no greater than 20% higher than the first investment and lower than 80% of the first investment price.
In
December 2016, the Company entered into a loan agreement and received $7,000 that bears interest on the outstanding daily balance at a floating per annum rate equal to the 30-day U.S. LIBOR plus 5.41%. The loan agreement created a first priority security interest with respect to substantially all assets of the Company, including proceeds of intellectual property, but expressly excluding intellectual property itself.
The Company was required to pay accrued interest on the current loan on the first day of each month through and including
January 1, 2018. Commencing on February 1, 2018, the Company was required to make equal monthly payments of principal, together with accrued and unpaid interest. The principal balance of the current loan amortizes ratably over 36 months, and matures on January 1, 2021, at which time all unpaid principal and accrued and unpaid interest shall be due and payable in full. In addition, a final payment of $245 will be due on the maturity date, of which $194 was accreted as of March 31, 2019, to be paid in 2021
and is included as a component of note payable on the Company’s condensed consolidated balance sheets.
In December 2016, and pursuant to the loan agreement, the Company entered into a success fee agreement with the lender under which the Company agreed to pay the lender a $250 success fee upon the first to occur of any of the following events: (a) a sale or other disposition by the Company of all or substantially all of its assets; (b) a merger or consolidation of the
Company into or with another person or entity, where the holders of the Company’s outstanding voting equity securities immediately prior to such merger or consolidation hold less than a majority of the issued and outstanding voting equity securities of the successor or surviving person or entity immediately following the consummation of such merger or consolidation; or (c) the closing price per share for the Company’s common stock being $8.00 or more for five successive business days. The estimated fair value of the success fee
Notes to Condensed Consolidated Financial Statements
($ and share amounts in thousands, except per share amounts)
(Unaudited)
was determined using the Binomial Lattice Model and was recorded as a discount to the debt obligation. The fair value of the contingent success fee is re-measured each reporting period with any adjustments in fair value being recognized in the condensed consolidated statements of operations and comprehensive loss. The success fee is classified as a liability on the condensed consolidated balance sheets. At March 31, 2019, the
fair value of the contingent success fee liability was $35.
The loan agreement includes a liquidity covenant requiring that the Company maintain unrestricted cash and cash equivalents in accounts of the lender or subject to control agreements in favor of the lender in an amount equal to at least three months of “Monthly Cash Burn,” which is the Company’s average monthly net income (loss) for the trailing six-month period plus certain expenses and plus the average monthly principal due and payable on interest-bearing liabilities in the immediately succeeding three-month period. Such amount was determined to be $4,908
as of March 31, 2019, the most current determination, with the amount subject to change on a month-to-month basis. At March 31, 2019, with cash on hand of $9,236, the Company was compliant with this liquidity covenant and all other covenants.
The final payment fee, debt issuance costs, and the initial fair value of the success fee combined with the stated interest resulted in an effective interest rate of 10.47% for the three months ended March
31, 2019. The final payment fee, initial fair value of the success fee and debt issuance costs was and will be accreted, amortized and amortized, respectively, to interest expense using the effective interest method over the life of the loan.
The following table presents scheduled principal payments of the Company’s long-term debt and final payment fee as of March 31, 2019:
Period
Amount
2019
- remainder
$
1,750
2020
2,333
2021
440
Total principal payments
4,523
Less
accreted portion of final payment fee, net of issuance cost and success fee discounts
97
Long-term debt, net
$
4,426
Current portion
$
2,333
Long-term
portion
2,093
Long-term debt, net
$
4,426
10. Lease Obligations
In May 2017, the
Company renewed its operating lease agreement for its headquarters and manufacturing facility in Richmond, California. The operating lease agreement expires in May 2022, with no further options to extend or terminate. During the renewal period, the base rent is approximately $32 per month during the first year, with incremental 3% increases per annum thereafter. The lease includes non-lease components (i.e. common area maintenance costs) that are paid separately from rent based on actual costs incurred and therefore were not included in the right-of-use asset and lease liability but are reflected as an expense in the period incurred.
In July 2017, the Company entered into an operating lease agreement
for its European operations office in Hamburg, Germany. The initial Hamburg lease term ends in July 2022. The Company has an option to extend the lease for another five-year term. Until April 2019, the Company had an unoccupied leased sales office in Freiburg, which had an original lease term expiring in December 2020. In April 2019, the Company entered an agreement with the lessor of the Freiburg office releasing the Company from future lease payments after April 30, 2019.
In
August 2015, the Company entered into a long-term financing lease for equipment. The aggregate principal of the lease at inception was $166, with an interest rate of 4.7%, minimum monthly payments of $3 and a July 1, 2020 maturity. This financing lease liability is classified as a component of accrued liabilities and other non-current liabilities in the condensed consolidated balance sheets.
Notes to Condensed Consolidated Financial Statements
($ and share amounts in thousands, except per share amounts)
(Unaudited)
The Company's future lease payments as of March 31, 2019 are as follows, which are presented as lease liabilities, current and lease liabilities on the Company's condensed consolidated balance sheets:
Period
Operating
Leases
2019 - remainder
$
406
2020
551
2021
564
2022
261
2023
—
Total
lease payments
1,782
Less: imputed interest
(370
)
Present value of lease liabilities
$
1,412
Lease
liabilities, current
$
406
Lease liabilities, noncurrent
1,006
Total lease liabilities
$
1,412
Weighted-average
remaining lease term (in years)
3.2
Weighted-average discount rate
10.5
%
Lease expense under the Company’s operating leases was $140 and $143 for the three months ended March
31, 2019 and 2018, respectively.
Practical Expedients
Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes the lease expense for such leases on a straight-line basis over the lease term.
The Company has elected to account for lease (e.g., fixed payments including rent) and non-lease components (e.g., common-area maintenance costs) as a single combined
lease component under ASC 842 as the lease components are the predominant elements of the combined components.
As part of the transition to ASC 842, the Company elected to use the modified retrospective transition method with the new standard being applied as of the January 1, 2019 adoption date. Additionally, the Company has elected, as of the adoption date, not to reassess whether expired or existing contracts contain leases under the new definition of a lease, not to reassess the lease classification for expired or existing leases, not to reassess whether previously
capitalized initial direct costs would qualify for capitalization under ASC 842.
11. Capitalization and Equity Structure
Summary
The Company’s authorized capital stock at March 31, 2019 consisted of 141,429 shares of common stock and 10,000 shares of preferred stock. At March 31, 2019,
67,529 shares of common stock were issued and outstanding and no shares of preferred stock were issued and outstanding.
Common Stock
On August 21, 2018, the Company entered into a Controlled Equity OfferingSM Sales Agreement ("ATM Agreement") with Cantor Fitzgerald & Co. (the “Agent”) under which the Company may issue and sell shares of its common stock, from time to time, to
Notes to Condensed Consolidated Financial Statements
($ and share amounts in thousands, except per share amounts)
(Unaudited)
or through the Agent, by methods deemed to be an “at the market offering.” Shares having an aggregate offering price of up to $25,000 may be offered pursuant to a prospectus dated August 21, 2018 (the “ATM Prospectus”) under the Company’s previously
filed and currently effective shelf registration statement on Form S-3 (Registration No. 333-218517). For the three months ended March 31, 2019, the Company sold 1,294 shares of common stock under the ATM Agreement at an average price of $1.85 per share, for aggregate proceeds of $2,313, net of commission and issuance costs. As of March 31, 2019, approximately $17,734 aggregate
offering price of the Company's common stock remained available for issuance pursuant to the ATM Prospectus.
On January 30, 2019, the Company sold 3,067 shares of its common stock for $5,000 at a purchase price of $1.63 under the SPA , in connection with the JV Agreement. Refer to Note 7. Investment in Unconsolidated Affiliate – Equity Investments for additional information.
In September 2017, in connection with the Rights Offering in August 2017, the Company issued warrants to purchase 200 shares of the Company’s common stock with an exercise price of $1.50 per share to an information agent (the “Information Agent Warrants”). The Information Agent Warrants became exercisable immediately upon issuance. These warrants were recorded in stockholders’ equity on the Company’s condensed consolidated balance sheet.
2015
Warrants
In December 2015, the Company issued warrants to purchase 2,122 shares with an exercise price of $3.74 per share (the “2015 Warrants”). The 2015 Warrants contain a put-option provision. Under this provision, while the 2015 Warrants are outstanding, if the Company enters into a Fundamental Transaction, defined as a merger, consolidation or similar transaction, the Company or any successor entity will, at the option of each warrant holder, exercisable at any time within 30 days after the consummation of the Fundamental
Transaction, purchase the warrant from the holder exercising such option by paying to the holder an amount of cash equal to the Black-Scholes value of the remaining unexercised portion of such holder’s warrant on the date of the consummation of the Fundamental Transaction. Because of this put-option provision, the 2015 Warrants are classified as a liability and are marked to market at each reporting date. During the years ended December 31, 2016 and 2017, 488 shares and 30 shares, respectively, of the 2015 warrants, were exercised.
On March 8, 2019, the Company
entered into an amendment to the 2015 Purchase Agreement (the “Amendment”) to retroactively remove a provision prohibiting the Company from effecting or entering into an agreement to effect any issuance by the Company of its common stock at a price determined based on the trading price of the Company's common stock or otherwise at a future determined price and reduced the exercise price of each such warrant from $3.74 per share to $2.75 per share, subject to further adjustments pursuant to the existing terms of such warrant. In the three months ended March
31, 2019, the Company recorded a $257 loss on the modification of these warrants.
Notes to Condensed Consolidated Financial Statements
($ and share amounts in thousands, except per share amounts)
(Unaudited)
The
warrant liability related to the 2015 Warrants is measured at fair value at each reporting date using certain estimated inputs, which are classified within Level 3 of the fair value hierarchy. The following assumptions were used in the Black Scholes Option Pricing Model to measure the fair value of the 2015 warrants as of March 31, 2019:
Current share price
$
2.51
Conversion
price
$
2.75
Risk-free interest rate
2.30%
Term (years)
1.75
Volatility of stock
102.0%
12. Stock-based
Compensation
In June 2018, the Company’s stockholders ratified an amendment to the Company’s Amended and Restated 2014 Equity Incentive Plan (the “2014 Plan”), which was first approved by the stockholders in December 2017, to increase the number of shares available for grant by 4,400 shares. As of March 31, 2019, the total shares authorized for grant under the 2014 Plan was 9,114, of which 1,580 were available for future grants.
Stock
Options
The following table summarizes information about the Company’s stock options outstanding as of March 31, 2019, and activity during the three months then ended:
As
of March 31, 2019, total unrecognized compensation cost related to unvested stock options was $4,856. This amount is expected to be recognized as stock-based compensation expense in the Company’s condensed consolidated statements of operations and comprehensive income over the remaining weighted average vesting period of 2.85 years.
The per-share fair value of each stock option was determined on the date of grant using the Black-Scholes option pricing model using the following assumptions:
Notes to Condensed Consolidated Financial Statements
($ and share amounts in thousands, except per share amounts)
(Unaudited)
The Company issues restricted stock units (“RSUs”) to employees and non-employee service providers as permitted by the 2014 Plan. Each RSU represents the right to receive one share of the Company’s common stock upon vesting and subsequent settlement. The
fair value of RSUs is determined based on the closing price of the Company’s common stock on the date of grant.
RSU activity for the period ended March 31, 2019 is summarized below:
As of March 31, 2019, $387 of total unrecognized compensation expense related to unvested RSUs was expected to be recognized over a weighted average period of 3.24 years.
Compensation
Expense
Total stock-based compensation expense related to options and RSUs granted to employees and non-employees is included in the condensed consolidated statements of operations and comprehensive loss as follows:
In August 2017, the Company’s Board of Directors approved a match benefit to the Ekso Bionics 401(k) plan (the “401(k) Plan”) in the form of shares of the Company’s common stock.
During the three months ended March 31, 2019, the Company issued 141 shares of common stock to eligible employees’ deferral accounts for the 401(k) Plan matching contribution representing 50%
of each eligible employee’s elected deferral (up to the statutory limit) for the year ending December 31, 2018.
13. Income Taxes
There were no material changes to the unrecognized tax benefits in the three months ended March 31, 2019, and the Company does not expect significant changes to unrecognized tax benefits through the end of the fiscal year. Because of the Company’s history of tax losses,
all years remain open to tax examination.
The Company enters various license, research collaboration and development agreements which provide for payments to the Company for government grants, fees, cost reimbursements typically with a markup, technology transfer and license fees, and royalty payments on sales.
Notes to Condensed Consolidated Financial Statements
($ and share amounts in thousands, except per share amounts)
(Unaudited)
The Company has two license agreements with the Regents of the University of California to maintain exclusive rights to certain patents. Pursuant to those license agreements, the Company is required to pay 1% of net
sales of products sold to entities other than the U.S. government and, in the event of a sub-license, the Company owes 21% of license fees and must pass through 1% of the sub-licensee’s net sales of products sold to entities other than the U.S. government. The agreements also stipulate minimum annual royalties of $50.
In connection with acquisition of Equipois, the Company assumed the rights and obligations of Equipois under a license agreement with the developer of certain intellectual property related to mechanical balance and support arm technologies, which grants the
Company an exclusive license with respect to the technology and patent rights for certain fields of use. Pursuant to the terms of the license agreement, the Company pays the developer a single-digit royalty on net receipts, subject to a $50 annual minimum royalty requirement.
The Company purchases components from a variety of suppliers and use contract manufacturers to provide manufacturing services for its products. Purchase obligations are defined as agreements that are enforceable and legally binding and that specify all significant terms, including: fixed or minimum
quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The Company had purchase obligations primarily for purchases of inventory and manufacturing related service contracts totaling $1,221 as of March 31, 2019, which is expected to be paid within a year. Timing of payments and actual amounts paid may be different depending on the time of receipt of goods or services or changes to agreed-upon amounts for some obligations.
Contingencies
In
the normal course of business, the Company is subject to various legal matters. In the opinion of management, the resolution of such matters will not have a material adverse effect on the Company’s condensed consolidated financial statements.
15. Net Loss Per Share
The following table sets forth the computation of basic and diluted net loss per share:
Net loss applicable to common stockholders, basic and diluted
$
(6,551
)
$
(7,901
)
Denominator:
Weighted-average
number of shares, basic and diluted
65,067
60,146
Net loss per share, basic and diluted
$
(0.10
)
$
(0.13
)
The
following table sets forth potential shares of common stock that are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive as of the end of each period presented:
Notes to Condensed Consolidated Financial Statements
($ and share amounts in thousands, except per share amounts)
(Unaudited)
The Company has two reportable segments: EksoHealth (also referred to as the medical devices segment) and EksoWorks (also referred to as the industrial devices segment). The EksoHealth segment designs, engineers, manufactures, and sells exoskeletons for applications in the medical markets. The EksoWorks segment designs, engineers, manufactures, and sells exoskeleton devices to allow able-bodied users to perform heavy duty work for extended periods.
The
Company evaluates performance and allocates resources based on segment gross profit margin. The reportable segments are each managed separately because they serve distinct markets, and one segment provides a service and the others manufacture and distribute unique products. The Company does not consider net assets as a segment measure and, accordingly, assets are not allocated.
One of the Company’s directors, Dr. Ted Wang, is the founder, general partner and Chief Investment Officer of Puissance Capital Management LP, or Puissance Capital, which is an affiliate of Puissance Cross-Border Opportunities II LLC, one of the Company’s largest stockholders. Prior to Dr. Wang’s appointment to the Board in September 2017, the Company entered into a one-year consulting agreement with Angel Pond Capital LLC, or Angel Pond, an entity solely owned and managed by Dr. Wang and affiliated with Puissance Capital. Angel Pond assists the
Company with strategic positioning in the Asia Pacific region, including the introduction to potential strategic and capital partners and the development of strategic partnerships for the sale and manufacture of the Company’s products in that market. During the three months ended March 31, 2019, Angel Pond provided consulting services amounting to $30, which was expensed in the condensed consolidated statement of operations and comprehensive loss.
In connection with the consulting agreement with Angel Pond, the Company is required to make a payment of $1,000
to Angel Pond when a China joint venture is formed and registered in China. This amount has not yet been recorded in the Company's condensed consolidated financial statements as the joint venture has not completed registration in China.
18. Subsequent Events
As previously reported, on January 30, 2019, Ekso Bionics, Inc. (“Ekso US”), a wholly-owned subsidiary of the Company, the Company, Zhejiang
Youchuang Venture Capital Investment Co., Ltd. (“ZYVC”) and Shaoxing City Keqiao District Paradise Silicon Intelligent Robot Industrial Investment Partnership (Limited Partnership) (the “Industrial Investment Fund” and, together with ZYVC, the “JV Partners”) entered into an Equity Joint Venture Contract (the “JV Agreement”). The JV Agreement relates
Notes to Condensed Consolidated Financial Statements
($
and share amounts in thousands, except per share amounts)
(Unaudited)
to the establishment and operation of a joint venture company called Exoskeleton Intelligent Robotics Co. Limited (the “China JV”) designed to develop and serve the exoskeleton market in China and other Asian markets and to create a global exoskeleton manufacturing center, and to the financing of the Company, as well as an obligation to fund the Company with an additional $5.0 million subject to satisfaction of certain conditions.
On April 30, 2019, Ekso US, the
Company and the JV Partners entered into an Amendment to the JV Agreement (the “JV Amendment”). Among certain other clarifying changes, the JV Amendment reduces the amount of capital contributions required to be made by the JV Partners within 90 days of the formation of the China JV from 30% (or RMB 187.2 million) to 10% (or RMB 62.4 million) and requires that the JV Partners contribute RMB 124.8 million of their capital contributions upon notice by the China JV based on the China JV’s then current operating plan. The remaining RMB 436.8 million capital contribution of the JV Partners will be paid by them within the 10 years after the formation
of the China JV as previously contemplated under the JV Agreement.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion of our financial condition and results of operation in conjunction with the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year
ended December 31, 2018.
This Quarterly Report on Form 10-Q contains forward-looking statements. These forward-looking statements include all statements other than statements of historical facts contained or incorporated by reference in this quarterly report, including statements regarding (i) the plans and objectives of management for future operations, including plans or objectives relating to the design, development and commercialization of human exoskeletons, (ii) a projection of income (including income/loss), earnings (including earnings/loss) per share, capital expenditures, dividends, capital structure or other financial items, (iii) our future financial performance, including any such statement contained in a discussion and analysis
of financial condition by management or in the results of operations included pursuant to the rules and regulations of the SEC, (iv) our beliefs regarding the potential for commercial opportunity for exoskeleton technology in general and our exoskeleton products in particular, (v) our beliefs regarding potential clinical and other health benefits of our medical devices, and (vi) the assumptions underlying or relating to any statement described in points (i), (ii), (iii), (iv) or (v) above. The words “may,”“might,”“would,”“should,”“could,”“project,”“estimate,”“pro-forma,”“predict,”“potential,”“strategy,”“anticipate,”“attempt,”“develop,”“plan,”“help,”“believe,”“continue,”“intend,”“expect,”“future,” and similar expressions (including the negative of any of the foregoing) are intended to identify forward-looking
statements.
The following factors, among others, including those described in the section titled “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2018, as updated and supplemented in this Quarterly Report under the heading “Part II – Item 1A. Risk Factors”, could cause our future results to differ materially from those expressed in the forward-looking information:
•
our ability to obtain adequate financing to fund operations and to develop or enhance our technology;
•
our
ability to obtain or maintain regulatory approval to market the Company’s medical devices;
•
the anticipated timing, cost and progress of the development and commercialization of new products or services, and improvements to our existing products, and related impacts on our profitability and cash position;
•
our ability to effectively market and sell our products and expand our business, both in unit sales and product diversification;
•
our
ability to achieve broad customer adoption of our products and services;
•
our ability to complete clinical trials on a timely basis and that completed clinical trials will be sufficient to support commercialization of our products;
•
existing or increased competition;
•
rapid changes in technological
solutions available to our markets;
•
volatility with our business, including long and variable sales cycles, which could have a negative impact on our results of operations for any given quarter;
•
our ability to obtain or maintain patent protection for the Company’s intellectual property;
•
the
scope, validity and enforceability of our and third-party intellectual property rights;
•
significant government regulation of medical devices and the healthcare industry;
•
our customers’ ability to get third-party reimbursement for our products and services associated with them;
•
our failure
to implement our business plan or strategies;
•
our ability to retain or attract key employees;
•
stock volatility or illiquidity;
•
our ability to maintain adequate internal controls over financial reporting; and
•
overall
economic and market conditions.
Although we believe that the assumptions underlying the forward-looking statements and forward-looking information contained herein are reasonable, any of the assumptions could be inaccurate, and therefore such statements and information included in this Quarterly Report on Form 10-Q may not prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements and forward-looking information included herein, the inclusion of such statements and information should not be regarded as a representation by us or any other person that the results or conditions described in such statements and information or that our objectives and plans will be achieved. Such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking
statements to reflect events or circumstances after the date of such statements.
We design, develop and sell exoskeleton technology to augment human strength, endurance and mobility. Our exoskeleton technology serves multiple markets and can be used both by able-bodied users as well as by persons with physical disabilities. We have sold, rented or leased devices that (a) enable individuals with neurological conditions affecting gait (stroke
and spinal cord injury) to rehabilitate and to walk again and (b) allow industrial workers to perform heavy duty work for extended periods.
Today, our medical exoskeleton, Ekso GT, is used as a rehabilitation tool to allow physicians and therapists to rehabilitate patients who have suffered a stroke or spinal cord injury. With its unique features designed specifically for hospitals and its proprietary SmartAssist software, Ekso GT allows for the early mobilization of patients, with high step count and high dosage treatments. The intent is to allow the patient’s central nervous system to take advantage of a person’s neuroplasticity to maximize a patient’s recovery.
For able-bodied industrial workers, we introduced in 2017 a second commercial product for industrial applications, the EksoVest, an
upper body exoskeleton that elevates and supports a worker's arms to assist them with tasks ranging from chest height to overhead. It is lightweight and low profile, making it comfortable to wear in all conditions while enabling freedom of motion. The goal is for workplaces with the EksoVest to experience fewer on-site injuries while tasks are completed faster and with higher quality results, for workers to stay healthier and experience increased stamina, and for companies to gain greater productivity in factories and on construction sites. In 2019, we are focusing on increasing sales of the EksoVest and EksoZeroG by pursuing alternative channels such as rental agreements with construction equipment and heavy tool providers and working with automotive and related manufacturers to roll out our product(s) globally within their assembly operations. In addition, we believe there is additional mid-to-long-term potential in the industrial markets, and
accordingly, we will continue our development efforts to expand our EksoWorks product offerings.
We believe the commercial opportunity for exoskeleton technology adoption is accelerating as a result of recent advancements in material technologies, electronic and electrical engineering, control technologies, and sensor and software development. Taken individually, many of these advancements have become ubiquitous in peoples’ everyday lives. We believe that we have learned how to integrate these existing technologies and wrap the result around a human being efficiently, elegantly and safely, supported by an industry leading intellectual property portfolio. We further believe that we can do so across a broad spectrum of applications, from persons with lower limb paralysis to able-bodied users.
First
Quarter 2019 Highlights
•
In January 2019, we entered into a joint venture agreement (the “JV Agreement”) to form a Chinese limited liability company (the “China JV”) to develop and serve the exoskeleton market in China and other Asian markets and to create a global exoskeleton manufacturing center. In connection with the China JV, one of the China JV partner affiliates agreed to purchase an aggregate of 3,067,485 shares of our common stock at a price per share equal to $1.63, for aggregate proceeds to us of $5.0 million, which we received in February 2019. In addition, within thirty (30) business days of the China JV delivering its first batch of finished products to Ekso US, its affiliates or a third-party
buyer located in the JV territory, the China JV or the China JV partner are obligated to invest a further $5.0 million in our common stock in accordance with the terms of the JV Agreement.
•
In the three months ended March 31, 2019, we sold 1.3 million shares of our common stock under our at-the-market offering program at an average price of $1.85 per share, for aggregate proceeds of $2.3 million, net of commission.
•
In
the three months ended March 31, 2019, we booked 23 Ekso GT units, 9 of which were rental units and 4 previously rented units were converted to sales.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and the related disclosure of contingent assets and liabilities.
We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Our estimates form the basis for our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting
estimate that are reasonably likely to occur, could materially impact the condensed consolidated financial statements. We believe that our critical accounting policies reflect the more significant estimates and assumptions used in the preparation of the condensed consolidated financial statements.
Adoption of New Accounting Policy
In February 2016, the FASB issued ASU 2016-02-Leases (ASC 842) and subsequent amendments to the initial guidance under ASU 2017-13, ASU 2018-10 and ASU 2018-11 (collectively, Topic 842) which superseded existing guidance on accounting for leases in ASC 840, Leases (ASC 840). Topic 842 requires us to recognize on our balance sheet a lease liability representing the present value of future lease
payments and a right-of-use asset representing the lessee's right to use, or control the use of a specified asset for the lease term for any operating lease with a term greater than one year. This standard is effective for us in the first quarter of 2019. We used the modified retrospective transition method, under which we applied the standard to each lease that had commenced as of the beginning of January 1, 2019. In addition, we elected to apply the package of practical expedients permitted under the transition guidance, which among other things, allowed us to carry forward the historical lease classification.
The adoption of this standard had a material impact on our condensed consolidated balance sheets, with the recognition of right of use assets and corresponding lease liabilities in the amounts of $1.5
million and $1.5 million respectively. The adoption of this standard did not have a material impact on our condensed consolidated statements of operations or cash flows, nor did it have a material impact on the financial covenants set forth in our long-term debt agreement. We have provided detailed right of use asset and liability disclosures as required by the new standard in Note 10 in the notes to our condensed consolidated financial statements under the caption Lease Obligations.
Results of Operations
The following table presents our results of operations (in thousands):
Device
and related revenue increased $1.1 million, or 44%, for the three months ended March 31, 2019, compared to the same period of 2018. This increase was made up of a $0.7 million increase in EksoHealth revenue and $0.4 million increase in EksoWorks revenue, primarily due to a higher volume of device sales.
Gross
profit increased $0.8 million, or 108%, for the three months ended March 31, 2019, compared to the same period of 2018, primarily due to higher volume and average selling price of EksoHealth devices.
Operating Expenses
Sales and marketing expenses decreased $1.0 million, or 27%, for the three months ended March 31, 2019, compared to the same period of 2018,
primarily due to lower employment costs from decreased headcount, a decrease in advertising and trade show activities, and the absence of amortization expense related to intangible assets as intangible assets were fully amortized as of December 31, 2018.
Research and development expenses decreased $0.4 million, or 23%, for the three months ended March 31, 2019, compared to the same period of 2018, primarily due to lower employment costs from decreased headcount in the EksoWorks business unit.
General and administrative
expenses decreased $1.4 million, or 38%, for the three months ended March 31, 2019, compared to the same period of 2018, primarily due to the absence of a severance charge related to the departure of our then Chief Executive Officer which was recorded in the comparable period and lower external consulting costs in the three months ended March 31, 2019.
Change in fair value, contingent liabilities for the three months ended March 31, 2019, included changes of fair value of the contingent liabilities related
to a success fee on our outstanding debt our lender.
Total Other (Expense) Income, Net
Loss on revaluation of warrant liability of $1.1 million for the three months ended March 31, 2019 was associated with the revaluation of warrants issued in 2015, compared to a $0.7 million gain upon revaluation of warrant liability for the three months ended March 31, 2018. Losses on revaluation of warrant liability are caused by increases in our stock price, while gains upon revaluation of warrant liability are caused by decreases
in our stock price.
Loss on modification of warrants of $0.3 million for the three months ended March 31, 2019 was due to the reduction of the warrant exercise price (See Note 11 in the notes to our condensed consolidated financial statements under the caption. Capitalization and Equity Structure). There was no comparable amount for the three months ended March 31, 2018.
Other (expense) income, net decreased $0.3 million, or 197%,
for the three months ended March 31, 2019, compared to the same period of 2018, due to unrealized gains and losses on foreign currency revaluations of inter-company monetary assets and liabilities.
Financial Condition, Liquidity and Capital Resource
Since the Company’s inception, it has devoted substantially all its efforts toward the development of exoskeletons for the medical and industrial markets, toward the commercialization of medical exoskeletons to rehabilitation centers and toward raising
capital. The Company has financed our operations primarily through the issuance and sale of equity securities for cash consideration and through bank debt.
Liquidity and Capital Resources
As of March 31, 2019, we had an accumulated deficit of $177.7 million. Largely as a result of significant research and development activities related to the development of our advanced technology and commercialization of this technology into our medical device business, we have incurred significant operating losses and negative cash flows from operations since inception. In the three
months ended March 31, 2019, we used $5.2 million of cash in our operations.
Cash on hand at March 31, 2019 was $9.2 million, compared to $7.7 million at December 31, 2018. As noted in Note 9 in the notes to our condensed consolidated financial statements under the caption Long-Term Debt, borrowings under our long-term debt agreement have a requirement of minimum cash on hand roughly equivalent to three months of cash burn. As of March 31,
2019, the most recent determination of this restriction, $4.9 million of cash must remain as restricted, with such amounts to be re-computed at each month end. After considering cash restrictions, effective unrestricted cash as of March 31, 2019 is estimated to be $4.3 million. Based on current forecasted amounts, our cash on hand will not be sufficient to satisfy our operations for the next twelve months from the date of issuance of these condensed consolidated financial statements, which raises substantial doubt about our ability to continue as a going concern.
Based upon our current cash resources, the recent rate of using cash for operations and investment, and assuming modest increases in current revenue, we believe we have sufficient resources to meet our financial obligations until late in the second quarter of 2019. While we will require significant additional financing, our actual capital requirements may vary significantly and will depend on many factors. We plan to continue our investments (i) in our clinical and sales initiatives to accelerate adoption of the Ekso robotic exoskeleton in the rehabilitation market, (ii) in our research, development and commercialization activities with respect to an Ekso robotic exoskeleton for rehabilitation, and/or (iii) in the development and commercialization of able-bodied exoskeletons for industrial use.
We
are actively pursuing opportunities to obtain additional financing through public or private equity and/or debt financings and corporate collaborations. Sales of additional equity securities by the Company could result in the dilution of the interests of existing stockholders. There can be no assurance that financing will be available when required in sufficient amounts, on acceptable terms or at all. In the event that the necessary additional financing is not obtained, we may be required to further reduce our discretionary overhead costs substantially, including research and development, general and administrative, and sales and marketing expenses or otherwise curtail operations.
Cash and Cash Equivalents
The
following table summarizes the sources and uses of cash (in thousands). We held no cash equivalents for any of the periods presented.
Net
cash provided (used in) by financing activities
6,769
(399
)
Effect of exchange rate changes on cash
(4
)
(66
)
Net increase (decrease) in cash
1,581
(7,241
)
Cash
at the beginning of the period
7,655
27,813
Cash at the end of the period
$
9,236
$
20,572
Net
Cash Used in Operating Activities
Net cash used in operations decreased $1.6 million, or 23%, for the three months ended March 31, 2019, compared to the same period of 2018 primarily due to decreased employment costs as a result of lower headcount, lower consulting and marketing related costs, and an increase in cash collections related to an increase in sales.
Net Cash Provided by (Used in) Financing Activities
Net cash provided by financing activities of $6.8
million for the three months ended March 31, 2019 was from the sale of common stock under our "at the market offering" program of $2.3 million and proceeds of $5.0 million from equity investors associated with the JV Agreement, offset by aggregate principal payments of $0.6 million against our term loan.
Net cash used in financing activities of $0.4 million for the three months ended March 31, 2018 was related to aggregate principal payments against our term loan.
Contractual
Obligations and Commitments
The following table summarizes our outstanding contractual obligations as of March 31, 2019, and the effect those obligations are expected to have on our liquidity and cash flows in future periods (in thousands):
In
addition to the table above, which reflects only fixed payment obligations, we have two license agreements to maintain exclusive rights to certain patents. Under these license agreements, we are required to pay 1% of net sales of products sold to entities other than the U.S. government. In the event of a sublicense, the Company owes 21% of license fees and must pass through 1% of the sub-licensee’s net sales of products sold to entities other than the U.S. government. The license agreements also stipulate minimum annual royalties of $50,000 per year.
In connection with our acquisition of Equipois in December 2015, we assumed the rights and obligations of Equipois under a license agreement with the developer of certain intellectual property related to mechanical balance and support arm technologies,
which grants us an exclusive license with respect to the technology and patent rights for certain fields of use. Pursuant to the terms of the license agreement, we pay the developer a single-digit royalty on net receipts, subject to a $50,000 annual minimum royalty requirement.
We purchase components from a variety of suppliers and use contract manufacturers to provide manufacturing services for our products. Purchase obligations are defined as agreements that are enforceable and legally binding and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. We had purchase obligations primarily for purchases of inventory and manufacturing related service contracts
totaling $1.2 million as of March 31, 2019, which is expected to be paid within a year. Timing of payments and actual amounts paid may be different depending on the time of receipt of goods or services or changes to agreed-upon amounts for some obligations.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
We are exposed to market risks in the ordinary course of our business, including inflation risks.
We do not believe that inflation has had a material effect on our business,
financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.
In addition, we conduct business in foreign countries and have subsidiaries based in Germany and Singapore. Accordingly, we are exposed to exchange rate risk. See Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the year ended December 31, 2018.
Item
4. Controls and Procedures
Disclosure Controls and Procedures.
Our management, with the participation of our principal executive officer and principal financial officer, conducted an evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed by us under the Exchange Act is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated
to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
It should be noted that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment and makes assumptions about the likelihood of future events. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
In December 2017, the Company disclosed that management had identified a material weakness in the Company’s internal controls over financial reporting due to a deficiency in the Company’s information technology (IT) general controls and segregation of duties. The Company has since implemented a more robust accounting and enterprise resource planning system. In response to the Company’s announcement, on February 5, 2018, a shareholder
filed a derivative action in Nevada state court: D’Arcy v. Looby et al. (Clark County, Nevada), Case No. a-18-768970-B (filed Feb. 5, 2018). The complaint alleges state law claims for breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets. The Company’s management believes that the lawsuit is without merit, and the Company plans to defend against it. On March 1, 2019, the Company filed motions to dismiss the complaint. In lieu of defending the complaint, plaintiff sought to amend the complaint. Plaintiff’s
amended complaint is due on May 24, 2019. The Company’s response to the amended complaint is due on June 28, 2019.
On July 26, 2018, July 31, 2018, and August 14, 2018, three shareholders filed separate derivative actions in California state court: Elmes v. Peurach et al. (Contra Costa County, California), Case No. CIVMSC18-01470 (filed July 26, 2018); Leung v. Peurach et al. (Contra Costa County, California), Case No. CIVMSC18-01554 (filed July
31, 2018); and Herby v. Hamilton et al. (Contra Costa County, California), Case No. CIVMSC18-01642 (filed August 14, 2018). The Elmes, Leung, and Herby complaints allege state law claims for breach of fiduciary duties, unjust enrichment, and waste of corporate assets. On October 3, 2018, the court consolidated the Elmes, Leung, and Herby actions, which are now maintained as one action: Elmes v. Peurach et al. (Contra Costa County, California), Case No. CIVMSC18-01470 (filed July
26, 2018). On December 20, 2018, the Company filed a motion to dismiss the actions. In lieu of defending the complaint, plaintiffs sought to amend the complaint. On April 4, 2019, plaintiffs filed a consolidated complaint in the Elmes action. The Company’s response to the consolidated complaint is due on May 7, 2019. The Company’s management believes that the lawsuit is without merit, and the Company plans to defend against
it.
On January 18, 2019, plaintiffs in the In re Ekso Bionics Holdings Corp. Derivative Litigation (previously described in the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2019) filed a voluntary dismissal and stated their intent to join the Elmes action. On January 23, 2019, the court granted plaintiffs’ request and dismissed the lawsuit without prejudice.
Item
1A. Risk Factors
Other than as described below, we have not identified any material changes to the risk factors previously disclosed in Part I-Item 1A-“Risk Factors” in our Annual Report filed on Form 10-K for the fiscal year ended December 31, 2018 (the “Annual Report”). Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described below or in the Annual Report, any one or more of which could, directly or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results
and stock price. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Quarterly Report on Form 10-Q, including the section titled “Part I-Item 2-Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the condensed consolidated financial statements and related notes.
U.S regulatory review may result in delays, restrictions or other adverse impacts on the operations of our China JV.
In January 2019, we entered into the China JV to develop and serve the exoskeleton market in China and other Asian markets and to create a global exoskeleton manufacturing center. In connection with the China JV, the China JV partners and their affiliates agreed to purchase an aggregate of 3,067,485
shares of our common stock at a price per share equal to $1.63, for aggregate proceeds to us of $5.0 million (the “Share Purchase”).
In February 2019, the Department of Defense (“DoD”) inquired about certain aspects of the China JV, including about our products’ classification under U.S. export control regimes and whether the China JV parties intended to notify the Committee on Foreign Investment in the United States (“CFIUS”) of the China JV.
We believe the activities contemplated under the China JV agreement are in compliance with U.S. export control laws and regulations and that the China JV and the related investment are not covered by CFIUS’s regulations, including those establishing the newly-implemented CFIUS “Pilot Program.” Our response to DoD
reflected these positions.
Notwithstanding our views regarding CFIUS and the applicability of CFIUS’s regulations to the China JV, CFIUS has broad discretion to assert jurisdiction to review foreign investments in U.S. businesses, and to restrict the ownership thereof and the transfer of technology therefrom to foreign investors, including where CFIUS believes that such foreign investment may present potential national security risks to the United States.
If CFIUS were to determine that the China JV or the Share
Purchase is subject to CFIUS review, CFIUS could review the China JV and take actions if CFIUS were to identify national security concerns with the transactions. CFIUS’s actions could include the imposition of measures designed to mitigate and resolve any such national security concerns. Such mitigation measures may include, but not necessarily be limited to, a requirement that we obtain prior approval from the U.S. government to transfer certain technology related to our products, which would present a risk to the operations of the China JV. If CFIUS were to determine that it cannot mitigate any identified national security concerns, CFIUS could recommend that the President of the United States compel the JV Partners to abandon or unwind the China JV or the Share Purchase. Even if a CFIUS review process does not result in mitigation or Presidential action, it might result in delay in the China JV’s ability to develop and serve the market in China.
In
addition, notwithstanding our views regarding the classifications of our products under export control regimes, the Department of Commerce has authority in certain circumstances under the Export Control Reform Act and the Export Administration Regulations to inform parties that a license is required to export items or technology to certain destinations, for reasons that include risk that the technology may be transferred for proscribed end uses. In the event the U.S. government exercises such authority over our products, it may delay and ultimately restrict our ability to transfer manufacturing technology to China JV.
Any of the foregoing actions by the U.S. government could materially and adversely affect our China JV, and therefore our business, financial condition and operating results.
Item
5. Other Information
See Note “18. Subsequent Events” to the Financial Statements included in this Quarterly Report on Form 10-Q under the section titled “Part I-Item 1-Notes to Condensed Consolidated Financial Statements (unaudited)”.
The following financial statements from the Ekso Bionics Holdings, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, formatted in Extensible Business Reporting Language (“XBRL”):
•
unaudited
condensed consolidated balance sheets;
•
unaudited condensed consolidated statements of operations and comprehensive loss;
•
unaudited condensed consolidated statements of stockholders' equity;
•
unaudited
condensed consolidated statement of cash flows;
•
notes to unaudited condensed consolidated financial statements;
*
Portions of this exhibit have been omitted as permitted by applicable regulations.
Pursuant to the requirements of the Securities Exchange Act of 1934, Ekso Bionics Holdings, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.