x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Israel
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Not applicable
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. employer identification no.)
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3 Hatnufa Street, Floor 6, Yokneam Ilit, Israel
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2069203
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
x
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(Do not check if a smaller reporting company)
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Emerging growth company
x
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Page No.
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June 30,
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December 31,
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||||
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2018
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2017
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||||
ASSETS
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||||
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CURRENT ASSETS
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||||
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||||
Cash and cash equivalents
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$
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9,094
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$
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14,567
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Trade receivable, net
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1,857
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|
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1,103
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Prepaid expenses and other current assets
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1,238
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1,625
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Inventories
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3,016
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3,643
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Total current assets
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15,205
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20,938
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||||
LONG-TERM ASSETS
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||||
Restricted cash and other long term assets
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1,058
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1,085
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Property and equipment, net
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762
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840
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Total long-term assets
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1,820
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1,925
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Total assets
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$
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17,025
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$
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22,863
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June 30,
|
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December 31,
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||||
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2018
|
|
2017
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
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|
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||||
CURRENT LIABILITIES
|
|
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|
||||
Current maturities of long term loan
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$
|
6,441
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|
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$
|
6,441
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Trade payables
|
2,957
|
|
|
1,811
|
|
||
Employees and payroll accruals
|
894
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|
|
872
|
|
||
Deferred revenues and customers advances
|
350
|
|
|
123
|
|
||
Other current liabilities
|
429
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|
|
480
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||
Total current liabilities
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11,071
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|
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9,727
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||
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||||
LONG-TERM LIABILITIES
|
|
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Long term loan, net of current maturities
|
6,640
|
|
|
8,911
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|
||
Deferred revenues
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325
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|
|
262
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|
||
Other long-term liabilities
|
253
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|
|
256
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Total long-term liabilities
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7,218
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|
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9,429
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|
||||
Total liabilities
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18,289
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19,156
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||||
COMMITMENTS AND CONTINGENT LIABILITIES
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|
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Shareholders’ equity (deficiency):
|
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||||
Share capital
|
|
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Ordinary shares NIS 0.01 par value- Authorized: 250,000,000 shares at June 30, 2018 and December 31, 2017; Issued and outstanding: 35,484,077 and 30,003,639 shares at June 30, 2018 and December 31, 2017, respectively
|
100
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|
|
84
|
|
||
Additional paid-in capital
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142,003
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134,843
|
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Accumulated deficit
|
(143,367
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)
|
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(131,220
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)
|
||
Total shareholders’ equity (deficiency)
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(1,264
|
)
|
|
3,707
|
|
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|
|
|
|
||||
Total liabilities and shareholders’ equity (deficiency)
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$
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17,025
|
|
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$
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22,863
|
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Three Months Ended June 30,
|
|
Six Months Ended June 30,
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||||||||||||
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2018
|
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2017
|
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2018
|
|
2017
|
||||||||
Revenues
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$
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1,770
|
|
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$
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2,007
|
|
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$
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3,349
|
|
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$
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4,506
|
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Cost of revenues
|
1,003
|
|
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1,266
|
|
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1,900
|
|
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2,716
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||||
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|
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|
|
|
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||||||||
Gross profit
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767
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|
|
741
|
|
|
1,449
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1,790
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||||
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||||||||
Operating expenses:
|
|
|
|
|
|
|
|
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||||
Research and development, net
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1,897
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|
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1,385
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4,048
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|
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2,815
|
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||||
Sales and marketing
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1,925
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2,873
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4,261
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|
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6,006
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||||
General and administrative
|
2,221
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|
|
1,850
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|
|
4,258
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|
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3,991
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||||
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|
|
|
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|
|
|
||||||||
Total operating expenses
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6,043
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|
|
6,108
|
|
|
12,567
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|
|
12,812
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|
||||
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|
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|
|
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||||||||
Operating loss
|
(5,276
|
)
|
|
(5,367
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)
|
|
(11,118
|
)
|
|
(11,022
|
)
|
||||
Loss on extinguishment of debt
|
—
|
|
|
313
|
|
|
—
|
|
|
313
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|
||||
Financial expenses, net
|
522
|
|
|
633
|
|
|
1,007
|
|
|
1,364
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|
||||
|
|
|
|
|
|
|
|
||||||||
Loss before income taxes
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(5,798
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)
|
|
(6,313
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)
|
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(12,125
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)
|
|
(12,699
|
)
|
||||
Income taxes (tax benefit)
|
—
|
|
|
(4
|
)
|
|
(1
|
)
|
|
10
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(5,798
|
)
|
|
$
|
(6,309
|
)
|
|
$
|
(12,124
|
)
|
|
$
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(12,709
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per ordinary share, basic and diluted
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$
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(0.18
|
)
|
|
$
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(0.37
|
)
|
|
$
|
(0.39
|
)
|
|
$
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(0.75
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares used in computing net loss per ordinary share, basic and diluted
|
32,772,061
|
|
|
17,218,154
|
|
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31,413,229
|
|
|
16,837,903
|
|
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Ordinary Share
|
|
Additional
paid-in capital |
|
Accumulated
deficit |
|
Total
shareholders’ equity |
|||||||
|
Number
|
|
Amount
|
|
||||||||||
Balance as of January 1, 2017
|
16,338,257
|
|
|
45
|
|
|
114,707
|
|
|
(106,492
|
)
|
|
8,260
|
|
Share-based compensation to employees and non-employees
|
—
|
|
|
—
|
|
|
3,654
|
|
|
—
|
|
|
3,654
|
|
Issuance of ordinary shares upon exercise of options to purchase ordinary shares and RSUs by employees and non-employees
|
166,748
|
|
|
1
|
|
|
37
|
|
|
—
|
|
|
38
|
|
Issuance of ordinary shares in at-the-market offering, net of issuance expenses in the amount of $467
|
5,613,084
|
|
|
16
|
|
|
9,293
|
|
|
—
|
|
|
9,309
|
|
Issuance of ordinary shares in follow-on public offering, net of issuance expenses in an amount of $1,117
|
7,885,550
|
|
|
22
|
|
|
7,141
|
|
|
—
|
|
|
7,163
|
|
Cumulative effect to stock based compensation from adoption of a new accounting standard
|
—
|
|
|
—
|
|
|
11
|
|
|
(11
|
)
|
|
—
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,717
|
)
|
|
(24,717
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance as of December 31, 2017
|
30,003,639
|
|
|
84
|
|
|
134,843
|
|
|
(131,220
|
)
|
|
3,707
|
|
Cumulative effect to accumulated deficit from adoption of a new accounting standard
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
(23
|
)
|
Share-based compensation to employees and non-employees
|
—
|
|
|
—
|
|
|
1,819
|
|
|
—
|
|
|
1,819
|
|
Issuance of ordinary shares upon exercise of options to purchase ordinary shares and RSUs by employees and non-employees
|
203,974
|
|
|
*)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Issuance of ordinary shares in a private placement agreement, net of issuance expenses in an amount of $830 (1)
|
4,117,891
|
|
|
12
|
|
|
4,283
|
|
|
—
|
|
|
4,295
|
|
Issuance of ordinary shares in at-the-market offering, net of issuance expenses in the amount of $198 (2)
|
1,158,573
|
|
|
4
|
|
|
1,058
|
|
|
—
|
|
|
1,062
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,124
|
)
|
|
(12,124
|
)
|
Balance as of June 30, 2018
|
35,484,077
|
|
|
100
|
|
|
142,003
|
|
|
(143,367
|
)
|
|
(1,264
|
)
|
*)
|
Represents an amount lower than $1.
|
(1)
|
See Note 7f to the condensed consolidated financial statements.
|
(2)
|
See Note 7e to the condensed consolidated financial statements.
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows used in operating activities:
|
|
|
|
||||
Net loss
|
$
|
(12,124
|
)
|
|
$
|
(12,709
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|||
|
|
|
|
||||
Depreciation
|
229
|
|
|
357
|
|
||
Share-based compensation to employees and non- employees
|
1,819
|
|
|
1,698
|
|
||
Deferred taxes
|
(13
|
)
|
|
(24
|
)
|
||
Loss on extinguishment of debt
|
—
|
|
|
313
|
|
||
Financial expenses related to long term loan
|
—
|
|
|
66
|
|
||
|
|
|
|
||||
Changes in assets and liabilities:
|
|
|
|
|
|||
|
|
|
|
||||
Trade receivables, net
|
(777
|
)
|
|
140
|
|
||
Prepaid expenses and other current and long term assets
|
261
|
|
|
(101
|
)
|
||
Inventories
|
627
|
|
|
(296
|
)
|
||
Trade payables
|
652
|
|
|
(604
|
)
|
||
Employees and payroll accruals
|
22
|
|
|
(297
|
)
|
||
Deferred revenues
|
203
|
|
|
164
|
|
||
Advances from customers
|
87
|
|
|
—
|
|
||
Other current and long term liabilities
|
(54
|
)
|
|
97
|
|
||
Net cash used in operating activities
|
(9,068
|
)
|
|
(11,196
|
)
|
||
|
|
|
|
||||
Cash flows used in investing activities:
|
|
|
|
||||
Purchase of property and equipment
|
(3
|
)
|
|
(22
|
)
|
||
Net cash used in investing activities
|
(3
|
)
|
|
(22
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|||
Issuance of ordinary shares upon exercise of options to purchase ordinary shares by employees and non-employees
|
—
|
|
|
20
|
|
||
Repayment of long term loan
|
(2,271
|
)
|
|
(2,414
|
)
|
||
Issuance of ordinary shares in investment agreement, net of issuance expenses in an amount of $300 (1)
|
4,700
|
|
|
—
|
|
||
Issuance of ordinary shares in at-the-market offering, net of issuance expenses in the amount of $109 (2)
|
1,150
|
|
|
6,224
|
|
||
Net cash provided by financing activities
|
3,579
|
|
|
3,830
|
|
||
|
|
|
|
||||
Decrease in cash, cash equivalents, and restricted cash
|
(5,492
|
)
|
|
(7,388
|
)
|
||
Cash, cash equivalents, and restricted cash at beginning of period
|
15,423
|
|
|
24,498
|
|
||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
9,931
|
|
|
$
|
17,110
|
|
|
|
|
|
||||
Supplemental disclosures of non-cash flow information
|
|
|
|
||||
At-the-market offering expenses not yet paid (2)
|
$
|
89
|
|
|
$
|
90
|
|
Classification of inventory to property and equipment, net
|
$
|
148
|
|
|
$
|
145
|
|
Investment agreement issuance cost not yet paid (1)
|
$
|
405
|
|
|
$
|
—
|
|
|
|
|
a.
|
ReWalk Robotics Ltd. (“RRL”, and together with its subsidiaries, the “Company”) was incorporated under the laws of the State of Israel on June 20, 2001 and commenced operations on the same date.
|
b.
|
RRL has
two
wholly-owned subsidiaries: (i) ReWalk Robotics Inc. (“RRI”) incorporated under the laws of Delaware on February 15, 2012 and (ii) ReWalk Robotics GMBH. (“RRG”) incorporated under the laws of Germany on January 14, 2013.
|
c.
|
The Company is designing, developing and commercializing the ReWalk system, an innovative exoskeleton that allow wheelchair-bound persons with mobility impairments or other medical conditions to stand and walk once again. The ReWalk system consists of a light wearable brace support suit which integrates motors at the joints, rechargeable batteries, an array of sensors and a computer-based control system to power knee and hip movement. There are currently
two
types of products: ReWalk Personal and ReWalk Rehabilitation. ReWalk Personal is designed for everyday use by individuals at home and in their communities and is custom-fitted for each user. ReWalk Rehabilitation is designed for the clinical rehabilitation environment where it provides individuals access to valuable exercise and therapy. It also enables individuals to evaluate their capacity for using ReWalk Personal system in the future.
|
d.
|
The Company markets and sells its products directly to institutions and individuals and through third-party distributors. The Company sells its products directly primarily in Germany and the United States, and primarily through distributors in other markets. In its direct markets, the Company has established relationships with rehabilitation centers and the spinal cord injury community, and in its indirect markets, the Company’s distributors maintain these relationships. RRI markets and sells products mainly in the United States and Canada. RRG sell the Company’s products mainly in Germany and Europe.
|
e.
|
During the
six months ended June 30, 2018
, the Company issued and sold
1,158,573
ordinary shares at an average price of
$1.09
per share under its $25 million ATM Offering Program (as defined in Note 7e below). The gross proceeds to the Company were approximately
$1.3 million
, and the net aggregate proceeds after deducting commissions, fees and offering expenses in the amount of
$198 thousand
were approximately
$1.1 million
. As a result, from the inception of the ATM Offering Program in May 2016 until
June 30, 2018
, the Company has issued and sold
7,463,719
ordinary shares at an average price of
$2.09
per share under its ATM Offering Program, with gross proceeds of approximately
$15.6 million
, and net aggregate proceeds of approximately
$14.5 million
after deducting commissions, fees and offering expenses in the amount of approximately
$1.1 million
. The Company could raise up to a remaining
$9.4 million
under its ATM Offering Program, subject to a limitation on sales under the Company’s effective Form S-3 limiting sales under such Form S-3 to
$13.7 million
during any 12-month period. See Note 7e below for more information about the Company’s ATM Offering Program.
|
f.
|
The Company had an accumulated deficit in the total amount of approximately
$143.4 million
as of
June 30, 2018
and further losses are anticipated in the development of its business. Those factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due.
|
|
|
|
a.
|
The significant accounting policies applied in the audited consolidated financial statements of the Company as disclosed in the Company's annual report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 8, 2018, are applied consistently in these unaudited interim condensed consolidated financial statements, except as discussed below.
|
b.
|
Revenue Recognition
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Units placed
|
$
|
1,672
|
|
|
$
|
1,926
|
|
|
$
|
3,200
|
|
|
$
|
4,369
|
|
Spare parts and warranties
|
98
|
|
|
81
|
|
|
149
|
|
|
137
|
|
||||
Total Revenues
|
$
|
1,770
|
|
|
$
|
2,007
|
|
|
$
|
3,349
|
|
|
$
|
4,506
|
|
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
Trade receivable, net
|
$
|
1,857
|
|
|
$
|
1,103
|
|
Deferred revenues (1)
|
$
|
588
|
|
|
$
|
385
|
|
c.
|
Recent Accounting Pronouncements:
|
|
|
|
d.
|
Concentrations of Credit Risks:
|
|
June 30,
|
|
December 31,
|
||
|
2018
|
|
2017
|
||
Customer A
|
50
|
%
|
|
*)
|
|
Customer B
|
*)
|
|
|
17
|
%
|
Customer C
|
*)
|
|
|
14
|
%
|
Customer D
|
*)
|
|
|
10
|
%
|
|
|
|
e.
|
Warranty provision:
|
|
US Dollars in thousands
|
||
Balance as of December 31, 2017
|
$
|
488
|
|
Provision
|
101
|
|
|
Usage
|
(152
|
)
|
|
June 30, 2018
|
$
|
437
|
|
|
June 30,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
Finished products
|
3,016
|
|
|
3,643
|
|
||
|
$
|
3,016
|
|
|
$
|
3,643
|
|
a.
|
Purchase commitments:
|
b.
|
Lease commitment: the Company operates from leased facilities in Israel, the United States and Germany. These leases expire between 2018 and 2025 (the “lease agreements”).
|
2018
|
$
|
366
|
|
2019
|
574
|
|
|
2020
|
582
|
|
|
2021
|
581
|
|
|
2022
|
590
|
|
|
And Thereafter
|
1,072
|
|
|
Total
|
$
|
3,765
|
|
|
|
|
c.
|
Royalties:
|
d.
|
Liens:
|
|
|
|
e.
|
Legal Claims:
|
|
|
|
|
|
|
|
|
|
a.
|
Share option plans:
|
|
Six Months Ended June 30,
|
||
|
2018
|
|
2017
|
Expected volatility
|
57% - 61%
|
|
56% - 58%
|
Risk-free rate
|
2.74% - 2.83%
|
|
1.85% - 2.07%
|
Dividend yield
|
—%
|
|
—%
|
Expected term (in years)
|
6.11
|
|
5.31-6.11
|
Share price
|
$1.07- $1.15
|
|
$1.3- $2.1
|
|
Six Months Ended June 30, 2018
|
|||||||||||
|
Number
|
|
Average
exercise
price
|
|
Average
remaining
contractual
life (in years) (1)
|
|
Aggregate
intrinsic
value (in
thousands)
|
|||||
Options and RSUs outstanding at the beginning of the period
|
1,846,797
|
|
|
$
|
1.86
|
|
|
6.33
|
|
$
|
586
|
|
Options granted
|
652,427
|
|
|
1.09
|
|
|
|
|
|
|
||
RSUs granted
|
505,803
|
|
|
—
|
|
|
|
|
|
|
||
Options exercised (2)
|
—
|
|
|
—
|
|
|
|
|
|
|
||
RSUs vested (2)
|
(164,292
|
)
|
|
—
|
|
|
|
|
|
|||
RSUs forfeited
|
(84,304
|
)
|
|
—
|
|
|
|
|
|
|||
Options forfeited
|
(47,589
|
)
|
|
9.49
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||
Options and RSUs outstanding at the end of the period
|
2,708,842
|
|
|
$
|
1.36
|
|
|
6.61
|
|
$
|
815
|
|
|
|
|
|
|
|
|
|
|||||
Options exercisable at the end of the period
|
1,071,113
|
|
|
$
|
2.41
|
|
|
4.33
|
|
$
|
5
|
|
(1)
|
Calculation of weighted average remaining contractual term does not include RSUs, which have an indefinite contractual term.
|
(2)
|
During the six months period ended
June 30, 2018
, the aggregate number of ordinary shares that were issued pursuant to RSUs that became vested and options that were exercised on a net basis was
163,066
ordinary shares.
|
|
|
|
Range of exercise price
|
|
Options and RSUs outstanding as of June 30, 2018
|
|
Weighted
average
remaining
contractual
life (years) (1)
|
|
Options exercisable as of June 30, 2018
|
|
Weighted
average
remaining
contractual
life (years) (1)
|
||||
RSUs only
|
|
826,278
|
|
|
—
|
|
|
—
|
|
|
—
|
|
$0.82
|
|
31,806
|
|
|
1.67
|
|
|
31,806
|
|
|
1.67
|
|
$1.32
|
|
982,519
|
|
|
7.81
|
|
|
330,092
|
|
|
3.84
|
|
$1.47 - $2.10
|
|
752,136
|
|
|
5.31
|
|
|
604,532
|
|
|
4.42
|
|
$6.80- $8.99
|
|
84,704
|
|
|
5.99
|
|
|
74,657
|
|
|
5.81
|
|
$9.22- $10.98
|
|
14,046
|
|
|
7.83
|
|
|
13,389
|
|
|
7.84
|
|
$19.62-$20.97
|
|
17,353
|
|
|
6.47
|
|
|
16,637
|
|
|
6.47
|
|
|
|
2,708,842
|
|
|
6.61
|
|
|
1,071,113
|
|
|
4.33
|
|
(1)
|
Calculation of weighted average remaining contractual term does not include the RSUs that were granted, which have an indefinite contractual term.
|
b.
|
Share-based awards to non-employee consultants:
|
|
|
|
c.
|
Warrants to purchase ordinary shares:
|
Issuance date
|
Warrants outstanding
|
|
Exercise
price per warrant |
|
Warrants
exercisable |
|
Contractual term
|
||||
|
(number)
|
|
|
|
(number)
|
|
|
||||
|
|
|
|
|
|
|
|
||||
July 14, 2014 (1)
|
403,804
|
|
|
$
|
10.08
|
|
|
403,804
|
|
|
July 13, 2018
|
December 30, 2015 (2)
|
119,295
|
|
|
$
|
9.64
|
|
|
119,295
|
|
|
See footnote (2)
|
November 1, 2016 (3)
|
2,437,500
|
|
|
$
|
4.75
|
|
|
2,437,500
|
|
|
November 1, 2021
|
December 28, 2016 (4)
|
47,717
|
|
|
$
|
9.64
|
|
|
47,717
|
|
|
See footnote (4)
|
|
3,008,316
|
|
|
|
|
3,008,316
|
|
|
|
d.
|
Share-based compensation expense for employees and non-employees:
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Cost of revenues
|
$
|
7
|
|
|
$
|
52
|
|
Research and development, net
|
203
|
|
|
232
|
|
||
Sales and marketing, net
|
300
|
|
|
375
|
|
||
General and administrative
|
1,309
|
|
|
1,039
|
|
||
Total
|
$
|
1,819
|
|
|
$
|
1,698
|
|
|
|
|
e.
|
At-the-market offering program:
|
f.
|
Timwell investment agreement:
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Foreign currency transactions and other
|
$
|
58
|
|
|
$
|
(57
|
)
|
|
$
|
39
|
|
|
$
|
(76
|
)
|
Financial expenses related to loan agreement with Kreos
|
455
|
|
|
683
|
|
|
950
|
|
|
1,422
|
|
||||
Bank commissions
|
9
|
|
|
7
|
|
|
18
|
|
|
18
|
|
||||
|
$
|
522
|
|
|
$
|
633
|
|
|
$
|
1,007
|
|
|
$
|
1,364
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues based on customer’s location :
|
|
|
|
|
|
|
|
||||||||
Israel
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
United States
|
1,091
|
|
|
1,342
|
|
|
2,269
|
|
|
3,441
|
|
||||
Europe
|
673
|
|
|
665
|
|
|
1,014
|
|
|
1,065
|
|
||||
Asia-Pacific
|
6
|
|
|
—
|
|
|
8
|
|
|
—
|
|
||||
Latin America
|
—
|
|
|
—
|
|
|
58
|
|
|
—
|
|
||||
Total revenues
|
$
|
1,770
|
|
|
$
|
2,007
|
|
|
$
|
3,349
|
|
|
$
|
4,506
|
|
|
June 30,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
Long-lived assets by geographic region (*):
|
|
|
|
||||
Israel
|
$
|
240
|
|
|
$
|
298
|
|
United States
|
346
|
|
|
342
|
|
||
Germany
|
176
|
|
|
200
|
|
||
|
$
|
762
|
|
|
$
|
840
|
|
|
June 30,
|
|
December 31,
|
||
|
2018
|
|
2017
|
||
Major customer data as a percentage of total revenues:
|
|
|
|
||
Customer A
|
46.4
|
%
|
|
35.2
|
%
|
•
|
our expectations regarding future growth, including our ability to increase sales in our existing geographic markets, expand to new markets and achieve our planned expense reductions;
|
•
|
our management’s conclusion, and our independent registered public accounting firm’s statement in its opinion relating to our accompanying consolidated financial statements, that there is a substantial doubt as to our ability to continue as a going concern;
|
•
|
our ability to comply with the continued listing requirements of the Nasdaq Capital Market and the risk that our ordinary shares will be delisted if we cannot do so;
|
•
|
our ability to maintain and grow our reputation and the market acceptance of our products;
|
•
|
our ability to achieve reimbursement from third-party payors for our products;
|
•
|
our expectations as to our clinical research program and clinical results;
|
•
|
our expectations as to the results of the Food and Drug Administration’s (“FDA
”
), potential regulatory developments with respect to our mandatory 522 postmarket surveillance study;
|
•
|
the outcome of ongoing shareholder class action litigation relating to our initial public offering (“IPO”);
|
•
|
our ability to repay our secured indebtedness;
|
•
|
our ability to improve our products and develop new products;
|
•
|
our ability to close periodic issuances of our ordinary shares to, and to form a joint venture in China with, Timwell;
|
•
|
the risk of substantial dilution resulting from the periodic issuances of our ordinary shares to Timwell;
|
•
|
the significant voting power and de facto voting control Timwell will acquire;
|
•
|
our ability to maintain adequate protection of our intellectual property and to avoid violation of the intellectual property rights of others;
|
•
|
our ability to gain and maintain regulatory approvals;
|
•
|
our ability to secure capital from equity and debt financings in light of limitations under our effective registration statement on Form S-3, the price range of our ordinary shares and conditions in the financial markets, and the risk that such financings may dilute our shareholders or restrict our business;
|
•
|
our ability to use effectively the proceeds of our offerings of securities;
|
•
|
our ability to maintain relationships with existing customers and develop relationships with new customers;
|
•
|
the impact of the market price of our ordinary shares on the determination of whether we are a passive foreign investment company; and
|
•
|
our compliance with medical device reporting regulations to report adverse events involving our products and the potential impact of such adverse events on ReWalk’s ability to market and sell its products.
|
•
|
In June 2018, the VA updated its national policy to provide expanded access to ReWalk exoskeletons for veterans in private rehabilitation clinics through the Veterans Choice Program. Under the VA’s revised policy, the exoskeleton evaluation process will have all veterans flow through one of 24 designated spinal cord injury VA centers ("SCI/D"). Once a veteran is determined to be qualified for training and procurement of his/her own exoskeleton system, the individual may be allowed to pursue training on exoskeleton use, such as use of the ReWalk (i) at the applicable SCI/D hub center; (ii) on a case-by-case basis, at a qualified VA hospital designated by the VA’s "hub & spoke" program; or (iii) on a case-by-case basis, at a qualified private rehabilitation center via the VA’s Veteran’s Choice Program, through which veterans can receive care from a community provider paid for by the VA.
|
•
|
All five leading stroke rehabilitation centers received Internal Review Board approval to conduct the ongoing clinical study on the use of ReWalk’s Restore, soft-suit exoskeleton in stroke patients, with continued patient enrollment currently underway.
|
•
|
ReWalk extended its agreement with the Wyss Institute at Harvard University to June 2022 to complete additional research programs for its groundbreaking Restore soft-suit exoskeleton.
|
•
|
ReWalk Personal 6.0 exoskeleton was added to the official German list of medical aids, becoming the first exoskeleton device to be included in the list.
|
•
|
ReWalk closed the First Tranch of the Investment Agreement with Timwell issuing 4,000,000 ordinary shares for $5.0 million on May 15, 2018.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues
|
$
|
1,770
|
|
|
$
|
2,007
|
|
|
$
|
3,349
|
|
|
$
|
4,506
|
|
Cost of revenues
|
1,003
|
|
|
1,266
|
|
|
1,900
|
|
|
2,716
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
767
|
|
|
741
|
|
|
1,449
|
|
|
1,790
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development, net
|
1,897
|
|
|
1,385
|
|
|
4,048
|
|
|
2,815
|
|
||||
Sales and marketing
|
1,925
|
|
|
2,873
|
|
|
4,261
|
|
|
6,006
|
|
||||
General and administrative
|
2,221
|
|
|
1,850
|
|
|
4,258
|
|
|
3,991
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total operating expenses
|
6,043
|
|
|
6,108
|
|
|
12,567
|
|
|
12,812
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating loss
|
(5,276
|
)
|
|
(5,367
|
)
|
|
(11,118
|
)
|
|
(11,022
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss on extinguishment of debt
|
—
|
|
|
313
|
|
|
—
|
|
|
313
|
|
||||
Financial expenses, net
|
522
|
|
|
633
|
|
|
1,007
|
|
|
1,364
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss before income taxes
|
(5,798
|
)
|
|
(6,313
|
)
|
|
(12,125
|
)
|
|
(12,699
|
)
|
||||
Income taxes (tax benefit)
|
—
|
|
|
(4
|
)
|
|
(1
|
)
|
|
10
|
|
||||
Net loss
|
$
|
(5,798
|
)
|
|
$
|
(6,309
|
)
|
|
$
|
(12,124
|
)
|
|
$
|
(12,709
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per ordinary share, basic and diluted
|
$
|
(0.18
|
)
|
|
$
|
(0.37
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.75
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares used in computing net loss per ordinary share, basic and diluted
|
32,772,061
|
|
|
17,218,154
|
|
|
31,413,229
|
|
|
16,837,903
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands, except unit amounts)
|
|
(in thousands, except unit amounts)
|
||||||||||||
Personal units placed
|
21
|
|
|
30
|
|
|
43
|
|
|
66
|
|
||||
Rehabilitation units placed
|
0
|
|
|
1
|
|
|
1
|
|
|
2
|
|
||||
Total units placed
|
21
|
|
|
31
|
|
|
44
|
|
|
68
|
|
||||
Personal unit revenues
|
$
|
1,770
|
|
|
$
|
1,903
|
|
|
$
|
3,269
|
|
|
$
|
4,326
|
|
Rehabilitation unit revenues
|
$
|
0
|
|
|
$
|
104
|
|
|
$
|
80
|
|
|
$
|
180
|
|
Revenues
|
$
|
1,770
|
|
|
$
|
2,007
|
|
|
$
|
3,349
|
|
|
$
|
4,506
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30, 2018
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Gross profit
|
$
|
767
|
|
|
$
|
741
|
|
|
$
|
1,449
|
|
|
$
|
1,790
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Research and development, net
|
$
|
1,897
|
|
|
$
|
1,385
|
|
|
$
|
4,048
|
|
|
$
|
2,815
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Sales and marketing
|
$
|
1,925
|
|
|
$
|
2,873
|
|
|
$
|
4,261
|
|
|
$
|
6,006
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
General and administrative
|
$
|
2,221
|
|
|
$
|
1,850
|
|
|
$
|
4,258
|
|
|
$
|
3,991
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Financial expenses, net
|
$
|
522
|
|
|
$
|
633
|
|
|
$
|
1,007
|
|
|
$
|
1,364
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Income tax (tax benefit)
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
(1
|
)
|
|
$
|
10
|
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Net cash used in operating activities
|
$
|
(9,068
|
)
|
|
$
|
(11,196
|
)
|
Net cash used in investing activities
|
(3
|
)
|
|
(22
|
)
|
||
Net cash provided by financing activities
|
3,579
|
|
|
3,830
|
|
||
Net cash flow
|
$
|
(5,492
|
)
|
|
$
|
(7,388
|
)
|
|
Payments due by period (in dollars, in thousands)
|
||||||||||||||||||
Contractual obligations
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase obligations (1)
|
$
|
914
|
|
|
$
|
914
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Collaboration Agreement and License Agreement obligations (2)
|
3,201
|
|
|
800
|
|
|
1,601
|
|
|
800
|
|
|
—
|
|
|||||
Operating lease obligations (3)
|
3,744
|
|
|
630
|
|
|
1,160
|
|
|
1,178
|
|
|
776
|
|
|||||
Long-term debt obligations (4)
|
15,235
|
|
|
6,441
|
|
|
8,794
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
23,094
|
|
|
$
|
8,785
|
|
|
$
|
11,555
|
|
|
$
|
1,978
|
|
|
$
|
776
|
|
•
|
untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;
|
•
|
customer notifications or repair, replacement or refunds;
|
•
|
operating restrictions or partial suspension or total shutdown of production;
|
•
|
recalls, withdrawals, or administrative detention or seizure of our products;
|
•
|
refusing or delaying requests for 510(k) marketing clearance or approval of pre-market approval applications relating to new products or modified products;
|
•
|
withdrawing a PMA approval;
|
•
|
refusing to provide Certificates for Foreign Government;
|
•
|
refusing to grant export approval for our products; or
|
•
|
pursuing criminal prosecution.
|
•
|
the composition of our board of directors, which has the authority to direct our business and to appoint and remove our officers;
|
•
|
approving or rejecting a merger, consolidation or other business combination;
|
•
|
raising future capital; and
|
•
|
amending our Second Amended and Restated Articles of Association, as amended by the First Amendment thereto, or our Articles of Association, which govern the rights attached to our ordinary shares.
|
Exhibit Number
|
|
Description
|
|
Amendment No. 1 to Investment Agreement, dated May 15, 2018, between ReWalk Robotics Ltd. and Timwell Corporation Limited (incorporated by reference to Exhibit 99.3 to Schedule 13D filed by Timwell Corporation Limited with the SEC on May 29, 2018).
|
|
|
Registration Rights Agreement, dated May 15, 2018, between ReWalk Robotics Ltd. and Timwell Corporation Limited (incorporated by reference to Exhibit 99.4 to Schedule 13D filed by Timwell Corporation Limited with the SEC on May 29, 2018).
|
|
|
Amendment No. 1 to the Research Collaboration Agreement, dated May 1, 2017, between ReWalk Robotics Ltd. and the President and Fellows of Harvard College (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 29, 2018).**
|
|
|
Amendment No. 1 to the Exclusive License Agreement and Amendment No. 2 to the Research Collaboration Agreement, dated April 1, 2018, between ReWalk Robotics Ltd. and the President and Fellows of Harvard College (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on June 29, 2018).**
|
|
|
Amendment No. 1 to the Exclusive Distribution Agreement, dated March, 2018, between the Company and Yaskawa Electric Corporation.
|
|
|
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act 2002.
|
|
|
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act 2002.
|
|
|
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
|
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
*
|
Furnished herewith.
|
**
|
Confidential treatment was granted by the SEC for portions of this document. The omitted portions of this document have been filed with the SEC as required by Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
|
|
ReWalk Robotics Ltd.
|
|
|
|
|
Date: August 14, 2018
|
By:
|
/s/ Larry Jasinski
|
|
|
Larry Jasinski
|
|
|
Chief Executive Officer
|
|
|
|
Date: August 14, 2018
|
By:
|
/s/ Ori Gon
|
|
|
Ori Gon
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
A.
|
ReWalk (formerly known as Argo Medical Technologies Ltd.) and YEC are parties to an Exclusive Distribution Agreement entered into as of September 24, 2013 (the “
Agreement
”).
|
B.
|
ReWalk and YEC have agreed to amend the definition of the Territory contained in the Agreement, and in consideration of such amendment ReWalk has agreed to make certain payments to YEC.
|
C.
|
This Amendment sets forth the terms and conditions of the amendment to the Agreement.
|
1.2.1
|
As used in this Section 1.2, “China Net Revenues” means net revenues actually received and collected by ReWalk during the period commencing on April 1, 2018 and ending on December 31, 2023, from sales in China (including Hong Kong and Macau) of the ReWalk spinal cord injury (SCI) line. China Net Revenues shall exclude: (i) fees paid to ReWalk for any third-party professional services; (ii) any charges and related expenses that are based on actual costs pertaining to the revenues, such as (without limitation) packaging, shipping, insurance, travel, accommodation, per diem allowance, export and import taxes, excise taxes, withholding taxes and/or value-added tax as applicable; (iii) any revenues that are conditional (
i.e.
that may be subject to return under occurrence of a certain event); (iv) any portion of a commission payable to another organization or individual involved with the sale; and (vi) any reimbursements or refunds to which a customer may be entitled.
|
1.2.2
|
Within __ days following (a) December 31, 2018, and (b) the last day of each subsequent calendar year, through and including December 31, 2023, ReWalk shall (1) provide YEC with a statement of China Net Revenues, if any, during such calendar year, and (2) pay YEC an amount equal to 3% of the China Net Revenues during such calendar year.
|
1.2.3
|
If the aggregate amount paid by ReWalk to YEC pursuant to Section 1.2.2 with respect to all periods through December 31, 2023 shall be less than US$ 75,000, ReWalk shall, together with the payment, if any, with respect to the calendar year ending December 31, 2023, pay YEC an amount equal to the difference between US$ 75,000 and the aggregate amount paid by ReWalk to YEC pursuant to Section 1.2.2 (including the amount paid on such date with respect to the calendar year ending December 31, 2023).
|
|
|
|
ReWalk Robotics Ltd.
|
|
YASKAWA ELECTRIC CORPORATION
|
|
|
|
/s/ Lawrence J. Jasinski
|
|
/s/ Shuji Murakami
|
Lawrence J. Jasinski
|
|
Shuji Murakami
|
Chief Executive Officer
|
|
Representative Director
|
|
|
Senior Managing Executive Officer
|
|
|
|
|
|
|
|
/s/ Larry Jasinski
|
|
Larry Jasinski
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
ReWalk Robotics Ltd.
|
|
/s/ Ori Gon
|
|
Ori Gon
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
ReWalk Robotics Ltd.
|
•
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
•
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Larry Jasinski
|
|
Larry Jasinski
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
ReWalk Robotics Ltd.
|
•
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
•
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Ori Gon
|
|
Ori Gon
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
ReWalk Robotics Ltd.
|