Part I [Item 1. Business](index=5&type=section&id=Item%201.%20BUSINESS) Ekso Bionics designs, develops, sells, and rents exoskeleton products for both medical rehabilitation (EksoNR, EksoUE) and industrial applications (EksoVest, EVO, EksoZeroG). The company focuses on leveraging advanced technology and an extensive intellectual property portfolio to address neurological conditions and enhance worker strength and endurance. Key developments in 2020 included FDA clearance for EksoNR in acquired brain injury and the launch of the EVO industrial exoskeleton - **Ekso Bionics designs, develops, sells, and rents exoskeleton products** for medical and industrial markets, augmenting human strength, endurance, and mobility[14](index=14&type=chunk) - For medical applications, **key products include EksoNR** for stroke, spinal cord injury (SCI), and acquired brain injury (ABI) rehabilitation, and EksoUE for upper extremity impairments[16](index=16&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk)[27](index=27&type=chunk) - For industrial applications, **products include EksoVest, EksoZeroG, and the newly introduced EVO**, designed to reduce worker fatigue and injuries in overhead tasks[17](index=17&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) - In **June 2020**, **EksoNR received 501(k) clearance from the U.S. FDA** for use with patients with ABI[16](index=16&type=chunk) - The company's **intellectual property portfolio includes 61 issued U.S. patents** and **4 pending applications**, with **203 international patents** issued or allowed[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) - **The China Joint Venture was terminated** in **August 2020** due to national security concerns raised by CFIUS[53](index=53&type=chunk) - The company **faces intense competition** in both medical technology and industrial robotics, with many competitors possessing significantly more resources[70](index=70&type=chunk) - As of **February 19, 2021**, the company had **40 employees** (**39 full-time**, **1 part-time**), with **7** in Europe and **2** in Singapore[91](index=91&type=chunk) [Item 1A. Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including the adverse impact of the COVID-19 pandemic on demand and operations, a limited operating history in a new and unproven market, intense competition, and challenges in obtaining and maintaining regulatory approvals and third-party reimbursement. Financial risks include a history of significant losses, anticipated future losses, and restrictions imposed by loan agreements. Intellectual property risks involve the cost and uncertainty of patent protection and potential litigation. Product liability and warranty claims also pose substantial risks - **The COVID-19 pandemic negatively impacted** demand for exoskeleton products, leading to **decreased** sales and operational challenges, including difficulties in in-person demonstrations and potential FDA delays[102](index=102&type=chunk) - **Booked units decreased by 38%** in **2020** (**61 units**) compared to **2019** (**98 units**)[177](index=177&type=chunk) - The company has a **limited operating history** (first medical device sold in **2012**, first industrial unit in **2016**), making future prospects uncertain in a new and unproven market susceptible to rapid technological change[103](index=103&type=chunk)[107](index=107&type=chunk) - The **market for the company's products is highly competitive**, with success dependent on market acceptance, new product development, regulatory approvals, and intellectual property protection[106](index=106&type=chunk) - **Sales cycles for EksoNR are long** (**8-12 months** for first device, **6-8 months** for subsequent), contributing to potential fluctuations in quarterly operating results[109](index=109&type=chunk) Net Losses and Accumulated Deficit (2019-2020) | Metric | 2020 (in millions) | 2019 (in millions) | |:------------------|:-------------------|:-------------------| | Net Losses | $15.8 | $12.1 | | Accumulated Deficit | $199.1 | $183.3 | - The company's **loan agreement with Pacific Western Bank imposes restrictive covenants**, limiting management's discretion in operations and potentially requiring capital resources for debt repayment[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) - **Failure to obtain or maintain necessary regulatory clearances** (e.g., FDA 510(k) or PMA) for medical devices, or delays in such processes, would harm commercial operations[134](index=134&type=chunk) - **Product liability claims or recalls**, potentially caused by device malfunction or misuse, could result in substantial damages, increased insurance rates, and harm to reputation and financial results[149](index=149&type=chunk)[151](index=151&type=chunk) [Item 1B. Unresolved Staff Comments](index=32&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved staff comments to report - **No unresolved staff comments**[161](index=161&type=chunk) [Item 2. Properties](index=32&type=section&id=Item%202.%20Properties) The company's principal executive offices and manufacturing facility are located in Richmond, California, occupying approximately 45,000 square feet. Additionally, it leases a 1,400 square foot office in Hamburg, Germany, for its European headquarters. The company does not own any real property - **Principal executive offices and manufacturing facility**: **45,000 sq ft** in Richmond, CA[162](index=162&type=chunk) - **European headquarters**: **1,400 sq ft** office in Hamburg, Germany[162](index=162&type=chunk) - The company **does not own any real property**[163](index=163&type=chunk) [Item 3. Legal Proceedings](index=32&type=section&id=Item%203.%20Legal%20Proceedings) The company is occasionally involved in litigation typical for its industry, including intellectual property and employment issues. Management believes the outcome of these matters will not materially adversely affect its financial results - **Involved in typical industry litigation** (IP, employment issues)[164](index=164&type=chunk) - **Management believes outcomes will not materially affect financial results**[164](index=164&type=chunk) [Item 4. Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - **Not applicable**[165](index=165&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=33&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the Nasdaq Capital Market under the symbol 'EKSO' since August 9, 2016. As of February 19, 2021, there were approximately 185 stockholders of record. The company has never declared or paid cash dividends and does not intend to in the foreseeable future, prioritizing business growth - **Common stock traded on Nasdaq Capital Market** under 'EKSO' since **August 9, 2016**[168](index=168&type=chunk) - As of **February 19, 2021**, approximately **185 stockholders** of record[169](index=169&type=chunk) - **No cash dividends declared or paid**; future earnings expected to fund business growth[170](index=170&type=chunk) [Item 6. Selected Financial Data](index=33&type=section&id=Item%206.%20Selected%20Financial%20Data) This item is not applicable to the company - **Not applicable**[172](index=172&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company experienced a significant adverse impact from the COVID-19 pandemic in 2020, leading to decreased demand and operational adjustments, including workforce reductions. Despite a 36% revenue decrease, gross margin improved to 57% due to higher average selling prices for EksoNR, increased medical device sales proportion, lower production costs, and the introduction of EVO. The company incurred a net loss of $15.8 million in 2020, an increase from $12.1 million in 2019, primarily due to a $9.4 million negative swing in warrant liabilities revaluation. Management took actions to improve liquidity and believes it has sufficient cash to fund operations for the foreseeable future - **COVID-19 pandemic negatively impacted** business, leading to a **38% decrease** in **booked units** (**61** in **2020** vs. **98** in **2019**) and workforce reductions[177](index=177&type=chunk)[215](index=215&type=chunk) - The company **launched upgraded EksoPulse platform** and the **EVO** industrial exoskeleton in **2020**, and **received FDA clearance for EksoNR** in ABI patients[189](index=189&type=chunk) Key Financial Performance (2019-2020, in thousands) | Metric | 2020 | 2019 | Change ($) | Change (%) | |:------------------------|:--------|:--------|:-----------|:-----------| | Revenue | $8,882 | $13,917 | $(5,035) | (36)% | | Cost of Revenue | $3,812 | $7,153 | $(3,341) | (47)% | | Gross Profit | $5,070 | $6,764 | $(1,694) | (25)% | | Gross Profit % | 57% | 49% | 8% | 16% | | Sales and Marketing | $7,752 | $11,398 | $(3,646) | (32)% | | Research and Development| $2,474 | $4,596 | $(2,122) | (46)% | | General and Administrative| $7,702 | $7,409 | $293 | 4% | | Total Operating Expenses| $18,361 | $23,403 | $(5,042) | (22)% | | Loss from Operations | $(13,291)| $(16,639)| $3,348 | (20)% | | Net Loss | $(15,825)| $(12,132)| $(3,693) | 30% | - **Gross margin increased to 57%** in **2020** from **49%** in **2019**, driven by higher average selling prices for EksoNR, increased proportion of medical device sales, lower unit production costs, and higher service margins[210](index=210&type=chunk) - **Net loss increased by 30%** to **$15.8 million** in **2020**, largely due to a **$9.4 million** negative swing from a gain to a **loss on warrant liabilities revaluation**[208](index=208&type=chunk)[218](index=218&type=chunk) Cash Flow Summary (2019-2020, in thousands) | Metric | 2020 | 2019 | |:--------------------------------|:--------|:---------| | Cash, beginning of year | $10,872 | $7,655 | | Net cash used in operating activities | $(8,755)| $(15,772)| | Net cash used in investing activities | $0 | $(60) | | Net cash provided by financing activities | $10,704 | $19,039 | | Cash, end of year | $12,862 | $10,872 | - **Net cash used in operations decreased by $7.0 million** (**44%**) in **2020**, primarily due to reduced operating expenses and improved accounts receivable collections[232](index=232&type=chunk) - **Net cash provided by financing activities was $10.7 million** in **2020**, from equity financing (**$7.1 million**), PPP loan (**$1.1 million**), and warrant exercises (**$3.3 million**), partially offset by debt payments[234](index=234&type=chunk) - **Subsequent to year-end, received** an additional **$36.4 million net proceeds from a public offering**, **$1.4 million from warrant exercises**, and **$0.7 million from ATM sales**[226](index=226&type=chunk)[281](index=281&type=chunk) [Overview](index=34&type=section&id=Overview) - The **discussion highlights the company's operations, financial condition, liquidity, and capital resources** for the periods described, based on audited consolidated financial statements[175](index=175&type=chunk) - All **common share and per share amounts have been retroactively adjusted** to reflect a one-for-fifteen reverse stock split effected on **March 24, 2020**[174](index=174&type=chunk) [COVID-19 Impact](index=34&type=section&id=COVID-19) - **The COVID-19 pandemic significantly impacted** the business, leading to **decreased** demand for exoskeleton products as rehabilitation facilities shifted priorities and delayed capital expenditures[177](index=177&type=chunk) - **Booked units decreased by 38%** in **2020** (**61 units**) compared to **2019** (**98 units**)[177](index=177&type=chunk) - The company adapted by engaging customers through virtual conferencing, training, and online demos, and expects an uptick in in-person interactions as the COVID outlook improves[177](index=177&type=chunk)[179](index=179&type=chunk) [Business Segments](index=35&type=section&id=Business) - **EksoHealth focuses on medical exoskeletons** like EksoNR (for lower extremity impairment rehabilitation, e.g., stroke, TBI, SCI) and EksoUE (for upper extremity impairments)[184](index=184&type=chunk)[185](index=185&type=chunk) - **EksoWorks develops and sells exoskeletons and assistive tools for industrial applications**, including EksoVest, EVO (new), and EksoZeroG, aimed at reducing worker fatigue and injuries[186](index=186&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) [Operational Highlights](index=35&type=section&id=Operational%20Highlights) - **Booked 61 EksoGT and EksoNR units** in **2020**, including **19 subscription units** and **9** converted from rentals[189](index=189&type=chunk) Gross Margins (2019-2020) | Year | Gross Margin | |:-----|:-------------| | 2020 | 57% | | 2019 | 49% | - **Launched upgraded EksoPulse platform** in **February 2020** for enhanced rehabilitation data analysis[189](index=189&type=chunk) - **Received FDA clearance for EksoNR for acquired brain injury patients** in **June 2020**[189](index=189&type=chunk) - **Launched EVO, an endurance-boosting upper body exoskeleton** for industrial use, in **August 2020**[191](index=191&type=chunk) [2020 Financing Activities](index=36&type=section&id=2020%20Financing%20Activities) - **Received $1.1 million unsecured loan under the Paycheck Protection Program (PPP)** in **April 2020**[191](index=191&type=chunk) - **Sold 1,747,704 common shares and warrants for $7.1 million net proceeds** in **June 2020** public offering[192](index=192&type=chunk) - **Paid off $1.5 million debt to Western Alliance Bank with proceeds from a new $2.0 million loan from Pacific Western Bank** in **August 2020**[192](index=192&type=chunk) - **Received $3.3 million from the exercise of 723,426 warrants** during **2020**[192](index=192&type=chunk) - **Subsequent to year-end, received $36.4 million net proceeds from a public offering**, **$1.4 million from warrant exercises**, and **$0.7 million from ATM sales**[192](index=192&type=chunk) [Critical Accounting Policies, Estimates, and Judgments](index=36&type=section&id=Critical%20Accounting%20Policies%2C%20Estimates%2C%20and%20Judgments) - **Key accounting estimates include** revenue recognition (transfer of control, distinct performance obligations), inventory valuation (lower of cost or net realizable value, excess/obsolete write-downs), stock-based compensation (Black-Scholes model, expected term, volatility), and warrant valuation (Black-Scholes/Binomial Lattice models, fair value as liability)[193](index=193&type=chunk)[194](index=194&type=chunk)[197](index=197&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk)[202](index=202&type=chunk)[203](index=203&type=chunk) - The company **assesses its ability to continue as a going concern** at every interim and annual period[204](index=204&type=chunk) [Comparison of 2020 to 2019 Financial Results](index=38&type=section&id=Comparison%20of%20the%20year%20ended%20December%2031%2C%202020%20to%20the%20year%20ended%20December%2031%2C%202019) Consolidated Statements of Operations (2019-2020, in thousands) | Metric | 2020 | 2019 | Change ($) | Change (%) | |:----------------------------------------|:----------|:----------|:-----------|:-----------| | Revenue | $8,882 | $13,917 | $(5,035) | (36)% | | Cost of revenue | $3,812 | $7,153 | $(3,341) | (47)% | | Gross profit | $5,070 | $6,764 | $(1,694) | (25)% | | Gross profit % | 57% | 49% | | | | Sales and marketing | $7,752 | $11,398 | $(3,646) | (32)% | | Research and development | $2,474 | $4,596 | $(2,122) | (46)% | | General and administrative | $7,702 | $7,409 | $293 | 4% | | Impairment of goodwill | $189 | $0 | $189 | NM | | Restructuring | $244 | $0 | $244 | NM | | Total operating expenses | $18,361 | $23,403 | $(5,042) | (22)% | | Loss from operations | $(13,291) | $(16,639) | $3,348 | (20)% | | Interest expense | $(139) | $(384) | $245 | (64)% | | Finance cost associated with warrant issuance | $(329) | $(1,096) | $767 | (70)% | | (Loss) gain on warrant liabilities | $(3,056) | $6,376 | $(9,432) | NM | | Loss on modification of warrants | $0 | $(257) | $257 | NM | | Other income (expense), net | $990 | $(132) | $1,122 | NM | | Total other (expense) income, net | $(2,534) | $4,507 | $(7,041) | (156)% | | Net loss | $(15,825) | $(12,132) | $(3,693) | 30% | [Revenue Analysis](index=38&type=section&id=Revenue) - **Total revenue decreased by $5.0 million** (**36%**) in **2020** compared to **2019**[209](index=209&type=chunk) - **Decrease was driven by** a **$3.9 million** reduction in EksoHealth and a **$1.1 million** reduction in EksoWorks, primarily due to lower medical device sales volume impacted by COVID-19[209](index=209&type=chunk) [Gross Profit Analysis](index=38&type=section&id=Gross%20Profit) - **Gross profit decreased by $1.7 million** (**25%**) in **2020**, mainly due to **decreased** device sales volume[210](index=210&type=chunk) - **Gross margin increased to 57%** in **2020** from **49%** in **2019**, attributed to higher average selling prices for EksoNR, a greater proportion of medical device sales, lower unit production costs, and higher service margins[210](index=210&type=chunk) [Operating Expenses Analysis](index=39&type=section&id=Operating%20Expenses) - **Sales and marketing expenses decreased by $3.6 million** (**32%**) in **2020**, due to reduced employee compensation (furloughs, reduction in force), shift to virtual selling, and lower marketing/trade show activities[211](index=211&type=chunk) - **Research and development expenses decreased by $2.1 million** (**46%**) in **2020**, due to lower employee compensation and reduced patent/licensing costs[213](index=213&type=chunk) - **General and administrative expenses increased by $0.3 million** (**4%**) in **2020**, primarily due to higher legal expenses[214](index=214&type=chunk) - A **goodwill impairment charge of $0.2 million** was recorded in **2020**, reducing the balance to zero, and a **restructuring expense of $0.2 million** was recorded due to workforce reduction[214](index=214&type=chunk)[215](index=215&type=chunk) [Other (Expense) Income, Net Analysis](index=39&type=section&id=Other%20(Expense)%20Income%2C%20Net) - **Interest expense decreased by $0.2 million** (**64%**) in **2020** due to lower effective interest rates on term loans[217](index=217&type=chunk) - A **$3.1 million loss on revaluation of warrant liabilities was recorded** in **2020**, a significant swing from a **$6.4 million** gain in **2019**, primarily driven by changes in stock price[218](index=218&type=chunk) - **Other income, net was $1.0 million** in **2020** (vs. **$0.1 million** expense in **2019**) due to unrealized gains on foreign currency revaluations[221](index=221&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=40&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) - **Working capital increased to $13.4 million** at **December 31, 2020**, from **$11.0 million** at **December 31, 2019**, due to higher cash from equity financings and warrant exercises, and reduced notes payable[223](index=223&type=chunk)[224](index=224&type=chunk) - As of **December 31, 2020**, the company had an **accumulated deficit of $199.1 million** and **cash on hand of $12.9 million**[225](index=225&type=chunk) - **Management took several actions** in **2020** to alleviate going concern doubts, including workforce reduction, a registered direct offering, refinancing debt, and product development investments[227](index=227&type=chunk) - After considering a **$2.0 million** restricted cash balance due to a liquidity covenant, **effective unrestricted cash was $10.9 million** as of **December 31, 2020**[228](index=228&type=chunk) - The company believes it has **sufficient cash to fund operations** beyond one year from the financial statement issuance date, but may require additional financing for future investments[228](index=228&type=chunk)[229](index=229&type=chunk) [Cash and Cash Equivalents](index=41&type=section&id=Cash%20and%20Cash%20Equivalents) Cash Flow Summary (2019-2020, in thousands) | Metric | 2020 | 2019 | |:--------------------------------------|:--------|:---------| | Cash, beginning of year | $10,872 | $7,655 | | Net cash used in operating activities | $(8,755)| $(15,772)| | Net cash used in investing activities | $0 | $(60) | | Net cash provided by financing activities | $10,704 | $19,039 | | Effect of exchange rate changes on cash | $41 | $10 | | Cash, end of year | $12,862 | $10,872 | [Net Cash Used in Operating Activities](index=41&type=section&id=Net%20Cash%20Used%20in%20Operating%20Activities) - **Net cash used in operations decreased by $7.0 million** (**44%**) in **2020**, primarily due to reduced operating expenses and improved accounts receivable collections[232](index=232&type=chunk) [Net Cash Used in Investing Activities](index=41&type=section&id=Net%20Cash%20Used%20in%20Investing%20Activities) - **Net cash used in investing activities decreased by $0.1 million** (**100%**) in **2020**, primarily due to lower hardware and software purchases[233](index=233&type=chunk) [Net Cash Provided by Financing Activities](index=41&type=section&id=Net%20Cash%20Provided%20by%20Financing%20Activities) - **Net cash provided by financing activities was $10.7 million** in **2020**, from equity financing (**$7.1 million**), PPP loan (**$1.1 million**), and warrant exercises (**$3.3 million**), partially offset by debt payments[234](index=234&type=chunk) - **Net cash provided by financing activities was $19.0 million** in **2019**, from equity financings (**$9.0 million**, **$4.2 million**, **$2.8 million** ATM), China JV equity (**$5.0 million**), and stock option exercises (**$0.2 million**), offset by debt payments[235](index=235&type=chunk) [Off-Balance Sheet Arrangements](index=41&type=section&id=Off-Balance%20Sheet%20Arrangements) - The company's **liquidity is not dependent on off-balance sheet financing arrangements**, and none existed as of **December 31, 2020**[236](index=236&type=chunk) [Contractual Obligations and Commitments](index=43&type=section&id=Contractual%20Obligations%20and%20Commitments) Contractual Obligations as of December 31, 2020 (in thousands) | Obligation | Total | Less than one year | 1-3 Years | 3-5 Years | After 5 Years | |:------------------------|:--------|:-------------------|:----------|:----------|:--------------| | Term loan | $3,356 | $90 | $3,266 | $0 | $0 | | Facility operating leases | $836 | $599 | $237 | $0 | $0 | | Purchase obligations | $396 | $396 | $0 | $0 | $0 | | **Total** | **$4,588**| **$1,085** | **$3,503**| **$0** | **$0** | - **License agreements require 1% royalty** on net sales of licensed medical devices (excluding U.S. government sales) and **21%** of sublicense fees, with a minimum annual royalty of **$50,000**[239](index=239&type=chunk) - An **exclusive license for mechanical balance and support arm technologies requires a single-digit royalty** on net receipts, subject to a **$50,000** annual minimum[240](index=240&type=chunk) [Recent Accounting Pronouncements](index=43&type=section&id=Recent%20Accounting%20Pronouncements) - **Refers to Note 2** in the consolidated financial statements for discussion of new accounting pronouncements[242](index=242&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to foreign currency risk as a portion of its revenue and receivables are denominated in foreign currencies (Euros, Singapore dollars). Approximately 33% of total revenue in 2020 was foreign currency denominated. A hypothetical 10% increase in the U.S. dollar exchange rate would decrease 2020 revenues by $0.3 million. The company does not currently hedge foreign currency exposures. Interest rate risk is primarily related to its variable-rate term loan, but a hypothetical 10% change in the prime rate would have an immaterial impact on interest expense - **Foreign currency risk exists** due to revenue and receivables in Euros and Singapore dollars; **33%** of **2020** revenue was foreign currency denominated[245](index=245&type=chunk) - A **hypothetical 10% increase in the U.S. dollar exchange rate would decrease 2020 revenues by $0.3 million**[245](index=245&type=chunk) - The company **does not currently hedge foreign currency exposures**[245](index=245&type=chunk) - **Interest rate risk is primarily from a variable-rate term loan** (**0.50%** above prime or **4.50%**, whichever is greater); a **10%** change in prime rate would have an immaterial impact[246](index=246&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=45&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for Ekso Bionics Holdings, Inc. for the years ended December 31, 2020 and 2019, including the balance sheets, statements of operations and comprehensive loss, stockholders' equity, and cash flows. The independent registered public accounting firm issued an unqualified opinion on these statements. Detailed notes provide further information on the company's organization, significant accounting policies, net loss per share, investments, fair value measurements, revenue recognition, property and equipment, accrued liabilities, notes payable, lease obligations, employee benefits, related party transactions, capitalization and equity structure, stock-based compensation, income taxes, commitments and contingencies, segment disclosures, and subsequent events - The independent registered public accounting firm, **OUM & CO. LLP, issued an unqualified opinion** on the consolidated financial statements for **2020** and **2019**[251](index=251&type=chunk) - A **critical audit matter identified was revenue recognition**, specifically the identification of distinct performance obligations, allocation of transaction price, and timing of revenue recognition[256](index=256&type=chunk)[257](index=257&type=chunk) [Report of Independent Registered Public Accounting Firm](index=46&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) - **OUM & CO. LLP provided an unqualified opinion** on the consolidated financial statements for the years ended **December 31, 2020** and **2019**[251](index=251&type=chunk) - **Revenue recognition was identified as a critical audit matter** due to challenges in determining distinct performance obligations, allocating transaction price, and timing of recognition[256](index=256&type=chunk)[257](index=257&type=chunk) [Consolidated Balance Sheets](index=48&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheets (in thousands) | Asset/Liability | December 31, 2020 | December 31, 2019 | |:----------------------------|:------------------|:------------------| | **Assets** | | | | Cash | $12,862 | $10,872 | | Accounts receivable, net | $3,389 | $5,208 | | Inventories | $1,978 | $2,489 | | Total current assets | $18,420 | $18,807 | | Property and equipment, net | $1,172 | $1,657 | | Goodwill | $0 | $189 | | Total assets | $20,597 | $21,915 | | **Liabilities & Equity** | | | | Accounts payable | $1,501 | $1,903 | | Accrued liabilities | $1,429 | $1,683 | | Deferred revenues, current | $1,496 | $1,492 | | Note payable, current | $0 | $2,333 | | Total current liabilities | $4,974 | $7,832 | | Notes payable, net | $3,075 | $407 | | Warrant liabilities | $6,037 | $4,307 | | Total liabilities | $16,163 | $15,118 | | Total stockholders' equity | $4,434 | $6,797 | [Consolidated Statements of Operations and Comprehensive Loss](index=49&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share amounts) | Metric | 2020 | 2019 | |:----------------------------------------|:----------|:----------| | Revenue | $8,882 | $13,917 | | Cost of revenue | $3,812 | $7,153 | | Gross profit | $5,070 | $6,764 | | Sales and marketing | $7,752 | $11,398 | | Research and development | $2,474 | $4,596 | | General and administrative | $7,702 | $7,409 | | Impairment of goodwill | $189 | $0 | | Restructuring | $244 | $0 | | Total operating expenses | $18,361 | $23,403 | | Loss from operations | $(13,291) | $(16,639) | | Interest expense | $(139) | $(384) | | Finance cost associated with warrant issuance | $(329) | $(1,096) | | (Loss) gain on warrant liabilities | $(3,056) | $6,376 |\ | Loss on modification of warrants | $0 | $(257) | | Other income (expense), net | $990 | $(132) | | Total other (expense) income, net | $(2,534) | $4,507 | | Net loss | $(15,825) | $(12,132) | | Foreign currency translation adjustments| $(897) | $142 | | Comprehensive loss | $(16,722) | $(11,990) | | Basic and diluted net loss per share | $(2.21) | $(2.53) | | Weighted average shares outstanding | 7,164 | 4,794 | [Consolidated Statements of Stockholders' Equity](index=50&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Consolidated Statements of Stockholders' Equity (in thousands) | Metric | Dec 31, 2018 | Dec 31, 2019 | Dec 31, 2020 | |:----------------------------------------|:-------------|:-------------|:-------------| | Common Stock Amount | $4 | $6 | $8 | | Additional Paid-in Capital | $173,962 | $190,019 | $204,376 | | Accumulated Other Comprehensive (Loss) Income | $(92) | $50 | $(847) | | Accumulated Deficit | $(171,146) | $(183,278) | $(199,103) | | Total Stockholders' Equity | $2,728 | $6,797 | $4,434 | | Net Loss | $(12,132) | $(15,825) | | | Equity financing, net | $12,444 | $7,082 | | | Exercise of warrants | | $7,310 | | | Stock-based compensation | $2,255 | $2,084 | | | Foreign currency translation adjustments| $142 | $(897) | | [Consolidated Statements of Cash Flows](index=51&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows (in thousands) | Activity | 2020 | 2019 | |:----------------------------------------|:----------|:----------| | Net cash used in operating activities | $(8,755) | $(15,772) | | Net cash used in investing activities | $0 | $(60) | | Net cash provided by financing activities | $10,704 | $19,039 | | Effect of exchange rate changes on cash | $41 | $10 | | Net increase in cash | $1,990 | $3,217 | | Cash at beginning of the year | $10,872 | $7,655 | | Cash at end of the year | $12,862 | $10,872 | [Notes to Consolidated Financial Statements](index=53&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [1. Organization](index=53&type=section&id=1.%20Organization) - **Ekso Bionics Holdings, Inc. designs, develops, sells, and rents exoskeleton products** for medical and industrial markets[277](index=277&type=chunk)[278](index=278&type=chunk) - As of **December 31, 2020**, the company had an **accumulated deficit of $199.1 million** and **cash on hand of $12.9 million**[280](index=280&type=chunk) - **Subsequent to year-end, received $36.4 million net proceeds from a public offering**, **$1.4 million from warrant exercises**, and **$0.7 million from ATM sales**[281](index=281&type=chunk) - **Management's actions** in **2020**, including workforce reduction and debt refinancing, along with post-year-end cash, provide **sufficient liquidity** for operations beyond one year[282](index=282&type=chunk)[283](index=283&type=chunk) [2. Summary of Significant Accounting Policies and Estimates](index=54&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies%20and%20Estimates) - **Consolidated financial statements are prepared in accordance with U.S. GAAP**, with all significant intercompany transactions eliminated[286](index=286&type=chunk)[287](index=287&type=chunk) - **Key estimates include revenue recognition**, warrant and stock option valuation, warranty costs, leases, useful lives of assets, inventory valuation, and deferred tax asset realizability[289](index=289&type=chunk) - **Foreign currency translation adjustments are recorded** in accumulated other comprehensive (loss) income[290](index=290&type=chunk)[291](index=291&type=chunk) - **Inventories are recorded at the lower of cost or net realizable value**, with cost computed using standard cost on a first-in, first-out basis[297](index=297&type=chunk) Inventories (in thousands) | Category | December 31, 2020 | December 31, 2019 | |:-----------------|:------------------|:------------------| | Raw materials | $1,724 | $2,208 | | Work in progress | $18 | $29 | | Finished goods | $236 | $252 | | **Total** | **$1,978** | **$2,489** | - The company **adopted ASC 842 (Leases) effective January 1, 2019**, recognizing operating lease liabilities and right-of-use assets on the balance sheet[300](index=300&type=chunk)[302](index=302&type=chunk) - A **restructuring plan completed in May 2020 resulted in $244 thousand** in expense, primarily for employee severance, and a **35%** workforce reduction[303](index=303&type=chunk) - **Goodwill impairment assessment in 2020 resulted in a $189 thousand charge**, reducing the balance to zero, due to **declining** sales and uncertainty in the ZeroG product line[308](index=308&type=chunk)[310](index=310&type=chunk) - **Warrants with potential cash settlement are classified as liabilities** and marked to market at each reporting date using Black-Scholes or Binomial Lattice models[312](index=312&type=chunk) - **Revenue from medical device sales is recognized upon shipment**, while Ekso Care contracts and rentals are recognized over the service/lease term[316](index=316&type=chunk)[317](index=317&type=chunk) - **Research and development costs are expensed as incurred**[319](index=319&type=chunk) - **Stock-based compensation expense is measured using the Black-Scholes Model** for options and closing stock price for RSUs, recognized over the service period[323](index=323&type=chunk)[325](index=325&type=chunk)[326](index=326&type=chunk) - The company **adopted ASU 2017-04 (Goodwill Impairment) and ASU 2018-13 (Fair Value Measurement Disclosures)** in **2020**, with no material impact[331](index=331&type=chunk)[332](index=332&type=chunk) [3. Net Loss Per Share of Common Stock](index=61&type=section&id=3.%20Net%20Loss%20Per%20Share%20of%20Common%20Stock) Net Loss Per Share (in thousands, except per share amounts) | Metric | 2020 | 2019 | |:----------------------------------------|:----------|:----------| | Net loss | $(15,825) | $(12,132) | | Weighted-average shares outstanding | 7,164 | 4,794 | | Basic and diluted net loss per share | $(2.21) | $(2.53) | Anti-Dilutive Common Stock Equivalents (in thousands) | Category | 2020 | |:-----------------------------|:-----| | Options to purchase common stock | 529 | | Restricted stock units | 143 | | Warrants for common stock | 1,325| | **Total** | **1,997**| [4. Investment in Unconsolidated Affiliate](index=62&type=section&id=4.%20Investment%20in%20Unconsolidated%20Affiliate) - **The China JV was terminated** in **August 2020** following CFIUS's determination that national security concerns could not be mitigated[335](index=335&type=chunk) - A **$66 thousand loss on investment in unconsolidated affiliate was recorded** in **2020** due to the write-off of direct costs related to establishing the China JV[336](index=336&type=chunk) [5. Fair Value Measurement](index=62&type=section&id=5.%20Fair%20Value%20Measurement) - **Fair value measurements are categorized into Level 1** (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[337](index=337&type=chunk) Fair Value Hierarchy for Liabilities (in thousands) | Liability | December 31, 2020 | December 31, 2019 | |:------------------------------|:------------------|:------------------| | Warrant liabilities | $6,037 | $4,307 | | Contingent success fee liability | $0 | $6 | Changes in Level 3 Financial Liabilities (2020, in thousands) | Metric | Warrant Liability | Contingent Success Fee Liability | |:----------------------------------------|:------------------|:---------------------------------| | Balance at December 31, 2019 | $4,307 | $6 | | Initial fair value of warrants (June 2020) | $2,650 | $0 | | Loss on revaluation of warrants | $3,056 | $0 | | Reclassification to equity upon exercise | $(3,976) | — | | Gain on revaluation of contingent liability | $0 | $(6) | | Balance at December 31, 2020 | $6,037 | $0 | [6. Revenue Recognition](index=63&type=section&id=6.%20Revenue%20Recognition) - **Revenue is recognized when control of promised products or services transfers to customers**, based on identified performance obligations and allocated transaction price[341](index=341&type=chunk)[342](index=342&type=chunk) Deferred Revenue (in thousands) | Category | December 31, 2020 | December 31, 2019 | |:----------------------------------------|:------------------|:------------------| | Deferred extended maintenance and support | $2,902 | $2,837 | | Deferred royalties | $282 | $290 | | Deferred device, rental revenues and advances | $118 | $154 | | **Total deferred revenues** | **$3,302** | **$3,281** | | Less current portion | $(1,496) | $(1,492) |\ | Deferred revenues, non-current | $1,806 | $1,789 | - The company **expects to recognize approximately $1.5 million of deferred revenue in 2021**[346](index=346&type=chunk) Revenue by Major Source (2020, in thousands) | Source | EksoHealth | EksoWorks | Total | |:------------------------|:-----------|:----------|:--------| | Device revenue | $5,012 | $689 | $5,701 | | Service and support | $1,723 | $0 | $1,723 | | Rentals | $782 | $55 | $837 | | Parts and other | $294 | $72 | $366 | | Collaborative arrangements | $255 | $0 | $255 | | **Total** | **$8,066** | **$816** | **$8,882**| Revenue by Major Source (2019, in thousands) | Source | EksoHealth | EksoWorks | Total | |:------------------------|:-----------|:----------|:--------| | Device revenue | $9,064 | $1,726 | $10,790 |\ | Service and support | $1,647 | $0 | $1,647 | | Rentals | $913 | $0 | $913 | | Parts and other | $259 | $234 | $493 | | Collaborative arrangements | $74 | $0 | $74 | | **Total** | **$11,957**| **$1,960**| **$13,917**| [7. Property and Equipment, net](index=65&type=section&id=7.%20Property%20and%20Equipment%2C%20net) Property and Equipment, net (in thousands) | Category | Estimated Life (Years) | December 31, 2020 | December 31, 2019 | |:--------------------------------|:-----------------------|:------------------|:------------------| | Company-owned fleet | 3-4 | $3,326 | $3,385 | | Computer software | 3-5 | $851 | $851 | | Leasehold improvement | 5-10 | $631 | $631 | | Furniture, office and leased equipment | 3-7 | $557 | $554 | | Machinery and equipment | 3-7 | $291 | $289 | | Tools, molds, dies and jigs | 5 | $96 | $96 | | Computers and peripherals | 3-5 | $77 | $77 | | **Total Cost** | | **$5,829** | **$5,883** | | Accumulated depreciation and amortization | | $(4,657) | $(4,226) | | **Property and equipment, net** | | **$1,172** | **$1,657** | - **Depreciation and amortization expense totaled $620 thousand** in **2020** and **$690 thousand** in **2019**[352](index=352&type=chunk) [8. Accrued Liabilities](index=65&type=section&id=8.%20Accrued%20Liabilities) Accrued Liabilities (in thousands) | Category | December 31, 2020 | December 31, 2019 | |:--------------------------------|:------------------|:------------------| | Salaries, benefits and related expenses | $1,194 | $1,098 | | Device warranty | $188 | $285 | | Other | $47 | $300 | | **Total** | **$1,429** | **$1,683** | Warranty Liability Activity (in thousands) | Metric | 2020 | 2019 | |:--------------------------------|:-----|:-----| | Balance at beginning of the period | $350 | $319 | | Additions for estimated future expense | $219 | $416 | | Incurred costs | $(343)| $(385)| | Balance at end of the period | $226 | $350 | | Current portion | $188 | $285 | | Long-term portion | $38 | $65 | [9. Notes payable, net](index=66&type=section&id=9.%20Notes%20payable%2C%20net) - In **August 2020**, the company **entered a new $2.0 million secured term loan with Pacific Western Bank (PWB)**, bearing interest at **0.50%** above prime or **4.50%**, whichever is greater, maturing **August 2023**[360](index=360&type=chunk)[362](index=362&type=chunk) - **Proceeds from the PWB loan were used to pay off the $1.5 million indebtedness** to Western Alliance Bank (WAB)[361](index=361&type=chunk) - The **PWB loan includes a liquidity covenant requiring minimum unrestricted cash** equal to the outstanding principal balance (**$2.0 million** as of **Dec 31, 2020**)[364](index=364&type=chunk) PWB Term Loan Principal Payments as of December 31, 2020 (in thousands) | Period | Amount | |:-------|:-------| | 2021-2022 | $0 | | 2023 | $2,000 |\ | **Total**| **$2,000**| - **Received a $1.1 million unsecured loan under the Paycheck Protection Program (PPP)** in **April 2020**, with a **1.00%** interest rate, maturing two years from disbursement[367](index=367&type=chunk) - The **PPP loan may be forgiven** if used for eligible expenses, and the company expects to begin principal and interest payments in **2022**[367](index=367&type=chunk) PPP Loan Principal Payments as of December 31, 2020 (in thousands, if not forgiven) | Period | Amount | |:-------|:-------| | 2021 | $0 | | 2022 | $1,086 |\ | **Total**| **$1,086**| [10. Lease Obligations](index=69&type=section&id=10.%20Lease%20Obligations) - The company **maintains a five-year operating lease for its Richmond, CA headquarters** (expires **May 2022**) and a **five-year operating lease for its Hamburg, Germany office** (expires **July 2022**)[370](index=370&type=chunk)[371](index=371&type=chunk) Future Lease Payments as of December 31, 2020 (in thousands) | Period | Operating Leases | |:-------|:-----------------| | 2021 | $599 | | 2022 | $237 | | **Total**| **$836** | | Less: imputed interest | $(55) | | **Present value of lease liabilities** | **$781** | | Lease liabilities, current | $548 | | Lease liabilities, noncurrent | $233 | - **Weighted-average remaining lease term is 1.44 years**, with a weighted-average discount rate of **10.5%**[372](index=372&type=chunk) [11. Employee Benefit Plan](index=69&type=section&id=11.%20Employee%20Benefit%20Plan) - The company **administers a 401(k) retirement plan and makes matching contributions** in common stock, equal to **50%** of employee contributions (up to statutory limit)[376](index=376&type=chunk) - **401(k) contribution expense was $169 thousand** in **2020** and **$142 thousand** in **2019**[376](index=376&type=chunk) [12. Related Party Transactions](index=69&type=section&id=12.%20Related%20Party%20Transactions) - In **2019**, Angel Pond Capital LLC (affiliated with a director) provided **$30 thousand** in consulting services for Asia Pacific strategic positioning[377](index=377&type=chunk) - In **2020**, the company **sold EksoVest raw material inventory and tooling to the China JV for $45 thousand**[378](index=378&type=chunk) [13. Capitalization and Equity Structure](index=69&type=section&id=13.%20Capitalization%20and%20Equity%20Structure) - A **1-for-15 reverse stock split was effected on March 24, 2020**, to regain compliance with Nasdaq's minimum bid price requirement[379](index=379&type=chunk)[380](index=380&type=chunk) - As of **December 31, 2020**, **authorized capital included 141,429 shares of common stock** and **10,000 shares of preferred stock**; **8,349 common shares** were outstanding[381](index=381&type=chunk) - In **June 2020**, the company **sold 1,748 thousand common shares and warrants to purchase 874 thousand shares** (June **2020** Investor Warrants) for gross proceeds of **$7,890 thousand**[384](index=384&type=chunk) - **June 2020 Investor Warrants have an exercise price of $5.18 per share** and expire **December 10, 2025**; they are classified as a liability due to a put option provision[384](index=384&type=chunk)[396](index=396&type=chunk) - In **October 2020**, the company **entered an At The Market Offering Agreement (ATM) to sell up to $7.5 million** of common stock, but **sold no shares** under it in **2020**[387](index=387&type=chunk)[390](index=390&type=chunk) Warrant Shares Outstanding (in thousands) | Source | Exercise Price | Term (Years) | Dec 31, 2019 | Issued | Expired | Exercised | Dec 31, 2020 | |:-------------------------------|:---------------|:-------------|:-------------|:-------|:--------|:----------|:-------------| | June 2020 Investor Warrants | $5.18 | 5.5 | — | 874 | — | (477) | 397 | | June 2020 Placement Agent Warrants | $5.64 | 5 | — | 122 | — | — | 122 | | December 2019 Warrants | $8.10 | 5 | 556 | — | — | — | 556 | | December 2019 Placement Agent Warrants | $8.44 | 5 | 52 | — | — | — | 52 | | May 2019 Warrants | $3.52 | 5 | 444 | — | — | (246) | 198 | | 2017 Information Agent Warrants | $22.50 | 3 | 13 | — | (13) | — | — | | 2015 Warrants | $41.25 | 5 | 107 | — | (107) | — | — | | Pre-2014 warrants | $144.90 | 9-10 | 6 | — | (6) | — | — | | **Total** | | | **1,178** | **996**| **(126)**| **(723)** | **1,325** | [14. Stock-based Compensation](index=75&type=section&id=14.%20Stock-based%20Compensation) 2014 Equity Incentive Plan Authorized Shares (in thousands) | Metric | Shares | |:----------------------------------------|:-------| | Original share pool | 137 | | 2015 increase | 111 | | June 2017 increase | 67 | | December 2017 increase | 293 | | 2019 increase | 233 | | March 2020 increase | 333 | | December 2020 increase | 800 | | **Total shares authorized for grant as of Dec 31, 2020** | **1,974**| - As of **December 31, 2020**, **1,113 thousand shares** were available for future grants under the **2014** Plan[418](index=418&type=chunk)[420](index=420&type=chunk) Stock Option Activity (2020, in thousands, except price and years) | Metric | Options Outstanding | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | |:----------------------------------------|:--------------------|:--------------------------------|:----------------------------------------------------| | Outstanding at beginning of year | 494 | $36.64 | | | Granted | 90 | $5.65 | | | Forfeited | (26) | $26.59 | | | Expired | (29) | $41.25 | | | **Outstanding at end of year** | **529** | **$31.62** | **7.35** | | Exercisable at year end | 342 | $40.63 | 6.71 | - **Total unrecognized compensation cost for unvested stock options was $2,203 thousand** as of **December 31, 2020**, to be recognized over **2.0 years**[426](index=426&type=chunk) Restricted Stock Unit (RSU) Activity (2020, in thousands, except price) | Metric | Number of Shares | Weighted Average Grant Date Fair Value | |:----------------------------------------|:-----------------|:---------------------------------------| | Unvested as of January 1, 2020 | 89 | $10.77 | | Granted | 135 | $4.45 | | Vested | (50) | $6.24 | | Forfeited | (31) | $10.96 | | **Unvested as of December 31, 2020** | **143** | **$6.31** | - **Total unrecognized compensation expense for unvested RSUs was $741 thousand** as of **December 31, 2020**, to be recognized over **2.20 years**[431](index=431&type=chunk) Stock-based Compensation Expense (in thousands) | Category | 2020 | 2019 | |:------------------------------|:--------|:--------|\ | Sales and marketing | $476 | $653 | | Research and development | $293 | $241 | | General and administrative | $1,641 | $1,361 | | **Total** | **$2,410**| **$2,255**| [15. Income Taxes](index=78&type=section&id=15.%20Income%20Taxes) Pre-Tax Loss by Component (in thousands) | Component | 2020 | 2019 | |:----------------|:----------|:----------| | Domestic | $(14,954) | $(10,321) |\ | Foreign | $(871) | $(1,811) | | **Total Loss before income taxes** | **$(15,825)**| **$(12,132)**| - **No current or deferred federal and state income tax expense/benefit in 2020 and 2019** due to net operating losses and a full valuation allowance[437](index=437&type=chunk)[438](index=438&type=chunk) Deferred Tax Assets and Liabilities (in thousands) | Category | 2020 | 2019 | |:------------------------------------|:----------|:----------| | Deferred tax assets: | | | | Net operating loss carryforwards | $43,241 | $40,683 | | Research and development tax credits | $1,837 | $1,817 | | Stock compensation expense | $2,547 | $2,197 | | Deferred tax liabilities: | | | | Lease liabilities | $(88) | $(214) | | Less: Valuation allowance | $(48,673) | $(45,481) |\ | **Net deferred tax asset (liability)**| **$0** | **$0** | - As of **December 31, 2020**, **federal net operating loss carryforwards were $164.3 million** (some expiring in **2027**, some indefinite but subject to **80%** taxable income limitation)[443](index=443&type=chunk) - **State net operating loss carryforwards were $107.0 million** (expiring in **2028**) and **foreign net operating loss carryforwards were $9.7 million** (no expiration)[444](index=444&type=chunk) [16. Commitments and Contingencies](index=81&type=section&id=16.%20Commitments%20and%20Contingencies) - The company has **license agreements requiring 1% royalty** on net sales of licensed medical devices (excluding U.S. government sales) and **21%** of sublicense consideration[448](index=448&type=chunk)[450](index=450&type=chunk) - An **exclusive license for mechanical balance and support arm technologies requires a single-digit royalty** on net receipts, with a **$50 thousand** annual minimum[451](index=451&type=chunk) - **Purchase obligations for inventory and manufacturing services totaled $396 thousand** as of **December 31, 2020**, expected to be paid within one year[452](index=452&type=chunk) Contractual Obligations as of December 31, 2020 (in thousands) | Obligation | Total | Less than one year | 1-3 Years | 3-5 Years | |:------------------------|:--------|:-------------------|:----------|:----------| | Term loans | $3,356 | $90 | $3,266 | $0 | | Facility operating lease | $836 | $599 | $237 | $0 | | **Total** | **$4,192**| **$689** | **$3,503**| **$0** | [17. Segment Disclosures](index=83&type=section&id=17.%20Segment%20Disclosures) - The company **operates in two reportable segments**: EksoHealth (medical exoskeletons) and EksoWorks (industrial exoskeletons), managed separately due to distinct markets[457](index=457&type=chunk) Segment Reporting Information (in thousands) | Segment | 2020 Revenue | 2020 Cost of Revenue | 2020 Gross Profit | 2019 Revenue | 2019 Cost of Revenue | 2019 Gross Profit | |:----------------|:-------------|:---------------------|:------------------|:-------------|:---------------------|:------------------| | EksoHealth | $8,066 | $3,219 | $4,847 | $11,957 | $5,404 | $6,553 | | EksoWorks | $816 | $593 | $223 | $1,960 | $1,749 | $211 | | **Total** | **$8,882** | **$3,812** | **$5,070** | **$13,917** | **$7,153** | **$6,764** | Geographic Revenue (in thousands) | Region | 2020 | 2019 | |:--------------|:----------|:----------| | United States | $5,945 | $9,071 | | All Other | $2,937 | $4,846 | | **Total** | **$8,882**| **$13,917**| [18. Subsequent Events](index=83&type=section&id=18.%20Subsequent%20Events) - In **February 2021**, the company **sold 3,902 thousand common shares for gross proceeds of $40.0 million** in a public offering, with estimated net proceeds of **$36.4 million**[461](index=461&type=chunk) - **Issued 5-year warrants (2021 Warrants) to purchase common stock at an exercise price of $12.8125 per share**, equal to **7.0%** of shares sold in the **February 2021** Offering[461](index=461&type=chunk) - Through **February 25, 2021**, **received $1.4 million from warrant exercises and $0.7 million from ATM sales**[462](index=462&type=chunk) [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=84&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There are no changes in or disagreements with accountants on accounting and financial disclosure to report - **Not applicable**[464](index=464&type=chunk) [Item 9A. Controls and Procedures](index=84&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the principal executive and financial officers, concluded that the company's disclosure controls and procedures were effective as of December 31, 2020. The internal control over financial reporting was also assessed as effective based on the COSO framework. The report does not include an attestation report from the registered public accounting firm - **Disclosure controls and procedures were effective** as of **December 31, 2020**[466](index=466&type=chunk) - **Management assessed internal control over financial reporting as effective** based on the COSO framework[469](index=469&type=chunk) - **No attestation report from the registered public accounting firm is included**[470](index=470&type=chunk) [Item 9B. Other Information](index=84&type=section&id=Item%209B.%20Other%20Information) There is no other information to report under this item - None[472](index=472&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=85&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's 2021 Annual Meeting of Shareholders Proxy Statement - **Information incorporated by reference from the 2021 Proxy Statement**[474](index=474&type=chunk) [Item 11. Executive Compensation](index=85&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's 2021 Annual Meeting of Shareholders Proxy Statement - **Information incorporated by reference from the 2021 Proxy Statement**[475](index=475&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=85&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership of certain beneficial owners and management, and related stockholder matters, is incorporated by reference from the company's 2021 Annual Meeting of Shareholders Proxy Statement - **Information incorporated by reference from the 2021 Proxy Statement**[476](index=476&type=chunk) [Item 13. Certain Relationships and Related Transactions and Director Independence](index=85&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Information regarding certain relationships and related transactions, and director independence, is incorporated by reference from the company's 2021 Annual Meeting of Shareholders Proxy Statement - **Information incorporated by reference from the 2021 Proxy Statement**[477](index=477&type=chunk) [Item 14. Principal Accountant Fees and Services](index=85&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's 2021 Annual Meeting of Shareholders Proxy Statement - **Information incorporated by reference from the 2021 Proxy Statement**[478](index=478&type=chunk) Part IV [Item 15. Exhibits, Financial Statements and Financial Statement Schedules](index=86&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statements%20and%20Financial%20Statement%20Schedules) This section lists the financial statement documents included in Item 8 of the Form 10-K, such as the reports of independent registered public accounting firm, consolidated balance sheets, statements of operations, stockholders' equity, cash flows, and notes to financial statements. It also provides an index of exhibits filed with the annual report - **Includes reports of independent registered public accounting firm, consolidated financial statements** (balance sheets, statements of operations, stockholders' equity, cash flows), and notes to consolidated financial statements[480](index=480&type=chunk) - **All schedules are omitted as they are not applicable** or the required information is presented in the financial statements or notes[480](index=480&type=chunk) - An **Exhibit Index details various agreements**, certificates, warrants, and other documents filed with the report[481](index=481&type=chunk)[483](index=483&type=chunk) [Item 16. 10-K Summary](index=91&type=section&id=Item%2016.%2010-K%20Summary) The company has elected not to include summary information in this Form 10-K - The company has **elected not to include summary information**[495](index=495&type=chunk) [Signatures](index=92&type=sec

Financial Data and Key Metrics Changes - The company achieved third quarter revenues of $2.9 million, representing a 28% sequential increase over Q2 2020 and 90% of revenues compared to the same period last year [9][23] - Gross margin reached a record 63%, up from 53% in the same period last year, driven by higher average selling prices and lower production costs [10][23] - Operating expenses for Q3 2020 were $4.2 million, a reduction of approximately 24% compared to $5.5 million in Q3 2019 [24] Business Line Data and Key Metrics Changes - EksoNR generated third quarter revenue of $2.9 million, compared to $2.3 million in Q2 2020 and $3.3 million in Q3 2019 [23] - The company recorded 22 total EksoNR bookings in Q3, including 17 for new units, indicating a solid order pipeline despite pandemic-related delays [10][12] Market Data and Key Metrics Changes - The company reported improved customer interactions and engagement levels, particularly in North America, while also gaining traction in international markets, including APAC and EMEA [16][17] - The introduction of the EVO exoskeleton has generated strong customer enthusiasm across various industry verticals, including construction and logistics [20] Company Strategy and Development Direction - The company is focused on expanding its install base through multiple acquisition options, including a new subscription model, to enhance customer engagement [12] - The launch of EVO aims to address productivity and health risk challenges in the industrial sector, with positive initial customer feedback [20][38] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the near-term outlook due to the rise of COVID cases, while emphasizing the importance of maintaining customer engagement [9][17] - The company is committed to delivering long-term value for patients, customers, and shareholders, with a focus on increasing user adoption and education [37][38] Other Important Information - The company reported a net income of $2.5 million for Q3 2020, benefiting from the revaluation of warrants, compared to a net income of $0.2 million in Q3 2019 [25] - Cash used in operating activities for the first nine months of 2020 was $7 million, significantly lower than $14.3 million for the same period in 2019 [27] Q&A Session Summary Question: Sales cycle and placements - The sales cycle has been extended due to the pandemic, but efforts are being made to shorten it through various strategies [30][31] Question: Sustainability of international markets - The company is focused on a methodical approach to expanding its global presence, particularly in Asia and Europe, while evaluating market investments [33] Question: Operating margin and expenses - The company is making progress in reducing cash burn and is comfortable with its current infrastructure, expecting stability in operating expenses [34]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________________________________________________________ FORM 10-Q ____________________________________________________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's analysis [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive loss, statements of stockholders' (deficit) equity, and statements of cash flows, along with their accompanying notes, providing a detailed financial overview of Ekso Bionics Holdings, Inc. for the periods ended June 30, 2020, and December 31, 2019 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets show the company's financial position as of June 30, 2020, compared to December 31, 2019, highlighting changes in assets, liabilities, and stockholders' equity | (In thousands) | June 30, 2020 (unaudited) | December 31, 2019 (Note 2) | |:---------------|:--------------------------|:---------------------------| | Cash | $13,260 | $10,872 | | Total assets | $22,349 | $21,915 | | Total liabilities | $22,377 | $15,118 | | Total stockholders' (deficit) equity | $(28) | $6,797 | - Total liabilities increased significantly from **$15,118 thousand** at December 31, 2019, to **$22,377 thousand** at June 30, 2020, primarily driven by an increase in warrant liabilities[10](index=10&type=chunk) - Total stockholders' (deficit) equity shifted from a positive **$6,797 thousand** at December 31, 2019, to a deficit of **$(28) thousand** at June 30, 2020[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This statement outlines the company's financial performance, including revenue, gross profit, operating expenses, and net loss, for the three and six months ended June 30, 2020, compared to the same periods in 2019 | (In thousands, except per share amounts) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | |:-----------------------------------------|:---------------------------------|:---------------------------------|:-------------------------------|:-------------------------------| | Revenue | $2,264 | $3,262 | $3,731 | $6,878 | | Cost of revenue | $1,005 | $1,702 | $1,835 | $3,719 | | Gross profit | $1,259 | $1,560 | $1,896 | $3,159 | | Total operating expenses | $4,351 | $6,658 | $9,769 | $13,169 | | Loss from operations | $(3,092) | $(5,098) | $(7,873) | $(10,010) | | Total other (expense) income, net | $(8,675) | $2,032 | $(6,428) | $393 | | Net loss | $(11,767) | $(3,066) | $(14,301) | $(9,617) | | Basic and diluted net loss per share | $(1.88) | $(0.65) | $(2.37) | $(2.12) | - Net loss significantly increased to **$(11,767) thousand** for the three months ended June 30, 2020, from **$(3,066) thousand** in the prior year, primarily due to a substantial loss on revaluation of warrant liabilities[13](index=13&type=chunk) - Revenue decreased by **31%** for the three months ended June 30, 2020, and by **46%** for the six months ended June 30, 2020, compared to the respective prior periods[13](index=13&type=chunk) [Condensed Consolidated Statements of Stockholders' (Deficit) Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20(Deficit)%20Equity) This statement details the changes in stockholders' (deficit) equity for the three and six months ended June 30, 2020, and 2019, reflecting net losses, stock issuances, and other comprehensive income/loss | (In thousands) | December 31, 2019 | March 31, 2020 | June 30, 2020 | |:---------------|:------------------|:---------------|:--------------| | Total Stockholders' (Deficit) Equity | $6,797 | $5,228 | $(28) | - The company's total stockholders' equity decreased from **$6,797 thousand** at December 31, 2019, to a deficit of **$(28) thousand** at June 30, 2020, primarily due to net losses and warrant-related adjustments[15](index=15&type=chunk) - Issuance of common stock from equity financing and exercise of warrants contributed to additional paid-in capital, partially offsetting the accumulated deficit[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement presents the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2020, and 2019, showing the overall change in cash | (In thousands) | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | |:---------------|:-------------------------------|:-------------------------------| | Net cash used in operating activities | $(5,745) | $(9,708) | | Net cash used in investing activities | $0 | $(60) | | Net cash provided by financing activities | $8,160 | $15,368 | | Net increase in cash | $2,388 | $5,607 | | Cash at end of period | $13,260 | $13,262 | - Net cash used in operating activities decreased by **$3,963 thousand (41%)** for the six months ended June 30, 2020, compared to the same period in 2019, indicating improved operational cash management[22](index=22&type=chunk) - Net cash provided by financing activities decreased from **$15,368 thousand** in H1 2019 to **$8,160 thousand** in H1 2020, despite new equity financing and PPP loan proceeds[22](index=22&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide additional information and explanations for the figures presented in the condensed consolidated financial statements, covering significant accounting policies, business operations, financial instruments, and other relevant disclosures [1. Organization](index=12&type=section&id=1.%20Organization) This section describes the company's business, its exoskeleton technology for medical and industrial markets, and addresses its liquidity and going concern status, including management's actions to mitigate substantial doubt - Ekso Bionics designs, develops, sells, and rents exoskeleton technology for medical rehabilitation (neurological conditions, upper extremity impairments) and industrial use (able-bodied workers)[27](index=27&type=chunk)[194](index=194&type=chunk) - As of June 30, 2020, the company had an accumulated deficit of **$197,579 thousand** and used **$5,745 thousand** cash in operations during the six months ended June 30, 2020[29](index=29&type=chunk) - Workforce reduced by approximately **35%** to lower operating expenses and cash burn[30](index=30&type=chunk) - Conducted a registered direct offering for net proceeds of **$7,082 thousand**[30](index=30&type=chunk) - Received FDA clearance for Acquired Brain Injury (ABI) to market products to a larger patient population[31](index=31&type=chunk) - Received proceeds of **$785 thousand** from warrant exercises in Q2 2020 and **$2,422 thousand** subsequent to quarter-end[31](index=31&type=chunk) [2. Basis of Presentation and Summary of Significant Accounting Policies and Estimates](index=13&type=section&id=2.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies%20and%20Estimates) This note details the basis of financial statement preparation, key accounting policies, and estimates, including revenue recognition, inventory valuation, leases, and the impact of recent accounting pronouncements - The financial statements are prepared in accordance with SEC rules and U.S. GAAP, with certain information condensed or omitted[37](index=37&type=chunk) - Revenue from medical device product sales (EksoNR, EksoGT, EksoUE, software, accessories) is recognized upon transfer of control, typically shipment. Ekso Care support and maintenance revenue is recognized over the contract term (**12-48 months**)[50](index=50&type=chunk) - Revenue from industrial device sales (EksoVest, EksoZeroG) is recognized upon shipment, while rental revenue is recognized over the rental term (typically **12 months**)[51](index=51&type=chunk) - The company adopted ASU 2017-04 (Goodwill Impairment) and ASU 2018-13 (Fair Value Measurement Disclosure) as of January 1, 2020, with no material impact on financial statements[66](index=66&type=chunk)[67](index=67&type=chunk) [3. Restructuring](index=17&type=section&id=3.%20Restructuring) This note describes the restructuring plan implemented in May 2020, which involved a workforce reduction and the associated expenses - In May 2020, the company reduced its workforce by approximately **35%** to streamline operations and lower operating expenses[68](index=68&type=chunk) - Restructuring expense of **$244 thousand** was recorded for the three and six months ended June 30, 2020, primarily for employee severance payments[69](index=69&type=chunk) [4. Accumulated Other Comprehensive Income](index=17&type=section&id=4.%20Accumulated%20Other%20Comprehensive%20Income) This note provides a summary of changes in accumulated other comprehensive income, specifically focusing on foreign currency translation adjustments | (In thousands) | Foreign Currency Translation | |:---------------|:-----------------------------| | Balance at December 31, 2019 | $50 | | Net unrealized loss on foreign currency translation | $(20) | | Balance at June 30, 2020 | $30 | [5. Fair Value Measurements](index=17&type=section&id=5.%20Fair%20Value%20Measurements) This note explains the fair value hierarchy used for financial instruments and presents the fair value measurements for warrant liabilities and contingent success fee liability | (In thousands) | June 30, 2020 | December 31, 2019 | |:---------------|:--------------|:------------------| | Warrant liabilities | $12,361 | $4,307 | | Contingent success fee liability | $0 | $6 | - Warrant liabilities significantly increased from **$4,307 thousand** at December 31, 2019, to **$12,361 thousand** at June 30, 2020, primarily due to the initial valuation of warrants from June 2020 financing and a loss on revaluation[75](index=75&type=chunk) - All warrant liabilities and contingent success fee liabilities are classified as **Level 3** in the fair value hierarchy, indicating the use of significant unobservable inputs[75](index=75&type=chunk) [6. Inventories, net](index=18&type=section&id=6.%20Inventories,%20net) This note provides a breakdown of the company's inventories, net, as of June 30, 2020, and December 31, 2019 | (In thousands) | June 30, 2020 | December 31, 2019 | |:---------------|:--------------|:------------------| | Raw materials | $2,041 | $2,208 | | Work in progress | $29 | $29 | | Finished goods | $314 | $252 | | Inventories, net | $2,384 | $2,489 | - Total inventories, net, decreased slightly from **$2,489 thousand** at December 31, 2019, to **$2,384 thousand** at June 30, 2020, mainly due to a reduction in raw materials[76](index=76&type=chunk) [7. Revenue Recognition](index=19&type=section&id=7.%20Revenue%20Recognition) This note details the company's revenue recognition policies, contract balances, and disaggregates revenue by major source and segment for the reported periods - Deferred revenue, primarily from extended support and maintenance contracts, totaled **$3,051 thousand** as of June 30, 2020[83](index=83&type=chunk) | (In thousands) | Three Months Ended June 30, 2020 | |:---------------|:---------------------------------| | EksoHealth Revenue | $2,086 | | EksoWorks Revenue | $178 | | Total Revenue | $2,264 | | (In thousands) | Six Months Ended June 30, 2020 | |:---------------|:-------------------------------| | EksoHealth Revenue | $3,276 | | EksoWorks Revenue | $455 | | Total Revenue | $3,731 | - EksoHealth revenue decreased from **$2,848 thousand** in Q2 2019 to **$2,086 thousand** in Q2 2020, and EksoWorks revenue decreased from **$414 thousand** to **$178 thousand** in the same period[89](index=89&type=chunk) [8. Investment in Unconsolidated Affiliate](index=21&type=section&id=8.%20Investment%20in%20Unconsolidated%20Affiliate) This note discusses the termination of the company's involvement with the China JV due to national security concerns raised by CFIUS - CFIUS determined that national security concerns regarding the China JV could not be mitigated, leading to a National Security Agreement (NSA) requiring the termination of the company's agreements and role with the China JV[93](index=93&type=chunk)[259](index=259&type=chunk) - A **$66 thousand** loss on investment in unconsolidated affiliate was recorded for the six months ended June 30, 2020, related to the write-off of direct costs for establishing the China JV[94](index=94&type=chunk) [9. Accrued Liabilities](index=21&type=section&id=9.%20Accrued%20Liabilities) This note provides a breakdown of accrued liabilities and details the changes in the device warranty liability | (In thousands) | June 30, 2020 | December 31, 2019 | |:---------------|:--------------|:------------------| | Salaries, benefits and related expenses | $746 | $1,098 | | Device warranty | $200 | $285 | | Other | $234 | $300 | | Total | $1,180 | $1,683 | - Total accrued liabilities decreased from **$1,683 thousand** at December 31, 2019, to **$1,180 thousand** at June 30, 2020, primarily due to lower salaries, benefits, and device warranty liabilities[95](index=95&type=chunk) | (In thousands) | Six Months Ended June 30, 2020 | |:---------------|:-------------------------------| | Balance at beginning of period | $350 | | Additions for estimated future expense | $73 | | Incurred costs | $(194) | | Balance at end of period | $229 | [10. Notes Payable, net](index=22&type=section&id=10.%20Notes%20Payable,%20net) This note details the company's security loan and the Paycheck Protection Program (PPP) loan, including their terms, amendments, and repayment schedules - The security loan agreement was amended on April 29, 2020, to defer principal payments for **three months**, with payments resuming on August 1, 2020[102](index=102&type=chunk) - A liquidity covenant requires maintaining unrestricted cash equal to the outstanding term loan balance (**$1,750 thousand** as of June 30, 2020), which the company was compliant with[102](index=102&type=chunk) - The company received an unsecured PPP loan of **$1,086 thousand** on April 20, 2020, with a **1.00%** interest rate, maturing in **two years**, and may be eligible for forgiveness[107](index=107&type=chunk) | (In thousands) | Security Loan Principal Payments | |:---------------|:---------------------------------| | Remainder of 2020 | $1,458 | | 2021 | $537 | | Total | $1,995 | | (In thousands) | PPP Loan Principal Payments (if not forgiven) | |:---------------|:----------------------------------------------| | Remainder of 2020 | $57 | | 2021 | $770 | | 2022 | $259 | | Total | $1,086 | [11. Lease Obligations](index=24&type=section&id=11.%20Lease%20Obligations) This note outlines the company's operating lease agreements for its facilities in Richmond, California, and Hamburg, Germany, including lease terms and liabilities - The Richmond Lease for headquarters and manufacturing facility expires in May 2022. An amendment in June 2020 resulted in a **$48 thousand** abatement and a **$79 thousand** payment deferral[109](index=109&type=chunk) - The Hamburg, Germany office has a **five-year** operating lease ending in July 2022, with an option to extend for another **five years**[112](index=112&type=chunk) | (In thousands) | Operating Leases | |:---------------|:-----------------| | Remainder of 2020 | $50 | | 2021 | $589 | | 2022 | $232 | | Total lease payments | $871 | | Present value of lease liabilities | $777 | | Lease liabilities, current | $269 | | Lease liabilities, noncurrent | $508 | [12. Capitalization and Equity Structure](index=25&type=section&id=12.%20Capitalization%20and%20Equity%20Structure) This note details the company's capital structure, including the impact of a reverse stock split, common stock and warrant offerings, and a comprehensive overview of outstanding warrants - A **1-for-15** reverse stock split was effected on March 24, 2020, retroactively adjusting all common stock share and per share amounts[116](index=116&type=chunk) - In June 2020, the company sold **1,748 thousand** shares of common stock and warrants to purchase **874 thousand** shares, generating gross proceeds of **$7,890 thousand**[120](index=120&type=chunk) - Warrant liabilities increased significantly due to the issuance of June 2020 warrants and the revaluation of existing warrants, driven by an increase in the common stock market price[130](index=130&type=chunk)[135](index=135&type=chunk)[138](index=138&type=chunk)[148](index=148&type=chunk)[151](index=151&type=chunk) | (In thousands) | Warrants Outstanding (June 30, 2020) | |:---------------|:-------------------------------------| | June 2020 Investor Warrants | 874 | | June 2020 Placement Agent Warrants | 122 | | December 2019 Warrants | 556 | | May 2019 Warrants | 221 | | 2017 Information Agent Warrants | 13 | | 2015 Warrants | 107 | | Total | 1,945 | [13. Stock-based Compensation](index=32&type=section&id=13.%20Stock-based%20Compensation) This note outlines the company's stock-based compensation plans, including stock options and restricted stock units (RSUs), and the associated compensation expense - As of June 30, 2020, **555 thousand** stock options were outstanding with a weighted-average exercise price of **$31.90** and a remaining contractual life of **7.81 years**[159](index=159&type=chunk) - Total unrecognized compensation cost for unvested stock options was **$2,989 thousand**, expected to be recognized over **2.4 years**[162](index=162&type=chunk) - As of June 30, 2020, **147 thousand** RSUs were unvested, with **$752 thousand** of unrecognized compensation expense expected to be recognized over **3.07 years**[165](index=165&type=chunk) | (In thousands) | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2020 | |:---------------|:---------------------------------|:-------------------------------| | Sales and marketing | $98 | $236 | | Research and development | $40 | $113 | | General and administrative | $370 | $746 | | Total | $508 | $1,095 | [14. Income Taxes](index=36&type=section&id=14.%20Income%20Taxes) This note addresses the company's income tax position, specifically regarding unrecognized tax benefits and the open tax examination periods - No material changes to unrecognized tax benefits occurred in the six months ended June 30, 2020, and no significant changes are expected through year-end[171](index=171&type=chunk) - Due to a history of tax losses, all years remain open to tax examination[171](index=171&type=chunk) [15. Commitments and Contingencies](index=36&type=section&id=15.%20Commitments%20and%20Contingencies) This note outlines the company's material contracts, including license agreements and purchase obligations, and addresses potential legal contingencies - The company has license agreements with the Regents of the University of California, requiring **1%** royalty on net sales and minimum annual royalties of **$50 thousand**[173](index=173&type=chunk) - A license agreement related to the Equipois acquisition requires a single-digit royalty on net receipts, subject to a **$50 thousand** annual minimum[174](index=174&type=chunk) - Purchase obligations, primarily for inventory and manufacturing services, totaled **$539 thousand** as of June 30, 2020, expected to be paid within **one year**[175](index=175&type=chunk) - Management believes that the resolution of current legal matters will not have a material adverse effect on the company's financial statements[176](index=176&type=chunk) [16. Net Loss Per Share](index=37&type=section&id=16.%20Net%20Loss%20Per%20Share) This note provides the computation of basic and diluted net loss per share and lists common stock equivalents that were anti-dilutive | (In thousands, except per share amounts) | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2020 | |:-----------------------------------------|:---------------------------------|:-------------------------------| | Net loss applicable to common stockholders | $(11,767) | $(14,301) | | Weighted-average number of shares, basic and diluted | 6,261 | 6,032 | | Net loss per share, basic and diluted | $(1.88) | $(2.37) | | (In thousands) | Common Stock Equivalents (June 30, 2020) | |:---------------|:-----------------------------------------| | Options to purchase common stock | 555 | | Restricted stock units | 147 | | Warrants for common stock | 1,945 | | Total common stock equivalents | 2,647 | [17. Segment Disclosures](index=37&type=section&id=17.%20Segment%20Disclosures) This note provides financial information disaggregated by the company's two reportable segments, EksoHealth and EksoWorks, and by geographic location - The company operates in two segments: EksoHealth (medical devices) and EksoWorks (industrial devices), managed separately due to distinct markets[180](index=180&type=chunk) | (In thousands) | Three Months Ended June 30, 2020 | |:---------------|:---------------------------------| | EksoHealth Revenue | $2,086 | | EksoWorks Revenue | $178 | | Total Revenue | $2,264 | | EksoHealth Gross Profit | $1,226 | | EksoWorks Gross Profit | $33 | | Total Gross Profit | $1,259 | | (In thousands) | Six Months Ended June 30, 2020 | |:---------------|:-------------------------------| | EksoHealth Revenue | $3,276 | | EksoWorks Revenue | $455 | | Total Revenue | $3,731 | | EksoHealth Gross Profit | $1,799 | | EksoWorks Gross Profit | $97 | | Total Gross Profit | $1,896 | - Revenue from the United States for the six months ended June 30, 2020, was **$2,888 thousand**, while all other regions contributed **$843 thousand**[185](index=185&type=chunk) [18. Related Party Transactions](index=39&type=section&id=18.%20Related%20Party%20Transactions) This note discloses transactions with related parties, including consulting services and sales to the China JV - During the six months ended June 30, 2019, Angel Pond Capital LLC, an entity affiliated with a director, provided **$30 thousand** in consulting services[186](index=186&type=chunk) - During the six months ended June 30, 2020, the company sold EksoVest raw material inventory and tooling to the China JV for **$45 thousand**[187](index=187&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, discussing key performance indicators, liquidity, capital resources, and the impact of significant events like the COVID-19 pandemic [Overview](index=41&type=section&id=Overview) This overview describes the company's core business of designing, developing, and selling exoskeleton technology for both medical and industrial applications, highlighting the accelerating commercial opportunity - Ekso Bionics develops exoskeleton technology to augment human strength, endurance, and mobility for medical rehabilitation (EksoNR, EksoUE) and industrial use (EksoVest, EksoZeroG)[194](index=194&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) - The company believes the commercial opportunity for exoskeleton technology is accelerating due to advancements in material technologies, electronic/electrical engineering, control technologies, and sensor/software development[195](index=195&type=chunk) [Second Quarter 2020 Highlights](index=41&type=section&id=Second%20Quarter%202020%20Highlights) This section summarizes key achievements and financial results for the second quarter of 2020, including revenue, financing activities, workforce adjustments, and regulatory milestones, alongside the impact of the COVID-19 pandemic - Reported revenue of **$2.3 million** in Q2 2020[199](index=199&type=chunk) - Sold **1,747,704** shares of common stock and warrants for net proceeds of **$7.1 million**[199](index=199&type=chunk) - Received **$1.1 million** PPP loan proceeds under the CARES Act[199](index=199&type=chunk) - Reduced workforce by **35%** to lower operating expenses[199](index=199&type=chunk) - Received FDA clearance for EksoNR™ robotic exoskeleton for acquired brain injury patients[199](index=199&type=chunk) - Named 'Best Healthcare Robotics Company' in 2020 MedTech Breakthrough Awards Program[199](index=199&type=chunk) - The COVID-19 pandemic negatively impacted demand for exoskeleton products, as rehabilitation facilities shifted priorities and delayed capital expenditures, though clinical need for stroke patients increased[202](index=202&type=chunk) [Critical Accounting Policies and Estimates](index=42&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the importance of management's estimates and assumptions in preparing the condensed consolidated financial statements, acknowledging that actual results may differ - The preparation of financial statements requires management to make estimates and assumptions affecting reported amounts, including revenue recognition, warrant valuation, and inventory[205](index=205&type=chunk)[40](index=40&type=chunk) - Critical accounting policies involve highly uncertain matters where different estimates or changes could materially impact financial statements[206](index=206&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's financial performance for the three and six months ended June 30, 2020, compared to the prior year, explaining the drivers behind changes in revenue, gross profit, operating expenses, and other income/expense | (In thousands) | Q2 2020 | Q2 2019 | Change | % Change | |:---------------|:--------|:--------|:-------|:---------| | Revenue | $2,264 | $3,262 | $(998) | (31)% | | Gross profit | $1,259 | $1,560 | $(301) | (19)% | | Sales and marketing | $1,712 | $3,039 | $(1,327) | (44)% | | Research and development | $452 | $1,499 | $(1,047) | (70)% | | General and administrative | $1,943 | $2,120 | $(177) | (8)% | | Restructuring | $244 | $0 | $244 | n/m | | Loss from operations | $(3,092) | $(5,098) | $2,006 | (39)% | | (Loss) gain on warrant liabilities | $(8,574) | $2,737 | $(11,311) | (413)% |\ | Net loss | $(11,767) | $(3,066) | $(8,701) | 284% | | (In thousands) | H1 2020 | H1 2019 | Change | % Change | |:---------------|:--------|:--------|:-------|:---------| | Revenue | $3,731 | $6,878 | $(3,147) | (46)% | | Gross profit | $1,896 | $3,159 | $(1,263) | (40)% | | Sales and marketing | $4,232 | $5,848 | $(1,616) | (28)% | | Research and development | $1,163 | $2,883 | $(1,720) | (60)% | | General and administrative | $4,130 | $4,438 | $(308) | (7)% | | Restructuring | $244 | $0 | $244 | n/m | | Loss from operations | $(7,873) | $(10,010) | $2,137 | (21)% | | (Loss) gain on warrant liabilities | $(6,055) | $1,615 | $(7,670) | (475)% |\ | Net loss | $(14,301) | $(9,617) | $(4,684) | 49% | - Revenue decreases in both Q2 and H1 2020 were primarily due to decreased device sales volume, driven by the COVID-19 pandemic's impact on customer priorities[209](index=209&type=chunk)[220](index=220&type=chunk) - Operating expenses decreased significantly in both periods (**35%** in Q2, **26%** in H1) due to workforce reductions, lower marketing/trade show activities, and completion of clinical trials[211](index=211&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk)[224](index=224&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk) - A substantial loss on revaluation of warrant liabilities (**$8.6 million** in Q2, **$6.1 million** in H1) was recorded, primarily due to increases in the common stock market price[216](index=216&type=chunk)[229](index=229&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=47&type=section&id=Financial%20Condition,%20Liquidity%20and%20Capital%20Resources) This section discusses the company's financial health, its ability to meet short-term obligations, and its strategies for funding future operations, including actions taken to address going concern issues and a summary of cash flow activities - As of June 30, 2020, the company had an accumulated deficit of **$197.6 million** and used **$5.7 million** cash in operations during the six months ended June 30, 2020[232](index=232&type=chunk) - Streamlined operations and reduced workforce by **35%**[234](index=234&type=chunk) - Conducted a registered direct offering for **$7.1 million** net proceeds[234](index=234&type=chunk) - Received FDA clearance for ABI, increasing product value proposition[235](index=235&type=chunk) - Received **$0.8 million** from warrant exercises in Q2 2020 and **$2.4 million** post-quarter end[235](index=235&type=chunk) - Unrestricted cash was estimated at **$11.5 million** as of June 30, 2020, after considering a **$1.8 million** restricted cash balance due to a secured term loan covenant[236](index=236&type=chunk) - The company believes it has sufficient cash to fund operations beyond **one year** but may require additional financing through equity offerings, debt, or collaborations[236](index=236&type=chunk)[237](index=237&type=chunk) | (In thousands) | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | |:---------------|:-------------------------------|:-------------------------------| | Net cash used in operating activities | $(5,745) | $(9,708) | | Net cash provided by financing activities | $8,160 | $15,368 | | Net increase in cash | $2,388 | $5,607 | | Cash at the end of the period | $13,260 | $13,262 | | (In thousands) | Total | Less than One Year | 1-3 Years | 3-5 Years | After 5 Years | |:---------------|:------|:-------------------|:----------|:----------|:--------------| | Notes payable, principal and interest | $3,142 | $2,497 | $645 | $0 | $0 | | Facility operating leases | $777 | $269 | $508 | $0 | $0 | | Purchase obligations | $539 | $539 | $0 | $0 | $0 | | Financing lease | $3 | $3 | $0 | $0 | $0 | | Total | $4,461 | $3,308 | $1,153 | $0 | $0 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section addresses the company's exposure to market risks, specifically inflation and foreign exchange rate fluctuations - The company does not believe inflation has had a material effect on its business, but inability to offset higher costs could be harmful[247](index=247&type=chunk) - The company is exposed to exchange rate risk due to foreign operations in Germany and Singapore, but does not use foreign currency hedging agreements[248](index=248&type=chunk)[41](index=41&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) This section reports on the effectiveness of the company's disclosure controls and procedures and confirms no material changes in internal control over financial reporting - Management concluded that disclosure controls and procedures were effective as of June 30, 2020, ensuring timely and accurate reporting[250](index=250&type=chunk) - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[252](index=252&type=chunk) [PART II. OTHER INFORMATION](index=51&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section presents legal proceedings, risk factors, exhibits, and required signatures for the quarterly report [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the company is not currently involved in any material legal proceedings - The company is not subject to any pending legal proceedings, nor are any presently threatened, that would have a material adverse impact on its properties, results of operations, or financial condition[254](index=254&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) This section updates and supplements previously disclosed risk factors, focusing on the adverse impacts of the China JV termination and the ongoing COVID-19 pandemic - The Committee on Foreign Investment in the United States (CFIUS) required the termination of the company's China JV due to national security concerns, which will adversely impact global expansion, particularly in China[256](index=256&type=chunk)[259](index=259&type=chunk) - The COVID-19 pandemic has negatively impacted demand, caused supply chain disruptions, led to workforce reductions, and created economic uncertainty, potentially having a material adverse effect on financial condition and operations[261](index=261&type=chunk)[262](index=262&type=chunk)[264](index=264&type=chunk)[265](index=265&type=chunk) - The termination of the China JV is not expected to materially impact operations for the remainder of 2020, but failure to find alternative manufacturing and distribution sources could adversely affect future financial results[260](index=260&type=chunk) [Item 6. Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including certifications and financial statements in XBRL format - Second Amendment to Loan and Security Agreement (Exhibit 10.1)[267](index=267&type=chunk) - Certifications of Chief Executive Officer and Chief Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2)[268](index=268&type=chunk) - Financial statements formatted in Extensible Business Reporting Language (XBRL) (Exhibit 101)[269](index=269&type=chunk) [Signatures](index=54&type=section&id=Signatures) This section contains the required signatures of the company's authorized officers, confirming the submission of the Quarterly Report - The report is signed by Jack Peurach, President and Chief Executive Officer, and John F. Glenn, Chief Financial Officer, on July 30, 2020[275](index=275&type=chunk)

Start Time: 16:30 January 1, 0000 5:00 PM ET Ekso Bionics Holdings, Inc. (NASDAQ:EKSO) Q2 2020 Earnings Conference Call July 30, 2020, 16:30 PM ET Company Participants Jack Peurach - President and CEO Jack Glenn - CFO Bill Shaw - Chief Commercial Officer David Carey - IR, Lazar Partners Ltd. Conference Call Participants Swayampakula Ramakanth - H.C. Wainwright Nathan Weinstein - Aegis Capital Operator Greetings, and welcome to Ekso Bionics Second Quarter 2020 Financial Results Call. At this time, all partic ...

Ekso Bionics Holdings, Inc. (NASDAQ:EKSO) Q1 2020 Results Earnings Conference Call April 30, 2020 4:30 PM ET Company Participants David Carey - Investor Relations, Lazar Partners Ltd. Jack Peurach - President and Chief Executive Officer Bill Shaw - Chief Commercial Officer Jack Glenn - Chief Financial Officer Conference Call Participants Sean Lee - H.C. Wainwright & Co. Nathan Weinstein - Aegis Capital Corp. Operator Greetings and welcome to the Ekso Bionics First Quarter 2020 Financial Results Conference C ...

PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Ekso Bionics' unaudited condensed consolidated financial statements are presented, highlighting liquidity challenges and substantial doubt regarding its going concern status [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased from **$21.9 million** to **$16.9 million**, driven by reduced cash and receivables, while total liabilities and stockholders' equity also declined Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2020 (unaudited) | December 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $8,516 | $10,872 | | Accounts receivable, net | $2,658 | $5,208 | | Total current assets | $14,062 | $18,807 | | **Total assets** | **$16,944** | **$21,915** | | **Liabilities & Equity** | | | | Total current liabilities | $7,550 | $7,832 | | Warrant liabilities | $1,788 | $4,307 | | **Total liabilities** | **$11,716** | **$15,118** | | **Total stockholders' equity** | **$5,228** | **$6,797** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q1 2020 revenue significantly decreased to **$1.5 million**, resulting in a **$2.5 million** net loss, an improvement from Q1 2019 due to a gain on warrant revaluation Q1 2020 vs. Q1 2019 Statement of Operations (in thousands, except per share) | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | Revenue | $1,468 | $3,616 | | Gross Profit | $637 | $1,599 | | Total Operating Expenses | $5,418 | $6,511 | | Loss from Operations | $(4,781) | $(4,912) | | Gain (loss) on revaluation of warrant liabilities | $2,519 | $(1,122) | | **Net Loss** | **$(2,534)** | **$(6,551)** | | Basic and diluted net loss per share | $(0.44) | $(1.51) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved to **$1.7 million** in Q1 2020, with the cash balance decreasing by **$2.4 million** to **$8.5 million** by quarter-end Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,722) | $(5,177) | | Net cash used in investing activities | $0 | $(7) | | Net cash (used in) provided by financing activities | $(589) | $6,769 | | **Net increase (decrease) in cash** | **$(2,356)** | **$1,581** | | Cash at end of period | $8,516 | $9,236 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes provide critical context, addressing liquidity, going concern uncertainty, China JV status, debt obligations, and subsequent events like a PPP loan and loan amendment - The company's cash on hand is not sufficient to fund operations for the next twelve months, which raises **substantial doubt** about its ability to continue as a going concern. As of March 31, **2020**, cash was **$8.5 million**, but restricted cash requirements reduced effective unrestricted cash to an estimated **$5.0 million**[31](index=31&type=chunk)[205](index=205&type=chunk) - On March 24, **2020**, the company effected a 1-for-15 reverse stock split of its common stock to regain compliance with Nasdaq's minimum bid price requirement[32](index=32&type=chunk)[120](index=120&type=chunk) - The company's China joint venture is under review by the Committee on Foreign Investment in the United States (CFIUS), which has imposed interim measures temporarily suspending the company's contributions and integration activities for the JV[99](index=99&type=chunk) - Subsequent to the quarter end, the company received a **$1.1 million** unsecured loan under the Paycheck Protection Program (PPP) and amended its term loan to **defer principal payments** for three months[173](index=173&type=chunk)[174](index=174&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a **59%** Q1 **2020** revenue decline due to COVID-19, a **17%** operating expense reduction, and reiterates the need for significant additional financing to address going concern issues Q1 2020 vs Q1 2019 Results of Operations (in thousands) | Metric | Q1 2020 | Q1 2019 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $1,468 | $3,616 | $(2,148) | (59)% | | Gross Profit | $637 | $1,599 | $(962) | (60)% | | Total Operating Expenses | $5,418 | $6,511 | $(1,093) | (17)% | | Net Loss | $(2,534) | $(6,551) | $4,017 | (61)% | - The decrease in revenue was primarily driven by the impact of the COVID-19 pandemic, as customers shifted priorities and delayed orders that are typically booked late in the quarter[193](index=193&type=chunk) - The reduction in operating expenses reflects company-wide initiatives implemented in the prior year and improved operational efficiencies, including lower headcount and reduced marketing and R&D costs[197](index=197&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk) - Management states that based on current cash resources, the company has sufficient funds to operate until the end of the fourth quarter of **2020**, but will require significant additional financing to continue beyond that[208](index=208&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks, including foreign currency exchange rate fluctuations from international operations, but inflation has not had a material effect - The company is exposed to exchange rate risk due to its business in foreign countries, including subsidiaries in Germany and Singapore[220](index=220&type=chunk) - Management does not believe inflation has had a material effect on the business, but notes that an inability to offset significant inflationary pressures with price increases could harm future results[219](index=219&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, **2020**, with no material changes to internal control over financial reporting - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of the end of the period[222](index=222&type=chunk) - No changes occurred in the company's internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls[225](index=225&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) The company is not subject to any pending legal proceedings that would materially impact its financial condition or results of operations - As of the filing date, the company is not the subject of any pending legal proceedings, and management is not aware of any threatened proceedings that would have a material impact[227](index=227&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) Material risk factors include COVID-19 impacts, potential China JV restrictions from CFIUS review, and risks associated with the recent reverse stock split - The COVID-19 outbreak could **materially adversely affect** financial results due to business disruptions, supply chain delays, reduced customer demand, and potential impacts on the company's workforce and ability to raise capital[229](index=229&type=chunk)[230](index=230&type=chunk) - The company's China JV is under review by CFIUS, which has imposed interim measures suspending contributions. An adverse outcome could restrict technology transfer or compel the company to abandon the JV[237](index=237&type=chunk)[238](index=238&type=chunk) - The 1-for-15 reverse stock split effected on March 24, **2020**, has **decreased the liquidity** of the common stock. While the company regained compliance with Nasdaq's minimum bid price rule, there is **no assurance it can maintain compliance** in the future[241](index=241&type=chunk)[243](index=243&type=chunk)[244](index=244&type=chunk) [Other Information](index=47&type=section&id=Item%205.%20Other%20Information) The company amended its loan agreement, **deferring principal payments** for three months and revising the liquidity covenant to a **minimum cash balance** requirement - The company amended its loan agreement to **defer principal payments** for three months starting in May **2020**, with interest-only payments required during this period[245](index=245&type=chunk) - The loan's liquidity covenant was changed from a 'three-months of monthly cash burn' requirement to a **minimum cash balance** equal to the outstanding loan amount[245](index=245&type=chunk) [Exhibits](index=48&type=section&id=Item%206.%20Exhibits) Exhibits filed with Form 10-Q include the second amendment to the loan agreement and CEO/CFO certifications - Key exhibits filed include the Second Amendment to the Loan and Security Agreement with Western Alliance Bank and certifications from the CEO and CFO[250](index=250&type=chunk)[249](index=249&type=chunk)[251](index=251&type=chunk)

Ekso Bionics Holdings, Inc. (NASDAQ:EKSO) Q4 2019 Earnings Conference Call February 27, 2020 4:30 PM ET Company Participants Matt Steinberg - Lazar Partners Jack Peurach - President, CEO & Director William Shaw - Chief Commercial Officer John Glenn - CFO & Secretary Conference Call Participants Dennis Pak - Cantor Fitzgerald Swayampakula Ramakanth - H.C. Wainwright & Co. Nathan Weinstein - Aegis Capital Corporation Operator Greetings and welcome to the Ekso Bionics Fourth Quarter 2019 Financial Results Conf ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Title of each class Trading Symbol Name of each exchange on which registered Common Stock, $0.001 par value EKSO Nasdaq Stock Market LLC (Nasdaq Capital Market) WASHINGTON, D.C. 20549 FORM 10-K ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 001-37854 Ekso Bionics H ...

Financial Data and Key Metrics Changes - Revenues for Q3 2019 increased by 30% year-over-year to $3.3 million, reflecting strong performance in EksoHealth and improved sales in Europe and APAC [8][33] - Gross margins improved to a record 53%, up from 42% in the same period last year, attributed to higher average selling prices and lower production costs [9][36] - Operating expenses decreased by 23% to $5.5 million compared to $7.2 million in Q3 2018, reflecting company-wide cost optimization initiatives [9][37] - Net income for the quarter was $0.2 million, compared to a net loss of $7 million in Q3 2018 [39] Business Segment Data and Key Metrics Changes - EksoHealth revenue increased by over 70% compared to Q3 2018, driven by higher sales to U.S. and European customers [12] - Ekso Works revenue decreased to $320,000 from $790,000 in the same period last year, primarily due to slower customer purchasing decisions [35][27] Market Data and Key Metrics Changes - The company identified a post-acute market opportunity of approximately $500 million to $750 million annually, focusing on Integrated Delivery Networks (IDNs) and network operators [16][91] - The company has established a presence in about 130 to 150 centers in the U.S., primarily in the inpatient rehabilitation facility segment [76] Company Strategy and Development Direction - The company aims to solidify its leadership in robotic neuro rehabilitation with the introduction of the EksoNR and EksoUE devices, enhancing its product portfolio [18][100] - The strategy includes expanding customer awareness and supporting channel partners to shorten the sales cycle, particularly in the EMEA and APAC regions [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the traction in the German market and the potential for growth in the EMEA region [11] - The company is focused on increasing sales to existing customers and expanding its customer pipeline in both medical and industrial segments [100] Other Important Information - The company is transitioning production to a joint venture in China, with expectations for industrial shipments to commence in Q1 2020 [30][31] - The company anticipates a reduction in product costs by approximately 20% annually, with further improvements expected in 2020 [83] Q&A Session Summary Question: What drove the increase in net placements this quarter? - Management noted that changes in the go-to-market strategy in Europe and a focus on IDNs in the U.S. contributed to the increase in net placements [44][45] Question: How does the pipeline of centers look today compared to a year ago? - The pipeline continues to build with individual centers and network operators, with new products like EksoNR positively impacting engagement [46][47] Question: What is the expected growth rate for customers with multiple rehab units? - Currently, 30% of customers have multiple units, and this number is trending upward as utilization increases [49][50] Question: Can you discuss salesforce expansion plans for 2019 and 2020? - The company is strategically expanding its salesforce, focusing on experienced personnel who understand network operators [54][55] Question: What is the status of the joint venture and expected revenue contribution? - The joint venture is progressing well, with expected benefits in cost of goods and working capital in 2020, although revenue from royalties will take longer to materialize [56][57] Question: What is driving the improvement in gross margins? - Improvements in average selling prices and production costs are driving gross margin increases, with expectations for continued growth [58][59]