Ekso Bionics(US:EKSO)2024-10-28 20:07PART I. FINANCIAL INFORMATION Financial Statements The unaudited statements show an $8.3 million cash balance, a $7.9 million net loss for the nine months ended, and a going concern warning Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Items | Sep 30, 2024 (unaudited) | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and restricted cash | $8,292 | $8,638 | | Total current assets | $21,066 | $20,208 | | Total assets | $29,209 | $28,918 | | Total current liabilities | $7,506 | $8,117 | | Total liabilities | $14,339 | $16,312 | | Total stockholders' equity | $14,870 | $12,606 | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $4,129 | $4,607 | $12,835 | $13,432 | | Gross Profit | $2,209 | $2,456 | $6,797 | $6,710 | | Loss from operations | ($2,639) | ($2,931) | ($8,230) | ($11,663) | | Net loss | ($2,072) | ($3,365) | ($7,917) | ($11,984) | | Net loss per share | ($0.10) | ($0.24) | ($0.42) | ($0.88) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($8,413) | ($10,470) | | Net cash used in investing activities | ($16) | ($114) | | Net cash provided by financing activities | $8,083 | $0 | | Net decrease in cash | ($346) | ($10,588) | | Cash at end of period | $8,292 | $9,937 | - The company has a history of significant operating losses and negative cash flows, raising substantial doubt about its ability to continue as a going concern for the next year1820 - As of September 30, 2024, the accumulated deficit was $247.1 million1820 Note 6. Revenue Revenue of $12.8 million for the nine months was driven by the EksoHealth segment, with a backlog of $3.4 million Revenue by Major Source - Nine Months Ended Sep 30, 2024 (in thousands) | Revenue Source | EksoHealth | EksoWorks | Total | | :--- | :--- | :--- | :--- | | Device revenue | $9,337 | $351 | $9,688 | | Service and support | $2,292 | - | $2,292 | | Subscriptions | $413 | - | $413 | | Parts and other | $388 | $54 | $442 | | Total | $12,430 | $405 | $12,835 | - As of September 30, 2024, the company had deferred revenue of $4.0 million, primarily from unearned revenue on extended support and maintenance contracts5960 - The company has a non-cancellable backlog of $3.4 million from unfulfilled customer orders and other services, expected to be recognized in 2024 and 202562 Note 9. Notes Payable, net The company holds two major debt instruments, including a $2.0 million loan with a restrictive cash covenant - The BoC Term Loan has a liquidity covenant requiring the company to maintain cash equal to the outstanding balance of $2.0 million in accounts with the lender79 - In connection with the HMC Acquisition, the company issued a $5.0 million unsecured, subordinated promissory note to Parker Hannifin, payable in quarterly installments83 Note 11. Capitalization and Equity Structure The company raised capital through two equity offerings in 2024 and has a significant number of warrants outstanding - In September 2024, the company completed an underwritten public offering, raising net proceeds of approximately $5.0 million through the sale of common stock and various warrants96210 - In January 2024, a registered direct offering of common stock raised net proceeds of approximately $3.9 million97211 - As of September 30, 2024, the company had warrants outstanding to purchase approximately 15.6 million shares of common stock100102103104 Note 16. Segment Disclosures The EksoHealth segment dominates revenue, with the Americas being the largest geographic market Segment Gross Profit - Nine Months Ended Sep 30, 2024 (in thousands) | Segment | Revenue | Cost of Revenue | Gross Profit | | :--- | :--- | :--- | :--- | | EksoHealth | $12,430 | $5,685 | $6,745 | | EksoWorks | $405 | $353 | $52 | | Total | $12,835 | $6,038 | $6,797 | Revenue by Geographic Region - Nine Months Ended Sep 30, 2024 (in thousands) | Region | Revenue 2024 | Revenue 2023 | | :--- | :--- | :--- | | Americas | $7,143 | $9,890 | | EMEA | $4,063 | $2,664 | | APAC | $1,629 | $878 | | Total | $12,835 | $13,432 | Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses lower Q3 revenue, improved net loss, and a strategic focus on the Personal Health line - The company's Personal Health business line is expected to have a higher growth rate than the Enterprise Health line, driven by recent CMS approval for Medicare reimbursement169172 Results of Operations Comparison - Q3 2024 vs Q3 2023 (in thousands) | Metric | Q3 2024 | Q3 2023 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $4,129 | $4,607 | ($478) | (10)% | | Gross Profit | $2,209 | $2,456 | ($247) | (10)% | | Total Operating Expenses | $4,848 | $5,387 | ($539) | (10)% | | Net Loss | ($2,072) | ($3,365) | $1,293 | (38)% | - Operating expenses decreased across the board in Q3 2024 vs Q3 2023: Sales and marketing down 14%, and R&D down 33%, due to lower headcount and consultant use191 - The company's unrestricted cash was approximately $6.3 million as of September 30, 2024, and management states that substantial doubt exists about meeting cash needs208219 Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes in its market risk profile during the first nine months of 2024 - No material changes in market risk were identified for the nine months ended September 30, 2024224 Controls and Procedures Management concluded that disclosure controls and internal controls over financial reporting were effective - The principal executive and financial officers concluded that the company's disclosure controls and procedures were effective as of September 30, 2024226 - No changes occurred in the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control228 PART II. OTHER INFORMATION Legal Proceedings The company believes current legal proceedings will not have a material adverse effect on its financials - Based on current knowledge, any reasonably possible losses from legal proceedings are not expected to have a material adverse effect on the business230 Risk Factors Key risks include market competition, dependence on third-party reimbursement, and potential shareholder dilution - The company faces intense competition and acknowledges that its market size assumptions may be inaccurate, which could adversely affect business development232234 - Sales of Personal Health products are highly dependent on reimbursement from third-party payers like Medicare (CMS), and unfavorable changes could diminish sales236238 - The company is currently seeking CE Certificates of Conformity under the EU MDR for its Ekso Indego devices, which cannot be sold in the EU until approved242 - Shareholders face potential dilution from future equity issuances, which the company expects to pursue to fund operations243245 Other Information No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the third quarter - No director or officer adopted or terminated a Rule 10b5-1 trading plan during the third quarter of 2024246 Exhibits This section lists filed exhibits, including warrant forms, equity plans, and officer certifications - The report includes filed exhibits such as forms of warrants, the company's equity incentive plan, CEO/CFO certifications, and iXBRL data248