March 8, 2018

ReWalk secures $20M investment after $24.7M annual loss

Courtesy
ReWalk's prototype for a system to help stroke patients walk.

Marlborough-headquartered ReWalk Robotics recorded a $24.7-million loss in 2017, but scored a $20-million investment from a Chinese group this week.

Despite the net loss, which was actually an improvement from 2016's net loss of $32.5 million, the company reported a record $7.8 million in revenue, an increase of 32 percent from 2016.

As of the end of 2017, the company had $14.6 million in cash on its balance sheet.

The company was able to reduce loss by cutting its operating expenses by nearly $6 million to $25.1 million.

Fourth quarter revenue of $1.6 million was down slightly from the same period in 2016, but the company placed just 23 ReWalk systems during the quarter, compared to 39 in 2016.

For the year, ReWalk placed 107 systems, also a decline from the full year 2016 figure of 119.

Gross margin, however, improved to 40 percent for the year, compared to 13 percent in 2016.

Simultaneous to the earnings report, the company announced a $20-million investment in exchange for 16 million of the company's shares at $1.25 a piece to Hong Kong-based Timwell Corp. Limited.

Per the agreement, ReWalk and Timwell, via its affiliates, will form a joint venture in China to develop, manufacture and market the company's exoskeleton device - the Restore soft-suit - in China.

The focus will first be on the use of the systems in a rehabilitation setting for stroke patients, followed by commercialization of the company's spinal cord injury devices for community and rehabilitation use.

Timwell's investment will come in three parts: a first $5 million placed in escrow to be released upon shareholder approval, a second $10-million payment upon the formation of the joint venture in China and a third $5 million to be paid no later than April 1, 2019.

Timwell is granted at least one seat on ReWalk's board of directors upon closing of the first payment.

In a statement, ReWalk CEO Larry Jasinski said the expansion to China brings access to 11 million stroke survivors and 2.4 million new stroke patients each year.

"This agreement also underscores Timwell's belief in the strength of our Restore technology to address the mobility and rehabilitation needs of the stroke community," Jasinski said. "We believe the unique Restore technology has the potential to revolutionize the use of and cost structure for exoskeletons worldwide."

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