ReWalk(RWLK) - 2021 Q1 - Quarterly Report

Financial Performance - The company's total revenue in Q1 2021 was $1.3 million, a 62.5% increase from $0.8 million in Q1 2020[124] - Revenues for the three months ended March 31, 2021, were $1.316 million, a 73% increase from $760 thousand in the same period of 2020[134] - Gross profit for the three months ended March 31, 2021, was $707 thousand, representing 54% of revenue, compared to 49% in the same period of 2020[135] - The company incurred a consolidated net loss of $3.062 million for the three months ended March 31, 2021, compared to a net loss of $3.840 million in 2020[148] Expenses and Cost Management - Operating expenses decreased to $3.7 million in Q1 2021, compared to $4 million in Q1 2020[124] - Research and development expenses decreased by $190 thousand, or 19%, to $795 thousand for the three months ended March 31, 2021, compared to $985 thousand in 2020[137] - Sales and marketing expenses remained flat at $1.671 million for the three months ended March 31, 2021, with a slight decrease of $10 thousand[138] - General and administrative expenses decreased by $47 thousand, or 4%, to $1.262 million for the three months ended March 31, 2021, compared to $1.309 million in 2020[140] - Financial expenses (income), net, decreased by $250 thousand, or 101%, to $(4) thousand for the three months ended March 31, 2021, compared to $246 thousand in 2020[143] Cash and Liquidity - As of March 31, 2021, the company had a strong balance sheet with $67.4 million in cash[124] - Cash and cash equivalents as of March 31, 2021, totaled $67.4 million, with a negative operating cash flow of $3.2 million for the same period[148] - Net cash used in operating activities decreased by $1.2 million or 27% to $(3,173) thousand for the three months ended March 31, 2021, compared to $(4,341) thousand in the same period of 2020[180] - Net cash provided by financing activities increased by $45.5 million to $50,236 thousand for the three months ended March 31, 2021, compared to $4,690 thousand in the same period of 2020[181] Market and Product Developments - The company placed 24 ReWalk Personal 6.0 units under a VA policy for veterans with spinal cord injuries as of March 31, 2021[120] - A new reimbursement code for ReWalk Personal 6.0 was issued in July 2020, effective October 1, 2020, which may lead to broader coverage by CMS[121] - The company has entered into a contract with BKK Mobile Oil health insurance to supply ReWalk's Personal 6.0 System in Germany[124] - The company continues to pursue reimbursement paths and fundraising efforts to support its products in the market[120] - The company expects future growth to be driven by sales of the ReWalk Personal device and broader commercial coverage policies with third-party payors[134] Operational Challenges - The COVID-19 pandemic has significantly disrupted the company's operations, affecting customer engagement and product trials[126] - The company has implemented remote working procedures and cost reduction measures in response to the pandemic[127] Financing and Investment Activities - The Company entered into warrant exercise agreements with institutional investors, issuing new warrants to purchase up to 480,000 ordinary shares at an exercise price of $7.50 per share[155] - The Company repaid the remaining loan principal amount to Kreos, resulting in an outstanding principal amount of zero as of December 31, 2020[156] - The Company received confirmation of its PPP Note forgiveness on November 6, 2020, for an unsecured loan of $392 thousand[157] - The Company completed a follow-on public offering on November 20, 2018, raising total gross proceeds of $13.1 million[160] - The Company issued and sold 833,334 ordinary shares at $6.00 per share and warrants to purchase up to 416,667 ordinary shares in a private placement on June 12, 2019[165] - The Company closed a public offering on February 10, 2020, issuing 5,600,000 common and pre-funded units at a price of $1.25 and $1.249 per unit, respectively[166] - The Company entered into a purchase agreement on February 19, 2021, for the issuance and sale of 10,921,502 ordinary shares at $3.6625 per share, along with warrants for 5,460,751 ordinary shares[169] - As of September 30, 2020, the Company had sold 302,092 ordinary shares under the ATM Offering Program for net proceeds of $14.5 million[173] - The Company is subject to restrictions on using the ATM Offering Program, limiting its ability to access capital efficiently[174] - The company entered into an investment agreement with Timwell Corporation for a total of $20 million, issuing 640,000 shares at $1.25 per share[175] - The first tranche of $5 million for 160,000 shares closed on May 15, 2018, with net proceeds of approximately $4.3 million after expenses[175] - The second and third tranches totaling $15 million were not completed due to Timwell's breaches of the investment agreement[176] Obligations and Risks - Total contractual obligations as of March 31, 2021, amounted to $4,950 thousand, with $1,150 thousand due within one year[183] - The collaboration agreement with Harvard has a remaining term of approximately 1.91 years, requiring quarterly funding installments[184] - The company has no off-balance sheet arrangements or guarantees of third-party obligations as of March 31, 2021[187] - There have been no material changes to the company's market risk during the first quarter of 2021[188] Strategic Initiatives - The company continues to evaluate potential relationships to penetrate the Chinese market for products designed for stroke patients[178]