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Which direction?
Revaluation of warrants was $8.6mm and occurred because of sp appreciation. This would have erased $1.10/sh of the total loss had it not been necessary to revalue. It was accretive when the sp was dropping. It is my hope that they have to continue to take charges for warrant revaluations.??
Skept,
While I agree with you that most posters on ST have no clue about EKSO there is no way IMHO that as a group they could represent anything but a fraction of the 150 million shares (20+ times float) traded the last two days. Which also means to me that almost all the owners will own shares above $5/sh.
In addition, part of the excitement comes from a possible government (VA) contract which I would expect to be substantial if true. As you remember, EKSO has already qualified for a GSA with $5MM contract several months ago. What happens to the stock price if this news drops?
Lastly, whether or not it is a new product or an old product used for a new purpose really doesn’t matter and amounts to splitting hairs. The fact is that the addressable market for EKSO just got a whole lot bigger that is not currently accessible to anyone else (as far as I know)... sales or no sales.
They are great when it comes to PR’ing bad news. Next one will be an offering.
Yes, but rehab centers has been at 270+ for more than a year.
I’ll take the extension any day in this market environment.
Hopefully there should be an update on China JV by end of April. This gives plenty of time for the perceived benefits of the JV and the additional $5MM at $1.30/sh to sink in to the investor thought process.
How you feeling today?
Hope that you held.
If you are talking about the restricted stock awards and options that the EC received recently then from what I can gather they are purely part of their compensation package that vests 1/8th of the total stock/option award amount every 3 months meaning they will be part of their compensation over the next two years.
What I find interesting is the restricted stock awards offered at $0.45 which is above current market value for the shares. Usually these are offered at no consideration. Options on the other hand usually have an excise price.
The sp doesn't have to be anything with an extension until September 2020.
https://fintel.io/so/us/ekso/armistice-capital-llc
So does this one.
incidentally most of the reporting periods are only through 9/30/19 and Armistice Capital's purchase doesn't show up at all.
The Ekso could have been supplied from US or other distributor outside the China JV. If it came from the China JV then wouldn’t an 8K come out regarding purchase of the second $5MM at $1.30/sh?
Did you mean May 20 instead of Mar 20 to announce intent to vote on R/S at annual shareholder meeting?
It would seem to me the best route is to get the extension in March with intent to vote on R/S in June. No need to move meeting date to regain compliance.
This, in my view, gives them the next 150 days to languish under a buck before they must be above $1/sh.
A few observations:
1) Rwlk didn’t wait the first full 180 days to seek shareholder approval it was more like 150 days.
2) Rwlk was in violation of more than the minimum bid standard and had to conduct offerings of shares and warrants to become compliant with Rule 5550(b) as well.
3) I don’t know if the shareholder meeting was moved to accommodate the R/S vote, but it doesn’t look like they could have waited much longer anyway considering they were in violation of more than one compliance rule.
What could this mean for EKSO?
1) being only in violation of Rule 5500(b) their chances of receiving an extension to 9/2020 are probably good if they include the intent to vote on R/S at annual shareholder meeting in 6/2020.
2) if they regain compliance before 6/2020 then shareholders can simply vote down the R/S... if not, then the vote can be held and the R/S ratio set accordingly.
3) there will be plenty of time to enact the R/S after shareholder meeting so no risk of losing their Nasdaq listing over timing
Rewalk R/S Timeline:
10/26/18 received listing compliance notice from Nasdaq claiming that the company was in violation of Nasdaq rule 5550(a)(2) [share price above $1/sh standard] and Nasdaq rule 5550(b) [$35M value of market securities or $2.5M shareholder equity and $500K net income standard].
03/27/19 Shareholders vote for R/S at annual shareholder meeting.
03/29/19 1:25 R/S announced.
04/01/19 1:25 R/S enacted.
04/12/19 completion of 10 consecutive days with share price above $1/sh.
04/15/19 regain listing compliance with Nasdaq rule 5550(a)(2).
I fear that the short sellers are receiving cover shares from the offering(s).
Nothing ventured nothing gained.
It was the strategy to quickly grow the business. Now they must figure out another way.
The only thing stupid would be if they continue to use their resources to progress it. Of course, if they abandon the deal they’ll have to cough up $5MM.
All I know is that EKSO is blowing up Twitter lately. Probably means nothing for sales, but at least they are getting the information out there.
Without a PR around new contracts or an insider buy, I seriously doubt the share price stabilizes and moves up. Shorts are in control and have effectively removed a source of capital (share issuance) that could be used to continue to run the business as a going concern.
Either they have deep pocket sponsors who will step up and provide the necessary capital or we are going down the path RWLK just took with reverse split and the share issuance. I have to believe that their is interest in the technology, just don’t know what that means for existing shareholders.
Major Takeaways from ER:
1) Product adoption and sales are occurring slower than the market and investors expect and maybe slower than the management team expected.
2) Operational and internal cost performance are improving as evident by both increased gross margins and lower overall cash burn (including warrant revaluation)
3) Increased gross margins from 45% to 48% QoQ are internally driven efforts and not from the China JV. If products had shipped from China then the second share traunch would be completed and EKSO would have an additional $5MM in the bank. ~$18MM total.
4) EksoUE product launch was viewed as a “hail marry” by investors as EKSO is trying to find other lines of business revenue as current product suite fails to gain traction.
5) No PRs because very little to PR based on low industrial sales and average rehabilitation sales observations. Plus, EKSO is getting the message out on GT adoption through social media.
Company Priorities:
1) Gain regulatory approval and close China JV agreement to further drive down cost of production, increase gross margins, increase revenue (royalties from sales) and acquire $5MM in additional cash from JV partner (at current burn rates, this could extend cash for another two quarters). This is the one thing that could completely change the company’s fortunes.
2) Get your sales team organized and let Bill Shaw do what you are paying him to do (if you are not already).
3) Continue to focus on product adoption and market penetration selling the value of your products until the day per unit production cost can be driven down and prices made more reasonable without sacrificing gross margins and they sell themselves (I’ll buy an Ekso vest).
4) Execute strategy and grow your markets. This goes without saying, but at this point there is only one quarter (or so) left were things can remain status quo.
Opportunities and Risks:
1) Unspent corporate budgets may open up towards year end leading to purchases
2) Lowering of lending rates could stimulate economy bringing additional opportunity
3) Additional stock offerings at a reduced share price and possible r/s to prevent delisting
4) Company sold, taken private or partially sold to private entity (new investor). Keep in mind that Puissance owns 20MM shares and didn’t buy them at $1/sh to lose money.
I don’t see BK as a significant risk at this point in time.
GLTA
Good assessment.
The stock price shouldn’t be here without a reason unless the whole run to $2.50 was China JV driven alone.
$10 MM raise likely for this product launch... really only logical explanation with ongoing ATM. No idea about the addressable market, but my guess is that the concept comes from their work in the rehabilitation space and Eksovest product.
Hoping for at least $4.5MM top line revenue in Q2. Something less would mean that the new product is a bit of a Hail Mary while their other products fail to gain traction... IMHO.
Update on China JV would be nice as well. Seems that this is their best chance to bring down costs while preserving gross margins of 45%.
Lots of information on trials out their. Just needs to translate into sales.
Thanks Rhet, Excellent post. Thanks for sharing.
I think Restore will find it difficult to crack the rehabilitation market. EKSO already owns much of the IP designed for rehabilitation and has already included it in the GT. I see Restore as an in-the-home product priced appropriately for the masses and more focused on mobility.
I don’t believe that is correct. The price quoted is the strike price. The options are worthless below the strike price and have value when the stock price is above the strike price.
I agree that the options are intended to encourage Mr. Shaw to get the common stock price higher than his option strike price.
Was it a buy? The filing looked more like compensatory stock options that were granted at no cost.
Would have to agree on China JV second traunch. Probably the reason the ralley stalled at $2.50.
$19MM should get them into next year unless cash burn increases with production ramp up. There certainly has been enough pilot activity even though EKSO doesn’t like to PR it.
Announced and closed all within a week. Seems pretty quick to me. Should mean there was plenty of subscription to the offering.
...And Why is also important.
I hope that some sort of guidance comes with the offering or at least an understanding why ATM wasn’t sufficient.
Porsche and Packer,
Thanks for the response and insights. I think EKSO is making good progress and will soon have enough sales to really blow away the numbers. This recent Kindered announcement being the type that could get a lot of units out the door plus one other undisclosed sale per Q1 ER.
Technically, I think the SP reversed trend yesterday. Pivot point fell nicely onto a fib ratio, SP held at the 200-d MA and topped it off with a bullish engulfing formation as bulls clearly took over end of day. Just need some follow through to break $2.5 resistance.
Well, since this board is hopping after the ER I guess that I will start a thread on the high points:
1) Top line revenue up, but GT unit sells down so a larger portion of rentals must have been converted to sales?
2) industrial product sales up, but based on 185 units sold, 52 must have been vests (down from Q4) and 133 mounts (way up from Q4)
3) cash burn is down and cash position is increasing with ATM and first traunch of China JV. Given ~$20MM remaining in ATM, $9MM on the books and $5MM still to come from China JV should be good on cash well into next year.
4) Gross margins flat. Possibly improved margins offset by increase in personnel expenses. Dunno
5) Sales in late Q1 that won’t be reported until Q2... could be a nice kicker next quarter!
6) No word on Japan JV Task or much information on trials beyond that they are progressing. Don’t always understand why that can’t name who they are working with specifically, but JP did mention all the industries that they have trials and it was significant.
7) since they haven’t reported the second China JV traunch it is safe to say that they didn’t start shipping units in Q1.
Overall, my expectations on earnings were higher, but solid progress nonetheless.
Ha! I noticed that the number of steps reported in the website went up at a higher rate than usual. Wonder if that was why?
Skep, you expecting a profit in Q1?
Click!
My guess is you don’t understand what ATM means....
Agree. Guidance is key to any sustained move up post ER. Prelkminaty, Q4 resulted have already been announced. I think that EKSO could be silent on pilots maturing and new deals as part of the Chinese JV partnership. Until they purchase the second truanch, EKSO may not be able to overtly influence share price. If this is correct, then outside the ER, we shouldn’t see another PR until after March.
According to the PR Ekso gets 20% of the JV. What I am unclear about is if they have to also fund it based on their 20% interest or if they are carried in the deal for the price of their IP.
The first truanch is a guarantee that the Chinese partner will pay the minimum price 60 days after initial transaction only if EKSO sells shares for less than $1.63. My take, so long ATM for at least 60 days.
The second truanch is based on market price action provided it stays within the stated range. If the 20 day average market price is outside the stated range then they pay the price stayed at the end caps. This is a private placement so EKSO can value the shares at what ever price they want. What this means to the common traded on the market should be very little unless there is an arbitrage opportunity that I am unaware.
Porsche,
I think RWLK will have to reverse split to avoid delisting which I have rarely observed being beneficial to shareholders in the short term. Plus, they sold their equity well below market to get a deal for cash, and I don’t know the terms, but based on the price action post announcement I would assume there were little or no restrictions on selling the acquired shares. Having said this, I am not sure that EKSO is doing any better with the ATM... time will tell.
What I like about RWLK is that they have a product that is approved for retail which I believe EKSO is late to this game, but a game they will have to also play. However, EKSO has products that address three different market segments where as RWLK just has medical.
Not really seeing an uptick in EKSO, but if so probably in sympathy with RWLK.
RWLK probably advanced due to valuation being too enticing... However, can’t see how they avoid RS at this point.
https://sanfrancisco.cbslocal.com/2018/08/07/exoskeleton-vest-autoworkers/amp/
More great press... hopefully not just local, but national too.
Based on AH action you may get another chance intraday tomorrow, but I sure hope support at $2.10 ultimately holds.
$3.5 assuming what was resistance at $2.10 becomes support and holds tomorrow.
Based on right triangle reversal pattern that has been forming since last November and appears to have broken out today.