|6 Months Ended|
Jun. 30, 2017
|Organization, Consolidation and Presentation of Financial Statements [Abstract]|
Description of Business
Ekso Bionics Holdings, Inc. (the “Company”) is a leading developer of exoskeleton solutions that amplify human potential by supporting or enhancing strength, endurance and mobility across medical, industrial and defense applications. Founded in 2005, the Company continues to build upon its unparalleled expertise to design some of the most cutting-edge, innovative wearable robots available on the market. Ekso Bionics is the only exoskeleton company to offer technologies that range from helping those with paralysis to stand up and walk, to enhancing human capabilities on job sites across the globe, to providing research for the advancement of R&D projects intended to benefit U.S. defense capabilities. The Company is headquartered in the Bay Area and is listed on the Nasdaq Capital Market under the symbol “EKSO”.
All common stock share and per share amounts have been adjusted to reflect the one-for-seven reverse stock split completed on May 4, 2016. See Note 12, Capitalization and Equity Structure Reverse Stock Split.
Largely as a result of significant research and development activities related to the development of the Company’s advanced technology and commercialization of this technology into its medical device business, the Company has incurred significant operating losses and negative cash flows from operations since inception. The Company has also recognized significant non-cash losses in previous periods associated with the revaluation of certain securities, which have also contributed significantly to its accumulated deficit. As of June 30, 2017, the Company had an accumulated deficit of $128,841.
Cash on hand at June 30, 2017 was $10,701 compared to $16,846 at December 31, 2016. For the six months ended June 30, 2017, the Company used $16,859 of cash in operations compared to $14,122 for the six month period ended June 30, 2016. As noted in Note 10, Long-Term Debt, borrowings under our long-term debt agreement have a requirement of minimum cash on hand roughly equivalent to three months of cash burn using the average of recent six month results, recomputed each month. As of June 30, 2017, the most recent determination of this restriction, which included one-time restructuring costs of $665, $7,518 of cash must remain as unrestricted. After considering such cash restriction, effective unrestricted cash as of June 30, 2017 is estimated to be $3,183.
Based upon the Company’s current cash resources, the recent rate of using cash for operations and investment, and assuming modest increases in current revenue, reduced expenses related to the Company’s recently announced restructuring and workforce reduction, as well as assuming the ability to exhaust its cash resources despite the covenant regarding minimum cash, the Company believes it has sufficient resources to meet its financial obligations into the first quarter of 2018. The Company’s cash on hand; however, will not be sufficient to satisfy its operations for the next twelve months from the date of issuance of these condensed consolidated financial statements, which raises substantial doubt about our ability to continue as a going concern. The Company will require significant additional financing. The Company is actively pursuing opportunities to obtain additional financing in the future through public or private equity and/or debt financings, corporate collaborations, or warrant solicitations.
In July of 2017, the Company announced that its board of directors approved a proposed rights offering to raise gross proceeds of up to $34,000 (refer to Note 18 Subsequent Events for additional information). Based on a look-forward period of one year from the date of issuance of these financial statements, and assuming the Company is able to generate expected proceeds in the third quarter of 2017 in connection with the proposed rights offering, the Company would have sufficient cash on hand to satisfy its operations for the next twelve months from the date of issuance of these condensed consolidated financial statements. In support of the anticipated financing described in Note 18 Subsequent Events , the Company and Lender agreed to an amendment of the long-term debt agreement described in Note 10 Long-term Debt, whereby the minimum liquidity requirement has been suspended until after the anticipated close and funding date(s) of the proposed rights offering described in Note 18 Subsequent Events.
The Company’s actual capital requirements may vary significantly and will depend on many factors. The Company plans to continue its investments (i) in its clinical, sales and marketing initiatives to accelerate adoption of the Ekso robotic exoskeleton in the rehabilitation market, (ii) in its research, development and commercialization activities with respect to an Ekso robotic exoskeleton for home use, and/or (iii) in the development and commercialization of able-bodied exoskeletons for industrial use. Consequently, the Company will require significant additional financing in the future, which the Company intends to raise through corporate collaborations, public or private equity offerings, debt financings, or warrant solicitations. Sales of additional equity securities by us could result in the dilution of the interests of existing stockholders. There can be no assurance that financing will be available when required in sufficient amounts, on acceptable terms or at all. In the event that the necessary additional financing is not obtained, the Company may be required to reduce its discretionary overhead costs substantially, including research and development, general and administrative, and sales and marketing expenses or otherwise curtail operations.
The entire disclosure for the business description and basis of presentation concepts. Business description describes the nature and type of organization including but not limited to organizational structure as may be applicable to holding companies, parent and subsidiary relationships, business divisions, business units, business segments, affiliates and information about significant ownership of the reporting entity. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS).
Reference 1: http://www.xbrl.org/2003/role/presentationRef