UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______ to ______
Commission File Number:
Ekso Bionics Holdings, Inc.
(Exact name of registrant as specified in its charter)
| |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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(Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
(Former name, former address, and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Name of each exchange on which registered:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| | |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☒ | Smaller reporting company | | |
Emerging growth company | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of shares of registrant’s common stock outstanding as of April 26, 2024 was
Quarterly Report on Form 10-Q
Table of Contents
Condensed Consolidated Balance Sheets
(In thousands, except par value)
March 31, 2024 | December 31, 2023 | |||||||
(unaudited) | (Note 2) | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and restricted cash | $ | $ | ||||||
Accounts receivable, net of allowances of $ and $ , respectively | ||||||||
Inventories | ||||||||
Prepaid expenses and other current assets | ||||||||
Total current assets | ||||||||
Property and equipment, net | ||||||||
Right-of-use assets | ||||||||
Intangible assets, net | ||||||||
Goodwill | ||||||||
Other assets | ||||||||
Total assets | $ | $ | ||||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | $ | ||||||
Accrued liabilities | ||||||||
Deferred revenues, current | ||||||||
Note payable, current | ||||||||
Lease liabilities, current | ||||||||
Total current liabilities | ||||||||
Deferred revenues | ||||||||
Notes payable, net | ||||||||
Lease liabilities | ||||||||
Warrant liabilities | ||||||||
Other non-current liabilities | ||||||||
Total liabilities | ||||||||
Commitments and contingencies (Note 14) | ||||||||
Stockholders’ equity: | ||||||||
Convertible preferred stock, $ par value; shares authorized; issued and outstanding at March 31, 2024 and December 31, 2023 | ||||||||
Common stock, $ par value; shares authorized; and shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively | ||||||||
Additional paid-in capital | ||||||||
Accumulated other comprehensive income | ||||||||
Accumulated deficit | ( | ) | ( | ) | ||||
Total stockholders’ equity | ||||||||
Total liabilities and stockholders’ equity | $ | $ |
The accompanying notes are an integral part of these condensed consolidated financial statements
Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended |
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March 31, |
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2024 |
2023 |
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Revenue |
$ | $ | ||||||
Cost of revenue |
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Gross profit |
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Operating expenses: |
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Sales and marketing |
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Research and development |
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General and administrative |
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Total operating expenses |
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Loss from operations |
( |
) | ( |
) | ||||
Other (expense) income, net: |
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Interest expense, net |
( |
) | ( |
) | ||||
Loss on modification of warrant |
( |
) | ||||||
Gain (loss) on revaluation of warrant liabilities |
( |
) | ||||||
Unrealized (loss) gain on foreign exchange |
( |
) | ||||||
Other income (expense), net |
( |
) | ||||||
Total other (expense) income, net |
( |
) | ||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Other comprehensive income (loss) |
( |
) | ||||||
Comprehensive loss |
$ | ( |
) | $ | ( |
) | ||
Net loss per share applicable to common shareholders, basic and diluted |
$ | ( |
) | $ | ( |
) | ||
Weighted average number of shares outstanding, basic and diluted |
The accompanying notes are an integral part of these condensed consolidated financial statements
Condensed Consolidated Statements of Stockholders’ Equity
(In thousands)
(Unaudited)
Accumulated |
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Other |
Total |
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Convertible Preferred Stock |
Common Stock |
Additional |
Comprehensive |
Accumulated |
Stockholders’ |
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Shares |
Amount |
Shares |
Amount |
Paid-in Capital |
(Loss) Income |
Deficit |
Equity |
|||||||||||||||||||||||||
Balance as of December 31, 2023 |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||||||
Net loss |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||
Issuance of common stock under: |
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Equity financing, net |
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Matching contribution to 401(k) plan |
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Equity incentive plan |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation expense |
— | — | ||||||||||||||||||||||||||||||
Foreign currency translation adjustments |
— | — | ||||||||||||||||||||||||||||||
Balance as of March 31, 2024 |
$ | $ | $ | $ | $ | ( |
) | $ |
Ekso Bionics Holdings, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(In thousands)
(Unaudited)
Accumulated |
||||||||||||||||||||||||||||||||
Other |
Total |
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Convertible Preferred Stock |
Common Stock |
Additional |
Comprehensive |
Accumulated |
Stockholders’ |
|||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Paid-in Capital |
(Loss) Income |
Deficit |
Equity |
|||||||||||||||||||||||||
Balance as of December 31, 2022 |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||||||
Net loss |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||
Issuance of common stock under: |
||||||||||||||||||||||||||||||||
Equity incentive plan |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation expense |
— | — | ||||||||||||||||||||||||||||||
Foreign currency translation adjustments |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||
Balance as of March 31, 2023 |
$ | $ | $ | $ | $ | ( |
) | $ |
The accompanying notes are an integral part of these condensed consolidated financial statements
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended March 31, |
||||||||
2024 |
2023 |
|||||||
Operating activities: |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash used in operating activities |
||||||||
Depreciation and amortization |
||||||||
Changes in provision for credit losses on accounts receivable |
( |
) | ||||||
(Gain) loss on revaluation of warrant liabilities |
( |
) | ||||||
Stock-based compensation expense |
||||||||
Loss on modification of warrant |
||||||||
Common stock contribution to 401(k) plan |
||||||||
Unrealized loss (gain) on foreign currency transactions |
( |
) | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
( |
) | ( |
) | ||||
Inventories |
( |
) | ( |
) | ||||
Prepaid expenses and other assets, current and noncurrent |
( |
) | ||||||
Accounts payable |
( |
) | ||||||
Accrued, lease and other liabilities, current and noncurrent |
( |
) | ( |
) | ||||
Deferred revenues |
( |
) | ||||||
Net cash used in operating activities |
( |
) | ( |
) | ||||
Investing activities: |
||||||||
Acquisition of property and equipment |
( |
) | ( |
) | ||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
Financing activities: |
||||||||
Principal payments under note payable |
( |
) | ||||||
Proceeds from issuance of common stock, net |
||||||||
Net cash provided by financing activities |
||||||||
Effect of exchange rate changes on cash |
( |
) | ||||||
Net increase (decrease) in cash |
( |
) | ||||||
Cash and restricted cash at beginning of period |
||||||||
Cash and restricted cash at end of period |
$ | $ | ||||||
Supplemental disclosure of cash flow activities |
||||||||
Cash paid for interest |
$ | $ | ||||||
Supplemental disclosure of non-cash activities |
||||||||
Transfer of inventory to (from) property and equipment |
$ | $ | ( |
) | ||||
Share issuance for common stock contribution to 401(k) plan |
$ | $ |
The accompanying notes are an integral part of these condensed consolidated financial statements
Description of Business
Ekso Bionics Holdings, Inc. (the “Company”) designs, develops, and markets wearable powered and non-powered exoskeleton products to augment human strength, endurance and mobility. The Company’s exoskeleton technology is primarily focused on aiding in the recovery and improved quality of life of individuals who have suffered from a variety of neurological conditions and allows for neurorehabilitation ranging from hospital to home, and also has technology that can be utilized by able-bodied users in the workplace. The Company has marketed devices that (i) enable individuals with neurological conditions affecting gait, including acquired brain injury ("ABI") and multiple sclerosis ("MS"), and spinal cord injury ("SCI") to rehabilitate and to stand and walk in neurorehabilitation settings and, for patients with a SCI, for home and community use, (ii) assist individuals with a broad range of upper extremity impairments, and (iii) allow industrial workers to perform difficult repetitive work for extended periods. Founded in 2005, the Company is headquartered in the San Francisco Bay area and listed on the Nasdaq Capital Market under the symbol “EKSO”.
Liquidity and Going Concern
As of March 31, 2024, the Company had an accumulated deficit of $
As described in Note 9. Notes Payable, net, borrowings under the Company’s secured term loan agreement with Pacific Western Bank have a liquidity covenant requiring minimum cash on hand equivalent to the current outstanding principal balance. As of March 31, 2024, $
Our expectation to generate operating losses and negative operating cash flows in the future and the need for additional funding to support our planned operations raise substantial doubt regarding our ability to continue as a going concern for a period of one year after the date that the condensed consolidated financial statements are issued. Management intends to raise funds through one or more financings. However, due to several factors, including those outside management’s control, there can be no assurance that the Company will be able to complete such financings on acceptable terms or in amounts sufficient to continue operating the business under the operating plan. If we are unable to complete sufficient additional financings, management’s plans include delaying or abandoning certain product development projects, cost reduction efforts for our products, and refocused sales efforts to accelerate revenue growth above historical results. We have concluded the likelihood that our plan to successfully reduce expenses to align with our available cash, while reasonably possible, is less than probable. Accordingly, we have concluded that substantial doubt exists about our ability to continue as a going concern for a period of at least 12 months from the date of issuance of these condensed consolidated financial statements.
The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.
2. Basis of Presentation and Summary of Significant Accounting Policies and Estimates
Basis of Presentation and Consolidation
The accompanying condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on March 4, 2024.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements have been prepared on a consistent basis with the audited consolidated financial statements for the fiscal year ended December 31, 2023, and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth herein.
The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or any future periods.
The condensed consolidated financial statements include the financial statements of Ekso Bionics Holdings, Inc. and its subsidiaries. All significant transactions and balances between Ekso Bionics Holdings, Inc. and its subsidiaries have been eliminated in consolidation.
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet, and the reported amounts of revenues and expenses during the reporting period. For the Company, these estimates include, but are not limited to, assets acquired and liabilities assumed in business combinations, revenue recognition, deferred revenue, the valuation of warrants and employee equity awards, future warranty costs, accounting for leases, useful lives assigned to long-lived assets, valuation of inventory, realizability of deferred tax assets, and contingencies. Actual results could differ from those estimates.
Foreign Currency
The assets and liabilities of foreign subsidiaries and equity investments, where the local currency is the functional currency, are translated from their respective functional currencies into U.S. dollars at the rates in effect at the balance sheet date, and revenue and expense amounts are translated at average rates during the period, with resulting foreign currency translation adjustments recorded in accumulated other comprehensive income as a component of stockholders’ equity. Gains and losses from the re-measurement of balances denominated in currencies other than the entities' functional currencies, are recorded in other expense, net in the accompanying condensed consolidated statements of operations and comprehensive loss.
Inventory
Inventories are recorded at the lower of cost or net realizable value. Cost is computed using the standard cost method, which approximates actual cost on a first-in, first-out basis. Materials from vendors are received and recorded as raw materials. Once the raw materials are incorporated in the fabrication of the product, the related value of the component is recorded as work in progress ("WIP"). Direct and indirect labor and applicable overhead costs are also allocated and recorded to WIP inventory. Finished goods are comprised of completed products that are ready for customer shipment. The Company periodically evaluates the carrying value of inventory on hand for potential excess amounts over sales and forecasted demand. Excess and obsolete inventories identified, if any, are recorded as an inventory impairment charge within the condensed consolidated statements of operations and comprehensive loss. The Company's estimate of write-downs for excess and obsolete inventory is based on a detailed analysis which includes on-hand inventory and purchase commitments in excess of forecasted demand. Subsequent disposals of inventories are recorded as a reduction of inventory.
Leases
The Company records its leases in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 842, Leases. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items, such as initial direct costs paid or incentives received.
Lease expense is recognized over the expected lease term on a straight-line basis. Operating leases are recognized on the balance sheet as right-of-use assets, lease liabilities current and lease liabilities non-current.
Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes the lease expense for such leases on a straight-line basis over the lease term.
Revenue Recognition
The Company records its revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which when capable of being distinct, are accounted for as separate performance obligations. Revenue recognition is evaluated based on the following five steps: (i) identification of the contract with the customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied.
For multiple-element arrangements, revenue is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are determined based on observable prices at which the Company separately sells its products or services. If a standalone selling price is not directly observable, judgment is made to estimate the selling price based on market conditions and entity-specific factors including cost plus analyses, features and functionality of the product and/or services, the geography of the Company’s customers, and type of customer. Any discounts or other reductions to the transaction price are allocated proportionately to all performance obligations within the multiple-element arrangement. The Company periodically validates the stand-alone selling price for performance obligations by evaluating whether changes in the key assumptions used to determine the stand-alone selling prices will have a significant effect on the allocation of transaction price between multiple performance obligations.
The Company exercised judgement to determine that a product return reserve was not required as historical returns activity have not been material.
Concentration of Credit Risk and Other Risks and Uncertainties
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable. The Company has significant cash balances at financial institutions which throughout the year regularly exceed the federally insured limit of $250. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company's financial condition, results of operations, and cash flows. The Company extends credit to customers in the normal course of business. Concentrations of credit risk with respect to accounts receivable exist to the full extent of amounts presented in the condensed consolidated financial statements. The Company does not require collateral from its customers to secure accounts receivable.
Accounts receivable are derived from the sale of products shipped and services performed for customers primarily located in the U.S., Europe, Asia, and Australia. Invoices are aged based on contractual terms with the customer. The Company reviews accounts receivable for collectability and provides an allowance for potential credit losses. The allowance for potential credit losses on trade receivables reflects the Company’s best estimate of probable losses inherent in the accounts receivable balance based on known troubled accounts, historical experience, and other currently available evidence. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 90 days. The Company has not experienced material losses related to accounts receivable as of March 31, 2024 and December 31, 2023.
Many of the sales contracts with customers outside of the U.S. are settled in a foreign currency other than the U.S. dollar. The Company does not enter into any foreign currency hedging agreements and is susceptible to gains and losses from foreign currency fluctuations. To date, the Company has not experienced significant gains or losses upon collecting receivables denominated in a foreign currency.
The Company had
During the three months ended March 31, 2024, the Company had
Recent Accounting Pronouncements
In November 2023, the FASB issued Accounting Standards Update, or ASU, No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU looks to provide improvements to the segment disclosure by providing users with more decision-useful information about reportable segments in a public entity. The main provisions require a company to disclose, on an annual and interim basis, significant expenses included within each reported measure of segment profit or loss, an amount for other segment items by reportable segment and a description of its composition. The ASU is to be applied retrospectively to all prior periods presented in the financial statements with an effective date for all public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this ASU.
Accounting Pronouncements Adopted in 2024
In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which simplified the accounting for convertible instruments. ASU 2020-06 eliminated certain models that require separate accounting for embedded conversion features, in certain cases. Additionally, among other changes, the guidance eliminated certain of the conditions for equity classification for contracts in an entity’s own equity. The guidance also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of share settlement for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards. This guidance became effective for the Company in the first quarter of 2024 and was applied using a full retrospective approach. The adoption did not have a material impact on the Company's financial statements.
3. Accumulated Other Comprehensive Income (Loss)
The Company's accumulated other comprehensive income (loss) consists of the accumulated net unrealized gains or losses on foreign currency translation adjustments. The change in accumulated other comprehensive income (loss) presented on the condensed consolidated balance sheets for the three months ended March 31, 2024 and 2023, is reflected in the table below net of tax:
Three Months Ended March 31, | ||||||||
2024 | 2023 | |||||||
Balance at beginning of period | $ | $ | ||||||
Net unrealized gain (loss) on foreign currency translation | ( | ) | ||||||
Balance at end of period | $ | $ |
4. Fair Value Measurement
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Three levels of inputs, of which the first two are considered observable and the last unobservable, may be used to measure fair value which are the following:
• | Level 1—Quoted prices in active markets for identical assets or liabilities. The Company considers a market to be active when transactions for the asset occur with sufficient frequency and volume to provide pricing information on an ongoing basis. |
• | Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
• | Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The valuation of Level 3 investments requires the use of significant management judgments or estimation. |
The Company’s fair value hierarchies for its financial assets and liabilities, which require fair value measurement on a recurring basis are as follows:
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
March 31, 2024 | ||||||||||||||||
Liabilities | ||||||||||||||||
Warrant liabilities | $ | $ | $ | $ | ||||||||||||
December 31, 2023 | ||||||||||||||||
Liabilities | ||||||||||||||||
Warrant liabilities | $ | $ | $ | $ |
The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities for the three months ended March 31, 2024, which were measured at fair value on a recurring basis:
Warrant Liabilities | ||||
Balance as of December 31, 2023 | $ | |||
Loss on modification of warrant | ||||
Net gain on revaluation of warrants issued | ( | ) | ||
Balance as of March 31, 2024 | $ |
Refer to Note 11. Capitalization and Equity Structure – Warrants for additional information regarding the valuation of warrants.
5. Inventories
Inventories consisted of the following:
March 31, 2024 |
December 31, 2023 |
|||||||
Raw materials |
$ | $ | ||||||
Work in progress |
||||||||
Finished goods |
||||||||
Inventories |
$ | $ |
6. Revenue
The Company’s medical device segment (EksoHealth) revenue is primarily generated through the sale and subscription of the EksoNR, Ekso Indego Therapy, and Ekso Indego Personal devices, along with the sale of support and maintenance contracts. Revenue from medical device product sales is recognized at the point in time when control of the product transfers to the customer. Transfer of control generally occurs upon shipment from the Company’s facility for sales of the EksoNR, Ekso Indego Therapy, and Ekso Indego Personal devices. Support and maintenance contracts extend coverage beyond the Company’s standard warranty agreements ranging from
The Company’s industrial device segment (EksoWorks) revenue is primarily generated through the sale of the upper body exoskeleton EVO and associated accessories. Revenue from industrial device sales is recognized at the point in time when control of the product transfers to the customer. Transfer of control generally occurs upon shipment from the Company’s facility.
Deferred Revenue
Deferred revenue is comprised mainly of unearned revenue related to extended support and maintenance contracts, but also includes other offerings for which the Company has been paid in advance and earns revenue when the Company transfers control of the product or service.
Deferred revenue consisted of the following:
March 31, 2024 | December 31, 2023 | |||||||
Deferred extended maintenance and support | $ | |||||||
Deferred device and advances | ||||||||
Total deferred revenues | ||||||||
Less current portion | ( | ) | ( | ) | ||||
Deferred revenues, non-current | $ | $ |
On September 25, 2023, the Company entered into a warranty claim lump-sum agreement with Parker Hannifin Corporation ("Parker"), pursuant to which, among other things, Parker paid the Company $
Deferred revenue activity consisted of the following for the three months ended March 31, 2024:
Beginning balance | $ | |||
Deferral of revenue | ||||
Recognition of deferred revenue | ( | ) | ||
Ending balance | $ |
The Company expects to recognize approximately $
In addition to deferred revenue, the Company has a non-cancellable backlog of $
Disaggregation of Revenue
The following table disaggregates the Company’s revenue by major source for the three months ended March 31, 2024:
EksoHealth | EksoWorks | Total | ||||||||||
Device revenue | $ | $ | $ | |||||||||
Service and support | ||||||||||||
Subscriptions | ||||||||||||
Parts and other | ||||||||||||
$ | $ | $ |
The following table disaggregates the Company’s revenue by major source for the three months ended March 31, 2023:
EksoHealth | EksoWorks | Total | ||||||||||
Device revenue | $ | $ | $ | |||||||||
Service and support | ||||||||||||
Subscriptions | ||||||||||||
Parts and other | ||||||||||||
$ | $ | $ |
7. Accrued Liabilities
Accrued liabilities consisted of the following:
March 31, 2024 |
December 31, 2023 |
|||||||
Salaries, benefits and related expenses |
$ | $ | ||||||
Device warranty |
||||||||
Other |
||||||||
Total |
$ | $ |
Warranty
The current portion of the device warranty liability is classified as a component of Accrued liabilities, while the long-term portion of the device warranty liability is classified as a component of Other non-current liabilities in the condensed consolidated balance sheets. A reconciliation of the changes in the device warranty liability for the three months ended March 31, 2024 is as follows:
Three Months Ended |
||||
March 31, 2024 |
||||
Balance at beginning of the period |
$ | |||
Additions for estimated future expense |
||||
Incurred costs |
( |
) | ||
Balance at end of the period |
$ |
Balance as of March 31, 2024 |
||||
Current portion |
$ | |||
Long-term portion |
||||
Total |
$ |
8. Goodwill and Intangible Assets
On December 5, 2022, the Company acquired the Human Motion Control ("HMC") business unit from Parker (the "HMC Acquisition"). The assets acquired from the business unit included intellectual property rights associated with the Ekso Indego Personal, Ekso Indego Therapy, and future products in the orthotics and prosthetics space.
Goodwill
The Company accounted for the acquisition as a business combination in accordance with ASC 805, Business Combinations, by applying the acquisition method, and accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their fair values at the acquisition date The excess of the purchase price over the net assets acquired of $
The Company determined no impairment existed for goodwill for the three months ended March 31, 2024.
Intangible Assets
The following table summarizes the components of gross assets, accumulated amortization, and net carrying values for definite and indefinite lived intangible asset balances as of March 31, 2024:
March 31, 2024 | ||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||
Developed technology | $ | $ | ( | ) | $ | |||||||
Trade name | N/A | |||||||||||
Intellectual property | ||||||||||||
Customer relationships | ( | ) | ||||||||||
Below market lease | ( | ) | ||||||||||
Total intangible assets | $ | $ | ( | ) | $ |
December 31, 2023 | ||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||
Developed technology | $ | $ | ( | ) | $ | |||||||
Trade name | N/A | |||||||||||
Intellectual property | ||||||||||||
Customer relationships | ( | ) | ||||||||||
Below market lease | ( | ) | ||||||||||
Total intangible assets | $ | $ | ( | ) | $ |
Definite lived intangible assets are amortized over their estimated lives using the straight line method, which is estimated as
years for developed technology, years for intellectual property, years for customer relationships and year for below market lease. The acquired trade name was estimated to have an indefinite life, and consequently, no amortization expense was recorded. The Company determined no impairment existed for intangible assets for the three months ended March 31, 2024.
The estimated future amortization expenses related to definite lived intangible assets as of March 31, 2024 were as follows:
Fiscal Year | Amount | |||
2024 - remainder | $ | |||
2025 | ||||
2026 | ||||
2027 | ||||
2028 | ||||
2029 and thereafter | ||||
Total | $ |
Amortization expense related to the acquired definite lived intangible assets was $
9. Notes Payable, net
PWB Term Loan
In August 2020, the Company entered into a loan agreement (the "PWB Loan Agreement") with a lender, Pacific Western Bank, and received a loan in the principal amount of $
The Company was required to pay accrued interest on the current loan on the 13th day of each month through and including August 13, 2023, at which time the unpaid principal and accrued and unpaid interest was due and payable in full. On August 17, 2023, the Company entered into an amendment to the PWB Loan Agreement extending the maturity date to August 13, 2026 with interest only payments until such date, having daily borrowings bearing interest at a variable annual rate equal to the greater of the Lender's "prime rate" then in effect and
The PWB Loan Agreement contains a liquidity covenant, which requires that the Company maintain cash in accounts of the lender or subject to control agreements in favor of the lender in an amount equal to at least the outstanding balance of the PWB Term Loan, which was $
The interest rate of the PWB Term Loan is subject to increase in the event of late payment and after occurrence of and during the continuation of an event of default. The Company may elect to prepay the PWB Term Loan at any time, in whole or in part, without penalty or premium.
The debt issuance costs and debt discounts combined with the stated interest resulted in an effective interest rate of
The following table presents scheduled principal payments of the Company’s PWB term loan as of March 31, 2024:
Period | Amount | |||
2024-2025 | $ | |||
2026 | ||||
Total principal payments | ||||
Less debt discount and issuance cost | ( | ) | ||
Note payable, net | $ | |||
Current portion | $ | |||
Long-term portion | ||||
Note payable, net | $ |
Parker Hannifin Promissory Note
In connection with the HMC Acquisition, on December 5, 2022, the Company delivered a $
The Promissory Note, upon the occurrence of an event of default, allows for the levying of interest equal to the lesser of (a)
The Company recorded the Promissory Note of $
The following table presents scheduled principal payments of the Company's Promissory Note as of March 31, 2024:
Period | Amount | |||
2024 - remainder | $ | |||
2025 | ||||
2026 | ||||
2027 | ||||
Total principal payments | ||||
Less debt discount | ( | ) | ||
Note payable, net | $ | |||
Current portion | ||||
Long-term portion | ||||
Note payable, net | $ |
10. Lease Obligations
The Company has determined that the new San Rafael Lease constitutes an operating lease under ASC 842 and estimates the lease term as July 2022 through October 2026. The option to extend for a
-year period lacks significant economic incentives and disincentives, which would make exercise reasonably certain. Fixed lease payments for identified lease components over the identified term have been discounted at the Company's estimated incremental borrowing rate as of the date of contract execution and are reflected in the condensed consolidated balance sheets under the captions Lease liabilities, current and Lease liabilities, and the corresponding right of use asset is reflected in the condensed consolidated balance sheets under the caption Right-of-use assets. Non-lease components, such as common area maintenance costs, are excluded from the lease liability calculation and expensed as incurred. The Company records a straight-line monthly rent expense for the San Rafael Lease equal to the sum of all fixed lease payments divided by the number of months in the lease term.
The Company's operating lease agreement for its office in Hamburg, Germany commenced in May 2022 and expires in June 2025 and it provides the Company with an option to renew for
-year period.
The Company has determined that the new Hamburg lease agreement constitutes a lease under ASC 842 and estimates the lease term as May 2022 through June 2025. The option to extend for a five-year period lacks significant economic incentives and disincentives which would make exercise reasonably certain. Fixed lease payments for identified lease components over the identified term have been discounted at the Company's estimated incremental borrowing rate and are reflected in the condensed consolidated balance sheets under the captions Lease liabilities, current and Lease liabilities, and the corresponding right of use asset is reflected in the condensed consolidated balance sheets under the caption Right-of-use assets. Non-lease components, such as common area maintenance costs, are excluded from the lease liability calculation and expensed as incurred. The Company records a straight-line monthly rent expense for this lease equal to the sum of all fixed lease payments divided by the number of months in the lease term.
The Company’s future lease payments as of March 31, 2024, which are presented as Lease liabilities, current and Lease liabilities on the Company’s condensed consolidated balance sheets are as follows:
Periods | Operating Leases | |||
2024 - remainder | $ | |||
2025 | ||||
2026 | ||||
Total lease payments | ||||
Less: imputed interest | ( | ) | ||
Present value of lease liabilities | $ | |||
Weighted-average remaining lease term (in years) | ||||
Weighted-average discount rate | % |
Lease expense under the Company’s operating leases was $
11. Capitalization and Equity Structure
Summary
The Company’s authorized capital stock at March 31, 2024 and December 31, 2023 consisted of
January 2024 Offering
On January 10, 2024, the Company entered into a securities purchase agreement with certain institutional investors to sell an aggregate of
At the Market Offering
In October 2020, the Company entered into an At The Market Offering Agreement (the "ATM Agreement") with H.C. Wainwright & Co., LLC (the "Agent"), under which the Company may issue and sell shares of its common stock, from time to time, to or through the Agent. The Company may offer and sell shares having an aggregate offering price of up to $
Warrants
Warrants outstanding as of March 31, 2024 and December 31, 2023 were as follows:
Exercise | Remaining term | |||||||||||||||||||||||
Source | Price | (Years) | December 31, 2023 | Issued | Exercised | March 31, 2024 | ||||||||||||||||||
2021 Warrants | $ | |||||||||||||||||||||||
June 2020 Investor Warrants | $ | |||||||||||||||||||||||
June 2020 Placement Agent Warrants | $ | |||||||||||||||||||||||
December 2019 Warrants | $ | |||||||||||||||||||||||
December 2019 Placement Agent Warrants | $ | |||||||||||||||||||||||
May 2019 Warrants | $ | |||||||||||||||||||||||
2021 Warrants
In February 2021, the Company issued warrants (the "2021 Warrants"), exercisable for up to
In addition, the 2021 Warrants contain a cashless exercise provision, whereby, if, at the time a holder exercises its 2021 Warrants, a registration statement registering the issuance or the resale of the shares of common stock underlying the 2021 Warrants under the Securities Act is not then effective or available for the issuance of such shares, then in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate exercise price, the holder may elect to instead receive, upon such exercise (either in whole or in part), the net number of shares of the Company’s common stock determined according to a formula set forth in the 2021 Warrants. The 2021 Warrants will be automatically exercised on a cashless basis on their expiration date. The 2021 Warrants could also require payment of liquidated damages by the Company in the form of cash payments in the event of a failure by the Company to timely deliver shares of common stock upon exercise of such warrants.
The 2021 Warrants also contain a put option, under which, if the Company enters into a Fundamental Transaction, as defined in the 2021 Warrants, the Company or any successor entity will, at the option of a holder of a 2021 Warrant, exercisable concurrently with or at any time within 30 days after the consummation of such Fundamental Transaction, purchase such holder’s 2021 Warrant by paying to such holder an amount of cash equal to the Black-Scholes value of the remaining unexercised portion of such holder’s 2021 Warrant within five trading days after the notice of exercise by the holder of the put option. Because of this put-option provision, the 2021 Warrants are classified as a liability and are marked to market at each reporting date.
The warrant liability related to the 2021 Warrants is measured at fair value upon issuance and at each reporting date using certain estimated inputs, which are classified within Level 3 of the fair value hierarchy. The following assumptions were used in the Black-Scholes Model to measure the fair value of the 2021 Warrants:
March 31, 2024 | December 31, 2023 | |||||||
Current share price | $ | $ | ||||||
Conversion price | $ | $ | ||||||
Risk-free interest rate | % | % | ||||||
Expected term (years) | ||||||||
Volatility of stock | % | % |
June 2020 Investor Warrants
In June 2020, the Company issued warrants (the "June 2020 Investor Warrants"), exercisable for up to
In addition, the June 2020 Investor Warrants contain a cashless exercise provision, whereby, if, at the time a holder exercises its June 2020 Investor Warrants, a registration statement registering the issuance or the resale of the shares of common stock underlying the June 2020 Investor Warrants under the Securities Act is not then effective or available for the issuance of such shares, then in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate exercise price, the holder may elect to instead receive, upon such exercise (either in whole or in part), the net number of shares of the Company’s common stock determined according to a formula set forth in the June 2020 Investor Warrant. The June 2020 Investor Warrants will be automatically exercised on a cashless basis on their expiration date.
The June 2020 Investor Warrants could also require payment of liquidated damages by the Company in the form of cash payments in the event of a failure by the Company to timely deliver shares of common stock upon exercise of such warrants.
The June 2020 Investor Warrants also contain a put option, under which, if the Company enters into a Fundamental Transaction, as defined in the June 2020 Investor Warrants, the holders of the June 2020 Investor Warrants will be entitled to receive upon exercise of the June 2020 Investor Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the June 2020 Investor Warrants immediately prior to such Fundamental Transaction. Alternatively, the Company or any successor entity will, at the option of a holder of a June 2020 Investor Warrant, exercisable concurrently with or at any time within 30 days after the consummation of such Fundamental Transaction, purchase such holder’s June 2020 Investor Warrant by paying to such holder an amount of cash equal to the Black-Scholes value of the remaining unexercised portion of such holder’s June 2020 Investor Warrant. Because of this put-option provision, the June 2020 Investor Warrants are classified as a liability and are marked to market at each reporting date.
The warrant liability related to the June 2020 Investor Warrants is measured at fair value at each reporting date using certain estimated inputs, which are classified within Level 3 of the fair value hierarchy. The following assumptions were used in the Black-Scholes Model to measure the fair value of the June 2020 Investor Warrants:
March 31, 2024 | December 31, 2023 | |||||||
Current share price | $ | $ | ||||||
Conversion price | $ | $ | ||||||
Risk-free interest rate | % | % | ||||||
Expected term (years) | ||||||||
Volatility of stock | % | % |
June 2020 Placement Agent Warrants
In June 2020, the Company issued warrants (the "June 2020 Placement Agent Warrants"), exercisable for up to
Because of the put-option provision in the June 2020 Placement Agent Warrants, these warrants are classified as a liability and are marked to market at each reporting date.
The warrant liability related to the June 2020 Placement Agent Warrants is measured at fair value at each reporting date using certain estimated inputs, which are classified within Level 3 of the fair value hierarchy. The following assumptions were used in the Black-Scholes Model to measure the fair value of the June 2020 Placement Agent Warrants:
March 31, 2024 | December 31, 2023 | |||||||
Current share price | $ | $ | ||||||
Conversion price | $ | $ | ||||||
Risk-free interest rate | % | % | ||||||
Expected term (years) | ||||||||
Volatility of stock | % | % |
December 2019 Warrants
In December 2019, pursuant to a securities purchase agreement (the "December 2019 Offering"), the Company issued warrants (the "December 2019 Warrants") to purchase
The December 2019 Warrants also contain a cashless exercise provision and could require cash payments in the event of a failure to timely deliver securities or in the event of insufficient authorized shares. The December 2019 Warrants will be automatically exercised on a cashless basis on their expiration date. The December 2019 Warrants also contain a put option, under which, if the Company enters into a Fundamental Transaction, as defined in the December 2019 Warrants, the Company or any successor entity will, at the option of a holder of a December 2019 Warrant, exercisable concurrently with or at any time within 30 days after the consummation of such Fundamental Transaction, purchase such holder’s December 2019 Warrant by paying to such holder an amount of cash equal to the Black-Scholes value of the remaining unexercised portion of such holder’s December 2019 Warrant within five trading days after the notice of exercise by the holder of the put option. Because of this put-option provision, the December 2019 Warrants are classified as a liability and are marked to market at each reporting date.
The warrant liability related to the December 2019 Warrants is measured at fair value at each reporting date using certain estimated inputs, which are classified within Level 3 of the fair value hierarchy. The following assumptions were used in the Black-Scholes Model to measure the fair value of the December 2019 Warrants:
March 31, 2024 | December 31, 2023 | |||||||
Current share price | $ | $ | ||||||
Conversion price | $ | $ | ||||||
Risk-free interest rate | % | % | ||||||
Expected term (years) | ||||||||
Volatility of stock | % | % |
December 2019 Placement Agent Warrants
In December 2019, in connection with the December 2019 Offering, the Company issued warrants to purchase
The warrant liability related to the December 2019 Placement Agent Warrants is measured at fair value at each reporting date using certain estimated inputs, which are classified within Level 3 of the fair value hierarchy. The following assumptions were used in the Black-Scholes Model to measure the fair value of the December 2019 Placement Agent Warrants:
March 31, 2024 | December 31, 2023 | |||||||
Current share price | $ | $ | ||||||
Conversion price | $ | $ | ||||||
Risk-free interest rate | % | % | ||||||
Expected term (years) | ||||||||
Volatility of stock | % | % |
Management has assessed that the likelihood of a Change of Control (as defined in the December 2019 Placement Agent Warrants), occurring during the term of the December 2019 Placement Agent Warrants is low, and that if such an event were to occur, the difference between the cashless exercise value and the warrants fair value is nominal.
May 2019 Warrants
In May 2019, pursuant to an underwriting agreement, (the "May 2019 Offering"), the Company issued the warrants (the "May 2019 Warrants") to purchase
In addition, if the Company effects or enters into any issuance of common stock or options or convertible securities exercisable for or convertible into common stock at a price which varies or may vary with the market price of the shares of the Company's common stock, subject to certain exceptions, a May 2019 Warrant holder may, at the time of exercise of the holder’s warrant, elect to exercise the warrant at such variable price.
The May 2019 Warrants include a put option, whereby while the May 2019 Warrants are outstanding, if the Company enters into a Change of Control, as defined in the May 2019 Warrants, the Company or any successor entity will, at the option of a 2019 Warrant holder exercise within 90 days after the public disclosure of the Change of Control transaction, purchase such holder’s May 2019 Warrants by paying to such holder an amount of cash equal to the Black-Scholes value of the remaining unexercised portion of such warrants on the later date of consummation of the Change of Control transaction or two trading days after the notice of such request. Because of this put option provision, the May 2019 Warrants are classified as a liability and are marked to market at each reporting date.
The warrant liability related to the May 2019 Warrants is measured at fair value at each reporting and exercise date using certain estimated inputs, which are classified within Level 3 of the fair value hierarchy. Because of the price protection feature contained in the May 2019 Warrants, the Company uses a combination of the Black-Scholes Model and the Lattice Model to estimate the fair value of the warrants at each reporting period. The following assumptions were used in the Black-Scholes Model in combination with the Lattice Model to measure the fair value of the May 2019 Warrants:
March 31, 2024 | December 31, 2023 | |||||||
Share price | $ | $ | (1) | |||||
Conversion price | $ | $ | ||||||
Risk-free interest rate | % | % | ||||||
Expected term (years) | ||||||||
Volatility of stock | % | % |
(1) As of December 31, 2023, management determined that a financing event was likely in the first quarter of 2024, and reduced the share price used in the model by 25% in order to reflect the total amount that would be realized accordingly.
Management has assessed that the likelihood of a Change of Control occurring during the term of the warrants is low, and that if such an event were to occur, the difference between the cashless exercise value and the May 2019 Warrants fair value is nominal.
12. Stock-based Compensation
The Company's Amended and Restated 2014 Equity Incentive Plan (the "2014 Plan") expired on January 31, 2024. Following such expiration, no grants may be made under the 2014 Plan, but the grants in effect prior to such expiration were not impacted by the expiration.
Stock Options
The following table summarizes information about the Company’s stock options outstanding as of March 31, 2024, and activity during the three months then ended:
Weighted- |
||||||||||||||||
Average |
||||||||||||||||
Weighted- |
Remaining |
Aggregate |
||||||||||||||
Stock |
Average |
Contractual |
Intrinsic |
|||||||||||||
Awards |
Exercise Price |
Life (Years) |
Value |
|||||||||||||
Balance as of December 31, 2023 |
$ | |||||||||||||||
Options cancelled |
( |
) | ||||||||||||||
Balance as of March 31, 2024 |
$ | $ | ||||||||||||||
Vested and expected to vest as of March 31, 2024 |
$ | $ | ||||||||||||||
Exercisable as of March 31, 2024 |
$ | $ |
There were
Restricted Stock Units
The Company issues time-based restricted stock units (“RSUs”) and performance-based restricted stock units ("PSUs") to employees and non-employee members of the Board. Each RSU and PSU represents the right to receive one share of the Company’s common stock upon vesting and subsequent settlement. PSUs vest upon achievement of performance targets based on the Company's annual operating plan. The fair values of RSUs and PSUs are determined based on the closing price of the Company’s common stock on the date of grant.
Combined RSU and PSU activity for the three months ended March 31, 2024 is summarized below:
Weighted- |
||||||||
Number of |
Average Grant |
|||||||
Shares |
Date Fair Value |
|||||||
Unvested as of December 31, 2023 |
$ | |||||||
Vested |
( |
) | ||||||
Unvested as of March 31, 2024 |
$ |
As of March 31, 2024, $
Compensation Expense
Stock-based compensation expense is included in the condensed consolidated statements of operations and comprehensive loss in general and administrative, research and development, or sales and marketing expenses, depending on the nature of the services provided. Stock-based compensation expense related to options, RSUs and PSUs was recorded as follows:
Three Months Ended March 31, |
||||||||
2024 |
2023 |
|||||||
Sales and marketing |
$ | $ | ||||||
Research and development |
||||||||
General and administrative |
||||||||
$ | $ |
401(k) Plan Share Match
During the three months ended March 31, 2024, the Company issued
The expense for the 401(k) Plan share matching was $
13. Income Taxes
There were no material changes to the unrecognized tax benefits in the three months ended March 31, 2024, and the Company does not expect significant changes to unrecognized tax benefits through the end of the fiscal year.
14. Commitments and Contingencies
Material Contracts
The Company has
In connection with the HMC Acquisition, the Company assumed
license agreements with Vanderbilt University to maintain exclusive rights to patents on the Company's behalf.
The Vanderbilt Exoskeleton License Agreement was entered into as of October 15, 2012 and will continue until April 29, 2038, unless sooner terminated. Under this agreement, the Company is required to pay
The Vanderbilt Knee License Agreement was entered into as of March 1, 2022 and will continue until February 15, 2041, unless sooner terminated. Under this agreement, the Company is required to pay
The Company also entered into transitional use agreements with Parker granting the Company access to certain information technology systems and shared services relating to manufacturing facilities in Macedonia, Ohio for twelve months following the date of the acquisition. As consideration for access to these resources, the Company made monthly payments of $
Purchase Obligations
The Company purchases components from a variety of suppliers and uses contract manufacturers to provide manufacturing services for its products. Purchase obligations are defined as agreements that are enforceable and legally binding and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.
The Company had purchase obligations primarily for purchases of inventory and manufacturing related service contracts totaling $
The Company has operating lease commitments totaling $
Loss Contingencies
In the normal course of business, the Company is subject to various legal matters. In the opinion of management, the resolution of such matters will not have a material adverse effect on the Company’s condensed consolidated financial statements.
15. Net Loss Per Share
The following table sets forth the computation of basic and diluted net loss per share:
Three Months Ended |
||||||||
March 31, |
||||||||
2024 |
2023 |
|||||||
Numerator: |
||||||||
Net loss applicable to common stockholders, basic and diluted |
$ | ( |
) | $ | ( |
) | ||
Denominator: |
||||||||
Weighted-average number of shares, basic and diluted |
||||||||
Net loss per share, basic and diluted |
$ | ( |
) | $ | ( |
) |
The following table sets forth potential shares of common stock that are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive as of the end of each period presented:
Three Months Ended |
||||||||
March 31, |
||||||||
2024 |
2023 |
|||||||
Options to purchase common stock |
||||||||
Restricted stock units |
||||||||
Warrants for common stock |
||||||||
Total common stock equivalents |
16. Segment Disclosures
The Company has
reportable segments: EksoHealth and EksoWorks. The EksoHealth segment designs, manufactures, and markets exoskeletons for applications in the medical markets. The EksoWorks segment designs, manufactures, and markets exoskeleton devices to allow able-bodied users to perform difficult repetitive work for extended periods. The reportable segments are each managed separately because they serve distinct markets.
The Company evaluates performance and allocates resources based on segment gross profit margin. The Company does not consider operating expenses or net assets as segment measures and, accordingly, are not allocated.
Segment reporting information is as follows:
EksoHealth | EksoWorks | Total | ||||||||||
Three months ended March 31, 2024 | ||||||||||||
Revenue | $ | $ | $ | |||||||||
Cost of revenue | ||||||||||||
Gross profit | $ | $ | $ | |||||||||
Three months ended March 31, 2023 | ||||||||||||
Revenue | $ | $ | $ | |||||||||
Cost of revenue | ||||||||||||
Gross profit | $ | $ | ( | ) | $ |
The Company operates in the following regions: (1) Americas, (2) Europe, the Middle East, and Africa (EMEA), and (3) Asia Pacific (APAC). Individual countries with revenue greater than 10% of total revenue for the three and three months ended March 31, 2024 and 2023 are disclosed separately from the regional totals. Geographic information for revenue based on location of customers is as follows:
Three Months Ended March 31, | ||||||||
2024 | 2023 | |||||||
Americas | ||||||||
United States | $ | $ |