ekso-20220331

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________________________________________________________

FORM 10-Q

____________________________________________________________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


☐			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: 001-37854

____________________________________________________________________________________________

Ekso Bionics Holdings, Inc.

(Exact name of registrant as specified in its charter)

____________________________________________________________________________________________


Nevada						99-0367049
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


1414 Harbour Way South, Suite 1201 Richmond, CA						94804
(Address of principal executive offices)						(Zip Code)

(510) 984-1761

(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

Common Stock, $0.001 par value per share

EKSO

Nasdaq Capital Market

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. Yes x No ¨

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). Yes x No ¨

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

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

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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 ☐ No x

The number of shares of registrant’s common stock outstanding as of April 25, 2022 was 12,844,501.

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Ekso Bionics Holdings, Inc.

Quarterly Report on Form 10-Q

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		Page No.
	PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	4

	Condensed Consolidated Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021	4

	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months ended March 31, 2022 and 2021 (unaudited)	5

	Condensed Consolidated Statements of Stockholders' Equity for the Three Months ended March 31, 2022 and 2021 (unaudited)	6

	Condensed Consolidated Statements of Cash Flows for the Three Months ended March 31, 2022 and 2021 (unaudited)	7

	Notes to Condensed Consolidated Financial Statements (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	31

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	33

Item 1A.	Risk Factors	33

Item 6.	Exhibits	34

	Signatures	35

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Ekso Bionics Holdings, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except par value)


	March 31, 2022		December 31, 2021
	(unaudited)		(Note 2)
Assets
Current assets:
Cash	$	36,176	$	40,406
Accounts receivable, net of allowances of $19 and $28, respectively	3,346		4,662
Inventories	2,772		2,242
Prepaid expenses and other current assets	829		485
Total current assets	43,123		47,795
Property and equipment, net	886		991
Right-of-use assets	92		216
Other assets	141		164
Total assets	$	44,242	$	49,166
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,939	$	3,107
Accrued liabilities	1,819		2,299
Deferred revenues, current	1,115		1,220

Lease liabilities, current	97		229
Total current liabilities	5,970		6,855
Deferred revenues	1,082		1,475
Notes payable, net	1,994		1,993

Warrant liabilities	1,650		1,550
Other non-current liabilities	60		74
Total liabilities	10,756		11,947
Commitments and contingencies (Note 13)
Stockholders’ equity:
Convertible preferred stock, $0.001 par value; 10,000 shares authorized; none issued and outstanding at March 31, 2022 and December 31, 2021	—		—
Common stock, $0.001 par value; 141,429 shares authorized; 12,844 and 12,693 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	13		13
Additional paid-in capital	246,765		246,090
Accumulated other comprehensive gain (loss)	195		(17)
Accumulated deficit	(213,487)		(208,867)
Total stockholders’ equity	33,486		37,219
Total liabilities and stockholders’ equity	$	44,242	$	49,166

The accompanying notes are an integral part of these condensed consolidated financial statements

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Ekso Bionics Holdings, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended March 31,
		2022		2021
Revenue		$	2,567	$	1,910
Cost of revenue		1,358		675
Gross profit		1,209		1,235

Operating expenses:
Sales and marketing		1,629		1,793
Research and development		999		603
General and administrative		2,818		1,978


Total operating expenses		5,446		4,374

Loss from operations		(4,237)		(3,139)

Other expense, net:
Interest expense		(27)		(26)
(Loss) gain on revaluation of warrant liabilities		(100)		11


Other expense, net		(256)		(516)
Total other expense, net		(383)		(531)

Net loss		$	(4,620)	$	(3,670)
Other comprehensive income		212		465
Comprehensive loss		$	(4,408)	$	(3,205)

Net loss per share applicable to common shareholders, basic and diluted		$	(0.36)	$	(0.34)


Weighted average number of shares outstanding, basic and diluted		12,728		10,752

The accompanying notes are an integral part of these condensed consolidated financial statements

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Ekso Bionics Holdings, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands)

(Unaudited)


	Convertible Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive (Loss) Income		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance at December 31, 2021	—	$	—	12,693	$	13	$	246,090	$	(17)	$	(208,867)	$	37,219
Net loss	—	—		—	—		—		—		(4,620)		(4,620)
Issuance of common stock under:
Matching contribution to 401(k) plan	—	—		68	—		176		—		—		176
Equity incentive plan	—	—		83	—		—		—		—		—

Stock-based compensation expense	—	—		—	—		499		—		—		499
Foreign currency translation adjustments	—	—		—	—		—		212		—		212
Balance at March 31, 2022	—	$	—	12,844	$	13	$	246,765	$	195	$	(213,487)	$	33,486


	Convertible Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive (Loss) Income		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance at December 31, 2020	—	$	—	8,349	$	8	$	204,376	$	(847)	$	(199,103)	$	4,434
Net loss	—	—		—	—		—		—		(3,670)		(3,670)
Issuance of common stock under:
Equity financing, net	—	—		3,980	4		35,356		—		—		35,360
Exercise of warrants	—	—		300	1		3,877		—		—		3,878
Matching contribution to 401(k) plan	—	—		26	—		152		—		—		152
Stock-based compensation expense	—	—		—	—		356		—		—		356
Foreign currency translation adjustments	—	—		—	—		—		465		—		465
Balance at March 31, 2021	—	$	—	12,655	$	13	$	244,117	$	(382)	$	(202,773)	$	40,975

The accompanying notes are an integral part of these condensed consolidated financial statements

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Ekso Bionics Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2022		2021
Operating activities:
Net loss	$	(4,620)	$	(3,670)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation	131		126
Changes in allowance for doubtful accounts	(9)		31


Loss (gain) on revaluation of warrant liabilities	100		(11)

Stock-based compensation expense	499		356
Common stock contribution to 401(k) plan	64		52

Unrealized loss on foreign currency transactions	254		503
Changes in operating assets and liabilities:
Accounts receivable	1,297		917
Inventories	(562)		(228)
Prepaid expenses, right-of-use assets, and other assets	(203)		(78)
Accounts payable	(166)		151
Accrued, lease and other liabilities	(503)		16
Deferred revenues	(488)		(165)
Net cash used in operating activities	(4,206)		(2,000)



Financing activities:
Proceeds from issuance of common stock and warrants, net	—		37,295



Proceeds from exercise of warrants	—		1,417
Net cash provided by financing activities	—		38,712
Effect of exchange rate changes on cash	(24)		(35)
Net (decrease) increase in cash	(4,230)		36,677
Cash at beginning of period	40,406		12,862
Cash at end of period	$	36,176	$	49,539

Supplemental disclosure of cash flow activities
Cash paid for interest	$	27	$	23


Supplemental disclosure of non-cash activities
Fair value of warrants issued upon equity financing	$	—	$	1,936
Reclassification of warrant liability to equity upon exercise of warrants	$	—	$	2,461
Transfer of inventory to (from) property and equipment	$	29	$	53
Share issuance for common stock contribution to 401(k) plan	$	176	$	152

The accompanying notes are an integral part of these condensed consolidated financial statements

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Ekso Bionics Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

($ and share amounts in thousands, except per share amounts)

(Unaudited)

1. Organization

Description of Business

Ekso Bionics Holdings, Inc. (the “Company”) designs, develops, and markets exoskeleton products to augment human strength, endurance and mobility. The Company’s exoskeleton technology serves multiple markets and can be utilized both by able-bodied users and by persons with physical disabilities. The Company has marketed devices that (i) enable individuals with neurological conditions affecting gait, including acquired brain injury ("ABI") and spinal cord injury ("SCI"), to rehabilitate and to walk again, (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 Capital Resources

As of March 31, 2022, the Company had an accumulated deficit of $213,487. Largely as a result of significant research and development activities related to the development of the Company’s advanced technology and commercialization of such technology into its medical device business, the Company has incurred significant operating losses and negative cash flows from operations since inception. In the three months ended March 31, 2022, the Company used $4,206 of cash in its operations. Cash on hand as of March 31, 2022 was $36,176.

As described in Note 8, 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, 2022, $2,000 of cash must remain as restricted. After considering cash restrictions, effective unrestricted cash as of March 31, 2022 is approximately $34,176. With this unrestricted cash balance, the Company believes that it currently has sufficient cash to fund its operations beyond the look forward period of one year from the issuance of these condensed consolidated financial statements.

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, 2021, which was filed with the SEC on February 24, 2022.

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, 2021, 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, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 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.

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Ekso Bionics Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

($ and share amounts in thousands, except per share amounts)

(Unaudited)

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, revenue recognition, deferred revenue and the deferral of the associated costs, the valuation of warrants and employee stock options, 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 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

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Ekso Bionics Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

($ and share amounts in thousands, except per share amounts)

(Unaudited)

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 the Company’s markets. 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 returns reserve was not required as historical returns activity have not been material.

Going Concern

The Company assesses its ability to continue as a going concern at every interim and annual period in accordance with ASC 205-40. The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

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 maintains cash accounts in excess of federally insured limits. However, the Company believes it is not exposed to significant credit risk due to the financial position of the depository institutions in which these deposits are held. 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 Company has not experienced material losses related to accounts receivable as of March 31, 2022 and December 31, 2021. 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 settling contracts denominated in a foreign currency.

At March 31, 2022, the Company had one customer (10%) with an accounts receivable balance totaling 10% or more of the Company’s total accounts receivable, as compared with zero customers at December 31, 2021.

During the three months ended March 31, 2022, the Company had one customer with sales of 10% or more of the Company’s total revenue (11%), as compared with two customers in the three months ended March 31, 2021 (14% and 11%, respectively).

Recent Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments to the initial guidance under ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10 and ASU 2022-02, which amends the current approach to estimate credit losses on certain financial assets, including trade and other receivables. Generally, this amendment requires entities to

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Ekso Bionics Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

($ and share amounts in thousands, except per share amounts)

(Unaudited)

establish a valuation allowance for the expected lifetime losses of these certain financial assets. Upon the initial recognition of such assets, which will be based on, among other things, historical information, current conditions, and reasonable supportable forecasts. Subsequent changes in the valuation allowance are recorded in current earnings and reversal of previous losses are permitted. Currently, U.S. GAAP requires entities to write down credit losses only when losses are probable and loss reversals are not permitted. The update will be effective for the Company beginning in the first quarter of 2023. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated financial statements and related disclosures.

In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which simplifies the accounting for convertible instruments. ASU 2020-06 eliminates certain models that require separate accounting for embedded conversion features, in certain cases. Additionally, among other changes, the guidance eliminates 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 is effective for the Company beginning in the first quarter of 2024 and must be applied using either a modified or full retrospective approach. Early adoption is permitted. The Company does not expect the impact of adopting ASU 2020-06 to be material on its consolidated 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, 2022 and 2021, is reflected in the table below net of tax:


	Three Months Ended March 31,
	2022		2021
Balance at beginning of period	$	(17)	$	(847)
Net unrealized gain on foreign currency translation	212		465
Balance at end of period	$	195	$	(382)

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.

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Ekso Bionics Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

($ and share amounts in thousands, except per share amounts)

(Unaudited)

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, 2022
Liabilities
Warrant liabilities	$	1,650	$	—	$	—	$	1,650

December 31, 2021
Liabilities
Warrant liabilities	$	1,550	$	—	$	—	$	1,550

The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities for the period ended March 31, 2022, which were measured at fair value on a recurring basis:


	Warrant Liability
Balance at December 31, 2021	$	1,550

Loss on revaluation of warrants issued in connection with the February 2021, June 2020, December 2019 and May 2019 financings	100

Balance at March 31, 2022	$	1,650

Refer to Note 10. Capitalization and Equity Structure – Warrants for additional information regarding the valuation of warrants.

5. Inventories

Inventories consisted of the following:


	March 31, 2022		December 31, 2021
Raw materials	$	2,218	$	2,061
Work in progress	308		145
Finished goods	246		36


Inventories	$	2,772	$	2,242

6. Revenue

The Company’s medical device segment (EksoHealth) revenue is primarily generated through the sale and subscription of the EksoNR, associated software (SmartAssist and VariableAssist), the sale and subscription of the EksoUE, the sale of accessories, and the sale of support and maintenance contracts (Ekso Care). In 2021, the Company moved to a customer subscription sales model and away from a rental sales model. Under the rental sales model, the Company offered customers a short-term rental arrangement of its products to help bridge to a capital purchase since customers typically have challenges in obtaining approvals for capital expenditures. Subscription sales arrangements, however, bypass the customer capital purchase process, are intended to renew annually, and provide a long-term revenue stream.

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, software and accessories. Ekso Care support and maintenance contracts extend coverage beyond the Company’s standard warranty agreements. The separately priced Ekso Care contracts range from 12 to 48 months. The Company receives payment at the inception of the contract and recognizes revenue evenly over the term of the contracts. Revenue from medical device subscriptions is recognized evenly over the initial contract term, typically over 12 months.

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Ekso Bionics Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

($ and share amounts in thousands, except per share amounts)

(Unaudited)

The Company’s industrial device segment (EksoWorks) revenue is generated through the sale of the upper body exoskeletons (EksoVest and the EVO) and the support arm (EksoZeroG). 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.

Contract Balances

Timing of revenue recognition may differ from the timing of invoicing to customers and receipt of payment. For the sale of its products, the Company generally recognizes revenue at a point in time through the ship-and-bill performance obligations. For the subscription of its products, the Company generally recognizes revenue over the subscription term commencing upon the completion of customer training. For service agreements, the Company generally invoices customers at the beginning of the coverage period and records revenue related to the billed amounts over time, equivalent to the coverage period of the maintenance and support contract.

Deferred revenue is comprised mainly of unearned revenue related to extended support and maintenance contracts (Ekso Care), 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, 2022		December 31, 2021
Deferred extended maintenance and support	$	2,124	$	2,349
Deferred royalties	—		280
Deferred device and advances	73		66
Total deferred revenues	2,197		2,695
Less current portion	(1,115)		(1,220)
Deferred revenues, non-current	$	1,082	$	1,475

Deferred revenue activity consisted of the following for the three months ended March 31, 2022:



Beginning balance	$	2,695
Deferral of revenue	196
Recognition of deferred revenue	(694)
Ending balance	$	2,197

As of March 31, 2022, the Company’s deferred revenue was $2,197. The Company expects to recognize approximately $902 of the deferred revenue during the remainder of 2022, $681 in 2023, and $614 thereafter.

In addition to deferred revenue, the Company has a non-cancellable backlog of $1,524 related to its contracts for subscription units with its customers. These subscription contracts typically have 12-month terms and subscription income is recognized on a straight-line basis over the lease term.

In the three months ended March 31, 2022 the Company recognized revenue of $280 related to a $300 upfront royalty payment associated with a license and distribution agreement that expired. The unrecognized royalty balance of $280 was included in deferred revenue as of December 31, 2021.

As of March 31, 2022 and December 31, 2021, total accounts receivable, net of allowance for doubtful accounts, were $3,486 and $4,824, respectively, and are included in accounts receivable, net and other assets on the Company’s condensed consolidated balance sheets.

The allowance for doubtful accounts reflects the Company’s best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on known troubled accounts, historical experience, and other currently

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Ekso Bionics Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

($ and share amounts in thousands, except per share amounts)

(Unaudited)

available evidence. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 90 days.

Disaggregation of revenue

The following table disaggregates the Company’s revenue by major source for the three months ended March 31, 2022:


	EksoHealth		EksoWorks		Total
Device revenue	$	963	$	309	$	1,272
Service and support	467		—		467
Subscriptions	216		69		285
Parts and other	156		308		464
Collaborative arrangements	79		—		79
	$	1,881	$	686	$	2,567

The following table disaggregates the Company’s revenue by major source for the three months ended March 31, 2021:


	EksoHealth		EksoWorks		Total
Device revenue	$	1,019	$	98	$	1,117
Service and support	488		—		488
Rentals and subscriptions	152		70		222
Parts and other	54		15		69
Collaborative arrangements	14		—		14
	$	1,727	$	183	$	1,910

7. Accrued Liabilities

Accrued liabilities consisted of the following:


	March 31, 2022		December 31, 2021
Salaries, benefits and related expenses	$	1,520	$	2,015
Device warranty	226		195


Other	73		89
Total	$	1,819	$	2,299

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, 2022 is as follows:

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Ekso Bionics Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

($ and share amounts in thousands, except per share amounts)

(Unaudited)


	Three Months Ended
	March 31, 2022
Balance at beginning of period	$	270
Additions for estimated future costs	76
Incurred costs	(60)
Balance at end of period	$	286

	Balance as of March 31, 2022
Current portion	$	226
Long-term portion	60
Total	$	286

8. Notes Payable, net

PWB Term Loan

In August 2020, the Company entered into a new loan agreement (the "PWB Loan Agreement") with a lender, Pacific Western Bank, and received a loan in the principal amount of $2,000 (the "PWB Term Loan") that bears interest on the outstanding daily balance at a rate equal to the greater of: (a) 0.50% above the variable rate of interest announced by the lender as its “prime rate” then in effect; or (b) 4.50%. The PWB Loan Agreement created a first priority security interest with respect to substantially all assets of the Company, including proceeds of intellectual property, but expressly excluding intellectual property itself.

The Company is required to pay accrued interest on the current loan on the 13th day of each month through and including August 13, 2023. The principal balance of the PWB Term Loan matures on August 13, 2023, at which time all unpaid principal and accrued and unpaid interest shall be due and payable in full. The interest rate of the PWB Term Loan is subject to increase in the event of late payments and after occurrence of and during the continuation of an event of default. Upon maturity, all unpaid principal and accrued and unpaid interest shall be due and payable in full. The Company may elect to prepay the PWB Term Loan at any time, in whole or in part, without penalty or premium.

The PWB Loan Agreement contains a liquidity covenant, which requires that the Company maintain unrestricted cash and cash equivalents 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 $2,000 as of March 31, 2022. On March 31, 2022, with cash on hand of $36,176, the Company was compliant with this liquidity covenant and all other covenants.

The debt issuance costs and debt discounts combined with the stated interest resulted in an effective interest rate of 4.70% for the three months ended March 31, 2022. The debt issuance costs will be amortized to interest expense using the effective interest method over the life of the loan.

The following table presents scheduled principal payments of the Company’s PWB term loan as of March 31, 2022:

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Ekso Bionics Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

($ and share amounts in thousands, except per share amounts)

(Unaudited)


Period	Amount
Remainder of 2022	$	—
2023	2,000
Total principal payments	2,000
Less debt discount and issuance cost	6
Note payable, net	$	1,994

Current portion	$	—
Long-term portion	1,994
Note payable, net	$	1,994

Paycheck Protection Program Loan

On April 20, 2020, the Company received an unsecured loan in the principal amount of $1,086 under the Paycheck Protection Program (the “PPP”) administered by the U.S. Small Business Administration (the "SBA"), pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), or the PPP loan. The PPP loan bore interest at 1.00% per annum, and matured two years after the date of initial disbursement. The terms of the PPP loan were subsequently revised in accordance with the provisions of the Paycheck Protection Flexibility Act of 2020, or the PPP Flexibility Act, which was enacted on June 5, 2020. The PPP loan was used for payroll costs, costs related to certain group health care benefits and insurance premiums, rent payments, utility payments and interest payments on other debt obligation that were incurred before February 15, 2020. Under the terms of the CARES Act and the PPP Flexibility Act, the Company could apply for and be granted forgiveness for all or a portion of loan granted under the PPP loan, with such forgiveness to be determined, subject to limitations (including where employees of the Company have been terminated and not re-hired by a certain date), based on the use of the loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities. The terms of any forgiveness were also subject to further requirements in regulations and guidelines adopted by the SBA.

On June 28, 2021, the Company received notification from the SBA that the Company’s Forgiveness Application of the PPP loan and accrued interest, totaling $1,099, was approved in full, and the Company had no further obligations related to the PPP loan. Accordingly, the Company recorded a gain on the forgiveness of the PPP loan as gain on forgiveness of note payable on the condensed consolidated statement of operations during the three months ended June 30, 2021.

9. Lease Obligations

The Company maintains a five-year operating lease agreement for its headquarters and manufacturing facility in Richmond, California (the "Richmond Lease") which expires in May 2022, with no further options to extend or terminate. The lease includes non-lease components (i.e. common area maintenance costs) that are paid separately from rent based on actual costs incurred.

The Company maintains a five-year operating lease agreement for its European operations office in Hamburg, Germany, which expires in July 2022. In February 2022, the Company executed a new lease agreement for a replacement office in Hamburg, Germany commencing May 1, 2022 and expiring June 30, 2025 with an option to renew for one five-year period. Since this operating lease commences after March 31, 2022, the lease payments are not recognized in lease liabilities and corresponding right-of-use assets on the balance sheet as of March 31, 2022.

The Company’s future lease payments as of March 31, 2022, which are presented as lease liabilities on the Company’s condensed consolidated balance sheets are as follows:

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Ekso Bionics Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

($ and share amounts in thousands, except per share amounts)

(Unaudited)


Period	Operating Leases
Remainder of 2022	$	98
2023	—
Total lease payments	98
Less: imputed interest	(1)
Present value of lease liabilities	$	97

Weighted-average remaining lease term (in years)	0.2
Weighted-average discount rate	10.5		%

Lease expense under the Company’s operating leases was $142 and $132 for the three months ended March 31, 2022 and 2021, respectively.

10. Capitalization and Equity Structure

Summary

The Company’s authorized capital stock at March 31, 2022 and December 31, 2021 consisted of 141,429 shares of common stock and 10,000 shares of preferred stock. As of March 31, 2022 and December 31, 2021, there were 12,844 and 12,693, respectively, shares of common stock issued and outstanding and no shares of preferred stock issued and outstanding.

Common Stock

February 2021 Offering

In February 2021, the Company entered into an amended and restated underwriting agreement (the "Underwriting Agreement") with H.C. Wainwright & Co., LLC ("Wainwright"), to sell 3,902 shares of the Company's common stock for a public price of $10.25 per share, for gross proceeds of $40,000 (the "February 2021 Offering"). The Company received net proceeds of $36,504 from the February 2021 Offering after deducting underwriting discounts, commissions and estimated offering expenses. Pursuant to the Underwriting Agreement, the Company issued, to certain designees of Wainwright, five year warrants (the “2021 Warrants”) to purchase shares of Common Stock in an amount equal to 7.0% of the aggregate number of shares sold in the February 2021 Offering, or 273 shares, at an exercise price of $12.81 per share.

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 $7,500 under the registration statement and prospectus supplement filed with the SEC related to such offering. Under the ATM Agreement, shares of the Company's common stock may not be sold for a price lower than $6.75 per share. The Company did not sell any shares under the ATM agreement during the three months ended March 31, 2022. As of March 31, 2022, the Company has $6,668 available for future offerings under the prospectus filed with respect to the ATM Agreement.

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Ekso Bionics Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

($ and share amounts in thousands, except per share amounts)

(Unaudited)

Warrants

Warrants outstanding as of March 31, 2022 and December 31, 2021 were as follows:


Source	Exercise Price		Term (Years)	December 31, 2021	Issued	Exercised	March 31, 2022
2021 Warrants	$	12.81	5	273	—	—	273
June 2020 Investor Warrants	$	5.18	5.5	127	—	—	127
June 2020 Placement Agent Warrants	$	5.64	5	39	—	—	39
December 2019 Warrants	$	8.10	5	556	—	—	556
December 2019 Placement Agent Warrants	$	8.44	5	52	—	—	52
May 2019 Warrants	$	3.52	5	193	—	—	193
				1,240	—	—	1,240

During the three months ended March 31, 2021, the Company received net proceeds of $1,417 from the exercise of 358 warrants and issued 300 shares of common stock, respectively, as a result of those exercises. No warrants were exercised during the three months ended March 31, 2022.

2021 Warrants

In February 2021, the Company issued the 2021 Warrants, exercisable for up to 273 shares of the Company’s common stock at an exercise price of $12.81 per share. The 2021 Warrants were exercisable immediately, and will expire five years from the date of issuance, or on February 11, 2026.

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, 2022			December 31, 2021
Current share price	$	2.89		$	2.65
Conversion price	$	12.81		$	12.81
Risk-free interest rate	2.44		%	1.13		%
Expected term (years)	3.86			4.11
Volatility of stock	95.67		%	98.3		%

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Ekso Bionics Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

($ and share amounts in thousands, except per share amounts)

(Unaudited)

June 2020 Investor Warrants

In June 2020, the Company issued warrants (the "June 2020 Investor Warrants"), exercisable for up to 874 shares of the Company’s common stock at an exercise price of $5.18 per share. The June 2020 Investor Warrants were immediately exercisable, and will expire five and one-half years from the date of issuance, or on December 10, 2025.

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. During the three months ended March 31, 2022 and 2021, no shares and 270 shares of the June 2020 Investor Warrants were exercised, respectively.

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 and exercise 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, 2022			December 31, 2021
Current share price	$	2.89		$	2.65
Conversion price	$	5.18		$	5.18
Risk-free interest rate	2.44		%	1.11		%
Expected term (years)	3.69			3.94
Volatility of stock	97.1		%	103.9		%

June 2020 Placement Agent Warrants

In June 2020, the Company issued warrants (the "June 2020 Placement Agent Warrants"), exercisable for up to 122 shares of the Company’s common stock, to the placement agent for such offering. The June 2020 Placement Agent Warrants have substantially the same form as the June 2020 Investor Warrants, including the put option described above, except that they have an exercise price per share equal to $5.64, subject to adjustment in certain circumstances, and will expire on June 7, 2025. During the three months ended March 31, 2022 and 2021, no shares and 83 shares of the June 2020 Placement Agent Warrants were exercised, respectively.

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.

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Ekso Bionics Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

($ and share amounts in thousands, except per share amounts)

(Unaudited)

The warrant liability related to the June 2020 Placement Agent 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. The following assumptions were used in the Black-Scholes Model to measure the fair value of the June 2020 Placement Agent Warrants:


	March 31, 2022			December 31, 2021
Current share price	$	2.89		$	2.65
Conversion price	$	5.64		$	5.64
Risk-free interest rate	2.45		%	1.03		%
Expected term (years)	3.19			3.44
Volatility of stock	99.8		%	100.0		%

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 556 shares of common stock. The December 2019 Warrants are currently exercisable, have an exercise price of $8.10 per share, and will expire five years from the date they initially became exercisable, or on June 21, 2025.

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, 2022			December 31, 2021
Current share price	$	2.89		$	2.65
Conversion price	$	8.10		$	8.10
Risk-free interest rate	2.45		%	1.04		%
Expected term (years)	3.22			3.47
Volatility of stock	99.5		%	99.7		%

December 2019 Placement Agent Warrants

In December 2019, in connection with the December 2019 Offering, the Company issued warrants to purchase 52 shares of the Company’s common stock to the placement agent for such offering (the "December 2019 Placement Agent Warrants"). The December 2019 Placement Agent Warrants have substantially the same form as the December 2019 Warrants, except that they have an exercise price per share equal to $8.44, subject to adjustment in certain circumstances, and will expire on December 18, 2025.

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:

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Ekso Bionics Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

($ and share amounts in thousands, except per share amounts)

(Unaudited)


	March 31, 2022			December 31, 2021
Current share price	$	2.89		$	2.65
Conversion price	$	8.44		$	8.44
Risk-free interest rate	2.4		%	0.96		%
Expected term (years)	2.72			2.97
Volatility of stock	103.5		%	102.9		%

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 444 shares of common stock. The May 2019 Warrants are currently exercisable, have a current exercise price of $3.52 per share, and will expire five years from the date of their issuance, or on May 24, 2024. The May 2019 Warrants contain a price protection feature, pursuant to which, subject to certain exceptions, if shares of common stock are sold or issued in the future, or securities convertible or exercisable for shares of the Company’s common stock are sold or issued in the future, for consideration, or with an exercise price or conversion price, as applicable, per share less than the exercise price per share then in effect for the May 2019 Warrants, the exercise price of the May 2019 Warrants is reduced to the consideration paid for, or the exercise price or conversion price of, as the case may be, the securities issued in such offering. Pursuant to this provision, in connection with the June 2020 Offering, the exercise price of the May 2019 Warrants was reduced to $3.52 per share, being the amount that is equal to the lower of (x) the consideration paid for the securities issued in the June 2020 Offering, or $4.51 per share, (y) the lowest exercise price of the June 2020 Investor Warrants, or $5.18, and (z) the lowest one-day volume-weighted average price of the Company’s Common Stock on the Nasdaq Capital Market as measured each day during the five trading day period starting on June 8, 2020, rounded to the nearest share, or $3.52. During the three months ended March 31, 2022 and 2021, no shares and 5 shares of the May 2019 warrants were exercised respectively.

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. The following assumptions were used in a combination of the Black-Scholes Model and the Lattice Model to measure the fair value of the May 2019 Warrants:


	March 31, 2022			December 31, 2021
Current share price	$	2.89		$	2.65
Conversion price	$	3.52		$	3.52
Risk-free interest rate	2.31		%	0.83		%
Expected term (years)	2.2			2.4
Volatility of stock	108.6		%	109.1		%

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Ekso Bionics Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

($ and share amounts in thousands, except per share amounts)

(Unaudited)

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.

11. Stock-based Compensation

Shares available to grant

As of March 31, 2022, the total shares authorized for grant under the 2014 Plan was 1,974, of which 576 were available for future grants.

Stock Options

The following table summarizes information about the Company’s stock options outstanding as of March 31, 2022, and activity during the three months then ended:


	Stock Awards	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Balance as of December 31, 2021	491	$	32.53


Options forfeited	(26)	10.58
Options cancelled	(16)	85.78
Balance as of March 31, 2022	449	$	31.96	5.12	$	—
Vested and expected to vest at March 31, 2022	449	$	31.96	5.12	$	—
Exercisable as of March 31, 2022	402	$	33.95	4.85	$	—

As of March 31, 2022, total unrecognized compensation cost related to unvested stock options was $526. This amount is expected to be recognized as stock-based compensation expense in the Company’s condensed consolidated statements of operations and comprehensive loss over the remaining weighted average vesting period of 1.08 years.

Restricted Stock Units

The Company issues time-based restricted stock units (“RSUs”) and performance-based restricted stock units ("PSUs") to employees and non-employee service providers. 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, 2022 is summarized below:


	Number of Shares	Weighted- Average Grant Date Fair Value
Unvested as of December 31, 2021	655	$	5.63
Granted	195	2.59
Vested	(127)	5.59
Forfeited	(142)	5.39
Unvested at March 31, 2022	581	$	4.69

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Ekso Bionics Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

($ and share amounts in thousands, except per share amounts)

(Unaudited)

As of March 31, 2022, $1,990 of total unrecognized compensation expense related to unvested RSUs and PSUs was expected to be recognized over a weighted average period of 1.72 years.

Compensation Expense

Total stock-based compensation expense related to options, RSUs and PSUs granted to employees is included in the condensed consolidated statements of operations and comprehensive loss as follows:


	Three Months Ended March 31,
		2022		2021
Sales and marketing		$	69	$	99
Research and development		79		52
General and administrative		351		205
		$	499	$	356

401(k) Plan Share Match

During the three months ended March 31, 2022 and 2021, the Company issued 68 and 26 shares of common stock with a fair value of $176 and $152, to eligible employees’ deferral accounts for the 401(k) Plan matching contribution representing 50% of each eligible employee’s elected deferral (up to the statutory limit) for the fiscal years ended December 31, 2021 and 2020, respectively.

The expense related to the accrual for the 401(k) plan share matching was $64 and $52 for the three months ended March 31, 2022 and 2021, respectively.

12. Income Taxes

There were no material changes to the unrecognized tax benefits in the three months ended March 31, 2022, and the Company does not expect significant changes to unrecognized tax benefits through the end of the fiscal year. Because of the Company’s history of tax losses, all years remain open to tax examination.

13. Commitments and Contingencies

Material Contracts

The Company enters various license, research collaboration and development agreements, which provide for payments to the Company primarily for technology transfer and license fees, and royalty payments on sales.

The Company has two license agreements with the Regents of the University of California to maintain exclusive rights to certain patents. The Company is required to pay 1% of net sales of licensed medical devices sold to entities other than the U.S. government. In addition, the Company is required to pay 21% of consideration collected from any sub-licensee for the grant of the sub-license.

Under a license agreement with the developer of certain intellectual property related to mechanical balance and support arm technologies, which grants the Company an exclusive license with respect to the technology and patent rights for certain fields of use, the Company is required to pay the developer a single-digit royalty on net receipts, subject to a $50 annual minimum royalty requirement.

The Company entered into a research and development collaboration agreement in December 2021 with a party that develops technologies having utility in robotic exoskeletons from research and development activities associated with a specific set of government funded research projects. Since January 2022, the Company has assisted with research and development activities in exchange for access to a worldwide, royalty free, transferable, sublicensable, exclusive license to design and market products that use or incorporate the jointly-developed technology within Ekso’s target market segments.

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Ekso Bionics Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

($ and share amounts in thousands, except per share amounts)

(Unaudited)

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 $3,460 as of March 31, 2022, which are expected to be paid within two years, and $1,446 as of December 31, 2021. Timing of payments and actual amounts paid may be different depending on the time of receipt of goods or services or changes to agreed-upon amounts for some obligations. Timing of payments and actual amounts paid may be different depending on the time of receipt of goods or services or changes to agreed-upon amounts for some obligations.

Due to a variety of factors, including the COVID-19 pandemic, various materials the Company used to manufacture its products are currently experiencing shortages and supply chain disruptions. Electronic components in general, semiconductor chips, battery cells, metals and plastics, all of which are used in the Company's products, are also in shorter supply compared to prior periods, and the Company is also experiencing longer lead times for manufacturing services such as machining and tool making. Numerous factors, such as the ongoing pandemic or further trade tensions between the U.S. and China, may prolong or deepen these challenges.

In addition, the Company has operating lease commitments totaling $227 payable ratably over three years related to an operating lease which was executed in February 2022 but does not commence until May 1, 2022. See Note 9. Lease Obligations.

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.

14. Net (Loss) Income Per Share

The following table sets forth the computation of basic and diluted net loss per share:


	Three Months Ended March 31,
		2022		2021
Numerator:
Net loss applicable to common stockholders, basic and diluted		$	(4,620)	$	(3,670)



Denominator:


Weighted-average number of shares, basic and diluted		12,728		10,752

Net loss per share, basic and diluted		$	(0.36)	$	(0.34)

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,
		2022	2021
Options to purchase common stock		449	522
Restricted stock units		581	325
Warrants for common stock		1,240	1,240
Total common stock equivalents		2,270	2,087

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Ekso Bionics Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

($ and share amounts in thousands, except per share amounts)

(Unaudited)

15. Segment Disclosures

The Company has two reportable segments: EksoHealth and EksoWorks. The EksoHealth segment designs, engineers, manufactures, and markets exoskeletons for applications in the medical markets. The EksoWorks segment designs, engineers, 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 net assets as a segment measure and, accordingly, assets are not allocated.

Segment reporting information is as follows:


	EksoHealth		EksoWorks		Total
Three months ended March 31, 2022
Revenue	$	1,881	$	686	$	2,567
Cost of revenue	1,015		343		1,358
Gross profit	$	866	$	343	$	1,209

Three months ended March 31, 2021
Revenue	$	1,727	$	183	$	1,910
Cost of revenue	542		133		675
Gross profit	$	1,185	$	50	$	1,235

Geographically, the regions the Company operates in are the Americas, Europe, the Middle East, and Africa (EMEA), and Asia Pacific (APAC). Individual countries with revenue greater than 10% of total revenue are disclosed separately from the regional totals. Geographic information for revenue based on location of customers is as follows:


	Three Months Ended March 31,
		2022		2021
United States		$	1,343	$	982
Other		55		36
Americas		1,398		1,018
Germany		124		437

Other		440		186
EMEA		564		623
Japan		280		19
Singapore		48		241
Other		277		9
APAC		605		269
		$	2,567	$	1,910

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

In this Quarterly Report, the “Company”, “we”, “its” and “our” refers to Ekso Bionics Holdings, Inc. and its wholly-owned subsidiaries. The following discussion of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 (this “Quarterly Report”) and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “Annual Report”).

This Quarterly Report contains forward-looking statements. These forward-looking statements include statements other than statements of historical facts contained or incorporated by reference in this Quarterly Report, including statements regarding (i) the plans and objectives of management for future operations, including those relating to the design, development and commercialization of exoskeleton products for humans, (ii) a projection of income (including income/loss), earnings (including earnings/loss) per share, capital expenditures, dividends, capital structure or other financial items, (iii) our future financial performance, including any such statement contained in a discussion and analysis of financial condition by management or in the results of operations included pursuant to the rules and regulations of the SEC, (iv) our beliefs regarding the potential for commercial opportunities for exoskeleton technology in general and our exoskeleton products in particular, (v) our beliefs regarding potential clinical and other health benefits of our medical devices, and (vi) the assumptions underlying or relating to any statement described in points (i), (ii), (iii), (iv) or (v) above. The words “may,” “might,” “would,” “should,” “could,” “project,” “estimate,” “pro-forma,” “predict,” “potential,” “strategy,” “anticipate,” “attempt,” “develop,” “plan,” “help,” “believe,” “continue,” “intend,” “expect,” “future,” and similar expressions (including the negative of any of the foregoing) are intended to identify forward-looking statements.

The following factors, among others, including those described in the section titled “Risk Factors” included in our Annual Report, as updated and supplemented in this Quarterly Report under the heading “Part II – Item 1A. Risk Factors,” could cause our future results to differ materially from those expressed in the forward-looking information:

•our ability to obtain adequate financing to fund operations and to develop or enhance our technology;

•our ability to obtain or maintain regulatory approval to market our medical devices;

•our ability to complete clinical trials on a timely basis and that completed clinical trials will be sufficient to support commercialization of our products;

•the anticipated timing, cost and progress of the development and commercialization of new products or services, and improvements to our existing products, and related impacts on our profitability and cash position;

•our ability to effectively market and sell our products and expand our business, both in unit sales and product diversification;

•our ability to achieve broad customer adoption of our products and services;

•existing or increased competition;

•rapid changes in technological solutions available to our markets;

•volatility with our business, including long and variable sales cycles, which could have a negative impact on our results of operations for any given quarter;

•changes to our domestic or international sales and operations;

•our ability to obtain or maintain patent protection for our intellectual property;

•the scope, validity and enforceability of our and third-party intellectual property rights;

•significant government regulation of medical devices and the healthcare industry;

•our ability to receive regulatory clearance from certain government authorities, such as CFIUS (as defined below), including any conditions, limitations or restrictions placed on such approvals;

•our customers’ ability to get third-party reimbursement for our products and services associated with them;

•the potential for our products to be subject to voluntary or involuntary recall;

•our product liability insurance may not adequately cover potential claims;

•warrant claims and our accelerated maintenance program results in additional operating costs to us;

•our failure to implement our business plan or strategies;

•our early termination of leases, difficulty filling vacancies or negotiating improved lease terms;

•our ability to retain or attract key employees;

•scope, scale and duration of the impact of outbreaks of a pandemic disease, such as COVID-19 (coronavirus);

•stock volatility or illiquidity;

•our ability to maintain adequate internal controls over financial reporting; and

•overall economic and market conditions.

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Although we believe that the assumptions underlying the forward-looking statements and forward-looking information contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, such statements and information included in this Quarterly Report may not prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements and forward-looking information included herein, the inclusion of such statements and information should not be regarded as a representation by us or any other person that the results or conditions described in such statements and information or that our objectives and plans will be achieved. Such forward-looking statements speak only as of the date of this Quarterly Report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Overview

Our Business

We design, develop, and market exoskeleton products that augment human strength, endurance and mobility. Our exoskeleton technology serves multiple markets and can be utilized both by able-bodied persons and by persons with physical disabilities. We have sold or leased devices that (i) enable individuals with neurological conditions affecting gait, including ABI and SCI, to rehabilitate, and in some cases, to walk again, (ii) assist individuals with a broad range of upper extremity impairments, and (iii) allow industrial workers to perform difficult repetitive work for extended periods.

We believe that the commercial opportunity for exoskeleton technology adoption is accelerating as a result of recent advancements in material technologies, electronic and electrical engineering, control technologies, and sensor and software development. Taken individually, many of these advancements have become ubiquitous in peoples’ everyday lives. We believe that we have learned how to integrate these existing technologies and wrap the result around a human being efficiently, elegantly and safely, supported by an industry leading intellectual property portfolio. We further believe that we can do so across a broad spectrum of applications, from persons with lower limb paralysis to able-bodied users.

EksoHealth

EksoHealth is our business unit focused on developing and marketing exoskeletons for medical applications.

Our leading product in EksoHealth, the EksoNR, is a robotic exoskeleton used to provide physical therapy for patients with lower extremity impairment. EksoNR, which in 2019 superseded our EksoGT product in this segment, includes unique features designed specifically to assist physical therapists and other clinicians to teach patients to walk again after suffering a neurological impairment. Typical conditions that can be treated with the assistance of EksoNR include ABIs, such as stroke and traumatic brain injuries, as well as SCIs and others. The benefits of using EksoNR for rehabilitation can include earlier mobilization of patients, longer and more intense rehab sessions, and better quality of sessions compared to alternative therapies. The product is most typically used in a clinical setting, with the most common among those being inpatient rehab facilities and stroke centers.

EksoUE is a wearable upper body exoskeleton that is also used as a tool during rehabilitation. EksoUE is designed to assist patients with a broad range of upper extremity impairments and aims to provide them with a wider active range of motion and increased endurance for rehabilitation sessions of higher intensity.

EksoWorks

EksoWorks is our business unit focused on developing, marketing, and selling exoskeletons and other assistive tools for industrial applications. The target users for these devices are generally able-bodied, and as such the goal of these products is to reduce fatigue for workers. The benefits of fatigue reduction can include reduced rates of injuries, higher productivity, higher worker morale, and lower turnover. Currently, we primarily sell these products directly to companies that deploy them for use in their operations.

Within EksoWorks we have two main categories of products. Our wearable exoskeleton products include EksoVest and the new EVO, both of which support the weight of a worker’s arms and tools, reducing the fatigue associated with working at or above shoulder height for extended periods. These products are currently targeted at end markets in aerospace, automotive, manufacturing, and specific construction trades.

EksoZeroG is a tool holder that can mount on an aerial lift platform or scaffolding. This effectively reduces the weight of heavy tools as felt by the operator. EksoZeroG has been sold primarily through rental companies into the construction market.

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First Quarter 2022 Highlights

•Reported revenue of $2.6 million in the first quarter of 2022

•Achieved gross margins of approximately 47% in the first quarter of 2022

•Booked a total of 23 EksoNR units in the first quarter of 2022

•Strong cash position of $36.2 million as of March 31, 2022

Economic and Industry Trends

Our revenue is highly dependent on market demand for our exoskeleton products. This market demand is influenced by many factors including the level of awareness of robotic exoskeleton rehabilitation among the rehabilitation clinics with significant stroke, ABI, and SCI populations, the imperatives among construction and manufacturing companies to drive adoption of improved safety and health practices, as well as conditions relating to overall economic growth and general business activity. Difficult and challenging economic conditions, including growing supply chain issues amidst an increasingly inflationary environment, could lead to increased price-based competition. In particular, the effects of such increasing price-based competition may have an especially significant impact on certain products that we offer, including the EksoNR, which have a lengthy sale and purchase order cycle because they are major capital expenditure items and generally require the approval of senior management at purchasing institutions. Furthermore, our business includes operations in the Americas, EMEA and APAC, so we are affected by demand for our products in those regions, as well as the strengthening or weakening of local currencies relative to the U.S. Dollar.

The COVID-19 pandemic and related public health measures have also materially affected how we and our customers are operating our businesses, and have materially affected our operating results, as demand for our exoskeleton products decreased as many inpatient rehabilitation facilities temporarily shifted priorities and delayed capital expenditures. While the duration and extent to which this will impact our future results remain uncertain, we have seen certain recovery in the demand for our exoskeleton products following the gradual reopening and recovery of the broader global economy, and we believe the clinical need for our products has not diminished, as evidenced by clinical data showing the increased prevalence of strokes during the pandemic. Although concerns about the emergence of new, more infectious variants of the coronavirus remain, we have gradually resumed in-person engagements in addition to virtual meetings with our current and prospective customers through conferences, training events and educational demos to offer our support and showcase the value of our Ekso devices. Further, now that our clinical team is fully vaccinated and are active onsite at U.S. rehab centers, we expect to see an uptick in live in-person interactions going forward. Although market uncertainties related to the pandemic make it difficult for us to project the full impact on our business and customers, we believe that we are well-positioned to serve our customers when business conditions begin to normalize.

Throughout the pandemic, our top priority has been to protect the health and safety of our employees and our consumers. We have an optional work from home policy for many of our employees. Vaccinated employees are permitted to work in the office and we have allowed essential business travel to resume. We have also enhanced the use of personal protective equipment in our facilities.

Management continues to actively monitor the global situation, including the geopolitical instability arising out of military conflict and escalating tensions between Russia and Ukraine, and its effects on our financial position and operations.

Management Changes

On January 14, 2022, Jack Peurach, our former President and Chief Executive Officer, notified us of his intention to resign as an officer and member of the Board of Directors of the Company to pursue other endeavors. On January 20, 2022, our Board and Mr. Peurach reached an understanding regarding his decision to leave the Company and entered into an Executive Separation and Release Agreement pursuant to which Mr. Peurach’s last day of service as the President, Chief Executive Officer and as a member of the Company’s Board was January 21, 2022. In addition, our Board of Directors appointed Steven Sherman, who currently serves and previously had served as the Chairman of our Board, to become Chief Executive Officer of the Company effective January 22, 2022. Mr. Sherman continues to serve as the Chairman of the Board of the Company, and Board member Stanley Stern has been designated the Board’s lead independent director. Furthermore, our Board of Directors appointed Scott Davis to become President and Chief Operating Officer effective January 22, 2022.

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Finally, on March 4, 2022, William Shaw, our former Chief Commercial Officer, notified our Board of Directors of his intention to resign as Chief Commercial Officer of the Company effective March 11, 2022 in connection with his retention as an employee at another company.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and the related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Our estimates form the basis for our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimate that are reasonably likely to occur, could materially impact the condensed consolidated financial statements. We believe that our critical accounting policies reflect the more significant estimates and assumptions used in the preparation of the condensed consolidated financial statements. Refer to Note. 2 Basis of Presentation and Summary of Significant Accounting Policies and Estimates in the notes to our condensed consolidated financial statements.

Results of Operations

The following table presents our results of operations (in thousands, except percentages):


	Three months ended March 31,
	2022			2021			Change		% Change

Revenue	$	2,567		$	1,910		$	657	34	%
Cost of Revenue	1,358			675			683		101	%
Gross profit	1,209			1,235			(26)		(2)	%
Gross profit %	47		%	65		%

Operating expenses:
Sales and marketing	1,629			1,793			(164)		(9)	%
Research and development	999			603			396		66	%
General and administrative	2,818			1,978			840		42	%

Total operating expenses	5,446			4,374			1,072		25	%
Loss from operations	(4,237)			(3,139)			(1,098)		35	%
Other expense, net:
Interest expense	(27)			(26)			(1)		4	%
(Loss) gain on revaluation of warrant liabilities	(100)			11			(111)		n/m(1)


Other expense, net	(256)			(516)			260		(50)	%
Total other expense, net	(383)			(531)			148		(28)	%
Net loss	$	(4,620)		$	(3,670)		$	(950)	26	%

(1) Not meaningful

Revenue

Revenue increased $0.7 million, or 34%, for the three months ended March 31, 2022, compared to the same period of 2021. Revenue in the first quarter of 2022 included approximately $1.9 million in EksoHealth revenue and approximately $0.7 million in EksoWorks revenue. The increase in revenue was primarily driven by an increase in the volume of EVO vest sales in the EksoWorks business unit and recognition of prepaid royalties associated with a license and distribution agreement that expired.

Gross Profit

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Gross profit decreased 2% for the three months ended March 31, 2022 compared to the same period of 2021. Gross margin was approximately 47% for the three months ended March 31, 2022, compared to a gross margin of 65% for the same period in 2021. The overall decrease in gross margin was primarily due to the increase in EksoHealth service costs, changes in product mix and increases in inventory costs due to the continued supply shortage; partially offset by the recognition of royalty revenue associated with a license and distribution agreement that expired.

EksoHealth service costs increased due to increased headcount and the company providing service on an increased number of customer units, owing to the receipt of service parts during the quarter, the shortage of which had previously precluded the completion of service.

Operating Expenses

Sales and marketing expenses decreased $0.2 million, or 9%, for the three months ended March 31, 2022, compared to the same period of 2021. The decrease was primarily due to reduced general marketing activities.

Research and development expenses increased $0.4 million, or 66%, for the three months ended March 31, 2022, compared to the same period of 2021, primarily due to an increase in product development activity and headcount.

General and administrative expenses increased $0.8 million, or 42%, for the three months ended March 31, 2022, compared to the same period of 2021, primarily due to an increase in compensation costs associated with the appointment of our new Chief Operating Officer and noncash stock-based compensation related to the appointment of our new Chief Executive Officer, as well as severance expense associated with the departure of our former Chief Executive Officer.

Total Other Expense, Net

Loss on revaluation of warrant liabilities was $0.1 million for the three months ended March 31, 2022, and was associated with the revaluation of warrants issued in 2019, 2020 and 2021. Gain on warrant liabilities was de minimis for the three months ended March 31, 2021, and was associated with the revaluation of warrants issued in 2019, 2020 and 2021. Gains and losses on revaluation of warrants are primarily driven by changes in our stock price and changes to the risk free rate.

Other expense, net for the three months ended March 31, 2022 was $0.3 million, as compared to $0.5 million for the same period of 2021, due to unrealized losses on foreign currency revaluations of our inter-company monetary assets and liabilities.

Financial Condition, Liquidity and Capital Resources

Since our inception, we have devoted substantially all of our efforts toward the development of exoskeletons for the medical and industrial markets, toward the commercialization of medical exoskeletons to rehabilitation centers and toward raising capital. We have financed our operations primarily through the issuance and sale of equity securities for cash consideration and through bank debt.

Liquidity and Capital Resources

On March 31, 2022, we had working capital of $37.2 million, compared to working capital of $40.9 million at December 31, 2021. The decrease in working capital is primarily due to a lower cash balance from cash used in operations. Our cash as of March 31, 2022, consisted of bank deposits with third party financial institutions. As of March 31, 2022, of our $36.2 million of cash, $35.5 million was held domestically while $0.7 million was held by foreign subsidiaries.

As described in Note 8 in the notes to our condensed consolidated financial statements under the caption Notes Payable, net, borrowings under our new secured term loan agreement with Pacific Western Bank have a requirement of minimum cash on hand equivalent to the current outstanding principal balance. As of March 31, 2022, $2.0 million of cash must remain as restricted. After considering cash restrictions, effective unrestricted cash as of March 31, 2022 is estimated to be $34.2 million. With this unrestricted cash balance, we believe that we currently have sufficient cash to fund our operations beyond the look forward period of one year from the issuance of these condensed consolidated financial statements.

Cash

The following table summarizes the sources and uses of cash (in thousands).

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	Three months ended March 31,
	2022		2021
Net cash used in operating activities	$	(4,206)	$	(2,000)

Net cash provided by financing activities	—		38,712
Effect of exchange rate changes on cash	(24)		(35)
Net (decrease) increase in cash	(4,230)		36,677
Cash at the beginning of the period	40,406		12,862
Cash at the end of the period	$	36,176	$	49,539

Net Cash Used in Operating Activities

Net cash used in operations increased $2.2 million, or 110%, for the three months ended March 31, 2022, compared to the same period of 2021 primarily due to higher payments for business development costs incurred in late 2021, increased employee compensation related to higher headcount and increased inventory purchases.

Net Cash Provided by Financing Activities

Net cash provided by financing activities of $38.7 million for the three months ended March 31, 2021, was from the sale of common stock and warrants for net proceeds of $36.5 million in connection with the equity financing, net proceeds of $0.7 million from our “at the market offering” program, and proceeds of $1.4 million from the exercise of warrants. There was no comparable amount for the three months ended March 31, 2022.

Contractual Obligations and Commitments

The following table summarizes our outstanding contractual obligations as of March 31, 2022, and the effect those obligations are expected to have on our liquidity and cash flows in future periods (in thousands):


	Payments Due By Period:
	Total		Less than One Year		1-3 Years		3-5 Years		After 5 Years
Note payable, principal and interest	$	2,128	$	90	$	2,038	$	—	$	—
Facility operating leases	325		162		144		19		—
Purchase obligations	3,460		3,393		67		—		—
Total	$	5,913	$	3,645	$	2,249	$	19	$	—

Refer to Note 13. Commitments and Contingencies for additional information regarding our license agreements and purchase obligations.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

We are exposed to market risks in the ordinary course of our business, including inflation risks.

We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.

In addition, we conduct business in foreign countries and have subsidiaries based in Germany and Singapore. Accordingly, we are exposed to exchange rate risk. See Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Annual Report.

Item 4. Controls and Procedures

Disclosure Controls and Procedures.

Our management, with the participation of our principal executive officer and principal financial officer, conducted an evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities

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Exchange Act of 1934, as amended (“Exchange Act”)) as of the end of the period covered by this Quarterly Report. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed by us under the Exchange Act is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

It should be noted that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment and makes assumptions about the likelihood of future events. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Management believes that the financial statements included in this Quarterly Report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are not the subject of any pending legal proceedings; and to the best of our management’s knowledge, no such proceeding is presently threatened, the results of which would have a material impact on the Companies properties, results of operations, or financial condition. Further, to the knowledge of management, no director or executive officer is party to any action in which any has an interest adverse to us.

Item 1A. Risk Factors

We have not identified any material changes to the risk factors previously disclosed in Part I - Item 1A - “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021.

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Item 6. Exhibits

Exhibit
Number

Description

10.1#

Executive Separation and Release Agreement, dated January 20, 2022 between the Company and Jack Peurach (incorporated by reference from Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on January 21, 2022).

10.2#

Employment Agreement, dated January 21, 2022, between the Company and Steven Sherman (incorporated by reference from Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on January 21, 2022).

10.3#

Offer Letter, dated February 22, 2021, between the Company and Scott Davis (incorporated by reference from Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on January 21, 2022).

10.4#

William Shaw Transition Services Agreement dated March 10, 2022 (incorporated by reference from Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on March 10, 2022).

31.1*

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.

31.2*

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.

32.1*

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101*

The following financial statements from the Ekso Bionics Holdings, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in Extensible Business Reporting Language (“XBRL”):

•

unaudited condensed consolidated balance sheets;

•

unaudited condensed consolidated statements of operations and comprehensive income (loss);

•

unaudited condensed consolidated statements of stockholders’ equity;

•

unaudited condensed consolidated statement of cash flows; and

•

notes to unaudited condensed consolidated financial statements.


			*			Filed herewith.
			#			Indicates management compensatory plan or other agreement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Ekso Bionics Holdings, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	EKSO BIONICS HOLDINGS, INC.

Date: April 28, 2022	By:	/s/ Steven Sherman
		Steven Sherman
		Chief Executive Officer and Chairman
		(Duly Authorized Officer and Principal Executive Officer)

Date: April 28, 2022	By:	/s/ John F. Glenn
		John F. Glenn
		Chief Financial Officer

		(Duly Authorized Officer and Principal Financial and Accounting Officer)