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What changed in EKSO BIONICS HOLDINGS, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of EKSO BIONICS HOLDINGS, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+353 added−244 removedSource: 10-K (2025-03-03) vs 10-K (2024-03-04)

Top changes in EKSO BIONICS HOLDINGS, INC.'s 2024 10-K

353 paragraphs added · 244 removed · 188 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

54 edited+62 added−17 removed45 unchanged
Biggest changeOther U.S. and international regulations We are subject to broadly applicable fraud and abuse, privacy, and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we research, market, sell and distribute our products. • Federal Anti-Kickback Statute • Federal criminal and civil false claims laws • Health Insurance Portability and Accountability Act (“HIPAA”) • Physician Payments Sunshine Act • Similar state and foreign laws and regulations The policies of the FDA and foreign regulatory authorities may change, and additional government regulations may be enacted which could prevent or delay regulatory approval of our products and could also increase the cost of regulatory compliance.
Biggest changeThe policies of the FDA and foreign regulatory authorities may change, and additional government regulations may be enacted which could prevent or delay regulatory approval of our products and could also increase the cost of regulatory compliance.
In the Europe, Middle East, and Africa region (“EMEA”), we sell through a combination of direct and indirect channels, with German speaking countries handled direct, and other countries and regions served through distributors. In the Asia Pacific region (“APAC”) we also use a combination of direct and indirect channels depending on the country.
In the Europe, the Middle East, and Africa region (“EMEA”), we sell through a combination of direct and indirect channels, with German speaking countries handled direct, and other countries and regions served through distributors. In the Asia Pacific region (“APAC”) we also use a combination of direct and indirect channels depending on the country.
These restrictions include: (i) not making any substantial changes to the products prior to EU MDR certification, (ii) implementing certain MDR requirements immediately, and (iii) applying for an EU MDR conformity assessment and having a quality management system in place by May 26, 2024 and signing a written agreement with a notified body by September 26, 2024.
These restrictions include: (i) not making any substantial changes to the products prior to EU MDR certification, (ii) implementing certain EU MDR requirements immediately, and (iii) applying for an EU MDR conformity assessment and having a quality management system in place by May 26, 2024 and signing a written agreement with a notified body by September 26, 2024.
Markets and Distribution EksoHealth Enterprise Health Market Our sales priority for Enterprise Health customers involves the education of clinical and executive stakeholders on the economic and clinical value of our robotic exoskeleton portfolio, including the EksoNR and the Ekso Indego Therapy devices.
Markets and Distribution Enterprise Health Market Our sales priority for Enterprise Health customers involves the education of clinical and executive stakeholders on the economic and clinical value of our robotic exoskeleton portfolio, including the EksoNR and the Ekso Indego Therapy devices.
In the U.S. and most markets globally where we sell our products, payment for medical services provided by our customers (collectively “providers”) is determined by the government, commercial payors (insurers), or both. 6 Table of Contents Personal Health Within the Personal Health market, the Veterans Administration provides our products to qualified veterans for individual use.
In the U.S. and most markets globally where we sell our products, payment for medical services provided by our customers (collectively “providers”) is determined by the government, commercial payors (insurers), or both. 6 Table of Contents Personal Health Within the Personal Health market, the VA provides our products to qualified veterans for individual use.
Under MDR rules, we can continue to place these products on the market until December 31, 2028, provided that we adhere to certain restrictions.
Under EU MDR rules, we can continue to place these products on the market until December 31, 2028, provided that we adhere to certain restrictions.
In certain circumstances, we may elect to maintain ownership of a product sold as a subscription in lieu of selling it to a third party financing partner.
In certain circumstances, we elect to maintain ownership of a product sold as a subscription in lieu of selling it to a third-party financing partner.
Subscription arrangements typically last for 24 months to 36 months. 5 Table of Contents We distribute our products to the Enterprise Health market in all of our geographic regions through a combination of direct and indirect (distributor) channels. In the Americas geographic region, sales are primarily made through our direct salesforce.
Subscription arrangements typically last for 12 months to 36 months. 5 Table of Contents We distribute our products to the Enterprise Health market in all of our geographic regions through a combination of direct and indirect (distributor) channels. In the Americas geographic region, sales are primarily made through our direct salesforce.
The rules for CE marking a product are set forth in the EU Medical Device Regulation (the “EU MDR”), which replace the EU Medical Device Directive (the “EU MDD”). The EU MDR regulations were adopted with transitional periods that allow some products to rely on EU MDD certificates for a period of time.
The rules for CE marking a product are set forth in the EU Medical Device Regulation (the “EU MDR”), which replaces the EU Medical Device Directive (the “EU MDD”). The EU MDR regulations were adopted with transitional periods that allow some products to rely on EU MDD certificates for a period of time.
The full portfolio of currently available and legacy Ekso exoskeletons (EksoNR and Ekso Indego) have been utilized in many of these protocols. The body of research examines a wide variety of diagnoses including ABI, SCI, stroke, MS, and others.
The full portfolio of currently available and legacy Ekso exoskeletons (EksoNR, Ekso Indego Therapy and Ekso Indego Personal) have been utilized in many of these protocols. The body of research examines a wide variety of diagnoses including ABI, SCI, stroke, MS, and others.
Intellectual Property We have established an extensive intellectual property portfolio that includes various U.S. patents and patent applications. The table below provides a summary of U.S. patents by issuing status and ownership status as of December 31, 2023.
Intellectual Property We have established an extensive intellectual property portfolio that includes various U.S. patents and patent applications. The table below provides a summary of U.S. patents by issuing status and ownership status as of December 31, 2024.
We subscribe to a customer focused approach to new product development, wherein we use customer feedback and suggestions to inform development plans. Areas our engineering and R&D teams target for improvement include enhanced functionality, improved reliability and uptime, and lower cost, among others.
We subscribe to a customer-focused approach to new product development, wherein we use customer feedback and suggestions to inform development plans. Areas our engineering and research and development teams target for improvement include enhanced functionality, improved reliability and uptime, and lower cost, among others.
With 25 VA spinal cord injury centers, the VA has the largest single network of spinal cord injury care in the United States. Veterans who receive our products through the VA complete a screening, in-clinic training and a home trial prior to the VA purchasing a device for each eligible Veteran.
With 25 VA SCI centers, the VA has the largest single network of SCI care in the United States. Veterans who receive our products through the VA complete a screening, in-clinic training and a home trial prior to the VA purchasing a device for each eligible Veteran.
Many of these applications have also been filed internationally as appropriate for their respective subject matter. As of December 31, 2023, 299 applications have issued or have been allowed as patents internationally. Our patent portfolio contains 334 cases that have issued or are in prosecution in 22 countries outside the U.S.
Many of these applications have also been filed internationally as appropriate for their respective subject matter. As of December 31, 2024, 277 applications have issued or have been allowed as patents internationally. Our patent portfolio contains 282 cases that have issued or are in prosecution in 22 countries outside the U.S.
EksoNR is FDA cleared for use in a clinical setting with individuals with a spinal cord injury ("SCI"), acquired brain injury ("ABI") - including stroke and traumatic brain injuries ("TBI"), and multiple sclerosis ("MS").
EksoNR is cleared by the Food and Drug Administration (the "FDA") for use in a clinical setting with individuals with a spinal cord injury ("SCI"), acquired brain injury ("ABI") - including stroke and traumatic brain injuries ("TBI") - and multiple sclerosis ("MS").
Often these arrangements will be marketed as a subscription product to the end customer. Typically, in a subscription arrangement we will sell the device to the third party financing partner who then contracts with the end customer for payment terms.
These arrangements are generally marketed as a subscription product to the end customer. Typically, in a subscription arrangement we sell the device to the third-party financing partner who then contracts with the end customer for payment terms.
See "Part I--Item 1A Risk Factors", specifically the risk titled "Coverage policies and reimbursement levels of third-party payers, including Medicare or Medicaid, may impact sales of our products," for more information. Outside of the VA and Medicare, we sell Ekso Indego Personal to individuals who pay out-of-pocket or have obtained coverage through a worker’s compensation claim.
Risk Factors,” specifically the risk titled “Coverage policies and reimbursement levels of third-party payers, including Medicare or Medicaid, may impact sales of our products” for more information. Outside of the VA and Medicare, we sell Ekso Indego Personal to individuals who pay out-of-pocket or have obtained coverage through a worker’s compensation claim.
Clinical Evidence Numerous research studies have been conducted focusing on safety and feasibility of exoskeletons and robotics in rehabilitation. As of March 1, 2024 a search for “robotic exoskeleton” on PubMed, a search engine for biomedical literature and life science journal articles, garners approximately 289 unique publications.
Clinical Evidence Numerous research studies have been conducted focusing on safety and feasibility of exoskeletons and robotics in rehabilitation. As of February 28, 2025, a search for “robotic exoskeleton” on PubMed, a search engine for biomedical literature and life science journal articles, garners approximately 367 unique publications.
Enterprise Health Our customers, including inpatient and outpatient rehabilitation facilities, typically bill third-party payors for the costs and fees associated with the procedures in which our products are used.
Third-party payers are typically not involved in the purchase of our EVO product. Enterprise Health Our customers, including inpatient and outpatient rehabilitation facilities, typically bill third-party payors for the costs and fees associated with the procedures in which our products are used.
EksoCare includes a comprehensive warranty, loaner devices to minimize downtime, clinical support, access to our EksoPulse online portal, and other benefits to customers. Device servicing and repair For devices not covered under warranty, we offer fee-for-service repairs and maintenance.
EksoCare includes a comprehensive warranty, loaner devices to minimize downtime, clinical support, access to our EksoPulse online portal to view statistics and device information gathered and transmitted during EksoNR walking sessions, and other benefits to customers. Device servicing and repair For devices not covered under warranty, we offer fee-for-service repairs and maintenance.
Issuing Status Issued Pending License Status Patents Applications Licensed to the Company 9 3 Exclusively licensed to the Company 10 — Co-owned with a third party, exclusively licensed to the Company 5 — Co-owned with a third party 3 — Sole ownership by the Company 61 9 Total 88 12 Pending applications mean a complete application has been filed with the applicable patent authority and additional action is pending.
Issuing Status Issued Pending License Status Patents Applications Non-Exclusively licensed to the Company 3 — Exclusively licensed to the Company 14 1 Co-owned with a third party, exclusively licensed to the Company 4 — Co-owned with a third party 3 — Sole ownership by the Company 53 4 Total 77 5 Pending applications mean a complete application has been filed with the applicable patent authority and additional action is pending.
The purchase rate of EksoCare varies by country, with U.S. customers typically preferring to include it in their initial purchase. Other regions have lower rates of purchase. In the Enterprise Health market, we offer a range of purchase options.
Some customers also purchase EksoCare at the time of a new device purchase for up to four years of coverage. The purchase rate of EksoCare varies by country, with U.S. customers typically preferring to include it in their initial purchase. Other regions have lower rates of purchase. In the Enterprise Health market, we offer a range of purchase options.
Third-Party Coverage and Payment In our EksoHealth segment, third-party payers are often involved either to pay for procedures in which our products are used or to purchase our devices on behalf of an individual. These payment mechanisms vary by product line and are detailed below. Third-party payers are typically not involved in the purchase of products in our EksoWorks segment.
Third-Party Coverage and Payment In our Enterprise Health and Personal Health markets, third-party payers are often involved either to pay for procedures in which our products are used or to purchase our devices on behalf of an individual. These payment mechanisms vary by product line and are described below.
Human Capital Resources and Management As of March 1, 2024, we had 70 full-time employees and two-part time employees, including 60 employees in the United States, ten employees in Europe, and two in Singapore. None of our employees are covered by a collective bargaining agreement and we consider our relationship with our employees to be good.
Human Capital Resources and Management As of February 28, 2025, we had 61 full-time employees and five part-time employees, including 55 employees in the United States, nine employees in Europe, and two in Singapore. None of our employees are covered by a collective bargaining agreement and we consider our relationship with our employees to be good.
In 2023, approximately 89% of our EVO production was outsourced. 8 Table of Contents As part of our manufacturing process, we purchase both custom and off-the-shelf components from a large number of suppliers and subject them to stringent quality specifications and processes. Whenever possible, we seek to secure dual source suppliers for our components.
EVO products are manufactured by a third-party contract manufacturing partner in Malaysia. 8 Table of Contents As part of our manufacturing process, we purchase both custom and off-the-shelf components from a large number of suppliers and subject them to stringent quality specifications and processes. Whenever possible, we seek to secure dual source suppliers for our components.
Intellectual Property Out-Licensing In June 2020, we entered into a non-exclusive license agreement with HAWE Hydraulik of Germany for rights to develop hydraulic pumps covered by a family of our patents. The agreement additionally includes an exclusivity option. We did not receive any royalty revenue from this license in the years ended December 31, 2023 and 2022.
Intellectual Property Out-Licensing In June 2020, we entered into a non-exclusive license agreement with HAWE Hydraulik of Germany ("HAWE") for rights to develop hydraulic pumps covered by a family of our patents. The agreement additionally includes an exclusivity option.
Personal Health Market Within the Personal Health market, we serve individual users with the Ekso Indego Personal, which is intended to provide overground ambulation in community and home settings. The primary use case for Ekso Indego Personal is for users with SCI. For this user population, confinement to a wheelchair can cause severe physical and psychological deterioration.
Personal Health Market Within the Personal Health market, we serve individual users with the Ekso Indego Personal, which is intended to provide overground ambulation in community and home settings. The primary use case for Ekso Indego Personal is for users with SCI.
Other countries Regulations in other countries, including the requirements for approvals, certification, or clearance and the time required for regulatory review, vary by country. Certain countries, such as Australia, Indonesia, Malaysia, Singapore, Canada, and others have their own regulatory agencies. These countries typically require regulatory approvals and compliance that we comply with either directly or through distribution partners.
Certain countries, such as Australia, Indonesia, Malaysia, Singapore, Canada, and others have their own regulatory agencies. These countries typically require regulatory approvals and compliance that we comply with either directly or through distribution partners.
Regulatory requirements in the United Kingdom (“UK”) are also changing as a result of Brexit (the UK’s withdrawal from the EU), and regulatory requirements in Switzerland are changing as a result of the country’s withdrawal from its Mutual Recognition Agreement with the EU Commission.
Our application for EU MDR with our notified body is currently pending technical review. 7 Table of Contents Regulatory requirements in the United Kingdom (“UK”) are also changing as a result of Brexit (the UK’s withdrawal from the EU), and regulatory requirements in Switzerland are changing as a result of the country’s withdrawal from its Mutual Recognition Agreement with the EU Commission.
In addition, the UC Berkeley License Agreements call for minimum annual payments of $50,000. We do not pay royalties to UC Berkeley on products sold or to be resold to the U.S. government. As part of the HMC acquisition, we are acquired and assumed certain intangible assets including license agreements with Vanderbilt University.
In addition, the UC Berkeley License Agreements call for minimum annual payments of $50,000. We do not pay royalties to UC Berkeley on products sold or to be resold to the U.S. government.
DMEs are responsible for the Medicare reimbursement process, which requires a physician’s prescription and evidence of medical necessity to be submitted to and approved by Medicare before reimbursement is provided. The level of such reimbursement, if any, and the timing of CMS's decisions with respect thereto are not within our control.
DMEs are responsible for the Medicare reimbursement process, which requires a physician’s prescription and evidence of medical necessity to be submitted to and approved by Medicare before reimbursement is provided.
Our current market focus is on the larger network providers, referred to as integrated delivery networks ("IDN"). Sales to IDNs typically involve multi-unit transactions that can benefit from lower selling costs, better pipeline visibility, and better economies of scale. In 2023, approximately 52% of our new unit shipments for EksoNR and Ekso Indego Therapy were to IDNs.
Among these facilities, ownership structures also vary from small independent rehabilitation centers to larger networks of providers. Our current market focus is on the larger network providers, referred to as integrated delivery networks ("IDN"). Sales to IDNs typically involve multi-unit transactions that can benefit from lower selling costs, better pipeline visibility, and better economies of scale.
Training is delivered as an online service, in-person, or as a combination of the two. Training is often included with the purchase of a new device, but training can also be purchased separately. 4 Table of Contents Segments EksoHealth Our EksoHealth segment represents sales of our regulated medical devices regardless of the end customer.
Training is delivered as an online service, in-person, or as a combination of the two. Training is often included with the purchase of a new device, but training can also be purchased separately. 4 Table of Contents Segments We operate as one operating and reportable segment with two markets: Enterprise Health and Personal Health.
In the year ended December 31, 2023, there was one report of an adverse event made to the FDA under the Manufacturer and User Facility Device Experience Database relating to our EksoNR product. There were no adverse events reported relating to our Ekso Indego Therapy or Ekso Indego Personal products.
In the year ended December 31, 2024, there were no reports of adverse events made to the FDA under the Manufacturer and User Facility Device Experience Database relating to any of our products.
Any medical device product that we develop must receive all requisite regulatory approvals or clearances, as the case may be, before it may be marketed in a particular country. All of our EksoHealth products are registered with the FDA according to each device classification. The following table lists the FDA registration status for each product.
Any medical device product that we develop must receive all requisite regulatory approvals or clearances, as the case may be, before it may be marketed in a particular country.
In tandem, we continue to leverage our EksoNR and Ekso Indego customer base to educate and mentor strategic target centers that specialize in stroke, ABI and SCI rehabilitation in specific geographies. Rehabilitation treatments that can benefit from the use of our EksoNR and Ekso Indego Therapy products take place in a range of different types of facilities.
In tandem, we continue to leverage our EksoNR and Ekso Indego Therapy customer base to educate and mentor strategic target centers that specialize in stroke, TBI, MS, and SCI rehabilitation and treatment in specific geographies.
Beyond the competitors listed below, we also believe that a number of other companies are developing competitive technology and devices in our Enterprise Health, Personal Health, and EksoWorks product lines. Enterprise Health For our Enterprise Health product line, we face competition from products that target lower extremity gait therapy, ambulation, and rehabilitation.
There are a number of other companies that are developing competitive technology and devices related to our Enterprise Health and Personal Health products. Enterprise Health For our Enterprise Health products, we face competition from products that target lower extremity gait therapy, ambulation, and rehabilitation in IRF, LTACH, skilled nursing facility, and outpatient rehabilitation clinic settings.
We currently run one shift per day at both facilities and believe we have the capacity to eventually run additional shifts should we deem it appropriate. In 2023, we completed the process of transferring sufficient technology and know-how to manufacture our EVO product line at a contract manufacturing partner located in Malaysia.
We currently run one shift per day at both of our facilities and believe we have the capacity to eventually run additional shifts should we deem it appropriate.
These challenges range from injury prevention, fatigue reduction, and/or improved worker productivity. With EVO as our only commercially available product in this segment, we focus on applications that involve repetitive work at shoulder height and above. While EVO is a general-purpose product, we currently target specific vertical markets; including aerospace, automotive, general manufacturing, and certain construction trades.
Sales of EVO are focused on applications that involve repetitive work at shoulder height and above. While EVO is a general-purpose product, we currently target specific vertical markets, including aerospace, automotive, general manufacturing, and certain construction trades.
Globally, multi-unit sales comprised approximately 70% of our unit shipments. The sales cycle for the EksoNR and Ekso Indego Therapy devices varies, but typically takes from approximately eight to 12 months for a first device and six to eight months for subsequent devices.
The sales cycle in the Enterprise Health market varies but typically takes from approximately eight to 12 months for a first device and six to eight months for subsequent devices. The typical sale of our EksoNR and Ekso Indego Therapy is a complete package, which includes the device and all relevant components, batteries for continuous run-time, training, and certification.
These include inpatient rehabilitation facilities ("IRF"), long term acute care hospitals ("LTACH"), skilled nursing facilities ("SNF"), and outpatient rehabilitation clinics, among others. The primary facility types we currently serve are IRFs. Among these facilities, ownership structures also vary from small independent rehabilitation centers to larger networks of providers.
Rehabilitation treatments that can benefit from the use of our EksoNR and Ekso Indego Therapy products take place in a range of different types of facilities. These include inpatient rehabilitation facilities ("IRF"), long-term acute care hospitals ("LTACH"), skilled nursing facilities, and outpatient rehabilitation clinics, among others. The primary facility types we currently serve are IRFs.
The sales cycle for the Ekso Indego Personal device averages eight to 12 months from the first interaction we have with the potential Ekso Indego Personal device user. The Ekso Indego Personal device is regulated by the FDA and the patient must have an injury level of T3 to L5 and have a support person when utilizing the device.
The Ekso Indego Personal device is regulated by the FDA and the patient must have an injury level of T3 to L5 and have a support person when utilizing the device. The U.S. Department of Veterans Affairs (the "VA") has an active program to provide products like Ekso Indego Personal to U.S. veterans with SCI.
Complying with the EU MDR and the evolving regulatory regimes in the UK and Switzerland requires modifications to our quality management systems, additional resources in certain functions and updates to technical files, among other changes. As of December 31, 2023, none of our products had yet been approved under EU MDR.
Complying with the EU MDR and the evolving regulatory regimes in the UK and Switzerland require modifications to our quality management systems, additional resources in certain functions and updates to technical files, among other changes. Other countries Regulations in other countries, including the requirements for approvals, certification, or clearance and the time required for regulatory review, vary by country.
Our lower extremity exoskeletons - EksoNR, Ekso Indego Therapy, and Ekso Indego Personal - are regulated as Class II devices and thus are covered under approved 510k fillings.
Our bipedal lower extremity exoskeletons - EksoNR, Ekso Indego Therapy, and Ekso Indego Personal - are regulated as Class II devices and thus are covered under our 510(k) clearances. Nomad is listed as a Class I device with the FDA and is exempt from premarket notification.
CMS and its fiscal intermediaries (Medicare Administrative Contractors) and state Medicaid programs establish reimbursement policies for medical and surgical services at the state and federal level for the Medicare and Medicaid programs. Our products currently do not have established reimbursement amounts with CMS.
CMS and its fiscal intermediaries (Medicare Administrative Contractors) and state Medicaid programs establish reimbursement policies for medical and surgical services at the state and federal level for the Medicare and Medicaid programs. In April 2024, CMS made a final pricing determination setting the reimbursement rate for the product code applicable to our Ekso Indego Personal product.
Ekso EVO EVO is a wearable upper body exoskeleton that elevates and supports a worker's arms to assist them with tasks from chest height to overhead. EVO is intended to reduce worker fatigue and reduce on-site injuries while boosting productivity. EVO is intended primarily for use with able-bodied individuals and has not been registered with or evaluated by the FDA.
EVO is intended to reduce worker fatigue and reduce on-site injuries while boosting productivity. EVO is intended primarily for use with able-bodied individuals and has not been registered with or evaluated by the FDA. Services EksoCare For most of our products, we offer extended warranty and premium service options under our EksoCare program.
Specifically, according to the National Spinal Cord Injury Statistical Center an estimated 294,000 individuals are currently living with SCI and another 17,810 suffer from new SCI injuries each year. Approximately 56% of individuals with SCI are enrolled in Medicare or Medicaid within 5 years post-injury.
Specifically, according to the National Spinal Cord Injury Statistical Center, an estimated 305,000 individuals are currently living with SCI and another 18,000 suffer from new SCI injuries each year. For this user population, confinement to a wheelchair can cause severe physical and psychological deterioration.
Item 1. BUSINESS Company Background 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 persons with physical disabilities or impairments.
Item 1. BUSINESS Company Background Founded in 2005, we are a Nevada corporation that designs, develops, and markets exoskeleton products that augment human strength, endurance and mobility. The primary end market for our exoskeleton technology is healthcare, where our technology primarily serves people with physical disabilities or impairments in both physical rehabilitation and mobility.
We provide products to the VA through distributors classified as Service-Disabled Veteran-Owned Small Businesses (SDVOSB). We are working toward obtaining Medicare reimbursement for the Ekso Indego Personal device. If we are successful, we expect access to this market will allow us to serve a larger portion of the SCI population in the U.S.
We provide products to the VA through distributors classified as Service-Disabled Veteran-Owned Small Businesses (SDVOSB). In April 2024, CMS approved a payment level of approximately $91,000 for Medicare reimbursement of the Ekso Indego Personal, which took effect on April 1, 2024.
If Medicare reimbursement goes into effect, we plan to sell products to individuals in this market through Durable Medical Equipment suppliers (DMEs). DMEs typically resell products from DME manufacturers to individual users.
According to the National Spinal Cord Injury Statistical Center, approximately 57% of individuals with SCI are enrolled in Medicare or Medicaid within five years post-injury. With Medicare reimbursement recently approved, we have begun selling products to individuals in this market through Durable Medical Equipment suppliers ("DMEs"). DMEs typically resell products from DME manufacturers to individual users.
Supply of Components We manufacture our EksoNR at our facility in San Rafael, California for worldwide distribution. Our Ekso Indego Therapy and Ekso Indego Personal devices are manufactured, and we expect our Nomad device will be manufactured, at our facilities in Macedonia, Ohio.
Our Ekso Indego Therapy, Ekso Indego Personal and Ekso Nomad devices are currently manufactured at our facility in Brecksville, Ohio, though by the end of the second quarter of 2025, we expect to complete the transfer of all final assembly of such devices at our facility in San Rafael, California as well.
As a result of the MDR transition, our products are currently CE marked with MDD certificates. As of March 1, 2024, all of our EksoHealth products bear CE marks and certificates which were obtained under EU MDD regulations.
As a result of the EU MDR transition, some of our products are currently CE marked with EU MDD certificates. On February 10, 2025, we received our CE certificate from our notified body for our Ekso Indego Therapy and Ekso Indego Personal products, finalizing our transition to EU MDR.
Ekso Nomad Ekso Nomad is a power Knee Ankle Foot Orthosis, or KAFO. Nomad is a pre-revenue product that is currently under development. We expect that Nomad with be available in limited volumes for clinicals trials in 2024, with commercial launch currently planned for 2025.
Ekso Nomad Ekso Nomad ("Nomad") is a power Knee Ankle Foot Orthosis, or KAFO. We expect that Nomad will continue to be available in limited volumes for non-Company-sponsored clinical studies in 2025. Ekso EVO Ekso EVO ("EVO") is a wearable upper body exoskeleton that elevates and supports a worker's arms to assist them with tasks from chest height to overhead.
Sales in EMEA and APAC have gained traction, and we believe there is additional potential in these regions for future sales to private individuals and through government-funded healthcare systems. EksoWorks Our primary end market for our EksoWorks segment is comprised of commercial enterprises that are focused on solving ergonomic challenges for their workers.
We believe there is additional potential in EMEA and APAC for future sales to private individuals and through government-funded healthcare systems. The sales cycle for the Ekso Indego Personal device averages eight to 12 months from the first interaction we have with the potential Ekso Indego Personal device user.
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On December 5, 2022, we acquired the Human Motion and Control ("HMC") Business Unit from Parker Hannifin Corporation ("Parker"), an Ohio corporation (the "HMC Acquisition"). The assets acquired from the business unit included intellectual property rights for devices which are U.S.
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Our revenues are primarily generated through the sale and subscription of our EksoNR, Ekso Indego Therapy, and Ekso Indego Personal devices, along with the sale of support and maintenance contracts. For additional information, please refer to Note 16 . Segment Disclosures in our notes to the consolidated financial statements.
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Food and Drug Administration ("FDA") cleared lower-limb powered exoskeletons that enable task-specific overground gait training to patients with weakness or paralysis in their lower extremities. Throughout 2023 we integrated the HMC products and team into Ekso Bionics, Inc. and are currently operating as a combined business.
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We also market our Ekso Indego Therapy product to Enterprise Health customers to be used as a training device for users of our Ekso Indego Personal device. In such cases, the Ekso Indego Therapy product may be offered at a discount contingent on future Ekso Indego Personal device trainings volume at that center.
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Services EksoPulse EksoNR includes cloud connectivity through EksoPulse, which gathers and transmits statistics and device information during EksoNR walking sessions. EksoCare For most of our Ekso Health products, we offer extended warranty and premium service options under our EksoCare program.
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See "Personal Health Market" below for additional information. Within our Enterprise Health market we also sell our EVO product to commercial and industrial companies that are focused on solving ergonomic challenges for their workers. These challenges range from injury prevention, fatigue reduction, and/or improved worker productivity.
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We separate our EksoHealth segment into two business lines. Enterprise Health and Personal Health. Enterprise Health Our Enterprise Health business line resides within our EksoHealth segment. Enterprise Health customers include inpatient rehabilitation hospitals and clinics as well as some outpatient rehabilitation clinics. The Enterprise Health product line includes EksoNR and Ekso Indego Therapy.
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This regulatory change has the potential to put this technology within reach of thousands of Medicare enrollees currently living with a SCI.
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Personal Health Our Personal Health business line also resides within our EksoHealth segment. Personal Health customers include the Veterans Administration, which provides our products to qualified veterans for individual use, individuals who are covered under worker’s compensation insurance, and private individuals who pay out of pocket.
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In the short-term, with the recent approval of CMS lump sum reimbursement for Ekso Indego Personal, there is a possibility that we will see increased demand for this device as we are able to more economically serve the larger U.S. patient population suffering from SCI.
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As described in further detail below, we are pursuing Medicare reimbursement for products in this business line. EksoWorks Sales of products to able-bodied individuals for use in industrial or work-related use are represented by our EksoWorks segment. Our only active product within our EksoWorks segment is EVO.
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The Company is developing a scalable go-to-market strategy through establishing and building upon relationships with national and regional DMEs and engaging with recognized third parties who specialize in market access process refinement and claims support.
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The typical sale of our EksoNR and Ekso Indego Therapy is a complete package, which includes the device and all relevant components, batteries for continuous run-time, training, and certification. Some customers also purchase EksoCare at the time of a new device purchase for up to four years of coverage.
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Additionally, we work closely with our extensive network of neurorehabilitation partners across the country, focusing on education efforts on appropriate patient selection and process for patients prescribed an Ekso Indego Personal for the home and community setting. Another key part of our growth strategy is seeking insurance coverage beyond CMS and seeking additional indications of use for our products.
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The U.S. Department of Veterans Affairs (the "VA") has an active program to provide products like Ekso Indego Personal to U.S. veterans with SCI. According to VA data, approximately 42,000 of such patients are veterans and are eligible for medical care and other benefits from the VA out of which 27,000 are receiving treatment annually.
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We believe that sales of our Personal Health products have the potential to be a significant growth driver for us as we work to gain coverage by other insurance providers, expand the products' indications of use beyond SCI and optimize our reimbursement submission processes. See “Part I—Item 1A.
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Within our EksoWorks segment, we offer our products for sale in the Americas, EMEA, and APAC. In the Americas, the majority of our sales to date have been direct to business customers in the U.S., with certain limited sales in 2023 being to business customers in Mexico and Canada.
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Nomad is currently for sale in limited volumes in the Personal Health market for use in a non-Company-sponsored single clinical study. Subject to clinical and patient feedback, we expect Nomad to be more broadly available starting in 2026.
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In EMEA and APAC, we have sold to a combination of businesses and distribution partners. Outside of the U.S., we expect distribution partners to account for a larger percentage of sales over time.
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This determination allows individual users who meet the FDA approved indications, along with other criteria, to purchase a device through an authorized DME provider and be reimbursed for 80% of the reimbursable rate.
Removed
Although we are working with CMS to establish a set level of reimbursement, the amount, if any, of such reimbursement and CMS's timing for making a decision are not within our control.
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Our establishments in California and Ohio are registered with the FDA as a medical device manufacturer or specification developer, and all of our products, with the exception of EVO, are listed in the FDA database as medical devices.
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The one adverse event was reported by us and related to a report of a patient injury. No field actions or recalls were performed as a result of the reported adverse event.
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Device Classification Unless otherwise specified by the FDA, under the FDCA, medical devices are classified into one of three classes-Class I, Class II or Class III-depending on the degree of risk associated with each medical device and the extent of control needed to provide reasonable assurances with respect to safety and effectiveness.
Removed
The CE certificates for our Ekso Indego Therapy and Ekso Indego Personal devices are currently held by Parker while we complete the process to obtain certificates registered by Ekso Bionics, Inc. As part of this transition, we are currently able to place the Indego products on the market in Europe through a series of manufacturing and quality agreements with Parker.
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Class I includes devices with the lowest risk to the patient and are those for which safety and effectiveness can be reasonably assured by adherence to a set of FDA regulations, referred to as the General Controls for Medical Devices, which require compliance with the applicable portions of the Quality System Regulation (“QSR”), facility registration and product listing, reporting of adverse medical events and malfunctions, and appropriate, truthful and non-misleading labeling, and promotional materials.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

82 edited+85 added−30 removed207 unchanged
Biggest changeThe principal factors and uncertainties that make investing in our company risky include, among others: • The markets in which our products are sold are highly competitive and continue to develop. • We may not be able to reduce the cost to manufacture or service our products as planned. • If we or our third-party manufacturers are unable to produce our products at a satisfactory quality, in a timely manner, in sufficient quantities or at an acceptable cost, our business could be negatively impacted. • Shortages in the materials used to manufacture our products, as well as reductions in manufacturer capacity, could impact our future results. • Coverage policies and reimbursement levels of third-party payers, including Medicare or Medicaid, may impact sales of our products. • The acquisition and integration of other companies, businesses, or technologies could result in operating difficulties, dilution, and other harmful consequences. • We may not be able to enhance our product offerings through our research and development efforts. • We have incurred significant losses to date and anticipate continuing to incur losses in the future, and we may not achieve or maintain profitability. • Our loan agreement with Pacific Western Bank imposes certain financial, and operational restrictions on us, limiting the discretion of our management in operating our business. • Protecting our intellectual proprietary rights can be costly, and our success in doing so is not certain. • If we fail to obtain or maintain necessary regulatory clearances or approvals for our medical device products, or if clearances or approvals for future products or modifications to existing products are delayed or not issued, our commercial operations would be harmed. • Modifications to our EksoNR, Ekso Indego Therapy, Ekso Indego Personal, and our future products may require new 510(k) clearances or premarket approvals, or may require us to cease marketing or recall the modified products until clearances are obtained • Our failure to meet strict post-market regulatory requirements with respect to our products could require us to pay fines, incur other costs or even close our facilities. • Our success depends on our management team, and on our ability to hire, train, retain, and motivate employees.
Biggest changeThe principal factors and uncertainties that make investing in our company risky include, among others: • If we fail to manage the complex and lengthy reimbursement process, our business and operating results could be adversely affected. • The markets in which our products are sold are highly competitive and continue to develop, and important assumptions about the potential market for our current and future products may be inaccurate. • If we or our third-party manufacturers are unable to produce our products at a satisfactory quality, in a timely manner, in sufficient quantities or at an acceptable cost, our business could be negatively impacted. • Shortages in the materials used to manufacture our products and supply chain disruptions, including as a result of changes in trade policies, could impact our future results. • Coverage policies and reimbursement levels of third-party payers, including Medicare or Medicaid, may impact sales of our products. • The acquisition and integration of other companies, businesses, or technologies could result in operating difficulties, dilution, and other harmful consequences. • We may not be able to enhance our product offerings through our research and development efforts. • We have incurred significant losses to date and anticipate continuing to incur losses in the future, and we may not achieve or maintain profitability. • Our loan agreement imposes certain financial and operational restrictions on us, limiting the discretion of our management in operating our business. • Protecting our intellectual proprietary rights can be costly, and our success in doing so is not certain. • If we fail to obtain or maintain necessary regulatory clearances or approvals for our medical device products, or if clearances or approvals for future products or modifications to existing products are delayed or not issued, our commercial operations would be harmed. • Modifications to our current and our future products may require new 510(k) clearances or premarket approvals, or may require us to cease marketing or recall the modified products until clearances are obtained. • Our failure to meet strict post-market regulatory requirements with respect to our products could require us to pay fines, incur other costs or even close our facilities. • If we do not regain compliance with or continue to satisfy the Nasdaq continued listing requirements, our common stock could be delisted from Nasdaq.
We cannot be certain that the markets for robotic exoskeletons will continue to develop as we expect, or that robotic exoskeletons for medical or industrial use will achieve market widespread market acceptance. Additionally, the development of new or improved products, processes or technologies by other companies may render our products or proposed products less competitive or obsolete.
We cannot be certain that the markets for robotic exoskeletons will continue to develop as we expect, or that robotic exoskeletons for medical or industrial use will achieve widespread market acceptance. Additionally, the development of new or improved products, processes or technologies by other companies may render our products or proposed products less competitive or obsolete.
These initiatives, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors.
These initiatives, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors.
Although we have implemented and are in the process of implementing additional systems and processes that are designed to protect our data and systems within our control, prevent data loss, and prevent other security breaches and security incidents, these measures cannot guarantee security.
Although we have implemented and are in the process of implementing additional systems and processes that are designed to protect our data and systems within our control, prevent data loss, and prevent other security breaches and incidents, these measures cannot guarantee security.
Our failure to comply with these complex laws and regulations could have a material adverse effect on our business, results of operations, financial condition and cash flows. 19 Table of Contents In the United States, before we can market a new medical device, or a new use of, new claim for or significant modification to an existing product, we must first receive either clearance under Section 510(k) of the FDCA or approval of a PMA application from the FDA, unless an exemption applies.
Our failure to comply with these complex laws and regulations could have a material adverse effect on our business, results of operations, financial condition and cash flows. 19 Table of Contents In the United States, before we can market a new medical device, or a new use of, new claim for or significant modification to an existing product, we must first receive either clearance under Section 510(k) of the FDCA or approval of a premarket approval ("PMA") application from the FDA, unless an exemption applies.
Under the FDA’s medical device reporting or MDR regulations, we are required to report to the FDA any incident in which our product may have caused or contributed to a death or serious injury or in which our product malfunctioned and, if the malfunction were to recur, would likely cause or contribute to death or serious injury.
Under the FDA’s medical device reporting or EU MDR regulations, we are required to report to the FDA any incident in which our product may have caused or contributed to a death or serious injury or in which our product malfunctioned and, if the malfunction were to recur, would likely cause or contribute to death or serious injury.
For example, we have been informed of a limited number of events with respect to our EksoNR device that have been determined to be reportable pursuant to the MDR regulations. In each case, the required MDR report was filed with the FDA.
For example, we have been informed of a limited number of events with respect to our EksoNR device that have been determined to be reportable pursuant to the EU MDR regulations. In each case, the required EU MDR report was filed with the FDA.
Many other jurisdictions globally are considering or have enacted legislation providing for local storage of data or otherwise imposing privacy, data protection, and data security obligations in connection with the collection, use, and other processing of personal data.
Many other jurisdictions globally are considering or have enacted legislation providing for local storage of data or otherwise imposing privacy, data protection, and information security obligations in connection with the collection, use, and other processing of personal data.
Any failure or perceived failure by us or our contractors or service providers to comply with our applicable policies or notices, our contractual or other obligations to third parties, or any of our other actual or asserted legal obligations relating to privacy or data protection, may result in governmental investigations or enforcement actions, litigation, claims, and other proceedings, harm our reputation, and could result in significant liability.
Any failure or perceived failure by us or our contractors or service providers to comply with our applicable policies or notices, our contractual or other obligations to third parties, or any of our other actual or asserted legal obligations relating to privacy, data protection, or information security, may result in governmental investigations or enforcement actions, litigation, claims, and other proceedings, harm our reputation, and could result in significant liability.
In addition, changes in regulatory policy for the approval or CE marking of a medical device during the period of product development and regulatory agency review or notified body review of each submitted new application may cause delays or rejections. In March 2023, the European Commission extended the original compliance dates for the EU MDR.
Specifically, changes in regulatory policy for the approval or CE marking of a medical device during the period of product development and regulatory agency review or notified body review of each submitted new application may cause delays or rejections. In March 2023, the European Commission extended the original compliance dates for the EU MDR.
Our obligations, which become due in August 2026, are also secured by a security interest in all of our assets, exclusive of intellectual property. As a result, we may need to use our capital resources to repay the PWB Loan in order to undertake certain financing or strategic transactions.
Our obligations, which become due in August 2026, are also secured by a security interest in all of our assets, exclusive of intellectual property. As a result, we may need to use our capital resources to repay the BoC Loan in order to undertake certain financing or strategic transactions.
As a general matter, compliance with laws, regulations, contractual obligations, and other actual and asserted obligations, such as industry standards, and any rules or guidance from self-regulatory organizations, relating to privacy, data protection, and data security that apply, or are asserted to apply, to our operations may result in substantial costs and may necessitate changes to our policies and practices, which may compromise our growth strategy, adversely affect our ability to acquire customers, and otherwise adversely affect our business, results of operations, and financial condition. 25 Table of Contents With laws, regulations, and other obligations relating to privacy, data protection, and information security imposing new and relatively burdensome obligations, and with substantial uncertainty over the interpretation and application of these and other obligations, we may face challenges in addressing their requirements and making necessary changes to our policies and practices.
As a general matter, compliance with laws, regulations, contractual obligations, and other actual and asserted obligations, such as industry standards, and any rules or guidance from self-regulatory organizations, relating to privacy, data protection, and data security that apply, or are asserted to apply, to our operations can be rigorous and time-intensive, may result in substantial costs, and may necessitate changes to our policies and practices, which may compromise our growth strategy, adversely affect our ability to acquire customers, and otherwise adversely affect our business, results of operations, and financial condition. 25 Table of Contents With laws, regulations, and other obligations relating to privacy, data protection, and information security imposing new and relatively burdensome obligations, and with substantial uncertainty over the interpretation and application of these and other obligations, we may face challenges in addressing their requirements and making necessary changes to our policies and practices.
We might not be able to continue as a going concern. Our audited consolidated financial statements as of December 31, 2023 have been prepared under the assumption that we will continue as a going concern for the next twelve months.
We might not be able to continue as a going concern. Our audited consolidated financial statements as of December 31, 2024 have been prepared under the assumption that we will continue as a going concern for the next twelve months.
Continuation of these activities could have a material adverse effect on our results of operations, cash flows and liquidity. 27 Table of Contents Risks Related to Ownership of Common Stock You may be diluted from future issuances of our equity securities, including from compensatory equity awards, exercise of outstanding warrants, or issuances of securities in financing or strategic transactions, and such issuances, or perception that such issuances may occur, could depress the market price of our common stock.
Continuation of these activities could have a material adverse effect on our results of operations, cash flows and liquidity. 27 Table of Contents Risks Related to Ownership of Common Stock You may be diluted from future issuances of our equity securities, including in future financings or strategic transactions, from compensatory equity awards and exercises of outstanding warrants, and such issuances, or perception that such issuances may occur, could depress the market price of our common stock.
The reimbursement process is complex and can involve lengthy delays between the time that a product is delivered to the consumer and the time that the reimbursement amounts are settled. Depending on the payor, we or our customers may be required to obtain certain payor-specific documentation from physicians and other healthcare providers before submitting claims for reimbursement.
The reimbursement process is complex and can involve lengthy delays between the time that a product is delivered to the consumer and the time that the reimbursement amounts are settled. Depending on the payor, we or our customers have been required to obtain certain payor-specific documentation from physicians and other healthcare providers before submitting claims for reimbursement.
Our success depends on our management team, and on our ability to hire, train, retain, and motivate employees. Our success depends on our management team and on our ability to identify, hire, train and retain highly qualified managerial, technical and sales and marketing personnel.
Our success depends on our management team and on our ability to identify, hire, train and retain highly qualified managerial, technical and sales and marketing personnel.
Our international activities are subject to a number of risks inherent in selling and operating abroad, including failure of local laws to provide the same degree of protection against infringement of our intellectual property rights; protectionist laws and business practices that favor local competitors, which could slow our growth in international markets; the expense of establishing facilities and operations in new foreign markets; building an organization capable of supporting geographically dispersed operations; challenges caused by distance, language and cultural differences; challenges caused by differences in legal regulations, markets, and customer preferences, which may limit our ability to adapt our products or succeed in other regions; multiple, conflicting, and changing laws and regulations, including complications due to unexpected changes in regulatory requirements, foreign laws, tax schemes, international import and export legislation, trading and investment policies, exchange controls and tariff and other trade barriers; foreign tax consequences; fluctuations in currency exchange rates and foreign currency translation adjustments; foreign exchange controls that might prevent us from repatriating income earned outside the United States; imposition of public sector controls; differing payer reimbursement regimes, governmental payers or patient self-pay systems and price controls; political, economic and social instability; and restrictions on the export or import of technology. 13 Table of Contents We may not be able to enhance our product offerings through our research and development efforts.
Our international activities are subject to a number of risks inherent in selling and operating abroad, including failure of local laws to provide the same degree of protection against infringement of our intellectual property rights; protectionist laws and business practices that favor local competitors, which could slow our growth in international markets; the expense of establishing facilities and operations in new foreign markets; building an organization capable of supporting geographically dispersed operations; challenges caused by distance, language and cultural differences; challenges caused by differences in legal regulations, markets, and customer preferences, which may limit our ability to adapt our products or succeed in other regions; multiple, conflicting, and changing laws and regulations, including complications due to unexpected changes in regulatory requirements, foreign laws, tax schemes, international import and export legislation, trading and investment policies, exchange controls and tariff and other trade barriers; foreign tax consequences; fluctuations in currency exchange rates and foreign currency translation adjustments; foreign exchange controls that might prevent us from repatriating income earned outside the United States; imposition of public sector controls; differing payer reimbursement regimes, governmental payers or patient self-pay systems and price controls; political, economic and social instability; and restrictions on the export or import of technology.
Some of our U.S. patents (which have associated international patents and applications) are co-owned by UC Berkeley. UC Berkeley has exclusively licensed its rights under many of these patents to us, but we do not have an exclusive license to UC Berkeley’s rights under three of these patents.
Some of our U.S. patents (which have associated international patents and applications) that cover our commercial products are co-owned by UC Berkeley. UC Berkeley has exclusively licensed its rights under many of these patents to us, but we do not have an exclusive license to UC Berkeley’s rights under three of these patents.
Sales of our EksoNR and Ekso Indego products generally include a one-year warranty for parts and services in the United States and a two-year warranty in EMEA and APAC. We also generally provide customers with an option to purchase an extended warranty for up to an additional four years.
Sales of our EksoNR, Ekso Indego Therapy and Ekso Indego Personal products generally include a one-year warranty for parts and services in the United States and a one- to three-year warranty in EMEA and APAC. We also generally provide customers with an option to purchase an extended warranty for up to an additional four years.
While we believe that the policies, processes and procedures we have put in place will be sufficient to render our internal controls over financial reporting effective, our initiatives may not prove successful. If so, management may not be able to conclude that our internal control over financial reporting is effective.
While we believe that the policies, processes and procedures we have put in place will be sufficient to maintain the effectiveness of our internal controls over financial reporting, our initiatives may not prove successful. If so, management may not be able to conclude that our internal control over financial reporting is effective.
During the period from our initial listing on Nasdaq on August 9, 2016 through December 31, 2023, the closing price of our common stock fluctuated from a high of $93.15 per share to a low of $0.67 per share (on a split-adjusted basis), and our stock price continues to fluctuate.
During the period from our initial listing on Nasdaq on August 9, 2016 through December 31, 2024, the closing price of our common stock fluctuated from a high of $93.15 per share to a low of $0.57 per share (on a split-adjusted basis), and our stock price continues to fluctuate.
We have thus far been largely dependent on capital raised through the sale of equity securities in various public and private offerings, and we have incurred losses in each fiscal year since our incorporation in 2005. Our net losses were $15.2 million and $15.1 million for the years ended December 31, 2023 and 2022, respectively.
We have thus far been largely dependent on capital raised through the sale of equity securities in various public and private offerings, and we have incurred losses in each fiscal year since our incorporation in 2005. Our net losses were $11.3 million and $15.2 million for the years ended December 31, 2024 and 2023, respectively.
Even if we are able to successfully develop proposed products when anticipated, these products may not produce sales in excess of the costs of development, and they may be quickly rendered obsolete by changing consumer preferences or the introduction by our competitors of products embodying new technologies or features.
Even if we are able to successfully develop proposed products when anticipated, these products may not produce sales in excess of the costs of development, and they may be quickly rendered obsolete by changing consumer preferences or the introduction by our competitors of products embodying new technologies or features. We will experience long and variable sales cycles.
In particular, these instruments limit our ability to, among other things, hold cash outside Pacific Western Bank, incur additional debt, grant liens on assets, sell or acquire assets outside the ordinary course of business, pay dividends and make certain fundamental business changes.
In particular, these instruments limit our ability to, among other things, hold cash outside Banc of California, incur additional debt, grant liens on assets, sell or acquire assets outside the ordinary course of business, pay dividends and make certain fundamental business changes.
This includes aggregate reductions of Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2030 unless additional Congressional action is taken.
This includes aggregate reductions of Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2030 unless additional Congressional action is taken. In June 2024, the U.S.
Moreover, disputes may arise between us and our counterparties regarding intellectual property subject to a licensing agreement, including the scope of rights granted under the license agreement and other interpretation-related issues; the extent to which our devices, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; the sublicensing of patent and other rights under our collaborative research and development relationships; our diligence obligations under the license agreement and what activities satisfy those diligence obligations; the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and the priority of invention of patented or patentable technology.
Moreover, disputes may arise between us and our counterparties, including with our non-Company-sponsored single clinical study partner for our Nomad product, regarding intellectual property subject to a licensing agreement, including the scope of rights granted under the license agreement and other interpretation-related issues; the extent to which our devices, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; the sublicensing of patent and other rights under our collaborative research and development relationships; our diligence obligations under the license agreement and what activities satisfy those diligence obligations; the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and the priority of invention of patented or patentable technology.
If we fail to manage the complex and lengthy reimbursement process, our business and operating results could be adversely affected. The sale of products in our Personal Health business line primarily depends on reimbursements provided by third party payors. We distribute these products to end users through the VA hospitals.
Business and Operational Risks 11 Table of Contents If we fail to manage the complex and lengthy reimbursement process, our business and operating results could be adversely affected. The sale of our Personal Health products primarily depends on reimbursements provided by third party payors. We distribute these products to end users through the VA hospitals.
Our loan agreement imposes certain financial, and operational restrictions on us, limiting the discretion of our management in operating our business. Our loan agreement with Pacific Western Bank, which we entered into in August 2020 (the "PWB Loan Agreement"), contains, subject to certain carve-outs, various restrictive covenants that limit our management's discretion in operating our business.
Our loan agreement imposes certain financial and operational restrictions on us, limiting the discretion of our management in operating our business. Our loan agreement with Banc of California, which we entered into in August 2020 (the "BoC Loan Agreement"), contains, subject to certain carve-outs, various restrictive covenants that limit our management's discretion in operating our business.
In the EU, we are required to comply with the EU MDR and obtain CE Certificates of Conformity in order to affix the CE Mark and market medical devices. As of December 31, 2023, none of our products had yet been approved under the EU MDR.
In the EU, we are required to comply with the EU MDR and obtain CE Certificates of Conformity in order to affix the CE Mark and market medical devices. As of December 31, 2024, our EksoNR product had yet been approved under the EU MDR.
As described in Note 10 to the consolidated financial statements, we have material near-term indebtedness due to the PWB Loan Agreement and the $5 million unsecured, subordinated promissory note (the “Promissory Note”) we delivered to Parker Hannifin Corporation in connection with the HMC Acquisition. Servicing our debt requires a significant amount of cash.
Notes Payable, net to the consolidated financial statements, we have material near-term indebtedness due to the BoC Loan Agreement and the $5 million unsecured, subordinated promissory note (the “Promissory Note”) we delivered to Parker Hannifin Corporation in connection with the HMC Acquisition. Servicing our debt requires a significant amount of cash.
As of December 31, 2023 and 2022, we had an accumulated deficit of $239.2 million and $223.9 million, respectively. The operation of our business and our growth efforts will require significant cash outlays to support our operations.
As of December 31, 2024 and 2023, we had an accumulated deficit of $250.5 million and $239.2 million, respectively. The operation of our business and our growth efforts will require significant cash outlays to support our operations.
The collection and use of health data and other personal data is governed in the EU by the General Data Protection Regulation (GDPR), which imposes substantial obligations upon companies and rights for individuals, and by certain EU member state-level legislation.
The U.S. federal government also is contemplating federal privacy legislation. The collection and use of health data and other personal data is governed in the EU by the General Data Protection Regulation (the "GDPR"), which imposes substantial obligations upon companies and rights for individuals, and by certain EU member state-level legislation.
We have historically relied, and in the future may rely, on sales of our EksoNR, Ekso Indego Therapy and Ekso Indego Personal for a significant portion of our revenue. We currently rely, and in the future will rely, on sales of our EksoNR, Ekso Indego Therapy and Ekso Indego Personal for a large portion of our revenue.
We currently rely, and in the future will rely, on sales of our EksoNR, Ekso Indego Therapy and Ekso Indego Personal for a large portion of our revenue.
In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory proposals to change the health care system in ways that could affect our ability to sell our products profitably. For example, in 2010, the Patient Protection and Affordable Care Act, or ACA, was enacted into law.
In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory proposals to change the health care system in ways that could affect our ability to sell our products profitably. For example, in 2010, the ACA was enacted into law. The legislation seeks to reform the United States healthcare system.
As of December 31, 2023, we had cash and restricted cash of $8.6 million and an accumulated deficit of $239.2 million. We do not believe that our cash and restricted cash are sufficient to fund our operations for the next 12 months.
As of December 31, 2024, we had cash and restricted cash of $6.5 million and an accumulated deficit of $250.5 million. We do not believe that our cash and restricted cash are sufficient to fund our operations for the next 12 months.
Shortages in the materials used to manufacture our products, as well as reductions in manufacturer capacity, could impact our future results. Due to a variety of factors, various materials we and the third-party manufacturers we rely on use to manufacture our products are currently, or may in the future, experience shortages and supply chain disruptions, including from shipping delays.
Due to a variety of factors, various materials we and the third-party manufacturers we rely on use to manufacture our products are currently, or may in the future, experience shortages and supply chain disruptions, including from shipping delays.
In the near future, we also anticipate our products may be distributed through DME suppliers, who will then pursue reimbursement from Medicare, Medicaid, or private insurance providers. Our financial condition and results of operations may be affected by coverage and reimbursement policies of these payors, which are also subject to change over time.
Our products are also distributed through DME suppliers, who will then pursue reimbursement from Medicare, Medicaid, or private insurance providers. Our financial condition and results of operations have been affected by coverage and reimbursement policies of these payors, which are also subject to change over time.
These regulatory requirements may significantly increase our production costs and may even prevent us from making our products in amounts sufficient to meet market demand. If we change our approved manufacturing process, the FDA may need to review the process before it may be used. The FDA enforces the QSR through periodic announced and unannounced inspections of manufacturing facilities.
These regulatory requirements and changes to the requirements may significantly increase our production costs and may even prevent us from making our products in amounts sufficient to meet market demand. If we change our approved manufacturing process, the FDA may need to review the process before it may be used.
We are a party to two exclusive license agreements with UC Berkeley, covering ten patents exclusively licensed to us. In addition, as a result of the “HMC” acquisition, we are party to two license agreements with Vanderbilt University.
We are a party to two exclusive license agreements with UC Berkeley, covering ten patents exclusively licensed to us. In addition, we are party to two license agreements with Vanderbilt University.
Failure to comply with the EU MDR requirements by the MDR transitional period deadline would prevent us from generating revenue from sales of our products in the EU, which could adversely affect our business, results of operations and financial condition.
As a result, the EU MDR transitional period deadline for our products was set to December 31, 2028. Failure to comply with the EU MDR requirements by the EU MDR transitional period deadline would prevent us from generating revenue from sales of our products in the EU, which could adversely affect our business, results of operations and financial condition.
Future operating or business decisions may cause dilution to our stockholders. For example, we may sell equity securities or issue securities exercisable or convertible into shares of our common stock in connection with strategic transactions or for financing purposes, including under an At The Market Offering Agreement we entered into in October 2020 with H.C.
Future operating or business decisions may cause dilution to our stockholders. For example, we may sell equity securities or issue securities exercisable or convertible into shares of our common stock in connection with strategic transactions or for financing purposes, including under our At The Market Offering Agreement (the "ATM Agreement") or otherwise through registered or unregistered offerings.
We may be unable to generate sufficient cash flow to service our debt obligations and operate our business.
We may be unable to generate sufficient cash flow to service our debt obligations and operate our business. As described in Note 9.
Changes and updates to HIPAA transaction standards could prove technically difficult, time-consuming or expensive to implement, all of which could harm our business. Regulatory requirements under Proposition 65 could adversely affect our business.
Changes and updates to HIPAA transaction standards could prove technically difficult, time-consuming or expensive to implement, all of which could harm our business.
Further, in our operations as a public company, future government shutdowns could impact our ability to access the public markets, such as through the declaration of effectiveness of registration statements and obtain necessary capital in order to properly capitalize and continue our operations.
Further, in our operations as a public company, future government shutdowns could impact our ability to access the public markets, such as through the declaration of effectiveness of registration statements and obtain necessary capital in order to properly capitalize and continue our operations. Damage to our brand and reputation could have an adverse effect on our business and financial performance.
You may also be subject to dilution from the exercise or settlement of outstanding options or restricted stock units under the Incentive Plan, and from the exercise of our warrants.
You may also be subject to dilution from the exercise or settlement of outstanding options or restricted stock units under the Amended and Restated 2014 Equity Incentive Plan, and from the exercise of our warrants, including the exercise of any pre-funded warrants.
If we are slow or unable to adapt to any such changes, our business, operating results and financial condition could be adversely affected. Failure to comply with the Federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, the Health Information Technology for Economic and Clinical Health Act, or HITECH Act, and implementing regulations could result in significant penalties.
If we are slow or unable to adapt to any such changes, our business, operating results and financial condition could be adversely affected. Failure to comply with HIPAA or the HITECH Act and implementing regulations could result in significant penalties.
If we are unable to successfully retain existing customers and attract new customers and achieve volume sales of our products, our business, prospects, financial condition and operating results will be materially and adversely affected. Furthermore, the markets for medical and industrial robotic exoskeletons are continuing to develop.
If we are unable to successfully retain existing customers and attract new customers and achieve volume sales of our products, our business, prospects, financial condition and operating results will be materially and adversely affected.
Our business plan within our Personal Health business line depends in a large part on sales of our Ekso Indego Therapy product by individuals with SCI who are covered by Medicare or Medicaid.
Our business plan related to our Ekso Indego Personal product depends in a large part on sales of our Ekso Indego Personal product to individuals with SCI who are covered by third-party payers, including Medicare or Medicaid.
For example, California adopted the California Consumer Privacy Act (CCPA), which became effective in January 2020. The CCPA establishes a privacy framework for covered businesses, including an expansive definition of personal information and data privacy rights for California residents. The CCPA includes a framework with potentially severe statutory damages and private rights of action.
The CCPA established a privacy framework for covered businesses, including an expansive definition of personal information and data privacy rights for California residents. The CCPA includes a framework with potentially severe statutory damages and private rights of action.
If CMS determines to not provide reimbursement for our Ekso Indego Therapy at acceptable levels or at all, delays or cancels reimbursement decisions, or materially changes any reimbursement levels once set, our ability to sell into this market may be diminished. In addition, the policies affecting the implementation of individual reimbursement decisions are made by regional DME MACs.
If CMS delays or cancels reimbursement decisions, or materially changes the reimbursement level it has set, our ability to sell into this market may be diminished. In addition, the policies affecting the implementation of individual reimbursement decisions are made by regional DME MACs.
Our license agreements with UC Berkeley and Vanderbilt University impose various development, diligence, commercialization, and other obligations on us, and any future license agreements may impose similar or other obligations on us.
Our license agreements with UC Berkeley and Vanderbilt University impose various development, diligence, commercialization, and other obligations on us, and any future license agreements may impose similar or other obligations on us. For example, under our license agreements with UC Berkeley and Vanderbilt University, we must satisfy specified minimum annual royalty payment obligations.
Any significant leadership change and accompanying senior management transition, such as the change in our chief executive officer in December 2022, and the hiring of other new leaders in key roles, involves inherent risk and any failure to ensure a smooth transition could hinder our strategic planning, execution and future performance.
Any significant leadership change and accompanying senior management transition, and the hiring of other new leaders in key roles, involves inherent risk and any failure to ensure a smooth transition could hinder our strategic planning, execution and future performance. In addition, as we introduce new products or services, we will need to hire additional personnel.
Future acquisitions or dispositions could result in potentially dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, amortization expenses, or write-offs of goodwill and intangible assets, any of which could harm our financial condition. Future acquisitions may also require us to obtain additional financing, which may not be available on favorable terms or at all.
Future acquisitions or dispositions could result in potentially dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, amortization expenses, or write-offs of goodwill and intangible assets, any of which could harm our financial condition.
Many of our personnel work remotely all or part of the time, which increases certain security risks. In addition, the risk of state-supported and geopolitical-related cybersecurity attacks is believed to be heightened in connection with the conflicts in Ukraine and the Middle East and any related political or economic responses and counter-responses.
The risk of state-supported and geopolitical-related cybersecurity attacks is believed to be heightened in connection with the conflicts in Ukraine and the Middle East and any related political or economic responses and counter-responses.
Business and Operational Risks 11 Table of Contents The markets in which our products are sold are highly competitive and continue to develop. We face competition within the medical devices and industrial robotics markets on the basis of product features, clinical outcomes, price, services and other factors.
The markets in which our products are sold are highly competitive and continue to develop, and important assumptions about the potential market for our current and future products may be inaccurate. We face competition within the medical devices and industrial robotics markets on the basis of product features, clinical outcomes, price, services and other factors.
In addition, as we introduce new products or services, we will need to hire additional personnel. Currently, competition for personnel with the required knowledge, skill and experiences is intense, particularly in the San Francisco Bay area, where we are headquartered, and we may not be able to attract, assimilate or retain such personnel.
Competition for personnel with the required knowledge, skill and experiences has, from time to time, been intense, particularly in the San Francisco Bay area, where we are headquartered, and we may not be able to attract, assimilate or retain such personnel.
These policies are not yet known to us and may affect the number of individual purchases that are approved to receive reimbursement in the future.
Certain policies are not yet known to us and may affect the number of individual purchases that are approved to receive reimbursement in the future. In addition, we may not be able to obtain insurance coverage beyond CMS.
Since its enactment, there have been numerous judicial, administrative, executive, and legislative challenges to certain aspects of the ACA, and we expect there will be additional challenges in the future. As a result, there have been delays in the implementation of, and action taken to repeal or replace, certain aspects of the ACA.
Since its enactment, there have been numerous judicial, administrative, executive, and legislative challenges to certain aspects of the ACA, and we expect there will be additional challenges in the future. In June 2021, the U.S.
Certain payors have filing deadlines and they will not pay claims submitted after such time. We may be subject to extensive pre-payment and post-payment audits by governmental and private payors that could result in material delays, refunds of monies received or denials of claims submitted for payment under such third-party payor programs and contracts.
We have been subject to extensive pre-payment, and may be subject post-payment, audits by governmental and private payors that have resulted in material delays and may result in refunds of monies received or denials of claims submitted for payment under such third-party payor programs and contracts. Operating within the CMS reimbursement environment was new to us.
We may never complete the development of any of our proposed products or product improvements into marketable products. We do not know when or whether we will successfully complete the development of the planned development-stage or next generation exoskeletal technologies, or any other proposed, developmental, or contemplated product for any of our target markets.
We do not know when or whether we will successfully complete the development of the planned development-stage or next generation exoskeletal technologies, or any other proposed, developmental, or contemplated product for any of our target markets. We continue to seek to improve our technologies before we are able to produce a commercially viable product.
We expect to experience pricing pressures in connection with the sale of any of our products due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, cost containment initiatives and additional legislative changes. We will experience long and variable sales cycles.
We expect to experience pricing pressures in connection with the sale of any of our products due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, cost containment initiatives and additional legislative changes. The acquisition and integration of other companies, businesses, or technologies could result in operating difficulties, dilution, and other harmful consequences.
We may not be able to reduce the cost to manufacture or service our products as planned. Our business plan assumes that exoskeletons can be manufactured more inexpensively than they are currently being manufactured.
Negative publicity about us could harm our reputation and damage the value of our brands, which could materially and adversely affect our financial performance. We may not be able to reduce the cost to manufacture or service our products as planned. Our business plan assumes that exoskeletons can be manufactured more inexpensively than they are currently being manufactured.
The ACA reduces Medicare and Medicaid payments to hospitals, clinical laboratories and pharmaceutical companies, and could otherwise reduce the volume of medical procedures. These factors, in turn, could result in reduced demand for our products and increased downward pricing pressure. It is also possible that the ACA will result in lower reimbursements.
These factors, in turn, could result in reduced demand for our products and increased downward pricing pressure. It is also possible that the ACA will result in lower reimbursements.
The legislation seeks to reform the United States healthcare system. It is far-reaching and is intended to expand access to health insurance coverage, improve quality and reduce costs over time. We expect the law will have a significant impact upon various aspects of our business operations.
It is far-reaching and is intended to expand access to health insurance coverage, improve quality and reduce costs over time. We expect the law will have a significant impact upon various aspects of our business operations. The ACA reduces Medicare and Medicaid payments to hospitals, clinical laboratories and pharmaceutical companies, and could otherwise reduce the volume of medical procedures.
Our operating results may be negatively impacted if global supply chains of semiconductors and other important commodities recur in the future. Coverage policies and reimbursement levels of third-party payers, including Medicare or Medicaid, may impact sales of our products.
Our operating results may be negatively impacted if global supply chains of semiconductors and other important commodities recur in the future.
Additionally, a new privacy law, the California Privacy Rights Act (CPRA), was approved by California voters in the November 2020 election and went into effect on January 1, 2023. The CPRA significantly modifies the CCPA, potentially resulting in further uncertainty. Other states have begun to propose and enact similar laws. The U.S. federal government also is contemplating federal privacy legislation.
Additionally, the California Privacy Rights Act (the "CPRA"), was approved by California voters in the November 2020 election and went into effect on January 1, 2023. The CPRA significantly modifies the CCPA, potentially resulting in further uncertainty.
Management has not yet determined the form such additional financing may take, but management expects that the most likely forms include one or more of the following: (i) underwritten offerings of shares of our common stock, (ii) sales of shares of our common stock under an "at the market" offering program, (iii) incurring indebtedness with one or more financial institutions, (iv) sale of product line or technology, and (v) the factoring of trade receivables.
To the extent we decide to conduct a financing in the future, the form of such financing may include one or more of the following: (i) underwritten offerings of shares of our common stock, (ii) sales of shares of our common stock under an "at the market" offering program, (iii) issuing shares of our common stock upon the exercise of warrants at reduced exercise prices, (iv) incurring indebtedness with one or more financial institutions, (v) sale of product line or technology, and (vi) the factoring of trade receivables.
However, it is possible that such initiatives could have an adverse effect on our ability to obtain approval and/or successfully commercialize products in the United States in the future.
It is unclear how any such challenges and healthcare measures promulgated by the new Trump administration will impact the ACA, our business, financial condition and results of operations. However, it is possible that such initiatives could have an adverse effect on our ability to obtain approval and/or successfully commercialize products in the United States in the future.
The inability to attract and retain the necessary managerial, technical and sales and marketing personnel could have a material adverse effect on our business, results of operations and financial condition. 15 Table of Contents The acquisition and integration of other companies, businesses, or technologies could result in operating difficulties, dilution, and other harmful consequences.
The inability to attract and retain the necessary managerial, technical and sales and marketing personnel could have a material adverse effect on our business, results of operations and financial condition. 15 Table of Contents Shutdowns of the U.S. federal government could materially impair our business and financial condition.
Certain efforts may be state-sponsored or supported by significant financial and technological resources, making them even more difficult to detect, remediate and otherwise respond to.
Many of our personnel work remotely all or part of the time, which increases certain security risks. In addition, certain attacks may be state-sponsored or supported by significant financial and technological resources, making them even more difficult to detect, remediate and otherwise respond to.
The regulatory frameworks for privacy, data protection, and information security issues worldwide are rapidly evolving and likely to remain uncertain for the foreseeable future. The U.S. federal and various state, local, and foreign government bodies and agencies have adopted or are considering adopting laws and regulations governing the collection, distribution, use, disclosure, storage, security, and other processing of personal information.
The U.S. federal and various state, local, and foreign government bodies and agencies have adopted or are considering adopting laws and regulations governing the collection, distribution, use, disclosure, storage, security, and other processing of information relating to individuals. For example, California adopted the California Consumer Privacy Act (the "CCPA"), which became effective in January 2020.
We continue to seek to improve our technologies before we are able to produce a commercially viable product. Failure to improve on any of our technologies could delay or prevent their successful development for any of our target markets. Developing any technology into a marketable product is a risky, time-consuming and expensive process.
Failure to improve any of our technologies could delay or prevent their successful development for any of our target markets. Developing any technology into a marketable product is a risky, time-consuming and expensive process. You should anticipate that we will encounter setbacks, discrepancies requiring time-consuming and costly redesigns and changes and that there is the possibility of outright failure.
The EksoNR and Ekso Indego products have a lengthy sale and purchase order cycle because it is a major capital expenditure item and generally requires the approval of senior management at purchasing institutions, which may contribute to substantial fluctuations in our quarterly operating results. International sales of our products are subject to factors outside of our control.
The EksoNR and Ekso Indego Therapy products have a lengthy sale and purchase order cycle because it is a major capital expenditure item and generally requires the approval of senior management at purchasing institutions. Ekso Indego Personal likewise can have a long sales cycle due to the complexity of the sales channel and lengthy approval process by CMS contractors.
If any of our key independent distributors were to cease to distribute our products, our sales could be adversely affected. In such a situation, we may need to seek alternative independent distributors or increase our reliance on our other independent distributors or our direct sales representatives, which may not prevent our sales from being adversely affected.
In such situations, we may need to seek alternative independent distributors or increase our reliance on our other independent distributors or our direct sales representatives, which may not prevent our sales from being adversely affected. Our success depends on our management team, and on our ability to hire, train, retain, and motivate employees.
In addition, while CMS reimbursement is considered an essential service and is thus less likely to be affected, other administrative functions within CMS could be affected.
In addition, while CMS reimbursement is considered an essential service and is thus less likely to be affected, other administrative functions within CMS could be affected, including as a result of the executive and congressional branches of the U.S. government being unable to reach a resolution on the deployment of the federal government’s funds].
If a prolonged government shutdown or budget sequestration occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
For example, in 2018 and 2019 the U.S. government shut down several times and certain regulatory agencies, such as the FDA and the SEC, had to furlough critical FDA, SEC, and other government employees and stop critical activities. [Also, if the U.S. government cannot reach a new spending agreement by March 14, 2025, the U.S. government will shut down again.] If a prolonged government shutdown or budget sequestration occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
We are required to comply with the FDA’s Quality System Regulation, or QSR, which is a complex regulatory scheme that covers the procedures and documentation of the design, testing, production, process controls, quality assurance, labeling, packaging, handling, storage, distribution, installation, servicing and shipping of our marketed products.
Our manufacturing and design processes and those of our third-party component suppliers are required to comply with the FDA’s QSR, which covers procedures and documentation of the design, testing, production, control, quality assurance, labeling, packaging, storage and shipping of our products in the United States.
An element of our strategy is to continue to upgrade our robotic exoskeleton platform to incorporate new software and hardware enhancements.
Modifications to our current and our future products may require new 510(k) clearances or premarket approvals, or may require us to cease marketing or recall the modified products until clearances are obtained. An element of our strategy is to continue to upgrade our robotic exoskeleton platform to incorporate new software and hardware enhancements.
Our business currently depends in part on our activities in the EMEA, APAC, and other foreign markets.
Such delays may contribute to substantial fluctuations in our quarterly operating results. International sales of our products are subject to factors outside of our control. Our business currently depends in part on our activities in the EMEA, APAC, and other foreign markets.
If imposed on us, any of these sanctions could have a material adverse effect on our reputation, business, results of operations and financial condition. Modifications to our current and our future EksoHealth products may require new 510(k) clearances or premarket approvals, or may require us to cease marketing or recall the modified products until clearances are obtained.
If imposed on us, any of these sanctions could have a material adverse effect on our reputation, business, results of operations and financial condition. Our products and operations are subject to extensive government regulation and oversight in the United States and other countries where we commercialize our medical devices.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisk Factors," specifically the risks titled " We are subject to cybersecurity risks to our systems, infrastructure, and technology, and data processed by us or third-party vendors. ” No matter how well designed or implemented our internal controls are, we will not be able to anticipate all cybersecurity threats, and we may not be able to implement effective preventive or detective measures against such security breaches in a timely manner.
Biggest changeRisk Factors," specifically the risks titled " We are subject to cybersecurity risks to our systems, infrastructure, and technology, and data processed by us or third -party vendors. ” No matter how well designed or implemented our internal controls are, we will not be able to anticipate all cybersecurity threats, and we may not be able to implement effective preventive or detective measures against cybersecurity threats.
Item 1C. CYBERSECURITY Risk Management and Strategy We perform a formal risk assessment each year. As part of its risk assessment, we consider the potential for cybersecurity threats, including but not limited to interruptions, outages and breaches to its operational and financial systems.
Item 1C. CYBERSECURITY Risk Management and Strategy We perform a formal risk assessment each year. As part of the Company's risk assessment, we consider the potential for cybersecurity threats, including but not limited to interruptions, outages and breaches to its operational and financial systems.
As of the date of this Form 10-K, we are not aware of any cybersecurity threats that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition. For further discussion of the cybersecurity risks, see "Part I—Item 1A.
As of the date of this Annual Report on Form 10 -K, we are not aware of any cybersecurity threats that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition. For further discussion of the cybersecurity risks, see "Part I—Item 1A.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe currently lease manufacturing facilities in Macedonia, Ohio from Parker Hannifin Corporation to support the production and service of the Ekso Indego product lines. Outside of the United States, we lease approximately 3,000 square feet of office space at Friesenweg 4, House 13, 4th floor, 22763 Hamburg, Germany for our European headquarters. We do not own any real property.
Biggest changeOutside of the United States, we lease approximately 3,000 square feet of office space at Friesenweg 20, 22763 Hamburg, Germany for our European headquarters. We do not own any real property.
Item 2. PROPERTIES Our principal executive offices are currently located at 101 Glacier Point, Suite A, San Rafael, California, 94901, where we lease approximately 17,000 square feet. The San Rafael office serves as headquarters for our medical device and industrial device sales segments.
Item 2. PROPERTIES Our principal executive office is currently located at 101 Glacier Point, Suite A, San Rafael, California, 94901, where we lease approximately 17,000 square feet. We currently lease a manufacturing facility in Brecksville, Ohio to support the production and service of the Ekso Indego Therapy and Ekso Indego Personal product lines.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFor additional information, please refer to Note 16 . Commitments and Contingencies in our notes to the consolidated financial statements.
Biggest changeFor additional information, please refer to Note 15 . Commitments and Contingencies in our notes to the consolidated financial statements.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe quotation of our common stock on the OTC market began on or about January 16, 2014. The closing price of EKSO stock as of March 1, 2024 was $1.99. As of March 1, 2024, we had approximately 175 stockholders of record of our common stock.
Biggest changeThe quotation of our common stock on the OTC market began on or about January 16, 2014. The closing price of EKSO stock as of February 28, 2025 was $0.52. As of February 28, 2025, we had approximately 175 stockholders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeRisk Factors,” specifically the risk titled “Coverage policies and reimbursement levels of third-party payers, including Medicare or Medicaid, may impact sales of our products,” for more information. 31 Table of Contents Results of Operations Consolidated Results of Operations: December 31, 2023 compared to the year ended December 31, 2022 (dollars in thousands): Years ended December 31, 2023 2022 Change % Change Revenue $ 18,279 $ 12,912 $ 5,367 42 % Cost of revenue 9,200 6,698 2,502 37 % Gross profit 9,079 6,214 2,865 46 % Gross profit % 50 % 48 % Operating expenses: Sales and marketing 8,472 7,157 1,315 18 % Research and development 5,025 3,626 1,399 39 % General and administrative 10,694 10,987 (293 ) (3 )% Total operating expenses 24,191 21,770 2,421 11 % Loss from operations (15,112 ) (15,556 ) 444 (3 )% Other (expense) income, net: Interest expense, net (302 ) (156 ) (146 ) 94 % (Loss) gain on revaluation of warrant liabilities (133 ) 1,317 (1,450 ) (110 )% Unrealized gain (loss) on foreign exchange 412 (655 ) 1,067 (163 )% Other expense, net (63 ) (30 ) (33 ) 110 % Total other (expense) income, net (86 ) 476 (562 ) (118 )% Net loss $ (15,198 ) $ (15,080 ) $ (118 ) 1 % Revenue Revenue increased $5.4 million, or 42%, for the year ended December 31, 2023, compared to the same period of 2022.
Biggest changeRisk Factors,” specifically the risk titled “Coverage policies and reimbursement levels of third-party payers, including Medicare or Medicaid, may impact sales of our products,” for more information. 31 Table of Contents Results of Operations Consolidated Results of Operations: December 31, 2024 compared to the year ended December 31, 2023 (dollars in thousands): Years ended December 31, 2024 2023 Change % Change Revenue $ 17,925 $ 18,279 $ (354 ) (2 )% Cost of revenue 8,414 9,200 (786 ) (9 )% Gross profit 9,511 9,079 432 5 % Gross profit % 53 % 50 % Operating expenses: Sales and marketing 7,308 8,472 (1,164 ) (14 )% Research and development 3,874 5,025 (1,151 ) (23 )% General and administrative 8,789 10,694 (1,905 ) (18 )% Total operating expenses 19,971 24,191 (4,220 ) (17 )% Loss from operations (10,460 ) (15,112 ) 4,652 (31 )% Other (expense) income, net: Interest expense, net (269 ) (302 ) 33 (11 )% Gain (loss) on revaluation of warrant liabilities 474 (133 ) 607 (456 )% Loss on modification of warrant (109 ) — (109 ) * Unrealized (loss) gain on foreign exchange (965 ) 412 (1,377 ) (334 )% Other expense, net (1 ) (63 ) 62 (98 )% Total other (expense) income, net (870 ) (86 ) (784 ) 912 % Net loss $ (11,330 ) $ (15,198 ) $ 3,868 (25 )% (*) Not meaningful Revenue Revenue decreased $0.4 million, or 2%, for the year ended December 31, 2024, compared to the same period of 2023.
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 and Ekso Indego, 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.
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 and Ekso Indego Therapy, 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.
Such shares may be offered pursuant to the registration statement on Form S-3 (File No. 333-272607) (the “Registration Statement”), which was declared effective by the SEC on June 20, 2023, and a related prospectus supplement filed with the SEC on July 28, 2028 (the “ATM Prospectus”).
Such shares may be offered pursuant to the registration statement on Form S-3 (File No. 333-272607) (the “Registration Statement”), which was declared effective by the SEC on June 20, 2023, and a related prospectus supplement filed with the SEC on July 28, 2023 (the “ATM Prospectus”).
Off-Balance Sheet Arrangements As of December 31, 2023, we did not have any significant off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K promulgated under the Exchange Act. 35 Table of Contents Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S.
Off-Balance Sheet Arrangements As of December 31, 2024, we did not have any significant off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K promulgated under the Exchange Act. 35 Table of Contents Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S.
Wainwright & Co., LLC (the "Agent"), under which we may issue and sell shares of our common stock, from time to time, to or through the Agent.
Wainwright & Co., LLC (the “Agent”), under which we may issue and sell shares of our common stock, from time to time, to or through the Agent.
Commitments and Contingencies in our notes to the consolidated financial statements for additional information regarding our contractual obligations and commitments.
Commitments and Contingencies in our notes to the consolidated financial statements for additional information regarding our contractual obligations and lease commitments.
Management expects that the Company's historical reliance on external financing, from both equity and debt financings, will continue to provide the capital necessary to meet its material cash requirements in the long term.
Management expects that our historical reliance on external financing, from both equity and debt financings, will continue to provide the capital necessary to meet its material cash requirements in the long term.
Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this Annual Report on Form 10-K titled “Risk Factors.” For a discussion related to the results of operations for 2022 compared to 2021, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Annual Report on Form 10-K filed with the SEC on March 28, 2023.
Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this Annual Report on Form 10-K titled “Risk Factors.” For a discussion related to the results of operations for 2023 compared to 2022, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2023 Annual Report on Form 10-K filed with the SEC on March 4, 2024.
Management must also make uncertain estimates regarding the likelihood and timing of certain future events for application of the Lattice Model for the valuation of certain warrants. Changes in these assumptions could have potential material impacts on the estimated fair value of warrant liabilities.
Management also made uncertain estimates regarding the likelihood and timing of certain future events for application of the Lattice Model for the valuation of certain warrants. Changes in these assumptions could have potential material impacts on the estimated fair value of warrant liabilities.
Loss on revaluation of warrant liabilities of $0.1 million and gain on revaluation of warrant liabilities of $1.3 million for the years ended December 31, 2023 and December 31, 2022, respectively, were 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.
Gain on revaluation of warrant liabilities of $0.5 million and loss on revaluation of warrant liabilities of $0.1 million for the years ended December 31, 2024 and December 31, 2023, respectively, were 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.
Unrealized gain on foreign exchange was $0.4 million for the year ended December 31, 2023, compared to unrealized loss on foreign exchange of $0.7 million for the same period of 2022, primarily due to foreign currency exchange rate fluctuations producing unrealized gains and losses on our inter-company monetary assets and liabilities.
Unrealized loss on foreign exchange was $1.0 million for the year ended December 31, 2024, compared to unrealized gain on foreign exchange of $0.4 million for the same period of 2023, primarily due to foreign currency exchange rate fluctuations producing unrealized gains and losses on our inter-company monetary assets and liabilities.
The Company does not expect, nor do our historical operating results suggest, that cash flows generated from operations will be sufficient to meet our material cash requirements in the long term.
We do not expect, nor do our historical operating results suggest, that cash flows generated from operations will be sufficient to meet our material cash requirements in the long term.
Pursuant to the Registration Statement and the ATM Prospectus, shares having an aggregate offering price of up to $5.0 million may be offered and sold, subject to certain SEC rules limiting the amount of shares of the Company’s common stock that we may sell under the Registration Statement.
Pursuant to the Registration Statement and the ATM Prospectus, shares having an aggregate offering price of up to $5.0 million may be offered and sold, subject to certain SEC rules limiting the number of shares of our common stock that we may sell under the Registration Statement.
Furthermore, we do business in the Americas, EMEA and APAC, which results in our business being impacted by demand changes in each of those regions, as well as changes in the strength of the local currencies relative to the U.S. Dollar.
Furthermore, we do business in the Americas, EMEA and APAC, which results in our business being impacted by demand changes in each of those regions, as well as changes in the strength of the local currencies relative to the U.S. Dollar. See “Part I—Item 1A.
Our most critical accounting estimates include: • the standalone selling prices used to allocate the contract consideration to the individual performance obligations in our device sales arrangements, which impacts revenue recognition; • the unobservable inputs and assumptions used by management in estimating the fair value of our warrant liabilities, which impacts net gain or loss; • the valuation of inventory, which impacts gross profit margins; • the estimates made regarding the recoverability of our net deferred tax asset, which impacts our financial condition; • assets acquired and liabilities assumed in business combinations; • future warranty costs; • accounting for leases; and • useful lives assigned to long-lived assets.
Our most critical accounting estimates include: • the standalone selling prices used to allocate the contract consideration to the individual performance obligations in our device sales arrangements, which impact revenue recognition; • the unobservable inputs and assumptions used by management in estimating the fair value of our warrant liabilities, which impacts net income or loss; • the provision for credit losses on accounts receivable; • the valuation of inventory, which impacts gross profit margins; • the estimates made regarding the recoverability of our net deferred tax asset, which impacts our financial condition; • the fair value of the tangible and intangible assets acquired and liabilities assumed in our business combination; • future warranty costs; • accounting for leases; and • useful lives assigned to long-lived assets.
Organization: Liquidity and Going Concern of the notes to our consolidated financial statements, management believes that substantial doubt exists about our ability to meet cash requirements twelve months from the issuance of such financial statements, and such substantial doubt is not alleviated by our plans.
As described in Note 1. Organization: Liquidity and Going Concern of the notes to our consolidated financial statements, management believes that substantial doubt exists about our ability to meet cash requirements 12 months from the issuance of such financial statements, and such substantial doubt is not alleviated by our plans.
Specifically, according to the National Spinal Cord Injury Statistical Center, an estimated 294,000 individuals are currently living with SCI and another 17,810 suffer from new SCI injuries each year. Approximately 56% of individuals with SCI are enrolled in Medicare or Medicaid within 5 years post-injury.
Specifically, according to the National Spinal Cord Injury Statistical Center, an estimated 305,000 individuals are currently living with SCI and another 18,000 suffer from new SCI injuries each year. According to the National Spinal Cord Injury Statistical Center, approximately 57% of individuals with SCI are enrolled in Medicare or Medicaid within five years post-injury.
During the year ended December 31, 2023, we sold 451,321 shares of common stock under the ATM Agreement at an average price of $1.59, for aggregate proceeds of $0.7 million, net of commission and issuance costs. As of December 31, 2023, we had $4.3 million available for future offerings under the prospectus filed with respect to the ATM Agreement.
During the year ended December 31, 2024, we sold 105,049 shares of common stock under the ATM Agreement at an average price of $1.43, for aggregate proceeds of $0.1 million, net of commission and issuance costs. As of December 31, 2024, we had $4.1 million available for future offerings under the prospectus filed with respect to the ATM Agreement.
Notes Payable, net in the notes to the Company's consolidated financial statements included elsewhere in the Annual Report on Form 10-K), and (5) operating lease payments (for additional information see Note 11. Lease Obligations in the notes to our consolidated financial statements included elsewhere in the Annual Report on Form 10-K). As described in Note 1.
Notes Payable, net in the notes to our consolidated financial statements included elsewhere in the Annual Report on Form 10-K), (5) operating lease payments (for additional information see Note 10. Lease Obligations in the notes to our consolidated financial statements included elsewhere in the Annual Report on Form 10-K), and (6) pursuing strategic initiatives.
Management has not yet determined the form such additional financing may take, but management expects that the most likely forms include one or more of the following: (i) underwritten offerings of shares of our common stock or other offerings of equity and/or equity-linked securities, (ii) sales of shares of our common stock under an "at the market" offering program, (iii) incurring indebtedness with one or more financial institutions, and (iv) the factoring of trade receivables.
Management has not yet determined the form such additional financing may take, but management expects that the most likely forms include one or more of the following: (i) underwritten offerings of shares of our common stock, (ii) sales of shares of our common stock under an "at the market" offering program, (iii) issuing shares of our common stock upon the exercise of warrants at reduced exercise prices, (iv) incurring indebtedness with one or more financial institutions, (v) sale of product line or technology, and (vi) the factoring of trade receivables.
Future warranty costs Sales of devices generally include an initial warranty for parts and services for one year in the Americas, two years in Europe, the Middle East, Africa (EMEA), and one or two years in the Asia Pacific (APAC) region.
Future Warranty Costs Sales of devices generally include an initial warranty for parts and services for one year in the Americas, two years in EMEA, and one to three years in the APAC region.
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, the levels of reimbursements our customers will be able to receive, as well as conditions relating to overall economic growth and general business activity.
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 levels of reimbursements our customers will be able to receive, the level of reimbursement we will able to receive from Medicare on claims related to our Ekso Indego Personal, as well as conditions relating to overall economic growth and general business activity.
DMEs are responsible for the Medicare reimbursement process, which requires a physician’s prescription and evidence of medical necessity to be submitted to and approved by Medicare before reimbursement is provided. See “Part I—Item 1A.
DMEs are responsible for the Medicare reimbursement process, which requires a physician’s prescription and evidence of medical necessity to be submitted to and approved by Medicare before reimbursement is provided. Operating within the CMS reimbursement environment was new to us.
As described in Note 10. Notes Payable, Net in the notes to our consolidated financial statements, borrowings under our secured term loan agreement with Pacific Western Bank have a requirement of minimum cash on hand equivalent to the current outstanding principal balance, which is due in full in August 2026.
Notes Payable, net in the notes to our consolidated financial statements, borrowings under our secured term loan agreement with Banc of California are subject to a liquidity covenant requiring minimum cash on hand equivalent to the current outstanding principal balance, which is due in full in August 2026.
On January 16, 2024, we sold an aggregate of 3.0 m illion shares of common stock in a registered direct offering at a price of $1.55 per share, which generated net proceeds of approximately $3.9 million after deducting placement agent fees and our estimated offering expenses. We intend to use such net proceeds for general corporate purposes.
On January 16, 2024, we sold an aggregate of 3.0 m illion shares of common stock in a registered direct offering (the "January 2024 Offering") at a price of $1.55 per share, which generated net proceeds of approximately $3.9 million after deducting placement agent fees and our estimated offering expenses. 33 Table of Contents In October 2020, we entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C.
There were no comparable cash inflows generated in financing activities for the year ended December 31, 2022. 34 Table of Contents Material Cash Requirements The Company's material cash requirements include the following items, some of which are represented in the table of Contractual Obligations and Commitments: (1) employee wages, benefits and incentives, (2) the procurement of raw materials and components to support the manufacturing and sale of the Company's products, (3) expenditures for the ongoing improvement and development of existing and new technologies, (4) debt repayments (for additional information see Note 10.
Net cash provided by financing activities of $0.3 million for the year ended December 31, 2023, was generated from the sale of common stock through our ATM Agreement, which was partially offset by a principal payment related to our Promissory Note. 34 Table of Contents Material Cash Requirements and Going Concern Our material cash requirements include the following items, some of which are represented in the table of Contractual Obligations and Commitments: (1) employee wages, benefits and incentives, (2) the procurement of raw materials and components to support the manufacturing and sale of our products, (3) expenditures for the ongoing improvement and development of existing and new technologies, (4) debt repayments (for additional information see Note 9.
Cash and Restricted Cash The following table summarizes the sources and uses of cash for the periods stated (in thousands): Years ended December 31, 2023 2022 Cash and restricted cash, beginning of year $ 20,525 $ 40,406 Net cash used in operating activities (12,054 ) (14,688 ) Net cash used in investing activities (157 ) (5,175 ) Net cash provided by financing activities 348 — Effect of exchange rate changes on cash (24 ) (18 ) Cash and restricted cash, end of year $ 8,638 $ 20,525 Net Cash Used in Operating Activities Net cash used in operating activities decreased $2.6 million for the year ended December 31, 2023, compared to the same period of 2022, primarily due to an increase in sales and the absence of business development costs incurred in the comparable period, partially offset by payments of acquisition and integration costs associated with HMC.
Cash and Restricted Cash The following table summarizes the sources and uses of cash for the periods stated (in thousands): Years ended December 31, 2024 2023 Cash and restricted cash, beginning of year $ 8,638 $ 20,525 Net cash used in operating activities (9,846 ) (12,054 ) Net cash used in investing activities (37 ) (157 ) Net cash provided by financing activities 7,769 348 Effect of exchange rate changes on cash (31 ) (24 ) Cash and restricted cash, end of year $ 6,493 $ 8,638 Net Cash Used in Operating Activities Net cash used in operating activities decreased by $2.2 million for the year ended December 31, 2024, compared to the same period of 2023, primarily due to the absence of payments related to the acquisition and integration of HMC, cost savings on supply chain, reduction in service costs and other efficiencies in operating activities.
If Medicare reimbursement goes into effect, we plan to sell products to individuals in this market through Durable Medical Equipment suppliers (DMEs). DMEs typically resell products from DME manufacturers to individual users.
With Medicare reimbursement recently approved, we have begun selling products to individuals in this market through Durable Medical Equipment suppliers ("DMEs"). DMEs typically resell products from DME manufacturers, like us, to individual users.
Net Cash Used in Investing Activities Net cash used in investing activities decreased $5.0 million for the year ended December 31, 2023, compared to the same period of 2022 due to the absence of the payment of $5.0 million for the HMC Acquisition in 2022.
Net Cash Used in Investing Activities Net cash used in investing activities decreased by $0.1 million for the year ended December 31, 2024, compared to the same period of 2023, primarily due to the reduction in manufacturing equipment purchases.
Contractual Obligations and Commitments The following table summarizes our outstanding contractual obligations, including interest payments, as of December 31, 2023 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 Term loan $ 2,468 $ 174 $ 2,294 $ — $ — Promissory Note 4,688 1,250 3,438 — Facility operating leases 1,216 436 780 — — Purchase obligations 2,783 2,783 — — — Total $ 11,155 $ 4,643 $ 6,512 $ — $ — Refer to Note 16.
Contractual Obligations and Commitments The following table summarizes our outstanding contractual obligations as of December 31, 2024, 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 Term loan $ 2,260 $ 156 $ 2,104 Promissory Note 3,437 1,250 2,187 Facility operating leases 953 481 472 Purchase obligations 1,263 1,263 — Total $ 7,913 $ 3,150 $ 4,763 Refer to Note 15.
Gross margin increased to approximately 50% for the year ended December 31, 2023, compared to a gross margin of 48% for the same period in 2022, due to lower device costs. 32 Table of Contents Operating Expenses Sales and marketing expenses increased $1.3 million, or 18%, for the year ended December 31, 2023, compared to the same period of 2022.
Gross margin increased to approximately 53% for the year ended December 31, 2024, compared to a gross margin of 50% for the same period in 2023, primarily driven by cost savings in supply chain and a reduction in service costs. 32 Table of Contents Operating Expenses Sales and marketing expenses decreased $1.2 million, or 14%, for the year ended December 31, 2024, compared to the same period of 2023.
Overview Our Business We design, develop, and market exoskeleton products that augment human strength, endurance, and mobility. Our exoskeleton technology serves multiple end markets and can be utilized both by able-bodied persons and those with physical disabilities or impairments.
Overview Our Business We design, develop, and market exoskeleton products that augment human strength, endurance, and mobility. The primary end market for our exoskeleton technology is healthcare, where our technology primarily serves people with physical disabilities or impairments in both physical rehabilitation and mobility.
Other (Expense) Income, Net Interest expense, net increased $0.1 million, or 94%, for the year ended December 31, 2023, compared to the same period of 2022, due to the interest related to the promissory note in connection with the HMC acquisition.
Total Other (Expense) Income, Net Interest expense, net decreased 11% for the year ended December 31, 2024, compared to the same period of 2023, primarily due to lower interest expense related to the Promissory Note.
If we are successful in obtaining CMS reimbursement for Indego Personal, we believe we will see increased demand for this device as we are able to more economically serve the larger U.S. patient population suffering from SCI.
On April 11, 2024, CMS approved a payment level of approximately $91,000 for Medicare reimbursement of the Ekso Indego Personal, which took effect on April 1, 2024. CMS reimbursement creates the possibility that we will see increased demand for this device as we are able to more economically serve the larger U.S. patient population suffering from SCI.
As of December 31, 2023, $2.0 million of cash must remain as restricted. After considering cash restrictions, effective unrestricted cash as of December 31, 2023 is estimated to be $6.6 million.
As of December 31, 2024, $2.0 million of cash must remain as restricted. After considering cash restrictions, effective unrestricted cash as of December 31, 2024 was approximately $4.5 million. As of December 31, 2024, we had working capital of $11.3 million, compared to working capital of $12.1 million as of December 31, 2023.
Our marketing to these customers involves the education of clinical and executive stakeholders on the economic and clinical value of our products and services. In tandem, we continue to leverage our EksoNR and Ekso Indego customer base to educate and mentor strategic target centers that specialize in stroke, ABI and SCI rehabilitation in specific geographies.
In tandem, we continue to leverage our EksoNR and Ekso Indego customer base to educate and mentor strategic target centers that specialize in stroke, traumatic brain injury ("TBI"), multiple sclerosis ("MS"), and spinal cord injury ("SCI") rehabilitation and treatment in specific geographies.
Liquidity and Capital Resources As of December 31, 2023, we had $8.6 million of cash of which $8.0 million was held domestically and $0.6 million was held by our foreign subsidiaries.
Liquidity and Capital Resources As of December 31, 2024, $6.5 million of cash was held domestically and by our foreign subsidiaries. Cash consisted of bank deposits with third-party financial institutions. As described in Note 9.
The increase was primarily due to additional headcount associated with the acquisition of HMC. Research and development expenses increased $1.4 million, or 39%, for the year ended December 31, 2023, compared to the same period of 2022, primarily due to additional headcount associated with the acquisition of HMC and costs associated with HMC-sponsored research agreements.
The decrease was primarily due to lower headcount, discretionary payroll and consultant costs. Research and development expenses decreased $1.2 million, or 23%, for the year ended December 31, 2024, compared to the same period of 2023, primarily due to lower discretionary payroll costs and decreases in the Company's use of product development consultants.
The majority of our sales have and are expected to be generated in our EksoHealth Segment, which includes the sales of products and services related to neurorehabilitation in clinical settings. We believe that our Enterprise Health business line will be a source of stable and growing sales.
The majority of our sales are generated from our Enterprise Health products, which include the sales of products and services related to neurorehabilitation in clinical settings. We also provide products and services from our Personal Health market to individual users.
In addition to our current products and services, we continue to explore business development initiatives to fuel growth and long-term value in our existing segments. EksoHealth Our Enterprise Health business line focuses on sales of our EksoNR and Ekso Indego Therapy products to customers, including inpatient rehabilitation hospitals and clinics as well as some outpatient rehabilitation clinics.
In addition to our current products and services, we continue to explore business development initiatives to fuel growth and long-term value in our existing markets.
General and administrative expenses decreased $0.3 million, or 3%, for the year ended December 31, 2023, compared to the same period of 2022, primarily due to the absence of legal expenses incurred in 2022 associated with the acquisition of HMC, partially offset by an increase in audit services incurred in 2023 in connection with the acquisition of HMC.
General and administrative expenses decreased $1.9 million, or 18%, for the year ended December 31, 2024, compared to the same period of 2023, primarily due to lower discretionary payroll, accounting and legal costs.
Gross Profit and Gross Margin Gross profit increased $2.9 million, or 46%, for the year ended December 31, 2023, compared to the same period of 2022, due to an increase in EksoHealth device sales.
Gross Profit and Gross Margin Gross profit increased $0.4 million, or 5%, for the year ended December 31, 2024, compared to the same period of 2023, primarily driven by cost savings in supply chain and a reduction in service costs.
Cash consisted of bank deposits with third-party financial institutions. As of December 31, 2023, we had working capital of $12.1 million, compared to $21.8 million as of December 31, 2022. The decrease in working capital was primarily due to cash outflows from operations of $12.1 million.
The decrease in working capital was primarily due to cash outflows from operations of $9.8 million. We have funded our operations primarily through the issuance and sale of equity securities and bank debt.
Our primary end market for our EksoWorks segment is comprised of commercial enterprises that are focused on solving ergonomic challenges for their workers. These challenges include injury prevention, fatigue reduction, and/or improved worker productivity. While EVO is a general-purpose product, we currently target specific vertical markets including aerospace, automotive, general manufacturing, and certain construction trades.
Within our Enterprise Health market we also sell our EVO product to commercial and industrial companies that are focused on solving ergonomic challenges for their workers. These challenges range from injury prevention, fatigue reduction, and/or improved worker productivity. Sales of EVO are focused on applications that involve repetitive work at shoulder height and above.
Removed
As a result of our acquisition of the Human Motion and Control (“HMC”) Business Unit from Parker Hannifin Corporation (“Parker”), in 2022, we also provide products and service to individual users, primarily driven by sales of our Ekso Indego Personal product in our Personal Health business line.
Added
Enterprise Health Market Our sales priority for Enterprise Health customers involves the education of clinical and executive stakeholders on the economic and clinical value of our robotic exoskeleton portfolio, including the EksoNR and the Ekso Indego Therapy devices.
Removed
Our Personal Health business line is focused on marketing and sales of our Ekso Indego Personal product to individual users. These individual users are currently served by the Veterans Administration, which provides our products to qualified veterans for individual use, individuals who are covered under worker’s compensation insurance, and private individuals who pay out of pocket.
Added
While EVO is a general-purpose product, we currently target specific vertical markets, including aerospace, automotive, general manufacturing, and certain construction trades. Personal Health Market Within the Personal Health market, we serve individual users with the Ekso Indego Personal, which is intended to provide overground ambulation in community and home settings.
Removed
We are pursuing Medicare reimbursement for products in this business line. EksoWorks Sales of products to able-bodied individuals for use in industrial or work-related use are represented by our EksoWorks segment. Our only active product within our EksoWorks segment is EVO.
Added
The primary use case for Ekso Indego Personal is for users with SCI. For this user population, confinement to a wheelchair can cause severe physical and psychological deterioration.
Removed
Economic and Industry Trends Our revenue is highly dependent on market demand for our exoskeleton products.
Added
As a result, the secondary medical consequences of paralysis can include difficulty with bowel and urinary tract function, osteoporosis, loss of lean mass, gain in fat mass, insulin resistance, diabetes, and heart disease. The cost of treating these conditions is substantial.
Removed
This increase was comprised of a $5.9 million increase in EksoHealth revenue, partially offset by a $0.5 million decrease in EksoWorks. The increase in EksoHealth revenue is primarily due to an increase in the volume of EksoNR and Indego device sales.
Added
Our DME submitted the first Ekso Indego Personal CMS reimbursement claim in May 2024, which claim was reimbursed in July 2024. All other ongoing CMS reimbursement claims for our devices are currently being managed through the appeals process.
Removed
The decrease in EksoWorks revenue was primarily driven by a reduction in the volume of EVO sales and the absence of the recognition of royalty revenue in the comparable period of 2022 related to an expired license and distribution agreement. Revenue from our EVO product line was affected by delays from our transition to our contract manufacturer.
Added
During the pendency of such appeals, we decided to put a hold on selling devices to DMEs for CMS reimbursement, instead focusing on refining and improving the CMS reimbursement process for our devices, naming National Seating & Mobility as the Company’s exclusive distributor of the Ekso Indego Personal device within the U.S. complex rehabilitation technology industry, ramping up pilots and partnerships with both regional and national DME suppliers, and building up a sales backlog for the Ekso Indego Personal device.
Removed
We have financed our operations primarily through the issuance and sale of equity securities for cash consideration and through bank debt. 33 Table of Contents In October 2020, we entered into an At The Market Offering Agreement (the "ATM Agreement") with H.C.
Added
At the end of February 2025, we had approximately 25 people who we believe qualify for reimbursement. We anticipate submitting those claims to CMS over the next six to nine months, though we expect our processes and procedures to continue to be refined as we work to scale up this sales channel over time.
Removed
Net Cash Provided by Financing Activities Net cash provided by financing activities of $0.3 million for the year ended December 31, 2023, was generated from the sale of common stock through our “at-the-market offering” program, which was offset by a principal payment related to our notes payable.
Added
We expect the majority of our revenue in 2025 will continue to come from Enterprise Health sales. Another key part of our growth strategy is seeking insurance coverage beyond CMS and seeking additional indications of use for our products.
Removed
During the year ended December 31, 2023, management made changes to its estimates regarding the likelihood and timing of future events. We do not believe the revision resulted in a material impact to the estimated fair value of warrant liabilities measured using the Lattice Model. Inventory Valuation Inventory is stated at the lower of cost or net realizable value.
Added
We believe that sales of our Personal Health products have the potential to be a significant growth driver for us as we work to gain coverage by other insurance providers, expand the products' indications of use beyond SCI and optimize our reimbursement submission processes.
Added
Nomad is currently for sale in limited volumes in the Personal Health market for use in a non-Company-sponsored single clinical study. Subject to clinical and patient feedback from clinical trials, we expect Nomad to be more broadly available starting in 2026. Economic and Industry Trends Our revenue is highly dependent on market demand for our exoskeleton products.
Added
The decrease in revenue was driven by a decrease in the average selling price for our Enterprise Health and Personal Health devices on an aggregate basis across all regions and a decrease in the volume of EksoNR subscriptions, partially offset by an increase in service revenue.
Added
Loss on modification of warrant of $0.1 million for the year ended December 31, 2024 was due to the reduction of the exercise price of the May 2019 Warrants from $3.52 per share to $1.55 per share, in connection with the January 2024 Offering. There was no comparable amount for the year ended December 31, 2023.
Added
On September 3, 2024, we sold 3,100,000 shares of common stock, a Pre-Funded Warrant to purchase 2,900,000 shares of common stock, Series A Warrants to purchase an aggregate of 6,000,000 shares of common stock, and Series B Warrants to purchase an aggregate of 6,000,000 shares of common stock in an underwritten public offering (the "September 2024 Offering"), which generated net proceeds of approximately $5.0 million after deducting the underwriting discount and commissions and offering expenses paid by the Company.
Added
We are using the net proceeds from the September 2024 Offering for general corporate purposes, which may include growth and expansion of our Personal Health products as we work to increase our revenue following the establishment of Medicare CMS reimbursement of the Ekso Indego Personal device, research and development activities, selling, general and administrative costs, pursuing strategic initiatives, and meeting our other working capital needs.
Added
Net Cash Provided by Financing Activities Net cash provided by financing activities of $7.8 million for the year ended December 31, 2024 was related to net proceeds of approximately $5.0 million from the September 2024 Offering after deducting the underwriting discount and commissions and offering expenses paid by us, net proceeds of approximately $3.9 million from the January 2024 Offering after deducting placement agent fees and offering expenses, proceeds of approximately $0.1 million from shares of common stock sold under the ATM Agreement, partially offset by approximately $1.3 million of principal payments towards the Promissory Note.
Added
We expect that our operating cash requirements in the near term will continue to exceed cash provided by operations with the significant research and development activities related to the development of our advanced technology and commercialization of such technology into its medical device business and with the service of our Promissory Note with Parker Hannifin Corporation.
Added
Provision for Credit Losses on Accounts Receivable We carry accounts receivable at invoiced amounts less an allowance (or "provision") for credit losses. We review accounts receivables for collectability and determine an allowance for credit losses.
Added
The allowance for credit losses on accounts receivables reflects the Company’s best estimate of probable losses inherent in the accounts receivable balance based on historical bad debt expense, the aging of the accounts, known troubled accounts, customer payment history, and other currently available evidence. Inventory Valuation Inventory is stated at the lower of cost or net realizable value.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed6 unchanged
Biggest changeFor the year ended December 31, 2023, sales denominated in foreign currencies were approximately 29% of total revenue. A hypothetical 10% increase in the United States dollar exchange rate used would have resulted in a $0.5 million decrease to revenues for 2023.
Biggest changeFor the year ended December 31, 2024, sales denominated in foreign currencies were approximately 43% of total revenue. A hypothetical 10% increase in the United States dollar exchange rate used would have resulted in a $0.7 million decrease to revenues for 2024.

Other EKSO 10-K year-over-year comparisons