Our colleague Stephen L. Kanaval first discussed Ekso Bionics (EKSO) over six months ago, and we continue to be impressed with the progress this company is making as a pioneer in the field of exoskeleton robotics. We found this brief video, posted two months ago, to be particularly enlightening. It highlights the use of the company’s Ekso GT exoskelelton at Alta Bates Summit Medical Center, the largest private, not-for-profit medical center in the East Bay area of northern California.

Source: Ekso Bionics YouTube Channel

Ekso Bionics is a leading developer of exoskeleton solutions that amplify human potential by supporting or enhancing strength, endurance and mobility across medical, industrial and defense applications. The company is the only exoskeleton company to offer technologies that range from helping those with paralysis to stand up and walk, to enhancing human capabilities on job sites across the globe, to providing research for the advancement of research and development projects intended to benefit U.S. defense capabilities.

Ekso Bionics reported very good numbers for Q4 and full year 2016 last month, highlighting several corporate milestones:

  • Record quarter, recognizing revenue from 16 medical units and 58 industrial exoskeleton units.
  • Revenues of $2.6 million for Q4 2016, compared to $1.9 million in Q4 2015.
  • Total revenue of $14.2 million for 2016, compared to $8.7 million for 2015.
  • Secured three IRB-approved centers (Institutional Review Board) for the company-sponsored WISE (Walking Improvement for Spinal Cord Injury with Exoskeletons) study, led by Burke Rehabilitation Institute, that is evaluating improvement in independent gait speeds of incomplete spinal cord injury patients undergoing rehabilitation with the Ekso GT
  • Was the subject of a Medical Innovation Briefing released by the National Institute for Health and Care Excellence in the United Kingdom.
  • Was the subject of 13 publications in the second half of 2016, bringing total studies completed or underway to 46, with over 1,000 patients now studied in the Ekso GT.
  • Closed on a term loan for up to $10 million of venture debt.
  • Its EksoZeroG industrial solution was named to the industry recognized Hot List 2017. EksoZeroG was selected by Rental Management magazine from a record number of submissions as one of nearly 200 new products or services to be featured at The Rental Show, the American Rental Association’s annual convention and trade show for the equipment rental industry. The EksoZeroG, a lightweight assistive device for industrial workers, is designed to bear the load of heavy tools and enhance both safety and productivity at construction sites. The device easily mounts to aerial work platform rails and/or scaffolding and can hold a wide range of heavy construction tools, such as rotary hammers and pneumatic chipping guns, as shown in this video:

Source: Ekso Bionics YouTube Channel

Since the company reported earnings in March, additional accomplishments include:

  • The EksoGT was named as a finalist in Fast Company’s 2017 World Changing Ideas Awards.
  • The company raised $11.7 million in gross proceeds from institutions off a shelf registration. The offering comprised common stock and out-of-the-money warrants.
  • The company received the Telehealth Award from HealthTechZone.com, a leading healthcare technology news source. The award, which recognizes vendors with proven success in improving health delivery and management, was granted to the EksoGT exoskeleton connected with Vodafone’s (NASDAQ: VOD) Internet-of-Things technology. Ekso Bionics’ EksoPulse technology is an advanced cloud-based platform that uniquely allows physical therapists to personalize patient care. EksoPulse is incorporated into the EksoGT exoskeletons and enables PTs to not only capture patient progress during sessions, but also to store the therapeutic data in a shared system, to synchronize that data in the cloud in order to track changes in patient performance, and to then make customized adjustments to care plans.

So, corporate milestones are being achieved, and the company is making a difference in medical and industrial settings. The stock chart, however, isn’t one to be envied. The market has chewed on all of the progress the company has made and has cut the stock by more than half over the past year, down to a market cap of just $64 million. There’s clearly a disconnect between the progress the company is making and the market’s appreciation of that progress.

The market has also punished the stock severely on two notable recent occasions. In August 2016, in conjunction with its uplisting from OTC to NASDAQ, the company priced a steeply discounted offering of common stock at $4.00 – off of the last OTC sale at $6.24. Beyond the market quickly deciding that $6.24 was clearly the wrong price when $4.00 stock was sloshing around on the first day of NASDAQ trading, the stock offering also triggered a reset on the conversion price of the Series A preferred and the exercise price of certain warrants – as those holders had anti-dilution protection, which of course meant dilution for everyone else.

Then, in October 2016, after recovering most of what it had lost in August, the stock lost nearly 40% over two trading sessions on nearly 1.8 million shares of volume. Average daily volume in EKSO is about 110,000 shares. We’re not privy to what exactly happened there, but would it surprise anyone if EKSO was victim to a pump and dump?

We’re left to conclude that the company needs to do a better job of articulating the investment thesis to the right investor audience. This will help spread the message, get stock in the hands of more fundamentally oriented investors and keep the pump and dump scammers at bay. The ugly chart is masking a company that is changing lives for stroke and spinal cord injury patients and making industrial workers more productive and safer.

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