Ekso Bionics Announces CFIUS Determination Regarding China Joint Venture
May 20 2020 - 4:10PM
Ekso Bionics Holdings, Inc. (Nasdaq: EKSO) (the “Company”), an
industry leader in exoskeleton technology for medical and
industrial use, today reported that the Company, Zhejiang Youchuang
Venture Capital Investment Co., Ltd and another partner
(collectively, the “JV Partners”) received notice from the
Committee on Foreign Investment in the United States (“CFIUS”) in
connection with its review of the Company’s and the JV Partners’
investment in Exoskeleton Intelligent Robotics Co. Limited (the
“JV”). The notice states that CFIUS’s prior national security
concerns regarding the JV could not be mitigated and, in connection
with its determination, CFIUS presented the Company and the JV
Partners with a National Security Agreement (“NSA”), which will,
among other things, require the termination of the Company’s role
with the JV. The Company intends to work cooperatively with the JV
Partners and CFIUS to finalize the terms of the NSA.
The JV was established in early 2019 with the
purpose of developing and serving the exoskeleton market in China
and other Asian markets and to create a global exoskeleton
manufacturing center in the Zhejiang Province of China.
Following U.S. governmental inquiries regarding the JV, the Company
and the JV formally submitted a joint voluntary notice to CFIUS in
December 2019 to review the transaction. CFIUS subsequently
inquired about Ekso Bionics’ legacy work for the U.S. government as
well as technology transfers and other aspects of the JV and, in
February 2020, imposed interim measures to mitigate identified
concerns pending completion of its investigation. These measures
temporarily suspended the Company’s contributions to the JV and
other integration activities for the JV.
“Despite our best efforts to mitigate their
concerns, we are disappointed that CFIUS will not allow us to move
forward with the joint venture,” said Jack Peurach, Chief Executive
Officer of Ekso Bionics. “Although we looked forward to working
with our JV partners, we are confident in our abilities to partner
with other global manufacturing sources to continue our product
cost reduction initiatives. The termination of the JV should not
have a material impact on our operations during the remainder of
2020.”
Mr. Peurach concluded, “We remain committed in
working to reach an agreement with our partners and CFIUS to
resolve this matter. We are grateful to the cooperation provided by
our partners in China in submitting the joint filing and supporting
us throughout this process. We regret that our case reflects the
substantial changes in the economic and political environment since
we first began the process to establish the JV that have made
completing transactions involving Chinese operations more
difficult.”
About Ekso Bionics®
Ekso Bionics® is a leading developer of
exoskeleton solutions that amplify human potential by supporting or
enhancing strength, endurance, and mobility across medical and
industrial applications. Founded in 2005, the Company continues to
build upon its unparalleled expertise to design some of the most
cutting-edge, innovative wearable robots available on the market.
Ekso Bionics is the only exoskeleton company to offer technologies
that range from helping those with paralysis to stand up and walk,
to enhancing human capabilities on job sites across the globe. The
Company is headquartered in the Bay Area and is listed on the
Nasdaq Capital Market under the symbol EKSO. For more information,
visit: www.eksobionics.com or follow @EksoBionics on Twitter.
Forward-Looking Statements
Any statements contained in this press release
that do not describe historical facts may constitute
forward-looking statements. Forward-looking statements may include,
without limitation, statements regarding (i) the plans and
objectives of management for future operations, including plans or
objectives relating to the design, development and
commercialization of human exoskeletons, plans or strategy relating
to the marketing and adoption and acceptance of the Company’s
products and potential for adoption of the Company’s products by
the market, and plans or strategy related managing the impact of
the COVID-19 epidemic, (ii) the Company's future plans regarding
the JV, including an unwinding or similar event, or its
relationships with the JV Partners, the impact of terminating the
JV, and potential manufacturing alternatives to the JV (iii)
finalization of any agreement with CFIUS and the JV Partners in
connection with the JV, including the final terms of the NSA, (iv)
action or inaction by CFIUS or other governmental body or authority
related to the JV, and (v) the assumptions underlying or relating
to any statement described in points (i) through (iv) above. Such
forward-looking statements are not meant to predict or guarantee
actual results, performance, events or circumstances and may not be
realized because they are based upon the Company's current
projections, plans, objectives, beliefs, expectations, estimates
and assumptions and are subject to a number of risks and
uncertainties and other influences, many of which the Company has
no control over. Actual results and the timing of certain events
and circumstances may differ materially from those described by the
forward-looking statements as a result of these risks and
uncertainties. Factors that may influence or contribute to the
inaccuracy of the forward-looking statements or cause actual
results to differ materially from expected or desired results may
include, without limitation, the Company’s failure to finalize the
NSA with the JV Parties and CFIUS, additional adverse regulatory
decisions related to the JV, the Company's inability to obtain
adequate financing to fund the Company's operations and necessary
to develop or enhance the Company’s technology, the significant
length of time and resources associated with the development of the
Company's products, the Company's failure to achieve broad market
acceptance of the Company's products, the failure of the Company’s
sales and marketing efforts or of partners to market the Company’s
products effectively, the failure of the Company to obtain or
maintain regulatory approval to market the Company's medical
devices, disruptions in the Company’s supply chain due to the
outbreak of the COVID-19 virus and other delays that may result
from the COVID-19 pandemic, and the Company's failure to implement
the Company's business plans or strategies. These and other factors
are identified and described in more detail in the Company's
filings with the SEC. To learn more about Ekso Bionics please visit
the Company’s website at www.eksobionics.com or refer to the
Company’s Twitter page at @EksoBionics. The Company does not
undertake to update these forward-looking statements.
Investor Contact: David
Carey212-867-1768investors@eksobionics.com
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