Item
1.01 Entry into a Material Definitive Agreement.
Public
Offering of Units and Pre-Funded Units
Pricing
and Closing
On
November 16, 2018, ReWalk Robotics Ltd. (the “Company”) entered into an underwriting agreement (the “Underwriting
Agreement”) with H.C. Wainwright & Co., LLC (the “Representative”), as representative to the underwriters
(the “Underwriters”), for an underwritten public offering (the “Public Offering”) of (i) 12,401,390 units
with a public offering price of $0.30 per unit, each containing one ordinary share of the Company, par value NIS 0.01 per share,
and one warrant to purchase one ordinary share at an exercise price of $0.30 per share (each, a “common warrant”),
and (ii) 26,259,332 pre-funded units with a public offering price of $0.29 per unit, each containing one pre-funded warrant with
an exercise price of $0.01 per share (each, a “pre-funded warrant”) and one common warrant to purchase one ordinary
share. Additionally, the Company granted the Underwriters a 30-day option to purchase up to an additional 5,799,108 ordinary shares
for $0.29 per share and/or common warrants to purchase up to an additional 5,799,108 ordinary shares for $0.01 per warrant, in
each case, less underwriting discounts and commissions.
On
November 18, 2018, the Underwriters fully exercised their option to purchase additional securities and on November 20, 2018, the
public offering closed. The net proceeds to the Company from the offering, including the exercise of the Underwriter’s option
to purchase additional securities, were approximately $12.1 million, excluding any proceeds from the exercise of common warrants
and pre-funded warrants, after deducting underwriting discounts and commissions and before payment of estimated offering expenses
(including an underwriter management fee) of approximately $0.6 million. As compensation for their role in the offering, the Company
also issued to the Underwriters warrants to purchase up to 2,667,590 ordinary shares (the “underwriter warrants”),
which are immediately exercisable starting on November 20, 2018 until November 15, 2023 at $0.375 per share. The issuance and
sale of the ordinary shares, common warrants, pre-funded warrants and underwriter warrants offered in the offering, as well as
the ordinary shares underlying all of the warrants, were registered under the Securities Act of 1933, as amended (the “Securities
Act”), pursuant to the Company’s effective registration statement on Form S-1 (File No. 333-227852).
As
discussed below under “Kreos V Loan Agreement Amendment,” the Company used $3.6 million of the offering’s proceeds
to repay outstanding indebtedness under its $3.0 million secured convertible promissory note, dated June 9, 2017 (the “Kreos
V Convertible Note”), held by Kreos Capital V (Expert Fund) Limited (“Kreos V”), and to make other related payments
to Kreos V. The Company intends to use the remainder for sales, marketing and reimbursement expenses related to market development
activities and broadening third-party payor coverage and for research and development costs related to developing lightweight
exo-suit technology for various lower limb disabilities, including stroke and other indications affecting the ability to walk.
The
Underwriting Agreement contains customary representations and warranties, agreements and obligations, conditions to closing and
termination provisions. The Underwriting Agreement provides for indemnification by the Underwriter of the Company, its directors,
certain of its executive officers and others, and by the Company of the Underwriter, for certain liabilities, including liabilities
arising under the Securities Act, and affords certain rights of contribution with respect thereto.
Terms
of Pre-Funded Warrants and Common Warrants
The
pre-funded warrants are immediately exercisable starting on November 20, 2018 and may be exercised at any time until all of the
pre-funded warrants are exercised in full. The common warrants are immediately exercisable starting on November 20, 2018 and may
be exercised at any time until November 20, 2023. The exercise price and number of shares issuable upon exercise of the common
warrants and pre-funded warrants are subject to appropriate customary adjustments in the event of stock dividends, stock splits,
reorganizations or similar events affecting the Company’s ordinary shares and the exercise price.
A
holder (together with its affiliates) may not exercise any portion of the pre-funded warrant or common warrant to the extent that
the holder would own more than 4.99% (or, at the purchaser’s option upon issuance, 9.99%) of the Company’s outstanding
ordinary shares immediately after exercise. However, upon at least 61 days’ prior notice from the holder to the Company,
a holder with a 4.99% ownership blocker may increase the amount of ownership of outstanding ordinary shares after exercising the
holder’s pre-funded warrant or common warrant up to 9.99% of the number of the Company’s ordinary shares outstanding
immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the
pre-funded warrant or common warrant. The pre-funded warrant and common warrant issued to Kreos V contain blocker provisions capping
the ownership of it and its affiliates at 9.99% of the Company’s outstanding ordinary shares.
Lock-up
Restrictions
The
Company agreed, in the Underwriting Agreement, to certain restrictions on the issuance and sale of its ordinary shares, or any
securities convertible into, or exercisable or exchangeable for, ordinary shares, for 90 days following November 16, 2018 (the
“Lock-up Period”). These lock-up restrictions do not apply to, in addition to certain customary exceptions, the Company’s
(i) issuance of equity or debt securities in acquisitions or strategic transactions approved by a majority of disinterested directors
not for the purpose of raising capital, (ii) offer, grant, issuance or sale of equity or debt securities in financings with certain
strategic investors or certain debt refinancing transactions, or (iii) issuance of ordinary shares under the investment agreement,
dated March 6, 2018, as amended, between the Company and Timwell Corporation Limited (“Timwell”), or any substantially
similar new agreement between the Company and Timwell or any of its affiliates.
Pursuant
to the Underwriting Agreement, the Company also agreed for a period of six months after November 20, 2018 not to (i) issue or
agree to issue equity or debt securities convertible into, or exercisable or exchangeable for, its ordinary shares at a conversion,
exercise or exchange price which floats with the trading price of its ordinary shares or which may be adjusted after issuance
upon the occurrence of certain events or (ii) enter into any agreement, including an equity line of credit, whereby the Company
may issue securities at a future-determined price. This restriction does not apply to the Company’s offer, issuance or sale
of ordinary shares in its at-the-market offering program or a new program with the same agent with substantially similar terms
following the 90-day Lock-up Period.
Kreos
V Loan Agreement Amendment
On
November 20, 2018, the Company and Kreos V entered into the Second Amendment (the “Second Amendment”) to the Agreement
for the Provision of a Loan Facility of up to $20,000,000, dated December 30, 2015, as previously amended on June 9, 2017 (the
“Kreos V Loan Agreement”). In the Second Amendment, the Company agreed to pay $3.6 million to Kreos V in satisfaction
of all outstanding indebtedness under the Kreos V Convertible Note and other related payments, including prepayment costs and
“End of Loan” payments (as defined in the Kreos V Loan Agreement), and Kreos V agreed to cancel the Kreos V Convertible
Note. The Company paid Kreos V the $3.6 million using the proceeds of the public offering, in which Kreos V participated by purchasing
4,800,000 units and 7,200,000 pre-funded units at the applicable public offering prices for an aggregate price of $3.6 million
(including the aggregate exercise price for the ordinary shares to be received upon exercise of the pre-funded warrants, assuming
Kreos V exercises all of the pre-funded warrants it purchased).
The
Company and Kreos V also agreed to revise the principal and the repayment schedule under the Kreos V Loan Agreement. This revised
repayment schedule, attached to the Kreos V Loan Agreement, effectively defers an additional $1.0 million of payments due in 2018
and approximately one-half of all payments due in 2019 under the loan’s prior repayment schedule, for total deferred payments
of approximately $3.9 million compared to the prior repayment schedule. As of November 20, 2018, the outstanding principal amount
under the Kreos V Loan Agreement was approximately $9.7 million. The Second Amendment also made certain changes to the prepayment
premiums under the Kreos V Loan Agreement, tying them to the date of the Second Amendment.
Kreos
V Warrant Amendment
On
November 20, 2018, Kreos V and the Company entered into the First Amendment to the Warrant to Purchase Shares (the “Kreos
V Warrant Amendment”), which amended the exercise price of the warrant to purchase 167,012 ordinary shares currently held
by Kreos V from $9.64 to $0.30. As previously disclosed, the Company granted this warrant to Kreos V on December 31, 2015 and
December 28, 2016 in connection with the Kreos V Loan Agreement, which is exercisable until the earlier of (i) December 30, 2025
or (ii) an “M&A Transaction,” as defined therein.
The
foregoing descriptions of the Underwriting Agreement, Kreos V Warrant Amendment, common warrants, the pre-funded warrants, the
underwriter warrants and the Kreos V Loan Agreement are not complete and are qualified by reference to the full text of the Underwriting
Agreement, form of common warrant, form of pre-funded warrant, form of underwriter warrant, Kreos V Warrant Amendment and Kreos
V Loan Agreement, copies of which are filed herewith as Exhibits 1.1, 4.1, 4.2, 4.3, 4.4 and 10.1 respectively, and incorporated
by reference herein.