Good morning
I am doing something a little out of the ordinary today. EKSO had a nice little pop at the end of the day on Friday as day traders took notice of a new order from Veterans Affairs being circulated. While the order is nice to see, the size of the order is not that significant or what I would consider a game changer. Full disclosure> I have been trading in and out of this stock for several years. I have taken it as a day trade, short term swing and I have taken positions in my long term hold account at what I considered to be opportunistic entries. I recently participated in the rights offering completed in August for 1 dollar a share in both my swing and long term hold accounts.
Some of you may remember the picture of Buddy a couple years ago (dated 01/03/2015) I first discovered the stock in 2014 and even though the long term chart is ugly and in a dominant down trend. I have done well with short term trades and I am patient enough to see how this plays out in the long run. With any young company that has a potentially disruptive technology you should expect volatility and recognize the risk of getting involved in the early stages of development. These are highly speculative types of investments and they can be very volatile because they don't make any money and burn through lots of cash on the road to hopefully achieving long term sustainable success.
Ekso has had a rocky road and the long term chart confirms that. However, I believe they are on the right path. They have a new CEO Tom Looby "Tom has most recently been president and Chief Commercialization Officer at Ekso Bionics, where he has been responsible for overseeing the operations of the company’s medical business. He joined Ekso Bionics in April 2014 as the company’s chief marketing officer, a role in which he led the development and execution of the company’s global rehabilitation marketing strategy. Prior to joining Ekso Bionics, Tom served as senior vice president and chief marketing officer at Given Imaging, now part of Medtronic, where he was responsible for worldwide market development for PillCam® capsule endoscopy and other novel diagnostics technologies." Given Imaging was acquired for nearly 1 billion dollars during Tom's tenure. I have personally spoken with Tom and have been very impressed with his knowledge and vision for Ekso Bionics.
I like Ekso for several reasons but the main reason are the markets they are involved in and the size and scope of the opportunities that lie ahead. When I fist started following them they were involved in three sectors. Aerospace and defense ( they were working with Lockheed Martin) In 2009 Ekso officially disclosed its business relationship with Lockheed Martin, announcing Lockheed Martin's intent to license and develop the HULC for military uses. In my mind that was a multi billion dollar industry that had significant potential.
Ekso over the years has diminished its roll in that sector and focused more of its time and resources on the development of its "Ekso GT™" the only Robotic Exoskeleton Cleared by FDA for Use With Stroke and Spinal Cord Injury Patients. They are currently leading the efforts in an important randomized, controlled study, entitled WISE (Walking Improvement for SCI with Exoskeletons), will evaluate improvement in independent gait speeds of spinal cord injury (SCI) patients undergoing rehabilitation with the Ekso GT™, the company's medical robotic exoskeleton, and will be compared to both conventional therapy and usual care control groups. The US-based study, which will be conducted in up to 8 centers, seeks to enroll approximately 160 community dwelling people with chronic incomplete SCI. You can read the full details of the study here. http://ir.eksobionics.com/press-releases/detail/581/ekso-bionics-announces-first-patient-enrolled-in-important
Ekso is convinced that Exoskeletons will become the standard of care for spinal injury and stroke patients in the future and I tend to agree. However, EKSO is not the only player in the field. There are larger companies with much deeper pockets that are also playing in this space. This is the second billion dollar industry they are actively involved in. Their focus has been on working with rehabilitation health care professionals but Ekso recently announced development of a lightweight flexible exoskeleton technology for potential home use. http://ir.eksobionics.com/press-releases/detail/616/ekso-bionics-develops-lightweight-flexible-exoskeleton
I have watched countless videos of people using the Ekso GT™ and the looks on their faces paint the whole picture for me. I literally get goose bumps watching people that may have thought they would never be able to stand up and look another person in the eye or take another step in their lifetime and do just that because of Ekso Bionics technology. The technology has displayed quicker recovery times, shortened hospital stays, benefits to the blood circulatory and bowel systems for patients. I often think about what impact it must have on the patients psychology and positive mental state. To me that is the most important piece and in my estimation something that can't be quantified. The true meaning of priceless! You don't have to take may word for it you can watch their most recent video here. https://www.youtube.com/watch?v=S13AfZlz9Vk
All of this will hopefully be confirmed at the end of the WISE study. One of the challenges for Ekso is that their exoskeletons are not currently covered by health care insurance providers. If and when that changes this would be a huge positive development and catalyst for the company in the future. Right now they endure a lengthy sales process that takes around 12 months to complete from product introduction to product placement. However, they are becoming much more efficient and shortening that sales lead time as their product and the benefits become more recognized throughout the industry. The units are not cheap @ nearly 150k a piece but several of the rehabilitation facilities that have tried the Ekso GT™ have ordered a second unit because they recognize the benefits of the system and it has proved to be worthy of the investment. http://ir.eksobionics.com/company-presentations
The third sector that Ekso Bionics recently entered is one that differentiates themselves from the competition and doesn't get as much attention from the investment community. "Eksoworks" is going after another billion dollar industry of industrial manufacturing and construction where they are looking to make a difference. This division is run by Russ Angold. "Mr. Angold is the Co-Founder and has served as the Chief Technology Officer of Ekso Bionics since December 2011. From the founding of Ekso Bionics until December 2011, Mr. Angold served as Vice President of Engineering. Prior to joining Ekso Bionics, Mr. Angold held various engineering positions at Rain Bird Corporation, Berkeley Process Control and the Irrigation Training and Research Center in San Luis Obispo, California. Mr. Angold is also the Founding President and Chairman of the Bridging Bionics Foundation. Mr. Angold is a registered Professional Mechanical Engineer and holds a bachelor’s degree in BioResource and Agricultural Engineering from California Polytechnic State University, San Luis Obispo." They currently have the Ekso ZeroG which is basically a zero gravity arm that assists in holding up heavy power tools which reduces worker fatigue increasing productivity and also increases safety on the job sites potentially limiting tools being dropped while working overhead off of scissor lifts. As someone that has a background in the the construction industry I know first hand that two of the biggest costs on a job site are directly related to worker productivity and safety related issues. You can see the ZeroG in action here https://www.youtube.com/watch?v=bW1jV3FyzfE and here https://www.youtube.com/watch?v=FKZtCHLGd_0 . The opportunities for this industry are huge as they come up with new systems to help all the various trades associated with the construction industry.
Ekso Bionics recently announced product to be introduced at the end of 2017 is the "EksoVest" https://www.youtube.com/watch?v=sn7qETycSUs which will be applicable to several different industries. The key to success for any new product is getting buy in and mass market acceptance. There are challenges ahead to get the "big tough construction workers" who can often be just a tad stubborn, to feel comfortable about wearing these out on job sites. However, if EKSO can demonstrate substantial benefits from both production performance and safety benefits to the executive teams of major construction companies and industrial manufacturers the workers may not have a choice as to whether or not they will wear them if they want to keep their jobs. I am excited to see who winds up using these and how they are accepted for adoption in the many industries they could serve.
I mentioned earlier that I took part in the rights offering for Ekso where they successfully raised 34 million dollars at the end of August. One of the exciting developments form that offering was the involvement of Dr Ted Wang. "Dr. Wang is the Chief Investment Officer of Puissance Capital Management, a global asset manager founded in 2015 with offices in the U.S. and China. Puissance was the lead investor in Ekso’s recently completed rights offering. Prior to founding Puissance, Dr. Wang was a Partner of Goldman Sachs & Co. in New York. During his 18-year tenure at Goldman Sachs he held many leadership positions including as a member of the Goldman Sachs Risk Committee. Prior to joining Goldman Sachs, he co-founded Xeotron Corp., a company specializing in DNA biochips in Texas. Dr. Wang holds a Ph.D. in Physics from the University of Minnesota, an MBA from the University of Texas, Austin, and a BS from Fudan University, China." Dr. Wang commented, “I am excited to join the Ekso Bionics Board, and I look forward to helping the company realize the potential and promise of its innovative exoskeleton portfolio. Ekso has an extraordinary opportunity to expand its presence in key international markets, and I am committed to working with the Ekso management team to execute on that opportunity.” Dr. Wang has an impressive background and is the type of person you want to see appointed to the board of directors of a company you are invested in and that is exactly what Ekso has done. http://ir.eksobionics.com/all-sec-filings#document-12007-0001144204-17-049281
Everything is not perfect with EKSO > they are burning through cash with the studies they are backing, R&D for product development and increasing their sales force as they delve into international markets. Mr. Angold recently sold a large portion of his stock holdings prior to the rights offering which is something I do not like to see especially from senior management. However, people have all kinds of personal reasons as to why they may be selling and it may not have anything to do with Mr. Angolds long term beliefs in the company and its ability to succeed. I have found over the years that there is usually only one reason that insiders buy stock in their company and that is typically because they believe their stock is undervalued and it offers a good opportunity to make some dang money. I am not talking about grants or stock options. I am talking about writing a check and buying shares on the open market. For the first time in a long time, several insiders have stepped up to the plate including Thomas Looby the CEO, the CFO and a couple of directors. Now these weren't what I would call significant buys but they were still buys and it is nice to see. http://rankandfiled.com/#/public/EKSO/ownership
Ekso has a lot to prove over the next few quarters and years. It will likely get some positive action next week form the day traders and maybe some short term swing players. You could try to take advantage of those opportunities but, I would also humbly suggest that for you investor types out there, this may be one to consider for the long hall after the day traders and short term players bail on it and the stock price drops to an area of potential price support. I personally see opportunities in the future for partnerships, licensing of their intellectual property or eventually a buyout of the entire company or maybe just a division. However that is pure speculation on my part.
In the video below I have identified areas of potential price support and resistance. Consider these levels for exits or entries depending on your trade style. We are currently looking at a potential double bottom where the dolla holla seems to be acting as strong price support.
Full disclosure I am long EKSO and I may buy and sell shares over the next week as a day trade, swing trade and add to or sell shares of my long term hold position.
I have no paid relationship with this Ekso Bionics and do not make one penny for writing this. These are only my views and should not be taken as investment advice. I am not and nor do I claim to be a professional investment advisor.
