Shares of Ekso Bionics Holdings (OTCMKTS:EKSO) have sold off over the past few days after the company announced that it raised $15 million at $1.01 per share. Although it is nice for the company to get $15 million, the additional shares and warrants dilute existing shareholders. Shares were priced at $1.01 and warrants at $1.25. After the deal was announced, shares sold off and are holding just above the critical $1 level. As you can see from the chart, for the past year the $1 level has been critical support and shares have bounced each and every time we've entered this territory.While there's some short term pressure on EKSO shares, we feel that the additional $15 million was well worth it in the long run. EKSO remains at the forefront of the robotic exoskeleton technological movement and is well capitalized. At the end of September, EKSO had just over $11 million in cash. With the additional $15 million, EKSO will have $26 million to continue its R&D efforts and expansion plans. Since 2005, EKSO has invested over $60 million in its technology making its $111 million market cap easily justifiable.
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EKSO's efforts are starting to pay off and we saw that in its most recent 10-Q. In the third quarter, revenues grew from $1.5 million last year to $2.9 million this year. For the first nine months of this year, EKSO recorded total revenues of $6.7 million compared to $3.8 million in the first nine months of 2014.EKSO is one OTC stock that has huge potential. The company has proven that human exoskeletons are more energy efficient than anyone thought possible and can be be used in the healthcare, industrial, military and consumer markets. EKSO's exoskeleton systems are strapped over the user's clothing and allow those with neurological conditions to walk again, soldiers to carry heavy loads for longer distances, and industrial workers to increase productivity for longer periods of time.The industrial area is one that EKSO plans to devote a good portion of its research and development budget. EKSO's new models will be able to increase an individual's workload, endurance and productivity. While there is an upfront investment from employers, EKSO believes that it can reduce employer's overall costs with increased productivity while reducing worker's compensation claims and insurance costs. This is a win-win for the employer and its workers.
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EKSO also has plenty of growth opportunities in the rehab center market where it already has a significant presence. EKSO is already established in 35 rehab centers in 12 countries and keeps adding more. The company estimates that this is a $1 billion potential market for EKSO. By getting those that previously could not walk to now walk again, we certainly agree with this thesis.
With all the potential EKSO has, the company has a better chance of succeeding than most. One of the biggest problems in penny stock land is that most companies are not able to continue financing their operations. EKSO is overcoming this obstacle and at the same time getting new investors on board to fund the company's goals. There are not many OTC stocks with as much cash on their balance sheet as EKSO.
Will EKSO Return To Previous Highs?
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As you can see, shares of EKSO had a lot of excitement when they first started trading back in 2014. Since then, shares have traded mostly between $1 and $2. Now that we're near the lower band of this trading range, we are certainly watching EKSO closely for the next catalyst to send shares higher. In order to not miss out on the next big move in EKSO shares, sign up for the Insider Financial newsletter and get the latest on EKSO and all of our other hot stock picks.
Disclosure: We own no shares of EKSO and have not been compensated for this article.
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